Juniper Networks (JNPR) 10-Q 5 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	JUNIPER NETWORKS INC
Entity Central Index Key	0001043604
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$8,114,000,000
Entity Common Stock, Shares Outstanding		526,139,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Net revenues:
Product	$721,201	$587,863
Service	191,417	176,320
Total net revenues	912,618	764,183
Cost of revenues:
Product	222,381	193,061
Service	78,216	68,830
Total cost of revenues	300,597	261,891
Gross margin	612,021	502,292
Operating expenses:
Research and development	206,994	185,400
Sales and marketing	192,375	187,864
General and administrative	43,138	39,211
Amortization of purchased intangible assets	1,137	4,390
Restructuring charges	8,105	4,229
Total operating expenses	451,749	421,094
Operating income	160,272	81,198
Interest and other income, net	1,459	1,950
Loss on equity investment	0	(1,686)
Income before income taxes and noncontrolling interest	161,731	81,462
Income tax (benefit) provision	(2,879)	85,922
Consolidated net income (loss)	164,610	(4,460)
Less: Net income attributable to noncontrolling interest	(1,495)	0
Net income (loss) attributable to Juniper Networks	$163,115	($4,460)
Net income (loss) per share attributable to Juniper Networks common stockholders:
Basic	0.31	-0.01
Diluted	0.3	-0.01
Shares used in computing net income(loss) per share:
Basic	521,141	524,429
Diluted	536,718	524,429

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	$1,723,949	$1,604,723
Short-term investments	592,679	570,522
Accounts receivable, net of allowances	402,934	458,652
Deferred tax assets, net	209,560	196,318
Prepaid expenses and other current assets	67,858	48,744
Total current assets	2,996,980	2,878,959
Property and equipment, net	457,957	455,651
Long-term investments	450,450	483,505
Restricted cash	55,391	53,732
Purchased intangible assets, net	12,672	13,834
Goodwill	3,658,602	3,658,602
Long-term deferred tax assets, net	9,784	10,555
Other long-term assets	36,899	35,425
Total assets	7,678,735	7,590,263
Current liabilities:
Accounts payable	230,330	242,591
Accrued compensation	156,704	176,551
Accrued warranty	37,828	38,199
Deferred revenue	619,968	571,652
Income taxes payable	60,903	34,936
Accrued litigation settlements	0	169,330
Other accrued liabilities	149,419	142,526
Total current liabilities	1,255,152	1,375,785
Long-term deferred revenue	169,920	181,937
Long-term income tax payable	92,576	170,245
Other long-term liabilities	39,764	37,531
Commitments and Contingencies - See Note 14
Juniper Networks 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; 524,909 shares and 519,341 shares issued and outstanding at March 31, 2010, and December 31, 2009, respectively	5	5
Additional paid-in capital	9,267,584	9,060,089
Accumulated other comprehensive loss	(4,466)	(1,433)
Accumulated deficit	(3,143,924)	(3,236,525)
Total Juniper Networks stockholders' equity	6,119,199	5,822,136
Noncontrolling interest	2,124	2,629
Total equity	6,121,323	5,824,765
Total liabilities and stockholders' equity	$7,678,735	$7,590,263

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
Share data in Thousands	Mar. 31, 2010	Dec. 31, 2009
Juniper Networks 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	524,909	519,341
Common stock, shares outstanding	524,909	519,341

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities:
Consolidated net income (loss)	$164,610	($4,460)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization	35,269	37,536
Share-based compensation	40,561	33,562
Loss on equity investment	0	1,686
Excess tax benefits from share-based compensation	(20,520)	(3,110)
Deferred income taxes	(12,471)	48,438
Changes in operating assets and liabilities:
Accounts receivable, net	55,718	68,012
Prepaid expenses and other assets	(11,150)	8,312
Accounts payable	(14,125)	(39,224)
Accrued compensation	(19,847)	(31,720)
Accrued litigation settlements	(169,330)	0
Income tax payable	(1,088)	19,307
Other accrued liabilities	4,620	3,442
Deferred revenue	36,299	22,084
Net cash provided by operating activities	88,546	163,865
Cash flows from investing activities:
Purchases of property and equipment, net	(37,807)	(34,226)
Purchases of trading investments	(1,245)	0
Purchases of available-for-sale investments	(447,716)	(109,290)
Proceeds from sales of available-for-sale investments	224,514	62,401
Proceeds from maturities of available-for-sale investments	235,960	16,850
Changes in restricted cash	(1,550)	0
(Purchases of) proceeds from privately-held equity investments, net	(4,773)	1,013
Net cash used in investing activities	(32,617)	(63,252)
Cash flows from financing activities:
Proceeds from issuance of common stock	118,920	22,628
Purchases and retirement of common stock	(76,225)	(119,846)
Net proceeds from (payments for) customer financing arrangements	2,082	(20,606)
Excess tax benefits from share-based compensation	20,520	3,110
Return of capital to noncontrolling interest	(2,000)	0
Net cash provided by (used in) financing activities	63,297	(114,714)
Net increase (decrease) in cash and cash equivalents	119,226	(14,101)
Cash and cash equivalents at beginning of period	1,604,723	2,019,084
Cash and cash equivalents at end of period	$1,723,949	$2,004,983

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
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 months ended March31, 2010, are not necessarily indicative of the results that may be expected for the year ending December31, 2010, 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, 2009. As of March31, 2010, the Company owned a 60percent interest in a joint venture with Nokia Siemens Networks B.V. (NSN). Given the Companys majority ownership interest in the joint venture, the accounts of the joint venture have been consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for the noncontrolling investors interests in the net assets and operations of the joint venture. Reclassifications During the three months ended March31, 2010, the Company reclassified certain selling and marketing costs that were previously reported as cost of service revenues as sales and marketing expense. Accordingly, $6.6million of costs reported in the first quarter of 2009 have been reclassified from cost of service revenues to sales and marketing expense to conform to the current periods presentation. The reclassification did not impact the Companys previously reported net revenues, segment results, operating income, net income, or earnings per share.

Summary of Significant Accounti

Summary of Significant Accounting Policies
	3 Months Ended Mar. 31, 2010
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2. Summary of Significant Accounting Policies Recent Accounting Policy Changes Revenue Recognition In October2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.2009-13, Multiple-Deliverable Revenue Arrangements (ASU 2009-13). ASU 2009-13 changes the requirements for establishing separate units of accounting in a multiple element arrangement and requires the allocation of arrangement consideration to each deliverable to be based on the relative selling price. Concurrently with issuing ASU 2009-13, the FASB also issued ASU No.2009-14, Certain Revenue Arrangements That Include Software Elements (ASU 2009-14). ASU 2009-14 excludes software that is contained on a tangible product from the scope of software revenue guidance if the software component and the non-software component function together to deliver the tangible products essential functionality. The Company early adopted these standards on a prospective basis as of the beginning of fiscal 2010 for new and materially modified arrangements originating after December31, 2009. As a result, net revenues for the first quarter of 2010 were approximately $25million higher than the net revenues that would have been recorded under the previous accounting rules. The increase in revenues was due to recognition of revenue for products booked and shipped during the first quarter of 2010, that contained undelivered elements for which the Company was unable to demonstrate fair value pursuant to the previous standards. Under the new standards the Company allocates the total arrangement consideration to each separable element of an arrangement based upon the relative selling price of each element. Arrangement consideration allocated to undelivered elements is deferred until delivery. Revenue is recognized when all of the following criteria have been met: Persuasive evidence of an arrangement exists. The Company generally relies upon sales contracts, or agreements, and customer purchase orders to determine the existence of an arrangement. Delivery has occurred. The Company uses shipping terms and related documents, or written evidence of customer acceptance, when applicable, to verify delivery or performance. In instances where the Company has outstanding obligations related to product delivery or the final acceptance of the product, revenue is deferred until all the delivery and acceptance criteria have been met. Sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on the payment terms and whether the sales price is subject to refund or adjustment. Collectability is reasonably assured. The Company assesses collectability based on the creditworthiness of the customer as determined by our credit checks and the customers payment history. The Company records accounts receivable net of allowance for doubtful accounts, estimated customer returns and pricing credits. For fiscal 2010 and future periods, pursuant to the guidance of ASU 2009-13, when a sales arrangement contains multiple elements and software and non-software components functi

Net Income

Net Income (Loss) per Share
	3 Months Ended Mar. 31, 2010
Net Income (Loss) per Share [Abstract]
Net Income (Loss) per Share	Note 3. Net Income (Loss) per Share Basic net income (loss)per share and diluted net loss per share are computed by dividing net income (loss)available to common stockholders 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 shares that were outstanding during the period. Dilutive potential common shares consist of common shares issuable upon exercise of stock options, vesting of restricted stock units (RSUs), and performance share awards (PSAs). The following table presents the calculation of basic and diluted net income (loss)per share attributable to Juniper Networks (in millions, except per share amounts): Three Months Ended March 31, 2010 2009 Numerator: Net income (loss)attributable to Juniper Networks $ 163.1 $ (4.5 ) Denominator: Weighted-average shares used to compute basic net income (loss)per share 521.1 524.4 Effective of dilutive securities: Employee stock awards 15.6 Weighted-average shares used to compute diluted net income (loss)per share 536.7 524.4 Net income (loss)per share attributable to Juniper Networks common stockholders: Basic $ 0.31 $ (0.01 ) Diluted $ 0.30 $ (0.01 ) Employee stock awards covering approximately 19.6million shares of the Companys common stock were not included in the computation of diluted earnings per share for the quarter ended March31, 2010, because their effect would have been anti-dilutive. As a result of the net loss for the quarter ended March31, 2009, approximately 69.4million common stock equivalents were excluded in the computation of diluted net loss per share because their effect would have been anti-dilutive.

Cash, Cash Equivalents, and Inv

Cash, Cash Equivalents, and Investments
	3 Months Ended Mar. 31, 2010
Cash, Cash Equivalents, and Investments [Abstract]
Cash, Cash Equivalents, and Investments	Note 4. Cash, Cash Equivalents, and Investments Cash and Cash Equivalents The following table summarizes the Companys cash and cash equivalents (in millions): As of March 31, December 31, 2010 2009 Cash and cash equivalents: Cash: Demand deposits $ 428.2 $ 427.2 Time deposits 225.5 127.9 Total cash 653.7 555.1 Cash equivalents: U.S. government securities 127.7 Commercial paper 23.5 17.0 Money market funds 919.0 1,032.6 Total cash equivalents 1,070.2 1,049.6 Total cash and cash equivalents $ 1,723.9 $ 1,604.7 Investments in Available-for-Sale and Trading Securities The following table summarizes the Companys unrealized gains and losses, and fair value of investments designated as trading or available-for-sale, as of March31, 2010, and December31, 2009 (in millions): Gross Gross Amortized Unrealized Unrealized Estimated Fair Cost Gains Losses Value As of March31, 2010: Fixed income securities: U.S. government securities $ 231.2 $ 0.2 $ (0.1 ) $ 231.3 Government-sponsored enterprise obligations 223.3 0.5 (0.1 ) 223.7 Foreign government debt securities 80.9 0.4 81.3 Commercial paper 79.2 79.2 Corporate debt securities 414.2 2.0 (0.2 ) 416.0 Total fixed income securities 1,028.8 3.1 (0.4 ) 1,031.5 Publicly-traded equity securities 11.6 0.1 11.7 Total $ 1,040.4 $ 3.2 $ (0.4 ) $ 1,043.2 Reported as: Short-term investments $ 591.5 $ 1.4 $ (0.2 ) $ 592.7 Long-term investments 448.9 1.8 (0.2 ) 450.5 Total $ 1,040.4 $ 3.2 $ (0.4 ) $ 1,043.2 Gross Gross Amortized Unrealized Unrealized Estimated Fair Cost Gains Losses Value As of December31, 2009: Fixed income securities: U.S. government securities $ 245.0 $ 0.1 $ $ 245.1 Government-sponsored enterprise obligations 212.0 0.6 (0.3 ) 212.3 Foreign government debt securities 96.4 0.3 (0.1 ) 96.6 Corporate debt securities 488.2 2.0 (0.3 ) 489.9 Total fixed income securities 1,041.6 3.0 (0.7 ) 1,043.9 Publicly-traded equity securities 10.1 10.1 Total $ 1,051.7 $ 3.0 $ (0.7 ) $ 1,054.0 Reported as: Short-term investment

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 5. Fair Value Measurements The Company determines the fair values of its financial instruments based on a 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 upon sale of 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. These inputs are valued using market based approaches. Level 3 Inputs are unobservable inputs based on the Companys assumptions. These inputs, if any, are valued using internal financial models. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table provides a summary of assets measured at fair value on a recurring basis (in millions): Fair Value Measurements at March 31, 2010 Using Significant Significant Quoted Prices in Other Other Active Markets Observable Unobservable For Identical Remaining Remaining Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Trading securities: Mutual funds $ 6.1 $ 6.1 Total trading securities 6.1 6.1 Available-for-sale debt securities: U.S. government securities (1) 89.8 269.8 359.6 Government sponsored enterprise obligation 195.5 28.2 223.7 Foreign government debt securities 26.4 54.9 81.3 Commercial paper 102.7 102.7 Corporate debt securities 416.0 416.0 Money market funds (2) 969.0 969.0 Total available-for-sale debt securities 1280.7 871.6 2,152.3 Available-for-sale equity securities: Technology securities 5.6 5.6 Total available-for-sale equity securities 5.6

Goodwill and Purchased Intangib

Goodwill and Purchased Intangible Assets
	3 Months Ended Mar. 31, 2010
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 March31, 2010, and December31, 2009 (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 first quarter of 2010. Purchased Intangible Assets The following table presents the Companys purchased intangible assets with definite lives (in millions): Accumulated Gross Amortization Net As of March31, 2010: Technologies and patents $ 380.0 $ (376.2 ) $ 3.8 Other 68.9 (60.0 ) 8.9 Total $ 448.9 $ (436.2 ) $ 12.7 As of December31, 2009: Technologies and patents $ 380.0 $ (376.0 ) $ 4.0 Other 68.9 (59.1 ) 9.8 Total $ 448.9 $ (435.1 ) $ 13.8 Amortization of purchased intangible assets of $1.1million and $5.7million were included in operating expenses and cost of product revenues for the three months ended March31, 2010, and 2009, respectively. There were no impairment charges with respect to purchased intangible assets in the three months ended March31, 2010, and 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 2010 (remaining nine months) $ 2.8 2011 2.1 2012 1.3 2013 1.2 2014 1.0 Thereafter 4.3 Total $ 12.7

Other Financial Information

Other Financial Information
	3 Months Ended Mar. 31, 2010
Other Financial Information [Abstract]
Other Financial Information	Note 7. Other Financial Information 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 condensed consolidated balance sheets. Changes in the Companys warranty reserve were as follows (in millions): Three Months Ended March 31, 2010 2009 Beginning balance $ 38.2 $ 40.1 Provisions made during the period, net 12.1 9.8 Change in estimate (0.5 ) (2.1 ) Actual costs incurred during the period (12.0 ) (10.3 ) Ending balance $ 37.8 $ 37.5 Deferred Revenue Details of the Companys deferred revenue were as follows (in millions): As of March 31, December 31, 2010 2009 Deferred product revenue: Deferred gross product revenue $ 402.6 $ 391.3 Deferred cost of product revenue (152.5 ) (150.0 ) Deferred product revenue, net 250.1 241.3 Deferred service revenue 539.8 512.3 Total $ 789.9 $ 753.6 Reported as: Current $ 620.0 $ 571.7 Long-term 169.9 181.9 Total $ 789.9 $ 753.6 Restructuring Liabilities In 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 2009 Restructuring Plan included a worldwide workforce reduction and restructuring of certain business functions and the reduction of facilities. The Company incurred restructuring charges of $8.1million and paid $4.1million for severance and facilities related charges associated with the 2009 Restructuring Plan during the three months ended March31, 2010. During the three months ended March31, 2009, the Company recorded $4.2million in restructuring charges and paid $2.5million for severance related charges associated with the 2009 Restructuring Plan. The following table provides a summary of changes in the Companys restructuring liability (in millions): Remaining Remaining Liability as of Liability as of December 31, Cash March 31, 2009 Charges Payments Adjustment 2010 Facilities $ 4.9 $ 6.8 $ (0.3 ) $ (1.6 ) $ 9.8 Severance, contractual commitments, and other charges 4.5 1.3 (3.8 ) 0.2 2.2 Total restructuring charges $ 9.4 $ 8.1 $ (4.1 ) $ (1.4 ) $ 12.0 The Company had no acquisition related restructuring charges during the three months ended March 31, 2010 or 2009. Restructuring charges were based on the Companys restructuring plans that were committed by management. Any changes in the estimates of executing the approved plans will be reflected in the Companys results of operations. Interest and

Financing Arrangements

Financing Arrangements
	3 Months Ended Mar. 31, 2010
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 financing arrangements for the sale of receivables, the Company sold net receivables of $135.6million and $91.2million during the three months ended March31, 2010, and 2009, respectively. During the three months ended March31, 2010, and 2009, the Company received cash proceeds of $138.9million and $95.6million, respectively, from the financing provider. The amounts owed by the financing provider recorded as accounts receivable on the Companys condensed consolidated balance sheets as of March31, 2010, and December31, 2009, were $82.6million and $89.8million, respectively. The portion of the receivable financed that has not been recognized as revenue is accounted for as a financing arrangement and is included in other accrued liabilities in the condensed consolidated balance sheet. As of March31, 2010, and December31, 2009, the estimated amounts of cash received from the financing provider that has not been recognized as revenue from distributors were $54.7million and $52.6million, respectively.

Derivative Instruments

Derivative Instruments
	3 Months Ended Mar. 31, 2010
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 first quarter of 2010 and 2009, respectively, 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. The total fair value of the Companys derivative assets located in other current assets on the condensed consolidated balance sheet as of March31, 2010 and 2009 was $0.2million and $0.7million, respectively. The total fair value of the Companys derivative liabilities located in other accrued liabilities on the condensed consolidated balance sheet as of March31, 2010, and 2009, was $1.5million and $1.2million, respectively. The Company recognized a loss of $1.5million and $5.7million in other comprehensive income for the effective portion of its derivative instruments as of March31, 2010, and 2009, respectively. The amount of loss reclassified from other comprehensive loss to the condensed consolidated statements of operations was $0.7million and $2.7million as of March31, 2010, and 2009, respectively. The ineffective portion of the Companys derivative instruments recognized in its condensed consolidated statements of operations was immaterial during the three months ended March 31, 2010, and 2009. 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 derivatives 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.

Stockholders' Equity

Stockholders' Equity
	3 Months Ended Mar. 31, 2010
Stockholders' Equity [Abstract]
Stockholders' Equity	Note 10. Stockholders Equity Stock Repurchase Activities In February2010, the Companys Board of Directors (the Board) approved a new stock repurchase program (the 2010 Stock Repurchase Program) which authorized the Company to repurchase up to $1.0 billion of its common stock. This new authorization is in addition to the stock repurchase program approved by the Board in March2008 (the 2008 Stock Repurchase Program), which also enabled the Company to repurchase up to $1.0billion of the Companys common stock. During the three months ended March31, 2010, the Company repurchased approximately 2.8million shares of its common stock at an average price of $27.04 per share for an aggregate purchase price of $74.4million under the 2008 Stock Repurchase Program. As of March31, 2010, the 2008 and 2010 Stock Repurchase Programs had remaining aggregate authorized funds of $1,244.2million. In addition to repurchases under the Companys stock repurchase programs, the Company repurchased common stock from its employees in connection with net issuance of shares to satisfy its tax withholding obligations for the vesting of certain RSUs and PSAs. During the three months ended March31, 2010, the Company repurchased approximately 0.1million shares of its common stock at an average price of $25.47 per share for an aggregate purchase price of $1.8million in connection with the net issuances. The Company repurchased an immaterial amount of common stock from its employees in connection with net issuance of shares, during the three months ended March31, 2009. All shares of common stock that have been repurchased under the Companys stock repurchase programs and from its employees in connection with net issuances have been retired. Future share repurchases under the Companys stock repurchase programs 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. These programs may be discontinued at any time. Comprehensive Income (Loss) Attributable to Juniper Networks Comprehensive income (loss) consists of the following (in millions): Three Months Ended March 31, 2010 2009 Consolidated net income (loss) $ 164.6 $ (4.5 ) Other comprehensive loss, net of tax: Change in net unrealized losses on investments, net of tax of nil (0.4 ) (3.6 ) Change in foreign currency translation adjustment, net of tax of nil (2.7 ) (10.5 ) Total other comprehensive loss, net of tax (3.1 ) (14.1 ) Consolidated comprehensive income (loss) 161.5 (18.6 ) Less: comprehensive income attributable to noncontrolling interest 1.5 Comprehensive income (loss)attributable to Juniper Networks $ 160.0 $ (18.6 ) The following tables summarize stockholders equity activity for the three months ended March31, 2010, and 2009 (in millions): Accumulated Common Stock Ot

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Mar. 31, 2010
Employee Benefit Plans [Abstract]
Employee Benefit Plans	Note 11. Employee Benefit Plans Share-Based Compensation Plans The Companys share-based compensation plans include the 2006 Equity Incentive Plan (the 2006 Plan), 2000 Nonstatutory Stock Option Plan (the 2000 Plan), Amended and Restated 1996 Stock Plan (the 1996 Plan), as well as various equity incentive plans assumed through acquisitions. Under these plans the Company has granted (or in the case of acquired plans, assumed) stock options, and in certain plans RSUs and PSAs. In addition, the Companys 2008 Employee Stock Purchase Plan (the 2008 Purchase Plan) permits eligible employees to acquire shares of the Companys common stock at a 15% discount to the offering price (as determined in the 2008 Plan) through periodic payroll deductions of up to 10% of base compensation, subject to individual purchase limits of 6,000 shares in any twelve-month period or $25,000 worth of stock, determined at the fair market value of the shares at the time the stock purchase option is granted, in one calendar year. Stock Option Activities The following table summarizes the Companys stock option activity and related information as of and for the three months ended March31, 2010 (in millions, except for per share amounts and years): Weighted Weighted Average Average Remaining Number of Exercise Contractual Aggregate Shares Price Term Intrinsic Value Balance at January1, 2010 67.4 $ 20.84 Options granted 5.0 28.77 Options canceled (0.6 ) 20.96 Options exercised (5.7 ) 18.03 Options expired (0.3 ) 48.21 Balance at March31, 2010 65.8 $ 21.55 4.6 $ 631.2 As of March31, 2010: Vested or expected-to-vest options 58.0 $ 21.42 4.4 $ 566.3 Exercisable options 41.7 $ 20.90 3.9 $ 436.3 Aggregate intrinsic value represents the difference between the Companys closing stock price on the last trading day of the period, which was $30.68 as of March31, 2010, and the exercise price multiplied by the number of related options. The pre-tax intrinsic value of options exercised, representing the difference between the fair market value of the Companys common stock on the date of the exercise and the exercise price of each option, was $59.2million for the three months ended March31, 2010. Total fair value of options vested for the three months ended March31, 2010, was $27.5million. Restricted Stock Units and Performance Share Awards Activities RSUs generally vest over a period of three to four years from the date of grant, and PSAs granted generally vest after three years provided that certain annual performance targets and other vesting criteria are met. Until vested, RSUs and PSAs do not have the voting and dividend participation rights of common stock and the shares underlying the awards are not considered issued and outstanding. Th

Segments

Segments
	3 Months Ended Mar. 31, 2010
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, SRX service gateways, secure socket layer (SSL) virtual private network (VPN) appliances, intrusion detection and prevention (IDP) appliances, 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 (RD) expenses, sales and marketing expenses, and general and administrative (GA) expenses. The CODM does not allocate certain miscellaneous expenses to its segments even though such expenses are 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, RD, 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 GA expenses are generally allocated to each segment based on factors including headcount, usage, and revenue. The CODM does not allocate share-based compensation, amortization of purchased intangible assets, restructuring and impairment charges, gains or losses on equity investments, other net income and expense, income taxes, or certain other charges to the segments. The following table summarizes financial information for each segment used by the CODM (in millions): Three Months Ended March 31, 2010 2009(1) Net revenues: Infrastructure: Product $ 556.1 $ 454.4 Service 122.6 112.8 Total Infrastructure revenues 678.7 567.2 Service Layer Technologies: Product 165.1 133.5 Service 68.8 63.5 Total Service Layer Technologies revenues 233.9 197.0 Total net revenues 912.6 764.2 Operating income: Infrastructure 176.5 111.9 Service Layer Technologies 35.1 13.1 Total management operating income 211.6 125.0 Amortization of purchased intangible assets (2) (1.1 ) (5.7 ) Share-based compensation expense (40.6 ) (33.6 ) Share-based payroll tax expense (1.6 ) (0.3 ) Restructuring charges (8.1 )

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Income Taxes [Abstract]
Income Taxes	Note 13. Income Taxes The Company recorded a tax benefit of $2.9million, or an effective tax benefit rate of 1.8%, and a tax provision of $85.9million, or an effective tax rate of 105%, for the three months ended March 31, 2010, and 2009, respectively. The effective tax rate for the three months ended March31, 2010, differs from the federal statutory rate of 35% primarily due to a $54.1million income tax benefit resulting from a change in the Companys estimate of unrecognized tax benefits related to share-based compensation. This change in estimate was a result of the taxpayer favorable ruling by the U.S. Court of Appeals for the Ninth Circuit (the Court) in Xilinx Inc. v. Commissioner discussed below. The effective tax rate for the three months ended March31, 2009, differed from the federal statutory rate of 35% primarily due to a $61.8million charge, which resulted from changes in California income tax laws enacted during the Companys first quarter of 2009, partially offset by the benefit of the federal Research and Development credit. The tax rates for the three months ended March31, 2010, and 2009 were favorably impacted by the benefit of earnings in foreign jurisdictions, which are subject to lower tax rates. On March22, 2010, the Court overturned its May27, 2009 decision in Xilinx v. Commissioner and affirmed the original U.S. Tax Court decision, which held in favor of the taxpayer. While Juniper Networks was not a named party to the case, the Courts decision does eliminate the uncertainty regarding the benefit of the tax position taken by the Company in certain years prior to fiscal 2004 relative to the allocable transfer price of share-based compensation related to the Companys intangible development costs. The Courts decision affirms that the value of share-based compensation related to share-based compensation grants made prior to 2004 is not required to be included in cost sharing agreements between related parties. In light of the Courts decision, the Company has determined that tax benefit recognized under its prior tax position is more likely than not to be sustained. The gross unrecognized tax benefits decreased by approximately $72.5million for the three months ended March31, 2010. Interest and penalties for the three months ended March31, 2010, decreased by approximately $5.9million. The decrease in the gross unrecognized tax benefits and the accrued interest and penalties is primarily related to the change in estimate resulting from the Courts decision in Xilinx v. Commissioner referenced above. The Company is currently under examination by the Internal Revenue Service (IRS) for the 2004 through 2006 tax years. The Company is also subject to two separate ongoing examinations by the India tax authorities for the 2004 tax year and 2004 through 2008 tax years, respectively, and has received an inquiry from the Hong Kong tax authorities for the 2002 through 2008 tax years. Additionally, the Company has not reached a final resolution with the IRS on an adjustment it proposed for the 1999 and 2000 tax years. The Company is not aware of any other income tax examination by taxing authorities in any other major j

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 14. Commitments and Contingencies Commitments The following table summarizes the Companys principal contractual obligations as of March31, 2010 (in millions): Total 2010 2011 2012 2013 2014 Thereafter Other Operating leases $ 302.6 $ 39.4 $ 44.6 $ 39.7 $ 31.0 $ 25.6 122.3 $ Sublease rental income (0.5 ) (0.5 ) Purchase commitments 110.8 110.8 Tax liabilities 97.7 1.5 96.2 Other contractual obligations 32.1 8.6 15.0 6.6 1.9 Total $ 542.7 $ 159.8 $ 59.6 $ 46.3 $ 32.9 $ 25.6 $ 122.3 $ 96.2 Operating Leases The Company leases its facilities under operating leases that expire at various times, the longest of which expires in November2022. Future minimum payments under the non-cancelable operating leases, net of committed sublease income, totaled $302.1million as of March31, 2010. Rent expense for the three months ended March31, 2010, and 2009 was $14.1million and $14.0million, respectively. 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 March31, 2010, there were NCNR component orders placed by the contract manufacturers with a value of $110.8million. The contract manufacturers use the components to build products based on the Companys forecasts and customer purchase orders received by the Company. 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 periods, 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 March31, 2010, the Company had accrued $28.2million based on its estimate of such charges. Tax Liabilities As of March31, 2010, the Company had $97.7million included in current and long-term liabilities in the condensed consolidated balance sheet for unrecognized tax positions. It is reasonably possible that the Company may reach agreement on certain issues and, as a result, the amount of the liability for unrecognized tax benefits may decrease by approximately $1.5million within the next 12months. At this time, the Company is unable to make a reasonably reliable estimate of the timing of payments related to the additional $96.2million in liability due to uncertainties in the timing of tax audit outcomes. Other Contractual Obligations As of March31, 2010, other contractual

Joint Venture

Joint Venture
	3 Months Ended Mar. 31, 2010
Joint Venture [Abstract]
Joint Venture	Note 15. Joint Venture In 2009, the Company entered into an agreement to form a joint venture to provide a combined carrier Ethernet-based solution with NSN. Since inception, the Company has had a 60percent interest in the joint venture. Both NSN and Juniper Networks are entitled to appoint two board members to the Board of the joint venture. The Board shall consist of four board members at all times. Given the Companys majority ownership interest in the joint venture, the ventures financial results have been consolidated with the accounts of the Company, and a noncontrolling interest has been recorded to reflect the noncontrolling investors interest in the ventures results. All intercompany transactions have been eliminated, with the exception of the noncontrolling interest.

Subsequent Events

Subsequent Events
	3 Months Ended Mar. 31, 2010
Subsequent Events [Abstract]
Subsequent Events	Note 16. Subsequent Events Stock Repurchases Subsequent to March31, 2010, through the filing of this report, the Company repurchased and retired approximately 1.3million shares of its common stock for approximately $39.4million through its 2008 Stock Repurchase Program at an average purchase price of $30.41 per share. The Companys stock repurchase programs had aggregate remaining authorized funds of $1,204.8million as of the report filing date. Purchases under the Companys stock repurchase programs 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. These programs may be discontinued at any time. Business Acquisition In April2010, the Company announced it had entered into a definitive agreement to acquire Ankeena Networks, Inc., a privately-held provider of new media infrastructure technology for a total consideration of less than $100million in cash and assumed employee equity awards. The acquisition of Ankeena Networks was consummated on April19, 2010.