0001043604
2008-01-01
2008-12-31
0001043604
2007-12-31
0001043604
2009-04-01
2009-06-30
0001043604
2008-04-01
2008-06-30
0001043604
2008-01-01
2008-06-30
0001043604
2009-06-30
0001043604
2008-12-31
0001043604
2008-06-30
0001043604
2009-08-03
0001043604
2009-01-01
2009-06-30
iso4217:USD
xbrli:shares
xbrli:shares
iso4217:USD
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<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 1. Basis of Presentation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 six months ended June 30, 2009, are not necessarily indicative of the
results that may be expected for the year ending December 31, 2009, or any future period. The
information included in this Quarterly Report on Form 10-Q should be read in conjunction with
“Management’s 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 Company’s Annual Report on Form 10-K for
the year ended December 31, 2008.
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<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 2. Summary of Significant Accounting Policies</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Recent Accounting Pronouncements</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2009, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial
Accounting Standards (“SFAS”) No. 165, <i>Subsequent Events </i>(“SFAS 165”). SFAS 165 establishes general
standards of accounting for and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued. In particular, SFAS 165 sets
forth: (a) the period after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition or disclosure in
the financial statements, (b) the circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial statements, and (c) the
disclosures that an entity should make about events or transactions that occurred after the balance
sheet date. SFAS 165 is effective for interim or annual reporting periods ending after June 15,
2009. The Company’s adoption of SFAS 165 during the second quarter of 2009 did not affect the
Company’s consolidated results of operations or financial condition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, the FASB issued SFAS No. 166, <i>Accounting for Transfers of Financial Assets — An
Amendment of FASB Statement No. 140 </i>(“SFAS 166”), which amends SFAS No. 140, <i>Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities </i>(“SFAS 140”) to
eliminate the concept of the qualifying special-purpose entity (“QSPE”) from SFAS 140, removes the
exception from applying FASB Interpretation No. 46 (revised December 2003), <i>Consolidation of
Variable Interest Entities </i>(“FIN 46R”) to QSPE, changes the requirements for derecognizing
financial assets, and requires additional disclosures. SFAS 166 is effective for each entity’s
first annual reporting period that begins after November 15, 2009, for interim periods within the
first annual reporting period, and for interim and annual reporting periods thereafter. SFAS 166
must be applied to transfers of financial assets occurring on or after the effective date. Earlier
application of SFAS 166 is prohibited. Accordingly, the Company’s transfers of financial assets
will be recorded and disclosed following existing GAAP until January 1, 2010. The impact of SFAS
166 on the Company’s consolidated results of operations or financial condition will depend upon the
level of activity of financial asset transfers that the Company may consummate after the effective
date.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, the FASB issued SFAS No. 167, <i>Amendments to FASB Interpretation No. 46(R) </i>(“SFAS
167”), which amends FIN 46R. FIN 46R was amended by SFAS 167 because of the elimination of the QSPE
concept in SFAS 166. SFAS 167 amends the provisions on determining whether an entity is a variable
interest entity and would require consolidation, as well as requires additional disclosures. SFAS
167 is effective for each entity’s first annual reporting period that begins after November 15,
2009, for interim periods within the first annual reporting period,
and for interim and annual reporting periods thereafter. Earlier application of SFAS 167 is
prohibited. Accordingly, the Company will adopt SFAS 167 on January 1, 2010. The impact of SFAS 167
on the Company’s consolidated results of operations or financial condition will depend upon its
involvement with variable interest entities after the adoption date.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2009, the FASB issued SFAS No. 168, <i>The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement 162 </i>(“SFAS
168”). SFAS 168 replaces SFAS No. 162, <i>The Hierarchy of Generally Accepted Accounting Principles,</i>
and establishes the FASB Accounting Standards Codification (“Codification”) as the single source of
authoritative accounting principles to be applied to financial statements of nongovernmental
entities in conformity with U.S. GAAP. SFAS 168 is effective for financial statements issued for
interim and annual periods ending after September 15, 2009. The Company does not expect its
implementation of SFAS 168 to affect its consolidated results of operations or financial condition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, the FASB issued FASB Staff Position (“FSP”) Financial Accounting Standard (“FAS”)
107-1 and Accounting Principles Board Opinion (“APB”) 28-1, <i>Interim Disclosure about Fair Value of
Financial Instruments </i>(“FSP FAS 107-1 and APB 28-1”). This FSP amends SFAS No. 107, <i>Disclosures
about Fair Value of Financial Instruments, </i>which requires disclosures about the fair value of
financial instruments for interim reporting periods of publicly-traded companies as well as annual
financial statements and amends APB No. 28, <i>Interim Financial Reporting, </i>to require those
disclosures in summarized financial information at interim reporting periods. The provisions of FSP
FAS 107-1 and APB 28-1 are effective for interim and annual reporting periods ending after June 15,
2009. The Company’s adoption of FSP FAS 107-1 and APB 28-1 during the second quarter of
2009 did not affect the Company’s consolidated results of operations or financial condition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, <i>Recognition and Presentation of
Other-Than-Temporary Impairments </i>(“FSP FAS 115-2 and FAS 124-2”), which amends SFAS No. 115,
<i>Accounting for Certain Investments in Debt and Equity Securities</i>, and SFAS No. 124, <i>Accounting for
Certain Investments Held by Not-for-Profit Organizations</i>. This FSP amends the accounting and
disclosure requirements to make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities. The provisions of FSP
FAS 115-2 and FAS 124-2 are effective for interim and annual reporting periods ending after June
15, 2009. The Company’s adoption of FSP FAS 115-2 and FAS 124-2 during the second quarter
of 2009 did not affect the Company’s consolidated results of operations or financial condition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, the FASB issued FSP FAS 157-4, <i>Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly </i>(“FSP 157-4”), which amends SFAS No. 157, <i>Fair Value Measurements </i>(“SFAS 157”) to
provide additional guidance on estimating fair value when the volume and level of activity for an
asset or liability have significantly decreased. In addition, this FSP includes guidance on
identifying circumstances that indicate a transaction is not orderly. The provisions of FSP 157-4
are effective for interim and annual reporting periods ending after June 15, 2009. The
Company’s adoption of FSP FAS 157-4 during the second quarter of 2009 did not affect the Company’s
consolidated results of operations or financial condition.
</div>
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<b>
</b>
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<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 3. Net Income per Share</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Basic net income per share is computed by dividing net income 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 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, common shares issuable upon exercise of stock
options, vesting of restricted stock units (“RSUs”), and vesting of performance shares.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the calculation of basic and diluted net income per share (in
millions, except per share amounts):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Numerator:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">14.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">120.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">230.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Denominator:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Weighted-average shares
used to compute basic net
income per share
</div></td>
<td> </td>
<td> </td>
<td align="right">523.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">529.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">523.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">526.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Effect of dilutive securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Shares issuable upon
conversion of the Senior
Notes
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Employee stock awards
</div></td>
<td> </td>
<td> </td>
<td align="right">9.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Weighted average shares
used to compute diluted
net income per share
</div></td>
<td> </td>
<td> </td>
<td align="right">532.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">559.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">531.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">561.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.03</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.23</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.02</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.44</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.03</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.22</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.02</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.41</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
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</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Employee stock awards for approximately 43.5 million shares and 60.5 million shares of the
Company’s common stock in the three and six months ended June 30, 2009, respectively, were
outstanding, but were not included in the computation of diluted earnings per share because their
effect would have been anti-dilutive. For the three and six months ended June 30, 2008,
approximately 22.9 million shares and 18.7 million shares of the Company’s common stock
equivalents, respectively, were not included in the computation of diluted earnings per share
because their effect would have been anti-dilutive.
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 4. Cash, Cash Equivalents, and Investments</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s cash, cash equivalents, and investments (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>As of</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">287.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">285.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Time deposits
</div></td>
<td> </td>
<td> </td>
<td align="right">124.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total cash
</div></td>
<td> </td>
<td> </td>
<td align="right">412.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">411.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash equivalents:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">70.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Government-sponsored enterprise obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">23.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">94.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Foreign government debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">16.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Commercial paper
</div></td>
<td> </td>
<td> </td>
<td align="right">132.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">90.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">900.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,281.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Total cash equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">1,142.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,608.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total cash and cash equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">1,554.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,019.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Fixed income securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">193.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">86.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Government sponsored-enterprise obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">276.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">71.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign government debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">47.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Commercial paper
</div></td>
<td> </td>
<td> </td>
<td align="right">33.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">284.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">110.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">835.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">268.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Publicly-traded equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">844.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">274.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reported as:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Short-term investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">423.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">172.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Long-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">420.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">101.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">844.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">274.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair Value As</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>of June 30, 2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Due within one year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">415.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Due between one and five years
</div></td>
<td> </td>
<td> </td>
<td align="right">420.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">835.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Publicly-traded equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">844.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Summary of Investments</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes unrealized gains and losses related to our investments designated as
trading or available-for-sale, as of June 30, 2009, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated Fair</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gains</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Fixed income securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">193.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">193.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Government-sponsored enterprise obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">275.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">276.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign government debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">47.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">316.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">317.7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">833.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">835.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Publicly-traded equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">8.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">841.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">844.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reported as:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Short-term investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">423.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">423.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">418.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">420.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">841.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">844.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated Fair</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gains</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Due within one year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">414.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">415.0</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Due between one and five years
</div></td>
<td> </td>
<td> </td>
<td align="right">418.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">420.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total fixed income securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">833.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">835.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Publicly-traded equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">8.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">841.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">844.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, the Company had approximately 32 investments that were in an unrealized
loss position. As of December 31, 2008, the Company had approximately 26 investments that were in
an unrealized loss position. The gross unrealized losses related to these investments were due to
changes in interest rates. The contractual terms of these investments do not permit the issuer to
settle the securities at a price less than the amortized cost of the investment. Given that the
Company has the ability and intent to hold each of these investments until a recovery of the fair
values, which may be maturity, the Company did not consider these investments to be
other-than-temporarily impaired as of June 30, 2009, and December 31, 2008. The Company reviews its
investments to identify and evaluate investments that have an indication of possible impairment.
The Company aggregated its investments by category and length of time the securities have been in a
continuous unrealized loss position.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the Company’s investments in an unrealized loss position as of June
30, 2009, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Less than 12 Months</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>12 Months or Greater</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Loss</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Loss</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Loss</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">124.8</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">124.8</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes unrealized gains and losses related to our investments
designated as trading or available-for-sale, as of December 31, 2008, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Amortized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unrealized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Estimated Fair</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gains</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Losses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Fixed income securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">86.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">86.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Government-sponsored enterprise obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">70.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">71.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">110.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.4</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">110.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">267.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">268.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Publicly-traded equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">272.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">274.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reported as:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Short-term investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">172.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">172.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Long-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">100.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">101.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">272.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">274.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Minority Equity Investments</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s minority equity investments in privately-held companies are carried at cost as the
Company does not have a controlling interest and does not have the ability to exercise significant
influence over these companies. The Company adjusts its minority equity investments for any
impairment if the fair value exceeds the carrying value of the respective assets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, and December 31, 2008, the carrying values of the Company’s minority equity
investments in privately-held companies of $11.1 million and $14.2 million, respectively, were
included in other long-term assets in the condensed consolidated balance sheets. Due to events and
circumstances that significantly affected the fair value of two of its minority equity investments,
which are normally carried at cost, the Company measured the fair value of these minority equity
investments using an analysis of the financial condition and near-term prospects of the investees,
including recent financing activities and their capital structure. As a result, during the three
and six months ended June 30, 2009, the Company recognized a loss of $1.6 million and $3.3 million,
respectively, due to the impairment of its minority equity investments in privately-held companies
that the Company judged to be other than temporary. The Company invested $2.2 million and $2.0
million in privately-held companies during the six months ended June 30, 2009, and 2008,
respectively. In addition, during the six months ended June 30, 2009, the Company had a minority
equity investment of $2.0 million in a privately-held company that was acquired by a
publicly-traded company.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 5 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 5. Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">SFAS 157 defines fair value 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.
SFAS 157 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Fair Value Hierarchy</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company determines the fair values of its financial instruments based on the fair value
hierarchy established in
SFAS 157, which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. 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:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or
liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Level 3 — Inputs are unobservable inputs based on the Company’s assumptions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Assets and Liabilities Measured at Fair Value on a Recurring Basis</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following tables provide the assets and liabilities, if any, measured at fair value on a
recurring basis (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at June 30, 2009, Using</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Active Markets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unobservable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>For Identical</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets measured at fair value:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">37.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">227.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">265.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Government sponsored enterprise obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">271.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">300.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign government debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">63.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">63.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Commercial paper
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">165.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">165.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">940.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">940.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Publicly-traded securities
</div></td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative asset
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,258.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">771.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,030.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at December 31, 2008, Using</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Active Markets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unobservable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>For Identical</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets measured at fair value:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">26.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">202.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">228.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Government sponsored enterprise obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">71.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">94.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">166.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">110.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">110.3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Commercial paper
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">90.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">90.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">1,281.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,281.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Publicly-traded securities
</div></td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative asset
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,384.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">500.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,885.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Assets measured at fair value on a recurring basis were presented on the Company’s condensed
consolidated balance sheets as follows (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at June 30, 2009, Using</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Active Markets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unobservable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>For Identical</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reported as:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash equivalents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">900.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">242.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,142.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Short-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">185.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">238.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">423.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Long-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">132.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">288.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">420.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Prepaid expenses and other assets
</div></td>
<td> </td>
<td> </td>
<td align="right">40.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">43.7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,258.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">771.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,030.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at December 31, 2008, Using</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Active Markets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unobservable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>For Identical</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reported as:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash equivalents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,281.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">327.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,608.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Short-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">57.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">115.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">172.9</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Long-term investments
</div></td>
<td> </td>
<td> </td>
<td align="right">46.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">101.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Prepaid expenses and other current assets
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,384.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">500.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,885.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the Company’s assets and liabilities, if any, that were measured at
fair value on a nonrecurring basis and the impairment charges recorded to loss on minority equity
investments (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="22" style="border-bottom: 0px solid #000000"><b>Fair Value Measurements Using</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Impairment</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Impairment</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Charges for</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Charges for</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>the Three</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>the Six</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Active Markets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Unobservable</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Months</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Months</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair Value as of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>For Identical</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>Description:</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Inputs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 1)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 2)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Level 3)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Minority equity
investments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total measured
at fair value
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the Company’s Level 3 asset activities during the three and six
months ended June 30, 2009, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Minority Equity Investments</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Three Months</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Six Months</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>Description:</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>Ended June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginning balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Transfers in to Level 3
</div></td>
<td> </td>
<td> </td>
<td align="right">2.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total loss recognized in statements of operations
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Due to events and circumstances that significantly affected the fair value of two of its minority
equity investments, which are normally carried at cost, the Company measured the fair value of
these minority equity investments using an analysis of the financial condition and near-term
prospects of the investees, including recent financing activities and their capital structure. As a
result, the Company recognized an impairment loss of $1.6 million and $3.3 million during the three
and six months ended June 30, 2009, respectively, and classified the investments as a Level 3 asset
due to the absence of quoted market prices and inherent lack of liquidity.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 6 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 6. Goodwill and Purchased Intangible Assets</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Goodwill</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents goodwill by segment as of June 30, 2009, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Segments</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Infrastructure
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,500.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Service Layer Technologies
</div></td>
<td> </td>
<td> </td>
<td align="right">2,158.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,658.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">There were no changes to goodwill during the three and six months ended June 30, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Purchased Intangible Assets</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the Company’s purchased intangible assets with definite lives (in
millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gross</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amortization</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Net</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>As of June 30, 2009:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Technologies and patents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">380.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(373.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">7.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">68.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(57.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">11.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">448.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(430.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">18.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>As of December 31, 2008:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Technologies and patents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">379.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(365.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">14.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">68.9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(54.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">14.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">448.5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(419.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">28.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Amortization of purchased intangible assets of $4.9 million and $9.4 million were included in
operating expenses and cost of product revenues for the three months ended June 30, 2009, and 2008,
respectively, and $10.6 million and $30.9 million were included in operating expenses and cost of
product revenues for the six months ended June 30, 2009, and 2008, respectively. In addition,
during the six months ended June 30, 2008, the Company recorded an
impairment charge of $5.0
million, included in its amortization of purchased intangible assets, due to the phase out of its
DX products. There was no impairment charge with respect to the purchased intangible assets in the
three and six months ended June 30, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The estimated future amortization expense of purchased intangible assets with definite lives for
future periods is as follows (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Years Ending December 31,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2009 (remaining six months)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2010
</div></td>
<td> </td>
<td> </td>
<td align="right">4.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2011
</div></td>
<td> </td>
<td> </td>
<td align="right">2.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2012
</div></td>
<td> </td>
<td> </td>
<td align="right">1.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2013
</div></td>
<td> </td>
<td> </td>
<td align="right">1.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Thereafter
</div></td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">18.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 7 - jnpr:OtherFinancialInformationTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 7. Other Financial Information</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Restricted Cash</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, and December 31, 2008, restricted cash was $44.7 million 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 Company’s India employees who have provided five or more years of continuous
service, and the Directors & Officers (“D&O”) indemnification trust.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Warranties</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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
Company’s condensed consolidated balance sheets. Changes in the Company’s warranty reserve were as
follows (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginning balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">37.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Provisions made during the period, net
</div></td>
<td> </td>
<td> </td>
<td align="right">8.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Change in estimate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Actual costs incurred during the period
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">35.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Deferred Revenue</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Details of the Company’s deferred revenue were as follows (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>As of</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred product revenue:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Deferred gross product revenue
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">305.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">268.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Deferred cost of product revenue
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(128.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(110.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Deferred product revenue, net
</div></td>
<td> </td>
<td> </td>
<td align="right">177.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">158.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred service revenue
</div></td>
<td> </td>
<td> </td>
<td align="right">471.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">432.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">648.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">590.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reported as:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Current
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">496.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">459.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term
</div></td>
<td> </td>
<td> </td>
<td align="right">152.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">130.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">648.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">590.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Restructuring Liabilities</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the first half 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 a reduction of workforce and facilities. The Company recorded $7.5
million and $11.8 million in restructuring charges during the three and six months ended June 30,
2009, associated with the 2009 Restructuring Plan. The Company paid $0.7 million and $3.2 million
for severance related charges associated with the 2009 Restructuring Plan during the three and six
months ended June 30, 2009. During the three and six months ended June 30, 2008, the Company
incurred no restructuring charges and paid an immaterial amount associated with past restructuring
plans. As of June 30, 2009, the restructuring liability was $6.8 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Restructuring charges were based on the Company’s restructuring plans that were committed to by
management. Any changes in the estimates of executing the approved plans will be reflected in the
Company’s results of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Other Charges</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the three and six months ended June 30, 2008, the Company accrued $9.0 million as other charges
for the settlement of its derivative lawsuits. The Company did not record any amounts as other
charges in the three and six months ended June 30, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Interest and Other Income, Net</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Interest and other income, net, consist of the following (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest income and expense, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">31.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other income and expense, net
</div></td>
<td> </td>
<td> </td>
<td align="right">1.3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total interest and other income, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">30.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Interest income and expense, net, primarily includes interest income from the Company’s cash, cash
equivalents, and investments as well as interest expense from customer financing arrangements.
Other income and expense, net, primarily includes foreign exchange gains and losses and other
miscellaneous expenses such as bank fees.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 8 - us-gaap:DebtDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 8. Financing Arrangements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 30 days 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the receivable financing arrangements for the sale of receivables, the Company sold net
receivables of $81.1 million and $108.2 million during the three months ended June 30, 2009, and
2008, respectively, and $172.3 million and $167.0 million during the six months ended June 30,
2009, and 2008, respectively. During the three months ended June 30, 2009, and 2008, the Company
received cash proceeds of $80.2 million and $77.8 million, respectively, and $175.7 million and
$132.1 million during the six months ended June 30, 2009, and 2008, respectively, from the
financing provider. The amount owed by the financing provider recorded as accounts receivable on
the Company’s condensed consolidated balance sheets as of June 30, 2009, and December 31, 2008, was
$66.7 million and $73.9 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The portion of the receivable financed that has not been recognized as revenue is accounted for as
a financing pursuant to FASB Emerging Issues Task Force Issue 88-18, <i>Sales of Future Revenues. </i>As
of June 30, 2009, and December 31, 2008, the estimated amounts of cash received from the financing
provider that has not been recognized as revenue were $27.9 million and $33.0 million,
respectively.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 9 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 9. Derivative Instruments</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company accounts for derivative instruments under SFAS No. 133, <i>Accounting for Derivative
Instruments and Hedging Activities </i>(“SFAS 133”)<i>. </i>The Company uses derivatives partially to offset
its market exposure to fluctuations in certain foreign currencies. The Company does not enter into
derivatives for speculative or trading purposes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Cash Flow Hedges</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 Company’s planned cost of services and
operating expenses denominated in foreign currencies. These derivatives are designated as cash flow
hedges under SFAS 133. Execution of these cash flow hedge derivatives typically occurs every month
with maturities of less than one year. The effective portion of the derivative’s 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 six months
ended June 30, 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 12 months.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Non-Designated Hedges</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 under SFAS
133. 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the total fair value of the Company’s derivative instruments as of
June 30, 2009, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Asset Derivatives</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Liability Derivatives</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives designated as
hedging instruments under SFAS 133:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange forward contracts
</div></td>
<td> </td>
<td colspan="2" align="center" nowrap="nowrap">Other current assets</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.2</td>
<td> </td>
<td> </td>
<td colspan="2" align="center" nowrap="nowrap">Other current liabilities</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total derivatives designated as
hedging instruments under SFAS 133
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.2</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has no non-designated derivatives under SFAS 133 as of June 30, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following represents the Company’s top three outstanding derivative positions by currency as of
June 30, 2009, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Buy</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Buy</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Buy</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts:
</div></td>
<td> </td>
<td colspan="3" align="center">EUR</td>
<td> </td>
<td colspan="3" align="center">GBP</td>
<td> </td>
<td colspan="3" align="center">INR</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Notional amount of foreign currency
</div></td>
<td> </td>
<td> </td>
<td align="right">32.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,427.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S dollar equivalent
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">44.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">18.6</td>
<td> </td>
<td> </td>
<td align="right"></td>
<td align="right">$28.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average maturity
</div></td>
<td> </td>
<td colspan="3" align="center">2 months</td>
<td> </td>
<td colspan="3" align="center">2 months</td>
<td> </td>
<td colspan="3" align="center">2 months</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The effective portion of the Company’s derivative instruments on its condensed consolidated
statements of operations during the three and six months ended June 30, 2009, was as follows (in
millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="8" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30, 2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="8" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30, 2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Location of</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Location of</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Gain</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gain </b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Loss</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Loss</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Reclassified</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Reclassified</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Reclassified</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Reclassified</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>from</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>from </b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>from </b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>from</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Accumulated</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Accumulated</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gain </b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Loss</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Other</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Comprehensive</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Comprehensive</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Recognized in</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Comprehensive</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Comprehensive</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated </b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Loss to</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Loss to</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Loss to</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Loss to</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Statements of</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Statements of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Other</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Statements of</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Statements of</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Comprehensive</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Operations</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Operations</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Comprehensive</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Operations</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Operations</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Loss (Effective</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>(Effective</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Effective</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Loss (Effective</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>(Effective</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>(Effective</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Portions)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Portions)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Portion)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Foreign exchange
forward contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5.1</td>
<td> </td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Operating expense</td>
<td> </td>
<td align="left">$</td>
<td align="right">1.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Operating expense</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1.7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5.1</td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.0</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1.7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The ineffective portion of the Company’s derivative instruments on its condensed consolidated
statements of operations was immaterial during the three and six months ended June 30, 2009.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Gains on the Company’s non-designated derivative instruments recognized in its condensed
consolidated statements of operations during the three and six months ended June 30, 2009, was as
follows (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Three Months</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Six Months</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Ended June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Ended June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location of Gain in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain Recognized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gain Recognized</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Statements of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">in Statements of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">in Statements of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Operations</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Operations</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Operations</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives not designated
as hedging instruments under SFAS
133:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange forward contracts
</div></td>
<td> </td>
<td colspan="3" align="center" NOWRAP>Other income, net</td>
<td> </td>
<td align="left">$</td>
<td align="right">3.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.2</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 10 - us-gaap:StockholdersEquityNoteDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 10. Stockholders’ Equity</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Stock Repurchase Activities</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In March 2008, the Company’s Board of Directors (the “Board”) approved a stock repurchase program
(the “2008 Stock Repurchase Program”), which authorized the Company to purchase up to $1.0 billion
of its common stock. Under this program, the Company repurchased approximately 2.2 million shares
of its common stock, at an average price of $22.73 per share for a total purchase price of $49.5
million in the three months ended June 30, 2009, and approximately 9.7 million shares of its common
stock at an average price of $17.52 per share for a total purchase price of $169.2 million in the
six months ended June 30, 2009. As of June 30, 2009, the Company has repurchased and retired
approximately 19.4 million shares of common stock under the 2008 Stock Repurchase Program and the
program had remaining authorized funds of $602.9 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">All shares of common stock purchased under the 2008 Stock Repurchase Program have been retired.
Future share repurchases under the Company’s 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Comprehensive Income</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Comprehensive income consists of the following (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">14.8</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">120.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">230.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Change in net unrealized
gains (losses) on
investments, net of tax of
nil
</div></td>
<td> </td>
<td> </td>
<td align="right">6.2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Change in foreign currency
translation adjustment, net
of tax of nil
</div></td>
<td> </td>
<td> </td>
<td align="right">11.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total comprehensive income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">32.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">114.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">228.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Accumulated Deficit</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the activity in the Company’s accumulated deficit account (in
millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Six Months</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, December 31, 2008
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,905.8</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Retirement of common stock
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(168.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td> </td>
<td align="right">10.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, June 30, 2009
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3,064.4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 11 - jnpr:EmployeeBenefitPlansTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 11. Employee Benefit Plans</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Stock Option Plans</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>2006 Equity Incentive Plan</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On May 18, 2006, the Company’s stockholders adopted the Company’s 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
Company’s non-employee members of the Board.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 Company’s
Amended and Restated 1996 Stock Plan (the “1996 Plan”) and the Company’s 2000 Nonstatutory Stock
Option Plan (the “2000 Plan”) that expire unexercised after May 18, 2006, up to a maximum of
75,000,000 additional shares of common stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 Company’s annual stockholder meetings: (i) each non-employee director who was a
non-employee director on the date of the prior year’s 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 year’s
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 Company’s 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 July 1, 2008
— December 31, 2008 for Annual Awards granted in May 2009). The First Option vests monthly over
approximately three years from the grant date subject to the non-employee
director’s continuous
service on the Board. The Annual Award shall vest approximately one year from the grant date
subject to the non-employee director’s continuous service on the Board. Under the 2006 Plan,
options granted to non-employee directors have a maximum term of seven years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>2000 Nonstatutory Stock Option Plan</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2000, the Board adopted the 2000 Plan. The 2000 Plan provided for the granting of
nonstatutory stock options to employees, directors and consultants. Options granted under the 2000
Plan generally become exercisable over a four-year period beginning on the date of grant and have a
maximum term of ten years. The Company had authorized 90,901,437 shares of common stock for
issuance under the 2000 Plan. Effective May 18, 2006, additional equity awards under the 2000 Plan
were discontinued and new equity awards are being granted under the 2006 Plan. Remaining authorized
shares under the 2000 Plan that were not subject to outstanding awards as of May 18, 2006, were
canceled on May 18, 2006. The 2000 Plan will remain in effect as to outstanding equity awards
granted under the plan prior to May 18, 2006.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Amended and Restated 1996 Stock Plan</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The 1996 Plan provided for the granting of incentive stock options to employees and nonstatutory
stock options to employees, directors, and consultants. On November 3, 2005, the Board adopted an
amendment to the 1996 Plan to add the ability to issue RSUs under the 1996 Plan. Options granted
under the 1996 Plan generally become exercisable over a four-year period beginning on the date of
grant and have a maximum term of ten years. The Company had authorized 164,623,039 shares of common
stock for issuance under the 1996 Plan. Effective May 18, 2006, additional equity awards under the
1996 Plan were discontinued and new equity awards are being granted under the 2006 Plan. Remaining
authorized shares under the 1996 Plan that were not subject to outstanding awards as of May 18,
2006 were canceled on May 18, 2006. The 1996 Plan will remain in effect as to outstanding equity
awards granted under the plan prior to May 18, 2006.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Plans Assumed Upon Acquisition</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In connection with past acquisitions, the Company assumed options and restricted stock under the
stock plans of the acquired companies. The Company exchanged those options and restricted stock for
Juniper Networks’ options and restricted stock and, in the case of the options, authorized the
appropriate number of shares of common stock for issuance pursuant to those options. As of June 30,
2009, there were approximately 2.4 million common shares subject to outstanding awards under plans
assumed through past acquisitions. There was no restricted stock subject to repurchase as of June
30, 2009, and December 31, 2008. There were no restricted stock repurchases during the three and
six months ended June 30, 2009, and 2008.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Stock Option Activities</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the Company’s stock option activity and related information as of and for the six
months ended June 30, 2009, is set forth in the following table:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Remaining</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Number of</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Exercise</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Contractual</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Aggregate</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Price</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Term</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Intrinsic Value</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In dollars)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In years)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In thousands)</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">73,637</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.24</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td> </td>
<td align="right">7,593</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.43</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Options canceled
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1,178</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">21.94</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Options exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2,867</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">11.31</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Options expired
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(941</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">22.69</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">76,244</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.28</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.7</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">345,253</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">As of June 30, 2009:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested or expected-to-vest options
</div></td>
<td> </td>
<td> </td>
<td align="right">67,624</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.36</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.6</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">308,332</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercisable options
</div></td>
<td> </td>
<td> </td>
<td align="right">48,578</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21.76</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">222,599</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the three and six months ended June 30, 2009, the Company granted stock options covering
approximately 0.5 million and 7.6 million shares of common stock, respectively, under the 2006
Plan. Total fair value of options vested for the three and six months ended June 30, 2009, was
$18.6 million and $43.6 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Aggregate intrinsic value represents the difference between the Company’s closing stock price on
the last trading day of the fiscal period, which was $23.60 as of June 30, 2009, 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 Company’s common stock
on the date of the exercise and the exercise price of each option, was $20.3 million and $27.2
million for the three and six months ended June 30, 2009, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Restricted Stock Units and Performance Share Awards Activities</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">RSUs generally vest over a period of three to five years from the date of grant and performance
share awards generally vest from 2009 through 2012 provided that certain annual performance targets
and other vesting criteria are met. Until vested, RSUs and performance share awards do not have the
voting rights of common stock and the shares underlying the awards are not considered issued and
outstanding. The following table summarizes information about the Company’s RSUs and performance
share awards as of and for the six months ended June 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Outstanding RSUs and Performance Share Awards</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Remaining</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Number of</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Grant-Date</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Contractual</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Aggregate</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Term</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Intrinsic Value</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In thousands)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In dollars)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In years)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>(In thousands)</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">6,692</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">24.59</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">RSUs and performance share awards granted
</div></td>
<td> </td>
<td> </td>
<td align="right">3,607</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.30</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">RSUs and performance share awards vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1,127</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">20.33</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">RSUs and performance share awards canceled
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(488</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">23.79</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">8,684</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.34</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">204,935</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">As of June 30, 2009:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested and expected-to-vest RSUs and
performance share awards
</div></td>
<td> </td>
<td> </td>
<td align="right">5,651</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.41</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.8</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">133,369</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the three months ended June 30, 2009, the Company granted RSUs and performance share awards
covering approximately 0.1 million and 0.1 million shares of common stock, respectively, under the
2006 Plan. In the six months ended June 30, 2009, the Company granted RSUs and performance share
awards covering approximately 1.4 million and 2.2 million shares of common stock, respectively,
under the 2006 Plan. During the three and six months ended June 30, 2009, RSUs and performance
share awards covering approximately 0.1 million and 1.1 million shares of common stock,
respectively, vested.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Employee Stock Purchase Plan</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In April 1999, the Board of Directors approved the adoption of the Juniper Networks 1999 Employee
Stock Purchase Plan (the “1999 Purchase Plan”). The 1999 Purchase Plan permits eligible employees
to acquire shares of the Company’s common stock through periodic payroll deductions of up to 10% of
base compensation. Each employee may purchase no more than 6,000 shares in any twelve-month period,
and in no event may an employee purchase more than $25,000 worth of stock, determined at the fair
market value of the shares at the time such option is granted, in one calendar year. The 1999
Purchase Plan is implemented in a series of offering periods, each six months in duration, or a
shorter period as determined by the Board. The price at which the common stock may be purchased is
85% of the lesser of the fair market value of the Company’s common stock on the first or last
trading day of the applicable offering period. Employees purchased approximately 1.6 million shares
of common stock through the 1999 Purchase Plan at an average price of $12.04 per share in the six
months ended June 30, 2009. Employees purchased approximately 0.7 million shares of common stock
through the 1999 Purchase Plan at an average price of $23.08 per share in the six months ended June
30, 2008. Effective February 1, 2009, immediately following the conclusion of the offering period
ended January 30, 2009, the 1999 Purchase Plan was discontinued, and no shares remained available
for future issuance under such plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2008, the Company’s stockholders approved the adoption of the Juniper Networks 2008 Employee
Stock Purchase Plan (the “2008 Purchase Plan”). The 2008 Purchase Plan replaced the 1999 Purchase
Plan, which
terminated immediately following the conclusion of the offering period ended January
30, 2009. The Board has reserved an aggregate of 12,000,000 shares of the Company’s common stock
for issuance under the 2008 Purchase Plan. The 2008 Purchase Plan is generally similar to the 1999
Purchase Plan, except that under the 2008 Purchase Plan, the Company’s stockholders must approve
any increases to the number of shares reserved for issuance. The first offering period of the 2008
Purchase Plan commenced on the first trading day after February 1, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Shares Available for Grant</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the total number of shares available for grant under the 2006 Plan as
of June 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Number of</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Shares (in</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">thousands)</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">28,589</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">RSUs and performance share awards granted (1)
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(7,575</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(7,593</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">RSUs canceled (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">965</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Options canceled (2)
</div></td>
<td> </td>
<td> </td>
<td align="right">1,178</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Options expired (2)
</div></td>
<td> </td>
<td> </td>
<td align="right">930</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at June 30, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">16,494</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>RSUs and performance share awards 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 2006
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.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Canceled or expired options under the 1996 Plan and the 2000 Plan and the stock plans of the
acquired companies are no longer available for future grant under such plans.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Common Stock Reserved for Future Issuance</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, the Company had reserved an aggregate of approximately 113.4 million shares of
common stock for future issuance under its stock option plans and the 2008 Purchase Plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Stock-Based Compensation Expense</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">SFAS No. 123(R), <i>Share-Based Payment </i>(“SFAS 123(R)”) requires the use of a valuation technique,
such as an option-pricing model, to calculate the fair value of stock option awards and common
shares issues under the 1999 and 2008 Purchase Plans. The Company has elected to use the
Black-Scholes-Merton (“BSM”) option-pricing model, which incorporates various assumptions including
volatility, risk-free interest rate, expected life, and dividend yield. The expected volatility is
based on the implied volatility of market-traded options on the Company’s common stock, adjusted
for other relevant factors including historical volatility of the Company’s common stock over the
most recent period commensurate with the estimated expected life of the Company’s stock options.
The expected life of an award is based on historical experience and on the terms and conditions of
the stock awards granted to employees, as well as the potential effect from options that had not
been exercised at the time.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, the government of India implemented a new fringe benefit tax that applies to equity awards
granted to India taxpayers. This fringe benefit tax is payable by the issuer of the equity awards;
however, the law allows an issuer to recover from individual award holders the fringe benefit taxes
the issuer paid on their applicable equity awards. Beginning in January 2008, the Company amended
its equity award agreements for future grants made to its employees in India to provide for the
Company to be reimbursed for fringe benefit taxes paid in relation to
applicable equity awards. The
Company has elected to use a BSM option-pricing model that incorporates a Monte Carlo simulation to
calculate the fair value of stock-based awards issued under the amended equity award agreements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The assumptions used and the resulting estimates of fair value for employee stock options during
the three and six months ended June 30, 2009, and 2008, were:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee Stock Options:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Volatility factor
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">49% - 52</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">43% - 46</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">49% - 58</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">43% - 48</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">0.5% - 2.9</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">1.7% - 4.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">0.4% -2.9</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">1.7% - 4.4</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected life (years)
</div></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">4.3 - 5.8</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">3.6 - 5.7</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">4.3 - 5.8</td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">3.6 - 5.7</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Dividend yield
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Fair value per share
</div></td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">7.54 - $10.49</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">8.32 - $10.60</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">6.02 - $10.49</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">8.32 - $10.88</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The assumptions used and the resulting estimates of weighted average fair value per share under the
employee stock purchase plan during the three and six months ended June 30, 2009, and 2008, were:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee Stock Purchase Plan:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Volatility factor
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">58</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">48</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">58</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">48</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.4</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.2</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.4</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.2</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Expected life (years)
</div></td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Dividend yield
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Weighted-average fair value per share
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">4.51</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">7.83</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4.51</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">7.83</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company expenses the cost of the RSUs, which is determined to be the fair market value of the
shares of the Company’s common stock at the date of grant, ratably over the period during which the
restrictions lapse. In addition, the Company estimates stock compensation expense for its
performance share awards based on the vesting criteria and only recognized expense for the portions
of such awards for which annual targets have been set. The weighted average fair value per share of
RSUs and performance share awards granted during these periods were:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted-average fair value per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">RSUs
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">22.66</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">24.79</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">15.56</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">25.24</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Performance share awards
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">18.42</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">24.48</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">15.12</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">25.10</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s stock-based compensation expense associated with stock options, employee stock
purchases, RSUs, and performance share awards is recorded in the following cost and expense
categories for the three and six months ended June 30, 2009, and 2008, (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of revenues — Product
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of revenues — Service
</div></td>
<td> </td>
<td> </td>
<td align="right">2.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">15.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22.2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Sales and marketing
</div></td>
<td> </td>
<td> </td>
<td align="right">10.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.8</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">General and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">33.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">50.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the three and six months ended June 30, 2009, the Company recorded stock-based compensation
expense related to employee stock options in the amount of $20.7 million and $39.5 million,
respectively, and during the three and six months ended June 30, 2008, the Company recorded
stock-based compensation expense related to employee stock options in the amount of $15.1 million
and $27.4 million, respectively. As of June 30, 2009, approximately $151.3 million of unrecognized
compensation cost, adjusted for estimated forfeitures, related to non-vested stock options will be
recognized over a weighted average period of approximately 2.8 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the three and six months ended June 30, 2009, the Company recorded stock-based compensation
expense related to its employee stock purchase plans in the amount of $3.6 million and $7.6
million, respectively, and during the three and six months ended June 30, 2008, the Company
recorded stock-based compensation expense related to its employee stock purchase plans in the
amount of $3.1 million and $6.6 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognized stock compensation expense of $9.2 million and $20.0 million for the three
and six months ended June 30, 2009, and $9.1 million $16.1 million for the three and six months
ended June 30, 2008, respectively, in connection with RSUs and performance share awards. As of June
30, 2009, approximately $66.2 million of unrecognized compensation cost, adjusted for estimated
forfeitures, related to non-vested RSUs and non-vested performance share awards will be recognized
over a weighted-average period of approximately 2.6 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>401(k) Plan</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Juniper Networks maintains a savings and retirement plan qualified under Section 401(k) of the
Internal Revenue Code of 1986, as amended. Employees meeting the eligibility requirement, as
defined, may contribute up to the statutory limits of the year. The Company has matched employee
contributions since January 1, 2001. Effective January 1, 2007, the Company matches 25% of all
eligible employee contributions up to an annual maximum of $3,750. All matching contributions vest
immediately. In the three and six months ended June 30, 2009, the Company’s matching contributions
to the plan totaled $3.2 million and $7.0 million, respectively. In the three and six months ended
June 30, 2008, the Company’s matching contributions to the plan totaled $3.1 million and $6.5
million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Deferred Compensation Plan</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2008, the Company formed a non-qualified deferred compensation plan (“NQDC”) plan, which 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. The plan assets are included within investments and
offsetting obligations are included within accrued compensation on the condensed consolidated
balance sheet. The investments are considered trading
securities and are reported at fair value. The realized and unrealized holding gains and losses
related to these investments, as well as the offsetting compensation expense are recorded in the
consolidated results of operations. The deferred compensation liability under this plan was
approximately $3.3 million and $1.0 million as of June 30, 2009, and December 31, 2008,
respectively.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 12 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 12. Segments</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s chief operating decision maker (“CODM”) allocates resources and assesses performance
based on financial information by the Company’s business groups. The Company’s 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 six months ended
June 30, 2009, and 2008, the CODM did not allocate certain miscellaneous expenses to its segments
even though such expenses were included in the Company’s management operating income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes financial information for each segment used by the CODM (in
millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net revenues:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Infrastructure:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Product
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">469.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">575.9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">924.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,104.6</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Service
</div></td>
<td> </td>
<td> </td>
<td align="right">114.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">96.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">226.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">189.7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Total Infrastructure revenues
</div></td>
<td> </td>
<td> </td>
<td align="right">584.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">672.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,151.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,294.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Service Layer Technologies:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Product
</div></td>
<td> </td>
<td> </td>
<td align="right">137.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">148.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">270.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">293.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Service
</div></td>
<td> </td>
<td> </td>
<td align="right">65.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">58.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">128.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">114.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Total Service Layer Technologies revenues
</div></td>
<td> </td>
<td> </td>
<td align="right">202.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">206.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">399.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">407.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total net revenues
</div></td>
<td> </td>
<td> </td>
<td align="right">786.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">879.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,550.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,701.9</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Operating income:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Infrastructure
</div></td>
<td> </td>
<td> </td>
<td align="right">119.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">195.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">231.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">386.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Service Layer Technologies
</div></td>
<td> </td>
<td> </td>
<td align="right">22.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18.5</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total segment operating income
</div></td>
<td> </td>
<td> </td>
<td align="right">142.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">207.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">267.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">405.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other corporate (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4.7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total management operating income
</div></td>
<td> </td>
<td> </td>
<td align="right">142.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">207.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">267.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">400.4</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Amortization of purchased intangible assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(35.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Stock-based compensation expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(33.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(67.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(50.1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Stock-based payroll tax expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Restructuring charges
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other charges
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9.0</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total operating income
</div></td>
<td> </td>
<td> </td>
<td align="right">95.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">160.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">176.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">303.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest and other income, net
</div></td>
<td> </td>
<td> </td>
<td align="right">2.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Loss on minority equity investments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.5</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income before income taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">97.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">172.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">178.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">332.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Other corporate charges include severance and related costs
associated with workforce-rebalancing activities, which are not
included in business segment results.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Depreciation expense allocated to the Infrastructure segment was $22.9 million and $45.0
million in the three and six months ended June 30, 2009, respectively, and $21.4 million and $41.6
million in the three and six months ended June 30, 2008, respectively. The depreciation expense
allocated to the SLT segment was $10.0 million and $19.7 million in the three and six months ended
June 30, 2009, respectively, and $9.6 million and $18.3 million in the three and six months ended
June 30, 2008, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company attributes revenues to geographic region based on the customer’s ship-to location. The
following table shows net revenues by geographic region (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Americas:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">350.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">324.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">665.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">714.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">40.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">85.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">92.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total Americas
</div></td>
<td> </td>
<td> </td>
<td align="right">390.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">388.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">750.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">806.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe, Middle East and Africa
</div></td>
<td> </td>
<td> </td>
<td align="right">232.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">285.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">455.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">525.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia Pacific
</div></td>
<td> </td>
<td> </td>
<td align="right">163.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">204.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">344.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">369.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">786.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">879.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,550.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,701.9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the three and six months ended June 30, 2009, no single customer accounted for greater than
10.0% or more of the Company’s net revenues. Nokia — Siemens Networks B.V. (“NSN”) accounted for
10.4% of the Company’s net revenues for the three months ended June 30, 2008, and no single
customer accounted for 10.0% or more of the Company’s net revenues for the six months ended June
30, 2008.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company tracks assets by physical location. The majority of the Company’s assets, including
property and equipment, were attributable to its U.S. operations as of June 30, 2009, and December
31, 2008. Although management reviews asset information on a corporate level and allocates
depreciation expense by segment, the CODM does not review asset information on a segment basis.
</div>
</div>
</body>
</html>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<html>
<head></head>
<body>
<!-- Begin Block Tagged Note 13 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 13. Income Taxes</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recorded tax provisions of $82.2 million and $51.7 million for the three months ended
June 30, 2009, and 2008, or effective tax rates of 85% and 30%, respectively. The Company recorded
tax provisions of $168.1 million and $101.7 million for the six months ended June 30, 2009, and
2008, or effective tax rates of 94% and 31%, respectively. The effective tax rate for the three
months ended June 30, 2009, differs from the federal statutory rate of 35% and the rate for the
same period in 2008 primarily due to a $52.1 million income tax charge resulting from a change in
the Company’s estimate of unrecognized tax benefits related to share-based compensation. This
change in estimate was a result of the decision by the U.S. Court of Appeals for the Ninth Circuit
(“the Court”) in <i>Xilinx Inc. v. Commissioner </i>discussed below. The effective tax rate for the six
months ended June 30, 2009, differs from the federal statutory rate of 35% and the rate for the
same period in 2008, primarily due to two income tax charges: the $52.1 million related to the
Court’s decision; and $61.8 million recorded in the three months ended March 31, 2009, which
resulted from changes in California income tax laws that were enacted during the Company’s first
quarter of 2009. The effective rate impact from these charges was partially offset by the federal Research
and Development (“R&D”) credit and the benefit of earnings in foreign jurisdictions, which are
subject to lower tax rates during the three and six months ended June 30, 2009. The effective tax
rate for the three and six months ended June 30, 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On May 27, 2009, the Court’s decision in <i>Xilinx v. Commissioner </i>overturned a 2005 U.S. Tax Court
ruling. While Juniper Networks, Inc. was not a named party to the case, the Court’s decision
impacts a tax position of the
Company for certain years prior to fiscal 2004. The Court’s decision
changes the tax treatment for determining the allocable transfer price of share-based compensation
expenses related to a company’s intangible development costs as the Court held that related parties
must share stock option costs. In light of the Court’s decision, the Company changed its estimate
of the tax benefit recognized under its prior tax position and has determined that it is not more
likely than not that such benefit will be sustained. The case is subject to further appeal and any
changes in the Court’s findings could impact the Company’s gross unrecognized tax benefits.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The gross unrecognized tax benefits increased by approximately $74.1 million for the six months
ended June 30, 2009, of which $24.5 million, if recognized, would affect the effective tax
rate. Interest and penalties accrued for the six months ended June 30, 2009, were approximately
$8.4 million. Approximately $75.9 million of the increase, including interest and penalties,
occurred during the three months ended June 30, 2009, and is related to the Court’s decision
referenced above.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is currently under examination by the Internal Revenue Service (“IRS”) for the 2004 tax
year, the Indian tax authorities for the 2004 tax year, and has received an inquiry from the Hong
Kong tax authorities for the 2002 through 2006 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 examination by taxing authorities in any other major
jurisdictions in which it files income tax returns as of June 30, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2008, as part of the on-going 2004 IRS audit, the Company received a proposed adjustment related
to the Company’s business credit carry-forwards, which if agreed, would reduce its business credit
carry-forwards. As part of this same audit, in July 2009 the Company received a proposed adjustment
related to the license of acquired intangibles under an intercompany R&D cost sharing arrangement.
In March 2009, the Company received an assessment from the Hong Kong tax authorities specifically
related to an inquiry of the 2002 tax year. In December 2008, the Company received a proposed
adjustment from the Indian tax authorities related to the 2004 tax year. The Company is pursuing
all available administrative procedures relative to these 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 financial condition
and results of operations. For more information, please see Note 14 — <i>Commitments and
Contingencies </i>under the heading “IRS Notices of Proposed Adjustments.”
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not expect complete resolution of any IRS, or other audits in significant foreign
or state jurisdictions within the next 12 months. However, it is reasonably possible that the
Company may reach agreement with certain issues and as a result, the amount of the liability for
unrecognized tax benefits may decrease by approximately $12.8 million within the next 12 months.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
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<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 14. Commitments and Contingencies</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Commitments</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the Company’s principal contractual obligations as of June 30, 2009,
(in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="20%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2012</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2013</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Thereafter</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Other</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
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<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Operating leases
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">195.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">26.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">51.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">15.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Sublease rental income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchase commitments
</div></td>
<td> </td>
<td> </td>
<td align="right">89.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">89.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Tax liabilities
</div></td>
<td> </td>
<td> </td>
<td align="right">161.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">161.1</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Other contractual obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">51.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">495.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">128.4</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">68.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">57.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">42.7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">15.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">161.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Operating Leases</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Juniper Networks leases its facilities under operating leases that expire at various times, the
longest of which expires in January 2017. Future minimum payments under the non-cancelable
operating leases, net of committed sublease income, totaled $194.1 million as of June 30, 2009.
Rent expense for the three months ended June 30, 2009, and 2008 was $14.3 million and $14.7
million, respectively, and $28.3 million and $28.9 million for the six months ended June 30, 2009,
and 2008, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Purchase Commitments</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 Company’s build forecasts. As of June 30, 2009, there were NCNR component
orders placed by the contract manufacturers with a value of $89.2 million. The contract
manufacturers use the components to build products based on the Company’s forecasts and on purchase
orders 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 Company’s 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 Company’s forecast or customer orders. As of June 30, 2009, the Company
had accrued $32.0 million based on its estimate of such charges.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Tax Liabilities</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, the Company had $161.1 million included in long-term liabilities in the
condensed consolidated balance sheet for unrecognized tax positions. At this time, the Company is
unable to make a reasonably reliable estimate of the timing of payments related to the additional
$161.1 million in liability due to uncertainties in the timing of tax audit outcomes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Other Contractual Obligations</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of June 30, 2009, other contractual obligations consisted primarily of an indemnity-related
escrow amount of $2.3 million, a five-year $36.4 million data center hosting agreement, a
three-year $22.7 million software subscription, and a joint development agreement with a
third-party for development of network-related technology, which requires quarterly payments of
$3.5 million through January 2010. The Company records the payment as research and development
expense in its condensed consolidated statements of operations until the technology under development has
reached technological feasibility. Pursuant to the joint development agreement, in exchange for
each party’s respective contributions to the development effort as well as the consideration
payable by the Company, each party will obtain a license to the technology that result from the
development for use in certain of their respective product lines. As of June 30, 2009, $23.1
million remained unpaid under the data center hosting agreement with the remaining commitment
expected to be paid through the end of April 2013 and $15.3 million remained unpaid under
the
software subscription agreement with the remaining commitment expected to be paid through the end
of January 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Guarantees</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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 infringe the
intellectual property rights of a third party. Other guarantees or indemnification arrangements
include guarantees of product and service performance, guarantees related to third-party customer
financing arrangements, and standby letters of credit for certain lease facilities. As of June 30,
2009, the Company had $34.2 million in guarantees and standby letters of credit and has recorded a liability of
$15.9 million related to a third-party customer financing guarantee. As of December 31, 2008, the Company had not recorded a liability
related to its guarantees and indemnification arrangements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Legal Proceedings</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is subject to legal claims and litigation arising in the ordinary course of business,
such as employment or intellectual property claims, including the matters described below. The
outcome of any such matters is currently not determinable. Although the Company does not expect
that any such legal claims or litigation will ultimately have a material adverse effect on its
consolidated financial condition or results of operations, an adverse result in one or more of such
matters could negatively affect the Company’s consolidated financial results in the period in which
they occur.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Federal Securities Class Action</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On July 14, 2006 and August 29, 2006, two purported class actions were filed in the Northern
District of California against the Company and certain of the Company’s current and former officers
and directors. On November 20, 2006, the Court consolidated the two actions as <i>In re Juniper
Networks, Inc. Securities Litigation, </i>No. C06-04327-JW, and appointed the New York City Pension
Funds as lead plaintiffs. The lead plaintiffs filed a Consolidated Class Action Complaint on
January 12, 2007, and filed an Amended Consolidated Class Action Complaint on April 9, 2007. The
Amended Consolidated Complaint alleges that the defendants violated federal securities laws by
manipulating stock option grant dates to coincide with low stock prices and issuing false and
misleading statements including, among others, incorrect financial statements due to the improper
accounting of stock option grants. The Amended Consolidated Complaint asserts claims for violations
of the Securities Act of 1933 and the Securities Exchange Act of 1934 on behalf of all persons who
purchased or otherwise acquired Juniper Networks’ publicly-
traded securities from July 12, 2001, through and including August 10, 2006. On June 7, 2007, the
defendants filed a motion to dismiss certain of the claims, and a hearing was held on September 10,
2007. On March 31, 2008, the Court issued an order granting in part and denying in part the
defendants’ motion to dismiss. The order dismissed with prejudice plaintiffs’ section 10(b) claim
to the extent it was based on challenged statements made before July 14, 2001. The order also
dismissed, with leave to amend, plaintiffs’ section 10(b) claim against Pradeep Sindhu. The order
upheld all of plaintiffs’ remaining claims. The plaintiffs did not amend their complaint. The
defendants filed their answer on June 23, 2008. On March 2, 2009, the plaintiffs filed a motion
seeking class certification for a modified plaintiff class of all persons who purchased or
otherwise acquired Juniper Networks’ publicly-traded securities from July 11, 2003, through August
10, 2006. The defendants filed their opposition to the motion for class certification on June 1,
2009. Plaintiffs’ reply in support of the motion for class certification is due on August 7, 2009.
</div>
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<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Calamore Proxy Statement Action</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On March 28, 2007, an action titled <i>Jeanne M. Calamore v. Juniper Networks, Inc., et al., </i>No.
C-07-1772-JW, was filed by Jeanne M. Calamore in the Northern District of California against the
Company and certain of the Company’s current and former officers and directors. The complaint
alleges that the proxy statement for the Company’s 2006 Annual Meeting of Stockholders contained
various false and misleading statements in that it failed to disclose stock option backdating
information. As a result, the plaintiff seeks preliminary and permanent injunctive relief with
respect to the Company’s 2006 Equity Incentive Plan, including seeking to invalidate the plan and
all equity awards granted and grantable thereunder. On May 21, 2007, the Company filed a motion to
dismiss and the plaintiff filed a motion for preliminary injunction. On July 19, 2007, the Court
issued an order denying the plaintiff’s motion for a preliminary injunction and dismissing the
complaint in its entirety with leave to amend. The plaintiff filed an amended complaint on August
27, 2007, and the defendants filed a motion to dismiss on October 9, 2007. On August 13, 2008, the
Court issued an order granting the defendants’ motion to dismiss with prejudice, and entered final
judgment in favor of defendants. On September 9, 2008, the plaintiff filed a Notice of Appeal in
the United States Court of Appeals for the Ninth Circuit. The plaintiff filed her opening appellate
brief on January 26, 2009, and defendants filed their answering brief on March 11, 2009. The
plaintiff filed her reply brief on April 24, 2009. No decision has been issued yet by the Court of
Appeals.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>IPO Allocation Case</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In December 2001, a class action complaint was filed in the United States District Court for the
Southern District of New York against the Goldman Sachs Group, Inc., Credit Suisse First Boston
Corporation, FleetBoston Robertson Stephens, Inc., Royal Bank of Canada (Dain Rauscher Wessels), SG
Cowen Securities Corporation, UBS Warburg LLC (Warburg Dillon Read LLC), Chase (Hambrecht & Quist
LLC), J.P. Morgan Chase & Co., Lehman Brothers, Inc., Salomon Smith Barney, Inc., Merrill Lynch,
Pierce, Fenner & Smith, Incorporated (collectively, the “Underwriters”), Juniper Networks and
certain of Juniper Networks’ officers. This action was brought on behalf of purchasers of the
Company’s common stock in its initial public offering in June 1999 and the Company’s secondary
offering in September 1999.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Specifically, among other things, this complaint alleged that the prospectus pursuant to which
shares of common stock were sold in the Company’s initial public offering and the Company’s
subsequent secondary offering contained certain false and misleading statements or omissions
regarding the practices of the Underwriters with respect to their allocation of shares of common
stock in these offerings and their receipt of commissions from customers related to such
allocations. Various plaintiffs have filed actions asserting similar allegations concerning the
initial public offerings of approximately 300 other issuers. These various cases pending in the
Southern District of New York have been coordinated for pretrial proceedings as <i>In re Initial
Public Offering Securities Litigation</i>, 21 MC 92. In April 2002, the plaintiffs filed a consolidated
amended complaint in the action against the Company, alleging violations of the Securities Act of
1933 and the Securities Exchange Act of 1934. The defendants in the coordinated proceeding filed
motions to dismiss. In October 2002, the Company’s officers were dismissed from the case without
prejudice pursuant to a stipulation. On February 19, 2003, the Court granted in part and denied in
part the motion to dismiss, but declined to dismiss the claims against the Company.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2004, a stipulation of settlement and release of claims against the issuer defendants,
including the Company, was submitted to the Court for approval. On August 31, 2005, the Court
preliminarily approved the settlement. In December 2006, the Appellate Court overturned the
certification of classes in the six test cases that were selected by the underwriter defendants and
plaintiffs in the coordinated proceedings (the action involving the Company is not one of the six
test cases). Because class certification was a condition of the settlement, it was unlikely that
the settlement would receive final Court approval. On June 25, 2007, the Court entered an order
terminating the proposed settlement based upon a stipulation among the parties to the settlement.
The plaintiffs have filed amended master allegations and amended complaints in the six focus cases.
On March 26, 2008, the Court largely denied the defendants’ motion to dismiss the amended
complaints in the six test cases.
</div>
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<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The parties have reached a global settlement of the litigation. Under the settlement, which remains
subject to final Court approval, the insurers would pay the full amount of the settlement share
allocated to the Company, and the Company would bear no financial liability. The Company, as well
as the officer and director defendants who were previously dismissed from the action pursuant to
tolling agreements, would receive complete dismissals from the case. On June 9, 2009, the Court
entered an order granting preliminary approval of the settlement. It is uncertain whether the
settlement will receive final Court approval.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>16(b) Demand</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On October 3, 2007, a purported Juniper Networks shareholder filed a complaint for violation of
Section 16(b) of the Securities Exchange Act of 1934, which prohibits short-swing trading, against
the Company’s IPO underwriters. The complaint, Vanessa Simmonds v. The Goldman Sachs Group, et al.,
Case No. C07-015777, in District Court for the Western District of Washington, seeks the recovery
of short-swing profits. The Company is named as a nominal defendant. No recovery is sought from the
Company in this matter.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Menlo Equities</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In December 2008, Menlo Equities Development Company II, LLC (“Menlo Equities”) initiated in an
arbitration proceeding against the Company. Menlo Equities and the Company are members of
Menlo/Juniper Networks LLC and are parties to an Operating Agreement and a Development Services
Agreement relating to certain real estate in Sunnyvale, California purchased in 2000. The dispute
relates to whether the Company would be obligated to pay Menlo Equities certain fees under the
agreements, if and when the real estate is developed or sold. Menlo Equities has asserted that it
is entitled to immediate payment of damages of approximately $29.0 million plus attorney’s fees as
a result of a repudiation and breach of the agreements. The Company denies Menlo Equities’
allegations. An arbitration hearing was conducted in June 2009 and the decision of the arbitrator
is expected in August 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>IRS Notices of Proposed Adjustments</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, the IRS opened an examination of the Company’s U.S. federal income tax and employment tax
returns for the 2004 fiscal year. Subsequently, the IRS extended their examination of the Company’s
employment tax returns to include fiscal years 2005 and 2006. As of June 30, 2009, the IRS has not
yet concluded its examinations of these returns. In September 2008, as part of its on-going audit
of the U.S. federal income tax return, the IRS issued a Notice of Proposed Adjustment (“NOPA”)
regarding the Company’s business credits. The Company is considering its response to the proposed
adjustment. The Company believes that it has adequately provided for any reasonably foreseeable
outcome related to this proposed adjustment and the ultimate resolution of this matter is unlikely
to have a material effect on the Company’s consolidated financial condition and results of
operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2009, the Company received a NOPA from the IRS claiming that the Company owes additional
taxes, plus interest and possible penalties, for the 2004 tax year based on a transfer pricing
transaction related to the license of acquired intangibles under an intercompany R&D cost sharing
arrangement. The asserted changes to the Company’s 2004 tax year would impact the Company’s income
tax liabilities in tax years subsequent to 2003. As a result of the NOPA, the estimated incremental
tax liability would be approximately $807.0 million, excluding interest and penalties. The Company
intends to file a protest to the proposed deficiency with the IRS, which will cause the matter
to be referred to the Appeals Division of the IRS. The Company strongly believes the IRS’ position
with regard to this matter is inconsistent with applicable tax laws and existing Treasury
regulations, and that its previously reported income tax provision for the year in question is
appropriate. However, there can be no assurance that this matter will be resolved in the Company’s
favor. Regardless of whether this matter is resolved in the Company’s favor, the final resolution
of this matter could be expensive and time-consuming to defend and/or settle. While the Company
believes it has provided adequately for this matter, there is still a possibility that an adverse
outcome of the matter could have a material effect on its results of operations and financial
condition.
</div>
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<b>
</b>
</div>
<div align="Center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has not reached a final resolution with the IRS on an adjustment the IRS proposed for the
1999 and 2000 tax years. The Company is also under routine examination by certain state and
non-U.S. tax authorities. The Company believes that it has adequately provided for any reasonably
foreseeable outcome related to these audits.
</div>
</div>
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<!-- Begin Block Tagged Note 15 - us-gaap:ScheduleOfSubsequentEventsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 15. Subsequent Event</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Stock Repurchases</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Subsequent to June 30, 2009, through the filing of this report, the Company repurchased and retired
approximately 1.7 million shares of its common stock for approximately $40.9 million under its 2008
Stock Repurchase program at an average purchase price of $24.43 per share. The Company’s 2008 Stock
Repurchase Program had remaining authorized funds of $562.0 million as of the report filing date.
Purchases under the Company’s 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.
</div>
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false
--12-31
2009-06-30
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