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
	June 30, 2013		December 31, 2012
Inventories, net:
Production materials	$	49.8	$	54.6
Finished goods	0.3		4.1
Total inventories, net	$	50.1	$	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 six months ended June 30, 2013 were as follows (in millions):



Balance as of December 31, 2012	$	29.7
Provisions made during the period, net	14.1
Adjustments related to pre-existing warranties	(0.7		)
Actual costs incurred during the period	(14.1		)
Balance as of June 30, 2013	$	29.0

Deferred Revenue

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



	As of
	June 30, 2013			December 31, 2012
Deferred product revenue:
Undelivered product commitments and other product deferrals	$	237.0		$	256.9
Distributor inventory and other sell-through items	100.0			138.4
Deferred gross product revenue	337.0			395.3
Deferred cost of product revenue	(59.5		)	(99.4		)
Deferred product revenue, net	277.5			295.9
Deferred service revenue	750.5			627.5
Total	$	1,028.0		$	923.4
Reported as:
Current	$	750.4		$	693.5
Long-term	277.6			229.9
Total	$	1,028.0		$	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) Income, Net

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



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Interest income	$	1.7		$	2.9		$	3.8		$	5.7
Interest expense	(14.9		)	(13.5		)	(29.2		)	(27.7		)
Other	0.6			13.4			2.7			0.4
Other (expense) income, net	$	(12.6	)	$	2.8		$	(22.7	)	$	(21.6	)

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 June 30, 2013, Other was primarily comprised of a gain on sale of certain investments partially offset by a loss on privately-held investments. During the six months ended June 30, 2013, Other was primarily comprised of a net gain of $1.3 million related to privately-held investments. During the three and six months ended June 30, 2012, Other was primarily comprised of a net gain of $14.8 million and $0.8 million, respectively, related to the Company's privately-held equity investments.