Other Financial Information

Inventories, Net

The Company purchases and holds inventory to provide adequate component supplies over the life of the underlying products. The majority of the Company's inventory is production components. Inventories, net are reported within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets and consisted of the following (in millions):



	As of
	March 31, 2013		December 31, 2012
Inventories, net:
Production materials	$	50.1	$	54.6
Finished goods	4.0		4.1
Total inventories, net	$	54.1	$	58.7

Warranties

The Company accrues for warranty costs as part of its cost of sales based on associated material costs, labor costs for customer support, and overhead at the time revenue is recognized. This provision is reported as accrued warranty within current liabilities on the Condensed Consolidated Balance Sheets. Changes in the Company’s warranty reserve during the three months ended March 31, 2013 were as follows (in millions):



Balance as of December 31, 2012	$	29.7
Provisions made during the period, net	7.3
Change in estimate	(0.3		)
Actual costs incurred during the period	(7.3		)
Balance as of March 31, 2013	$	29.4

Deferred Revenue

Details of the Company's deferred revenue, as reported on the Condensed Consolidated Balance Sheets, were as follows (in millions):



	As of
	March 31, 2013			December 31, 2012
Deferred product revenue:
Undelivered product commitments and other product deferrals	$	250.5		$	256.9
Distributor inventory and other sell-through items	122.7			138.4
Deferred gross product revenue	373.2			395.3
Deferred cost of product revenue	(86.4		)	(99.4		)
Deferred product revenue, net	286.8			295.9
Deferred service revenue	693.9			627.5
Total	$	980.7		$	923.4
Reported as:
Current	$	774.7		$	693.5
Long-term	206.0			229.9
Total	$	980.7		$	923.4

Deferred product revenue represents unrecognized revenue related to shipments to distributors that have not sold through to end-users, undelivered product commitments, and other shipments that have not met all revenue recognition criteria. Deferred product revenue is recorded net of the related costs of product revenue. Deferred service revenue represents customer payments made in advance for services, which include technical support, hardware and software maintenance, professional services, and training.

Other Expense, Net

Other expense, net consisted of the following (in millions):



	Three Months Ended March 31,
	2013			2012
Interest income	$	2.1		$	2.8
Interest expense	(14.3		)	(14.2		)
Other	2.1			(13.0		)
Other expense, net	$	(10.1	)	$	(24.4	)

Interest income primarily includes interest earned on the Company’s cash, cash equivalents, and investments. Interest expense primarily includes interest net of capitalized interest expense from long-term debt and customer financing arrangements. Other typically consists of investment and foreign exchange gains and losses and other non-operational income and expense items. During the three months ended March 31, 2013, Other was primarily comprised of a $1.6 million gain related to a privately-held investment. During the three months ended March 31, 2012, Other was primarily comprised of an other-than-temporary impairment charge of $14.0 million, related to a privately-held equity investment.