Other Financial Information

Inventories

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 are reported within prepaid expenses and other current assets and other long-term assets in the Condensed Consolidated Balance Sheets and consisted of the following (in millions):



	As of
	March 31, 2014		December 31, 2013
Production materials	$	53.5	$	51.3
Finished goods	1.2		1.4
Inventories	$	54.7	$	52.7

In connection with the 2014 Restructuring Plan discussed in Note 9, Restructuring and Other Charges, the Company commenced a product rationalization initiative and accelerated the end-of-service life of certain products resulting in inventory charges of $8.4 million recorded within cost of revenues in the Condensed Consolidated Statement of Operations.

Other Long-Term Assets

Other long-term assets consisted of the following (in millions):



	As of
	March 31, 2014		December 31, 2013
Privately-held investments	$	58.7	$	57.2
Licensed software	9.5		90.4
Federal income tax receivable	20.0		20.0
Financed customer receivable	20.9		19.9
Inventory	14.9		15.2
Prepaid costs, deposits, and other	34.9		31.1
Other long-term assets	$	158.9	$	233.8

In connection with the 2014 Restructuring Plan discussed in Note 9, Restructuring and Other Charges, the Company reviewed its product portfolio and determined to cease development of the application delivery controller software technology licensed in July 2012. As a result, the Company recognized a charge of $84.7 million recorded within operating expenses in the Condensed Consolidated Statement of Operations. There were no revenues associated with this technology.

Warranties

The Company accrues for warranty costs based on associated material, labor for customer support, and overhead at the time revenue is recognized. This accrual 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, 2014 were as follows (in millions):



Balance as of December 31, 2013	$	28.0
Provisions made during the period, net	7.3
Adjustments related to pre-existing warranties	—
Actual costs incurred during the period	(6.9		)
Balance as of March 31, 2014	$	28.4

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, 2014			December 31, 2013
Deferred product revenue:
Undelivered product commitments and other product deferrals	$	186.3		$	184.9
Distributor inventory and other sell-through items	93.8			118.7
Deferred gross product revenue	280.1			303.6
Deferred cost of product revenue	(48.9		)	(58.6		)
Deferred product revenue, net	231.2			245.0
Deferred service revenue	923.0			824.3
Total	$	1,154.2		$	1,069.3
Reported as:
Current	$	772.5		$	705.8
Long-term	381.7			363.5
Total	$	1,154.2		$	1,069.3

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 billable amounts for service contracts, which include technical support, hardware and software maintenance, professional services, and training, for which services have not been rendered.

Other Income (Expense), Net

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



	Three Months Ended March 31,
	2014			2013
Interest income	$	2.1		$	2.1
Interest expense	(15.4		)	(14.3		)
Other	167.5			2.1
Other income (expense), net	$	154.2		$	(10.1	)

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, 2014, Other was primarily comprised of net realized gains of $164.0 million related to certain publicly-traded equity and privately-held investments. During the three months ended March 31, 2013, Other was primarily comprised of a $1.6 million gain related to the sale of a privately-held investment.