Table of ~~our key customer verticals as follows and a summary of the types of customers included in our verticals is discussed below.~~Conten t s

~~Telecom/Cable is now referred to as ‘Service Provider’~~

~~Strategic Enterprise is now referred to as ‘Enterprise’~~

~~Cloud remains unchanged~~

Further, we believe our ~~networking infrastructure offerings~~solutions benefit our ~~key~~ customers by:

•Reducing capital and operational costs by running multiple services over the same network using our secure, high density, highly automated, and highly reliable platforms;

•Creating new or additional revenue opportunities by enabling new services to be offered to new market segments, which includes existing customers and new customers, based on our product capabilities;

•Increasing customer satisfaction, while lowering costs, by ~~enabling customers to self-select automatically provisioned service packages that provide~~optimizing the ~~quality, speed,~~experience of network operators and ~~pricing they desire;~~ their users via automation, AI-enabled troubleshooting and support, and cloud-management;

•Providing increased asset longevity and higher return on investment as our customers' networks can scale to higher throughput based on the capabilities of our platforms;

•Offering network security across every environment—from the data center to campus and branch environments to assist in the protection and recovery of services and applications; and

•Offering operational improvements that enable cost reductions, including lower administrative, training, customer care, and labor costs.

The following is an overview of the trends affecting the market in which we operate by each of our customer verticals. We believe the networking needs for each of our customers will eventually result in cloud-based network architectures for improved agility and greater levels of operating efficiency.

Cloud

Our Cloud vertical includes companies that are heavily reliant on the cloud for their business model’s success. Customers in the Cloud vertical can include cloud service providers, such as the largest public cloud providers, which we refer to as hyperscalers, and Tier-2 cloud providers, as well as enterprises that provide SaaS; infrastructure-as-a-service; or platform-as-a-service.

Cloud providers continue to grow as more organizations take advantage of public infrastructure to run their business. As their businesses grow, we expect they will continue to invest in their networks, which dictates the quality and experience of the products and the services they deliver to their end-customers. Further, as cloud providers begin to ~~early~~ adopt new network technologies, such as the transition to ~~400-gig~~400-gigabit Ethernet, or 400GbE, we believe this ~~will~~should present further opportunities for ~~Juniper~~us across our portfolio as our cloud customers value high-performance, highly compact, power efficient infrastructures, which we support and continue to develop.

In addition, SaaS continues to be an important factor for cloud providers as their customers, such as enterprises, prefer to ~~consume~~procure and ~~procure~~consume product and service offerings via SaaS models. As a result, we believe that SaaS providers will invest in high performance infrastructure because the quality of experience has proven just as important competitively as software features and functions. Lastly, as a result of ~~new~~ regulations and the need for lower latency and high-performance networking, cloud providers ~~are~~have been transitioning to regional network build-outs or distributed cloud environments to address the increasing demand for services, data privacy, data protection, and consumer rights.

As Cloud customers are pushing the envelope in networking, our focus on collaboration combined with networking innovation around automation has made us a strategic partner with these customers, helping them develop high-performance and lower total cost of ownership networking solutions to support their business.

Service Provider

Our Service Provider vertical includes wireline and wireless carriers and cable operators, and we support most of the major carrier and operator networks in the world with our ~~high performance~~high-performance network infrastructure offerings. In recent years, we have seen increased convergence of these different types of customers through acquisitions, mergers, and partnerships.

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Service Provider customers recognize the need for high-performance networks and leveraging the cloud to reduce costs from their network operations. This is dictating a change in business models and their underlying infrastructure, which we believe requires investment in the build-out of high-performance networks and the transformation of existing legacy infrastructure to distributed cloud environments in order to satisfy the growth in mobile traffic and video as a result of the increase in mobile device usage including smartphones, tablets, and connected devices of various kinds.

We expect that Network Function Virtualization, or NFV, and ~~software-defined networking, or~~ SDN, will be critical elements to enable our Service Provider customers the flexibility to support enhanced mobile video and dynamic new service deployments. We are engaging with these customers to transition their operations to essentially next-generation cloud operations as the need for a highly efficient infrastructure to handle large amounts of data along with low latency, or minimal delay, plays into the need to have a high performance, scalable infrastructure in combination with the automation and flexibility required to drive down operational costs and ~~rapidly~~rapid provision applications. We consistently deliver leading technologies that transform the economics and experience of ~~networking-significantly~~networking while significantly improving customer economics by lowering the capital expenditures required to build networks and the operating expenses required to manage and maintain them.

In addition to reducing operating costs, ~~Service Providers~~service providers are seeking to create new or additional revenue opportunities to support their evolving business models. These customers are ~~preparing for~~beginning to deploy 5G, which we expect towill begin to ~~occur~~roll out over the next few years, and IoT, which we believe will give rise to new services like connected cars, smart cities, robotic manufacturing, and agricultural transformation. 5G and IoT ~~will~~ require a highly distributed cloud data center architecture from which services are delivered to the end users and will involve a great degree of analytics and embedded security. We expect this trend will present further

opportunities for Juniper with our focus on delivering a strong portfolio of network virtualization and software-based orchestration solutions, which position us to deliver on the automation and agility requirements ~~needs~~ of ~~Service Providers.~~service providers.

Enterprise

Our high-performance network infrastructure offerings are designed to meet the performance, reliability, and security requirements of the world's most demanding enterprises. We offer enterprise solutions and services for data centers as well as branch and campus applications. Our Enterprise vertical includes enterprises not included in the Cloud vertical. ~~In particular, they~~They are industries with high performance, high agility requirements, including financial services; national, federal, state, and local governments; as well as research and educational institutions. We believe that our Enterprise customers are able to deploy our solutions as a powerful component in delivering the advanced network capabilities needed for their leading-edge applications.

We believe that as our Enterprise customers continue to transition their workloads to the cloud, they continue to seek greater flexibility in how they consume networking and security services, such as pay-per-use models. Additionally, Enterprises are deploying multicloud architectures which require end-to-end solutions for managing, orchestrating, and securing distributed cloud resources as a single pool of resources. Also, we are increasingly seeing a convergence of networking and security, resulting in security becoming an embedded capability in ~~each and~~ every solution that we offer to our customers.

High-performance enterprises require IP networks that are global, distributed, and always available. We are innovating in key technology areas to meet the needs of our Enterprise customers whether they plan to move to a public cloud architecture or hybrid cloud architecture (which is a mix of public and private cloud, as well as a growing number of SaaS applications).

In ~~2018, 2017,~~2020, 2019, and ~~2016,~~2018, no single customer accounted for 10% or more of our net revenues.

Products, Services, and Technology

Early in our history, we developed, marketed, and sold the first commercially available purpose-built IP backbone router optimized for the specific high-performance requirements of telecom and cable operators. As the need for core bandwidth continued to increase, the need for service-rich platforms at the edge of the network was created.

We have expanded our portfolio to address multiple domains in the network: core; edge; access and aggregation; data centers; and campus and branch. We have systematically focused on how we innovate in silicon, systems, and software (including our Junos OS and virtual network functions, or VNF) such as firewall, network orchestration, and automation to provide a range of hardware and software solutions in high-performance, secure networking.

Our acquisition of 128 Technology represents the next step in our AI-driven enterprise evolution. We believe 128 Technology will enhance our AI-Driven enterprise network portfolio with its session smart networking, accelerating the industry evolution

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from network-centric SD-WAN solutions to modern user-centric AI-driven networks. Also, we believe our acquisition of Netrounds, which is an end-to-end assurance solution for our Service Provider customers, will enhance our automated WAN solutions with innovative testing and service assurance capabilities to further simplify operations for service providers and ensure positive end-user experiences. Further, we believe our acquisition of Apstra, a leader in intent-based networking, open programmability and automated closed loop assurance for the management of data center networks, will expand upon our data center networking portfolio to advance our vision to transform data center operations.

Further, our intent is to expand our software business by introducing new software solutions to our product ~~portfolio~~and services portfolios that simplify the operation of networks, and ~~allow~~provide flexibility in consumption and deployment to our customers across our key ~~verticals, flexibility in consumption and deployment.~~verticals. Our software offerings include ~~subscription arrangements~~subscriptions, SaaS, and term or time-based perpetual licenses. We believe our software and related services revenues as a percentage of total revenues will increase over time as we introduce new software ~~product offerings and business models~~solutions designed to better monetize the value of software functionality in our ~~software~~ offerings.

Significant Product Development Projects and Solutions

In 2020, we continued to execute on our product and service solution strategy and announced several new innovations, including metro, edge, and core innovations to accelerate service providers’ 5G transformation. Our Metro Fabric line expansion includes one and three rack unit ACX700 Universal Metro Routers. We ~~conduct business globally~~announced a new edge MPC11E line card in the MX2000 Series 5G Universal Routing Platform, delivering an increase in line card and system capacity using our Penta Silicon chip. We also announced our new Triton Silicon enabling end-to-end secure connectivity at scale with 400GbE, and native Media Access Control Security that will be used in the PTX10008 and PTX10016 Universal Chassis. These new solutions will help service providers with their infrastructure transformation to 5G.

Also, we introduced our next-generation, cloud-ready operating system, Junos OS Evolved. It has the same command-line interface, the same applications and features, the same management and automation tools as Junos OS, but its infrastructure is entirely modernized, which enables higher availability, accelerated deployment, greater innovation and improved operational efficiencies.

Moreover, we announced a cloud-managed version of our SD-WAN solution. Our Contrail Service Orchestration now gives enterprises a simple way to manage and secure their WAN infrastructure, Branch LAN, and Wi-Fi networks. We also released our PTX10003 router and our QFX5220 switch, which are ~~managed, operated, and organized by major functional departments that operate on a consolidated basis. As a result, we operate in one reportable segment.~~ both 400GbE ready.

The following is an overview of our principal product families and service offerings in ~~2018:~~2020:

Routing Products

•ACX Series: Our ACX Series Universal Access Routers cost-effectively address current operator challenges to rapidly deploy new high-bandwidth services. ~~The~~We believe that the ACX Series is well positioned to address the growing metro Ethernet and mobile backhaul needs of our customers, as we expect 5G mobile network build-outs to ~~begin to occur~~roll out over the next few years. The platforms deliver the necessary scale and performance needed to support multi-generation wireless technologies.

•MX Series: Our MX Series is a family of high-performance, SDN-ready, Ethernet routers that function as a Universal Edge platform with high system capacity, density, and performance. The MX Series platforms utilize our custom silicon and provide carrier-class performance, scale, and reliability to support large-scale Ethernet deployments. We also offer the vMX, a virtual version of the MX router, which is a fully featured MX Series 3D Universal Edge Router optimized to run as software on x86 servers.

•PTX Series: Our PTX Series Packet Transport Routers deliver high throughput at a low cost per bit, optimized for the ~~Service Provider~~service provider core as well as the scale-out architectures of ~~Cloud Providers.~~cloud providers. The PTX Series is built on our custom silicon and utilizes a forwarding architecture that is focused on optimizing IP/~~multi-protocol label switching, or~~ MPLS, and Ethernet. This ensures high density and scalability, high availability, and network simplification.

~~Cloud Customer Premises Equipment, or CPE, Solution~~: Our Cloud CPE is a fully automated, end-to-end NFV solution that builds on Juniper Networks Contrail Networking and supports cloud-based and premises-based VNFs. This solution includes Contrail Service Orchestration, a comprehensive management and orchestration platform that delivers and manages virtualized network services such as virtual security, and the NFX security family, a network services platform that can operate as a secure, on-premises device running software defined wide area network, or SD-WAN, and multiple virtual services, from Juniper and third parties, simultaneously.

•NorthStar Controller: Our wide-area network SDN controller automates the creation of traffic-engineering paths across the network, increasing network utilization and enabling a customized programmable networking experience.

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Switching Products

•EX Series: Our EX Series Ethernet switches address the access, aggregation, and core layer switching requirements of micro branch, branch office, and campus environments, providing a foundation for the fast, secure, and reliable delivery of applications able to support strategic business processes. ~~Our EX switches can also serve as security enforcement points as part of our Unified Cybersecurity Platform.~~

•QFX Series: Our QFX Series of core, spine, and top-of-rack data center switches offer a revolutionary approach to switching that are designed to deliver dramatic improvements in data center performance, operating costs, and business agility for enterprises, high-performance computing networks, and cloud providers.

•Juniper Access Points: Our ~~QFX switches can also serve as security enforcement~~access points ~~as part of our Unified Cybersecurity Platform.~~

provide wireless access and performance, which is automatically optimized through reinforcement learning algorithms. Our access points have a dynamic virtual Bluetooth low energy element antenna array for accurate and scalable location services.

Security Products

•SRX Series Services Gateways for the Data Center and Network Backbone: Our mid-range, high-end and virtual SRX Series platforms provide high-performance, scalability, and service integration, which are ideally suited for medium to large enterprise, data centers and large campus environments, where scalability, high performance, and concurrent services, are essential. Our high-end SRX5800 platform is suited for service provider, large enterprise, and public sector networks. The upgrade to our high-end SRX firewall offering with our Services Process Card 3, or SPC3, with our Advanced Security Acceleration line card enhances the SRX5800 to deliver power for demanding use cases, including high-end data centers, IoT, and 5G.

•Branch SRX, Security Policy and Management: The Branch SRX family provides an integrated firewall and next-generation firewall, or NGFW, capabilities. Security Director is a network security management product that offers efficient, highly scalable, and comprehensive network security policy management. These solutions are designed to enable organizations to securely, reliably, and economically deliver powerful new services and applications to all locations and users with superior service quality.

•Virtual Firewall: Our vSRX Firewall delivers all of the features of our physical firewalls, including NGFW functionality, advanced security, and automated lifecycle management capabilities. The vSRX provides scalable, secure protection across private, public, and hybrid clouds. We also offer the cSRX which has been designed and optimized for container and cloud environments.

•Advanced Malware Protection: Our Advanced Threat Prevention portfolio consists of Sky ATP, a cloud-based service and Juniper ATP, or JATP, a premises-based solution. These products are designed to use both static and dynamic analysis with machine learning to find unknown threat signatures (zero-day attacks).

Services

In addition to our products, we offer maintenance and support, professional, SaaS, and educational services. We utilize a multi-tiered support model to deliver services that leverage the capabilities of our own direct resources, ~~channels~~channel partners, and other third-party organizations.

We also train our channel partners in the delivery of support, professional, and educational services to ensure these services can be locally delivered.

As of December 31, ~~2018,~~2020, we employed ~~1,818~~1,887 people in our worldwide customer service and support organization. We believe that a broad range of services is essential to the successful customer deployment and ongoing support of our products, and we employ remote technical support engineers, on-site resident engineers, spare parts planning and logistics staff, professional services consultants, and educators with proven network experience to provide those services.

Platform Strategy

In addition to our major product families and services, our software portfolio has been a key technology element in our goal to be a leader in high-performance networking.

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Our Junos Platform enables our customers to expand network software into the application space, deploy software clients to control delivery, and accelerate the pace of innovation with an ecosystem of developers. At the heart of the Junos Platform is Junos ~~OS.~~OS Evolved. We believe Junos OS Evolved is fundamentally differentiated from other network operating systems not only in its design, but also in its development capabilities. The advantages of Junos OS Evolved include:

~~One~~•A modular operating system with common base of code and a single, consistent implementation for each control plane feature;

•A highly disciplined and firmly scheduled development process; ~~and~~

~~One~~•A common modular software architecture that scales across all Junos-based ~~platforms.~~platforms;

•A central database, which is used by not only Junos native applications but also external applications using application programming interfaces, or API's; and

•A fully distributed general-purpose software infrastructure that leverages all the compute resources on the network element.

Junos OS Evolved is designed to improve the availability, performance, and security of business applications running across the network. Junos OS Evolved helps to automate network operations by providing a single consistent implementation of features across the network in a single release train that seeks to minimize the complexity, cost, and risk associated with implementing network features and upgrades.

Orchestration and Monitoring

As many of our customers ~~are~~continue moving to ~~a hybrid, multicloud environment,~~programmable and automated network operations, managing, orchestrating, and securing that complex ~~environment~~journey can be a challenge. Network automation is the process of automating the configuration, management, testing, deployment, and operations of physical and virtual devices within a network. We believe the keys to achieving success with network and security automation includes:

•Architecting networking systems with strong APIs, analytics, and autonomous control; and

•Automating operations to become more reliable in the context of IT systems, teams, processes, and network operation and security operation workflows.

We are committed to providing solutions to ~~simplify networking operations to~~ help our customers to optimize their ~~infrastructure~~programmable and ~~workload placement across their hybrid, multicloud environment~~automated networking operations with the following offerings:

•Contrail: Our Contrail Networking and Contrail Cloud Platform offer an open-source, standards-based platform for SDN and NFV. This platform enables our customers to address their key problems in the area of network automation, agility, and time-to-service deployment by providing a mechanism to virtualize the network over any physical network and automating the provisioning and management of networking services (such as security and load balancing). Contrail Enterprise Multicloud and Contrail Edge Cloud provide packaged solutions designed for Enterprise multicloud and Service Provider Edge environments, respectively. Contrail’s approach is to support multiple cloud and hardware vendors, various types of workloads, and both existing and new deployments. In late 2018, we completed the acquisition of HTBase Corporation ("HTBase"), a company that has developed a unique and disruptive platform for software-defined enterprise multicloud, which we expect will accelerate our leadership in multicloud and function with the compute orchestration capabilities of

•Contrail ~~Enterprise Multicloud.~~

~~AppFormix~~Insights: ~~AppFormix~~Contrail Insights (formerly known as AppFormix) is an optimization and management software platform for public, private, and hybrid clouds. This intent-driven software manages automated operations, visibility, and reporting in cloud and NFV use cases. It features machine learning-based policy and smart monitors, application and software-defined infrastructure analytics, and alarms to provide comprehensive visualization, smart analytics, and the ability to manage automatic remediation for service assurance.

•Wired, Wireless, and WAN Assurance driven by Mist AI: We provide visibility all the way down to the individual client, application and session to optimize individual user experiences from client-to-cloud. With customizable service levels that span the LAN, WLAN, and WAN, our solutions enable our customers to set and measure key metrics and proactively assure optimal user experiences on an ongoing basis. In addition, automated workflows are combined with event correlation, predictive analytics, and proactive self-driving operations to simplify IT operations and minimize end-to-end network troubleshooting costs.

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•Marvis Virtual Network Assistant driven by Mist AI: Our Marvis Virtual Network Assistant identifies the root cause of issues across the information technology, or IT, domains and automatically resolves many issues proactively. It recommends actions for those connected systems outside of the Mist domain, while offering a real-time network health dashboard that reports issues from configuration to troubleshooting. Marvis has unique Natural Language Processing ("NLP") capabilities with a conversational interface so IT staff can get accurate answers to normal English language queries.

~~Significant Product Development Projects~~

•Netrounds: Netrounds is a programmable, software-based active test and ~~Solutions~~

~~In 2018, we continued to execute on our product~~service assurance platform suitable for fixed and ~~solutions strategy and announced several new innovations that we expect to bring to market over~~mobile networks for the next few quarters, including the industry's first 400-gig optimized routing platform; a new high-performance MX Series 5G Universal Routing Platform with new programmable silicon; and our multi-cloud orchestration and telemetry platform, including Contrail Edge Cloud and Contrail Enterprise Multicloud, each of which, we believe, will help strengthen our position across our core markets.

~~We also announced new initiatives under an existing partnership with Nutanix, which we expect will help strengthen our~~entire service lifecycle. With its unique ability to ~~capitalize on multicloud~~actively test and monitor networks directly within software-defined virtual services, Netrounds acts as the missing link between services and networks, providing assurance about the quality of service experience from a customer's perspective, with ~~our Contrail Enterprise Multicloud integration with Nutanix’s application programming interface, or APIs providing enhanced network visibility. Further, we entered into~~insight to where a ~~new partnership with Ericsson to accelerate 5G initiatives by leveraging each company’s complementary portfolios to drive our competitive advantage in the marketplace.~~problem originated.

Research and Development

We have assembled a team of skilled engineers with extensive experience in the fields of high-end computing, network system design, ASIC design, security, routing protocols, software applications and platforms, and embedded operating systems. As of December 31, ~~2018,~~2020, we employed ~~3,692~~4,044 people in our worldwide research and development, or R&D, organization.

We believe that strong product development capabilities are essential to our strategy of enhancing our core technology, developing additional applications, integrating that technology, and maintaining the competitiveness and innovation of our product and service offerings. In our products, we are leveraging our software, ASIC and systems technology, developing additional network interfaces targeted to our customers' applications, and continuing to develop technology to support the build-out of secure high-performance networks and cloud environments. We continue to expand the functionality of our products to improve performance, reliability and scalability, and to provide an enhanced user interface.

Our R&D process is driven by our corporate strategy and the availability of new technology, market demand, and customer feedback. We have invested significant time and resources in creating a structured process for all product development projects. Following an assessment of market demand, our R&D team develops a full set of comprehensive functional product specifications based on inputs from the product management and sales organizations. This process is designed to provide a framework for defining and addressing the steps, tasks, and activities required to bring product concepts and development projects to market.

Sales and Marketing

As of December 31, ~~2018,~~2020, we employed ~~2,425~~2,880 people in our worldwide sales and marketing organization. These sales and marketing employees operate in different locations around the world in support of our customers.

Our sales organization, with its structure of sales professionals, business development teams, systems engineers, marketing teams, channel teams, and an operational infrastructure team, ~~are generally distributed between~~is based on both vertical ~~markets. Within each team, sales team members serve the following three~~markets and geographic regions: (i) Americas (including United States, Canada, Mexico, Caribbean and Central and South America), (ii) EMEA, and (iii) APAC. Within each region, there are regional and country teams, as well as vertical market focused teams, to ensure we operate close to our customers.regions.

Our sales teams operate in their respective regions and generally either engage customers directly or manage customer opportunities through our distribution and reseller relationships as described below.

We sell to a number of Cloud and Service Provider customers directly. Otherwise, we sell to all of our key customer verticals primarily through distributors and resellers.

In 2019, we transitioned our sales organization to better align our sales strategy to each of our customer verticals. We believe the alignment of our sales leadership and product management teams across our customer verticals will position us for improved sales force productivity in late 2019 and position Juniper to better capitalize on our end market opportunities in the long-term.

Direct Sales Structure

The terms and conditions of direct sales arrangements are governed either by customer purchase orders ~~and~~along with acknowledgment of our standard order ~~acknowledgment~~ terms, ~~for those orders~~ or by direct master purchase ~~contracts.~~agreements. The direct ~~contracts~~master purchase agreements with these customers set forth only general terms of sale and generally do not require customers to purchase specified quantities of our products. We directly receive and process customer purchase orders.

Channel Sales Structure

A critical part of our sales and marketing efforts are our channel partners through which we conduct the majority of our sales.

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We utilize various channel partners, including, but not limited to the following:

•A global network of strategic distributor relationships, as well as region-specific or country-specific distributors who in turn sell to local VARs who sell to end-user customers. Our distribution channel partners resell routing, switching, and security products, software and services, which are purchased by all of our key customer verticals. These distributors tend to focus on particular regions or ~~countries within regions.~~countries. For example, we have substantial distribution relationships with Ingram Micro in the Americas and Hitachi in Japan. Our agreements with these distributors are generally non-exclusive, limited by region, and provide product and service discounts and other ordinary terms of sale. These agreements do not require our distributors to purchase specified quantities of our products or services. Further, most of our distributors sell our competitors' products and services, and some sell their own competing products and services.

•VARs and ~~Direct~~direct value-added resellers, including our strategic worldwide alliance partners referenced below, resell our products to end-users around the world. These channel partners either buy our products and services through distributors, or directly from us, and have expertise in designing, selling, implementing, and supporting complex networking solutions in their respective markets. Our agreements with these channel partners are generally non-exclusive, limited by region, and provide product and service discounts and other ordinary terms of sale. These agreements do not require these channel partners to purchase specified quantities of our products or services. Increasingly, our Cloud and Service Provider customers also resell our products or services to their customers or purchase our products or services for the purpose of providing managed or cloud-based services to their customers.

•Strategic worldwide reseller relationships with established Juniper alliances, comprised of ~~Dimension Data Holdings, or Dimension Data;~~Nippon Telegraph and Telephone Corporation; Ericsson Telecom A.B., or Ericsson; International Business Machines, or IBM; NEC Corporation; Fujitsu; and ~~NEC Corporation.~~Atos. These companies each offer services and products that complement our own product and service offerings and act as a reseller, and in some instances as an integration partner for our products. Our arrangements with these partners allow them to resell our products and services on a non-exclusive and generally global basis, provide for product and service discounts, and specify other general terms of sale. These agreements do not require these partners to purchase specified quantities of our products or services.

Manufacturing and Operations

As of December 31, ~~2018,~~2020, we employed 340 people in worldwide manufacturing and operations who manage our supply chain including relationships with our contract manufacturers, original design manufacturers, component suppliers, warehousing and logistics service providers.

Our manufacturing is primarily conducted through contract manufacturers and original design manufacturers in ~~the United States, or U.S.,~~ China, Malaysia, Mexico, and Taiwan. As of December 31, ~~2018,~~2020, we utilized Celestica Incorporated, Flextronics International Ltd., Accton Technology Corporation, and Alpha Networks Inc. for the majority of our manufacturing activity. Our contract manufacturers and original design manufacturers are responsible for all phases of manufacturing from prototypes to full production including activities such as material procurement, surface mount assembly, final assembly, test, control, shipment to our customers, and repairs. Together with our contract manufacturers and original design manufacturers, we design, specify, and monitor the tests that are required to ensure that our products meet internal and external quality standards. We believe that these arrangements provide us with the following benefits:

•We can quickly ramp up and deliver products to customers with turnkey manufacturing;

•We gain economies of scale by leveraging our buying power with our contract manufacturers and original design manufacturers when we manufacture large quantities of products;

•We operate with a minimum amount of dedicated space and employees for manufacturing operations; and

•We can reduce our costs by reducing what would normally be fixed overhead expenses.

Our contract manufacturers and original design manufacturers build our products based on our rolling product demand forecasts. Each contract manufacturer procures the components necessary to assemble the products in our forecast and tests the products according to agreed-upon specifications. Products are then shipped to our distributors, ~~VARs,~~resellers, or ~~end-users.~~end-customers. Generally, we do not own the components. Title to the finished goods is generally transferred from the contract manufacturers to us when the products leave the

contract manufacturer's or original design manufacturer's location. Customers take title to the

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products upon delivery at a specified destination. If the product or components remain unused or the products remain unsold for a specified period, we may incur carrying charges or charges for excess or obsolete materials.

Our contracts with our contract manufacturers and original design manufacturers set forth a framework within which the contract manufacturer and original design manufacturer, as applicable, may accept purchase orders from us. These contracts do not represent long-term commitments.

We also purchase and hold inventory for strategic reasons and to mitigate the risk of shortages of certain critical components; the majority of this inventory is production components. As a result, we may incur additional holding costs and obsolescence charges, particularly resulting from uncertainties in future product demand.

Some of our custom components, such as ASICs, are manufactured primarily by sole or limited sources, each of which is responsible for all aspects of production using our proprietary designs. To ensure the security and integrity of Juniper products during manufacture, assembly and distribution, we have implemented a supply chain risk management framework as part of our overall Brand Integrity Management System. This framework encompasses all aspects of the supply chain as well as enhanced elements specific to security issues applicable to Juniper products and our customers.

By working collaboratively with our suppliers and as members of coalitions such as the Responsible Business Alliance, Responsible Minerals Initiative, and the CDP, formerly the Carbon Disclosure Project, Supply Chain program, we endeavor to promote socially and environmentally responsible business practices beyond our company and throughout our worldwide supply chain. To this end, we have adopted a business partner code of conduct and promote compliance with such code of conduct to our suppliers. Our business partner code of conduct expresses support for and is aligned with the Ten Principles of the United Nations Global Compact and the Responsible Business Alliance Code of Conduct. The Responsible Business Alliance, a coalition of electronics, retail, auto and toy companies, provides guidelines and resources to drive performance and compliance with critical corporate social responsibility policies. Its goals are to promote ethical business practices, to ensure that working conditions in the electronic industry supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible. By using standard audit and assessment protocols and tools, we measure and monitor manufacturing partners’ and direct material suppliers’ compliance to the codes of conduct, including but not limited to: onsite audits; risk assessments; CDP climate change and water requests; and conflict minerals surveys. ~~CDP is a global standardized mechanism by which companies can report their environmental performance on climate change and water and forest programs to institutional investors and customers.~~ Our Corporate Citizenship and Sustainability Report, which details our supply chain efforts, and Business Partner Code of Conduct are available on our website.

Backlog

Our sales are made primarily pursuant to purchase orders under ~~framework~~master sales agreements either with our distributors, resellers, or end-customers. At any given time, we have backlog orders for products that have not shipped. Because customers may cancel purchase orders or change delivery schedules without significant penalty, we believe that our backlog at any given date may not be a reliable indicator of future operating results. As of December 31, ~~2018~~2020 and December 31, ~~2017,~~2019, our total product backlog was approximately ~~$344.3~~$419.6 million and ~~$400.7~~$341.1 million,^(*), respectively. Our product backlog consists of confirmed orders for products scheduled to be shipped to our distributors, resellers, or end-customers, generally within the next six months. Backlog excludes certain future revenue adjustments for items such as product revenue deferrals, sales return reserves, service revenue allocations, and early payment discounts.

^(*)

Prior to January 1, 2018, our product backlog consisted of confirmed orders for products scheduled to be shipped to customers, generally within the next six months, and excluded orders from distributors as we recognized product revenue on sales made through distributors upon sell-through to end-users. Backlog also excluded certain future revenue adjustments for items such as product revenue deferrals, rebates, stock rotation reserves, sales return reserves, service revenue allocations, and early payment discounts.

Seasonality

We, as do many companies in our industry, experience seasonal fluctuations in customer spending patterns. Historically, we have experienced stronger customer demand in the fourth quarter and weaker demand in the first ~~quarter.~~quarter of the fiscal year. This historical pattern should not be considered a reliable indicator of our future net revenues or financial performance.

Competition

We compete in the network infrastructure markets. These markets are characterized by rapid change, converging technologies, and a migration to solutions that combine high performance networking with cloud technologies. In the network infrastructure business, Cisco Systems, Inc., or Cisco, has historically been the dominant player. However, our principal competitors also include Arista Networks, Inc.~~, or Arista;~~; Dell ~~Inc., or Dell;~~Technologies; Hewlett Packard Enterprise Co., or HPE; Huawei Technologies Co., Ltd., or Huawei; and Nokia Corporation, or Nokia.

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Many of our current and potential competitors, such as Cisco, Nokia, HPE, and Huawei, among others, have broader portfolios which enable them to bundle their networking products with other networking and information technology products in a manner that may discourage customers from purchasing our products. Many of our current and potential competitors have greater name recognition, marketing budgets, and more extensive customer bases that they may leverage to compete more effectively. Increased competition could result in price reductions, fewer customer orders, reduced gross margins, and loss of market share, negatively affecting our operating results.

In addition, there are a number of other competitors in the security network infrastructure space, including Palo Alto Networks, Inc.~~, or Palo Alto Networks;~~; Check Point Software Technologies, Ltd.~~, or Check Point;~~; F5 Networks, Inc.~~, or F5 Networks;~~; and Fortinet, Inc.~~, or Fortinet;~~; among others, who tend to be focused specifically on security solutions and, therefore, may be considered specialized compared to our broader product line.

We expect that over time, large companies with significant resources, technical expertise, market experience, customer relationships, and broad product lines, such as Cisco, Nokia, and Huawei, will introduce new products designed to compete more effectively in the market. There are also several other companies that aim to build products with greater capabilities to compete with our products. Further, there has been significant consolidation in the networking industry, with smaller companies being acquired by larger, established suppliers of network infrastructure products. We believe this trend is likely to continue which may increase the competitive pressure faced by us due to their increased size and breadth of their product portfolios.

In addition to established competitors, a number of public and private companies have announced plans for new products to address the same needs that our products address. We believe that our ability to compete depends upon our ability to demonstrate that our products are superior and cost effective in meeting the needs of our current and potential customers.

As a result, we expect to face increased competition in the future from larger companies with significantly more resources than we have and also from emerging companies that are developing new technologies. Although we believe that our technology and the purpose-built features of our products make them unique and will enable us to compete effectively with these companies, there can be no assurance that new products, enhancements or business strategies will achieve widespread market acceptance.

Material Government Regulations

Our business activities are worldwide and subject us to various federal, state, local, and foreign laws in the countries in which we operate, and our products and services are subject to laws and regulations affecting the sale of our products. To date, costs and accruals incurred to comply with these governmental regulations have not been material to our capital expenditures, results of operations, and competitive position. Although there is no assurance that existing or future governmental laws and regulations applicable to our operations, products or services will not have a material adverse effect on our capital expenditures, results of operations, and competitive position, we do not currently anticipate material expenditures for government regulations. Nonetheless, as discussed below, we believe that environmental and global trade regulations could potentially have a material impact our business.

Environment

We are committed to maintaining compliance with all environmental laws applicable to our operations, products, and services and to reducing our environmental impact across our business and supply chain. Our operations and many of our products are subject to various federal, state, local, and foreign regulations that have been adopted with respect to the environment, such as the Waste Electrical and Electronic Equipment, ~~or WEEE,~~ Directive; Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic ~~Equipment, or RoHS; and~~Equipment; Registration, Evaluation, Authorization, and Restriction of ~~Chemicals, or REACH,~~Chemicals; and Substances of Concern In Products, regulations adopted by the European Union, or EU, and China. To date, compliance with federal, state, local, and foreign laws enacted for the protection of the environment has had no material effect on our capital expenditures, earnings, or competitive position. However, see the risk factor entitled "Regulation of our industry in general and the telecommunications industry in particular could harm our operating results and future prospects" in the section entitled ~~Risk Factors~~ ~~in Item 1A of Part I of this Report for additional information concerning regulatory compliance.~~

Juniper’s greatest impact on the environment is through our products and services. Juniper has an environmental program, based on our new product introduction process that supports a circular economy model for environmental sustainability and focuses on energy efficiency, materials innovation, and recyclability. We consider opportunities to minimize resource impacts and improve efficiencies over a product’s life cycle, from the materials we use and a product’s energy footprint, to packaging and end-of-life, or EOL, activities such as reuse, refurbishment, and recycling.

~~We are committed to~~ For example, the ~~environment through our efforts to improve the energy efficiency per gigabit~~Juniper Certified Pre-Owned program offers a broad range of ~~throughput of key elements in our~~refurbished high-performance network ~~product offerings. Our products are independently tested by third parties for energy efficiency compliance. As an example, our MX10008~~solutions from Juniper’s current line and ~~MX10016 products redefine per-slot economics, enabling customers to do more~~end-of-production hardware portfolios with ~~less while simplifying network design~~available Juniper-backed warranty and ~~reducing operating expenses, by consuming 0.6W per Gigabit of throughput. Additionally, we have redesigned packaging in ways that optimizes costs while minimizing resource impacts.~~support services.

We are also voluntarily participating in CDP climate change and water disclosures and encourage our direct material suppliers and manufacturing partners to do the same. Additionally, we are a member of the Responsible Business Alliance, or RBA, and have adopted and promote the adoption by our suppliers ~~of the practices of~~ the RBA Code of Conduct, as discussed above in the section entitled

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Manufacturing and Operations. We continue to invest in the infrastructure and systems required to execute on, monitor and drive environmental improvements in our global operations and within our supply chain.

Global Trade

As a global company, the import and export of our products and services are subject to laws and regulations including international treaties, U.S. export controls and sanctions laws, customs regulations, and local trade rules around the world. The scope, nature, and severity of such controls varies widely across different countries and may change frequently over time. Such laws, rules and regulations may delay the introduction of some of our products or impact our competitiveness through restricting our ability to do business in certain places or with certain entities and individuals, or by requiring us to comply with domestic preference programs, laws concerning transfer and disclosure of sensitive or controlled technology or source code, unique technical standards, localization mandates, and duplicative in-country testing and inspection requirements. In particular, the U.S. and other governments have imposed restrictions on the import and export of, among other things, certain telecommunications products and components, particularly those that contain or use encryption technology. Most of our products are telecommunications products and contain or use encryption technology and, consequently, are subject to restrictions. The consequences of any failure to comply with domestic and foreign trade regulations could limit our ability to conduct business globally. We continue to support open trade policies that recognize the importance of integrated cross-border supply chains that are expected to continue to contribute to the growth of the global economy and measures that standardize compliance for manufacturers to ensure that products comply with safety and security requirements.

For additional information concerning regulatory compliance and a discussion of the risks associated with governmental regulations that may materially impact us, please see the section entitled “Risk Factors” in Item 1A of Part I of this Report.

Intellectual Property

Our success and ability to compete are substantially dependent upon our internally developed technology and expertise, as well as our ability to obtain and protect necessary intellectual property rights. While we rely on patent, copyright, trade secret, and trademark law, as well as confidentiality agreements, to protect our technology, we also believe that factors such as the technological and creative skills of our personnel, new product developments, frequent product enhancements, and reliable product maintenance are essential to establishing and maintaining a technology leadership position. There can be no assurance that others will not develop technologies that are similar or superior to our technology.

Patents

As of December 31, 2020, we had over 4,300 patents worldwide and numerous patent applications are pending. Patents generally have a term of twenty years from filing. As our patent portfolio has been built over time, the remaining terms on the individual patents vary. We cannot be certain that patents will be issued on the patent applications that we have filed, that we will be able to obtain the necessary intellectual property rights, or that other parties will not contest our intellectual property rights.

Licenses

In addition, we integrate licensed third-party technology into certain of our products and, from time to time, we need to renegotiate these licenses or license additional technology from third parties to develop new products or product enhancements or to facilitate new business models. There can be no assurance that third-party licenses will be available or continue to be available to us on commercially reasonable terms or at all. Our inability to maintain or re-license any third-party licenses required in our products or our inability to obtain third-party licenses necessary to develop new products and product enhancements could require us to obtain substitute technology of lower quality or performance standards or at a greater cost, any of which could harm our business, financial condition, and results of operations.

Trademarks

JUNIPER NETWORKS, JUNIPER, the Juniper Networks logo, JUNOS, RUNNING JUNOS, CONTRAIL, and other trademarks are registered trademarks of Juniper Networks, Inc. and/or its affiliates in the United States and other countries. Other names may be trademarks of their respective owners.

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Human Capital Resources

We believe our success in delivering high-performance networks in the digital transformation era relies on our culture, values, and the creativity and commitment of our people. As of December 31, ~~2018,~~2020, we had ~~over 3,100 patents worldwide~~9,950 full-time employees, of whom approximately 46%, 41% and ~~numerous patent applications~~13% resided in the Americas, APAC, and EMEA, respectively. We invest in our people. We strive to maintain healthy, safe, and secure working conditions - a workplace where our employees are ~~pending. Patents generally have~~treated with respect and dignity. Our vision is to create an inclusive, diverse and authentic community that inspires collaboration, integrity, engagement, and innovation. We are striving to create a ~~term~~world-class employee experience – one that offers opportunity for personal and professional growth, and enable work-life balance that aligns with the core values embodied in The Juniper Way.

The Juniper Way

More than a set of ~~twenty years from filing.~~ shared values, the Juniper Way reflects the company’s commitment to inspire every Juniper employee to do their best work. This foundation is embodied in three values – Be Bold, Build Trust, and Deliver Excellence, along with a set of refined behaviors for each.

Inclusion and Diversity

As a company committed to innovation and representing diversity in a myriad of ways — including race, ethnicity, age, background, perspectives, tenure, work style, and sexual orientation — we believe that diversity is a competitive asset. At our ~~patent portfolio has been built over time,~~core, we believe excellence depends on seeking out diverse ideas and fostering a culture where all employees are actively engaged. Also, we are committed to improving inclusivity by being engaged and accountable at the ~~remaining terms~~highest level of leadership.

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We monitor our progress against our inclusion and diversity strategy of diversifying our talent base, creating an environment where all employees feel included and valued, and driving accountability across the organization. In 2020, we continued to make progress in our inclusion and diversity efforts, including higher female representation in the global leadership.

Employee Engagement

We use a framework called Talent Matters to encourage an open and interactive culture between employees and their manager, where individual needs are recognized and met, and company goals are supported. Our professional development approach includes reviewing and assessing our management teams as well as facilitating personal employee development and growth. For all employees, growth goals are tied to our corporate objectives and key results, to ensure that they are progressing and are supported by management teams. In early 2020, we launched a People Manager Network to create global consistency in how people managers lead teams and support employees, including specific focus on leading during the ~~individual patents vary. We cannot be certain that patents will be issued on~~COVID-19 pandemic. With this program, managers are empowered and provided with the ~~patent applications that we have filed, that we will be able~~training and resources to ~~obtain~~scale employee career growth and provide their teams with the necessary ~~intellectual property rights, or~~tools to facilitate that ~~other parties will not contest~~growth. Managers are encouraged to schedule Conversation Days with their direct reports to identify opportunities for the company to better support employees and set goals for professional and personal growth. 91% of the people managers participated in a People Manager Network experience in 2020.

To ensure our ~~intellectual property rights.~~

~~Employees~~

~~As of December 31, 2018,~~employees’ personal and professional growth, we had 9,283 full-time employees. We have not experienced any work stoppages, and we consider our relations with our employees to be good. Competition for qualified personnel in our industry is intense. We believe that our future success depends in part on our continued ability to hire, motivate, and retain qualified personnel. We believe that we have been successful in recruiting qualified employees, but there is no assurance that we will continue to ~~be successful~~develop training courses focused on building personal capabilities as well as skill development. Each year, Juniper employees also receive role-specific training, in addition to trainings, which includes topics, such as human rights, environmental performance, compliance with the ~~future.~~Juniper Worldwide Code of Business Conduct, engineering and other compliance and industry-specific subjects.

~~Our future performance depends significantly upon~~We consistently work to improve the ~~continued service of~~employee experience by addressing feedback collected through the annual Juniper Voice Survey and topic-specific surveys, including employee benefits and total rewards package and Juniper's response to the COVID-19 pandemic.

Information about our key technical, sales, and senior management personnel, none of whom are bound by an employment agreement requiring service for any defined period of time. The loss of one or more of our key employees could have a material adverse effect on our business, financial condition, and results of operations.

Executive Officers ~~of the Registrant~~

The following sets forth certain information regarding our executive officers as of the filing of this Report:

Name

Age

Position

Rami Rahim

4850

Chief Executive Officer and Director

Anand Athreya

5557

Executive Vice President, Chief Development Officer

~~Bikash Koley~~

~~Executive Vice President, Chief Technology Officer~~

Manoj Leelanivas

4951

Executive Vice President, Chief Product Officer

Brian Martin

5759

Senior Vice President, General Counsel and Secretary

Kenneth B. Miller

4849

Executive Vice President, Chief Financial Officer

~~Terrance F. Spidell~~Thomas A. Austin

5053

Vice President, Corporate Controller and Chief Accounting Officer

RAMI RAHIMjoined Juniper in January 1997 and became Chief Executive Officer of Juniper, and a member of the Board of Directors, in November 2014. From March 2014 until he became Chief Executive Officer, Mr. Rahim served as Executive Vice President and General Manager of Juniper Development and ~~Innovation, or JDI.~~Innovation. His responsibilities included driving strategy, development and business growth for routing, switching, security, silicon technology, and the Junos operating system. Previously, Mr. Rahim served Juniper in a number of roles, including Executive Vice President, Platform Systems Division, Senior Vice President and General Manager, Edge and Aggregation Business Unit, or EABU, and Vice President, Product Management for EABU. Prior to that, Mr. Rahim spent the majority of his time at Juniper in the development organization where he helped with the architecture, design and implementation of many Juniper core, edge, and carrier Ethernet products. Mr. Rahim holds a ~~Bachelor~~bachelor of ~~Science~~science degree in Electrical Engineering from the University of Toronto and a ~~Master~~master of ~~Science~~science degree in Electrical Engineering from Stanford University.

ANAND ATHREYAjoined Juniper in August 2004 and became Executive Vice President and Chief Development Officer in August 2017. In this role, he is responsible for Juniper's Engineering organization. Since joining Juniper, Mr. Athreya has held various leadership positions within Engineering, including most recently serving as Senior Vice President of Engineering from May 2014 through August 2017, and Corporate Vice President of Engineering from February 2011 through May 2014. Mr. Athreya joined Juniper from Procket Networks, a maker of routers and routing technology, where he served as Director of Software Engineering. Prior to that, he was Vice President of Engineering at Malibu Networks, a supplier of fixed wireless networking based broadband solutions, Assistant Vice President of Product Management and Strategy at Tiara Networks, a provider of broadband access systems, and held engineering roles at Novell, a software and services company. Mr. Athreya received his ~~Bachelor~~bachelor of science degree in Electrical Engineering from Bangalore University, a ~~master's~~master of science degree in

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Computer Science and Engineering from Osmania University, and an MBA from National University. He is also a graduate of the Advanced Management Program at Harvard Business School.

~~BIKASH KOLE~~Y joined Juniper in September 2017 as Executive Vice President, Chief Technology Officer. From January 2008 to August 2017, Mr. Koley worked at Google, Inc. ("Google"), a global technology company, where he served most recently as a Distinguished Engineer and the Head of Network Architecture, Engineering and Planning from November 2015 through August 2017. In this role, he helped to design, build and operate Google’s production network infrastructure. In addition, from May 2012 through October 2015 Mr. Koley served as a Principal Architect and Director, Network Architecture and Engineering at Google. Prior to Google, Mr. Koley was the CTO of Qstreams Networks, a company he co-founded. He also spent several years at Ciena Corporation, a network strategy and technology company, in various technical roles. Mr. Koley received his Bachelor of Technology degree in Electronics and Communications Engineering from the Indian Institute of Technology, Kharagpur, India and M.S. and Ph.D. degrees in Electrical and Computer Engineering from the University of Maryland at College Park.

MANOJ LEELANIVAS joined Juniper in March 2018 as Executive Vice President, Chief Product Officer. In this role, Mr. Leelanivas leads all aspects of product strategy and direction for Juniper and helps to align products with our go-to-market strategies and execution, including marketing operations. From June 2013 to September 2017, Mr. Leelanivas was President and ~~CEO~~Chief Executive Officer of Cyphort, an innovator in scale-out security analytics technology, that was acquired by Juniper in September 2017. From March 1999 to May 2013, he held several key product management positions at Juniper, including Executive Vice President of Advanced Technologies Sales for data center. Mr. Leelanivas holds a ~~Bachelor~~bachelor of ~~Technology~~technology in Computer Engineering from the National Institute of Technology Karnataka, ~~an M.S.~~a master of science degree in Computer Science from the University of Kentucky, and is a graduate of the Stanford University Executive Business Program.

BRIAN MARTIN joined Juniper in October 2015 as Senior Vice President, General Counsel and Secretary. InFrom January 2018 to October 2018, Mr. Martin also assumed the role of interim Chief Human Resources Officer ("CHRO") ~~until October 2018,~~ while the Company continued its search for a full-time CHRO. From April 2007 to September 2015, Mr. Martin served as Executive Vice President, General Counsel and Corporate Secretary of KLA-Tencor Corporation ("KLA-Tencor"), a provider of process control and yield management solutions. Prior to joining KLA-Tencor, Mr. Martin spent ten years in senior legal positions at Sun Microsystems, Inc. ("Sun"), a manufacturer of computer workstations, servers, software, and services for networks, most recently as Vice President, Corporate Law Group, responsible for legal requirements associated with Sun’s corporate securities, mergers, acquisitions and alliances, corporate governance and Sarbanes-Oxley compliance, and litigation management. Prior to joining Sun, Mr. Martin was in private practice where he had extensive experience in antitrust and intellectual property litigation. From August 2020 to the present, he has served as an adjunct professor at the Southern University Law Center. Mr. Martin holds a ~~bachelor’s~~bachelor of science degree in ~~economics~~Economics from the University of Rochester and a J.D. from the State University of New York at Buffalo Law School.

KENNETH B. MILLER joined Juniper in June 1999 and has served as our Executive Vice President, Chief Financial Officer since February 2016. Mr. Miller ~~will assume the role of Interim~~served as our interim Chief Accounting Officer while the Company ~~continues~~continued to search for a full-time Chief Accounting Officer ~~following Mr. Spidell’s resignation, as described in Mr. Spidell’s biography below.~~from February 2019 to September 2019. From April 2014 to February 2016, Mr. Miller served as our Senior Vice President, Finance, where he was responsible for the finance organization across the Company, as well as our treasury, tax and global business services functions. Previously, Mr. Miller served as our Vice President, Go-To-Market ~~Finance;~~Finance, Vice President, Platform Systems ~~Division;~~Division, Vice President, SLT Business Group Controller and in other positions in our Finance and Accounting organizations. Mr. Miller holds a ~~Bachelor~~bachelor of ~~Science~~science degree in Accounting from Santa Clara University.

~~TERRANCE F. SPIDELL~~THOMAS A. AUSTIN joined Juniper in ~~August 2011~~September 2019 as ~~Vice President, Assistant Corporate Controller, and has served as~~our Vice President, Corporate Controller ~~since November 2012. In 2013, Mr. Spidell assumed the position of our~~and Chief Accounting Officer. ~~Before joining Juniper,~~From September 2016 until July 2019, Mr. ~~Spidell was~~Austin served as the Vice President of Corporate Finance at ~~VeriSign,~~Dell Technologies, Inc., a ~~provider of Internet infrastructure services,~~multinational information technology company. From September 2008 until its acquisition by Dell Technologies in September 2016, Mr. Austin served as the Vice President of Corporate ~~Controller, from June 2009~~Finance at EMC Corporation, a multinational information technology company. From January 2001 through July ~~2011~~2008, Mr. Austin served as the Chief Financial Officer and ~~as Vice President, Accounting Operations, from March 2008 through June 2009.~~Treasurer at Arbor Networks, Inc., a network security company. Prior to ~~VeriSign,~~joining Arbor Networks, Mr. ~~Spidell held various positions, most recently Senior Manager,~~Austin served as a controller for several companies. He began his career in public accounting at PricewaterhouseCoopers, a registered public accounting firm. Mr. ~~Spidell is a Certified Public Accountant and~~Austin holds a ~~Bachelor~~bachelor of ~~Business Administration degrees~~science degree in Public Accountancy from Providence College and an MBA from Babson College. Mr. Austin is also an adjunct professor of Finance ~~and Accounting, from Boise State University.~~at Providence College School of Business.

Mr. Spidell’s full-time employment with Juniper will end on the business day immediately following the date that Juniper’s Annual Report on Form 10-K for the fiscal year 2018 is filed with the SEC.

Available Information

We file our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K ~~pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended,~~ with the SEC electronically. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including Juniper Networks that file electronically with the SEC. The address of that website is https://www.sec.gov.

You may obtain a free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports on our website at http://www.juniper.net or by sending an e-mail message to Juniper Networks Investor Relations at investorrelations@juniper.net. Such reports and other information are available on our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Our Corporate Governance Standards, the charters of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, as

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well as our Worldwide Code of Business Conduct are also available on our website. Information on our website is not, and will not be deemed, a part of this report or incorporated into any other filings the Company makes with the SEC.

Investors and others should note that we announce material financial and operational information to our investors using our Investor Relations website (http://investor.juniper.net), press releases, SEC filings and public conference calls and webcasts. We also use the Twitter accounts @JuniperNetworks and the Company’s blogs as a means of disclosing information about the Company and for complying with our disclosure obligations under Regulation FD. The social media channels that we use as a means of disclosing information described above may be updated from time to time as listed on our Investor Relations website.

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Item 1A. Risk Factors

Factors That May Affect Future Results

~~Investments~~We operate in ~~our securities involve significant risks. Even small changes in investor expectations for our future growth~~rapidly changing economic and ~~earnings, whether as a result~~technological environments that present numerous risks, many of ~~actual~~which are driven by factors that we cannot control or ~~rumored financial or operating results, changes~~predict. Some of these risks are highlighted in the ~~mix~~following discussion, and in Management’s Discussion and Analysis of ~~the products~~Financial Condition and ~~services sold, acquisitions, industry changes, or other factors, could trigger,~~Results of Operations and ~~have triggered in the past, significant fluctuations in the market price of our common stock.~~Quantitative and Qualitative Disclosures About Market Risk. Investors in our securities should carefully consider all ~~of the~~ relevant ~~factors~~risks disclosed by us ~~including, but~~before investing in our securities. The occurrence of any of these risks or additional risks and uncertainties not ~~limited~~presently known to ~~the following factors,~~us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, operating results, and stock price.

RISKS RELATED TO OUR BUSINESS STRATEGY AND INDUSTRY

The COVID-19 pandemic has significantly affected how we and our customers are operating our businesses, and the duration and extent to which this will impact our future results of operations and overall financial performance remains uncertain. The COVID-19 pandemic has, and may continue to, negatively affect our operations, including as a result of external factors beyond our control such as restrictions on the physical movement of our employees, contract manufacturers, partners, and customers to limit the spread of COVID-19 and the availability and acceptance of a COVID-19 vaccine. Since March 2020, the majority of our global workforce has been working remotely resulting from shelter-in-place requirements and travel restrictions. We continue to follow the guidance of local and national governments, including monitoring the health of employees who have returned to our offices and limiting the gathering size of employee groups in indoor spaces. If the COVID-19 pandemic has a substantial impact on our employees, partners or customers health, attendance or productivity, our results of operations and overall financial performance may be adversely impacted.

Moreover, the conditions caused by the pandemic may affect the overall demand environment for our products and services and could adversely affect our customers’ ability or willingness to purchase our products or services or to make payments on existing contracts with us, delay prospective customers’ purchasing decisions, delay the provisioning of our offerings, lengthen payment terms, or affect attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance. Further, the pandemic has and could continue to adversely affect our ability to provide or deliver products and on-site services to our customers. For example, during fiscal 2020, the COVID-19 pandemic caused us to experience supply constraints due to both constrained manufacturing capacity as well as shortages of component parts as our component vendors also faced manufacturing challenges. These challenges resulted in extended lead-times to our customers and increased logistics costs, which negatively impacted our ability to recognize revenue and decreased our gross margins for these periods. While our manufacturing capacity continues to improve, we expect several of our component suppliers will remain challenged in the near term. Further, the spread of COVID-19 has and is likely to continue to affect the shipment of goods globally.

The duration and extent of the impact from the COVID-19 pandemic on our business depends on future developments that cannot be accurately forecasted at this time, such as the transmission rate and geographic spread of the disease, the extent and effectiveness of containment actions, the world-wide distribution and acceptance of vaccines, and the impact of these and other factors on our employees, customers, partners, and vendors. If we are not able to respond to and manage the impact of such events effectively and if the macroeconomic conditions of the general economy or the industries in which we operate do not improve, or worsen from present levels, our business, operating results, financial condition and cash flows could continue to be adversely affected.

Our quarterly results are unpredictable and subject to substantial fluctuations; as a result, we may fail to meet the expectations of securities analysts and ~~investors, which could adversely affect the trading price of our common stock.~~

investors. Our revenues and operating results may vary significantly from quarter-to-quarter due to a number of factors, many of which are outside of our ~~control~~control. If our quarterly financial results or our predictions of future financial results fail to meet the expectations of securities analysts and ~~any~~investors, the trading price of ~~which~~our securities could be negatively affected. Our operating results for prior periods may ~~cause~~not be effective predictors of our ~~stock price to fluctuate.~~future performance.

~~The factors~~Factors associated with our industry, the operation of our business, and the markets for our products and services that may cause our quarterly results to ~~vary quarter by quarter and be unpredictable~~fluctuate, include but are not limited to:

•unpredictable ordering patterns and limited ~~or reduced~~ visibility into our customers’ spending plans and associated revenue;

•changes in our customer ~~mix;~~

~~changes in the demand for our products and services;~~

~~changes in~~mix, the mix of products and services ~~sold;~~

~~changes in~~sold, and the ~~mix of~~ geographies in which our products and services are sold;

•changes in the demand for our products and services, including seasonal fluctuations in customer spending;

•changing market and economic conditions;

~~current and potential customer, partner and supplier consolidation and concentration;~~

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•price and product competition;

~~long sales, qualification and implementation cycles;~~•ineffective legal protection of our intellectual property rights in certain countries;

~~success in new and evolving markets and emerging technologies;~~

•how well we execute on our strategy and ~~operating plans and the impact of changes in our~~ business ~~model that could result in significant restructuring charges;~~model;

~~ability of our customers, channel partners, contract manufacturers and suppliers to purchase, market, sell, manufacture or supply our products (or components of our products) and services;~~

•financial stability of our customers, including the solvency of private sector customers, ~~and~~ which may be impacted by the COVID-19 pandemic;

•statutory authority for government customers to purchase goods and services;

~~our ability to achieve targeted cost reductions;~~

•executive orders, tariffs, changes in ~~tax~~ laws or regulations and accounting rules, or interpretations thereof;

~~changes in the amount and frequency of share repurchases or dividends;~~

•regional economic and political ~~conditions; and~~conditions which may be aggravated by unanticipated global events;

~~seasonality.~~

~~For example, we, and many companies~~•disruptions in our ~~industry, experience adverse seasonal fluctuations in customer spending, particularly in~~business operations or target markets caused by, among other things, terrorism or other intentional acts, outbreaks of disease, such as the first quarter. In addition, while we may have backlog orders for products that have not shipped, we believe that our backlog may not be a reliable indicator of future operating results for a number of reasons, including project delays, changes in project scope and the fact that our customers may cancel purchase ordersCOVID-19 pandemic, or ~~change delivery schedules without significant penalty. Furthermore, market trends, competitive pressures, commoditization of products, rebates and discounting, increased component~~earthquakes, floods, or ~~logistics costs, issues with product quality, regulatory impacts~~other natural disasters; and other factors may result in reductions in revenue or pressure on gross margins in a given period, which may necessitate adjustments to our operations. Such adjustments may be difficult or impossible to execute in the short or medium term.unanticipated extraordinary externalities.

~~As a result of the factors described above, as well as other variables affecting our operating results, we~~We believe that quarter-to-quarter comparisons of operating results are not necessarily a good indication of what our future performance will be. In ~~the past,~~some prior periods, our operating results have been below our guidance, our long-term financial model or the expectations of securities analysts or ~~investors, and this~~investors. This may happen ~~in the future, in which case~~again, and the price of our common stock may ~~decline and has declined in~~decline. In addition, our failure to pay quarterly dividends to our stockholders or the ~~past. Such~~failure to meet our commitments to return capital to our stockholders could have a ~~decline could also occur, and has occurred in the past, even when we have met~~material adverse effect on our ~~publicly stated revenues and/or earnings guidance.~~stock price.

We expect our gross margins and operating margins to vary over time.

~~We expect our~~Our product and service gross margins are expected to vary, ~~both in the near-term and in the long-term,~~ and may be adversely affected in the future by numerous factors, ~~some of which have occurred and may occur in the future,~~ including, but not limited to, customer, vertical, product and geographic mix shifts, an increase or decrease in our software sales or services we provide, increased price competition in one or more of the markets in which we compete, ~~changes in the actions of our competitors or their pricing strategies, which may be difficult to predict and respond to,~~ modifications to our pricing strategy ~~in order~~ to gain footprint in ~~certain~~ markets or with ~~certain~~ customers, currency fluctuations that impact our costs or the cost of our products and services to our customers, increases in material, labor, logistics, warranty costs, or inventory carrying costs, excess product component or obsolescence charges from our contract manufacturers, issues with manufacturing or component availability, issues relating to the distribution of our products and provision of our services, quality or efficiencies, increased costs due to changes in component pricing or charges incurred due to inaccurately forecasting product demand, warranty related issues, the impact of tariffs, or our introduction of new products and enhancements, or entry into new markets with different pricing and cost structures. For example, in fiscal year 2018, our margins decreased as compared to fiscal year 2017, primarily due to lower net revenues and product mix. In fiscal year 2017, our margins decreased as compared to fiscal year 2016, primarily due to lower product net revenues and product mix, resulting from the year-over-year decline in routing revenues, our customers' architectural shifts, and higher costs of certain memory components. In fiscal year 2016, our margins decreased compared to fiscal year 2015, primarily due to elevated pricing pressure and product mix. Failure to sustain or improve our gross margins reduces our profitability and may have a material adverse effect on our business and stock price.

~~Further, while we will continue to remain diligent in our long-term financial objective to increase revenue and operating margins and manage our operating expenses as a percentage of revenue.~~ We expect that our margins will vary with our ability to achieve these goals. We can provide no assurance that we will be able to achieve all or any of the goals of these plans or meet our announced expectations, in whole or in part, or that our plans will have the intended effect of improving our margins on the expected timeline, or at all.

~~A limited number of our customers comprise~~derive a material portion of our revenues ~~and any changes in the way they purchase products and services~~ from ~~us could affect our business. In addition, there is an ongoing trend toward consolidation in the industry in which~~a limited number of our customers, and ~~partners operate. Any decrease in revenues from~~ our customers ~~or partners could have an adverse effect on our net revenues and operating results.~~

compete in industries that continue to experience consolidation. A material portion of our net revenues, across each customer vertical, depends on sales to a limited number of customers. If such customers ~~and distribution partners. Changes in the~~change their business requirements or focus, vendor selection, project prioritization, ~~financial prospects, capital resources, and expenditures,~~ or purchasing behavior, ~~(including product mix purchased~~ or ~~delays in deployment) of our key customers could significantly decrease our sales~~are parties to ~~such customers~~consolidation transactions, they may delay, suspend, reduce or ~~could lead to delays or cancellations of planned~~cancel their purchases of our products or services and our business, financial condition, and results of operations may be adversely affected.

If we are unable to compete effectively, our business and financial results could be harmed. The markets that we serve are rapidly evolving and highly competitive and include a number of well-established companies. We also compete with other public and private companies that are developing competing technologies to our products. In addition, actual or speculated consolidation among competitors, or the acquisition by, or of, our partners and/or resellers by competitors can increase the competitive pressures faced by us as customers may delay spending decisions or not purchase our products at all. Our partners and resellers generally sell or resell competing products on a non-exclusive basis and consolidation could delay spending or require us to increase discounts to compete, which ~~increases~~could also adversely affect our business. Several of our competitors have substantially greater resources and can offer a wider range of products and services for the ~~risk~~overall network equipment market than we do. Other competitors have become more integrated, including through consolidation and vertical integration, and offer a broader range of ~~quarterly fluctuations~~products and services, which could make their solutions more attractive to our customers. Many of our competitors also sell networking products as bundled solutions with other IT products. If we are unable to compete effectively against existing or future competitors, we could experience a loss in market share and a reduction in revenues and/or be required to reduce prices, which could reduce our ~~revenues~~gross margins and ~~operating results. Any of these factors could~~materially and adversely affect our business, financial condition, and results of operations.

In addition, in recent years, there has been movement towards consolidation in the telecommunications industry (for example, CenturyLink, Inc.'s acquisition of Level 3 Communications, Inc., Vodafone India’s acquisition of Idea Cellular Ltd. and T-Mobile US, Inc.'s proposed acquisition of Sprint Corp.) and that consolidation trend has continued. Certain telecommunications companies have also moved towards vertical consolidation through acquisitions of media and content companies, such as Verizon’s acquisition of Yahoo, AT&T’s acquisition of Time Warner, and Comcast's acquisition of Sky. If our customers or partners are parties to consolidation transactions they may delay, suspend or indefinitely reduce or cancel their purchases of our products or other direct or indirect unforeseen consequences could harm our business, financial condition, and results of operations.

Fluctuating economic conditions make it difficult to predict revenues and gross margin for a particular period and a shortfall in revenues or increase in costs of production may harm our operating results.

Our revenues and gross margin depend significantly on general economic conditions and the demand for products in the markets in which we compete. Economic weakness or uncertainty, customer financial difficulties, and constrained spending on network expansion and enterprise infrastructure have in the past resulted in, and may in the future result in, decreased revenues and earnings. Such factors could make it difficult to accurately forecast revenues and operating results and could negatively affect our ability to provide accurate forecasts to our contract manufacturers, ~~and~~ manage our contract manufacturer relationships and other ~~expenses.~~expenses and to make decisions about future investments. In addition, economic instability or uncertainty, ~~as well as~~ continued turmoil in the

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geopolitical environment in many parts of the world and other events beyond our control, such as the COVID-19 pandemic, have, and may continue to, put pressure on economic conditions, which has led and could lead, to reduced demand for our products, to delays or reductions in network expansions or infrastructure projects, and/or higher costs of production. More generally-speaking, economic weakness may also lead to longer collection cycles for payments due from our customers, an increase in customer bad debt, restructuring initiatives and associated expenses, and impairment of investments. Furthermore, instability in the global markets may adversely impact the ability of our customers to adequately fund their expected expenditures, which could

lead to delays or cancellations of planned purchases of our products or services. Our operating expenses are largely based on anticipated revenue trends and a high percentage of our expenses is, and will continue to be, fixed in the short and medium term. Uncertainty about future economic conditions also makes it difficult to forecast operating results and to make decisions about future investments. Future or continued economic weakness, failure of our customers and markets to recover from such weakness, customer financial difficulties, increases in costs of production, and reductions in spending on network maintenance and expansion could result in price concessions in certain markets or have a material adverse effect on demand for our products and consequently on our business, financial condition, and results of operations.

Our success depends upon our ability to effectively plan and manage our resources and restructure our ~~business through rapidly fluctuating economic and market conditions, and such actions may have an adverse effect on our financial and operating results.~~

business. Our ability to successfully offer our products and services in a rapidly evolving market requires an effective planning, forecasting, and management process to enable us to effectively scale and adjust our business and business models in response to fluctuating market opportunities and conditions.

From time to time, we have increased investment in our business by ~~for example,~~ increasing headcount, acquiring companies, and increasing our investment in ~~R&D,~~research and development, sales and marketing, and other parts of our business. Conversely, in ~~2017, 2018,~~the last few years and ~~2019,~~in 2020, we have initiated restructuring plans to realign our workforce as a result of organizational and leadership changes ~~align our execution priorities, increase operational efficiencies, and to consolidate facilities~~ which resulted in restructuring charges in each of these years. Some of our expenses related to such efforts are fixed costs that cannot be rapidly or easily adjusted in response to fluctuations in our business or numbers of employees. Rapid changes in the size, alignment or organization of our workforce, including sales account coverage, could adversely affect our ability to develop and deliver products and services as planned or impair our ability to realize our current or future business and financial objectives.charges. Our ability to achieve the anticipated cost savings and other benefits from ~~our restructuring~~these initiatives ~~within the expected time frame~~ is subject to many estimates and assumptions, which are subject to ~~significant economic, competitive and other uncertainties, some of which are beyond~~uncertainties. If our ~~control. If these~~ estimates and assumptions are incorrect or if we are unsuccessful at implementing changes, or if other unforeseen events occur, our business and results of operations could be adversely affected.

~~We face intense competition that~~Integration of acquisitions or divestitures of businesses could ~~reduce our revenues and adversely affect~~disrupt our business and harm our financial ~~results.~~condition and stock price and equity issued as consideration for acquisitions may dilute the ownership of our stockholders. We have made, and may continue to make, acquisitions in order to enhance our business and invest significant resources to integrate the businesses we acquire. The success of each acquisition depends in part on our ability to realize the business opportunities and manage numerous risks, including, but not limited to: problems combining the purchased operations, technologies or products, unanticipated costs, higher operating expenses, liabilities, litigation, diversion of management's time and attention, adverse effects on existing business relationships with suppliers and customers, risks associated with entering markets in which we have no or limited prior experience, and where competitors in such markets have stronger market positions, initial dependence on unfamiliar supply chains, failure of our due diligence processes to identify significant problems, liabilities or other challenges of an acquired company or technology, and the potential loss of key employees, customers, distributors, vendors, and other business partners of the companies we acquire.

~~Competition is intense~~There can be no assurance that we will be able to successfully integrate any businesses, products, technologies, or personnel that we might acquire or that the transaction will advance our business strategy, and we may not realize anticipated revenues or other benefits associated with our acquisitions. In addition, we have divested, and may in the ~~markets~~future, divest businesses, product lines, or assets. These initiatives may also require significant separation activities that could result in the diversion of management’s time and attention, loss of employees, substantial separation costs, and accounting charges for asset impairments.

In connection with certain acquisitions, we ~~serve. The routing~~may agree to issue common stock, or assume equity awards, that dilute the ownership of our current stockholders, use a substantial portion of our cash resources, assume liabilities (both known and ~~switching markets have historically been dominated by Cisco, with competition coming from other companies such as Nokia Corporation, Arista, HPE,~~unknown), record goodwill and ~~Huawei. In the security market, we face intense competition from Cisco and Palo Alto Networks,~~amortizable intangible assets as well as ~~companies such as Check Point, F5 Networks,~~restructuring and ~~Fortinet. Further, a number of~~ other ~~small public and private companies have products or have announced plans for new products to address the same challenges and markets that our products address.~~

In addition, actual or speculated consolidation among competitors, or the acquisition by, or of, our partners and/or resellers by competitors can increase the competitive pressures faced by us as customersrelated expenses. We may delay spending decisions or not purchase our products at all. A number of our competitors have substantially greater resources and can offer a wider range of products and services for the overall network equipment market than we do. In addition, some of our competitors have become more integrated, including through consolidation and vertical integration, and offer a broader range of products and services,incur additional acquisition-related debt, which could ~~make their solutions more attractive to~~increase our ~~customers. Many of our competitors sell networking products as bundled solutions with other IT products, such as compute~~leverage and storage systems. If we are unable to compete successfully against existing and future competitors on the basis of product offerings or price, we could experience a loss in market share and revenues and/or be required to reduce prices, which could reduce our gross margins, and which could materially and adverselypotentially negatively affect our ~~business,~~credit ratings resulting in more restrictive borrowing terms or increased borrowing costs thereby limiting our ability to borrow. Any of the foregoing, and other factors, could harm our ability to achieve anticipated levels of profitability or other financial ~~condition, and results~~benefits from our acquired or divested businesses, product lines or assets or to realize other anticipated benefits of ~~operations. Our partners and resellers generally sell~~divestitures or ~~resell competing products on a non-exclusive basis and consolidation could delay spending or require us to increase discounts to compete, which could also adversely affect our business.~~acquisitions.

~~The long~~Long sales and implementation cycles for our products ~~as well as our expectation that some customers will sporadically place~~and customer urgency related to ship dates to fill large orders ~~with short lead times,~~ may cause our revenues and operating results to vary significantly from quarter-to-quarter.

~~A customer's decision~~We experience lengthy sales cycles because our customers' decisions to purchase certain of our products, particularly new products, ~~involves~~involve a significant commitment of ~~its~~their resources and a lengthy evaluation and product qualification process. ~~As a result, the sales cycle may be lengthy. In particular, customers making critical decisions regarding the~~Customers design and ~~implementation of~~implement large network deployments ~~may engage in very~~following lengthy procurement processes, ~~that~~which may ~~delay or~~ impact expected future orders. Throughout the sales cycle, we may spend considerable time educating and providing information to prospective customers regarding the use and benefits of our products. Even after making the decision toFollowing a purchase, customers may also deploy our products slowly and deliberately. ~~Timing of deployment~~

can vary widely and depends on the skill set of the customer, the size of the network deployment, the complexity of the customer's network environment, and the degree of hardware and operating system configuration necessary to deploy the products. Customers with large networks ~~usually~~often expand their networks in large increments on a periodic ~~basis. Accordingly, we may receive purchase~~basis and place large orders ~~for significant dollar amounts~~ on an irregular basis. These ~~long~~sales and implementation cycles, as well as our expectation that customers will ~~tend to sporadically~~ place large orders with ~~short lead times, both of which~~urgent ship dates, may ~~be exacerbated by the impact of global economic weakness, may~~ cause our revenues and operating results to vary significantly ~~and unexpectedly~~ from quarter-to-quarter.

~~The~~Our ability to recognize revenue in a particular period is contingent on the timing of product orders and deliveries and/or our ~~reliance on revenue from~~ sales of certain software, or subscriptions, and professional support and maintenance ~~services may cause us to recognize revenue in~~services. In some of our businesses, our quarterly sales have periodically reflected a ~~different period than the one~~pattern in which a ~~transaction takes place.~~

~~Due to~~disproportionate percentage of each quarter's total sales occurs towards the ~~cost, complexity and custom nature~~end of ~~configurations required by our customers,~~the quarter. Further, we ~~generally~~ build ~~our network equipment~~certain products asonly when orders are received. ~~The~~Since the volume of orders received late in any given fiscal quarter remains ~~unpredictable. If~~unpredictable, if orders for ~~certain~~custom products are received late in any quarter, we may not be able to recognize revenue for these orders in the same period ~~which could adversely affect~~or meet our expected quarterly revenues.

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Similarly, if we were to take actions to encourage customers to place orders or accept deliveries earlier than anticipated, our ability to meet our expected revenues ~~for such quarter.~~in future quarters could be adversely affected. We also determine our operating expenses based on our anticipated revenues and technology roadmap and a high percentage of our expenses are fixed in the short and medium term. Any failure or delay in generating or recognizing revenue could cause significant variations in our operating results and operating margin from quarter-to-quarter.

In addition, services revenue accounts for a significant portion of our revenue, comprising ~~33%~~36%, ~~31%~~35%, and ~~29%~~33% of total revenue in fiscal ~~year~~years 2020, 2019, and 2018, ~~2017, and 2016,~~ respectively. ~~Sales~~We expect our sales of new or renewal professional services, support, and maintenance contracts ~~may decline and/or~~to fluctuate ~~as a result of a number of factors, including~~due to end-customers’ level of satisfaction with our products and services, the prices of our products and services or those offered by our competitors, and reductions in our end-customers’ spending levels. We recognize professional services when delivered, and we recognize support and maintenance, and SaaS revenue periodically over the term of the relevant service period.

~~The introduction of new software products and services is part of our intended strategy to expand our software business, and~~Further, we recognize certain software revenues ~~may be recognized~~ periodically over the term of the relevant use ~~period~~ or subscription ~~period. As~~periods and as a result, ~~certain~~the related software ~~subscription~~ and support and maintenance revenue we report each fiscal quarter is derived from the recognition of deferred revenue from contracts entered into during previous fiscal quarters. ~~Consequently, a decline~~Any fluctuation in such new or renewed contracts in any one fiscal quarter ~~will~~may not be fully or immediately reflected in revenue ~~in that fiscal quarter but will~~and could negatively affect our revenue in future fiscal quarters. Accordingly, the effect of significant downturns in new or renewed sales of certain software products, subscriptions or support and maintenance is not reflected in full in our operating results until future periods. Also, it is difficult for us to rapidly increase such software or services revenue through additional sales in any period, as revenue from those software, subscription and support and maintenance contracts must be recognized over the applicable period.

Additionally, we determine our operating expenses largely on the basis of anticipated revenues and technology roadmap and a high percentage of our expenses are fixed in the short and medium term. As a result, a failure or delay in generating or recognizing revenue could cause significant variations in our operating results and operating margin from quarter-to-quarter.RISKS RELATED TO OUR TECHNOLOGY AND BUSINESS OPERATIONS

~~We sell our products to customers that use those products to build networks and IP infrastructure, and if~~If the demand for network and IP systems does not continue to grow, our business, financial condition, and results of operations could be adversely affected.

A substantial portion of our business and revenues depends on the growth of secure IP infrastructure ~~and~~as well as customers that depend on the continued growth of IP services to deploy our products in their networks and IP infrastructures. As a result of changes in the economy, capital spending, or the building of network capacity in excess of demand (all of which, have in the past, particularly affected telecommunications service providers), spending on IP infrastructure can vary, which could have a material adverse effect on our business, financial condition, and results of operations. In addition, a number of our existing customers are evaluating the build-out of their next generation networks. During the decision-making period when our customers are determining the design of those networks and the selection of the software and equipment they will use in those networks, such customers may greatly reduce or suspend their spending on secure IP infrastructure. ~~For example, in recent years, our switching and routing results were adversely affected by~~Any reduction or suspension of spending ~~delays from our largest Cloud customers, who we believe are in the process of implementing a networking architectural shift. The duration of the delay~~on IP infrastructure is difficult to predict, and may be due to events beyond our control, such as the COVID-19 pandemic. This, in ~~part because each Cloud customer will migrate their network architecture based on their own constraints. Such delays in purchases~~turn, can make it more difficult to accurately predict revenues from customers, can cause fluctuations in the level of spending by customers and, even where our products are ultimately selected, can have a material adverse effect on our business, financial condition, and results of operations.

If we do not successfully anticipate technological shifts, market needs and opportunities, and develop products, product enhancements and business strategies that meet those technological shifts, needs and opportunities, or if those products are not made available or strategies are not executed in a timely manner or do not gain market acceptance, we may not be able to compete effectively and our ability to generate revenues will suffer.

~~The markets for our products~~If we are ~~characterized by rapid technological change, frequent new product introductions, changes in customer requirements, continuous pricing pressures and a constantly evolving industry. We may not be able~~unable to anticipate future technological shifts, market needs, and opportunities or be able to develop new products, product enhancements or business strategies to meet such technological shifts, needs or opportunities in a timely manner or at all. For example, the move from traditional wide area network, or WAN, infrastructures towards software-defined WAN, or SD-WAN, has been receiving considerable attention. In our view, it will take several years to see the full impact of SD-WAN, and we believe the successful products and solutions in this market will combine hardware and software elements. If we fail to anticipate market requirements or opportunities, or fail to develop and introduce new products, product enhancements or business strategies to meet those requirements or opportunities in a timely manner or at all, it could cause us to lose customers, ~~and such failure could~~ substantially decrease or delay market acceptance and sales of our present and future products and services, ~~which would~~and significantly harm our business, financial condition, and results of operations. In addition, if we invest ~~time, energy and resources~~ in developing products for a market that ~~doesn't~~does not develop, it could ~~likewise~~ significantly harm our business, financial condition, and results of operations. Even if we are able to anticipate, develop, and commercially introduce new products, enhancements or business strategies, there can be no assurance that any new products, enhancements or business strategies will achieve widespread market acceptance.

~~In recent years, we have announced a number of new products and enhancements to~~Further, our hardware and software products across routing, switching and security. The success of our new products depends on several factors, including, but not limited to, component costs, timely completion and introduction of these products, prompt resolution of any defects or bugs in these products, our ability to support these products, differentiation of new products from those of our competitors and market acceptance of these products.

~~The introduction of new software products~~strategy is ~~part of our intended strategy~~ to expand our software business. We have also begun to disaggregate certain software from certain hardware products, such that customers would be able to purchase or license our hardware and software products independently, which we expect could in time enable our hardware to be deployed with third- party networking applications and services and our software to be used with third-party hardware. The success of our strategy ~~to expand our software business, including our strategy to disaggregate software from certain hardware products,~~ is subject to a number of risks and uncertainties, including:

•the additional development efforts and costs required to create new software products ~~and/or~~and to make our disaggregated products compatible with multiple technologies;

•the possibility that our new software products or disaggregated products may not achieve widespread customer adoption;

•the possibility that our strategy could erode our revenue and gross margins;

•the impact on our financial results of longer periods of revenue recognition for certain types of software products

and changes in tax treatment associated with software sales;

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•the additional costs associated with regulatory compliance and changes we need to make to our distribution chain in connection with increased software sales;

•the ability of our disaggregated hardware and software products to operate independently and/or to integrate with current and future third-party products; and

•issues with third-party technologies used with our disaggregated products, which may be attributed to us.

If any of our new products or business strategies do not gain market acceptance or meet our expectations for growth, our ability to meet future financial targets may be adversely affected and our competitive position and our business and financial results could be harmed.

If our products do not interoperate with our customers’ networks, installations will be delayed or cancelled and could harm our business. Our products are designed to interface with our customers’ existing networks, each of which have different specifications and utilize multiple protocol standards and products from other vendors. Many of our customers’ networks contain multiple generations of products that have been added over time as these networks have grown and evolved. Our products must interoperate with many or all of the products within these networks as well as future products to meet our customers’ requirements. If we find errors in the existing software or defects in the hardware used in our customers’ networks, we may need to modify our software or hardware to fix or overcome these errors so that our products will interoperate and scale with the existing software and hardware, which could be costly and could negatively affect our business, financial condition, and results of operations. In addition, if our products do not interoperate with those of our customers’ networks, demand for our products could be adversely affected or orders for our products could be cancelled. This could hurt our operating results, damage our reputation, and seriously harm our business and prospects.

Our products incorporate and rely upon licensed third-party technology. We integrate licensed third-party technology into certain of our products. From time to time, we may be required to renegotiate our current third-party licenses or license additional technology from third parties to develop new products or product enhancements or to facilitate new business models. Third-party licenses may not be available or continue to be available to us on commercially reasonable terms and some of our agreements with our licensors may be terminated for convenience by them. In addition, we cannot be certain that our licensors are not infringing on the intellectual property rights of third parties or that our licensors have sufficient rights to the licensed intellectual property in all jurisdictions in which we may sell our products. Third-party technology we incorporate into our products that is deemed to infringe on the intellectual property of others may result, and in some cases has resulted, in limitations on our ability to source technology from those third parties, restrictions on our ability to sell products that incorporate the infringing technology, increased exposure to liability that we will be held responsible for incorporating the infringing technology in our products, and increased costs involved in removing that technology from our products or developing substitute technology. Our inability to comply with, maintain or re-license any third-party licenses required in our products or our inability to obtain third-party licenses necessary to develop new products and product enhancements, could require us to develop substitute technology or obtain substitute technology of lower quality or performance standards or at a greater cost, any of which could delay or prevent product shipment and harm our business, financial condition, and results of operations.

We may face difficulties enforcing our proprietary rights, which could adversely affect our ability to compete. We rely on a combination of patents, copyrights, trademarks, trade secret laws and contractual restrictions on disclosure of confidential and proprietary information, to protect our proprietary rights. Although we have been issued numerous patents and other patent applications are currently pending, there can be no assurance that any of our patent applications will result in issued patents with the scope of the claims we seek or that any of our patents or other proprietary rights will not be challenged, invalidated, infringed or circumvented or that our rights will, in fact, provide competitive advantages to us or protect our technology. If we cannot protect our intellectual property rights, we could incur costly product redesign efforts, discontinue certain product offerings and experience other competitive harm.

Unauthorized parties may also attempt to copy aspects of our products or obtain and use our proprietary information. We generally enter into confidentiality or license agreements with our employees, consultants, vendors, and customers, and generally limit access to and distribution of our proprietary information. However, we cannot assure you that we have entered into such agreements with all parties who may have or have had access to our confidential information or that these agreements will not be breached. We cannot guarantee that any of the measures we have taken will prevent misappropriation of our technology. We are ~~dependent~~also vulnerable to third parties who illegally distribute or sell counterfeit, stolen or unfit versions of our products, which has happened in the past and could happen in the future. Such sales could have a negative impact on our reputation and business.

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In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as do the laws of the U.S. The outcome of any actions taken in these foreign countries may be different than if such actions were determined under the laws of the U.S. If we are unable to protect our proprietary rights, we may be at a competitive disadvantage to others who need not incur the substantial expense, time, and effort required to create innovative products that have enabled our success.

We depend on contract manufacturers ~~with whom~~and original design manufacturers as well as single-source and limited source suppliers. Our operations depend on our ability to anticipate our needs for components, products and services, as well as the ability of our manufacturers, original design manufacturers, and suppliers to deliver sufficient quantities of quality components, products and services at reasonable prices and in time for us to meet critical schedules for the delivery of our own products and services. Given the wide variety of solutions that we ~~do not have long-term supply contracts,~~offer, the large and ~~changes~~diverse distribution of our manufactures, and suppliers, and the long lead times required to ~~or disruptions~~manufacture, assemble and deliver certain products, problems could arise in ~~those relationships or manufacturing processes, expected or unexpected, may result in delays~~production, planning and inventory management that could ~~cause us~~seriously harm our business. Any delay in our ability to ~~lose revenues~~produce and ~~damage our customer relationships.~~

We depend on independent contract manufacturers (each of which is a third-party manufacturer for numerous companies) to manufacture our products. Although we have contracts with our contract manufacturers, these contracts do not require them to manufacturedeliver our products ~~on a long-term basis in any specific quantity or at any specific price.~~could cause our customers to purchase alternative products from our competitors. In addition, ~~it is~~our ongoing efforts to optimize the efficiency of our supply chain could cause supply disruptions and be more expensive, time-consuming and ~~costly~~resource-intensive than expected. Other manufacturing and supply problems that we could face are described below.

•Manufacturing Issues. We may experience supply shortfalls or delays in shipping products to ~~qualify and implement additional contract manufacturer relationships. Therefore,~~our customers if ~~we fail to effectively manage~~ our ~~contract manufacturer relationships, which could include failing to provide accurate forecasts of our requirements, or if one or more of them experiences~~manufacturers experience delays, disruptions, or quality control problems in their manufacturing operations, or if we ~~had~~have to change or add additional ~~contract~~ manufacturers or contract manufacturing ~~sites,~~locations. Although we have contracts with our ~~ability~~manufacturers that include terms to ~~ship products~~protect us in the event of an early termination, we may not have adequate time to transition all of our ~~customers could be delayed.~~manufacturing needs to an alternative manufacturer under comparable commercial terms in the event of an early termination. We have experienced in the past and may experience in the future an increase in the expected time required to manufacture our products or ship ~~products. Such~~products, including delays ~~could result in supply shortfalls that damage our ability~~due to ~~meet customer demand for those products~~the manufacturing restrictions, travel restrictions and ~~could cause our customers~~shelter-in-place orders to ~~purchase alternative products from our competitors. Also,~~control the ~~addition~~spread of ~~manufacturing locations or contract manufacturers or the introduction of new products by us would increase the complexity of our supply chain management.~~COVID-19. Moreover, a significant portion of our manufacturing is performed in China, Malaysia and other foreign countries and is therefore subject to risks associated with doing business outside of the ~~United States,~~U.S., including import tariffs, or regional conflicts. For example, the United States recently imposed a tariff on networking products imported from China; this includes certain products that we import into and sell within the United States. If we cannot mitigate the impact of the tariffs, the increased cost could translate into higher prices for our customers, reduced customer demand or increased cost of goods sold. In addition, increased costs of production or delays in production caused by any relocation of contract manufacturing facilities could impact the global competitiveness of our products. Each of these factors could adversely affect our business, financial condition and results of operations.

~~We are dependent on sole source and limited source suppliers, including for key components, which makes us susceptible~~export restrictions, disruptions to ~~shortages, quality issues or price fluctuations in~~ our supply chain, ~~and we may face increased challenges in supply chain management in the future.~~pandemics, regional climate-related events, or regional conflicts.

•Single-Source Suppliers. We rely on single or limited sources for many of our components due to technology, availability, price, quality, scale or customization needs. In addition, there has been consolidation among certain suppliers of our components. ~~During periods of high demand for electronic products, component shortages are possible, and~~Consolidation among suppliers can result in the ~~predictability~~reduction of the ~~availability~~number of independent suppliers of components available to us, which could negatively impact our ability to access certain component parts or the prices we have to pay for such parts and may impact our gross margins. Additionally, if certain components that we receive from our suppliers have defects or other quality issues, we may have to replace or repair such components, ~~may~~and we could be ~~limited. For example, we have recently experienced industry-wide~~subject to claims based on warranty, product liability, epidemic or delivery failures that could lead to significant expenses.

•Supply-chain Disruption. Any disruptions to our supply ~~constraints related~~chain or significant increase in component costs could decrease our sales, earnings and liquidity or otherwise adversely affect our business and result in increased costs. Such a disruption could occur as a result of any number of events, including, but not limited to: an extended closure of or any slowdown at our supplier's plants or shipping delays due to ~~power management components.~~efforts to limit the spread of COVID-19, increases in prices, the imposition of regulations, quotas or embargoes on components, labor stoppages, transportation delays or failures affecting the supply chain and shipment of materials and finished goods, third-party interference in the integrity of the products sourced through the supply chain, the unavailability of raw materials, severe weather conditions, adverse effects of climate change, natural disasters, geopolitical developments, war or terrorism and disruptions in utilities and other services. In addition, ~~some components used in our networking solutions have in~~ the ~~past and may~~development, licensing, or acquisition of new products in the future ~~experience extended lead times~~may increase the complexity of supply chain management. Failure to effectively manage the supply of components and ~~higher pricing, given the~~products would adversely affect our business.

•Component Supply Forecast. We provide demand forecasts for our products to our manufacturers, who order components and plan capacity based on these forecasts. If we overestimate our requirements, our manufacturers may assess charges, or we may have liabilities for excess inventory, each of which could negatively affect our gross margins. If we underestimate our requirements, our contract manufacturers may have inadequate time, materials, and/or components required to produce our products. This could increase costs or delay or interrupt manufacturing of our products, resulting in ~~the market.~~delays in shipments and deferral or loss of revenues and could negatively impact customer satisfaction. Any future spike in growth in our business, in the use of certain components we share in common with other companies, in IT spending, or in the economy in general, is likely to create greater short-term ~~pressures~~pressure on us and

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our suppliers to accurately forecast overall component demand and to establish optimal component inventories. If shortages or delays persist, we may not be able to secure enough components at reasonable prices or of acceptable quality to build and deliver products in a timely manner, and our revenues, gross margins and customer relationships could suffer. Additionally, if certain components that we receive from our suppliers have defects or other quality issues, we may have to replace or repair such components, and we could be subject to claims based on warranty, product liability, epidemic or delivery failures that could lead to significant expenses. We maintain product liability insurance, but there is no guarantee that such insurance will be available or adequate to protect against all such claims. We have experienced, and from time-to-time may experience, component shortages or quality issues that resulted, or could result, in delays

•Alternative Sources of product shipments, revenue charges that impact our gross margins, and/or warranty or other claims or costs. We also currently purchase numerous key components, including ASICs and other semiconductor chips, from single or limited sources and many of our component suppliers are concentrated in China and Korea. In addition, there has been consolidation among certain suppliers of our components. For example, GLOBALFOUNDRIES acquired IBM’s semiconductor manufacturing business, Avago Technologies Limited acquired Broadcom Corporation and Intel Corporation acquired Altera Corporation. Consolidation among suppliers can result in the reduction of the number of independent suppliers of components available to us, which could negatively impact our ability to access certain component parts or the prices we have to pay for such parts. In addition, our suppliers may determine not to continue a business relationship with us for other reasons that may be beyond our control. Any disruptions to our supply chain could decrease our sales, earnings and liquidity or otherwise adversely affect our business and result in increased costs. Such a disruption could occur as a result of any number of events, including, but not limited to, increases in wages that drive up prices, the imposition of regulations, quotas or embargoes on components, labor stoppages, transportation failures affecting the supply chain and shipment of materials and finished goods, third-party interference in the integrity of the products sourced through the supply chain, the unavailability of raw materials, severe weather conditions, natural disasters, civil unrest, military conflicts, geopolitical developments, war or terrorism and disruptions in utility and other services.

Supply.The development of alternate sources for components is time-consuming, difficult, and costly. In addition, the lead times associated with certain components are ~~lengthy~~lengthy. For example, we have experienced extended lead times of up to 50 weeks on some semiconductor products, and ~~preclude rapid changes in quantities~~we expect these extended lead times to continue for the foreseeable future, which may impact our production and delivery schedules. Also, long-term supply and maintenance obligations to customers increase the duration for which specific components are required, which may further increase

the risk of component shortages or the cost of carrying inventory. In the event of a component shortage, or supply interruption or significant price increase from these suppliers, we may not be able to develop alternate or second sources in a timely manner. If we are unable to buy these components in quantities sufficient to meet our requirements on a timely basis, we will not be able to deliver products and services to our customers, which would seriously affect present and future sales, ~~which~~and would, in turn, adversely affect our business, financial condition, and results of operations.

~~In addition,~~•COVID-19 Impact. Delays in production or in product deliveries due to the ~~development, licensing, or acquisition of new products in the future~~COVID-19 pandemic have adversely affected and may ~~increase the complexity of supply chain management. Failure~~continue to ~~effectively manage the supply of components and products would~~ adversely affect our ~~business.~~

Ifbusiness, financial condition, and results of operations. For example, during fiscal 2020, the COVID-19 pandemic caused us to experience supply constraints due to both constrained manufacturing capacity, particularly in China and Malaysia, as well as component parts shortages as our component vendors were also facing manufacturing challenges, and increased logistics costs due to air travel and transport restrictions that limited the availability of flights on which we ~~fail~~ship our products. These challenges resulted in extended lead-times to ~~accurately predict~~ our customers and had a negative impact on our ability to recognize associated revenue in each quarter. We continue to work with government authorities and implement safety measures to ensure that we are able to continue manufacturing ~~requirements, we could incur additional costs or experience manufacturing delays, which would harm our business.~~

~~We provide demand forecasts for~~and distributing our products during the COVID-19 pandemic. However, uncertainty resulting from the pandemic as well as the world-wide distribution of the vaccines for COVID-19 could result in an unforeseen disruption to our ~~contract manufacturers~~supply chain (for example, a closure of a key manufacturing or distribution facility or the inability of a key supplier or transportation supplier to source and ~~original design manufacturers, who order components and plan capacity based on these forecasts. If we overestimate~~transport materials) that could impact our requirements, our original design or contract manufacturers may assess charges, or we may have liabilities for excess inventory, each of which could negatively affect our gross margins. For example, in certain prior quarters, our gross margins were reduced as a result of an inventory charge resulting from inventory we held in excess of forecasted demand. In addition, some optical modules we use are experiencing faster product transitions than our other products, which increases the risk that we could have excess inventory of those modules. Conversely, lead times for required materials and components vary significantly and depend on factors such as the specific supplier, contract terms, and the demand for each component at a given time. Given that our contract manufacturers are third-party manufacturers for numerous other companies, if we underestimate our requirements, as we have in certain prior quarters with respect to certain products, our contract manufacturers may have inadequate time, materials, and/or components required to produce our products. This could increase costs or delay or interrupt manufacturing of our products, resulting in delays in shipments and deferral or loss of revenues and could negatively impact customer satisfaction.operations.

System security risks, data protection breaches, and ~~cyber-attacks~~cyberattacks could compromise our and our customers’ proprietary information, disrupt our internal operations and harm public perception of our ~~products, which could cause our business and reputation to suffer and adversely affect our stock price.~~

products. In the ordinary course of business, we store sensitive data, including intellectual property, personal data, our proprietary business information and that of our employees, contractors, customers, suppliers, vendors, and other business partners on our networks. In addition, we store sensitive data through cloud-based services that may be hosted by third parties and in data center infrastructure maintained by third parties. ~~The secure~~Secure maintenance of this information is critical to our operations and business strategy. ~~The growing cyber risk environment means that individuals, companies,~~On an ongoing and ~~organizations of all sizes, including Juniper,~~regular basis, we have been, and ~~are increasingly~~expect to be, subject to ~~the threat of~~cyberattacks and attempted intrusions on ~~their~~our networks and systems by a wide range of actors, including, but not limited to, nation states, criminal enterprises, ~~and~~ terrorist organizations, onand other organizations or individuals, as well as errors, wrongful conduct or malfeasance by employees and third-party service providers (collectively, “malicious parties”). The continued occurrence of high-profile data breaches provides evidence of an ~~ongoing and regular basis.~~ environment increasingly hostile to information security.

Despite our security measures, and those of our third-party vendors, our information technology and infrastructure ~~has~~have experienced breaches and may be subject to or vulnerable to breaches or attacks in the future to breach or attacks by computer programmers, hackers or sophisticated nation-state and nation-state supported actors or breached due to employee error or wrongful conduct, malfeasance, or other disruptions.future. If any breach or attack compromises our networks or those of our vendors, creates system disruptions or slowdowns or exploits security vulnerabilities of our products, the information stored on our networks or ~~those~~the networks of our customers, suppliers or business partners could be accessed and modified, publicly disclosed, lost, destroyed or stolen, and we may be subject to claims for contractual, tort or equitable liability ~~to our customers, suppliers, business partners and others,~~ and suffer reputational and financial harm. In addition, malicious parties may compromise our manufacturing supply chain to embed malicious hardware, components and ~~operating system~~ software and applications that we produce or procure from third parties may contain defects in design or manufacture, including "bugs", vulnerabilities and other problems that could unexpectedly interfere with the operation of our networks or expose us or our products to cyber attacks. This can be true even for “legacy” products that have been determined to have reached an end of life engineering status but will continue to operate for a limited amount of time. Furthermore, third parties may attempt to exfiltrate data through the introduction into the Information and Communications Technology supply chain of malicious products and components that are designed to defeat or circumvent encryption and other cybersecurity measures to interfere with the operation of our networks, expose us or our products to cyberattacks, or gain unauthorized access to our or our customers’ systems and ~~if successful,~~information. If such actions are successful, they could diminish customer trust in our products, harm our business reputation, and adversely affect our business and financial condition.

When vulnerabilities are discovered, we evaluate the risk, apply patches or take other remediation actions as required and notify customers and suppliers when appropriate. All of this requires significant time and attention from management and our employees.

As a result of any actual or perceived breach of network security that occurs in our network or in the network of a customer of our products, regardless of whether the breach is attributable to our products, the market perception of the effectiveness of our products and our overall reputation could be harmed. As a large, well known provider of networking products, cyber attackers may specifically target our products or attempt to imitate us or our products in order to compromise a network. Because ~~the~~ techniques used by ~~attackers, many of whom are highly sophisticated and well-funded,~~malicious parties to access or sabotage networks change

frequently and generally are not recognized until after they are used, we may be unable to anticipate or immediately detect these techniques or the vulnerabilities they have caused. Further, when vulnerabilities are discovered, we evaluate the risk, apply patches or take other remediation actions and notify customers, business partners, and suppliers as appropriate.

All of this requires significant resources and attention from management and our employees, and the economic costs to us to eliminate or alleviate these issues could be significant and may be difficult to anticipate or measure. The market perception of

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the effectiveness of our products and our overall reputation could also be harmed as a result of any actual or perceived breach of security that occurs in our network or in the network of a customer of our products, regardless of whether the breach is attributable to our products, the systems of other vendors and/or to actions of malicious parties. This could impede our sales, manufacturing, distribution or other critical functions, which could have an adverse impact on our financial results. ~~The economic costs~~These risks to ~~us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software~~our systems ~~and security vulnerabilities could be significant and~~ may be ~~difficult to anticipate or measure, because~~increased during the ~~damage may differ based on~~COVID-19 pandemic as the ~~identity~~health of our internal security team members who monitor and ~~motive of~~address cyber threats and attacks against us and our employees around the ~~attacker, which are often difficult to pinpoint.~~ world is also at risk.

Additionally, we could be subject to measures that regulate the security of the types of products we sell, such as the California Internet of Things (IoT) security law (SB-327), which became enforceable in 2020. Such regulations may result in increased costs and delays in product releases and changes in features to achieve compliance which may impact customer demand for our products, and result in regulatory investigations, potential fines, and litigation in connection with a compliance concern, security breach or related issue, and ~~be liable~~potential liability to third parties arising from such breaches. Further, in response to actual or anticipated cybersecurity regulations or contractual security requirements negotiated with our customers, we may need to make changes to existing policies, processes and supplier relationships that could impact product offerings, release schedules and service response times, which could adversely affect the demand for ~~these types~~and sales of ~~breaches.~~

~~We rely on value-added and other resellers, as well as distribution partners, to sell~~ our products and ~~disruptions~~services. We maintain product liability insurance, but there is no guarantee that such insurance will be available or adequate to protect against all such claims. If our business liability insurance coverage is inadequate, or future coverage is unavailable on acceptable terms or at all, our ~~failure to effectively develop~~financial condition and ~~manage,~~results of operations could be harmed.

Disruption in our distribution ~~channel~~channels could seriously harm our future revenue and ~~the processes~~financial condition and ~~procedures that support it could adversely affect~~increase our ~~ability to generate revenues from the sale of our products.~~

~~Our future success is highly dependent upon establishing~~costs and maintaining successful relationships with a variety of value-added and other reseller and distribution partners, including our worldwide strategic partners such as Ericsson, IBM, Dimension Data and NEC Corporation. expenses. The majority of our revenues are derived through value-added resellers and distributors, most of which also sell our competitors’ products, and some of which sell their own competing products. ~~Our revenues depend in part on the performance of these partners.~~ The loss of or reduction in sales to our resellers or distributors could materially reduce our revenues. Our competitors may in some cases be effective in leveraging their market share positions or in providing incentives to current or potential resellers and distributors to favor their products or to prevent or reduce sales of our products. If we ~~fail~~are unable to develop and maintain relationships with our partners, ~~fail to~~ develop new relationships with value-added resellers and distributors in new markets, ~~fail to~~ expand the number of distributors and resellers in existing markets, ~~fail to~~ manage, train or motivate existing value-added resellers and distributors effectively, ~~determine that we cannot continue to do business with these partners for any reason~~ or if these partners are not successful in their sales efforts, sales of our products may decrease, and our business, financial condition, and results of operations would suffer.

~~In addition, we~~ We recognize a portion of our revenues at the time we sell products to our distributors. If these sales are made based on inaccurate or untimely information, the amount or timing of our revenues could be adversely impacted. Further, our distributors may increase orders during periods of product shortages, cancel orders if their inventory is too high, or delay orders in anticipation of new products. They also may adjust their orders in response to the supply of our products and the products of our competitors that are available to them, and in response to seasonal fluctuations in end-user demand.

We are also vulnerable to third parties who illegally distribute or sell counterfeit, stolen or unfit versions of our products, which has happened in the past and could happen in the future. Such sales could have a negative impact on our reputation and business.

~~Further, in order to~~To develop and expand our distribution channel, we ~~must~~ continue to offer attractive channel programs to potential partners and ~~scale and improve our processes and procedures that support the channel. As a result, our programs, processes and procedures may become increasingly complex and inherently difficult to manage. We~~ have previously entered into OEM agreements with partners ~~pursuant~~ to ~~which they~~ rebrand and resell our products as part of their product portfolios. These ~~types of~~ relationships ~~are complex and~~ require ~~additional~~ processes and procedures that may be costly or challenging ~~and costly~~ to implement, maintain, and manage. Our failure to successfully manage and develop our distribution channel ~~and the programs, processes and procedures that support it~~ could adversely affect our ability to generate revenues from the sale of our products. We also depend on our global channel partners to comply with applicable legal and regulatory requirements. ~~To the extent that they fail~~Any failure by our partners to ~~do so, that~~comply with these requirements, could have a material adverse effect on our business, operating results, and financial condition.

~~Our ability to process orders and ship products in a timely manner is dependent in part~~We rely on the performance of our business systems and ~~performance of the~~third-party systems and processes of third parties as well as the interfaces between our systems and the systems of such third parties. Dependence on outsourced information technology and other administrative functions may impair our ability to operate effectively.

processes. Some of our business processes depend upon our IT systems, the systems and processes of and IT services provided by third parties, and the interfaces between the two. For example, ~~we are in the process~~IBM provides us with a broad range of ~~further consolidating our on-site data centers to the cloud~~information technology services, such as applications, including support, development and ~~to off-site facilities that are hosted~~maintenance; infrastructure management and ~~controlled by third parties. In addition, on December 31, 2018, we entered into a Master Services Agreement~~support, including for server storage and ~~certain Statements of Work with IBM pursuant to which we will outsource significant portions of our IT~~network devices, and ~~other administrative functions following a transition period.~~end user support including service desk. These cloud providers, third party providers, and off-site facilities are vulnerable to damage, interruption, orincluding performance problems from earthquakes, hurricanes, floods, fires, power loss, telecommunications failures, equipment failure, adverse events caused by operator error, cybersecurity attacks, pandemics, and similar events. In addition, because we lease ~~our cloud storage space and~~ off-site data center facilities, we cannot be assured that we will be able to expand our data center infrastructure to meet user demand in a timely manner, or on favorable economic terms. If we have issues receiving and processing

data, this may delay our ability to provide products and services to our customers and business partners and damage our business. We also rely upon the performance of the systems and processes of our contract manufacturers to build and ship our products. If those systems and processes experience interruption or delay, our ability to build and ship our products in a timely manner may be harmed. Since IT is critical to our operations, ~~any failure to perform on the part of our IT providers could impair our ability to operate effectively. In~~in addition to the risks outlined above, problems with any of the third parties we rely on for our IT systems and services could result in liabilities to our customers and business partners, lower revenue and unexecuted efficiencies, and impact our results of operations and our stock price.

~~Integration of acquisitions~~ We could ~~disrupt~~also face significant additional costs or business disruption if our ~~business~~arrangements with these third parties are terminated or impaired and ~~harm our financial condition and stock price and may dilute the ownership of our stockholders.~~

~~We have made, and may continue~~we cannot find alternative services or support on commercially reasonable terms or on a timely basis or if we are unable to ~~make, acquisitions~~hire new employees in order to ~~enhance~~provide these services in-house.

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Our ability to develop, market, and sell products could be harmed if we are unable to retain or hire key personnel or if our ~~business. For example,~~existing personnel were harmed by COVID-19. Our future success and ability to maintain a technology leadership position depends upon our ability to recruit and retain key management, engineering, technical, sales and marketing, and support personnel as well as to maintain the health of our personnel during a pandemic, including the COVID-19 pandemic. The supply of highly qualified individuals with technological and creative skills, in particular engineers, in specialized areas with the expertise to develop new products and enhancements for our current products, and provide reliable product maintenance, as well as the number of salespeople with industry expertise, is limited. Competition for people with the specialized technical skills we ~~acquired HTBase in 2018 and Cyphort in 2017. Acquisitions involve numerous risks, including, but not limited to, problems combining the purchased operations, technologies~~require is significant. None of our officers or products, unanticipated costs, liabilities, litigation, and diversion of management's attention from our core businesses, adverse effects on existing business relationships with suppliers and customers, risks associated with entering markets in which we have no or limited prior experience, and where competitors in such markets have stronger market positions, initial dependence on unfamiliar supply chains or relatively small supply partners, and the potential loss of key employees ~~customers, distributors, vendors~~is bound by an employment agreement for any specific term. If we fail to attract new personnel or retain and ~~other~~motivate our current personnel, the development and introduction of new products could be delayed, our ability to market, sell, or support our products could be impaired, and our business, ~~partners~~results of ~~the companies we acquire.~~operations and future growth prospects could suffer. There can be no assurance that weothers will ~~be able~~not develop technologies that are similar or superior to integrate successfully any businesses, products, technologies, or personnel that we might acquire. The integration of businesses that we may acquire is likely to be a complex, time-consuming, and expensive process and we may not realize the anticipated revenues or other benefits associated with our acquisitions. If we fail to successfully manage, operate or integrate any acquired business or if we are unable to efficiently operate as a combined organization utilizing common information and communication systems, operating procedures, financial controls, and human resources practices, our business, financial condition, and results of operations may be adversely affected.technology.

~~In connection with certain acquisitions, we may agree to issue common stock , or assume equity awards, that dilute the ownership~~A number of our ~~current stockholders, use a substantial portion of our cash resources, assume liabilities (both known~~team members are foreign nationals who rely on visas and ~~unknown), record goodwill and amortizable intangible assets that will be subject~~entry permits in order to impairment testing on a regular basis and potential periodic impairment charges, incur amortization expenses related to certain intangible assets, and incur large and immediate write-offs and restructuringlegally work in the U.S. and other ~~related expenses, all~~countries. In recent years, the U.S. has increased the level of ~~which could harm our financial condition and results of operations.~~

~~We are a party to lawsuits, investigations, proceedings,~~scrutiny in granting H-1B, L-1 and other ~~disputes, which are costly to defend~~business visas. Compliance with new and ~~if determined adversely to us,~~unexpected U.S. immigration and labor laws could also require us to ~~pay fines~~incur additional unexpected labor costs and expenses or ~~damages, undertake remedial measures~~could restrain our ability to retain and attract skilled professionals. Additionally, pandemics, such as the COVID-19 pandemic, may interfere with our ability to hire or ~~prevent us from taking certain actions, any or all of which could harm our business, results of operations, financial condition or cash flows.~~

We, and certain of our current and former officers and current and former members of our Board of Directors, have been or are subject to various lawsuits. We have been served with lawsuits related to employment matters, commercial transactions and patent infringement, as well as securities laws. The U.S. Securities and Exchange Commission, or the SEC, is conducting, and the U.S. Department of Justice, or the DOJ, was previously conducting investigations into possible violations by the Company of the U.S. Foreign Corrupt Practices Act, or the FCPA, in a number of countries. The Company's Audit Committee, with the assistance of independent advisors, conducted a thorough internal review of possible violations of the FCPA, and the Company made improvements in its internal controls and carried out a number of disciplinary actions. The Company is continuing to fully cooperate with the SEC’s ongoing investigation, and based on the recent communications with the Staff of the SEC, the Company believes it is likely that the Staff of the SEC will seek to bring an enforcement action against the Company. The Company believes it is probable that it could incur a loss and has established an estimated legal reserve of $12.0 million related to the ongoing SEC investigation. Litigation and investigations are inherently uncertain. We therefore cannot predict the duration, scope, outcome or consequences of litigation and government investigations. In connection with any government investigations, including those in which we are currently involved as described above, if the government takes action against us or we agree to settle the matter, we may be required to pay substantial fines and incur other sanctions, which may be material, and suffer reputational harm. The lawsuits and investigations are expensive and time-consuming to defend, settle, and/or resolve, and may require us to implement certain remedial measures that could prove costly or disruptive to our business and operations. The unfavorable resolution of one or moreretain personnel. Any of these ~~matters~~restrictions could have a material adverse effect on our business, results of operations and financial ~~condition or cash flows.~~conditions.

LEGAL, REGULATORY, AND COMPLIANCE RISKS

We are a party to litigation and claims regarding intellectual property rights, resolution of which may be time-consuming and expensive, as well as require a significant amount of resources to prosecute, defend, or make our products non-infringing.

~~Our industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding patent~~lawsuits, investigations, and other ~~intellectual property rights.~~ disputes. We ~~expect that~~have been named a party to litigation involving employment matters, commercial transactions, patent infringement, claims may increase as the number of products and competitors in our market increases and overlaps occur. Third parties have asserted and may in the future assert claims or initiate litigation related to patent, copyright, trademark,copyrights, trademarks, and other ~~intellectual property~~ rights to technologies and related standards that are relevant to our ~~products.~~products, as well as governmental claims, and securities laws, and we may be named in additional litigation. For example, certain U.S. governmental agencies previously conducted investigations into possible violations by us of the U.S. Foreign Corrupt Practices Act, or the FCPA, which ultimately resulted in the Company entering into a settlement with the SEC that involved making a payment of $11.8 million in August 2019. The asserted claims and/or initiated litigation may include claims against us or our manufacturers, suppliers, partners, or customers, alleging that our products or services infringe proprietary rights. The expense of initiating and defending, and in some cases settling, such litigation and investigations may be costly, and may cause us to suffer reputational harm, divert management’s attention from day-to-day operations of our business, and may require us to implement certain remedial measures that could disrupt our business and operations. In addition, if we fail to comply with the terms of any settlement agreement, we could face more substantial penalties. An unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows.

Further, increased patent litigation brought by non-practicing entities ~~in recent years~~ may result, and in some cases has resulted, in our customers requesting or requiring us to absorb a portion of the costs of such litigation or providing broader indemnification for litigation, each of which could increase our expenses and negatively affect our business, financial condition, and results of operations. Regardless of the merit of these claims, they ~~have been and can be time-consuming, result in costly litigation, and~~ may require us to develop non-infringing technologies, enter into license agreements, or cease engaging in certain activities or offering certain products or services. Furthermore, even arguably unmeritorious claims may be settled at significant costs to us because of the potential for high awards of damages or injunctive ~~relief that are not necessarily predictable, even arguably unmeritorious claims may be settled for significant amounts of money.~~ relief.

If any infringement or other intellectual property claim made against us or anyone we are required to indemnify ~~by any third-party~~ is successful ifand we are required to pay significant monetary awards or damages to settle litigation, ~~for significant amounts~~enter into royalty or licensing arrangements, or satisfy indemnification obligations that we have with some of ~~money, if~~our customers, or we fail to develop non-infringing technology ifand we incorporate infringing technology in our products, ~~or if we license required proprietary rights at material expense,~~ our business, financial condition, and results of operations could be materially and adversely affected.

As we seek to sell more products to telecommunications, cable and cloud service provider companies and other large customers, we may be required to agree to terms and conditions that could have an adverse effect on our business or impact the amount of revenues to be recognized.

Telecommunications, cable and cloud service provider companies, which comprise a significant portion of our customer base, and other large companies, generally have greater purchasing power than smaller entities and, accordingly, often request and receive more favorable terms from suppliers. For example, our customers France Telecom-Orange and Deutsche Telekom AG have formed a company for the purpose of purchasing products from, and negotiating more favorable contractual terms with, suppliers. As we seek to sell more products to this class of customer, we may be required to agree to such terms and conditions, which may include terms that affect the timing of our ability to recognize revenue, increase our costs and have an adverse effect on our business, financial condition, and results of operations. Consolidation among such large customers can further increase their buying power and ability to require onerous terms.

In addition, service providers have purchased products from other vendors who promised but failed to deliver certain functionality and/or had products that caused problems or outages in the networks of these customers. As a result, these customers may request additional features from us and require substantial penalties for failure to deliver such features or may require substantial penalties for any network outages that may be caused by our products. These additional requests and penalties, if we are required to agree to them, may impact the amount of revenue recognition from such sales, which may negatively affect our business, financial condition and results of operations. In addition, increased patent litigation brought against customers ~~by non-practicing entities~~ in recent years, may result, and in some cases has resulted, in customers requesting or requiring vendors to absorb a portion of the costs of such litigation or providing broader indemnification for litigation, each of which could increase our expenses and negatively affect our business, financial condition, and results of operations.

Non-standard contract terms with telecommunications, cable and cloud service provider companies and other large customers, could have an adverse effect on our business or impact the amount of revenues to be recognized. Telecommunications, cable and cloud service provider companies, and other large companies, generally have greater purchasing power than smaller entities and often request and receive more favorable terms from suppliers. We may be required to agree to such terms and conditions, which may include terms that affect the timing of or our ability to recognize revenue,

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increase our costs, and have an adverse effect on our business, financial condition, and results of operations. Consolidation among such large customers can further increase their buying power and ability to require onerous terms from us.

In addition, other vendors may have promised but failed to deliver certain functionality to these types of customers and/or had products that caused problems or outages in their networks. As a result, these customers may request additional features from us and require substantial penalties for failure to deliver such features or for any network outages that may or may not have been caused by our products. If we are required to agree to these requests or incur penalties, the amount of revenue recognized from such sales may be negatively impacted and as a result, may negatively affect our business, financial condition and results of operations.

Regulation of our industry ~~in general and the telecommunications industry in particular~~or those of our customers could harm our operating results and future prospects.

We are subject to laws and regulations affecting the sale of our products in a number of areas. For example, some governments have regulations prohibiting government entities from purchasing security products that do not meet country-specific safety, conformance or security certification criteria or in-country test requirements. Other regulations that may negatively impact our business include local content or local manufacturing requirements most commonly applicable for government, state-owned enterprise or regulated industry procurements. These types of regulations are in effect or under consideration in several jurisdictions where we do business.

The ~~Dodd-Frank Wall Street Reform and Consumer Protection Act includes disclosure requirements applicable~~SEC requires us, as a public company who uses certain raw materials that are considered to ~~public companies regarding the use of~~be “conflict minerals” ~~mined~~in our products, to report publicly on the extent to which "conflict minerals" are in our supply chain. As a provider of hardware end-products, we are several steps removed from the ~~Democratic Republic~~mining, smelting or refining of ~~Congo~~any conflict minerals. Accordingly, our ability to determine with certainty the origin and ~~adjoining countries, which~~chain of custody of these raw materials is limited. Our relationships with customers and suppliers could suffer if we ~~refer~~are unable to ~~collectively~~describe our products as ~~the DRC, and procedures regarding a manufacturer's efforts to prevent the sourcing of such “conflict minerals.~~“conflict-free.” ~~These minerals are present~~We may also face increased costs in ~~our products. In addition, the European Union reached agreement in late 2016 on a EU-wide~~complying with conflict minerals ~~rule under which most EU importers of tin, tungsten, tantalum, gold and their ores will have to conduct due diligence to~~disclosure requirements.

ensure the minerals do not originate from conflict zones and do not fund armed conflicts. Large manufacturers also will have to disclose how they plan to monitor their sources to comply with the rules. The regulation was adopted in 2017 with compliance required by 2021.

~~In addition, environmental~~Environmental laws and regulations relevant to electronic equipment manufacturing or operations, including laws and regulations governing the hazardous material content of our products and ~~laws relating to~~ the collection of and recycling of electrical and electronic equipment, may adversely impact our business and financial condition. ~~These~~In particular, we face increasing complexity in our product design and procurement operations as we adjust to new and future requirements relating to the chemical and material composition of our products, their safe use, the energy consumption associated with those products, climate change laws, and regulations ~~include, among others, the European Union, or EU, Restriction on the Use of Certain Hazardous Substances Directive, or RoHS. The EU RoHS~~ and the similar laws of other jurisdictions limit the content of certain hazardous materials, such as lead, mercury, and cadmium, in electronic equipment, including our products. Currently, our products comply with the EU RoHS requirements. However, certain exemptions are scheduled to lapse. The lapse of any exemption, further changes to this or other laws, or passage of similar laws in the EU or other jurisdictions, wouldproduct take-back legislation, which could require us to cease selling non-compliant products and to reengineer our products to use compliant components ~~compatible with these regulations. This reengineering and component substitution~~which could result in additional costs to us, disrupt our operations, ~~or logistics,~~ and result in an adverse impact on our operating results. ~~In addition, in validating the compliance of~~If we were to violate or become liable under environmental laws or if our products become non-compliant with applicable hazardous materials restrictions, we rely substantially on affirmations by our component suppliers as to the compliance of their products with respect to those same restrictions. Failure by our component suppliers to furnish accurate and timely information could subject us to penalties or liability for violation of such hazardous materials restrictions, interrupt our supply of products to the EU, and result inenvironmental laws, our customers ~~refusing or being unable~~may refuse to purchase our ~~products. Additionally, the EU~~products and ~~a number~~we could incur substantial costs or face other sanctions, which may include restrictions on our products entering certain jurisdictions. The amount and timing of ~~other jurisdictions have adopted regulations requiring producers of electrical and electronic equipment~~costs to assume certain responsibilities for collecting, treating, recycling and disposing of products when they have reached the end of their useful life. Finally, the EU REACH regulations regulate the handling of certain chemical substances that may be used in our products.comply with environmental laws are difficult to predict.

In addition, as a contractor and subcontractor to the U.S. government, ~~departments and agencies,~~ we are subject to federal regulations pertaining to our IT ~~systems. For instance, as a subcontractor to the U.S. Department of Defense, or DOD, the Defense Federal Acquisition Regulation Supplement, or DFARS, required~~systems that ~~our IT systems comply~~requires compliance with ~~the~~certain security and privacy controls described in National Institute of Standards and Technology Special Publication 800-171, or NIST SP 800-171. The DFARS also requires that we flow the security control requirement down to certain of our own subcontractors.controls. Failure to comply with these requirements could result in a loss of federal government business, subject us to claims or other remedies for non-compliance, ~~and~~or negatively impact our business, financial condition, and results of operations.

~~The~~Moreover, our customers in the telecommunications industry ~~is highly regulated,~~may be subject to regulations and our business and financial condition could be adversely affected by changes in such regulations ~~relating to the Internet telecommunications industry. Similarly, while there are currently few~~affecting our customers. Further, we could be affected by new laws or regulations ~~that apply directly to~~on access to or commerce on IP networks ~~future regulations could include sales taxes on products sold via the Internet and Internet service provider access charges. We could be adversely affected by regulation of IP networks and commerce~~ in ~~any country~~jurisdictions where we market ~~equipment and services to service providers or cloud provider companies.~~our solutions. Regulations governing the range of services and business models that can be offered by service providers or cloud provider companies could adversely affect those customers' needs for products. For instance, in December 2017, the U.S. Federal Communications Commission repealed its 2015 regulations governing aspects of fixed broadband networks and wireless networks. This change in regulatory treatment of networks might impact service provider and cloud provider business models and their need for Internet telecommunications equipment and services. At the same time, several states have enacted their own laws and regulations governing certain aspects of fixed and wireless networks in the manner of the 2015 FCC regulations. These laws and regulations enacted by the states are or will be subject to legal challenges from the federal government and/or regulated providers. Also, many jurisdictions are evaluating or implementing regulations relating to ~~cyber security,~~cybersecurity, supply chain integrity, privacy and data protection, any of which can affect the market and requirements for networking and security equipment.

The adoption and implementation of additional regulations could reduce demand for our products, increase the cost of building and selling our products, result in product inventory write-offs, impact our ability to ship products into affected areas and recognize revenue in a timely manner, require us to spend significant time and expense to comply with, and subject us to fines and civil or criminal sanctions or claims if we were to violate or become liable under such regulations. Any of these impacts could have a material adverse effect on our business, financial condition, and results of operations.

Governmental regulations and economic sanctions affecting the import or export of products ~~generally~~ or affecting products containing encryption capabilities ~~in particular,~~ could negatively affect our revenues and operating results.

The ~~United States~~U.S. and ~~various foreign~~other governments have imposed ~~controls and~~ restrictions on the import and export of, among other things, certain telecommunications products and components, particularly those that contain or use encryption technology. Most of our products are telecommunications

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products and contain or use encryption technology and, consequently, are subject to ~~such controls, requirements and~~ restrictions. ~~Certain governments, like those of Russia and China, control importation and in-country use of encryption items and technology.~~ The scope, nature, and severity of such controls vary widely across different countries and may change frequently over time.

~~Increasingly, governments have begun using export~~In many cases, these government restrictions require a license prior to importing or exporting a good. Such licensing requirements can introduce delays into our operations as we must apply for the license and wait for government officials to process it; it is possible that lengthy delays will lead to the cancellation of orders by customers. Moreover, if we fail to obtain necessary licenses prior to importing or exporting covered goods, we can be subject to government sanctions, including monetary penalties. Government restrictions on the import ~~controls not only to further national security objectives but also to protect local industries and restrict proliferation of locally developed “emerging~~ or foundational technology." For example, in 2018 the U.S. enacted the Export Control Reform Act, which expands the power of the Commerce Department to use export controls to protect domestic industry and to restrict the export of emerging and foundational technologies not currently subject to controls. In furtherance of that law, on November 19, 2018, the United States Department of Commerce sought public comment on how to define emerging technologies. Ourtechnology can restrict our ability to ~~market~~manufacture and sell our products, ~~overseas may be impacted by such export controls.~~which can affect negatively our revenues and operating results.

Certain governments also impose special local content, certification, testing, source code review, escrow and governmental recovery of private encryption keys, or feature requirements on cybersecurity and other network equipment for purposes of government procurements. Similar requirements also may be imposed in procurements by state owned entities (“SOE’s”) or even private companies forming part of “critical network infrastructure” or supporting sensitive industries. For example, China, Vietnam and India have promulgated cybersecurity regulations affecting networking products that may impair our ability to profitably market and sell our products there. China, in particular, is expected to require implementation of non-standard Chinese encryption algorithms in products sold into certain government, SOE, critical infrastructure and sensitive industry (such as financial institutions) markets. In the U.S., there are new restrictions on the use of certain Chinese-origin components or systems in items sold to the U.S. government.

In addition, the U.S. and other governments have especially broad sanctions and embargoes prohibiting provision of goods or services to certain countries, ~~and~~ territories, ~~and to certain~~ sanctioned governments, ~~legal entities~~businesses, and individuals. Some of these restrictions have been imposed not just to protect national security but also to protect domestic industries and to achieve political aims. For instance, the U.S. Department of Commerce in 2018 added to its Entity List a Chinese semiconductor manufacturer on the express basis that it threatens the viability of U.S. competitors; the Entity List traditionally is used to restrict exports to end users that pose a security risk. Particularly far reaching and complex are restrictions imposed by the U.S. and EU on exports to Russia and, in particular, to the disputed region of Crimea. We have implemented systems to detect and prevent sales into ~~these~~ restricted countries or to prohibited entities or individuals, but there can be no assurance that our third party, downstream resellers and distributors will abide by these restrictions or have processes in place to ensure ~~compliance, especially where~~compliance.

Certain governments also impose special local content, certification, testing, source code review, escrow and governmental recovery of private encryption keys, or other cybersecurity feature requirements to protect network equipment and software procured by or for the government. Similar requirements also may be imposed in procurements by state owned entities or even private companies forming part of “critical network infrastructure” or supporting sensitive industries.

In recent years, U.S. government ~~regulation might prohibit adherence~~officials have had concerns with the security of products and services from certain telecommunications and video providers based in China, Russia, and other regions. As a result, Congress has enacted bans on the use of certain Chinese-origin components or systems either in items sold to the U.S. government or in the internal networks of government contractors and subcontractors (even if those networks are not used for government-related projects). The U.S. government also has been considering policies that would limit the ability of businesses to acquire certain goods and services from entities with geographic connections to China, Russia, and other untrusted nation-states, including subjecting such ~~restrictions.~~acquisitions to government review. Such proposals, if implemented, could introduce significant uncertainty into our supply chain and overall operational planning as we would not be certain which potential acquisitions and transactions the government would permit and which it would reject.

In addition, governments sometimes impose additional taxes on certain imported products. For example, the ~~United States~~U.S. and Chinese governments each have imposed tariffs on certain products, including information and communication technology products originating from the other ~~country. In 2018, the United States, for example, imposed tariffs on a large variety of products of China origin. As a result, beginning September 24, 2018,~~country, which resulted in a large portion of ~~Juniper~~our products manufactured in China ~~became~~becoming subject to a 10% tariff on importation into the U.S. That tariff rate may increase to 25% on March 2, 2019, absent satisfactory outcome of continuing negotiations between the United States and China. The U.S. President has also indicated a readiness to further expand the scope of the tariffs ~~on Chinese goods if negotiations are not successful; such action could subject an even wider range of Juniper products to tariff~~ on importation into the U.S. Depending upon ~~its~~their duration and implementation, as well as our ability to mitigate their impact, these tariffs could materially affect our business, including in the form of increased cost of goods sold, increased pricing for customers, and reduced sales.

Governmental regulation of ~~encryption or~~our IP networking, encryption technology and ~~regulation of~~ imports or exports, or our failure to obtain required import or export approval for our products, or related economic sanctions could harm our international and domestic sales and adversely affect our revenues and operating results. In addition, failure to comply with such regulations could result in harm to our reputation and ability to compete in international markets, penalties, costs, seizure of assets (including source code) and restrictions on import or export privileges or adversely affect sales to government agencies or government-funded projects.

Our actual or perceived failure to adequately protect personal data could adversely affect our business, financial condition, and results of operations.

A wide variety of provincial, state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. These ~~privacy-~~privacy and data protection-related laws and regulations are evolving, ~~with new or modified laws~~extensive, and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. Further, our legal and regulatory obligations in foreign jurisdictions are subject to unexpected changes, including the potential for regulatory or other governmental entities to enact new or additional laws or regulations, to issues rulings that invalidate prior laws or regulations, or to increase penalties significantly.complex. Compliance with these laws and regulations can be costly and can delay or impede the development and offering of new products and services. In addition, the interpretation and application of privacy and data protection-related laws in some cases is uncertain, and our legal and regulatory obligations are subject to frequent changes, including the potential for various regulator or other governmental bodies to enact new or additional laws or regulations, to issue rulings that invalidate prior laws or regulations, or to increase penalties. Examples of recent and anticipated developments that have or could impact our business include the following:

~~For example, the~~•The General Data Protection Regulation, ~~(“GDPR”),~~ which became effective in May 2018, imposes ~~more~~ stringent data protection requirements and provides ~~for significantly greater~~significant penalties for ~~noncompliance, than~~noncompliance. We have relied on the ~~EU laws~~use of model contractual clauses approved by the E.U. Commission to legitimize the transfer of personal data outside of the E.U. to certain jurisdictions, including the United States. The model contractual clauses have been subject to legal challenge. In relation to the recent “Schrems II” decision by the Court of Justice of the European Union and its impact on our data transfer mechanism, we may experience additional costs associated with increased compliance burdens and new

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contract negotiations with third parties that ~~previously applied. Additionally, California recently enacted~~aid in processing of data on our behalf. We may face reluctance or resistance by our current and prospective customers to use our products and services. Further, we may find it necessary to make further changes to our handling of personal data of residents of the European Economic Area (“EEA”). The regulatory environment applicable to the handling of EEA residents’ personal data, and our actions in addressing such environment, may cause us to assume additional liabilities or incur additional costs and could result in our business, operating results and financial condition being harmed. In addition, both we and our customers may face a risk of enforcement actions by data protection authorities in the EEA relating to personal data transfers to us and by us from the EEA. Any such enforcement actions could result in substantial costs and diversion of resources, distract management and technical personnel, and negatively affect our business, operating results, and financial condition.

•On January 31, 2020, the United Kingdom ("U.K.") withdrew from the European Union ("EU"), commonly referred to as "Brexit". There is significant uncertainty related to how data flows in and out of the U.K. will be affected if the U.K. does not receive an adequacy decision in the next six months. We may experience additional costs associated with increased compliance burdens and new contract negotiations with third parties depending on the outcome of the adequacy discussions.

•Data protection legislation is also becoming increasingly common in the U.S. at both the federal and state level. The California Consumer Privacy Act (“CCPA”), which ~~will become~~became effective ~~January 1, 2020. The CCPA will,~~and enforceable in 2020 requires, among other ~~requirements, require~~things, covered companies to provide new disclosures to California consumers regarding the use of personal information, gives California residents expanded rights to access their personal information and ~~allow~~allows such consumers new abilities to opt-out of certain sales of personal information. Legislators have stated that they intend to propose amendments to the CCPA before the effective date. It remains unclear the extent of the modifications that will be made to the CCPA, or how such modifications will be interpreted. The effects of the CCPA ~~potentially are significant~~ and other similar laws may require us to modify our data processing practices and policies, adapt our goods and toservices, and incur substantial costs and expenses to comply. The CCPA also provides for civil penalties for violations and a private right of action for data breaches that may increase the frequency and cost associated with data breach litigation. Further, the new California Privacy Rights Act (“CPRA”) which was passed in anNovember 2020, significantly modifies the CCPA. These modifications may result in additional uncertainty and require us to incur additional costs and expenses in our effort to comply. We

•The Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data. In addition, we may ~~also~~ be or become subject to ~~additional obligations relating~~data localization laws mandating that data collected in a foreign country be processed and stored within that country.

•Both U.S. and non-U.S. governments are considering regulating artificial intelligence and machine learning, which may impact our products and services and cause us to ~~personal data by contract that industry standards apply~~incur costs and expenses in order to ~~our practices.~~ comply.

Our actual or perceived failure to comply with applicable laws and regulations or other obligations to which we may be subject relating to personal data, or to protect personal data from unauthorized access, use, or other processing, could result in enforcement actions and regulatory investigations against us, claims for damages by customers and other affected individuals, fines, damage to our reputation, and loss of goodwill, any of which could have a material adverse effect on our operations, financial performance, and business. Further, evolving and changing definitions of personal data and personal information, within the EU, the U.S., U.K., and elsewhere, including the classification of IP addresses, machine identification information, location data, and other information, may limit or inhibit our ability to operate or expand our business, including limiting business relationships and partnerships that may involve the sharing or uses of data, and may require significant costs, resources, and efforts in order to comply.

~~Our ability to develop, market, and sell products could be harmed if we are unable to retain or hire key personnel.~~FINANCIAL RISKS

Our future success depends upon our ability to recruit and retain the services of executive, engineering, sales and marketing, and support personnel. The supply of highly qualified individuals, in particular engineers in very specialized technical areas, or sales people with specialized industry expertise, is limited and competition for such individuals is intense. None of our officers or key employees is bound by an employment agreement for any specific term. The loss of the services of any of our key employees, the inability to attract or retain personnel in the future or delays in hiring required personnel, engineers and sales people, and the complexity and time involved in replacing or training new employees, could delay the development and introduction of new products, and negatively impact our ability to market, sell, or support our products.

A number of our team members are foreign nationals who rely on visas and entry permits in order to legally work in the United States and other countries. In recent years, the United States has increased the level of scrutiny in granting H-1(B), L-1 and other business visas. In addition, the current U.S. administration has made immigration reform a priority. Compliance with United States immigration and labor laws could require us to incur additional unexpected labor costs and expenses or could restrain our ability to retain skilled professionals. Any of these restrictions could have a material adverse effect on our business, results of operations and financial conditions.

Our financial condition and results of operations could suffer if there is an impairment of goodwill or ~~other~~purchased intangible assets. As of December 31, 2020, our goodwill was $3,669.6 million, and our purchased intangible assets ~~with indefinite lives.~~

were $266.7 million. We are required to test intangible assets with indefinite lives, including goodwill, annually or, in certain instances, more frequently, ~~if certain circumstances change that would more likely than not reduce the fair value of a reporting unit~~ and intangible assets below their carrying values. As of December 31, 2018, our goodwill was $3,108.8 million and our intangible assets with indefinite lives was $49.0 million. When the carrying value of a reporting unit’s goodwill exceeds its implied fair value of goodwill, or if the carrying amount of an intangible asset with an indefinite life exceeds its fair value, a chargemay be required to ~~operations is recorded. Either event would result in incremental expenses for that quarter,~~record impairment charges, which would reduce any earnings or increase any loss for the period in which the impairment was determined to have occurred. We have in the past recorded goodwill impairment charges. Declines in our level of revenues or declines in our operating margins, or sustained declines in our stock price, increase the risk that goodwill and intangible assets with indefinite lives may become impaired in future periods.

Our goodwill impairment analysis is sensitive to changes in key assumptions used in our ~~analysis, such as expected future cash flows, the degree of volatility in equity and debt markets, and our stock price.~~analysis. If the assumptions used in our analysis are not realized, it is possible that an impairment charge may need to be recorded in the future. We cannot accurately predict the amount and timing of any impairment of goodwill or other intangible assets. However, any such impairment would have an adverse effect on our results of operations.

Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results.

Our future effective tax rates and the amount of our taxable income could be subject to volatility

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or adversely affected by the following: earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated earnings in countries where we have higher statutory rates; changes in the valuation of our deferred tax assets and liabilities; expiration of, or lapses in, the R&D tax credit laws applicable to us; transfer pricing adjustments related to certain acquisitions, including the license of acquired intangibles under our intercompany R&D cost sharing arrangement; costs related to intercompany restructuring; tax effects of share-based compensation; challenges to our methodologies for valuing developed technology or intercompany arrangements; limitations on the deductibility of net interest expense; or changes in tax laws, regulations, accounting principles, or interpretations thereof. For example, on July 24, 2018, the Ninth Circuit Court of Appeals, or the Court, issued an opinion in Altera Corp. v. Commissioner requiring related parties in an intercompany cost-sharing arrangement to share expenses related to share-based compensation. On August 7, 2018, the Court withdrew its opinion to allow time for a reconstituted panel to confer. We are monitoring this case and any impact the final opinion may have on our financial statements. In addition, the Tax ~~Cuts and Jobs~~ Act ~~of 2017 (the “Tax Act”), which was signed into law on December 22, 2017,~~ made significant changes to the taxation of U.S. business entities, ~~that may have a meaningful impact to our provision for income taxes. These changes~~which included a reduction to the federal corporate income tax rate, the current taxation of certain foreign earnings, the imposition of base-erosion prevention measures which may limit the deduction of certain transfer pricing payments, and possible limitations on the deductibility of net interest expense or corporate debt obligations. Accounting for the income tax effects of the Tax Act required significant judgments and estimates that are based on current interpretations of the Tax Act. The U.S. Department of the Treasury continues to issue Proposed Regulations that affect various components of the Act. Our future effective tax rate may be impacted by changes in interpretation of the regulations, as well as additional legislation and guidance regarding the Tax Act.

Furthermore, onin October 5, 2015, the Organisation for Economic Co-operation and Development, ~~or OECD,~~ an international association of 3537 countries including the U.S., published final proposals under its Base Erosion and Profit Shifting, or BEPS, Action Plan. The BEPS Action Plan includes fifteen Actions to address BEPS in a comprehensive manner and represents a significant change to the international corporate tax landscape. These proposals, as adopted by countries, may increase tax uncertainty and adversely affect our provision for income taxes.

In addition, we are generally subject to the continuous examination of our income tax returns by the Internal Revenue Service, ~~or IRS,~~ and other tax authorities. It is possible that tax authorities may disagree with certain positions we have taken and any adverse outcome of such a review or audit could have a negative effect on our financial position and operating results. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes, but the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment by management, and there are transactions where the ultimate tax determination is uncertain. Although we believe that our estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our consolidated financial statements and may materially affect our financial results in the period or periods for which such determination is made. ~~There can be no assurance that the outcomes from continuous examinations will not have an adverse effect on our business, financial condition, and results of operations.~~

~~We may face difficulties enforcing our proprietary rights, which could adversely affect our ability to compete.~~

We generally rely on a combination of patents, copyrights, trademarks, and trade secret laws and contractual restrictions on disclosure of confidential and proprietary information, to establish and maintain proprietary rights in our technology and products. Although we have been issued numerous patents and other patent applications are currently pending, there can be no assurance that any of our patent applications will result in issued patents or that any of our patents or other proprietary rights will not be challenged, invalidated, infringed or circumvented or that our rights will, in fact, provide competitive advantages to us or protect our technology, any of which could result in costly product redesign efforts, discontinuance of certain product offerings and other competitive harm.

In addition, despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary. We generally enter into confidentiality or license agreements with our employees, consultants, vendors, and customers, and generally limit access to and distribution of our proprietary information. However, we cannot assure you that we have entered into such agreements with all parties who may have or have had access to our confidential information or that the agreements we have entered into will not be breached. We cannot guarantee that any of the measures we have taken will prevent misappropriation of our technology.

Furthermore, the laws of some foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States. The outcome of any actions taken in these foreign countries may be different than if such actions were determined under the laws of the United States. Although we are not dependent on any individual patents or group of patents for particular segments of the business for which we compete, if we are unable to protect our proprietary rights in a market, we may find ourselves at a competitive disadvantage to others who need not incur the substantial expense, time, and effort required to create innovative products that have enabled our success.

We are subject to risks arising from our international operations, which may adversely affect our business, financial condition, and results of operations.

We derive a substantial portion of our revenues from our international operations, and we plan to continue expanding our business in international markets. We conduct significant sales and customer support operations directly and indirectly through our distributors and value-added resellers in countries throughout the world and depend on the operations of our contract manufacturers and suppliers that are located outside of the ~~United States.~~U.S. In addition, a portion of our R&D and our general and administrative operations are conducted outside the ~~United States. In some countries, we may experience reduced intellectual property protection.~~

U.S. As a result of our international operations, we are affected by economic, business regulatory, social, and political conditions in foreign countries, including the following:

•changes in general IT ~~spending,~~spending;

•the impact of the recent COVID-19 pandemic, and any other adverse public health developments, epidemic disease or other pandemic in the countries in which we operate or where our customers are located;

•the imposition of government controls, inclusive of critical infrastructure protection;

•changes ~~or limitations~~ in trade ~~protection laws~~controls, economic sanctions, or other ~~regulatory requirements,~~international trade regulations, which may affect our ability to import or export our products to or from various countries;

•laws that restrict sales of products that are developed, manufactured, or ~~manufactured outside of the country;~~incorporate components or assemblies from certain countries to specific customers (e.g., U.S. federal government departments and agencies) and industry segments, or for particular uses or more generally;

•varying and potentially conflicting laws and ~~regulations;~~regulations, changes in laws and interpretation of laws, misappropriation of intellectual property and reduced intellectual property protection;

•political uncertainty, including demonstrations, that could have an impact on product delivery;

•fluctuations in local economies;

~~wage inflation or a tightening of the labor market;~~•fluctuations in currency exchange rates (see Quantitative and Qualitative Disclosures about Market Risk for more information);

•tax policies, treaties or laws that could have aan unfavorable business impact;

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~~import tariffs imposed by~~

•the ~~United States~~negotiation and ~~reciprocal tariffs imposed by foreign countries;~~implementation of free trade agreements between the U.S. and other nations;

•data privacy rules and other regulations that affect cross border data flow; and

~~the impact~~•theft or unauthorized use or publication of the following on customer spending patterns: political considerations, unfavorable changes in tax treaties or laws, natural disasters, epidemic disease, labor unrest, earnings expatriation restrictions, misappropriation ofour intellectual property ~~military actions, acts of terrorism, political~~ and ~~social unrest and difficulties in staffing and managing international operations.~~other confidential business information.

Any or all of these factors has or could have ~~a material~~an adverse impact on our business, financial condition, and results of operations.

In addition, the medium and long term consequences of Brexit for the economies of the U.K.~~’s exit~~ and EU member states as a result of the U.K.'s withdrawal from the EU ~~commonly referred to as Brexit, has caused,~~remain unknown and ~~may continue to cause, uncertainty~~unpredictable. We conduct business in the ~~global markets. Brexit, if implemented,will take some period of time to complete~~EU and ~~could result in regulatory changes that impact our business. For example, changes to the way service providers conduct business and transmit data between~~ the U.K. As a consequence, any one or more medium and ~~the EU could require us to make changes to the way we handle customer data. We will also review the impact~~longer term effects of ~~any resulting~~

~~changes to EU or U.K. law that could affect our operations, such as~~Brexit, including those affecting labor policies, financial planning, product manufacturing, product distribution, and product distribution. Political and regulatory responses to the vote are still developing and we are in the process of assessing the impact the vote may have on our business as more information becomes available. Nevertheless, because we conduct business in the EU, including the U.K., any of thethose effects ~~of Brexit, including those~~ we cannot anticipate, could have a material adverse effect on our business, business opportunities, operating results, financial condition, and cash ~~flows.~~flows if we are unable to anticipate and adequately address these risks.

There remains significant risk that the U.K. will exit from the EU on March 30, 2019, without agreement between the EU and U.K. on terms addressing customs and trade matters. If it occurs, this “Hard Brexit” scenario would mean, among other things, that as of March 30, 2019, U.K. Customs would have to clear a far greater daily volume of imports than it has ever had to before. If U.K. Customs is not able to handle such increased volume as of the end of March, significant delays in imports may very well result, thereby potentially producing a short-term material adverse effect on our business. Hard Brexit could result in further short-term uncertainty and currency volatility. Additional currency volatility could drive a weaker British pound, which increases the cost of goods imported into our U.K. operations and may decrease the profitability of our U.K. operations. A weaker British pound versus the U.S. dollar also causes local currency results of our U.K. operations to be translated into fewer U.S. dollars during a reporting period. Any adjustments we make to our business and operations as a result of Brexit could result in significant time and expense to complete. Our business is also impacted by the negotiation and implementation of free trade agreements between the United States and other nations. Such agreements can reduce barriers to international trade and thus the cost of conducting business overseas. For instance, the United States recently reached a new trilateral trade agreement with the Governments of Canada and Mexico to replace the North American Free Trade Agreement (NAFTA). If the United States withdraws from NAFTA and the three countries fail to approve the new agreement, known as the United States-Mexico-Canada Agreement (U.S.MCA), our cost of doing business within the three countries could increase.

Moreover, local laws and customs in many countries differ significantly from or conflict with those in the ~~United States~~U.S. or in other countries in which we operate. In many foreign countries, it is common for others to engage in business practices that are prohibited by our internal policies and procedures or U.S. regulations applicable to us. There can be no assurance that our employees, contractors, channel partners, and agents will not take actions in violation of our policies and procedures, which are designed to ensure compliance with U.S. and foreign laws and policies. Violations of laws or key control policies by our employees, contractors, channel partners, or agents could result in termination of our relationship, financial reporting problems, fines, and/or penalties for us, or prohibition on the importation or exportation of our products and could have a material adverse effect on our business, financial condition and results of operations.

~~Our products~~There are highly technical and if they contain undetected defects, errors or malware or do not meet customer quality expectations, our business could be adversely affected, and we may be subject to additional costs or lawsuits or be required to pay damages in connection with any alleged or actual failure of our products and services.

Our products are highly technical and complex, are critical to the operation of many networks, and, in the case of our security products, provide and monitor network security and may protect valuable information. Our products have contained and may contain one or more undetected errors, defects, malware, or security vulnerabilities. These errors may arise from hardware or software we produce or procure from third parties. Some errors in our products may only be discovered after a product has been installed and used by end-customers.

Any errors, defects, malware or security vulnerabilities discovered in our products after commercial release could result in monetary penalties, negative publicity, loss of revenues or delay in revenue recognition, loss of customers, loss of future business and reputation, penalties, and increased service and warranty cost, any of which could adversely affect our business, financial condition, and results of operations. In addition, in the event an error, defect, malware, or vulnerability is attributable to a component supplied by a third-party vendor, we may not be able to recover from the vendor all of the costs of remediation that we may incur. In addition, we could face claims for product liability, tort, or breach of warranty or indemnification. Defending a lawsuit, regardless of its merit, is costly and may divert management’s attention. If our business liability insurance coverage is inadequate, or future coverage is unavailable on acceptable terms or at all, our financial condition and results of operations could be harmed. Moreover, if our products fail to satisfy our customers' quality expectations for whatever reason, the perception of and the demand for our products could be adversely affected.

~~We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations.~~

Because a substantial portion of our business is conducted outside the United States, we face exposure to adverse movements in non-U.S. currency exchange rates. These exposures may change over time as business practices evolve and could have a material adverse impact on our financial condition and results of operations.

The majority of our revenues and expenses are transacted in U.S. Dollars. We also have some transactions that are denominated in foreign currencies, primarily the British Pound, Chinese Yuan, Euro, and Indian Rupee related to our sales and service operations outside of the United States. An increase in the value of the U.S. Dollar could increase the real cost to our customers of our products in those markets outside the United States in which we sell in U.S. Dollars. This could negatively affect our ability to meet our customers' pricing expectations in those markets and may result in erosion of gross margin and market share. A weakened U.S. Dollar could increase the cost of local operating expenses and procurement of raw materials to the extent we must purchase components in foreign currencies.

~~Currently, we hedge currency exposures~~risks associated with ~~certain assets~~our outstanding and liabilities denominated in nonfunctional currencies and periodically hedge anticipated foreign currency cash flows, with the aim of offsetting the impact of currency fluctuations on these exposures. However, hedge activities can be costly, and hedging cannot fully offset all risks, including long-term declines or appreciation in the value of the U.S. Dollar. If our attempts to hedge against these risks are not successful, or if long-term declines or appreciation in the value of the U.S. Dollar persist, our financial condition and results of operations could be adversely impacted.

~~If we fail to adequately evolve our financial and managerial control and reporting systems and processes, our ability to manage and grow our business will be negatively affected.~~

Our ability to successfully offer our products and implement our business plan in a rapidly evolving market requires an effective planning, forecasting, and management process to enable us to effectively scale and adjust our business and business models in response to fluctuating market opportunities and conditions. We will need to continue to improve our financial and managerial control and our reporting systems and procedures in order to manage our business effectively in the future. If we fail to effectively improve our systems and processes or we fail to monitor and ensure that these systems and processes are being used correctly, our ability to manage our business, financial condition, and results of operations may be negatively affected.

~~If our products do not interoperate with our customers’ networks, installations will be delayed or cancelled and could harm our business.~~

Our products are designed to interface with our customers’ existing networks, each of which have different specifications and utilize multiple protocol standards and products from other vendors. Many of our customers’ networks contain multiple generations of products that have been added over time as these networks have grown and evolved. Our products must interoperate with many or all of the products within these networks as well as future products in order to meet our customers’ requirements. If we find errors in the existing software or defects in the hardware used in our customers’ networks, we may need to modify our software or hardware to fix or overcome these errors so that our products will interoperate and scale with the existing software and hardware, which could be costly and could negatively affect our business, financial condition, and results of operations. In addition, if our products do not interoperate with those of our customers’ networks, demand for our products could be adversely affected or orders for our products could be cancelled. This could hurt our operating results, damage our reputation, and seriously harm our business and prospects.

Our products incorporate and rely upon licensed third-party technology, and if licenses of third-party technology do not continue to be available to us or are not available on terms acceptable to us, our revenues and ability to develop and introduce new products could be adversely affected.

We integrate licensed third-party technology into certain of our products. From time to time, we may be required to renegotiate our current third-party licenses or license additional technology from third-parties to develop new products or product enhancements or to facilitate new business models. Third-party licenses may not be available or continue to be available to us on commercially reasonable terms. The failure to comply with the terms of any license, including free open source software, may result in our inability to continue to use such license. Some of our agreements with our licensors may be terminated for convenience by them. In addition, we cannot be certain that our licensors are not infringing the intellectual property rights of third parties or that our licensors have sufficient rights to the licensed intellectual property in all jurisdictions in which we may sell our products. Third- party technology we incorporate into our products that is deemed to infringe on the intellectual property of others may result, and in some cases has resulted, in limitations on our ability to source technology from those third parties, restrictions on our ability to sell products that incorporate the infringing technology, increased exposure to liability that we will be held responsible for incorporating the infringing technology in our products and increased costs involved in removing that technology from our products or developing substitute technology. Our inability to maintain or re-license any third-party licenses required in our products or our inability to obtain third-party licenses necessary to develop new products and product enhancements, could require us, if possible, to develop substitute technology or obtain substitute technology of lower quality or performance standards or at a greater cost, any of which could delay or prevent product shipment and harm our business, financial condition, and results of operations.

~~We rely on the availability and performance of information technology services provided by third parties, including IBM which will manage a significant portion of our systems.~~

Under the terms of our recent Master Services Agreement and certain Statements of Work, following a transition period, IBM will provide us with a broad range of information technology services, such as applications, including support, development and maintenance; infrastructure management and support, including for servers storage and network devices; and end user support including service desk. We expect that our businesses will become dependent on the services provided and systems operated for us by IBM and its third-party providers. While we believe that we conducted appropriate due diligence before entering into this agreement, the failure of one or more of these entities to meet our performance standards and expectations, including with respect to data security, may have a material adverse effect on our business, results of operations or financial condition.

Our success is dependent on our ability to maintain effective relationships with IBM and other third-party technology and service providers as well as the ability of IBM and any other third-party providers to perform as expected. We may terminate our agreement with IBM and any and all Statements of Work at any time on short notice for cause, convenience, certain specific performance failures, a breach of warranties by IBM, failure to transition, failure to transform, changes in law, force majeure, or a change in the control of either IBM or us. Depending on the type and timing of a termination, we may be required to pay certain termination amounts to IBM. IBM's only right to terminate the agreement is based on our failure to comply with certain terms applying to disputed payments.

Our ability to realize the expected benefits of this arrangement is subject to various risks, some of which are not within our complete control. These risks include, but are not limited to, disruption in services and the failure to protect the security and integrity of the Company's data under the terms of the agreement. We are unable to provide assurances that some or all of these risks will not occur. Failure to effectively mitigate these risks, if they occur, could have a material adverse effect on our operations and financial results. In addition, we could face significant additional costs or business disruption if our arrangement with IBM is terminated or impaired and we cannot find alternative IT services or support on commercially reasonable terms or on a timely basis or if we are unable to hire new employees in order to return these services in-house.

We are required to evaluate the effectiveness of our internal control over financial reporting and publicly disclose material weaknesses in our controls. Any adverse results from such evaluation may adversely affect investor perception, and our stock price.

Section 404 of the Sarbanes-Oxley Act of 2002 requires our management to assess the effectiveness of our internal control over financial reporting and to disclose in our filing if such controls were unable to provide assurance that a material error would be prevented or detected in a timely manner. We have an ongoing program to review the design of our internal controls framework in keeping with changes in business needs, implement necessary changes to our controls design and test the system and process controls necessary to comply with these requirements. If in the future, our internal controls over financial reporting are determined to be not effective resulting in a material weakness or significant deficiency, investor perceptions regarding the reliability of our financial statements may be adversely affected which could cause a decline in the market price of our stock and otherwise negatively affect our liquidity and financial condition.

~~Failure to maintain our credit ratings could adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets.~~

~~The major credit rating agencies routinely evaluate our~~ indebtedness. This evaluation is based on a number of factors, which include financial strength as well as transparency with rating agencies and timeliness of financial reporting. There can be no assurance that we will be able to maintain our credit ratings and failure to do so could adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets.

~~We may be unable to generate the cash flow to satisfy our expenses, make anticipated capital expenditures or service our debt obligations, including the Notes and the Revolving Credit Facility.~~

As of December 31, ~~2018,~~2020, we ~~have issued $2,150.0~~had $2,123.8 million in aggregate principal amount of senior notes, which we refer to collectively as ~~the Notes, and had $2,139.0 million in total outstanding debt, including $350 million of senior notes that mature in February 2019.~~(the "Notes"). In ~~June 2014,~~April 2019, we entered into a ~~Credit Agreement~~credit agreement (the “Credit Agreement”) with certain institutional lenders that provides for a five-year $500.0 million unsecured revolving credit facility ~~which we refer to as the Revolving~~(the “Revolving Credit Facility, with an option to increase the Revolving Credit Facility by up to an additional $200.0 million. The Credit Agreement will terminate in June 2019, at which point all amounts borrowed must be repaid. As of December 31, 2018, no amounts were outstanding under the Credit Agreement.Facility”).

We may not be able to generate sufficient cash flow to enable us to satisfy our expenses, make anticipated capital expenditures or service our indebtedness, including the ~~Notes and the Revolving Credit Facility (if drawn upon).~~Notes. Our ability to pay our expenses, satisfy our debt obligations, refinance our debt obligations and fund planned capital expenditures ~~will depend on~~is dependent upon our future performance ~~which will be affected by general economic, financial, competitive, legislative, regulatory~~ and other factors ~~beyond our control. Based upon current levels of operations, we believe cash flow from operations and available cash will~~discussed in this section. However, there can be adequate for at least the next twelve months to meet our anticipated requirements for working capital, capital expenditures and scheduled payments of principal and interest on our indebtedness, including the Notes and the Revolving Credit Facility (if drawn upon). However, if we are unable to generate sufficient cash flow from operations or to borrow sufficient funds in the future to service our debt, we may be required to sell assets, reduce capital expenditures, refinance all or a portion of our existing debt (including the Notes) or obtain additional financing. There is no assurance that we will be able to ~~refinance our debt, sell assets or borrow more money on terms acceptable to us, or at all.~~manage any of these risks successfully.

The ~~indentures~~indenture that ~~govern~~governs the Notes ~~contain~~contains various covenants that limit our ability and the ability of our subsidiaries to, among other things:

incur ~~liens;~~

liens, incur sale and leaseback ~~transactions;~~transactions, and

consolidate or merge with or into, or sell substantially all of our assets to another person.

~~The~~ Further, the Credit Agreement contains two financial covenants along with customary affirmative and negative covenants that include the following:

•maintenance of a leverage ratio no greater than 3.0x (provided that if a material acquisition has been consummated, we are permitted to maintain a leverage ratio no greater than 3.5x for up to four quarters) and an interest coverage ratio no less than ~~3.0x~~3.0x; and

•covenants that limit or restrict the ability of the Company and its subsidiaries to, among other things, grant liens, merge or consolidate, dispose of all or substantially all of its assets, change their accounting or reporting policies, change their business and incur subsidiary indebtedness, in each case subject to customary exceptions for a credit facility of this size and type.

As a result of these covenants, we are limited in the manner in which we can conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs. Accordingly, these restrictions may limit our ability to successfully operate our business. A failure to comply with these restrictions could lead to an event of default, which could result in an acceleration of the indebtedness. Our future operating results may not be sufficient to enable compliance with these covenants to remedy any such default. In addition, ~~in the event of an acceleration, we may not have or be able to obtain sufficient funds to make any accelerated payments, including those~~ under ~~the Notes,~~applicable U.S. tax laws and ~~the Revolving Credit Facility (if drawn upon).~~

~~In addition, certain changes under the Tax Act may result in~~regulations, there are limitations on the deductibility of ~~our~~ net business interest expenses. ~~The Tax Act generally limits the annual deduction for net business interest expense to an amount equal to 30% of adjusted taxable income.~~ As a result, if our taxable income were to decline, we may not be able to fully deduct our net interest ~~expense. These changes, among others under the Tax Act, could result in increases to our future U.S. tax expenses,~~expense, which could have a material impact on our business.

~~A portion of the transaction consideration~~Further, we ~~received~~receive debt ratings from the ~~divestiture of our Junos Pulse product portfolio is~~major credit rating agencies in the ~~form~~U.S. Factors that influence our credit ratings include financial strength as well as transparency with rating agencies and timeliness of ~~a non-contingent seller promissory note and we may not receive the amount owed to us (including accrued interest), including in the time frame contemplated, by the buyer under the note.~~

In the fourth quarter of fiscal 2014, we completed the sale of our Junos Pulse product portfolio to an affiliate of Siris Capital, a private equity firm, for total consideration of $230.7 million, of which $125.0 million was in the form of an 18-month non-contingent interest-bearing promissory note issued to the Company. On May 1, 2017, we received a principal payment in the amount of $75.0 million and outstanding interest on the note, and we and the issuer agreed to further amend the terms of the note with respect to the remaining approximately $58.0 million to, among other things, extend the maturity date from December 31, 2018 to September 30, 2022, provide that interest duefinancial reporting. There can be paid in kind by increasing the outstanding principal amount of the note and subordinate the note to other debt issued by senior lenders. Since a portion of the transaction consideration is in the form of a non-contingent seller promissory note and the note is subordinated to debt issued by senior lenders, there is the risk that we may not receive the amount owed to us (including accrued interest), including in the time frame contemplated, under the note. In the event that the promissory note is not repaid on the terms we contemplate, any collection or restructuring efforts we undertake

~~may be costly and require significant time and attention from our management and there is~~ no ~~guarantee~~assurance that we will be able to ~~recover the amounts owed to us in full.~~

~~Our~~maintain our credit ratings and failure to ~~pay quarterly dividends to~~do so could adversely affect our ~~stockholders or the failure to meet our commitments to return capital to our stockholders could have a material adverse effect on our stock price.~~

~~Our ability to pay quarterly dividends or achieve our intended capital return policy will be subject to, among other things, our financial~~cost of funds and related margins, liquidity, competitive position and ~~results~~access to capital markets.

Table of operations, available cash and cash flow, capital and debt service requirements, use of cash for acquisitions and other factors. Any failure to pay or increase future dividends as announced, or a reduction or discontinuation of quarterly dividends could have a material adverse effect on our stock price.Conten t s

In November 2018, we announced that for 2019, we intend to target a capital return policy, inclusive of share repurchases and dividends, of approximately 75% of annual free cash flow. Free cash flow is calculated as net cash provided by operating activities less capital expenditures. In January 2018, we announced that our Board of Directors approved a new $2.0 billion buyback authorization, which replaced our prior authorization. In February 2018, as a part of our new buyback authorization, we entered into a $750.0 million accelerated share repurchase program, or ASR, which was completed in the third quarter of 2018, and our Board of Directors declared an increase to our quarterly cash dividend to $0.18 per share, which reflects an increase of 80% compared to previous quarterly dividends. In January 2019, our Board of Directors declared an increase to our quarterly cash dividend to $0.19 per share. Any failure to meet our commitments to return capital to our stockholders could have a material adverse effect on our stock price.

~~The investment of our cash balance and our~~Our investments ~~in government and corporate debt securities and equity securities~~ are subject to risks, which may cause losses and affect the liquidity of these investments.

~~At December 31, 2018, we had $2,489.0 million in cash and cash equivalents and $1,269.1 million in short-and long-term investments.~~ We have ~~invested these amounts primarily~~substantial investments in asset-backed securities, certificates of deposit, commercial paper, corporate debt securities, foreign government debt securities, money market funds, mutual funds, time deposits, U.S. government agency securities, and U.S. government securities. We also have ~~$90.4 million in other long-term assets for our~~ investments in privately-held companies. Certain of our investments are subject to general credit, liquidity, market, sovereign debt, and interest rate risks. Our future investment income may fall short of expectations due to changes in interest rates or if the decline in fair value related to creditworthiness of our publicly traded debt ~~or equity~~ investments is judged to be ~~other-than-temporary. These~~material. In addition, should financial market conditions worsen in the future, investments in some financial instruments may be subject to risks ~~associated with our investment portfolio may~~arising from market liquidity and credit concerns, which could have a material adverse effect on our liquidity, financial condition, and results of operations.

Changes in the method of determining the London Interbank Offered Rate, or LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect our current or future indebtedness. Certain of our financial obligations and instruments, including our Revolving Credit Facility, accounts receivable finance programs, and floating rate notes that we have invested in, as well as interest rate derivatives that we use as fair value and cash flow hedges, are or may be made at variable interest rates that use LIBOR (or metrics derived from or related to LIBOR) as a benchmark for establishing the interest rate. In 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. If LIBOR ceases to exist, we may need to renegotiate our debt arrangements that extend beyond 2021 that utilize LIBOR as a factor in determining the interest rate, which may negatively impact the terms of such indebtedness. Changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and cash flows. In addition, the overall financial markets may be disrupted as a result of the phase out or replacement of LIBOR. Disruption in the financial markets could have an adverse effect on our financial position, results of operations, cash flows, and liquidity.

GENERAL RISK FACTORS

Failing to adequately evolve our financial and managerial control and reporting systems and processes, or any weaknesses in our internal controls may adversely affect investor perception, and our stock price. We will need to continue to improve our financial and managerial control and our reporting systems and procedures to manage and grow our business effectively in the future. We are required to assess the effectiveness of our internal control over financial reporting annually and to disclose in our filing if such controls were unable to provide assurance that a material error would be prevented or detected in a timely manner. If in the future, our internal controls over financial reporting are determined to not be effective, resulting in a material weakness, investor perceptions regarding the reliability of our financial statements may be adversely affected which could cause a decline in the market price of our stock and otherwise negatively affect our liquidity and financial condition.

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial ~~forum for disputes with us or our directors, officers, or employees.~~

forum. Our amended and restated bylaws provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or if the Court of Chancery does not have jurisdiction, the U.S. District Court for the District of Delaware) is the sole and exclusive forum for ~~(i) any derivative action or proceeding brought on~~certain actions and proceedings as specified in our behalf; (ii) any action asserting a claim of breach of fiduciary duty owed by any of our current or former directors, officers, or other employees to us or to our stockholders; (iii) any action asserting a claim arising pursuant to the Delaware General Corporation Law, our restated certificate of incorporation, or our bylaws; (iv) any action or proceeding asserting a claim as to which Delaware General Corporation Law confers jurisdiction on the Court of Chancery or (v) any action asserting a claim governed by the internal affairs doctrine.bylaws. The exclusive forum provisions in our bylaws may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our current or former directors, officers, or other employees, which may discourage such lawsuits against us and our current or former directors, officers, and other employees. Alternatively, if a court were to find the exclusive forum provisions contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material and adverse impact on our business.

~~Uninsured losses could harm our operating results.~~

We self-insure against many business risks and expenses, such as intellectual property litigation, cybersecurity and our medical benefit programs, where we believe we can adequately self-insure against the anticipated exposure and risk or where insurance is either not deemed cost-effective or is not available. We also maintain a program of insurance coverage for various types of property, casualty, and other risks. We place our insurance coverage with various carriers in numerous jurisdictions. The types and amounts of insurance that we obtain vary from time to time and from location to location, depending on availability, cost, and our decisions with respect to risk retention. The policies are subject to deductibles, policy limits, and exclusions that result in our retention of a level of risk on a self-insurance basis. In addition, our insurance coverage may not be adequate to compensate us

~~for all losses or failures that may occur. Losses not covered by insurance could be substantial and unpredictable and could adversely affect our financial condition and results of operations.~~

~~Our stock price may fluctuate.~~

Historically, our common stock has experienced substantial price volatility, particularly as a result of variations between our actual financial results and the published expectations of analysts and as a result of announcements by our competitors and us. Furthermore, speculation in the press or investment community about our strategic position, financial condition, results of operations, business, security of our products, or significant transactions can cause changes in our stock price. In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market price of many technology companies in particular and that have often been unrelated to the operating performance of these companies. From time to time, economic weakness has contributed to extreme price and volume fluctuations in global stock markets that have also reduced the market price of many technology company stocks, including ours. These factors, as well as general economic and political conditions and the announcement of proposed and completed acquisitions or other significant transactions, or any difficulties associated with such transactions, by us or our current or potential competitors, may materially adversely affect the market price of our common stock in the future.

ITEM 1B. Unresolved Staff Comments

Not applicable.

ITEM 2. Properties

Our corporate headquarters ~~are~~is located on 80 acres of owned land in Sunnyvale, California and includes approximately 0.7 million square feet of owned buildings. ~~In addition to our owned facilities, we lease approximately 0.1 million square feet in buildings in Sunnyvale, California as part of our corporate headquarters as of December 31, 2018.~~

In addition, ~~to our leased buildings in Sunnyvale,~~ we ~~also~~ lease space (including offices and other facilities) in various locations throughout the United States, Canada, South America, EMEA, and APAC regions, including offices in Australia, China, Hong Kong, India, Ireland, Israel, Japan, the Netherlands, Russia, United Arab Emirates, and the United Kingdom. As of December 31, ~~2018,~~2020, we leased approximately ~~1.6~~1.7 million square feet worldwide, with approximately ~~31%~~36% in North America. The respective operating leases expire at various times through ~~November 2029. In addition, in July 2015 we entered into a lease arrangement through March 2026 for approximately 63,000 square feet of space in the State of Washington.~~May 2031. Each leased facility is subject to an individual lease or sublease, which could provide various options

Table of Conten t s

to renew/terminate the agreement or to expand/contract the leased space. We believe that our current offices and other facilities are in good condition and appropriately support our current business needs. We may improve, replace or reduce facilities as considered appropriate to meet the needs of our operations.

For additional information regarding obligations under our leases, see Note ~~16,~~ 15, Commitments and Contingencies, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report. For additional information regarding properties by geographic region, see Note ~~13,~~ 12, Segments, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.

ITEM 3. Legal Proceedings

The information set forth under the heading “Legal Proceedings” in Note ~~16,~~ 15, Commitments and Contingencies, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, is incorporated herein by reference.

ITEM 4. Mine Safety Disclosures

Not applicable.

Table of Conten t s

PART II

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

The principal market in which our common stock is traded is the New York Stock Exchange, or NYSE, under the symbol JNPR.

Stockholders

As of February ~~15, 2019,~~10, 2021, there were ~~742~~599 stockholders of record of our common stock and we believe a substantially greater number of beneficial owners who hold shares through brokers, banks or other nominees.

Dividends

We paid cash dividends of ~~$0.18~~$0.20 per share each quarter, totaling ~~$249.3~~$264.1 million during the year ended December 31, ~~2018.~~2020. In January ~~2019,~~2021, we declared a quarterly cash dividend of ~~$0.19~~$0.20 per share of common stock to be paid on March 22, ~~2019~~2021 to stockholders of record as of the close of business on March 1, ~~2019.~~2021. The declaration and amount of any future cash dividends are at the discretion of the Board of Directors and will depend on our financial performance, economic outlook, and any other relevant considerations.

Unregistered Securities Issued

On ~~December 6, 2018,~~November 30, 2020, we issued ~~105,317~~823,310 shares of our common stock as consideration to ~~an individual~~eight individuals in connection with the ~~2016 AppFormix acquisition.~~

~~On December 7, 2018, we issued 56,692 shares of our common stock as consideration to one individual in connection with the HTBase~~128 Technology acquisition in the fourth quarter of ~~2018.~~2020.

The issuance of the above securities was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon Section 4(a)(2) of the Securities Act as transactions by an issuer not involving any public offering and/or the private offering safe harbor provision of Rule 506 of Regulation D promulgated under the Securities Act.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

~~During~~The following table provides stock repurchase activity during the three months ended December 31, ~~2018, there~~2020 (in millions, except per share amounts):


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(*)	Maximum Dollar Value of Shares that May Still Be Purchased Under the Plans or Programs(*)
October 1 - October 31, 2020	—	$	—	—	$	1,400.0
November 1 - November 30, 2020	—	$	—	—	$	1,400.0
December 1 - December 31, 2020	3.4	$	21.83	3.4	$	1,325.0
Total	3.4			3.4

________________________________

(*) Shares were ~~no share repurchases~~repurchased during the periods set forth in the table above under our stock repurchase program, which had been approved by the Board ~~approved 2018 Stock Repurchase Program, which~~and authorized us to purchase an aggregate of up to ~~$2.0~~$3.0 billion of our common stock. Future share repurchases under our capital return plan will be subject to a review of the circumstances in place at that time and will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal ~~requirements, including Rule 10b-18 promulgated under the Exchange Act.~~requirements. This program may be discontinued at any time. For the majority of restricted stock units granted to executive officers of the Company, the number of shares issued on the date the restricted stock units vest is net of shares withheld to meet applicable tax withholding requirements. Although these withheld shares are not issued or considered common stock repurchases under our stock repurchase program and therefore are not included in the preceding table, they are treated as common stock repurchases in our financial statements as they reduce the number of shares that would have been issued upon vesting, see Note 10, Equity, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.

Table of Conten t s

Company Stock Performance

The information contained in this Company Stock Performance section shall not be deemed to be incorporated by reference into other U.S. Securities and Exchange Commission, or SEC, filings; nor deemed to be soliciting material or filed with the Commission or subject to Regulation 14A or 14C or subject to Section 18 of the Exchange Act. The comparisons in the performance graph below are based upon historical data and are not indicative of, or intended to forecast, future performance of our common stock.

The performance graph below shows the cumulative total stockholder return over a five-year period assuming the investment of $100 on December 31, ~~2013,~~2015, in each of Juniper Networks' common stock, the Standard & Poor's 500 Stock Index (“S&P 500”), and the NASDAQ Telecommunications Index. Total stockholder return assumes reinvestment of all dividends.


	As of December 31,
	2015		2016		2017		2018		2019		2020
JNPR	$	100.00	$	104.09	$	106.46	$	103.21	$	97.40	$	92.16
S&P 500	$	100.00	$	111.95	$	136.38	$	130.39	$	171.44	$	202.96
NASDAQ Telecommunications Index	$	100.00	$	117.59	$	141.37	$	148.82	$	169.12	$	210.04

As of December 31,
2013
2014
2015
2016
2017
2018
JNPR $ 100.00

$ 99.77

$ 125.22

$ 130.34

$ 133.31

$ 129.24
S&P 500 $ 100.00

$ 113.68

$ 115.24

$ 129.02

$ 157.17

$ 150.27
NASDAQ Telecommunications Index $ 100.00

$ 111.51

$ 105.60

$ 124.17

$ 149.28

$ 157.14

~~ITEM 6.~~ ~~Selected Financial Data~~

~~The following selected consolidated financial data is derived from our audited Consolidated Financial Statements. As our operating results are not necessarily indicative~~Table of ~~future operating results, this data should be read in conjunction with Item 7,~~ ~~Management's Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and the notes thereto in Item 8,~~ ~~Financial Statements and Supplementary Data, of this Report, which are incorporated herein by reference.~~

The information presented below reflects the impact of certain significant transactions and the adoption of certain accounting pronouncements, which makes a direct comparison difficult between each of the last five fiscal years. For a complete description of matters affecting the results in the tables below during the three years ended December 31, 2018, see ~~Notes to Consolidated Financial Statements~~ ~~in Item 8 of Part II of this Report.~~

~~Consolidated Statements of Operations Data~~

Conten t s

Years Ended December 31,

2018⁽¹⁾

2017⁽²⁾
2016 2015
2014⁽³⁾

(In millions)
Net revenues $ 4,647.5
$ 5,027.2
$ 4,990.1
$ 4,857.8
$ 4,627.1
Gross margin 2,741.2
3,072.1
3,104.5
3,078.6
2,858.2
Operating income (loss) 572.2
848.1
889.7
912.0
(419.7 )
Net income (loss) $ 566.9
$ 306.2
$ 592.7
$ 633.7
$ (334.3 )


⁽¹⁾	~~Fiscal year 2018 includes a tax benefit of $133.0 million related to a lapse in the statute of limitations and tax accounting method changes related to deferred revenue.~~


⁽²⁾	~~Fiscal year 2017 includes an estimated $289.5 million of tax expense related to the U.S. Tax Cuts and Jobs Act, and~~ ~~pre-tax~~ ~~restructuring charges of $65.6 million.~~


⁽³⁾	Fiscal year 2014 includes the following significant pre-tax items: impairment of goodwill of $850.0 million; restructuring and other charges of $208.5 million; gain on the sale of equity investments of ~~$163.0 million;~~ ~~gain, net of legal fees in connection with the litigation settlement with Palo Alto Networks of~~ ~~$196.1 million; and gain on the sale of Junos Pulse of $19.6 million.~~

~~Per Common Share Data~~

Years Ended December 31,
2018 2017 2016 2015 2014
Net income (loss) per share:

Basic $ 1.62
$ 0.81
$ 1.55
$ 1.62
$ (0.73 )
Diluted $ 1.60
$ 0.80
$ 1.53
$ 1.59
$ (0.73 )
Cash dividends declared per share of common stock $ 0.72
$ 0.40
$ 0.40
$ 0.40
$ 0.20

~~Consolidated Balance Sheet Data~~

As of December 31,
2018 2017 2016 2015 2014
(In millions)
Cash, cash equivalents, and investments $ 3,758.1
$ 4,021.0
$ 3,657.3
$ 3,192.2
$ 3,104.9
Working capital 2,739.3
2,446.3
2,236.0
1,110.5
1,297.2
Goodwill 3,108.8
3,096.2
3,081.7
2,981.3
2,981.5
Total assets⁽¹⁾
9,363.3
9,833.8
9,656.5
8,607.9
8,273.6
Total debt⁽¹⁾
2,139.0
2,136.3
2,133.7
1,937.4
1,341.2
Total long-term liabilities (excluding long-term debt)⁽²⁾
908.5
1,278.4
824.4
594.1
499.9
Total stockholders' equity^{(3) (4)}
$ 4,823.2
$ 4,680.9
$ 4,962.5
$ 4,574.4
$ 4,919.1

⁽¹⁾

~~Fiscal year 2016 includes the adoption of Accounting Standards Update ("ASU") No. 2015-03 (Subtopic 835-30) -~~ ~~Simplifying the Presentation of Debt Issuance Costs~~, requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Other long-term assets and long-term debt in the prior years were retrospectively adjusted to conform to the required presentation.


⁽²⁾	~~Fiscal 2017 includes an estimated $394.0 million recorded in long-term income taxes payable related to the one-time transition tax as a result of the Tax Cuts and Jobs Act.~~

⁽³⁾

~~Fiscal year 2017 includes the adoption of ASU No. 2016-09 (Topic 718)~~ ~~Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting~~, which simplified several aspects of the accounting for share-based payment transactions, including the accounting for forfeitures, among other things. We elected to account for forfeitures as they occur using a modified retrospective transition method, rather than estimating forfeitures, resulting in a cumulative-effect adjustment of $9.0 million, which increased the January 1, 2017 opening accumulated deficit balance on the Consolidated Balance Sheets.

⁽⁴⁾

Fiscal 2018 includes the adoption of ASU No. 2014-09 (Topic 606) Revenue from Contracts with Customers, which provides guidance for revenue recognition that superseded the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition and most industry specific guidance. We adopted the standard under the modified retrospective approach, applying the amendments to prospective reporting periods. Upon adoption, we recorded a cumulative effect adjustment of $324.7 million, which decreased the January 1, 2018 opening accumulated deficit balance on the Consolidated Balance Sheet primarily due to the application of the new guidance in the areas of distributor sales, software revenue, variable consideration, revenue allocation, and contract acquisition costs.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read with the Business in Item 1 of Part I and the Consolidated Financial Statements and the related notes in Item 8 of Part II of this Report.

The following discussion is based upon our Consolidated Financial Statements included elsewhere in this Report, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. In the course of operating our business, we routinely make decisions as to the timing of the payment of invoices, the collection of receivables, the manufacturing and shipment of products, the fulfillment of orders, the purchase of supplies, and the building of inventory and spare parts, among other matters. In making these decisions, we consider various factors including contractual obligations, customer satisfaction, competition, internal and external financial targets and expectations, and financial planning objectives. Each of these decisions has some impact on the financial results for any given period. For further information about our critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” section included in this “Management's Discussion and Analysis of Financial Condition and Results of Operations.”

To aid in understanding our operating results for the periods covered by this Report, we have provided an executive overview, which includes a summary of our business and market environment along with a financial results and key performance metrics overview. These sections should be read in conjunction with the more detailed discussion and analysis of our consolidated financial condition and results of operations in this Item 7, our “Risk Factors” section included in Item 1A of Part I, and our Consolidated Financial Statements and notes thereto included in Item 8 of Part II of this Report.

Table of Conten t s

Executive Overview

~~Business and Market Environment~~

Juniper designs, develops, and sells products and services for high-performance networks to enable customers to build scalable, reliable, secure and cost-effective networks for their businesses, while achieving agility and improved operating efficiency through automation.

Our products are sold in three geographic regions: Americas; Europe, Middle East and Africa, or EMEA; and Asia Pacific, or APAC. We sell our high-performance network products and service offerings across routing, switching, and security technologies. In addition to our products, we offer our customers services, including maintenance and support, professional services, and education and training programs. Our products and services address high-performance network requirements for our customers within our verticals: Cloud, Service Provider, and Enterprise who view their network as critical to their success. We believe our silicon, systems, and software represent innovations that transform the economics and experience of networking, helping our customers achieve superior performance, greater choice, and flexibility, while reducing overall total cost of ownership.

Further, our intent is to expand our software business by introducing new software solutions to our product portfolio that simplify the operation of networks, and allow our customers across our key verticals flexibility in consumption and deployment. We believe our software revenues as a percentage of total revenues will increase over time as we introduce new software product offerings and business models designed to better monetize the value of our software offerings.

We believe the network needs for our customers in our Cloud, Service Provider, and Enterprise verticals are converging, as these customers recognize the need for high performance networks and are adopting cloud architectures for their infrastructure and service delivery, such as large public and private data centers and service provider edge data centers, for improved agility and greater levels of operating efficiency.

In 2018, we continued to experience weakness within our Cloud and Service provider verticals. In our Cloud vertical, certain large Cloud customers were transitioning their network architecture as they continued to add capacity. This resulted in these customers transitioning from purchasing our MX product family to our PTX product family which contributed to the decline in our net revenues as the PTX product family has a lower average selling price compared to the MX product family. We believe the MX to PTX transition is largely behind us; however, the pace of deployments in a portion of our Cloud customer’s networks has been slower than expected. Nevertheless, we are focused on the Cloud vertical as well as the transition to 400-gig Ethernet, or 400G, which we believe will present further opportunities for Juniper across our portfolio as our Cloud customers value high-performance, highly compact, power efficient infrastructures, which we support and continue to develop.

In our Service Provider vertical, changes in business models and the increase in industry consolidation, such as acquisitions, mergers, and partnerships may continue to impact Service Provider investment and the build-out of their networks in the near-term, however, we believe that our Service Provider customers will need to invest in the build-out of high performance networks and the transformation of existing legacy infrastructure to distributed cloud environments. We are committed to this transformation, which we refer to as the Telco Cloud transformation, as our Service Provider customers rearchitect their infrastructure to enable, among other things, next generation mobile network build-outs, or 5G. We are well positioned to capitalize on 5G carrier deployments with the refresh of our MX 5G product and Contrail solutions as well as our new partnership with Ericsson to accelerate 5G initiatives by leveraging each company’s complementary portfolios to drive our competitive advantage in the marketplace. We believe these products and partnership position Juniper for improved Service Provider spending in late 2019.

We remain confident in our strategy and we are executing against our innovation roadmap, as each of our industry verticals transitions to cloud architectures. We believe our understanding of high-performance networking technology and cloud architecture, and our strategy, position us to capitalize on the industry transition to more automated, cost-efficient, scalable networks.

In 2018, we continued to execute on our product and solutions strategy and announced several new innovations, including a new 400G optimized routing platform; a new high-performance MX Series 5G Universal Routing Platform with new programmable silicon; an upgrade to our high-end SRX firewall offering with our SPC3 Advanced Security Acceleration line card; and our multi-cloud orchestration and telemetry platform including Contrail Edge Cloud and Contrail Enterprise Multicloud, each of which, we believe, will help strengthen our position across our core markets. We also announced new initiatives under an existing partnership with Nutanix, which we expect will help strengthen our ability to capitalize on multicloud with our Contrail Enterprise Multicloud integration with Nutanix’s application programming interface, or APIs to provide enhanced network visibility.

In late 2018, we completed the acquisition of HTBase, a software company that has developed a unique and disruptive platform for software-defined enterprise multicloud, which we expect will accelerate our leadership in multicloud and function with the compute orchestration capabilities of Contrail Enterprise Multicloud. We will continue to look at targeted and strategic acquisitions that we believe can complement our portfolio, operations, R&D strategy, and overall business.

In 2019, we believe we will continue to experience weakness with our Cloud customers in the near-term, as deployment cycles remain difficult to predict; however, we remain confident in our competitive position with our strategic Cloud customers. We are taking a number of actions that we believe will help Juniper achieve year-over-year revenue growth at some point in the second half of 2019 such as: (1) new product offerings which include new MX line cards to capitalize on 5G carrier initiatives; 400G platforms to capture data center footprint; and new enhancements to our Contrail Enterprise Multicloud platform that make it simpler and more cost effective, (2) transitioning our sales organization to better align with our sales strategy, and (3) monetizing our software offerings through subscriptions. Further, we believe the 400G upgrade cycle, 5G deployments, and enterprise multicloud initiatives each represent large opportunities where are well positioned to benefit over the next several years.

Financial Results and Key Performance Metrics Overview

~~On January 1, 2018, we adopted Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, No. 2014-09 (Topic 606) -~~ ~~Revenue from Contracts with Customers,~~ ~~which we refer to asTopic 606. The standard provides guidance for revenue recognition that superseded the revenue recognition requirements in Accounting Standards Codification Topic 605,~~ ~~Revenue Recognition,~~ ~~which we refer to as Topic 605, and most industry specific guidance. See Note 2,~~ ~~Significant Accounting Policies,~~ in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for further discussion on the adoption of Topic 606. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under Topic 605.

The following table provides an overview of our financial results and key financial metrics (in millions, except per share amounts, percentages, and days sales outstanding, or DSO):


	As of and for the Years Ended December 31,																				As of and for the Years Ended December 31,
	2018			2017			2016			2018 vs. 2017					2017 vs. 2016						2020			2019			$ Change		% Change
										$ Change			% Change		$ Change			% Change
Net revenues	$	4,647.5		$	5,027.2		$	4,990.1		$	(379.7	)	(8	)%	$	37.1		1	%	Net revenues	$	4,445.1		$	4,445.4		$	(0.3)	—	%
Gross margin	$	2,741.2		$	3,072.1		$	3,104.5		$	(330.9	)	(11	)%	$	(32.4	)	(1	)%	Gross margin	$	2,573.7		$	2,616.8		$	(43.1)	(2)	%
Percentage of net revenues	59.0		%	61.1		%	62.2		%											Percentage of net revenues	57.9		%	58.9		%
Operating income	$	572.2		$	848.1		$	889.7		$	(275.9	)	(33	)%	$	(41.6	)	(5	)%	Operating income	$	353.1		$	442.2		$	(89.1)	(20)	%
Percentage of net revenues	12.3		%	16.9		%	17.8		%											Percentage of net revenues	7.9		%	9.9		%
Net income	$	566.9		$	306.2		$	592.7		$	260.7		85	%	$	(286.5	)	(48	)%	Net income	$	257.8		$	345.0		$	(87.2)	(25)	%
Percentage of net revenues	12.2		%	6.1		%	11.9		%											Percentage of net revenues	5.8		%	7.8		%
Net income per share																				Net income per share
Basic	$	1.62		$	0.81		$	1.55		$	0.81		100	%	$	(0.74	)	(48	)%	Basic	$	0.78		$	1.01		$	(0.23)	(23)	%
Diluted	$	1.60		$	0.80		$	1.53		$	0.80		100	%	$	(0.73	)	(48	)%	Diluted	$	0.77		$	0.99		$	(0.22)	(22)	%

Operating cash flows	$	861.1		$	1,259.3		$	1,126.6		$	(398.2	)	(32	)%	$	132.7		12	%	Operating cash flows	$	612.0		$	528.9		$	83.1	16	%
Stock repurchase plan activity	$	750.0		$	719.7		$	312.9		$	30.3		4	%	$	406.8		130	%	Stock repurchase plan activity	$	375.0		$	550.0		$	(175.0)	(32)	%
Cash dividends declared per common stock	$	0.72		$	0.40		$	0.40		$	0.32		80	%	$	—		—	%	Cash dividends declared per common stock	$	0.80		$	0.76		$	0.04	5	%
DSO^(*)	58			62			68			(4		)	(6	)%	(6		)	(9	)%	DSO(*)	71			66			5		8	%

Deferred revenue	$	1,213.6		$	1,539.3		$	1,481.1		$	(325.7	)	(21	)%	$	58.2		4	%	Deferred revenue	$	1,285.8		$	1,223.4		$	62.4	5	%
Product deferred revenue	$	144.4		$	334.2		$	322.9		$	(189.8	)	(57	)%	$	11.3		3	%	Product deferred revenue	$	104.7		$	132.6		$	(27.9)	(21)	%
Service deferred revenue	$	1,069.2		$	1,205.1		$	1,158.2		$	(135.9	)	(11	)%	$	46.9		4	%	Service deferred revenue	$	1,181.1		$	1,090.8		$	90.3	8	%


^(*)	~~DSO is for the fourth quarter ended December 31, 2018, 2017 and 2016.~~

(*) DSO is for the fourth quarter ended December 31, 2020, and 2019.

•Net Revenues: ~~During 2018, net~~ Net revenues ~~decreased~~were flat during 2020 compared to ~~2017, primarily due to lower routing product revenues from our Cloud and Service Provider verticals in the Americas.~~2019. We experienced ~~ongoing networking architectural transitions~~growth in our Enterprise and ~~a slower than expected pace of deployments for certain large~~ Cloud ~~customers as well as~~verticals, which was offset by a decline in our Service Provider ~~business due to the timing of deployments.~~vertical. The ~~year-over-year decline in product net revenues was partially offset by broad-based revenue~~ growth in our Enterprise ~~vertical. Excluding~~vertical was primarily driven by Switching, and the ~~impact of Topic 606,~~growth in our ~~service~~Cloud vertical was primarily driven by Routing. We believe the decline in our Service Provider vertical was partially due to the COVID-19 related supply constraints. Service net revenues ~~would have~~ increased ~~during the 2018, compared to 2017,~~ primarily due to strong ~~renewal and attach rates~~renewals of support contracts. ~~Of our top ten customers for 2018, five were Cloud, four were Service Provider, and one was an Enterprise.~~

During 2018, the adoption of Topic 606 resulted in a decrease in revenue recognition of $22.6 million due to lower service revenues, partially offset by higher product revenues. Service revenues during 2018 were lower by $122.9 million under Topic 606, compared to Topic 605, primarily due to the impact of revenue allocation between products and services. Product revenues during 2018 were higher by $100.3 million under Topic 606, compared to Topic 605, primarily due to the impact of revenue allocation between products and services and the timing of revenue recognition of certain contracts that were precluded by Topic 605, partially offset by variable consideration. The product revenues increase from Topic 606 was primarily allocated between routing and switching.

•Gross Margin: ~~Our gross~~ Gross margin as a percentage of net revenues decreased ~~during 2018, compared to 2017,~~ primarily due to ~~lower net revenues~~increased logistics and other supply chain-related costs related to the COVID-19 pandemic, customer and product mix, ~~resulting from~~and intangible amortization associated with the ~~year-over-year decline in routing revenues from our Cloud and Service Provider verticals, and to a lesser extent, the impact~~acquisition of ~~Topic 606,~~Mist, partially offset by ~~improvements in our cost structure.~~

the impact associated with higher service revenues.

•Operating Margin: ~~During 2018, compared to 2017, operating~~ Operating income as a percentage of net revenues decreased primarily due to the drivers described in the gross margin discussion above, higher restructuring charges, and higher personnel-related costs. The decrease in operating margin was partially offset by ~~a net decrease in our operating expenses during 2018, compared to 2017, as a result of~~ lower ~~restructuring charges.~~

~~Net Income:~~ ~~During 2018, net income increased compared to 2017, primarily driven by a lower statutory tax rate~~travel costs due to the ~~Tax Act and tax benefits related to items unique to 2018. See Note 14,~~ ~~Income Taxes,~~ ~~in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, for further discussion.~~

COVID-19 pandemic.

•Operating Cash Flows: Net cash provided by operations ~~decreased in 2018, compared to 2017,~~increased primarily due to higher ~~cash collections from customers during 2017~~invoicing activity and working capital differences related to ~~service renewals invoiced during~~customer collections, partially offset by higher payments to indirect suppliers and for employee compensation.

•Capital Return: We continue to return capital to our stockholders. During the fourth quarter of ~~2016, partially offset by a decline~~2019, we entered into an accelerated share repurchase program (the "ASR"), to repurchase an aggregate of $200.0 million in ~~cash paid for personnel-related costs, principally as a result~~shares. Under

Table of ~~a reduction in headcount~~Conten t s

the ASR, we made an up-front payment of $200.0 million and ~~lower incentive compensation,~~received and ~~a decrease in payments to suppliers.~~

~~Capital Return:~~ ~~In 2018, we repurchased 29.3~~retired 6.4 million shares of our common stock during the fourth quarter of 2019. During the first quarter of 2020, the ASR was completed, and we received and retired an additional 1.8 million shares for a total repurchase of 8.2 million shares of our common stock. During 2020, we repurchased a total of 16.1 million shares of our common stock in the open market at an average price of $23.36 per share for an aggregate ~~amount~~purchase price of ~~$750.0 million through the completion~~$375.0 million. During 2020, we paid quarterly dividends of ~~a $750.0 million accelerated share repurchase program, or ASR. During 2018, we also paid a quarterly cash dividend of $0.18~~$0.20 per share, for an aggregate amount of ~~$249.3~~$264.1 million.

•DSO: DSO is calculated as the ratio of ending accounts receivable, net of allowances, divided by average daily net revenues for the preceding 90 days. DSO ~~for the quarter ended December 31, 2018 decreased, compared to the quarter ended December 31, 2017,~~increased, primarily due to ~~lower~~higher accounts receivable resulting from higher overall invoicing ~~volume, partially offset by lower revenues.~~

volume.

•Deferred Revenue: Total deferred revenue increased, primarily due to the timing of maintenance service renewals.

COVID-19 Pandemic Update

The COVID-19 pandemic and the containment measures taken by governments and businesses are expected to continue to have a substantial negative impact on businesses around the world and on global, regional, and national economies. As a result, the pandemic has, and may continue to, negatively affect our operations, including as a result of external factors beyond our control such as restrictions on the physical movement of our employees, contract manufacturers, partners, and customers to limit the spread of COVID-19 and the availability and acceptance of a COVID-19 vaccine. Since March 2020, the majority of our global workforce has been working remotely due to shelter-in-place requirements and travel restrictions. We continue to follow the guidance of local and national governments, including monitoring the health of our employees who have returned to our offices and limiting the gathering size of employee groups in indoor spaces.

We continue to support healthy customer demand for our products by working with our suppliers and distributors to address supply chain disruptions as well as travel restrictions that have impacted our operations. We have a global supply chain footprint with our primary manufacturing partners located in China, Taiwan, Malaysia, Mexico, and the United States. Our component suppliers are more geographically distributed with vendors from many countries throughout the world. During 2020, the supply constraints we experienced were due to both constrained manufacturing capacity as well as component parts shortages as our component vendors were also facing manufacturing challenges. These challenges resulted in extended lead-times to our customers, increased logistics costs, and impacted the volume of products we were able to deliver, which negatively impacted our ability to recognize revenue and decreased ~~as of December 31, 2018, compared~~our gross margins.

Challenges to ~~December 31, 2017,~~our supply chain due to the impact of ~~adoption~~the pandemic remain dynamic, including ongoing shortages of ~~Topic 606. See Note 2,~~ ~~Significant Accounting Policies,~~ component parts, and increased logistics costs due to air travel and transport restrictions that limited the availability of flights on which we were able to ship products in the ~~Notes~~fourth quarter. However, we saw improvements in our manufacturing capacity during the second half of 2020. We also believe that we have a robust and fairly flexible supply chain. Our supply chain team has been working to ~~Consolidated Financial Statements~~meet our customer needs by executing on a strong risk mitigation plan, including multi-sourcing, pre-ordering components, transforming our logistics network, prioritizing critical customers, working with local government agencies to understand challenges, and partnering on solutions that limit disruptions to our operations while ensuring the safety of our employees, partners and suppliers.

The pandemic has not had a substantial net impact to our consolidated operating results or our liquidity position in ~~Item 8~~2020. We continue to generate operating cash flows to meet our short-term liquidity needs, and we expect to continue to maintain access to the capital markets enabled by our strong credit ratings. In 2020, we did not observe any material impairments of ~~Part II~~our assets or a significant change in the fair value of ~~this Report, for further discussion.~~assets due to the pandemic.

We enter the first quarter of fiscal year 2021 with healthy backlog in our Cloud and Service Provider verticals. We intend to continue to work with government authorities and implement safety measures to ensure that we are able to continue manufacturing and distributing our products during the pandemic. We may continue to experience constrained supply and increased logistics costs and could experience curtailed customer demand, any of which could adversely impact our business, results of operations, and overall financial performance in future periods.

Table of Conten t s

Critical Accounting Policies and Estimates

The preparation of the financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to sales returns, pricing credits, warranty costs, allowance for doubtful accounts, impairment of long-term assets, especially goodwill and intangible assets, contract manufacturer liabilities, assumptions used in the valuation of share-based compensation, and litigation. We base our estimates and assumptions on current facts, historical experience, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. For further information about our significant accounting policies, see Note 2, 1, Description of Business, Basis of Presentation and Significant Accounting Policies, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, which describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The accounting policies described below are significantly affected by critical accounting estimates. Such accounting policies require significant judgments, assumptions, and estimates used in the preparation of the Consolidated Financial Statements and actual results could differ materially from the amounts reported based on these policies. To the extent there are material differences between our estimates and the actual results, our future consolidated results of operations may be affected.

~~Goodwill:~~•Goodwill and Purchased Intangible Assets: We make significant estimates, assumptions, and judgments when valuing goodwill and other intangible assets in connection with the initial purchase price allocation of an acquired entity, as well as when evaluating impairment of goodwill and other intangible assets on an ongoing basis. ~~These estimates are based upon a number~~The purchase price of ~~factors, including historical experience, market conditions,~~an acquired entity is allocated between intangible assets and ~~information obtained from~~ the ~~management~~net tangible assets of the acquired ~~company.~~business with the residual of the purchase price recorded as goodwill. The determination of the value of the intangible assets acquired involves certain judgments and estimates. Critical estimates ~~in valuing certain intangible assets~~ include, but are not limited to, historical and projected customer retention rates, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets. These factors are also considered in determining the useful life of the acquired intangible assets. ~~The amounts~~These estimates are based upon a number of factors, including historical experience, market conditions, and ~~useful lives assigned~~information obtained from the management of the acquired company. These judgments can include, but are not limited to, ~~identified intangible assets impacts~~ the ~~amount~~cash flows that an asset is expected to generate in future periods and ~~timing~~the appropriate weighted average cost of ~~future amortization expense.~~

capital.

Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recorded. ~~The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill.~~ We evaluate ~~our~~ goodwill for impairment on an annual basis, as of November 1^st, or more frequently if an event occurs or facts and circumstances change that would more likely than not reduce the fair value of our reporting units below their carrying amount.

Goodwill is tested for impairment at the reporting unit level, which is one level below ~~our~~the operating segment, ~~level,~~ by comparing the reporting unit's carrying value, including goodwill, to the fair value of the reporting unit. The reporting units are determined based on the components of our operating segment that constitutesfirst performing a ~~business for which discrete financial information is available, and segment management regularly review the operating results of the component.~~

~~The provisions of the accounting standard for goodwill and other intangibles allow us to first assess~~ qualitative ~~factors~~assessment to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Various factors are considered in the qualitative assessment, including macroeconomic conditions, financial performance, or a sustained decrease in share price. If as a result of the qualitative assessment, it is deemed more likely than not that the fair value of athe reporting unit is less than its carrying ~~amount, management will perform the quantitative test.~~

~~The quantitative goodwill impairment test, if necessary, involves a two-step process to identify goodwill impairment~~value. This initial assessment includes, among others, consideration of macroeconomic conditions and measure the amount of goodwill impairment loss to be recognized, if any. The first step tests for potential impairment by comparing the fair value of the reporting unit with the reporting unit’s carrying value.financial performance. If the ~~fair value of the reporting unit exceeds the carrying value of the reporting unit’s net assets, goodwill~~qualitative assessment indicates that it is more likely than not impaired and no further testing is required. If the fair value of the reporting unit does not exceed the carrying value of the net assets assigned to the reporting unit, then we perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. The second step requires an assignment of the reporting unit’s fair value to the reporting unit’s assets and liabilities, using the relevant acquisition accounting guidance, to determine the implied fair value of the reporting unit’s goodwill. The implied fair value of the reporting unit’s goodwill is then compared with the carrying amount of the reporting unit’s goodwill, and if the carrying value of a reporting unit's goodwill exceeds its implied fair value, we recordthat an impairment ~~loss equal to the difference.~~

In the first step, the fair value of each of our reporting units is determined using both the income and market valuation approaches. We believe the income approach and the market approach are equally representative of the reporting unit’s fair value. Under the income approach, the fair value of the reporting unit is based on the present value of estimated future cash flows that the reporting unit is expected to generate over its remaining life. Under the market approach, the value of the reporting unit is based on an analysis that compares the value of the reporting unit to values of publicly-traded companies in similar lines of business. In the application of the income and market valuation approaches, we are required to make estimates of future operating trends and judgments on discount rates and other variables. Determining the fair value of a reporting unit is highly judgmental in nature and involves the use of significant estimates and assumptions. We base our fair value estimates on assumptions we believe to be reasonable, but unpredictable and inherently uncertain. Actual future results related to assumed variables could differ from these estimates. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the weighted-average cost of capital, adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business's ability to execute on the projected cash flows. Under the market approach, we estimate the fair value based on market multiples of earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting units, and then apply a control premium, which is determined by

considering control premiums offered as part of the acquisitions that have occurred in market segments that are comparable with our reporting units. The income approach and the market approach are equally weighted to derive the fair value of the reporting unit.

~~During the fourth quarter of 2018, we performed~~exists, a quantitative ~~assessment for all of our reporting units: Routing, Switching, and Security. This quantitative assessment was~~analysis is performed by determining the fair value of each reporting unit using a combination of the ~~income approach~~discounted cash flow and the market ~~approach. Based on~~approaches. The discounted cash flow approach uses expected future operating results. The market approach uses comparable company information to determine revenue and earnings multiples to value our reporting units. Failure to achieve these expected results or market multiples may cause a future impairment of goodwill of our reporting units. Goodwill is considered impaired if the ~~results~~carrying value of the ~~quantitative assessments,~~reporting unit exceeds its fair value. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.

We conducted our annual impairment test of goodwill during the fourth quarters of 2020 and 2019. For the years ended December 31, 2020 and 2019, we determined that no impairment of the ~~fair~~carrying value of ~~each~~goodwill for any reporting ~~unit significantly exceeded its respective carrying value, resulting~~units exists. See Note 6, Goodwill and Purchased Intangible Assets, in ~~no goodwill impairment.~~Notes to the Consolidated Financial Statements in Item 8 of Part II of this Report for additional information regarding our Goodwill and Purchased Intangible Assets.

•Inventory Valuation and Contract Manufacturer Liabilities: Inventory consists primarily of component parts to be used in the manufacturing process and finished goods in-transit, and is stated at the lower of cost or net realizable value. A provision is recorded when inventory is determined to be in excess of anticipated demand or obsolete, to adjust inventory to its estimated realizable value. In determining the provision, we also consider estimated recovery

Table of Conten t s

rates based on the nature of the inventory. As of December 31, ~~2018~~2020 and December 31, ~~2017,~~2019, our net inventory balances were ~~$82.0~~$221.9 million and ~~$97.8~~$94.2 million, respectively.

We establish a liability for non-cancelable, non-returnable purchase commitments with our contract manufacturers for quantities in excess of our demand forecasts or obsolete materials charges for components purchased by contract manufacturers based on our demand forecasts or customer orders. We also take estimated recoveries of aged inventory into consideration when determining the liability. As of December 31, ~~2018~~2020 and December 31, ~~2017,~~2019, our contract manufacturer liabilities were ~~$30.4~~$15.2 million and ~~$22.0~~$28.6 million, respectively.

Significant judgment is used in establishing our forecasts of future demand, recovery rates based on the nature and age of inventory, and obsolete material exposures. We perform a detailed analysis and review of data used in establishing our demand forecasts. If the actual component usage and product demand are significantly lower than forecast, which may be caused by factors within and outside of our control, or if there were a higher incidence of inventory obsolescence because of rapidly changing technology and our customer requirements, we may be required to increase our inventory write-downs and contract manufacturer liabilities, which could have an adverse impact on our gross margins and profitability. We regularly evaluate our exposure for inventory write-downs and adequacy of our contract manufacturer liabilities. Inventory and supply chain management remains an area of focus as we balance the risk of material obsolescence and supply chain flexibility in order to reduce lead times.

•Revenue Recognition: We enter into contracts to sell our products and services, and while some of our sales agreements contain standard terms and conditions, there are agreements that contain non-standard terms and conditions and include promises to transfer multiple goods or services. As a result, significant interpretation and judgment are sometimes required to determine the appropriate accounting for these transactions, including: (1) whether performance obligations are considered distinct that should be accounted for separately versus together, how the price should be allocated among the performance obligations, and when to recognize revenue for each performance obligation; (2) developing an estimate of the stand-alone selling price, or SSP, of each distinct performance obligation; (3) combining contracts that may impact the allocation of the transaction price between product and services; and (4) estimating and accounting for variable consideration, including rights of return, rebates, price protection, expected penalties or other price concessions as a reduction of the transaction price.

Our estimates of SSP for each performance obligation require judgment that considers multiple factors, including, but not limited to, historical discounting trends for products and services, pricing practices in different geographies and through different sales channels, gross margin objectives, internal costs, competitor pricing strategies, and industry technology lifecycles. Our estimates for rights of return, rebates, and price protection are based on historical sales returns and price protection credits, specific criteria outlined in customer contracts or rebate agreements, and other factors known at the time. Our estimates for expected penalties and other price concessions are based on historical trends and expectations regarding future incurrence.

Changes in judgments with respect to these assumptions and estimates could impact the timing or amount of revenue recognition.

•Income Taxes: We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our taxes. Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in our historical income tax provisions and accruals. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made.

Significant judgment is also required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.

Our provision for income taxes is subject to volatility and could be adversely affected by earnings being lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates; by changes in the valuation of our deferred tax assets and liabilities; by expiration of, or lapses in the research and

Table of Conten t s

development, or R&D, tax credit laws; by transfer pricing adjustments, including the effect of acquisitions on our intercompany R&D cost-sharing arrangement and legal structure; by tax effects of nondeductible compensation; by tax costs related to intercompany realignments; by changes in accounting principles; or by changes in tax laws and regulations, including possible U.S. changes to the taxation of earnings of our foreign subsidiaries, the deductibility of expenses attributable to foreign income, or the foreign tax credit rules. In addition, the OECD’s recommended changes to numerous long-standing tax principles, as adopted by countries, will increase tax uncertainty and may adversely affect our provision for income taxes. Significant judgment is required to determine the recognition and measurement attributes prescribed in the accounting guidance for uncertainty in income taxes. The accounting guidance for uncertainty in income taxes applies to all income tax positions, including the potential recovery of previously paid taxes, which if settled unfavorably could adversely affect our provision for income taxes or additional paid-in capital. In addition, we are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our operating results and financial condition.

•Loss Contingencies: We are involved in various lawsuits, claims, investigations, and proceedings, including those involving our IP, commercial, securities and employment matters, which arise in the ordinary course of business. We use significant judgment and assumptions to estimate the likelihood of loss or impairment of an asset, or the incurrence of a liability, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. We record a charge equal to the minimum estimated liability for litigation costs or a loss contingency only when both of the following conditions are met: (i) information available prior to issuance of our consolidated financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted and whether new accruals are required.

Recent Accounting Pronouncements

See Note 2, 1, Description of Business, Basis of Presentation and Significant Accounting Policies, in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Report for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial condition and results of operations, which is incorporated herein by reference.

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Results of Operations

A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2020 compared to 2019 is presented below. A discussion regarding our financial condition and results of operations for fiscal year ended December 31, 2019 compared to 2018 can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 20, 2020, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at http://investor.juniper.net.

Revenues

The following table presents net revenues by product and service, customer vertical,^(*), and geographic region (in millions, except percentages):


	Years Ended December 31,
	2020			2019			$ Change		% Change

Routing	$	1,612.1		$	1,623.2		$	(11.1)	(1)	%
Switching	918.9			901.0			17.9		2	%
Security	314.0			343.5			(29.5)		(9)	%
Total Product	2,845.0			2,867.7			(22.7)		(1)	%
Percentage of net revenues	64.0		%	64.5		%
Total Service	1,600.1			1,577.7			22.4		1	%
Percentage of net revenues	36.0		%	35.5		%
Total net revenues	$	4,445.1		$	4,445.4		$	(0.3)	—	%

Cloud	$	1,081.2		$	1,059.8		$	21.4	2	%
Percentage of net revenues	24.3		%	23.8		%
Service Provider	1,761.7			1,827.8			(66.1)		(4)	%
Percentage of net revenues	39.6		%	41.1		%
Enterprise	1,602.2			1,557.8			44.4		3	%
Percentage of net revenues	36.1		%	35.1		%
Total net revenues	$	4,445.1		$	4,445.4		$	(0.3)	—	%

Americas:
United States	$	2,233.9		$	2,299.8		$	(65.9)	(3)	%
Other	211.2			218.2			(7.0)		(3)	%
Total Americas	2,445.1			2,518.0			(72.9)		(3)	%
Percentage of net revenues	55.0		%	56.7		%
EMEA	1,233.8			1,215.3			18.5		2	%
Percentage of net revenues	27.8		%	27.3		%
APAC	766.2			712.1			54.1		8	%
Percentage of net revenues	17.2		%	16.0		%
Total net revenues	$	4,445.1		$	4,445.4		$	(0.3)	—	%

Years Ended December 31,
2018 2017 2016 2018 vs. 2017 2017 vs. 2016
$ Change % Change $ Change % Change
Routing $ 1,839.7
$ 2,189.5
$ 2,352.9
$ (349.8 ) (16 )% $ (163.4 ) (7 )%
Switching 934.4
963.4
858.0
(29.0 ) (3 )% 105.4
12 %
Security 333.0
293.3
318.0
39.7
14 % (24.7 ) (8 )%
Total Product 3,107.1
3,446.2
3,528.9
(339.1 ) (10 )% (82.7 ) (2 )%
Percentage of net revenues 66.9 % 68.6 % 70.7 %
Total Service 1,540.4
1,581.0
1,461.2
(40.6 ) (3 )% 119.8
8 %
Percentage of net revenues 33.1 % 31.4 % 29.3 %
Total net revenues $ 4,647.5
$ 5,027.2
$ 4,990.1
$ (379.7 ) (8 )% $ 37.1
1 %

Cloud $ 1,049.9
$ 1,310.7
$ 1,315.9
$ (260.8 ) (20 )% $ (5.2 ) — %
Percentage of net revenues 22.6 % 26.0 % 26.4 %
Service Provider 2,066.7
2,319.4
2,316.4
(252.7 ) (11 )% 3.0
— %
Percentage of net revenues 44.5 % 46.1 % 46.4 %
Enterprise 1,530.9
1,397.1
1,357.8
133.8
10 % 39.3
3 %
Percentage of net revenues 32.9 % 27.8 % 27.2 %
Total net revenues $ 4,647.5
$ 5,027.2
$ 4,990.1
$ (379.7 ) (8 )% $ 37.1
1 %

Americas:
United States $ 2,339.1
$ 2,712.6
$ 2,737.0
$ (373.5 ) (14 )% $ (24.4 ) (1 )%
Other 202.1
234.6
231.8
(32.5 ) (14 )% 2.8
1 %
Total Americas 2,541.2
2,947.2
2,968.8
(406.0 ) (14 )% (21.6 ) (1 )%
Percentage of net revenues 54.7 % 58.6 % 59.5 %
EMEA 1,290.8
1,195.8
1,238.1
95.0
8 % (42.3 ) (3 )%
Percentage of net revenues 27.8 % 23.8 % 24.8 %
APAC 815.5
884.2
783.2
(68.7 ) (8 )% 101.0
13 %
Percentage of net revenues 17.5 % 17.6 % 15.7 %
Total net revenues $ 4,647.5
$ 5,027.2
$ 4,990.1
$ (379.7 ) (8 )% $ 37.1
1 %


^(*)	~~Certain prior-period amounts have been reclassified to conform to the current-period classifications.~~

~~2018 Compared to 2017~~

Product net revenues decreased ~~in 2018, compared to 2017, primarily~~ due to ~~Cloud~~decreases in Security and ~~Service Provider, impacting routing and switching in the Americas. The decrease in product revenues was partially~~Routing, offset by ~~the impact of Topic 606 and growth in Enterprise.~~Switching.

~~The decrease in routing and switching revenues in the Americas was~~Security revenue decreased primarily driven by ~~the networking architectural transitions for certain large Cloud customers due to the timing of deployments and a decline in our Service Provider business, resulting in~~Enterprise from lower net revenues from our MX, PTX, and QFX product families. For PTX, the decline was primarily due to the pace of deployments for certain large Cloud customers. We believe PTX sales will increase as incremental capacity requirements eventually drive improved demand. The decline was partially offset by broad-based revenue growth in Enterprise across all technologies and geographies. Given the strength in our Enterprise vertical, strong customer interest in our new platforms, such as Contrail Enterprise MultiCloud and MX10003, and the investments we are making in our enterprise sales strategy, we believe our Enterprise vertical will continue to contribute toSRX product family.

Routing revenue ~~growth in 2019. We also saw strength in EMEA~~decreased primarily driven by ~~the aforementioned revenue growth in Enterprise,~~

~~as well as higher revenues from~~ Service Provider ~~customers, resulting from our solutions based sales strategy to enable the Telco Cloud transformation and enterprise multicloud initiatives.~~

We experienced growth in revenues from our security business during 2018, compared to 2017, across all verticals as customers transitioned to our newer product offerings. We expect that our security business will see year-over-year growth for the full year 2019.

Service net revenues decreased during 2018, compared to 2017, due to the impact of Topic 606. Excluding the impact of Topic 606, our service net revenues would have increased year-over-year, driven primarily by strong renewal and attach rates of support contracts.

~~2017 Compared to 2016~~

~~Product net revenues decreased in 2017, compared to 2016, primarily due to a decrease in routing~~ and to a lesser extent, ~~security, partially offset by growth in switching.~~

Lower routing revenues were driven by Cloud customers in the Americas as a result of the ongoing architectural shifts in the Cloud vertical to more automated, cost efficient, and scalable networks. RoutingEnterprise, from lower net revenues in EMEA also declined year-over-year due to lower sales from Service Provider customers, partially offset by revenue growth in APAC from our Service Provider vertical. As we continue to expand our footprint with certain strategic APAC Service Provider and Cloud customers, we expect these strategic opportunities will ultimately help to drive revenue growth in APAC, however the timing is difficult to predict. Revenues from our MX ~~and legacy routing products declined year-over-year, which~~product family. The decrease was partially offset by ~~an increase~~strength in ~~revenues from our PTX products from the continued adoption of our PTX1000 series of products.~~Cloud.

~~Security net revenues declined in 2017, compared to 2016,~~Switching revenue increased primarily driven by ~~a decrease~~Enterprise and Service Provider, from higher net revenues in our ~~high-end SRX series as it had been undergoing a~~Mist product ~~refresh cycle and the decline in our Other Legacy products.~~family.

Table of Conten t s

The decline in product net revenues was partially offset by an increase in switching net revenues due to continued growth from our data center switching portfolio, particularly from our QFX product family, which grew 25% year-over-year. This growth was across public and private clouds, driven in part by 100G adoption. The switching net revenue growth was primarily driven by the Cloud vertical in the Americas and, to a lesser extent, our Enterprise vertical.

Service net revenues increased ~~during in 2017, compared to 2016,~~ primarily due to strong ~~renewal and attach rates~~renewals of support contracts. ~~Additionally, we saw strong year-over-year services revenue growth in APAC and EMEA.~~

~~Customer~~

~~No customer accounted for greater than 10% of our net revenues during the years ended December 31, 2018, 2017, and 2016.~~

Gross Margins

The following table presents gross margins (in millions, except percentages):


	Years Ended December 31,
	2020			2019			$ Change		% Change

Product gross margin	$	1,566.4		$	1,640.7		$	(74.3)	(5)	%
Percentage of product revenues	55.1		%	57.2		%
Service gross margin	1,007.3			976.1			31.2		3	%
Percentage of service revenues	63.0		%	61.9		%
Total gross margin	$	2,573.7		$	2,616.8		$	(43.1)	(2)	%
Percentage of net revenues	57.9		%	58.9		%

Years Ended December 31,
2018 2017 2016 2018 vs. 2017 2017 vs. 2016
$ Change % Change $ Change % Change
Product gross margin $ 1,829.9
$ 2,085.3
$ 2,202.7
$ (255.4 ) (12 )% $ (117.4 ) (5 )%
Percentage of product revenues 58.9 % 60.5 % 62.4 %
Service gross margin 911.3
986.8
901.8
(75.5 ) (8 )% 85.0
9 %
Percentage of service revenues 59.2 % 62.4 % 61.7 %
Total gross margin $ 2,741.2
$ 3,072.1
$ 3,104.5
$ (330.9 ) (11 )% $ (32.4 ) (1 )%
Percentage of net revenues 59.0 % 61.1 % 62.2 %

Our gross margins as a percentage of net revenues have been and will continue to be affected by a variety of factors, including the mix and average selling prices of our products and services, new product introductions and enhancements, manufacturing, component and logistics costs, expenses for inventory obsolescence and warranty obligations, cost of support and service personnel, customer mix as we continue to expand our footprint with certain strategic customers, the mix of distribution channels through

which our products and services are sold, and import tariffs. For example, ~~the United States recently imposed a tariff~~we are subject to tariffs on networking ~~products~~components imported from China, which ~~includes certain~~are included in products that we import into and sell within the United States. ~~These import tariffs could~~In addition, our logistics and other supply chain-related costs have ~~a significant impact~~increased due to ~~our gross margins in~~ the ~~event we are unable to meaningfully mitigate their impact.~~ COVID-19 pandemic. For more information on the potential impact of tariffs and COVID-19 on our business, see the “Risk Factors” section of Item 1A of Part III of this Report.

~~2018 Compared to 2017~~

Product gross margin

Product gross margin as a percentage of product revenues decreased ~~in 2018, compared to 2017,~~ primarily due to ~~lower net revenues~~increased logistics and other supply chain-related costs related to the COVID-19 pandemic, customer and product mix, ~~resulting from~~and higher amortization of intangible assets associated with the ~~year-over-year decline~~acquisition of Mist, acquired in ~~routing revenues from our Cloud and Service Provider verticals, partially offset by~~ the ~~impact~~second quarter of ~~Topic 606 and improvements in our cost structure.~~2019. We continue to undertake specific efforts to address certain factors impacting our product gross margin. These efforts include performance and quality improvements through engineering to increase value across our products; optimizing our supply chain and service business; pricing management; and increasing software and solution ~~sales; however, there can be no guarantee that these efforts will be successful or that they will be realized in the time frame we anticipate.~~sales.

Service gross margin

Service gross margin as a percentage of service net revenues decreased in 2018, compared to 2017, due to lower revenues from the impact of Topic 606, increased professional services costs to support our software deployments, and higher service delivery costs, partially offset by lower personnel-related costs.

~~2017 Compared to 2016~~

~~Product gross margin~~

Product gross margin as a percentage of product revenues decreased in 2017, compared to 2016, primarily due to lower product net revenues, customer mix, and product mix resulting from the year-over-year decline in routing revenues and our customers' architectural shifts, partially offset by improvements in our cost structure.

~~Service gross margin~~

Service gross margin as a percentage of service net revenues increased ~~in 2017, compared to 2016,~~primarily due to higher ~~service revenues, partially offset by higher material~~revenue and ~~higher~~lower delivery costs.

Table of Conten t s

Operating Expenses

The following table presents operating expenses (in millions, except percentages):

Years Ended December 31,
2018 2017 2016 2018 vs. 2017 2017 vs. 2016
$ Change % Change $ Change % Change
Research and development $ 1,003.2
$ 980.7
$ 1,013.7
$ 22.5
2 % $ (33.0 ) (3 )%
Percentage of net revenues 21.6 % 19.5 % 20.3 %
Sales and marketing 927.4
950.2
972.9
(22.8 ) (2 )% (22.7 ) (2 )%
Percentage of net revenues 19.9 % 18.9 % 19.5 %
General and administrative 231.1
227.5
224.9
3.6
2 % 2.6
1 %
Percentage of net revenues 5.0 % 4.5 % 4.5 %
Restructuring charges 7.3
65.6
3.3
(58.3 ) N/M
62.3
N/M
Percentage of net revenues 0.2 % 1.3 % 0.1 %
Total operating expenses $ 2,169.0
$ 2,224.0
$ 2,214.8
$ (55.0 ) (2 )% $ 9.2
— %
Percentage of net revenues 46.7 % 44.2 % 44.4 %


	Years Ended December 31,
	2020			2019			$ Change		% Change

Research and development	$	958.4		$	955.7		$	2.7	—	%
Percentage of net revenues	21.6		%	21.5		%
Sales and marketing	938.8			939.3			(0.5)		—	%
Percentage of net revenues	21.1		%	21.1		%
General and administrative	255.4			244.3			11.1		5	%
Percentage of net revenues	5.7		%	5.5		%
Restructuring charges	68.0			35.3			32.7		93	%
Percentage of net revenues	1.5		%	0.8		%
Total operating expenses	$	2,220.6		$	2,174.6		$	46.0	2	%
Percentage of net revenues	50.0		%	48.9		%

~~N/M - percentage is not meaningful.~~

Our operating expenses have historically been driven in large part by personnel-related costs, including salaries and wages; commissions and bonuses, which we refer to collectively as variable compensation; benefits; share-based compensation; and travel. Facility and information technology, or IT, departmental costs are allocated to each department based on usage and headcount. We had a total of ~~9,283, 9,381,~~9,950 and ~~9,832~~9,419 employees as of December 31, ~~2018, 2017,~~2020, and ~~2016,~~2019, respectively. Our headcount ~~decreased~~increased by 98531 employees, or 1%6%, primarily from hiring for the research and development, and sales organizations, and to a lesser extent, from the acquisitions in 2018, compared to 2017, primarily due to our restructuring plan initiated in the third quarter of 2018 to realign our workforce as a result of organizational and leadership changes, which we refer to as the 2018 Restructuring Plan. Our headcount decreased by 451 employees, or 5%, in 2017, compared to 2016, primarily due to our restructuring plan initiated in the first quarter of 2017 to realign our workforce and increase operational efficiency, which we refer to as the 2017 Restructuring Plan.2020.

~~2018 Compared to 2017~~

Research and development

Research and development expense, or R&D, increased ~~in 2018, compared to 2017,~~$2.7 million primarily due to higher personnel-related costs ~~including~~of $26.3 million driven by an increase in share-based compensation expense of $34.4 million driven by higher expense from the modification of certain performance share awards, or PSAs, whose vesting is contingent upon the achievement of certain performance milestones,headcount and higher ~~variable compensation expense~~professional services spending of ~~$17.8~~$12.4 million. The increase was partially offset by a decrease in share-based compensation expense of $15.2 million, lower ~~salaries and wages~~engineering costs of ~~$26.7~~$14.3 million due to ~~a geographic shift~~decreased investments in ~~headcount to~~certain R&D projects, and lower ~~cost regions, as well as a reduction in headcount from restructuring actions.~~

~~Sales and marketing~~

~~Sales and marketing expense decreased in 2018, compared to 2017,~~travel costs of $4.0 million due to ~~lower personnel-related costs of $10.9 million primarily resulting from a decline in headcount of 49 employees driven by restructuring actions and lower costs of $9.3 million from a decrease in~~ the ~~number of marketing events held in 2018, compared to 2017. The decrease was partially offset by higher outside service costs of $7.1 million related to consulting projects.~~COVID-19 pandemic.

General and administrative

General and administrative expense increased ~~in 2018, compared to 2017,~~$11.1 million primarily due to higher ~~acquisition~~acquisition-related costs ~~related to~~of $10.5 million, mainly for our ~~2018 business acquisition~~acquisitions during the fourth quarter of ~~HTBase, partially offset by a decline in outside service costs resulting from fewer consulting projects and lower legal costs.~~2020.

Restructuring charges

~~Restructuring charges decreased in 2018, compared to 2017, primarily due to lower restructuring charges from the 2018 Restructuring Plan, compared to the 2017 Restructuring Plan.~~

~~See Note 18,~~ ~~Subsequent Events, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for a discussion of our restructuring plan initiated subsequent to December 31, 2018.~~

~~2017 Compared to 2016~~

~~Research and development~~

Research and development expense, decreased in 2017, compared to 2016, primarily due to a decline in personnel-related costs, including lower share-based compensation of $39.8 million primarily driven by lower expense from certain PSAs, whose vesting is contingent upon the achievement of financial performance metrics or certain performance milestones, and lower variable compensation of $13.7 million. The decrease was partially offset by higher costs related to certain R&D project cancellations of $11.4 million and higher prototype costs of $10.4 million.

~~Sales and marketing~~

Sales and marketing expense decreased in 2017, compared to 2016, primarily due to a decline in personnel-related costs of $20.5 million, including lower variable compensation of $15.5 million primarily as a result of lower commissions expense and lower salaries and wages driven by a decrease in headcount as a result of the 2017 Restructuring Plan.

~~General and administrative~~

General and administrative expense increased in 2017, compared to 2016, primarily due to litigation settlement charges pursuant to a litigation settlement reached in November 2017 in connection with a legal proceeding of approximately $13.0 million, partially offset by a decline in other legal costs of $6.4 million.

~~Restructuring charges~~

Restructuring charges increased ~~in 2017, compared to 2016,~~$32.7 million, primarily due to higher severance costs related to voluntary and ~~contract termination costs~~involuntary workforce reductions recorded under the ~~2017~~2020 Restructuring Plan.

Table of Conten t s

Loss on Extinguishment of Debt

The following table presents the loss on extinguishment of debt (in millions, except percentages):


	Years Ended December 31,
	2020			2019			$ Change		% Change

Loss on extinguishment of debt	$	(55.0)		$	(15.3)		$	(39.7)	259	%
Percentage of net revenues	(1.2)		%	(0.3)		%

During 2020, we incurred a loss on extinguishment of debt of $55.0 million related to the early repayment of a portion of our 2024 and 2025 Senior Notes. The loss primarily consists of a premium on the tender offer and acceleration of unamortized debt discount and fees on the redeemed debt. During 2019, we incurred a loss on extinguishment of debt of $15.3 million related to the early repayment of our 2020 and 2021 Senior Notes.

Other Expense, Net

The following table presents other expense, net (in millions, except percentages):


	Years Ended December 31,																					Years Ended December 31,
	2018			2017			2016			2018 vs. 2017					2017 vs. 2016							2020			2019			$ Change		% Change
										$ Change			% Change		$ Change				% Change
Interest income	$	72.7		$	53.0		$	35.4		$	19.7		37	%	$	17.6		��	50	%	Interest income	$	36.3		$	79.1		$	(42.8)	(54)	%
Interest expense	(103.2		)	(101.2		)	(97.7		)	(2.0		)	2	%	(3.5		)		4	%	Interest expense	(77.0)			(88.7)			11.7		(13)	%
(Loss) gain on investments, net	(7.4		)	14.6			(1.8		)	(22.0		)	(151	)%	16.4				N/M
Gain (loss) on investments, net																					Gain (loss) on investments, net	13.3			(3.8)			17.1		N/M
Other	(1.6		)	(2.7		)	1.8			1.1			(41	)%	(4.5		)		(250	)%	Other	(5.5)			0.9			(6.4)		N/M
Total other expense, net	$	(39.5	)	$	(36.3	)	$	(62.3	)	$	(3.2	)	9	%	$	26.0			(42	)%	Total other expense, net	$	(32.9)		$	(12.5)		$	(20.4)	163	%
Percentage of net revenues	(0.8		)%	(0.7		)%	(1.2		)%												Percentage of net revenues	(0.7)		%	(0.3)		%

N/M - percentage is not meaningful.

~~Other Expense, Net~~

Interest income primarily includes interest earned on our cash, cash equivalents, investments, and a promissory note issued to us in connection with the sale of Junos Pulse. Interest expense primarily includes interest, net of capitalized interest expense, from long-term debt and customer financing arrangements. ~~(Loss) gain~~Gain (loss) on investments, net, primarily includes ~~gains~~losses from the sale of investments in public and privately-held companies, and any observable changes in fair value and impairment charges recorded on these investments. Other typically consists of foreign exchange gains and losses and other non-operational income and expense items.

~~2018 Compared to 2017~~

Interest Income

Interest income ~~increased in 2018, compared to 2017,~~decreased $42.8 million, primarily due to ~~higher interest income related to~~lower yields from our fixed income investment portfolio as a result of ~~higher yields on our investments, partially offset by~~a lower interest rates and lower average ~~investment balances.~~portfolio balance, and to a lesser extent, lower interest income as a result of the collection of a promissory note receivable in connection with the previously completed sale of Junos Pulse.

Interest Expense

Interest expense ~~increased in 2018, compared to 2017,~~decreased $11.6 million primarily due to ~~distributor financing arrangements~~lower interest rates and savings from ~~extended payment terms financing.~~our interest rate swap contracts.

~~(Loss)~~ Gain (loss) on Investments, Net

During ~~the year ended December 31, 2018,~~2020, we had ~~losses~~gains related to ~~the sale of~~certain equity investments and other isolated transactions, compared to losses from certain equity investments in privately-held companies, compared to gains on sales during 2017. In addition, we recorded impairment charges on a certain equity investment in a privately-held company in 2018, and there were no such charges recorded in 2017.2019.

~~2017 Compared to 2016~~

~~Interest Income~~

~~Interest income increased in 2017, compared to 2016, primarily due to an increase in interest income related to our investment portfolio, as a result~~Table of ~~higher yields and a larger balance in the portfolio.~~Conten t s

~~Interest Expense~~

~~Interest expense increased in 2017, compared to 2016, primarily due to a full-year effect of interest expense from the issuance of our 2019 and 2024 Notes in the first quarter of 2016. See Note 10,~~ ~~Debt and Financing, in Notes to Consolidated Financial Statements in Item 8 in Part II of this Report for additional information regarding our 2019 and 2024 Notes.~~

~~Gain (Loss) on Investments, Net~~

In 2017, gains on equity investments increased, primarily related to the sale of investments in public and privately-held companies, compared to 2016. In addition, we recorded impairment charges on certain investments in privately-held companies in 2016, and there were no such charges recorded in 2017.

Income Tax ~~(Benefit)~~ Provision

The following table presents the income tax provision (benefit) ~~provision~~ (in millions, except percentages):


	Years Ended December 31,
	2020			2019			$ Change		% Change

Income tax provision	$	7.4		$	69.4		$	(62.0)	(89)	%
Effective tax rate	2.8		%	16.7		%

Years Ended December 31,
2018 2017 2016 2018 vs. 2017 2017 vs. 2016
$ Change % Change $ Change % Change
Income tax (benefit) provision
$ (34.2 ) $ 505.6
$ 234.7
$ (539.8 ) (107 )% $ 270.9
115 %
Effective tax (benefit) rate (6.4 )% 62.3 % 28.4 %

~~2018 Compared to 2017~~

The effective tax rate for fiscal year ~~2018 is~~2020 was lower than ~~2017,~~2019, primarily due ~~to:~~to the net difference in discrete items unique to fiscal year 2020 compared to fiscal year 2019. In 2020, our effective rate included a ~~lower statutory tax rate as a result of the Tax Act enacted on December 22, 2017; a $67.6~~$63.7 million benefit, including interest and penalties, related to a ~~lapse in~~multi-year recognition of previously unrecognized tax benefits and a $20.1 million charge, including interest, for the ~~federal statute~~cumulative impact of ~~limitations relative to tax years 2010 through 2014, including interest;~~cost sharing for share-based compensation. In 2019, our effective rate included a ~~$33.2~~$25.4 million benefit, ~~as a result of filing a change in tax accounting method for~~including interest, related to the recognition of ~~deferred product revenue in~~previously unrecognized tax benefits pursuant to the ~~U.S. to better align with the financial statement recognition~~resolution of ~~such revenue; a $32.2 million resulting from~~ a tax ~~accounting method change related to foreign deferred service revenue;~~audit and a ~~favorable change~~$7.5 million benefit, including interest, for a lapse in ~~the geographic mix~~statute of ~~earnings; and, discrete taxes of approximately $289.5 million accrued on accumulated foreign earnings under the Tax Act in the fourth quarter ended December 31, 2017.~~limitations.

The Tax Act introduced significant changes to U.S. income tax law. Effective January 1, 2018, the Tax Act reduced the U.S. federal corporate income tax rate from 35% to 21% and created a minimum tax on foreign earnings and imposed a one-time transition tax on accumulated foreign earnings through December 31, 2017. In 2017, we recorded provisional amounts for the effects of the Tax Act of $289.5 million, primarily related to net taxes on accumulated foreign earnings and the re-measurement of our deferred tax assets at the revised U.S. statutory rate. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of December 31, 2018. We have elected to pay our transition tax, net of applicable tax refunds, over the eight-year period provided in the Tax Act.

For a complete reconciliation of our effective tax rate to the U.S. federal statutory rate of 21% and further explanation of our income tax provision, see Note ~~14,~~ 13, Income Taxes, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.

On July 24, 2018, the Ninth Circuit Court of Appeals, or the Court, issued an opinion in Altera Corp. v. Commissioner requiring related parties in an intercompany cost-sharing arrangement to share expenses related to share-based compensation. On August 7, 2018, the Court withdrew its opinion to allow time for a reconstituted panel to confer. We will continue to monitor ongoing developments and potential impacts to its financial statements. Had the Ninth Circuit not withdrawn its opinion, our effective tax rate for 2018 would have been higher.

Our effective tax rate may fluctuate significantly on a quarterly basis and may be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates. Our effective tax rate may also fluctuate due to changes in the valuation of our deferred tax assets or liabilities, or by changes in tax laws, regulations, or accounting principles, as well as certain discrete items. See Item 1A of Part I, "Risk Factors" of this Report for a description of relevant risks which may adversely affect our results.

~~2017 Compared to 2016~~

The effective tax rate for the fiscal year 2017 was higher than 2016, primarily due to an estimated $289.5 million of net income tax expense related to changes imposed by the Tax Act, which was enacted on December 22, 2017. Effective January 1, 2018, the Tax Act provided for significant changes to U.S. income tax law including the reduction of the U.S. federal corporate income tax rate from 35% to 21% and the creation of a minimum tax on foreign earnings. In addition, the Tax Act imposed a one-time transition tax on accumulated foreign earnings through December 31, 2017. The $289.5 million income tax expense included an estimated tax charge of $431.2 million on our accumulated foreign earnings, which we elected to pay over eight years.

As a result of recommendations by the ~~Organisation for Economic Cooperation and Development, or~~ OECD on Base Erosion and Profit Shifting, certain countries in EMEA and APAC have either enacted new corporate tax legislation or are considering enacting such legislation in the near future. We expect the effect of these reform measures to potentially impact long-standing tax principles, particularly in regards to transfer pricing. Consequently, we expect global tax authorities to increasingly challenge our cost sharing and other intercompany arrangements, and the related sourcing of taxable profits in global jurisdictions.

Table of Conten t s

Liquidity and Capital Resources

The following sections discuss the effects of changes in our balance sheet, our capital return strategy, including our stock repurchase program and dividends, our contractual obligations, and certain other commitments and activities on our liquidity and capital resources.

We have funded our business primarily through our operating activities and the issuance of our long-term debt. The following table presents our capital resources (in millions, except percentages):


	As of December 31,
	2020		2019		$ Change		% Change
Working capital	$	1,110.1	$	1,665.9	$	(555.8)	(33)	%

Cash and cash equivalents	$	1,361.9	$	1,215.8	$	146.1	12	%
Short-term investments	412.1		738.0		(325.9)		(44)	%
Long-term investments	656.6		589.8		66.8		11	%
Total cash, cash equivalents, and investments	2,430.6		2,543.6		(113.0)		(4)	%
Short-term portion of long-term debt	421.5		—		421.5		(100)	%
Long-term debt	1,705.8		1,683.9		21.9		1	%
Cash, cash equivalents, and investments, net of debt	$	303.3	$	859.7	$	(556.4)	(65)	%

As of December 31,
2018 2017 $ Change % Change
Working capital $ 2,739.3
$ 2,446.3
$ 293.0
12 %

Cash and cash equivalents $ 2,489.0
$ 2,006.5
$ 482.5
24 %
Short-term investments 1,070.1
1,026.1
44.0
4 %
Long-term investments 199.0
988.4
(789.4 ) (80 )%
Total cash, cash equivalents, and investments 3,758.1
4,021.0
(262.9 ) (7 )%
Short-term portion of long-term debt 349.9
—
349.9
N/M
Long-term debt 1,789.1
2,136.3
(347.2 ) (16 )%
Cash, cash equivalents, and investments, net of debt $ 1,619.1
$ 1,884.7
$ (265.6 ) (14 )%

~~N/M - percentage is not meaningful.~~

Summary of Cash Flows

The following table summarizes cash flow activity from our Consolidated Statements of Cash Flows (in millions, except percentages):


	Years Ended December 31,
	2020		2019		$ Change		% Change

Net cash provided by operating activities	$	612.0	$	528.9	$	83.1	16	%
Net cash used in investing activities	$	(288.9)	$	(528.2)	$	239.3	(45)	%
Net cash used in financing activities	$	(222.4)	$	(1,228.8)	$	1,006.4	(82)	%

Years Ended December 31,
2018 2017 2016 2018 vs. 2017 2017 vs. 2016
$ Change % Change $ Change % Change
Net cash provided by operating activities^(*)
$ 861.1
$ 1,259.3
$ 1,126.6
$ (398.2 ) (32 )% $ 132.7
12 %
Net cash provided by (used in) investing activities^(*)
$ 564.8
$ (303.0 ) $ (417.0 ) $ 867.8
(286 )% $ 114.0
(27 )%
Net cash used in financing activities $ (968.6 ) $ (794.8 ) $ (236.3 ) $ (173.8 ) 22 % $ (558.5 ) 236 %


^(*)	~~On January 1, 2018, we adopted the new accounting pronouncement~~ ~~Statement of Cash Flows: Restricted Cash~~. We applied this provision on a retrospective basis to conform to the current-period presentation. The adoption did not have a material impact on the cash flow activity presented in our Consolidated Statement of Cash Flows for the fiscal years ended 2017 and 2016.

Operating Activities

Our primary source of operating cash flows is cash collections from our customers. Our primary uses of cash from operating activities are for personnel-related expenditures, payments for suppliers and other general operating expenses, as well as payments related to taxes, interest, and facilities.

~~2018 Compared to 2017~~

Net cash provided by operations ~~decreased in 2018, compared to 2017,~~increased primarily due to higher cash collections from customers during 2017 related to service renewals invoiced during the fourth quarter of 2016, partially offset by a decline in cash paid for personnel-related costs, principally as a result of a reduction in headcount and lower incentive compensation, and a decrease in payments to suppliers.

~~2017 Compared to 2016~~

~~Net cash provided by operating activities increased in 2017, compared to 2016, primarily due to an increase in cash collections from customers in the first half of 2017~~ due to higher invoicing activity ~~during the fourth quarter of 2016,~~and working capital differences related to customer collections, partially offset by ~~an increase in~~higher payments to indirect suppliers ~~higher payments~~and for ~~restructuring activities, and an increase in cash paid for income taxes.~~employee compensation.

Investing Activities

Investing cash flows consist primarily of capital expenditures; purchases, sales, maturities, and redemptions of investments; and cash used for business combinations.

~~2018 Compared to 2017~~

Net cash provided by investing activities increased in 2018, compared to 2017, primarily due to the liquidation of repatriated offshore investments to fund the accelerated share repurchase program discussed below.

~~2017 Compared to 2016~~

Net cash used in investing activities decreased in ~~2017,~~2020, compared to ~~2016, primarily due to lower payments~~2019. In 2020, the net payment for ~~business combinations and capital expenditures~~acquisitions was $438.1 million and the ~~receipt of $75.0 million in~~net proceeds from sales, maturities, and redemptions of investments was $250.7 million. In 2019, the ~~Pulse Note, partially offset by higher~~ net ~~purchases~~payment for the acquisition of ~~available-for-sale debt securities.~~Mist was $270.9 million and the net purchase of investments was $140.4 million.

Table of Conten t s

Financing Activities

Financing cash flows consist primarily of repurchases and retirement of common stock, payment of cash dividends to stockholders, issuance and repayment of long-term debt, and proceeds from the issuance of shares of common stock through employee equity incentive plans.

~~2018 Compared to 2017~~

Net cash used in financing activities ~~increased~~decreased in ~~2018,~~2020, compared to ~~2017,~~2019, primarily due to ~~an increase~~$416.2 million net issuance of debt in ~~payments of cash dividends and higher repurchases of our common stock, as a result of the accelerated share repurchase program, or ASR, described further below.~~

~~2017 Compared to 2016~~

~~Net cash used in financing activities increased in 2017,~~2020 compared to ~~2016, primarily due to an increase~~$454.8 million net repayment of debt in 2019, and $175 million decrease in stock repurchases ~~and retirement of our common stock in 2017. In 2016, we raised $494.0 million from our 2019 Notes and 2024 Notes and repaid $300.0 million of our 2016 Notes.~~as discussed below.

Capital Return

The following table summarizes our dividends paid and stock repurchase activities (in millions, except per share amounts):


	Dividends				Stock Repurchase Program					Total
Year	Per Share		Amount		Shares	Average price per share (*)		Amount		Amount
2020	$	0.80	$	264.1	17.9	$	23.47	$	375.0	$	639.1

2019	$	0.76	$	260.1	20.1	$	25.36	$	550.0	$	810.1

2018	$	0.72	$	249.3	29.3	$	25.62	$	750.0	$	999.3

(*) During 2020, the $23.47 average price per share includes $375.0 million in open market purchases, and settlement of a forward contract of $40.0 million under accelerated share repurchase program (the "ASR"), which was initiated during the fourth quarter of 2019. During 2019, the $25.36 average price per share excludes the forward contract of $40.0 million under the ASR.

Dividends Stock Repurchase Program Total
Year Per Share Amount Shares
Average price
per share
Amount Amount
2018 $ 0.72
$ 249.3
29.3
$ 25.62
$ 750.0
$ 999.3
2017 $ 0.40
$ 150.4
26.1
$ 27.61
$ 719.7
$ 870.1
2016 $ 0.40
$ 152.5
13.5
$ 23.25
$ 312.9
$ 465.4

In January 2018, our Board of Directors, which we refer to as the Board, approved a $2.0 billion share repurchase program, which we refer to as the 2018 Stock Repurchase Program. ~~The~~In October 2019, the Board authorized a $1.0 billion increase to the 2018 Stock Repurchase Program ~~replaces the previous authorization approved by the Board in 2014.~~for a total of $3.0 billion.

As part of the 2018 Stock Repurchase Program, in February 2018 and April 2019, we entered into ~~an ASR to repurchase~~two ASRs and repurchased $750.0 million and $300.0 million of our common ~~stock. We made an up-front payment of $750.0 million pursuant to the ASR to repurchase our common stock.~~stock, respectively. The aggregate number of shares ultimately repurchased of 29.3 million and 11.6 million shares of our common stock, respectively, was determined based on a volume weighted average repurchase price, less an agreed upon discount, of $25.62 and $25.79 per share, respectively. The shares we received were retired and accounted for as a reduction to stockholder’s equity in the Consolidated Balance Sheets, and treated as a repurchase of common stock for purposes of calculating earnings per share.

As part of the 2018 Stock Repurchase Program, on October 28, 2019, we entered into an additional ASR with a financial institution to repurchase an aggregate of $200.0 million of our outstanding common stock. We made an up-front payment of $200.0 million pursuant to the ASR and received and retired an initial 6.4 million shares of our common stock for an aggregate price of $160.0 million based on the market price of $25.15 per share of our common stock on the date of the transaction. In January, 2020, the ASR was completed, and an additional 1.8 million shares were received for a total repurchase of 8.2 million shares of our common stock at a volume weighted average repurchase price, less an agreed upon discount, of $24.44 per share. The shares received by us were retired, accounted for as a reduction to stockholder’s equity in the Consolidated Balance Sheets, and treated as a repurchase of common stock for purposes of calculating earnings per share.

During the fiscal year ended December 31, 2020, we repurchased 16.1 million shares of our common stock in the open market for an aggregate purchase price of $375.0 million at an average price of $23.36 per share, under the 2018 Stock Repurchase Program.

As of December 31, ~~2018,~~2020, there was $1.3 billion of authorized funds remaining under the 2018 Stock Repurchase ~~Program, as of the filing date of this Report.~~Program.

Future share repurchases under the 2018 Stock Repurchase Program will be subject to a review of the circumstances at that time and will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. Our 2018 Stock Repurchase Program may be discontinued at any time. See Note ~~11,~~ 10, Equity, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for further discussion of our share purchase program.

Table of Conten t s

In addition, any future dividends, and the establishment of record and payment dates, are subject to approval by the Board or an authorized committee thereof. See Note ~~18,~~ 17, Subsequent ~~Event~~Events, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for discussion of our dividend declaration subsequent to December 31, ~~2018.~~2020.

Off-Balance Sheet Arrangements

As of December 31, ~~2018~~2020 and ~~2017,~~2019, we did not have any off-balance sheet arrangements, as defined in Item 303 (a)(4)(ii) of SEC Regulation S-K. It is not our business practice to enter into off-balance sheet arrangements. However, in the normal course of business, we enter into contracts consisting of guarantees of product and service performance, standby letters of credit for certain lease facilities and insurance programs. See Guarantees below for additional information regarding our guarantees.

Contractual Obligations

Our principal commitments consist of obligations outstanding under operating leases, purchase commitments, debt, and other contractual obligations. The following table summarizes our principal contractual obligations as of December 31, ~~2018~~2020 and the effect such obligations are expected to have on our liquidity and cash flow in future periods (in millions):


	Payments Due by Period											Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years			Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating leases⁽¹⁾	$	146.3	$	33.7	$	55.0	$	31.3	$	26.3	Operating leases(1)	$	232.7	$	52.9	$	91.6	$	67.9	$	20.3
Other lease arrangement⁽²⁾	101.0		13.1		26.9		28.1		32.9
Purchase commitments with contract manufacturers and suppliers⁽¹⁾	663.3		605.9		57.4		—		—		Purchase commitments with contract manufacturers and suppliers(1)	1,283.0		825.8		457.2		—		—
Long-term debt⁽³⁾	2,150.0		350.0		600.0		—		1,200.0
Interest payment on long-term debt⁽³⁾	798.9		88.5		144.4		118.7		447.3
Tax liability related to the Tax Act⁽⁴⁾	245.2		—		—		53.8		191.4
Long-term debt(2)											Long-term debt(2)	2,123.8		423.8		—		400.0		1,300.0
Interest payment on long-term debt(2)											Interest payment on long-term debt(2)	764.9		59.6		110.7		110.7		483.9
Tax liability related to the Tax Act(3)											Tax liability related to the Tax Act(3)	250.6		—		59.2		191.4		—
Other contractual obligations⁽¹⁾	97.8		43.1		37.8		14.0		2.9		Other contractual obligations(1)	156.8		62.3		83.8		10.7		—
Total	$	4,202.5	$	1,134.3	$	921.5	$	245.9	$	1,900.8	Total	$	4,811.8	$	1,424.4	$	802.5	$	780.7	$	1,804.2

Outstanding RSUs, RSAs, and PSAs ⁽⁶⁾
Number of Shares
Weighted Average
Grant-Date Fair
Value per Share

Weighted Average
Remaining
Contractual Term
(In Years)

Aggregate
Intrinsic
Value
Balance at December 31, 2017 19.5
$ 25.39

RSUs granted⁽¹⁾⁽²⁾
7.4
25.40

RSUs substituted in acquisitions⁽²⁾⁽⁵⁾
0.1
26.26

RSAs substituted in acquisitions⁽²⁾⁽⁵⁾
0.1
27.66

PSAs granted⁽²⁾⁽⁴⁾
0.9
24.62

RSUs vested⁽³⁾
(6.5 ) 25.67

RSAs vested⁽³⁾
(0.2 ) 25.12

PSAs vested⁽³⁾
(1.1 ) 24.14

RSUs canceled (2.0 ) 25.92

PSAs canceled (0.8 ) 24.45

Balance at December 31, 2018 17.4
$ 25.32
1.0 $ 467.6

As of December 31, 2018
Vested and expected-to-vest RSUs, RSAs, and PSAs 15.5
$ 25.31
1.0 $ 418.4


⁽¹⁾	~~Includes service-based and market-based RSUs granted under the 2015 Plan according to their terms.~~


⁽²⁾	~~The weighted-average grant-date fair value of RSUs, RSAs, and PSAs granted and assumed or substituted during 2018, 2017, and 2016 was $25.33, $27.53, and $24.66, respectively.~~


⁽³⁾	~~Total fair value of RSUs, RSAs, and PSAs vested during 2018, 2017, and 2016 was $200.5 million, $187.3 million, and $185.7 million, respectively.~~

⁽⁴⁾

The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee are achieved at target is 0.7 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 million to 1.0 million shares.


⁽⁵⁾	~~RSUs and RSAs substituted in connection with the acquisition of HTBase.~~

⁽⁶⁾

Excludes 1.9 million shares of PSAs that were modified in 2018, which relate primarily to PSAs assumed by the Company in connection with acquisitions consummated in 2016. These awards are contingent upon the achievement of certain performance milestones. The total incremental compensation cost resulting from the modifications totaled $6.9 million to be recognized over the remaining terms of the modified awards.

~~100~~

Table of Contents

Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

Shares Available for Grant

The following table presents the stock activity and the total number of shares available for grant under the 2015 Plan (in millions):



	Number of Shares
Balance as of December 31, ~~2017~~2019	~~33.5~~16.6
Additional shares authorized	—0
RSUs and PSAs granted⁽¹⁾(*)	~~(17.7~~(8.4)	)
RSUs and PSAs canceled⁽²⁾(*)	~~5.4~~3.9
~~Options canceled/expired~~⁽²⁾	~~0.7~~
Balance as of December 31, ~~2018~~2020	~~21.9~~12.1

⁽¹⁾

RSUs and PSAs with a per share or unit purchase price lower than 100% of the fair market value of the Company's common stock on the day of the grant under the 2015 Plan are counted against shares authorized under the plan as two and one-tenth shares of common stock for each share subject to such award. The number of shares subject to PSAs granted represents the maximum number of shares that may be issued pursuant to the award over its full term.

⁽²⁾

Canceled or expired options and canceled RSUs and PSAs under the 2006 Plan are no longer available for future grant under such plan; however, the number of shares available for grant under the 2015 Plan are increased by (i) the amount of such canceled or expired options and (ii) two and one-tenth the shares for each canceled RSUs or PSAs, as applicable, up to a maximum of 29.0 million additional shares of common stock, pursuant to the terms of the 2015 Plan.

(*) In May 2019, the 2015 Plan was amended, and the amendment removed the fungible share adjustment used to determine shares available for issuance. Under the original terms of the 2015 Plan, RSUs and PSAs with a per share or unit purchase price lower than 100% of the fair market value of the Company's common stock on the day of the grant were counted against shares authorized under the plan as two and one-tenth shares of common stock ("the prior fungible rate") for each share subject to such award. Pursuant to the amendment, beginning on May 14, 2019, each share award granted under the 2015 Plan reduces the share reserve by one share and all share awards granted on May 14, 2019 and thereafter that are later forfeited, canceled or terminated are returned to the share reserve in the same manner. During 2020, among the total 3.9 million of canceled shares, 3.5 million shares represent the shares returned to the share reserve at the prior fungible rate. The number of shares subject to PSAs granted represents the maximum number of shares that may be issued pursuant to the award over its full term.

Employee Stock Purchase Plan

~~The Company's ESPP is implemented in a series of offering periods, each six months in duration, or a shorter period as determined by the Board. Employees~~During 2020, 2019, and 2018, employees purchased 2.7 million, 2.4 million and 2.5 million shares of common stock through the ESPP ~~during 2018, and 2.7 million shares in both 2017 and 2016~~ at an average exercise price of ~~$22.31, $20.83,~~$19.59, $22.04, and ~~$19.66~~$22.31 per share, respectively.

Valuation Assumptions

The weighted-average assumptions used and the resulting estimates of fair value for ESPP purchase rights and market-based RSUs were as follows:


	Years Ended December 31,
	2020	2019	2018
ESPP Purchase Rights:
Volatility	31%	27%	29%
Risk-free interest rate	0.8%	2.1%	1.9%
Expected life (years)	1.3	1.2	1.2
Dividend yield	3.3%	2.9%	2.7%
Weighted-average fair value per share	$6.34	$6.65	$6.93

Market-based RSUs:
Volatility	25%	25%	28%
Risk-free interest rate	1.3%	2.4%	2.4%
Dividend yield	3.3%	2.8%	2.6%
Weighted-average fair value per share	$26.32	$27.32	$28.39

Years Ended December 31,
2018 2017 2016
ESPP:
Volatility 29% 25% 32%
Risk-free interest rate 1.9% 0.9% 0.4%
Expected life (years) 1.2 0.5 0.5
Dividend yield 2.7% 1.5% 1.8%
Weighted-average fair value per share $6.93 $6.04 $5.56

Market-based RSUs:
Volatility 28% 30% 36%
Risk-free interest rate 2.4% 1.9% 1.2%
Dividend yield 2.6% 1.4% 1.7%
Weighted-average fair value per share $28.39 $19.30 $14.71

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Notes to Consolidated Financial Statements (Continued)

Share-Based Compensation Expense

Share-based compensation expense associated with stock options, RSUs, RSAs, PSAs, and ESPP purchase rights was recorded in the following cost and expense categories in the Company's Consolidated Statements of Operations (in millions):


	Years Ended December 31,
	2020		2019		2018
Cost of revenues - Product	$	5.4	$	5.7	$	6.3
Cost of revenues - Service	15.8		17.3		18.0
Research and development	78.8		94.0		120.6
Sales and marketing	58.2		56.0		51.1
General and administrative	31.4		29.2		21.1
Total	$	189.6	$	202.2	$	217.1

Years Ended December 31,
2018 2017 2016
Cost of revenues - Product $ 6.3
$ 4.6
$ 6.4
Cost of revenues - Service 18.0
17.5
15.3
Research and development 120.6
86.6
126.5
Sales and marketing 51.1
55.6
55.2
General and administrative 21.1
23.2
23.4
Total $ 217.1
$ 187.5
$ 226.8

The following table summarizes share-based compensation expense by award type (in millions):


	Years Ended December 31,
	2020		2019		2018
Stock options	$	7.3	$	7.7	$	0.4
RSUs, RSAs, and PSAs	162.6		176.5		198.2
ESPP Purchase Rights	19.7		18.0		18.5
Total	$	189.6	$	202.2	$	217.1

Years Ended December 31,
2018 2017 2016
Stock options $ 0.4
$ 0.5
$ 4.4
RSUs, RSAs, and PSAs 198.2
171.3
206.9
ESPP 18.5
15.7
15.5
Total $ 217.1
$ 187.5
$ 226.8

For the years ended December 31, ~~2018, 2017~~2020, 2019 and ~~2016,~~2018, the Company recognized tax benefits on total stock-based compensation expense, which are reflected in the income tax provision in the Consolidated Statements of Operations, of ~~$33.8~~$23.5 million, ~~$29.1~~$29.6 million, and ~~$53.3~~$33.8 million, respectively.

For the years ended December 31, ~~2018, 2017~~2020, 2019, and ~~2016,~~2018, the realized tax benefit related to awards vested or exercised during the period was ~~$38.9~~$21.7 million, ~~$64.1~~$30.6 million and ~~$58.6~~$38.9 million, respectively. These amounts do not include the indirect effects of stock-based awards, which primarily relate to the research and development tax credit.

As of December 31, ~~2018,~~2020, the total unrecognized compensation cost related to unvested share-based awards was ~~$280.4~~$333.1 million to be recognized over a weighted-average period of ~~1.4~~1.8 years.

401(k) Plan

The Company maintains a savings and retirement plan qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended (the "IRC"). Employees meeting the eligibility requirements, as defined under the IRC, may contribute up to the statutory limits each year. The Company currently matches 30% of all eligible employee contributions which vest immediately. The Company’s matching contributions to the plan totaled $22.0 million, $20.2 million, ~~$21.1 million,~~ and ~~$20.7~~$20.2 million during 2020, 2019, and 2018, ~~2017, and~~ ~~2016~~, respectively.

Deferred Compensation Plan

The Company’s NQDC plan is an unfunded and unsecured deferred compensation arrangement. Under the NQDC plan, officers and other senior employees may elect to defer a portion of their compensation and contribute such amounts to one or more investment funds. As of December 31, ~~2018,~~2020, the liability of the Company to the plan participants was ~~$24.3~~$29.3 million, of which ~~$3.6~~$3.1 million was included within other accrued liabilities and ~~$20.7~~$26.2 million was included in other long-term liabilities on the Consolidated Balance Sheets. The Company had investments of ~~$24.3~~$29.3 million correlating to the deferred compensation obligations, of which ~~$3.6~~$3.1 million was included within prepaid expenses and other current assets and ~~$20.7~~$26.2 million was included within other long-term assets on the Consolidated Balance Sheets. As of December 31, ~~2017,~~2019, the liability of the Company was ~~$27.6~~$26.8 million, of which ~~$4.9~~$4.1 million was included within other accrued liabilities and $22.7 million was included in other long-term liabilities on the Consolidated Balance Sheets. The Company had investments of ~~$27.6~~$26.8 million correlating to

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

the deferred compensation obligations, of which ~~$4.9~~$4.1 million was included within prepaid expenses and other current assets and $22.7 million was included within other long-term assets on the Consolidated Balance Sheets.

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Notes to Consolidated Financial Statements (Continued)

~~Non-US Pension Plans~~

The Company maintains the India Gratuity Trust and Israel Retirement Trust (or "the Pension Plans") to cover statutory severance obligations in the event of termination of any of its India and Israel employees, respectively. The Pension Plans are primarily invested in mutual funds and measured at fair value using Level 1 hierarchy on a recurring basis. The Company reports the Pension Plans on a net basis on the Consolidated Balance Sheets. As of December 31, 2018 and December 31, 2017, the fair value of the Pension Plans was $13.1 million and $11.3 million, respectively. As of December 31, 2018 and December 31, 2017, the Company recorded a net plan liability of $2.5 million and $4.3 million, respectively, in accrued compensation on the Consolidated Balance Sheets.

Note ~~13.~~12. Segments

The Company operates in ~~one~~1 reportable segment. The Company's chief executive officer, who is the chief operating decision maker, reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance, accompanied by disaggregated information about net revenues by product and service, customer vertical, and geographic region as presented below.

The following table presents net revenues by product and service (in millions):


	Years Ended December 31,
	2020		2019		2018
Routing	$	1,612.1	$	1,623.2	$	1,839.7
Switching	918.9		901.0		934.4
Security	314.0		343.5		333.0
Total product	2,845.0		2,867.7		3,107.1

Total service	1,600.1		1,577.7		1,540.4
Total	$	4,445.1	$	4,445.4	$	4,647.5

Years Ended December 31,
2018 2017 2016
Routing $ 1,839.7
$ 2,189.5
$ 2,352.9
Switching 934.4
963.4
858.0
Security 333.0
293.3
318.0
Total product 3,107.1
3,446.2
3,528.9

Total service 1,540.4
1,581.0
1,461.2
Total $ 4,647.5
$ 5,027.2
$ 4,990.1

The following table presents net revenues by customer vertical^(*)(in millions):


	Years Ended December 31,
	2020		2019		2018
Cloud	$	1,081.2	$	1,059.8	$	1,049.9
Service Provider	1,761.7		1,827.8		2,066.7
Enterprise	1,602.2		1,557.8		1,530.9
Total	$	4,445.1	$	4,445.4	$	4,647.5

Years Ended December 31,
2018 2017 2016
Cloud $ 1,049.9
$ 1,310.7
$ 1,315.9
Service Provider 2,066.7
2,319.4
2,316.4
Enterprise 1,530.9
1,397.1
1,357.8
Total $ 4,647.5
$ 5,027.2
$ 4,990.1


^(*)	~~Certain prior-period amounts have been reclassified to conform to the current-period classifications.~~

The Company attributes revenues to geographic region based on the customer’s shipping address. The following table presents net revenues by geographic region (in millions):


	Years Ended December 31,
	2020		2019		2018
Americas:
United States	$	2,233.9	$	2,299.8	$	2,339.1
Other	211.2		218.2		202.1
Total Americas	2,445.1		2,518.0		2,541.2
Europe, Middle East, and Africa	1,233.8		1,215.3		1,290.8
Asia Pacific	766.2		712.1		815.5
Total	$	4,445.1	$	4,445.4	$	4,647.5

Years Ended December 31,
2018 2017 2016
Americas:
United States $ 2,339.1
$ 2,712.6
$ 2,737.0
Other 202.1
234.6
231.8
Total Americas 2,541.2
2,947.2
2,968.8
Europe, Middle East, and Africa 1,290.8
1,195.8
1,238.1
Asia Pacific 815.5
884.2
783.2
Total $ 4,647.5
$ 5,027.2
$ 4,990.1

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~~Juniper Networks, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

During the years ended December 31, ~~2018, 2017,~~2020, 2019, and ~~2016,~~2018, no customer accounted for greater than 10% of the Company's net revenues.

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

The following table presents geographic information for property and equipment, net and purchased intangible assets, net (in millions):


	As of December 31,
	2020		2019
United States	$	807.4	$	815.9
International	221.6		200.8
Property and equipment, net and purchased intangible assets, net	$	1,029.0	$	1,016.7

As of December 31,
2018 2017
United States $ 941.7
$ 1,005.1
International 128.5
144.1
Property and equipment, net and purchased intangible assets, net $ 1,070.2
$ 1,149.2

The Company tracks assets by physical location. The majority of the Company’s assets, excluding cash and cash equivalents and investments, as of December 31, ~~2018~~2020 and December 31, ~~2017~~,2019, were attributable to U.S. operations.

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~~Note 14.~~	Juniper Networks, Inc. Notes to Consolidated Financial Statements (Continued) Note 13. Income Taxes

The components of pretax income are summarized as follows (in millions):


	Years Ended December 31,
	2020		2019		2018
Domestic	$	204.2	$	296.2	$	160.6
Foreign	61.0		118.2		372.1
Total pretax income	$	265.2	$	414.4	$	532.7

Years Ended December 31,
2018 2017 2016
Domestic $ 160.6
$ 474.2
$ 466.2
Foreign 372.1
337.6
361.2
Total pretax income $ 532.7
$ 811.8
$ 827.4

The provision (benefit) ~~provision~~ for income taxes is summarized as follows (in millions):


	Years Ended December 31,
	2020		2019		2018
Current provision (benefit):
Federal	$	73.4	$	6.2	$	(126.1)
States	20.3		14.4		9.0
Foreign	(21.6)		48.5		38.9
Total current provision (benefit)	72.1		69.1		(78.2)
Deferred (benefit) provision:
Federal	(58.7)		0.8		36.6
States	(6.6)		2.8		2.2
Foreign	0.6		(3.3)		5.2
Total deferred (benefit) provision	(64.7)		0.3		44.0

Total provision (benefit) for income taxes	$	7.4	$	69.4	$	(34.2)

Years Ended December 31,
2018 2017 2016
Current (benefit) provision:

Federal $ (126.1 ) $ 594.3
$ 121.4
States 9.0
13.9
10.3
Foreign 38.9
45.4
46.0
Total current (benefit) provision (78.2 ) 653.6
177.7
Deferred (benefit) provision:
Federal 36.6
(128.7 ) 57.2
States 2.2
(17.7 ) 4.3
Foreign 5.2
(1.6 ) (4.5 )
Total deferred (benefit) provision 44.0
(148.0 ) 57.0
Total (benefit) provision for income taxes $ (34.2 ) $ 505.6
$ 234.7

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~~Juniper Networks, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

The provision (benefit) ~~provision~~ for income taxes differs from the amount computed by applying the federal statutory tax rate of 21% ~~for 2018 and 35% for 2017 and 2016, respectively,~~ to pretax income for each of the years presented as follows (in millions):


	Years Ended December 31,
	2020		2019		2018
Expected provision at statutory rate	$	55.7	$	87.0	$	111.9
State taxes, net of federal benefit	8.7		9.4		7.4
Foreign income at different tax rates	(5.9)		1.8		(12.8)
R&D tax credits	(16.4)		(18.8)		(22.1)
Share-based compensation	9.0		3.8		4.7
Non-deductible compensation	3.5		3.3		1.9
Temporary differences not currently benefited	(0.9)		12.9		0


Recognition of previously unrecognized tax benefits	(63.7)		(25.4)		0
Cost sharing adjustment- Altera	20.1		0		0
Lapses in federal statutes of limitations	0		(7.5)		(67.6)
Tax accounting method changes	0		0		(65.4)


Impact of the U.S. Tax Cuts and Jobs Act	0		0		2.8
Other	(2.7)		2.9		5.0
Total provision (benefit) for income taxes	$	7.4	$	69.4	$	(34.2)

Years Ended December 31,
2018 2017 2016
Expected provision at statutory rate $ 111.9
$ 284.1
$ 289.6
State taxes, net of federal benefit 7.4
12.0
8.9
Foreign income at different tax rates (12.8 ) (46.4 ) (53.4 )
R&D tax credits (22.1 ) (15.1 ) (16.8 )
Share-based compensation 4.7
—
10.5
Release of valuation allowance —
(1.7 ) (0.7 )
Domestic production activities —
(12.4 ) (9.5 )
Non-deductible compensation 1.9
1.6
2.4
Impact of the U.S. Tax Cuts and Jobs Act 2.8
289.5
—
Tax accounting method changes (65.4 ) —
—
Lapses in federal statutes of limitations (67.6 ) —
—
Other 5.0
(6.0 ) 3.7
Total (benefit) provision for income taxes $ (34.2 ) $ 505.6
$ 234.7

In 2018, the Company recorded a $67.6 million benefit related to a lapse in the federal statute of limitations relative to tax years 2010 through 2014, including interest, a $33.2 million benefit as a result of filing a change in accounting method for the tax recognition of deferred product revenue in the U.S. to better align with the financial statement recognition of such revenue, and a $32.2 million benefit resulting from tax accounting method change related to foreign deferred service revenue.

The Tax Act introduced significant changes to U.S. income tax law. Effective January 1, 2018, the Tax Act reduced the U.S. federal corporate income tax rate from 35% to 21%, created a minimum tax on foreign earnings and imposed a one-time transition tax on accumulated foreign earnings through December 31, 2017. In 2017, the Company recorded provisional amounts for the effects of the Tax Act of $289.5 million primarily related to net taxes on accumulated foreign earnings and the re-measurement of the Company’s deferred tax assets at the revised U.S. statutory rate. In the fourth quarter of 2018, the Company completed its analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of December 31, 2018.

The Company accounts for U.S. tax on certain foreign subsidiaries income, which is referred to as Global Intangible Low-Taxed Income (“GILTI”) in the year earned. Therefore, the Company has not provided any deferred tax impacts of GILTI in its Consolidated Financial Statements for the year ended December 31, 2018.

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Notes to Consolidated Financial Statements (Continued)

In 2020, the Company recorded a $63.7 million benefit, including interest and penalties, related to a multi-yearrecognition of previously unrecognized tax benefits and a $20.1 million charge, including interest, for a cumulative impact of cost sharing for share-based compensation described below.

In 2019, the Company recorded a $25.4 million benefit, including interest, related to the recognition of previously unrecognized tax benefits pursuant to the resolution of a tax audit and a $7.5 million benefit, including interest, for a lapse in statute of limitations.

On June 7, 2019, the Ninth Circuit Court of Appeals issued an opinion in Altera Corp. v. Commissioner requiring related parties in an intercompany cost-sharing arrangement to share expenses related to share-based compensation. On February 10, 2020, Altera appealed this decision to the U.S. Supreme Court, which on June 22, 2020, declined to review the decision. Based on the Supreme Court's decision, the Company's share-based compensation is subject to cost sharing, and the Company recorded a $20.1 million charge referenced above during the year ended December 31, 2020.

Deferred income taxes reflect the net tax effects of tax carry-forward items and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's long-term deferred tax assets and deferred tax liabilities are as follows (in millions):

As of December 31,
2018 2017
Deferred tax assets:

Net operating loss carry-forwards $ 12.9
$ 18.3
Research and other credit carry-forwards 220.0
198.8
Deferred revenue 37.7
103.5
Share-based compensation 26.1
31.1
Cost sharing adjustment 12.2
12.4
Reserves and accruals not currently deductible 62.7
76.7
Other 13.2
12.8
Total deferred tax assets 384.8
453.6
Valuation allowance (233.7 ) (214.5 )
Deferred tax assets, net of valuation allowance 151.1
239.1
Deferred tax liabilities:
Property and equipment basis differences (40.6 ) (42.5 )
Purchased intangibles (13.7 ) (12.4 )
Unremitted foreign earnings (26.4 ) (25.4 )
Deferred compensation and other (8.9 ) (10.4 )
Total deferred tax liabilities (89.6 ) (90.7 )
Net deferred tax assets $ 61.5
$ 148.4

Based on changes provided by the Tax Act, the Company re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.


	As of December 31,
	2020		2019
Deferred tax assets:
Net operating loss carry-forwards	$	48.2	$	27.7
Research and other credit carry-forwards	252.8		236.7
Deferred revenue	43.4		40.0
Share-based compensation	15.0		24.3
Capitalized R&D expenditure	60.5		0
Reserves and accruals not currently deductible	43.5		55.8
Operating lease liabilities	51.3		48.3
Other	10.6		12.0
Total deferred tax assets	525.3		444.8
Valuation allowance	(261.5)		(249.4)
Deferred tax assets, net of valuation allowance	263.8		195.4
Deferred tax liabilities:
Property and equipment basis differences	(20.1)		(39.2)
Purchased intangible assets	(45.6)		(27.8)
Unremitted foreign earnings	(25.5)		(23.7)
Net unrealized gain	(21.1)		(8.7)
Operating lease assets	(44.9)		(41.1)

Total deferred tax liabilities	(157.2)		(140.5)
Net deferred tax assets	$	106.6	$	54.9

As of December 31, ~~2018~~2020 and ~~2017,~~2019, the Company had a valuation allowance on its U.S. domestic deferred tax assets of ~~approximately $233.7~~$261.5 million and ~~$214.5~~$249.4 million, respectively. The balance at December 31, ~~2018~~2020 consisted of ~~approximately $206.0~~$225.2 million, ~~$20.2~~$28.6 million and ~~$3.1~~$3.4 million against the Company's California, Massachusetts and Canadian deferred tax assets, respectively, which the Company believes are not more likely than not to be utilized in future years. The remaining deferred tax assets onfor which the Company recorded a valuation allowance of ~~approximately $4.4~~$1.6 million are related to capital losses that ~~are capital in nature and~~ may carry forward to offset future capital gains only. The valuation allowance increased in ~~2018~~2020 and ~~2017~~2019 by ~~$19.2~~$12.1 million and ~~$60.1~~$15.7 million, respectively, primarily related to the ~~change~~changes in California ~~Massachusetts~~ and ~~Canadian~~Massachusetts R&D tax credits.

As of December 31, ~~2018,~~2020, the Company had federal and California net operating loss carry-forwards of approximately ~~$54.4~~$172.9 million and ~~$150.4~~$134.0 million, respectively. The California net operating loss carry-forwards of ~~$150.4~~$134.0 million are expected to expire unused. The Company also had federal and California tax credit carry-forwards of approximately ~~$2.6~~$6.3 million and ~~$244.1~~

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

$266.0 million, respectively. Unused net operating loss carry-forwards will expire at various dates beginning in the year ~~2019.~~2021. The California tax credit carry-forwards will carry forward indefinitely.

The Company provides deferred tax liabilities for all tax consequences associated with the undistributed earnings that are expected to be repatriated to subsidiaries' parent unless the subsidiaries' earnings are considered indefinitely reinvested. The Company has made no provision for deferred taxes on approximately $60.2 million of cumulative undistributed earnings of certain foreign subsidiaries through December 31, 2020. These earnings are considered indefinitely invested in operations of the subsidiaries, as the Company intends to utilize these amounts to fund future expansion of its operations. If these earnings were distributed to the parent, the Company would be subject to additional taxes of approximately $12.0 million.

As of December 31, ~~2018, 2017,~~2020, 2019, and ~~2016,~~2018, the total amount of gross unrecognized tax benefits was ~~$178.1~~$116.0 million, ~~$264.5~~$151.3 million, and ~~$223.1~~$178.1 million, respectively. As of December 31, ~~2018,~~2020, approximately ~~$175.3~~$92.8 million of the ~~$178.1~~$116.0 million gross unrecognized tax benefits, if recognized, would affect the effective tax rate.

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~~Juniper Networks, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

A reconciliation of the beginning and ending amount of the Company's total gross unrecognized tax benefits was as follows (in millions):


	Years Ended December 31,
	2020		2019		2018
Balance at beginning of year	$	151.3	$	178.1	$	264.5
Tax positions related to current year:
Additions	5.3		5.9		4.3
Tax positions related to prior years:
Additions	18.1		0.8		12.7
Reductions	(52.0)		(3.3)		(33.8)
Settlements	(1.8)		(22.5)		(2.6)
Lapses in statutes of limitations	(4.9)		(7.7)		(67.0)
Balance at end of year	$	116.0	$	151.3	$	178.1

Years Ended December 31,
2018 2017 2016
Balance at beginning of year $ 264.5
$ 223.1
$ 216.1
Tax positions related to current year:
Additions 4.3
64.6
27.2
Tax positions related to prior years:
Additions 12.7
1.8
1.0
Reductions (33.8 ) (16.6 ) (4.1 )
Settlements (2.6 ) (4.0 ) (14.3 )
Lapses in statutes of limitations (67.0 ) (4.4 ) (2.8 )
Balance at end of year $ 178.1
$ 264.5
$ 223.1

As of December 31, ~~2018, 2017,~~2020, 2019, and ~~2016,~~2018, the Company had accrued interest and penalties related to unrecognized tax benefits of $5.3 million, $29.9 million, and $33.8 million, ~~$40.7 million, and $31.3 million,~~ respectively, toas other long-term liabilities in the Consolidated Balance Sheets. Due to the changes in the level of gross unrecognized tax ~~benefit,~~benefits, the Company recognized a benefit for net interest and penalties of ~~$5.2~~$20.7 million, $2.8 million and ~~an expense of $8.5 million and $6.0~~$5.2 million in its Consolidated Statements of Operations during the years ended December 31, 2020, 2019, and 2018, ~~2017,~~respectively. The Company recognizes interest and ~~2016, respectively.~~penalties related to unrecognized tax benefits as a component of income tax expense.

~~On November 30, 2018,~~In 2020, the Company received a final ~~order~~orders from the US and India ~~Supreme Court,~~Competent Authorities, which resolved the Company’s dispute with the India Tax Authorities for the ~~2004~~2010 through ~~2008~~2012 income tax years. The ~~final order from the Court effectively concludes the tax investigation for the respective tax years, and as a result the~~ Company ~~released $5.4 million of~~also remeasured certain previously unrecognized tax benefits for all open years resulting in a total release of $58.8 million, including ~~$4.6~~$18.4 million of interest and penalties. In addition, the Company closed an administrative procedure with the Joint Committee on Taxation, resulting in the release of a previously unrecognized tax benefit of $9.0 million.

In 2018, the U.K., German and Australian tax authorities concluded examinations of the 2016 tax year, 2010 through 2013 tax years and the 2016 through 2017 tax years, respectively, which did not have a material impact to the Company’s financial statements.

The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. There is a greater than remote likelihood that the balance of the gross unrecognized tax benefits will decrease by ~~approximately $7.7~~up to $10.6 million within the next twelve months due to ~~lapses of applicable statutes of limitation and~~ the completion of tax review cycles in various tax ~~jurisdictions.~~jurisdictions and lapses of applicable statutes of limitation.

The Company conducts business globally and, as a result, Juniper Networks or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as the Netherlands, U.K., France, Germany, Japan, China, Australia, India, and the U.S. With few exceptions, the Company is no longer subject to U.S. federal, state and local, and non-U.S. income tax examinations for years before ~~2007.~~2009.

The Company is currently under examination ~~by the IRS for the 2007 through 2009 tax years and~~ by the India tax authorities for the 2009 through 2015 tax years. ~~In March 2016, the IRS concluded its field audit and issued a final assessment. The Company is appealing this assessment.~~ The examinations by the India tax authorities are ongoing. The Company regularly assesses the likelihood of an adverse outcome

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

resulting from such examinations. As of December 31, ~~2018,~~2020, the Company believes the resolution of the audits is unlikely to have a material effect on its consolidated financial condition or results of operations.

The Company is pursuing all available administrative remedies relative to these ongoing matters. The Company believes that it has adequately provided for any reasonably foreseeable outcomes related to these proposed adjustments and the ultimate resolution of these matters is unlikely to have a material effect on its consolidated financial condition or results of operations; however, there is still a possibility that an adverse outcome of these matters could have a material effect on its consolidated financial condition and results of operations.

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

Note ~~15.~~14. Net Income per Share

The Company computed basic and diluted net income per share as follows (in millions, except per share amounts):


	Years Ended December 31,
	2020		2019		2018
Numerator:
Net income	$	257.8	$	345.0	$	566.9
Denominator:
Weighted-average shares used to compute basic net income per share	330.4		343.2		349.0
Dilutive effect of employee stock awards	4.8		5.0		5.4
Weighted-average shares used to compute diluted net income per share	335.2		348.2		354.4
Net income per share:
Basic	$	0.78	$	1.01	$	1.62
Diluted	$	0.77	$	0.99	$	1.60

Anti-dilutive shares	5.3		4.7		3.9

Years Ended December 31,
2018 2017 2016
Numerator:
Net income $ 566.9
$ 306.2
$ 592.7
Denominator:
Weighted-average shares used to compute basic net income per share 349.0
377.7
381.7
Dilutive effect of employee stock awards 5.4
6.5
6.1
Weighted-average shares used to compute diluted net income per share 354.4
384.2
387.8
Net income per share:
Basic $ 1.62
$ 0.81
$ 1.55
Diluted $ 1.60
$ 0.80
$ 1.53

Anti-dilutive shares 3.9
1.1
2.5

Basic net income per share is computed using net income available to common stockholders and the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed using net income available to common stockholders and the weighted-average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Dilutive potential common shares consist of common shares issuable upon exercise of stock options ~~issuances of ESPP,~~and purchase rights, and vesting of RSUs, RSAs, and PSAs. The Company includes the common shares underlying PSAs in the calculation of diluted net income per share only when they become contingently issuable. Anti-dilutive shares are excluded from the computation of diluted net income per share.

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

Note ~~16.~~15. Commitments and Contingencies

Commitments

Unconditional Purchase Obligations

Unconditional purchase obligations consist of agreements that include firm and non-cancelable terms to transfer funds in the future for fixed or minimum amounts or quantities to be purchased at fixed or minimum prices. For obligations with cancellation provisions, the amounts included in the following table were limited to the non-cancelable portion of the agreement terms or the minimum cancellation fee.

The following table summarizes the Company’s unconditional purchase obligations ~~and future minimum payments under non-cancelable operating and other lease arrangements~~ for each of the next five years and thereafter as of December 31, ~~2018~~2020 (in millions):


Years Ending December 31,	Unconditional Purchase Obligations
2021	$	62.3
2022	53.0
2023	30.8
2024	9.0
2025	1.6

Total	$	156.7

Leases
Years Ending December 31, Unconditional Purchase Obligations Operating Leases
Other Lease Arrangement
2019 $ 43.1
$ 33.7
$ 13.1
2020 26.4
30.7
13.3
2021 11.4
24.3
13.6
2022 8.5
17.0
13.9
2023 5.5
14.3
14.2
Thereafter 2.9
26.3
32.9
Total $ 97.8
$ 146.3
$ 101.0

In December 2018, the Company entered into a Master Services Agreement and certain Statements of Work, (collectively, the “Agreement”) with International Business Machines Corporation ("IBM"), pursuant to which the Company ~~will outsource~~outsourced significant portions of its IT and other administrative functions ~~following a transition period. Under the Agreement,~~to IBM ~~will provide the Company a broad range of IT services such as applications, including support, development and maintenance; infrastructure management and support, including~~in exchange for ~~servers, storage and network devices; and end user support including service desk. The Agreement has an initial term through 2026 over which period the Company will pay IBM~~ a combination of fixed and variable fees, fluctuating based on the Company's actual need for the services utilized. ~~The~~During the second quarter of 2020, the Company amended the Agreement, resulting in a $79.4 million reduction in fees payable to IBM. As of December 31, 2020, the Company expects to pay IBM

~~108~~

~~Table~~ $183.3 million over the remaining initial term of ~~Contents~~

~~Juniper Networks, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~approximately $325.0 million.~~the Agreement. The table above does not include fees payable to IBM under the contract as the Company is unable to make a reasonably reliable estimate of the amount of the payments related to this contract due to uncertainties in the usage of the services.

~~Unconditional Purchase Obligations~~

Unconditional purchase obligations consist of agreements that include firm and non-cancelable terms to transfer funds in the future for fixed or minimum amounts or quantities to be purchased at fixed or minimum prices. These obligations primarily result from contracts entered into for the acquisition of software development services and product development. For obligations with cancellation provisions, the amounts included in the preceding table were limited to the non-cancelable portion of the agreement terms or the minimum cancellation fee.

In ~~May 2018,~~December 2019, the Company entered into a ~~strategic alliance~~15-year Energy Services Agreement ("ESA") with ~~Ericsson AB ("Ericsson") under~~a Supplier to purchase energy and environmental attributes generated from a third-party fuel cell systems, which ~~both companies have agreed~~will be installed, operated, and maintained by the Supplier on the Company's premises. Service fees payable to ~~undertake certain development, testing and related work~~Supplier fluctuate based on the actual amount of electricity delivered to ~~bring specific products to market. The alliance has an initial term through 2023.~~the Company during a given operational year. As of December 31, ~~2018,~~2020, the ~~minimum fixed~~Company expects to pay Supplier approximately $29.0 million over the remaining initial term of the ESA. The table above does not include fees payable to ~~Ericsson was $18.0 million.~~this Supplier due to uncertainties associated with system outputs.

~~Operating~~ Leases

The Company leases its facilities and certain equipment under non-cancelable operating leases that ~~expire at~~have remaining lease terms of 1 to 10 years and 1 to 4 years, respectively. Each leased facility is subject to an individual lease or sublease, which could provide various ~~dates through November 2029. Certain leases require~~options to extend or terminate the lease agreement. Facilities are primarily comprised of corporate offices, data centers, and R&D facilities. Equipment includes vehicles and various office equipment. The Company ~~to pay~~also has variable ~~costs such as taxes,~~lease payments that are primarily comprised of common area maintenance and ~~insurance~~utility charges. The Company's lease agreements do not contain any residual value guarantees or restrictive covenants.

The components of lease costs and ~~include renewal options~~other information related to leases were as follows (in millions, except years and ~~escalation clauses. Rent expense for~~ ~~2018~~, ~~2017, and~~ ~~2016~~ ~~was approximately $39.0 million, $39.3 million, and~~ ~~$37.9 million, respectively.~~percentages):

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~~Other Lease Arrangement~~Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

In July 2015, the Company entered into a lease arrangement through March 2026 for approximately 63,000 square feet of space in the State of Washington. The space is used, among other things, to consolidate certain of the Company's laboratory operations currently located in Sunnyvale, California.


	December 31, 2020			December 31, 2019
Operating lease cost	$	50.8		$	50.3
Variable lease cost	13.4			12.6
Total lease cost	$	64.2		$	62.9

Operating cash outflows from operating leases	$	54.2		$	49.6
ROU assets obtained in exchange for new operating lease liabilities	$	54.7		$	14.0

Weighted average remaining lease term (years)	4.9			5.5
Weighted average discount rate	3.7		%	3.9		%

Due to certain contractual obligations during the construction period, the Company was deemed the owner of the property during that period. The Company capitalized the construction costs by recording a build-to-suit lease asset and a corresponding build-to-suit financing liability. Upon the completion of construction in 2016, the Company concluded that it had a certain form of continuing economic involvement in the facility, which precluded sale-leaseback accounting treatment. As a result, a total of $60.9 million of costs capitalized were placed in service and are being depreciated over the lease term. As of December 31, ~~2018,~~2020, future operating lease payments for each of the next five years and thereafter is as follows (in millions):


Years Ending December 31,	Amount
2021	$	52.9
2022	48.8
2023	42.8
2024	38.0
2025	29.9
Thereafter	20.3
Total lease payments	232.7
Less: interest	(20.1)
Total(*)	$	212.6

Balance Sheet Information
Other accrued liabilities	$	49.1
Long-term operating lease liabilities	163.5
Total	$	212.6

(*) The total ~~payment under the~~does not include one operating lease ~~agreement over the ten-year term is approximately $101.0~~with a total lease obligation of $10.7 million that has not yet commenced as of ~~which $59.7 million is included in other-long term liabilities on the Consolidated Balance Sheets.~~December 31, 2020.

Purchase Commitments with Contract Manufacturers and Suppliers

In order to reduce manufacturing lead times and in the interest of having access to adequate component supply, the Company enters into agreements with contract manufacturers and certain suppliers to procure inventory based on the Company's requirements. A significant portion of the Company's purchase commitments arising from these agreements consists of firm and non-cancelable commitments. ~~These~~The following table summarizes the Company’s purchase commitments ~~totaled $663.3 million~~for each of the next five years and thereafter as of December 31, ~~2018.~~2020 (in millions):


Years Ending December 31,	Purchase Commitments

2021	$	825.8
2022	230.9
2023	226.3


Total	$	1,283.0

The Company establishes a liability in connection with purchase commitments related to quantities in excess of its demand forecasts or obsolete materials charges for components purchased by the contract manufacturers based on the Company’s

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

demand forecast or customer orders. As of December 31, ~~2018,~~2020, the Company had accrued ~~$30.4~~$15.2 million based on its estimate of such charges.

Debt and Interest Payment on Debt

As of December 31, ~~2018,~~2020, the Company held total outstanding debt consisting of the Notes with a carrying value of ~~$2,139.0 million.~~$2,127.3 million. See Note ~~10,~~ 9, Debt and Financing, for further discussion of the Company's long-term debt and expected future principal maturities.

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~~Table of Contents~~

~~Juniper Networks, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

Tax Liability

In the fourth quarter of 2018, the Company completed its analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of December 31, 2018. The Company has elected to pay its transition tax, net of applicable tax refunds, over the eight-year period provided in the Tax Act. The long-term income taxes payable of ~~$245.2~~$250.6 million represents the remaining balance of the Company's transition tax obligation.

As of December 31, ~~2018,~~2020, the Company had ~~$159.2~~$61.9 million included in long-term income taxes payable on the Consolidated Balance Sheets for unrecognized tax positions. At this time, the Company is unable to make a reasonably reliable estimate of the timing of payments related to this amount due to uncertainties in the timing of tax audit outcomes.

Guarantees

The Company enters into agreements with customers that contain indemnification provisions relating to potential situations where claims could be alleged that the Company’s products solely, or in combination with other third-party products, infringe the intellectual property rights of a third-party. As of December 31, ~~2018~~2020 and ~~2017,~~2019, the Company recorded ~~$11.9~~$6.7 million and ~~$20.4~~$9.0 million, respectively, for such indemnification obligations in other accrued liabilities and other long-term liabilities on the Consolidated Balance Sheets. The Company also has financial guarantees consisting of ~~guarantees of product and service performance and~~ standby letters of credit for certain lease facilities, ~~and~~ insurance programs ~~of $23.1~~and customs of $29.0 million and ~~$23.0~~$30.6 million, as of December 31, ~~2018~~2020 and December 31, ~~2017,~~2019, respectively.

Legal Proceedings

~~Investigations~~

The Company previously disclosed that it has been the subject of investigations by the U.S. Securities and Exchange Commission ("SEC") and the U.S. Department of Justice ("DOJ") into possible violations by the Company of the U.S. Foreign Corrupt Practices Act ("FCPA"). In cooperation with these investigations, the Company and the Audit Committee of the Board of Directors, with the assistance of outside counsel and other independent advisors, conducted a thorough internal investigation. As a result of its internal investigation, the Company made significant improvements in its internal controls and carried out a number of disciplinary actions. In the fourth quarter of 2017, the DOJ notified the Company that the DOJ has closed its investigation related to these matters without taking any action against the Company. The Company is continuing to fully cooperate with the SEC’s ongoing investigation, and based on the Company’s recent communications with the Staff of the SEC, the Company believes that it is likely that the Staff of the SEC will seek to bring an enforcement action against the Company. The Company believes it is probable that it could incur a loss and has established an estimated legal reserve of $12.0 million related to the ongoing SEC investigation; however, as discussions are continuing, there can be no assurance as to the timing or the terms of any final resolution of this matter.

~~Other Litigations and Investigations~~

~~In addition to the investigations discussed above, the~~ Company is involved in ~~other~~ investigations, disputes, ~~litigations,~~litigation, and legal proceedings. The Company records an accrual for loss contingencies for legal proceedings when it believes that an unfavorable outcome is both (a) probable and (b) the amount or range of any possible loss is reasonably estimable. The Company intends to aggressively defend itself in these matters, and while there can be no assurances and the outcome of these matters is currently not determinable, the Company currently believes that none of these existing claims or proceedings are likely to have a material adverse effect on its financial position. Notwithstanding the foregoing, there are many uncertainties associated with any litigation and these matters or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could adversely affect gross margins in future periods. If any of those events were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company's estimates, if any, which could result in the need to adjust the liability and record additional expenses.

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Juniper Networks, Inc.

Notes to Consolidated Financial Statements (Continued)

Note ~~17.~~16. Selected Quarterly Financial Data (Unaudited)

The table below sets forth selected unaudited financial data for each quarter of the years ended December 31, ~~2018~~2020 and December 31, ~~2017~~2019 (in millions, except per share amounts):


	Year Ended December 31, 2018								Year Ended December 31, 2017										Year Ended December 31, 2020								Year Ended December 31, 2019
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter				First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Net revenues	$	1,082.6	$	1,204.1	$	1,179.8	$	1,181.0	$	1,221.0	$	1,308.9	$	1,257.8	$	1,239.5		Net revenues	$	998.0	$	1,086.3	$	1,138.2	$	1,222.6	$	1,001.7	$	1,102.5	$	1,133.1	$	1,208.1
Gross margin	618.4		700.9		711.0		710.9		746.6		801.9		772.4		751.2			Gross margin	579.3		619.6		657.8		717.0		582.3		636.8		678.4		719.3
Income before income taxes	41.4		150.9		152.0		188.4		140.6		245.2		225.8		200.2			Income before income taxes	28.3		86.1		111.6		39.2		44.5		77.8		118.1		174.0
Net income (loss)⁽¹⁾	$	34.4	$	116.5	$	223.8	$	192.2	$	108.8	$	179.8	$	165.7	$	(148.1	)
Net income																		Net income	$	20.4	$	61.2	$	145.4	$	30.8	$	31.1	$	46.2	$	99.3	$	168.4

Net income (loss) per share:⁽²⁾
Net income per share:(*)																		Net income per share:(*)
Basic	$	0.10	$	0.33	$	0.65	$	0.56	$	0.29	$	0.47	$	0.44	$	(0.40	)	Basic	$	0.06	$	0.18	$	0.44	$	0.09	$	0.09	$	0.13	$	0.29	$	0.50
Diluted⁽³⁾	$	0.10	$	0.33	$	0.64	$	0.55	$	0.28	$	0.47	$	0.43	$	(0.40	)
Diluted																		Diluted	$	0.06	$	0.18	$	0.43	$	0.09	$	0.09	$	0.13	$	0.29	$	0.49

_______________


⁽¹⁾	~~Net income for the third and fourth quarters of 2018 include a lower statutory tax rate due to the Tax Act and tax benefits related to items unique to 2018. See Note 14,~~ ~~Income Taxes, for further discussion. Net loss for the fourth quarter of 2017 includes an estimated $289.5 million of tax expense related to the Tax Act, and restructuring charges of $36.2 million.~~


⁽²⁾	~~Net income (loss) per share is computed independently. Therefore, the sum of the quarterly net income per share may not equal the total computed for the year or any cumulative interim period.~~


⁽³⁾	~~Potentially dilutive common shares for the fourth quarter of 2017 were excluded from the computation of diluted net loss per share because their effect would be anti-dilutive.~~

(*) Net income per share is computed independently. Therefore, the sum of the quarterly net income per share may not equal the total computed for the year or any cumulative interim period.

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Note ~~18.~~17. Subsequent Events

~~Restructuring~~Apstra Acquisition

In January ~~2019,~~2021, the Company ~~initiated a restructuring plan (the "2019 Restructuring Plan") designed~~acquired Apstra for approximately $180 million, subject to ~~realign its workforce with~~customary adjustments, in cash and the assumption of equity awards. The acquisition is expected to expand upon the Company's ~~sales strategy, improve productivity,~~data center networking portfolio to advance its vision to transform data center operations by combining Apstra's full lifecycle management solution for data center networking and ~~enhance cost efficiencies. The 2019 Restructuring Plan consists of workforce reductions and facility consolidations and closures. The~~fabric automation from initial design to everyday management operations.

Debt Repayment

On January 11, 2021, the Company ~~estimates that the implementation~~redeemed, in full, $265.8 million of the ~~2019 Restructuring Plan will result~~remainder of its outstanding 2024 notes and $158.0 million of the remainder of its outstanding 2025-I notes, for a principal redemption amount in ~~total charges~~the aggregate of approximately ~~$18.0~~$482.1 million, ~~to $22.0 million.~~plus accrued interest. The repayments resulted in a loss on extinguishment of debt of $60.6 million, consisting primarily of a premium on the early redemption and acceleration of unamortized debt discount and fees on the redeemed debt.

Dividend Declaration

On January ~~29, 2019,~~28, 2021, the Company announced that the Board declared a quarterly cash dividend of ~~$0.19~~$0.20 per share of common stock to be paid on March 22, ~~2019~~2021 to stockholders of record as of the close of business on March 1, ~~2019.~~2021.

Stock Repurchase Activities

Subsequent to December 31, 2020, through the date of filing of this Report (the "filing date"), the Company repurchased 2.5 million shares of its common stock in the open market, for an aggregate purchase price of $61.7 million at an average price of $24.94 per share, under the 2018 Stock Repurchase Program. Repurchases of approximately 2.0 million shares were settled prior to the filing of this Report and the remaining shares will be settled after the filing date. The Company has an aggregate of $1.3 billion of authorized funds remaining under the Stock Repurchase Program as of the filing date.

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ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

(a) Management's Annual Report on Internal Control Over Financial Reporting: See "Management's Annual Report on Internal Control over Financial Reporting" under Item 8 of Part II of this Report, which is incorporated herein by reference.

(b) For the “Report of Independent Registered Public Accounting Firm,” see the report under Item 8 of Part II of this Report, which is incorporated herein by reference.

Evaluation of Disclosure Controls and Procedures

Attached, as exhibits to this report are certifications of our principal executive officer and principal financial officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This “Controls and Procedures” section includes information concerning the controls and related evaluations referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the fourth quarter of ~~2018~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any significant impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. The design of our processes and controls allow for remote execution with accessibility to secure data. We are continually monitoring and assessing the COVID-19 situation to minimize the impact, if any, on the design and operating effectiveness on our internal controls.

111

~~ITEM 9B.~~ ~~Other Information~~

~~As previously disclosed, the employment~~Table of Terrance F. Spidell, the Company’s Chief Accounting Officer, will terminate the business day following the filing of this Report with the SEC. Effective immediately upon Mr. Spidell’s termination, Kenneth B. Miller, our Executive Vice President and Chief Financial Officer, will assume the role as the Company’s Interim Chief Accounting Officer.Contents

~~Information regarding Mr. Miller’s background and business experience is included in this Annual Report on Form 10-K under Item 1.~~ ~~Business, Executive Officers of the Registrant.~~

No material plan, contract, or arrangement was entered into or materially amended in connection with Mr. Miller’s appointment as the Company’s Interim Chief Accounting Officer, and there was no grant or award to Mr. Miller or modification thereto under any such plan, contract, or arrangement in connection with such appointment.

Mr. Miller is not a party to any transaction that would require disclosure under Item 404(a) of Regulation S-K. There are no family relationships between Mr. Miller and any of the Company’s directors or executive officers.

PART III

ITEM 10. Directors, Executive Officers and Corporate Governance

For information with respect to our executive officers, see Part I, Item 1 of this Annual Report on Form 10-K, under ~~“Executive Officers of the Registrant.~~“Information about our Executive Officers.”

Information concerning our directors, including director nominations, and our audit committee and audit committee financial expert, is included in our definitive Proxy Statement to be filed with the SEC in connection with our ~~2019~~2021 Annual Meeting of Stockholders (the “Proxy Statement”) under “Corporate Governance Principles and Board ~~Matters,”~~Matters” and “Election of Directors” and is incorporated herein by reference.

~~Information concerning~~With regard to the information required by this Item regarding compliance with Section 16(a) ~~beneficial ownership reporting compliance is included~~of the Exchange Act, we will provide disclosure of delinquent Section 16(a) reports, if any, in ~~the~~our Proxy Statement under ~~“Section~~“Delinquent Section 16(a) ~~Beneficial Ownership Reporting Compliance”~~Reports” and such disclosure, if any, is incorporated herein by reference.

Information concerning our worldwide code of business conduct that applies to our principal executive officer and all other employees is included in the Proxy Statement under “Corporate Governance Principles and Board Matters” and is incorporated herein by reference.

ITEM 11. Executive Compensation

Information required by Item 402 of Regulation S-K is included in the Proxy Statement under “Director Compensation,” and “Executive Compensation,” and is incorporated herein by reference.

Information concerning compensation committee interlocks and insider participation appearing in the Proxy Statement under “Compensation Committee Interlocks and Insider Participation” is incorporated herein by reference.

Information concerning the compensation committee report appearing in the Proxy Statement under “Compensation Committee Report” is incorporated herein by reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information concerning the security ownership of certain beneficial owners and management is included in the Proxy Statement under “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and is incorporated herein by reference.

Information concerning our equity compensation plan information is included in the Proxy Statement under “Equity Compensation Plan Information” and is incorporated herein by reference.

ITEM 13. Certain Relationships and Related Transactions, and Director Independence

Information concerning certain relationships and related transactions is included in the Proxy Statement under the heading “Certain Relationships and Related Transactions” and is incorporated herein by reference.

Information concerning director independence is included in the Proxy Statement under the heading “Board Independence” and is incorporated herein by reference.

ITEM 14. Principal Accounting Fees and Services

Information concerning principal accountant fees and services and the audit committee's pre-approval policies and procedures is included in the Proxy Statement under the heading “Principal Accountant Fees and Services” and is incorporated herein by reference.

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PART IV

ITEM 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Report:

1. Consolidated Financial Statements

See Index to Consolidated Financial Statements at Item 8 herein.

2. Financial Statement Schedules

Juniper Networks, Inc.

Schedule II - Valuation and Qualifying Accounts

Years Ended December 31, ~~2018, 2017,~~2020, 2019, and ~~2016~~2018

(In millions)


Allowance for Doubtful Accounts	Balance at Beginning of Year		Charged to (Reversed from) Costs and Expenses		Write-offs, Net of Recoveries		Balance at End of Year
2020	$	5.5	$	4.4	$	0	$	9.9
2019	$	4.9	$	1.7	$	(1.1)	$	5.5
2018	$	5.7	$	(0.8)	$	0	$	4.9

Allowance for Doubtful Accounts
Balance at
Beginning of
Year

Charged to
(Reversed from)
Costs and
Expenses

Write-offs,
Net of
Recoveries

Balance at
End of
Year
2018 $ 5.7
$ (0.8 ) $ —
$ 4.9
2017 $ 7.6
$ (2.0 ) $ 0.1
$ 5.7
2016 $ 9.3
$ 1.0
$ (2.7 ) $ 7.6


			Additions
Sales Return Reserve	Balance at Beginning of Year		Charged as a Reduction in Revenues		Charged to Other Accounts		Used			Balance at End of Year		Sales Return Reserve	Balance at Beginning of Year		Charged as a Reduction in Revenues		Used		Balance at End of Year
2020												2020	$	24.8	$	60.7	$	(57.1)	$	28.4
2019												2019	$	32.7	$	59.5	$	(67.4)	$	24.8
2018^(*)	$	44.5	$	70.7	$	—	$	(82.5	)	$	32.7	2018(*)	$	44.5	$	70.7	$	(82.5)	$	32.7
2017	$	71.4	$	25.0	$	65.9	$	(107.1	)	$	55.2
2016	$	71.2	$	44.6	$	89.6	$	(134.0	)	$	71.4



Delaware		77-0422528
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1133 Innovation Way
Sunnyvale, ~~California~~	California	94089
(Address of principal executive offices)		(Zip code)
~~(408) 745-2000~~



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	JNPR	New York Stock Exchange


	- 150 BPS		- 100 BPS		- 50 BPS		Fair Value as of December 31, 2020		+ 50 BPS		+ 100 BPS		+ 150 BPS
Available-for-sale fixed income securities	$	1,411.5	$	1,406.3	$	1,401.1	$	1,395.8	$	1,390.7	$	1,385.5	$	1,380.3



	- 150 BPS		- 100 BPS		- 50 BPS		Fair Value as of December 31, 2018		+ 50 BPS		+ 100 BPS		+ 150 BPS
Available-for-sale fixed income securities	$	2,210.6	$	2,208.0	$	2,205.4	$	2,202.8	$	2,200.3	$	2,197.7	$	2,195.1


	- 150 BPS		- 100 BPS		- 50 BPS		Fair Value as of December 31, 2019		+ 50 BPS		+ 100 BPS		+ 150 BPS
Available-for-sale fixed income securities	$	1,630.4	$	1,625.2	$	1,620.1	$	1,614.9	$	1,609.7	$	1,604.5	$	1,599.3



x☒		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	~~For the fiscal year ended December 31, 2018~~



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from__________ to____________



	As of December 31,
	2013		2014		2015		2016		2017		2018
JNPR	$	100.00	$	99.77	$	125.22	$	130.34	$	133.31	$	129.24
S&P 500	$	100.00	$	113.68	$	115.24	$	129.02	$	157.17	$	150.27
NASDAQ Telecommunications Index	$	100.00	$	111.51	$	105.60	$	124.17	$	149.28	$	157.14



	Years Ended December 31,
	2018⁽¹⁾		2017⁽²⁾		2016		2015		2014⁽³⁾
	(In millions)
Net revenues	$	4,647.5	$	5,027.2	$	4,990.1	$	4,857.8	$	4,627.1
Gross margin	2,741.2		3,072.1		3,104.5		3,078.6		2,858.2
Operating income (loss)	572.2		848.1		889.7		912.0		(419.7		)
Net income (loss)	$	566.9	$	306.2	$	592.7	$	633.7	$	(334.3	)


⁽¹⁾	~~See Note 16,~~ ~~Commitments and Contingencies,~~ ~~in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for additional information regarding our contractual commitments.~~


⁽²⁾	~~Lease arrangement is related to a data center lease agreement that we entered in to in July 2015. See Note 16,~~ ~~Commitments and Contingencies, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for further explanation on the lease agreement.~~


⁽³⁾	~~See Note 10,~~ ~~Debt and Financing,~~ ~~in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for additional information regarding our debt.~~


^(*)	Prior to January 1, 2018, certain investments in privately-held companies were accounted for at cost less impairment. Realized gains or losses from sales or impairments were recognized in the Consolidated Statements of Operations.



				Page
Reports of Independent Registered Public Accounting Firm				6257
Management's Report on Internal Control Over Financial Reporting				6461
Consolidated Statements of Operations				6562
Consolidated Statements of Comprehensive Income				6663
Consolidated Balance Sheets				6764
Consolidated Statements of Cash Flows				6865
Consolidated Statements of Changes in Stockholders' Equity				6966
Notes to Consolidated Financial Statements				7067
			Note 1. Description of Business, ~~and~~ Basis of Presentation	70
	~~Note 2.~~ and Significant Accounting Policies	7067
			Note 2. Business Combinations	76
			Note 3. ~~Business Combinations~~	81Cash
	~~Note 4. Cash~~ Equivalents and Investments	8478
			Note 4. Fair Value Measurements	81
			Note 5. ~~Fair Value Measurements~~Derivative Instruments	8783
			Note 6. ~~Derivative Instruments~~	89
	~~Note 7.~~ Goodwill and Purchased Intangible Assets	9085
			Note 7. Other Financial Information	86
			Note 8. ~~Other Financial Information~~Restructuring Charges	9189
			Note 9. ~~Restructuring Charges~~Debt and Financing	9490
			Note 10. ~~Debt and Financing~~Equity	9592
			Note 11. ~~Equity~~	97
	~~Note 12.~~ Employee Benefit Plans	9994
			Note 12. Segments	99
			Note 13. ~~Segments~~Income Taxes	~~103~~101
			Note 14. Net Income ~~Taxes~~per Share	~~104~~105
			Note 15. ~~Net Income per Share~~Commitments and Contingencies	~~108~~106
			Note 16. ~~Commitments and Contingencies~~	~~108~~Selected
	~~Note 17. Selected~~ Quarterly Financial Data (Unaudited)	~~111~~109
			Note ~~18.~~ 17. Subsequent Events	~~111~~110


			Identification of distinct performance obligations in revenue contracts
Description of the matter			As described in Note 1 to the consolidated financial statements, the Company’s contracts with customers sometimes contain multiple performance obligations, which are accounted for separately if they are distinct. In such cases, the transaction price is then allocated to the distinct performance obligations on a relative standalone selling price basis and revenue is recognized when control of the distinct performance obligation is transferred. For example, product revenue is recognized at the time of hardware shipment or delivery of software license, and support revenue is recognized over time as the services are performed. Auditing the Company’s revenue recognition was challenging, specifically related to the effort required to identify and determine the distinct performance obligations and the associated timing of revenue recognition. For example, there were nonstandard terms and conditions that required judgment to determine the distinct performance obligations and the impact on the timing of revenue recognition.


How we addressed the matter in our audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue recognition process, including controls to identify and determine the distinct performance obligations and the timing of revenue recognition. Among the procedures we performed to test the identification and determination of the distinct performance obligations and the timing of revenue recognition, we read the executed contract and purchase order to understand the contract, identified the performance obligation(s), determined the distinct performance obligations, and evaluated the timing and amount of revenue recognized for a sample of individual sales transactions. We evaluated the accuracy of the Company’s contract summary documentation, specifically related to the identification and determination of distinct performance obligations and the timing of revenue recognition.
			Accounting for the acquisition of 128 Technology, Inc.
Description of the matter			During 2020, the Company completed the acquisition of 128 Technology, Inc. for consideration of $448.2 million, as disclosed in Note 2 to the consolidated financial statements. The transaction was accounted for as a business combination. Auditing the Company's accounting for its acquisition of 128 Technology, Inc. was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of identified intangible assets of $116 million, which principally consisted of developed technology ($88 million) and customer relationships ($27 million). The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business and the limited historical data and market data on which those assumptions were based. The Company used a discounted cash flow model to measure the developed technology and customer relationship intangible assets. The significant assumptions used to estimate the value of the intangible assets included discount rates and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates, market share and technology migration curves). These significant assumptions are forward looking and could be affected by future economic and market conditions.
How we addressed the matter in our audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for acquisitions. This included testing controls over the estimation process supporting the recognition and measurement of the technology and customer relationships intangible assets, including the valuation models and underlying assumptions used to develop such estimates. To test the estimated fair value of the technology and customer relationships intangible assets, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the significant assumptions to current industry, market and economic trends and to the Company's budgets and forecasts. We involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates.


	December 31, 2020		December 31, 2019

ASSETS
Current assets:
Cash and cash equivalents	$	1,361.9	$	1,215.8
Short-term investments	412.1		738.0
Accounts receivable, net of allowance for doubtful accounts of $9.9 and $5.5 as of December 31, 2020 and 2019, respectively	964.1		879.7
Prepaid expenses and other current assets	533.1		376.3
Total current assets	3,271.2		3,209.8
Property and equipment, net	762.3		830.9
Operating lease assets	184.6		169.7
Long-term investments	656.6		589.8

Purchased intangible assets, net	266.7		185.8
Goodwill	3,669.6		3,337.1
Other long-term assets	567.3		514.6
Total assets	$	9,378.3	$	8,837.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	277.0	$	219.5
Accrued compensation	270.7		229.0
Deferred revenue	867.3		812.9
Short-term portion of long-term debt	421.5		0
Other accrued liabilities	324.6		282.5
Total current liabilities	2,161.1		1,543.9
Long-term debt	1,705.8		1,683.9
Long-term deferred revenue	418.5		410.5
Long-term income taxes payable	312.5		372.6
Long-term operating lease liabilities	163.5		158.1
Other long-term liabilities	73.4		58.1
Total liabilities	4,834.8		4,227.1
Commitments and contingencies (Note 15)	0		0
Stockholders' equity:
Preferred stock, $0.00001 par value; 10.0 shares authorized; NaN issued and outstanding	0		0
Common stock, $0.00001 par value; 1,000.0 shares authorized; 327.7 shares and 335.9 shares issued and outstanding as of December 31, 2020 and 2019, respectively	0		0
Additional paid-in capital	7,156.9		7,370.5
Accumulated other comprehensive income (loss)	55.6		(18.5)
Accumulated deficit	(2,669.0)		(2,741.4)
Total stockholders' equity	4,543.5		4,610.6
Total liabilities and stockholders' equity	$	9,378.3	$	8,837.7



	December 31, 2018			December 31, 2017

ASSETS
Current assets:
Cash and cash equivalents	$	2,489.0		$	2,006.5
Short-term investments	1,070.1			1,026.1
Accounts receivable, net of allowance for doubtful accounts of $4.9 and $5.7 as of December 31, 2018 and 2017, respectively	754.6			852.0
Prepaid expenses and other current assets	268.1			299.9
Total current assets	4,581.8			4,184.5
Property and equipment, net	951.7			1,021.1
Long-term investments	199.0			988.4
Purchased intangible assets, net	118.5			128.1
Goodwill	3,108.8			3,096.2
Other long-term assets	403.5			415.5
Total assets	$	9,363.3		$	9,833.8
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	208.8		$	217.6
Accrued compensation	221.0			186.0
Deferred revenue	829.3			1,030.3
Short-term portion of long-term debt	349.9			—
Other accrued liabilities	233.5			304.3
Total current liabilities	1,842.5			1,738.2
Long-term debt	1,789.1			2,136.3
Long-term deferred revenue	384.3			509.0
Long-term income taxes payable	404.4			650.6
Other long-term liabilities	119.8			118.8
Total liabilities	4,540.1			5,152.9
Commitments and contingencies (Note 16)
Stockholders' equity:
Convertible preferred stock, $0.00001 par value; 10.0 shares authorized; none issued and outstanding	—			—
Common stock, $0.00001 par value; 1,000.0 shares authorized; 346.4 shares and 365.5 shares issued and outstanding as of December 31, 2018 and 2017, respectively	—			—
Additional paid-in capital	7,672.8			8,042.1
Accumulated other comprehensive loss	(18.2		)	(5.4		)
Accumulated deficit	(2,831.4		)	(3,355.8		)
Total stockholders' equity	4,823.2			4,680.9
Total liabilities and stockholders' equity	$	9,363.3		$	9,833.8


	Shares	Common Stock and Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
Balance at December 31, 2017	365.5	$	8,042.1	$	(5.4)	$	(3,355.8)	$	4,680.9
Net income	—	—		—		566.9		566.9
Other comprehensive loss, net	—	—		(18.5)		—		(18.5)
Issuance of common stock	10.4	56.9		—		—		56.9
Repurchase and retirement of common stock	(29.5)	(395.1)		—		(361.5)		(756.6)
Share-based compensation expense	—	218.2		—		—		218.2
Payment of cash dividends ($0.72 per share of common stock)	—	(249.3)		—		—		(249.3)
Cumulative adjustment upon adoption of ASU 2014-09 ("Topic 606"), net	—	—		—		324.7		324.7
Reclassification of tax effects upon adoption of ASU 2018-02 ("Topic 220"), net	—	—		5.7		(5.7)		0
Balance at December 31, 2018	346.4	7,672.8		(18.2)		(2,831.4)		4,823.2
Net income	—	—		—		345.0		345.0
Other comprehensive loss, net	—	—		(0.3)		—		(0.3)
Issuance of common stock	9.8	55.6		—		—		55.6
Common stock assumed upon business combination	—	4.6		—		—		4.6
Repurchase and retirement of common stock	(20.3)	(264.6)		—		(250.3)		(514.9)
Purchase of forward contract under accelerated share repurchase program ("ASR")	—	(40.0)		—		—		(40.0)
Share-based compensation expense	—	202.2		—		—		202.2
Payments of cash dividends ($0.76 per share of common stock)	—	(260.1)		—		—		(260.1)
Cumulative adjustment upon adoption of ASU 2017-12 ("Topic 815"), net	—	—		—		0.1		0.1
Cumulative adjustment upon adoption of ASU 2016-02 ("Topic 842"), net	—	—		—		(4.8)		(4.8)
Balance at December 31, 2019	335.9	7,370.5		(18.5)		(2,741.4)		4,610.6
Net income	—	—		—		257.8		257.8
Other comprehensive loss, net	—	—		74.1		—		74.1
Issuance of common stock	10.0	54.7		—		—		54.7
Common stock assumed upon business combination	—	1.5		—		—		1.5
Repurchase and retirement of common stock	(18.2)	(235.7)		—		(185.4)		(421.1)
Purchase of forward contract under ASR	—	40.0		—		—		40.0
Share-based compensation expense	—	190.0		—		—		190.0
Payments of cash dividends ($0.80 per share of common stock)	—	(264.1)		—		—		(264.1)
Balance at December 31, 2020	327.7	$	7,156.9	$	55.6	$	(2,669.0)	$	4,543.5



	Estimated Useful Life (years)
Computers, equipment, and software		1.5 to 710
Furniture and fixtures		5 to 7
Building and building improvements		7 to 40
Land improvements		10 to 40
Leasehold improvements		Lease term, not to exceed 10 years



	December 31, 2017						January 1, 2018
	As reported			Adjustments			As adjusted
Assets:
Accounts receivable, net of allowances	$	852.0		$	(1.9	)	$	850.1
Prepaid expenses and other current assets	299.9			31.5			331.4
Other long-term assets	415.5			(21.1		)	394.4
Total assets	$	9,833.8		$	8.5		$	9,842.3

Liabilities:
Deferred revenue	$	1,030.3		$	(225.4	)	$	804.9
Other accrued liabilities	304.3			33.8			338.1
Long-term deferred revenue	509.0			(124.6		)	384.4
Total liabilities	$	5,152.9		$	(316.2	)	$	4,836.7

Stockholders' Equity:
Accumulated deficit	$	(3,355.8	)	$	324.7		$	(3,031.1	)



	Year Ended December 31, 2018*
	Year Ended December 31, 2018*
	As Reported		Without Adoption of Topic 606		Topic 606 Impact
Net revenues:
Product	$	3,107.1	$	3,006.8	$	100.3
Service	1,540.4		1,663.3		(122.9		)
Total net revenues	$	4,647.5	$	4,670.1	$	(22.6	)

Operating expenses:
Sales and marketing	$	927.4	$	929.3	$	(1.9	)


^*	~~Except as disclosed, the adoption of Topic 606 did not have a material impact on the Company’s Consolidated Statements of Operations for the year ended December 31, 2018.~~



	As of December 31, 2018
	As Reported			Without Adoption of Topic 606			Topic 606 Impact
Assets:
Accounts receivable, net of allowances	$	754.6		$	746.3		$	8.3
Prepaid expenses and other current assets	268.1			241.6			26.5
Other long-term assets	403.5			400.4			3.1
Total assets	$	9,363.3		$	9,325.6		$	37.7

Liabilities:
Deferred revenue	$	829.3		$	1,111.9		$	(282.6	)
Other accrued liabilities	233.5			178.6			54.9
Long-term deferred revenue	384.3			431.8			(47.5		)
Total liabilities	$	4,540.1		$	4,815.2		$	(275.1	)

Stockholders' Equity:
Accumulated deficit	$	(2,831.4	)	$	(3,144.3	)	$	312.9


⁽¹⁾	~~The primary areas of the preliminary purchase price allocation that are subject to change relate to certain legal and income tax matters.~~


⁽²⁾	~~See Note 7,~~ ~~Goodwill and Purchased Intangible Assets, for adjustments made during the measurement period subsequent to the acquisition dates.~~


⁽³⁾	~~The goodwill recognized for these acquisitions was primarily attributable to expected synergies and is not deductible for U.S. federal income tax purposes.~~


	2020						2019
	128 Technology			Netrounds			Mist
	Weighted Average Estimated Useful Life (In Years)	Amount		Weighted Average Estimated Useful Life (In Years)	Amount		Weighted Average Estimated Useful Life (In Years)	Amount
Intangible assets:
Existing technology	5	$	88.0	4	$	5.3	5	$	81.0
Customer relationships	5	27.0		5	3.4		5	15.0
Trade name	—	—		—	—		5	6.0
Backlog	1.5	1.7		—	—		—	—
Total intangible assets acquired		$	116.7		$	8.7		$	102.0


	As of December 31, 2020								As of December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed income securities:
Asset-backed securities	$	76.5	$	0.2	$	0	$	76.7	$	81.3	$	0.1	$	0	$	81.4
Certificates of deposit	32.9		0		0		32.9		38.6		0		0		38.6
Commercial paper	89.3		0		0		89.3		168.2		0		0		168.2
Corporate debt securities	632.0		5.5		(0.1)		637.4		604.9		0.7		(0.1)		605.5
Foreign government debt securities	4.6		0		0		4.6		11.4		0		0		11.4
Time deposits	255.6		0		0		255.6		226.3		0		0		226.3
U.S. government agency securities	65.3		0.2		0		65.5		89.0		0		0		89.0
U.S. government securities	232.8		1.0		0		233.8		394.3		0.3		(0.1)		394.5
Total fixed income securities	1,389.0		6.9		(0.1)		1,395.8		1,614.0		1.1		(0.2)		1,614.9
Privately-held debt and redeemable preferred stock securities	18.3		37.4		0		$	55.7	19.1		37.4		0		56.5
Total available-for-sale debt securities	$	1,407.3	$	44.3	$	(0.1)	$	1,451.5	$	1,633.1	$	38.5	$	(0.2)	$	1,671.4

Reported as:
Cash equivalents	$	333.7	$	0	$	0	$	333.7	$	290.9	$	0	$	0	$	290.9
Short-term investments	404.3		1.2		0		405.5		733.7		0.5		0		734.2
Long-term investments	651.0		5.7		(0.1)		656.6		589.4		0.6		(0.2)		589.8
Other long-term assets	18.3		37.4		0		55.7		19.1		37.4		0		56.5
Total	$	1,407.3	$	44.3	$	(0.1)	$	1,451.5	$	1,633.1	$	38.5	$	(0.2)	$	1,671.4



	As of December 31, 2018									As of December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Fixed income securities:
Asset-backed securities	$	46.8	$	—	$	(0.3	)	$	46.5	$	287.1	$	—	$	(0.6	)	$	286.5
Certificates of deposit	152.9		—		—			152.9		83.8		—		—			83.8
Commercial paper	393.6		—		—			393.6		217.1		—		—			217.1
Corporate debt securities	416.1		—		(3.1		)	413.0		929.6		0.4		(3.0		)	927.0
Foreign government debt securities	20.0		—		(0.1		)	19.9		62.9		—		(0.2		)	62.7
Time deposits	278.6		—		—			278.6		239.2		—		—			239.2
U.S. government agency securities	87.2		—		(0.2		)	87.0		143.9		—		(0.7		)	143.2
U.S. government securities	811.8		—		(0.5		)	811.3		406.8		0.1		(0.9		)	406.0
Total fixed income securities	2,207.0		—		(4.2		)	2,202.8		2,370.4		0.5		(5.4		)	2,365.5
Privately-held debt and redeemable preferred stock securities	16.6		37.4		—			54.0		15.9		37.4		—			53.3
Total available-for-sale debt securities	$	2,223.6	$	37.4	$	(4.2	)	$	2,256.8	$	2,386.3	$	37.9	$	(5.4	)	$	2,418.8

Reported as:
Cash equivalents	$	936.5	$	—	$	—		$	936.5	$	351.0	$	—	$	—		$	351.0
Short-term investments	1,069.2		—		(1.9		)	1,067.3		1,027.2		0.1		(1.2		)	1,026.1
Long-term investments	201.3		—		(2.3		)	199.0		992.2		0.4		(4.2		)	988.4
Other long-term assets	16.6		37.4		—			54.0		15.9		37.4		—			53.3
Total	$	2,223.6	$	37.4	$	(4.2	)	$	2,256.8	$	2,386.3	$	37.9	$	(5.4	)	$	2,418.8


	Amortized Cost		Estimated Fair Value
Due in less than one year	$	738.0	$	739.2
Due between one and five years	651.0		656.6
Total	$	1,389.0	$	1,395.8


	As of December 31, 2020
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Fixed income securities:
Asset-backed securities	$	17.5	$	0	$	0	$	0	$	17.5	$	0


Corporate debt securities	61.0		(0.1)		0		0		61.0		(0.1)
Foreign government debt securities	0.6		0		0		0		0.6		0
U.S. government securities	2.3		0		0		0		2.3		0
Total fixed income securities	$	81.4	$	(0.1)	$	0	$	0	$	81.4	$	(0.1)


⁽¹⁾	Prior to January 1, 2018, money market funds were classified as available-for-sale securities and accounted for at fair value with unrealized gains and losses recognized in accumulated other comprehensive income (loss). Realized gains or losses from sales or impairments were recognized in the Consolidated Statements of Operations.


⁽²⁾	Prior to January 1, 2018, mutual funds related to the Company's NQDC plan were classified as trading securities. Unrealized gains or losses were recognized in the Consolidated Statements of Operations.



	Fair Value Measurements at December 31, 2018										Fair Value Measurements at December 31, 2017
	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Remaining Inputs (Level 2)			Significant Other Unobservable Remaining Inputs (Level 3)		Total			Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Remaining Inputs (Level 2)			Significant Other Unobservable Remaining Inputs (Level 3)		Total
Assets:
Available-for-sale debt securities:
Asset-backed securities	$	—	$	46.5		$	—	$	46.5		$	—	$	286.5		$	—	$	286.5
Certificates of deposit	—		152.9			—		152.9			—		83.8			—		83.8
Commercial paper	—		393.6			—		393.6			—		217.1			—		217.1
Corporate debt securities	—		413.0			—		413.0			—		927.0			—		927.0
Foreign government debt securities	—		19.9			—		19.9			—		62.7			—		62.7
Time deposits	—		278.6			—		278.6			—		239.2			—		239.2
U.S. government agency securities	—		87.0			—		87.0			—		143.2			—		143.2
U.S. government securities	352.8		458.5			—		811.3			322.4		83.6			—		406.0
Privately-held debt and redeemable preferred stock securities	—		—			54.0		54.0			—		—			53.3		53.3
Total available-for-sale debt securities	352.8		1,850.0			54.0		2,256.8			322.4		2,043.1			53.3		2,418.8
Equity securities:
Money market funds⁽¹⁾	996.9		—			—		996.9			969.8		—			—		969.8
Mutual funds⁽²⁾	24.3		—			—		24.3			27.6		—			—		27.6
Publicly-traded equity securities	2.8		—			—		2.8			—		—			—		—
Total equity securities	1,024.0		—			—		1,024.0			997.4		—			—		997.4
Derivative assets:
Foreign exchange contracts	—		5.3			—		5.3			—		9.2			—		9.2
Total assets measured at fair value	$	1,376.8	$	1,855.3		$	54.0	$	3,286.1		$	1,319.8	$	2,052.3		$	53.3	$	3,425.4
Liabilities:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(7.1	)	$	—	$	(7.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)
Total liabilities measured at fair value	$	—	$	(7.1	)	$	—	$	(7.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)

Total assets, reported as:
Cash equivalents	$	1,025.2	$	896.6		$	—	$	1,921.8		$	928.1	$	350.9		$	—	$	1,279.0
Short-term investments	297.5		772.6			—		1,070.1			247.5		778.6			—		1,026.1
Long-term investments	18.2		180.8			—		199.0			74.8		913.6			—		988.4
Prepaid expenses and other current assets	10.8		5.3			—		16.1			36.3		9.2			—		45.5
Other long-term assets	25.1		—			54.0		79.1			33.1		—			53.3		86.4
Total assets measured at fair value	$	1,376.8	$	1,855.3		$	54.0	$	3,286.1		$	1,319.8	$	2,052.3		$	53.3	$	3,425.4

Total liabilities, reported as:
Other accrued liabilities	$	—	$	(7.1	)	$	—	$	(7.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)
Total liabilities measured at fair value	$	—	$	(7.1	)	$	—	$	(7.1	)	$	—	$	(1.8	)	$	—	$	(1.8	)