Juniper Networks (JNPR) 10-Q 6 Nov 09 2009 Q3 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
	9 Months Ended Sep. 30, 2009	Nov. 02, 2009	Jun. 30, 2008
Document and Company Information [Abstract]
Entity Registrant Name	JUNIPER NETWORKS INC
Entity Central Index Key	0001043604
Document Type	10-Q
Document Period End Date	2009-09-30
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$8,883,000,000
Entity Common Stock, Shares Outstanding		525,439,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net revenues:
Product	$634,074	$766,969	$1,828,896	$2,165,100
Service	189,838	179,993	545,562	483,783
Total net revenues	823,912	946,962	2,374,458	2,648,883
Cost of revenues:
Product	206,329	230,060	606,966	636,985
Service	80,379	77,519	234,215	224,711
Total cost of revenues	286,708	307,579	841,181	861,696
Gross margin	537,204	639,383	1,533,277	1,787,187
Operating expenses:
Research and development	185,204	194,014	554,498	551,017
Sales and marketing	177,345	200,600	529,163	576,886
General and administrative	39,877	37,623	118,263	106,866
Amortization of purchased intangible assets	1,330	5,190	9,259	38,318
Restructuring charges	4,493	0	16,251	0
Other charges	1,000	0	1,000	9,000
Total operating expenses	409,249	437,427	1,228,434	1,282,087
Operating income	127,955	201,956	304,843	505,100
Interest and other income, net	1,733	9,740	6,581	40,517
Loss on minority equity investments	0	0	(3,311)	(1,499)
Income before income taxes	129,688	211,696	308,113	544,118
Provision for income taxes	45,902	63,188	214,018	164,845
Net income	$83,786	$148,508	$94,095	$379,273
Net income per share:
Basic	0.16	0.27	0.18	0.71
Diluted	0.16	0.27	0.18	0.67
Shares used in computing net income per share:
Basic	523,878	540,983	523,802	534,894
Diluted	538,132	554,350	532,686	561,932

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands	Sep. 30, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$1,618,590	$2,019,084
Short-term investments	448,986	172,896
Accounts receivable, net of allowances	373,241	429,970
Deferred tax assets, net	160,230	145,230
Prepaid expenses and other current assets	52,724	49,026
Total current assets	2,653,771	2,816,206
Property and equipment, net	449,814	436,433
Long-term investments	531,509	101,415
Restricted cash	54,534	43,442
Purchased intangible assets, net	15,895	28,861
Goodwill	3,658,602	3,658,602
Long-term deferred tax assets, net	14,083	71,079
Other long-term assets	36,239	31,303
Total assets	7,414,447	7,187,341
Current liabilities:
Accounts payable	243,585	249,854
Accrued compensation	139,598	160,471
Accrued warranty	37,255	40,090
Deferred revenue	480,832	459,749
Income taxes payable	61,145	33,047
Other accrued liabilities	120,854	113,399
Total current liabilities	1,083,269	1,056,610
Long-term deferred revenue	162,363	130,514
Long-term income tax payable	173,343	78,164
Other long-term liabilities	38,050	20,648
Stockholders' equity:
Convertible preferred stock, $0.00001 par value; 10,000 shares authorized; none issued and outstanding	0	0
Common stock, $0.00001 par value; 1,000,000 shares authorized; 525,342 shares and 526,752 shares issued and outstanding at September 30, 2009, and December 31, 2008, respectively	5	5
Additional paid-in capital	9,006,351	8,811,497
Accumulated other comprehensive income (loss)	3,461	(4,245)
Accumulated deficit	(3,052,395)	(2,905,852)
Total stockholders' equity	5,957,422	5,901,405
Total liabilities and stockholders' equity	$7,414,447	$7,187,341

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $)
Share data in Thousands	Sep. 30, 2009	Dec. 31, 2008
Stockholders' equity:
Convertible preferred stock, par value	0.00001	0.00001
Convertible preferred stock, shares authorized	10,000	10,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common stock, par value	0.00001	0.00001
Common stock, shares authorized	1,000,000	1,000,000
Common stock, shares issued	525,342	526,752
Common stock, shares outstanding	525,342	526,752

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash flows from operating activities:
Net income	$94,095	$379,273
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	111,803	134,623
Stock-based compensation	101,445	78,877
Loss on minority equity investments	3,311	1,499
Change in excess tax benefits from share-based compensation	673	(38,756)
Deferred income taxes	41,996	(9,208)
Other non-cash charges	0	698
Changes in operating assets and liabilities:
Accounts receivable, net	56,729	11,155
Prepaid expenses and other assets	(11,444)	3,862
Accounts payable	(778)	2,738
Accrued compensation	(20,873)	(29,569)
Income taxes payable	84,813	62,441
Other accrued liabilities	21,790	13,169
Deferred revenue	52,932	49,266
Net cash provided by operating activities	536,492	660,068
Cash flows from investing activities:
Purchases of property and equipment, net	(113,210)	(121,728)
Purchases of available-for-sale investments	(1,164,833)	(384,835)
Proceeds from sales of available-for-sale investments	202,276	95,932
Proceeds from maturities of available-for-sale investments	262,325	231,764
Changes in restricted cash	(11,276)	(8,103)
Purchase of minority equity investments, net	(5,289)	(4,500)
Net cash used in investing activities	(830,007)	(191,470)
Cash flows from financing activities:
Proceeds from issuance of common stock	131,391	115,424
Purchases and retirement of common stock	(241,481)	(562,187)
Net proceeds from customer financing arrangements	3,784	2,083
Redemption of convertible debt	0	(287)
Change in excess tax benefits from share-based compensation	(673)	38,756
Net cash used in financing activities	(106,979)	(406,211)
Net (decrease) increase in cash and cash equivalents	(400,494)	62,387
Cash and cash equivalents at beginning of period	2,019,084	1,716,110
Cash and cash equivalents at end of period	1,618,590	1,778,497
Supplemental disclosure of non-cash investing and financing activities:
Common stock issued in connection with conversion of the Senior Notes	$0	$399,153

Basis of Presentation

Basis of Presentation
	9 Months Ended Sep. 30, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	Note 1. Basis of Presentation The unaudited Condensed Consolidated Financial Statements of Juniper Networks, Inc. (Juniper Networks or the Company) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information as well as the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended September30, 2009, are not necessarily indicative of the results that may be expected for the year ending December31, 2009, or any future period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Managements Discussion and Analysis of Financial Condition and Results of Operations, Risk Factors, Quantitative and Qualitative Disclosures About Market Risk, and the Consolidated Financial Statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the year ended December31, 2008.

Summary of Significant Accounti

Summary of Significant Accounting Policies
	9 Months Ended Sep. 30, 2009 USD / shares
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2. Summary of Significant Accounting Policies Recent Accounting Pronouncements In October2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.2009-14, Software (Topic 985) Certain Arrangements That Contain Software Elements a consensus of the FASB Emerging Issues Task Force (EITF) (ASU 2009-14), which amends the scope of software revenue guidance in Accounting Standards Codification (ASC) Subtopic 985-605, Software-Revenue Recognition, to exclude tangible products containing software and non-software components that function together to deliver the products essential functionality. In October2009, FASB issued ASU No.2009-13, Revenue Recognition (Topic 605) Multiple-Deliverable Revenue Arrangements a consensus of the FASB EITF (ASU 2009-13), which eliminates the residual method of allocation and requires the relative selling price method when allocating deliverables of a multiple-deliverable revenue arrangement. ASU 2009-13 specifies the best estimate of a selling price is consistent with that used to determine the price to sell the deliverable on a standalone basis. ASU 2009-14 and ASU 2009-13 are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June15, 2010, and must be adopted in the same period using the same transition method. If adoption is elected in a period other than the beginning of a fiscal year, the amendments in these standards must be applied retrospectively to the beginning of the fiscal year. Full retrospective application of these amendments to prior fiscal years is optional. Companies may elect early adoption of these standards. The Company is currently assessing the timing of adoption and affects that ASU 2009-14 and ASU 2009-13 will have on its consolidated results of operations and financial condition. In August2009, the FASB issued ASU No.2009-05, Fair Value Measurements and Disclosures (Topic 820) Measuring Liabilities at Fair Value (ASU 2009-05). ASU 2009-05 amends FASB ASC Topic 820 and provides amendments to FASB ASC Subtopic 820-10, Fair Value Measurements and Disclosures Overall, for the fair value measurement of liabilities. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for an identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: (1)a valuation technique that uses: (a)quoted price of the identical liability when traded as an asset, or (b)quoted prices for similar liabilities or similar liabilities when traded as assets, or (2)another valuation technique that is consistent with the principles of FASB ASC Topic 820. The guidance in ASU 2009-05 is effective for the first reporting period (including interim periods) beginning after issuance. The Companys adoption of ASU 2009-5 in the fourth quarter of 2009 will not materially affect the Companys consolidated results of operations or financial condition. In June2009, the FASB issued ASU No.2009-01, Topic 105 Generally Accepted Accounting Principles amendments based upon Statement of

Net Income per Share

Net Income per Share
	9 Months Ended Sep. 30, 2009 USD / shares
Net Income per Share [Abstract]
Net Income per Share	Note 3. Net Income per Share Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for that period. Diluted net income per share is computed giving effect to all dilutive potential common shares that were outstanding during the period on a weighted average basis. Dilutive potential common shares consist of shares issuable upon conversion of senior notes, if any, and various employee stock awards including, common shares issuable upon exercise of stock options, vesting of restricted stock units (RSUs), and vesting of performance shares. The following table presents the calculation of basic and diluted net income per share (in millions, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Numerator: Net income $ 83.8 $ 148.5 $ 94.1 $ 379.3 Denominator: Weighted-average shares used to compute basic net income per share 523.9 541.0 523.8 534.9 Effect of dilutive securities: Shares issuable upon conversion of the Senior Notes 11.8 Employee stock awards 14.2 13.3 8.9 15.2 Weighted average shares used to compute diluted net income per share 538.1 554.3 532.7 561.9 Net income per share: Basic $ 0.16 $ 0.27 $ 0.18 $ 0.71 Diluted $ 0.16 $ 0.27 $ 0.18 $ 0.67 Employee stock awards for approximately 24.4million shares and 48.4million shares of the Companys common stock were not included in the computation of diluted earnings per share for the three and nine months ended September30, 2009, respectively, because their effect would have been anti-dilutive. For the three and nine months ended September30, 2008, approximately 25.5million shares and 21.4million shares of the Companys outstanding common stock equivalents, respectively, were not included in the computation of diluted earnings per share because their effect would have been anti-dilutive.

Cash, Cash Equivalents, and Inv

Cash, Cash Equivalents, and Investments
	9 Months Ended Sep. 30, 2009 USD / shares
Cash, Cash Equivalents, and Investments [Abstract]
Cash, Cash Equivalents, and Investments	Note 4. Cash, Cash Equivalents, and Investments The following table summarizes the Companys cash and cash equivalents (in millions): As of September 30, December 31, 2009 2008 Cash: Demand deposits $ 376.1 $ 285.9 Time deposits 124.6 125.1 Total cash 500.7 411.0 Cash equivalents: U.S. government securities 74.4 141.8 Government-sponsored enterprise obligations 35.8 94.8 Commercial paper 63.8 90.4 Money market funds 943.9 1,281.1 Total cash equivalents 1,117.9 1,608.1 Total cash and cash equivalents $ 1,618.6 $ 2,019.1 Summary of Investments The following table summarizes the Companys unrealized gains and losses, and fair value of investments designated as trading or available-for-sale, as of September30, 2009, (in millions): Gross Gross Amortized Unrealized Unrealized Estimated Fair Cost Gains Losses Value Fixed income securities: U.S. government securities $ 217.8 $ 0.1 $ $ 217.9 Government-sponsored enterprise obligations 229.1 1.3 230.4 Foreign government debt securities 88.9 0.3 (0.1 ) 89.1 Commercial paper 96.8 96.8 Corporate debt securities 334.9 2.0 (0.2 ) 336.7 Total fixed income securities 967.5 3.7 (0.3 ) 970.9 Publicly-traded equity securities 9.5 0.1 9.6 Total $ 977.0 $ 3.8 $ (0.3 ) $ 980.5 Reported as: Short-term investments $ 447.9 $ 1.1 $ $ 449.0 Long-term investments 529.1 2.7 (0.3 ) 531.5 Total $ 977.0 $ 3.8 $ (0.3 ) $ 980.5 The following table presents the Companys maturities of its available-for-sale investments and publicly-traded securities, as of September30, 2009, (in millions): Gross Gross Amortized Unrealized Unrealized Estimated Fair Cost Gains Losses Value Fixed income securities: Due within one year $ 438.4 $ 1.0 $ $ 439.4 Due between one and five years 529.1 2.7 (0.3 ) 531.5 Total fixed income securities 967.5 3.7 (0.3 ) 970.9 Publicly-traded equity securities 9.5 0.1 9.6 Total investments $ 977.0 $ 3.8 $ (0.3 ) $ 980.5 The following table presents the Companys trading and available-for sale investments that are in an unrealized loss position as of September30, 2009, (in millions): Less than 12 Months 12 Months or Greater T

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Sep. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 5. Fair Value Measurements Fair Value Hierarchy The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 Inputs are unobservable inputs based on the Companys assumptions. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables provide the assets and liabilities, if any, measured at fair value on a recurring basis (in millions): Fair Value Measurements at September 30, 2009, Using Quoted Prices in Significant Other Significant Other Active Markets Observable Unobservable For Identical Remaining Remaining Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets measured at fair value: U.S. government securities $ 109.9 $ 234.1 $ $ 344.0 Government-sponsored enterprise obligations 221.1 45.1 266.2 Foreign government debt securities 26.6 62.5 89.1 Corporate debt securities 336.7 336.7 Commercial paper 160.6 160.6 Money market funds 943.9 943.9 Publicly-traded securities 9.6 9.6 Derivative asset 1.0 1.0 Total $ 1,311.1 $ 840.0 $ $ 2,151.1 Fair Value Measurements at December 31, 2008, Using Quoted Prices in Significant Other Significant Other Active Markets Observable Unobservable For Identical Remaining Remaining Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets measured at fair value:

Goodwill and Purchased Intangib

Goodwill and Purchased Intangible Assets
	9 Months Ended Sep. 30, 2009 USD / shares
Goodwill and Purchased Intangible Assets [Abstract]
Goodwill and Purchased Intangible Assets	Note 6. Goodwill and Purchased Intangible Assets Goodwill The following table presents goodwill by segment as of September30, 2009, and December31, 2008, (in millions): Segments Infrastructure $ 1,500.5 Service Layer Technologies 2,158.1 Total $ 3,658.6 There were no changes to goodwill during the three and nine months ended September30, 2009. Purchased Intangible Assets The following table presents the Companys purchased intangible assets with definite lives (in millions): Accumulated Gross Amortization Net As of September30, 2009: Technologies and patents $ 380.0 $ (374.8 ) $ 5.2 Other 68.9 (58.2 ) 10.7 Total $ 448.9 $ (433.0 ) $ 15.9 As of December31, 2008: Technologies and patents $ 379.6 $ (365.4 ) $ 14.2 Other 68.9 (54.3 ) 14.6 Total $ 448.5 $ (419.7 ) $ 28.8 Amortization of purchased intangible assets included in operating expenses and cost of product revenues totaled $2.7million and $6.5million for the three months ended September30, 2009, and 2008, respectively, and $13.4million and $37.4million for the nine months ended September30, 2009, and 2008, respectively. In addition, during the nine months ended September30, 2008, the Company recorded an impairment charge of $5.0million, included in its amortization of purchased intangible assets, due to the phase out of its DX products. There was no impairment charge with respect to the purchased intangible assets in the three and nine months ended September30, 2009. The estimated future amortization expense of purchased intangible assets with definite lives for future periods is as follows (in millions): Years Ending December 31, Amount 2009 (remaining three months) $ 2.1 2010 4.0 2011 2.1 2012 1.2 2013 1.1 Thereafter 5.4 Total $ 15.9

Other Financial Information

Other Financial Information
	9 Months Ended Sep. 30, 2009 USD / shares
Other Financial Information [Abstract]
Other Financial Information	Note 7. Other Financial Information Restricted Cash As of September30, 2009, and December31, 2008, restricted cash was $54.5million and $43.4 million, respectively, which consisted of escrow accounts required by certain acquisitions completed in 2005, the India Gratuity Trust, which covers statutory severance obligations in the event of termination of the Companys India employees who have provided five or more years of continuous service, and the Directors Officers (DO) indemnification trust. Warranties The Company provides for the estimated cost of product warranties at the time revenue is recognized. This provision is reported as accrued warranty within current liabilities on the Companys condensed consolidated balance sheets. Changes in the Companys warranty reserve were as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Beginning balance $ 35.8 $ 41.8 $ 40.1 $ 37.5 Provisions made during the period, net 14.7 3.8 33.4 16.0 Change in estimate (1.1 ) (4.5 ) Actual costs incurred during the period (12.1 ) (2.5 ) (31.7 ) (10.4 ) Ending balance $ 37.3 $ 43.1 $ 37.3 $ 43.1 Deferred Revenue Details of the Companys deferred revenue were as follows (in millions): As of September 30, December 31, 2009 2008 Deferred product revenue: Deferred gross product revenue $ 328.4 $ 268.0 Deferred cost of product revenue (138.0 ) (110.0 ) Deferred product revenue, net 190.4 158.0 Deferred service revenue 452.8 432.3 Total $ 643.2 $ 590.3 Reported as: Current $ 480.8 $ 459.8 Long-term 162.4 130.5 Total $ 643.2 $ 590.3 Restructuring Liabilities During the first nine months of 2009, the Company implemented a restructuring plan (the 2009 Restructuring Plan) in an effort to better align its business operations with the current market and macroeconomic conditions. The restructuring plan included a restructuring of certain business functions that resulted in reductions of workforce and facilities. The Company recorded $4.5 million and $16.3million in restructuring charges during the three and nine months ended September 30, 2009, associated with the 2009 Restructuring Plan. The Company paid $2.8million and $6.0 million for severance related charges associated with the 2009 Restructuring Plan during the three and nine months ended September30, 2009. During the three and nine months ended September30, 2008, the Company incurred no restructuring charges and paid an immaterial amount associated with past restructuring plans. As of September30, 2009, the restructuring liability was $8.3million. Restructuring charges were based on the Companys restructuring plans that were committed to by management. Any changes in the estimates of executing the a

Financing Arrangements

Financing Arrangements
	9 Months Ended Sep. 30, 2009 USD / shares
Financing Arrangements [Abstract]
Financing Arrangements	Note 8. Financing Arrangements The Company has customer financing arrangements to sell its accounts receivable to a major third-party financing provider. The program does not and is not intended to affect the timing of revenue recognition because the Company only recognizes revenue upon sell-through. Under the financing arrangements, proceeds from the financing provider are due to the Company 30days from the sale of the receivable. In these transactions with the financing provider, the Company has surrendered control over the transferred assets. The accounts receivable have been isolated from the Company and put beyond the reach of creditors, even in the event of bankruptcy. The Company does not maintain effective control over the transferred assets through obligations or rights to redeem, transfer, or repurchase the receivables after they have been transferred. Pursuant to the receivable financing arrangements for the sale of receivables, the Company sold receivables of $122.5million and $139.8million during the three months ended September30, 2009, and 2008, respectively, and $294.9million and $306.9million during the nine months ended September30, 2009, and 2008, respectively. During the three months ended September30, 2009, and 2008, the Company received cash proceeds of $101.5million and $125.6million, respectively, and $277.2million and $257.7million during the nine months ended September30, 2009, and 2008, respectively, from the financing provider. The amount owed by the financing provider recorded as accounts receivable on the Companys condensed consolidated balance sheets as of September30, 2009, and December31, 2008, was $84.3million and $73.9million, respectively. The portion of the receivable financed that has not been recognized as revenue is accounted for as a financing arrangement. As of September30, 2009, and December31, 2008, cash received from the financing provider that has not been recognized as revenue was approximately $36.7million and $33.0million, respectively.

Derivative Instruments

Derivative Instruments
	9 Months Ended Sep. 30, 2009 USD / shares
Derivative Instruments [Abstract]
Derivative Instruments	Note 9. Derivative Instruments The Company uses derivatives partially to offset its market exposure to fluctuations in certain foreign currencies and does not enter into derivatives for speculative or trading purposes. Cash Flow Hedges The Company uses foreign currency forward or option contracts to hedge certain forecasted foreign currency transactions relating to cost of services and operating expenses. The derivatives are intended to protect the U.S. Dollar equivalent of the Companys planned cost of services and operating expenses denominated in foreign currencies. These derivatives are designated as cash flow hedges. Execution of these cash flow hedge derivatives typically occurs every month with maturities of less than one year. The effective portion of the derivatives gain or loss is initially reported as a component of accumulated other comprehensive income (loss), and upon occurrence of the forecasted transaction, is subsequently reclassified into the cost of services or operating expense line item to which the hedged transaction relates. The Company records any ineffectiveness of the hedging instruments, which was immaterial during the three and nine months ended September30, 2009, and the comparable periods in 2008 in interest and other income, net on its condensed consolidated statements of operations. Cash flows from such hedges are classified as operating activities. All amounts within other comprehensive income (loss)are expected to be reclassified into income within the next 12months. Non-Designated Hedges The Company also uses foreign currency forward contracts to mitigate variability in gains and losses generated from the re-measurement of certain monetary assets and liabilities denominated in foreign currencies. These hedges do not qualify for special hedge accounting treatment. These derivatives are carried at fair value with changes recorded in interest and other income, net. Changes in the fair value of these derivatives are largely offset by re-measurement of the underlying assets and liabilities. Cash flows from such derivatives are classified as operating activities. The derivatives have maturities of approximately two months. The following table summarizes the total fair value of the Companys derivative instruments as of September30, 2009, (in millions): Asset Derivatives Liability Derivatives Balance Sheet Fair Balance Sheet Fair Location Value Location Value Derivatives designated as hedging instruments: Foreign exchange forward contracts Other current assets $ 1.2 Other current liabilities $ 0.1 Total $ 1.2 $ 0.1 The Company has no non-designated derivatives as of September30, 2009. The following represents the Companys top three outstanding derivative positions by currency as of September30, 2009, (in millions): Buy Buy Buy Foreign currency forward contracts: EUR GBP INR Notional amount of foreign currency 35.2 11.1 1,

Stockholders Equity

Stockholders Equity
	1/1/2009 - 9/30/2009 USD / shares
Stockholders' Equity [Abstract]
Stockholders' Equity	Note 10. Stockholders Equity Stock Repurchase Activities In March2008, the Companys Board of Directors (the Board) approved a stock repurchase program (the 2008 Stock Repurchase Program), which authorized the Company to purchase up to $1.0billion of its common stock. Under this program, the Company repurchased approximately 2.9million shares of its common stock, at an average price of $24.67 per share for a total purchase price of $71.9 million in the three months ended September30, 2009, and approximately 12.6million shares of its common stock at an average price of $19.18 per share for a total purchase price of $241.1million in the nine months ended September30, 2009. As of September30, 2009, the Company has repurchased and retired approximately 22.3million shares of common stock under the 2008 Stock Repurchase Program and the program has remaining authorized funds of $531.0million. All shares of common stock purchased under the 2008 Stock Repurchase Program have been retired. Future share repurchases under the Companys 2008 Stock Repurchase Program 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. This program may be discontinued at any time. Comprehensive Income Comprehensive income consists of the following (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Net income $ 83.8 $ 148.5 $ 94.1 $ 379.3 Change in net unrealized gains (losses)on investments, net of tax of nil (0.9 ) (4.4 ) 1.7 (7.8 ) Change in foreign currency translation adjustment, net of tax of nil 4.9 (10.7 ) 6.0 (9.8 ) Total comprehensive income $ 87.8 $ 133.4 $ 101.8 $ 361.7 Accumulated Deficit The following table summarizes the activity in the Companys accumulated deficit account (in millions): Nine Months Ended September 30, 2009 Balance, December31, 2008 $ (2,905.8 ) Retirement of common stock (240.7 ) Net income 94.1 Balance, September30, 2009 $ (3,052.4 )

Employee Benefit Plans

Employee Benefit Plans
	9 Months Ended Sep. 30, 2009 USD / shares
Employee Benefit Plans [Abstract]
Employee Benefit Plans	Note 11. Employee Benefit Plans Stock Option Plans 2006 Equity Incentive Plan On May18, 2006, the Companys stockholders adopted the Companys 2006 Equity Incentive Plan (the 2006 Plan) to enable the granting of incentive stock options, nonstatutory stock options, RSUs, restricted stock, stock appreciation rights, performance shares, performance units, deferred stock units, and dividend equivalents to the employees and consultants of the Company. The 2006 Plan also provides for automatic, non-discretionary awards of nonstatutory stock options and RSUs to the Companys non-employee members of the Board. The maximum aggregate number of shares authorized under the 2006 Plan is 64,500,000 shares of common stock, plus the addition of any shares subject to outstanding options under the Companys Amended and Restated 1996 Stock Plan (the 1996 Plan) and the Companys 2000 Nonstatutory Stock Option Plan (the 2000 Plan) that expire unexercised after May18, 2006, up to a maximum of 75,000,000 additional shares of common stock. Options granted under the 2006 Plan have a maximum term of seven years from the grant date, and generally vest and become exercisable over a four-year period. Subject to the terms of change of control severance agreements, and except for a limited number of shares allowed under the 2006 Plan, restricted stock, performance shares, RSUs, or deferred stock units that vest solely based on continuing employment or provision of services will vest in full no earlier than the three-year anniversary of the grant date, or in the event vesting is based on factors other than continued future provision of services, such awards will vest in full no earlier than the one-year anniversary of the grant date. The 2006 Plan provides each non-employee director an automatic grant of an option to purchase 50,000 shares of common stock on the date such individual first becomes a director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy (the First Option). In addition, at each of the Companys annual stockholder meetings: (i)each non-employee director who was a non-employee director on the date of the prior years annual stockholder meeting shall be automatically granted RSUs for a number of shares equal to the Annual Value (as defined below), and (ii)each non-employee director who was not a non-employee director on the date of the prior years annual stockholder meeting shall receive a RSU award for a number of shares determined by multiplying the Annual Value by a fraction, the numerator of which is the number of days since the non-employee director received their First Option, and the denominator of which is 365, rounded down to the nearest whole share. Each RSU award specified in (i)and (ii)are referred to herein as an Annual Award. The Annual Value means the number of RSUs equal to $125,000 divided by the average daily closing price of the Companys common stock over the six month period ending on the last day of the fiscal year preceding the date of grant (for example, the period from July1, 2008 December31, 2008 for Annual Awards granted in May2009). The First Option vests

Segments

Segments
	9 Months Ended Sep. 30, 2009 USD / shares
Segments [Abstract]
Segments	Note 12. Segments The Companys chief operating decision maker (CODM) allocates resources and assesses performance based on financial information by the Companys business groups. The Companys operations are organized into two reportable segments: Infrastructure and Service Layer Technologies (SLT). The Infrastructure segment includes products from the E-, M-, MX-, and T-series router product families, EX-series switching products, as well as the circuit-to-packet products. The SLT segment consists primarily of Firewall virtual private network (Firewall) systems and appliances, dynamic services gateways, secure sockets layer virtual private network (SSL) appliances, intrusion detection and prevention appliances (IDP), the J-series router product family, and wide area network (WAN) optimization platforms. The primary financial measure used by the CODM in assessing performance of the segments is segment operating income, which includes certain cost of revenues, research and development expenses, sales and marketing expenses, and general and administrative expenses. In the three and nine months ended September30, 2009, and 2008, the CODM did not allocate certain miscellaneous expenses to its segments even though such expenses were included in the Companys management operating income. For arrangements with both Infrastructure and SLT products and services, revenue is attributed to the segment based on the underlying purchase order, contract, or sell-through report. Direct costs and operating expenses, such as standard costs, research and development, and product marketing expenses, are generally applied to each segment. Indirect costs, such as manufacturing overhead and other cost of revenues, are allocated based on standard costs. Indirect operating expenses, such as sales, marketing, business development, and general and administrative expenses are generally allocated to each segment based on factors including headcount, usage, and revenue. The CODM does not allocate stock-based compensation, amortization of purchased intangible assets, restructuring and impairment charges, gains or losses on equity investments, other net income and expense, income taxes, as well as certain other charges to the segments. The following table summarizes financial information for each segment used by the CODM (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Net revenues: Infrastructure: Product $ 472.0 $ 610.3 $ 1,396.2 $ 1,714.9 Service 123.2 119.0 350.1 308.7 Total Infrastructure revenues 595.2 729.3 1,746.3 2,023.6 Service Layer Technologies: Product 162.1 156.7 432.7 450.2 Service 66.6 61.0 195.5 175.1 Total Service Layer Technologies revenues 228.7 217.7 628.2 625.3 Total net revenues 823.9 947.0 2,374.5 2,648.9 Operating income:

Income Taxes

Income Taxes
	9 Months Ended Sep. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	Note 13. Income Taxes The Company recorded tax provisions of $45.9million and $63.2million for the three months ended September30, 2009, and 2008, or effective tax rates of 35% and 30%, respectively. The Company recorded tax provisions of $214.0million and $164.8million for the nine months ended September 30, 2009, and 2008, or effective tax rates of 69% and 30%, respectively. The effective tax rate for the three months ended September30, 2009, is substantially similar to the federal statutory rate of 35% and differs from the effective tax rate for the same period in 2008, primarily due to a $4.6 million income tax charge resulting from an investigation by the India tax authorities. The effective tax rate for the nine months ended September30, 2009, differs from the federal statutory rate of 35% and the rate for the same period in 2008, primarily due to the following income tax charges: (i)the $4.6million related to the investigation by the India tax authorities; (ii) $52.1 million resulted from a change in the Companys unrecognized tax benefits related to share-based compensation due to a decision reached by the U.S. Court of Appeals for the Ninth Circuit in Xilinx Inc. v. Commissioner in the Companys second quarter of 2009; and (iii) $61.8million resulted from changes in California income tax laws that were enacted during the Companys first quarter of 2009. The effective rate impact from these charges was partially offset by the federal Research and Development (RD) credit and the benefit of earnings in foreign jurisdictions, which are subject to lower tax rates during the three and nine months ended September30, 2009. The effective tax rate for the three and nine months ended September30, 2008, differed from the federal statutory rate of 35% primarily due to the benefit of earnings in foreign jurisdictions, which are subject to lower tax rates. The gross unrecognized tax benefits increased by approximately $67.5million for the nine months ended September30, 2009, of which $66.2million, if recognized, would affect the effective tax rate. Gross unrecognized tax benefits have decreased approximately $6.6million during the three months ended September30, 2009. The decrease relates to a $12.8million adjustment by the Internal Revenue Service (IRS) to the Companys fiscal year 2004 research credit carryforwards offset primarily by additional charges related to share-based compensation. Interest and penalties accrued for the nine months ended September30, 2009, were approximately $13.7million. Approximately $4.6 million of the increase in interest and penalties, occurred during the three months ended September 30, 2009, and is related to the India tax matter discussed below. The Company is currently under examination by the IRS for the 2004 tax year, and in July2009, the IRS informed the Company that it intends to open an audit for the 2005 and 2006 tax years. The Company is also subject to two separate ongoing examinations by the India tax authorities for the 2004 and 2004 through 2008 tax years, respectively, and has received an inquiry from the Hong Kong tax authorities for the 2002 through 2006 tax years. Additionally, the Compan

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Sep. 30, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 14. Commitments and Contingencies Commitments The following table summarizes the Companys principal contractual obligations as of September30, 2009, (in millions): Total 2009 2010 2011 2012 2013 Thereafter Other Operating leases $ 185.4 $ 13.8 $ 52.7 $ 44.5 $ 37.6 $ 20.9 $ 15.9 $ Sublease rental income (0.8 ) (0.2 ) (0.6 ) Purchase commitments 120.3 120.3 Tax liabilities 173.3 4.6 168.7 Other contractual obligations 45.6 7.3 17.3 13.5 5.6 1.9 Total $ 523.8 $ 141.2 $ 74.0 $ 58.0 $ 43.2 $ 22.8 $ 15.9 $ 168.7 Operating Leases Juniper Networks leases its facilities under operating leases that expire at various times, the longest of which expires in January2017. Future minimum payments under the non-cancelable operating leases, net of committed sublease income, totaled $184.6million as of September30, 2009. Rent expense for the three months ended September30, 2009, and 2008 was $14.2million and $14.4million, respectively, and $42.6million and $43.3million for the nine months ended September30, 2009, and 2008, respectively. Subsequent to September30, 2009, the Company amended three existing lease agreements for the Companys corporate headquarters facilities located in Sunnyvale, California. See Operating Lease Extensions in Note 15 Subsequent Events in Notes to Condensed Consolidated Financial Statements in ItemI of this Form 10-Q for further discussion of amended lease obligations. Purchase Commitments In order to reduce manufacturing lead times and ensure adequate component supply, contract manufacturers utilized by the Company place non-cancelable, non-returnable (NCNR) orders for components based on the Companys build forecasts. As of September30, 2009, there were NCNR component orders placed by the contract manufacturers with a value of $120.3million. The contract manufacturers use the components to build products based on the Companys forecasts and purchase orders that the Company has received from customers. Generally, the Company does not own the components and title to the products transfers from the contract manufacturers to the Company and immediately to the Companys customers upon delivery at a designated shipment location. If the components remain unused or the products remain unsold for specified period, the Company may incur carrying charges or obsolete materials charges for components that the contract manufacturers purchased to build products to meet the Companys forecast or customer orders. As of September30, 2009, the Company had accrued $29.9million based on its estimate of such charges. Tax Liabilities As of September30, 2009, the Company had $173.3million included in long-term liabilities in the condensed consolidated balance sheet for unrecognized tax positions.

Subsequent Event

Subsequent Event
	9 Months Ended Sep. 30, 2009 USD / shares
Subsequent Event [Abstract]
Subsequent Event	Note 15. Subsequent Event Stock Repurchases Subsequent to September30, 2009, through the filing of this report, the Company repurchased and retired approximately 1.6million shares of its common stock for approximately $42.0million under its 2008 Stock Repurchase program at an average purchase price of $26.69 per share. The Companys 2008 Stock Repurchase Program had remaining authorized funds of $489.0million as of the report filing date. Purchases under the Companys 2008 Stock Repurchase Program are subject to a review of the circumstances in place at the time and will be made from time to time as permitted by securities laws and other legal requirements. This program may be discontinued at any time. Operating Lease Extensions In October2009, the Company amended three existing leases for the Companys corporate headquarters facilities in Sunnyvale, California. Each lease was amended to: (i)extend the underlying lease term, and (ii)establish new monthly base rent payments for periods after November1, 2009. The new monthly base rent payments represent a significant reduction in base rent that would have been payable for the previously remaining terms of each of the underlying leases. The Companys operating lease obligations will increase by $128.1million under these amended lease agreements with expiration dates ranging from June2020 through November2022.