x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2017 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from_________ to_________ |
Delaware | 77-0422528 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1133 Innovation Way | ||
Sunnyvale, California | 94089 | |
(Address of principal executive offices) | (Zip code) | |
(408) 745-2000 | ||
(Registrant's telephone number, including area code) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o |
(Do not check if a smaller reporting company) |
Table of Contents | |
Page | |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net revenues: | |||||||||||||||
Product | $ | 869.7 | $ | 928.2 | $ | 2,615.8 | $ | 2,543.3 | |||||||
Service | 388.1 | 357.1 | 1,171.9 | 1,061.2 | |||||||||||
Total net revenues | 1,257.8 | 1,285.3 | 3,787.7 | 3,604.5 | |||||||||||
Cost of revenues: | |||||||||||||||
Product | 336.0 | 349.6 | 1,026.4 | 955.8 | |||||||||||
Service | 149.4 | 136.2 | 440.4 | 401.9 | |||||||||||
Total cost of revenues | 485.4 | 485.8 | 1,466.8 | 1,357.7 | |||||||||||
Gross margin | 772.4 | 799.5 | 2,320.9 | 2,246.8 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 236.4 | 251.8 | 752.8 | 750.7 | |||||||||||
Sales and marketing | 232.5 | 242.9 | 716.6 | 718.4 | |||||||||||
General and administrative | 70.6 | 54.0 | 176.7 | 172.0 | |||||||||||
Restructuring charges | 2.0 | 0.8 | 29.4 | 3.2 | |||||||||||
Total operating expenses | 541.5 | 549.5 | 1,675.5 | 1,644.3 | |||||||||||
Operating income | 230.9 | 250.0 | 645.4 | 602.5 | |||||||||||
Other expense, net | (5.1 | ) | (13.4 | ) | (33.8 | ) | (47.2 | ) | |||||||
Income before income taxes | 225.8 | 236.6 | 611.6 | 555.3 | |||||||||||
Income tax provision | 60.1 | 64.2 | 157.3 | 151.5 | |||||||||||
Net income | $ | 165.7 | $ | 172.4 | $ | 454.3 | $ | 403.8 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.44 | $ | 0.45 | $ | 1.20 | $ | 1.06 | |||||||
Diluted | $ | 0.43 | $ | 0.45 | $ | 1.18 | $ | 1.04 | |||||||
Shares used in computing net income per share: | |||||||||||||||
Basic | 378.3 | 381.0 | 380.0 | 382.3 | |||||||||||
Diluted | 382.7 | 384.5 | 386.5 | 387.9 | |||||||||||
Cash dividends declared per common stock | $ | 0.10 | $ | 0.10 | $ | 0.30 | $ | 0.30 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 165.7 | $ | 172.4 | $ | 454.3 | $ | 403.8 | |||||||
Other comprehensive income (loss), net of taxes: | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Unrealized (losses) gains net of tax benefits of $0.5 and $0.2 during the three and nine months ended September 30, 2017, respectively, and tax provision of $0.3 and benefit of $0.4 for the corresponding periods of the fiscal year ended December 31, 2016 ("fiscal 2016"), respectively | (0.2 | ) | (0.6 | ) | 1.4 | 5.4 | |||||||||
Reclassification adjustment for realized net gains included in net income, net of tax provision of $0.9 during both the three and nine months ended September 2017, respectively, and net of tax provisions of zero and $0.5 for the corresponding periods of fiscal 2016, respectively | (1.9 | ) | (0.3 | ) | (2.0 | ) | (1.1 | ) | |||||||
Net change on available-for-sale securities, net of taxes | (2.1 | ) | (0.9 | ) | (0.6 | ) | 4.3 | ||||||||
Cash flow hedges: | |||||||||||||||
Unrealized gains (loss) net of tax provisions of $0.5 and $3.0, for the three and nine months ended September 30, 2017, respectively, and tax provisions of $0.6 and $1.2 for the corresponding periods of fiscal 2016, respectively | 6.3 | (0.3 | ) | 14.6 | 3.6 | ||||||||||
Reclassification adjustment for realized net gains included in net income, net of tax provisions of $0.8 and $1.7 during the three and nine months ended September 30, 2017, respectively, and tax provisions of $0.3 and $0.4 for the corresponding periods of fiscal 2016, respectively | (2.5 | ) | (0.9 | ) | (2.4 | ) | (1.0 | ) | |||||||
Net change on cash flow hedges, net of taxes | 3.8 | (1.2 | ) | 12.2 | 2.6 | ||||||||||
Change in foreign currency translation adjustments | 8.4 | (6.9 | ) | 19.3 | (1.1 | ) | |||||||||
Other comprehensive income (loss), net of taxes | 10.1 | (9.0 | ) | 30.9 | 5.8 | ||||||||||
Comprehensive income | $ | 175.8 | $ | 163.4 | $ | 485.2 | $ | 409.6 |
September 30, 2017 | December 31, 2016 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,363.7 | $ | 1,833.2 | |||
Short-term investments | 922.0 | 752.3 | |||||
Accounts receivable, net of allowances | 724.3 | 1,054.1 | |||||
Prepaid expenses and other current assets | 273.3 | 332.3 | |||||
Total current assets | 4,283.3 | 3,971.9 | |||||
Property and equipment, net | 1,007.5 | 1,063.8 | |||||
Long-term investments | 913.6 | 1,071.8 | |||||
Restricted cash and investments | 64.9 | 99.9 | |||||
Purchased intangible assets, net | 133.0 | 130.2 | |||||
Goodwill | 3,096.2 | 3,081.7 | |||||
Other long-term assets | 245.8 | 237.2 | |||||
Total assets | $ | 9,744.3 | $ | 9,656.5 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 205.4 | $ | 221.0 | |||
Accrued compensation | 166.2 | 233.6 | |||||
Deferred revenue | 977.4 | 1,032.0 | |||||
Other accrued liabilities | 236.3 | 249.3 | |||||
Total current liabilities | 1,585.3 | 1,735.9 | |||||
Long-term debt | 2,135.7 | 2,133.7 | |||||
Long-term deferred revenue | 485.5 | 449.1 | |||||
Long-term income taxes payable | 224.0 | 209.2 | |||||
Other long-term liabilities | 155.7 | 166.1 | |||||
Total liabilities | 4,586.2 | 4,694.0 | |||||
Commitments and contingencies (Note 16) | |||||||
Stockholders' equity: | |||||||
Convertible preferred stock, $0.00001 par value; 10.0 shares authorized; none issued and outstanding | — | — | |||||
Common stock, $0.00001 par value; 1,000.0 shares authorized; 377.2 shares and 381.1 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | — | — | |||||
Additional paid-in capital | 8,211.0 | 8,281.6 | |||||
Accumulated other comprehensive loss | (6.4 | ) | (37.3 | ) | |||
Accumulated deficit | (3,046.5 | ) | (3,281.8 | ) | |||
Total stockholders' equity | 5,158.1 | 4,962.5 | |||||
Total liabilities and stockholders' equity | $ | 9,744.3 | $ | 9,656.5 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 454.3 | $ | 403.8 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Share-based compensation expense | 151.1 | 162.1 | |||||
Depreciation, amortization, and accretion | 169.7 | 151.9 | |||||
(Gain) loss on investments and disposal of fixed assets, net | (6.7 | ) | 1.6 | ||||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||
Accounts receivable, net | 331.9 | 36.6 | |||||
Prepaid expenses and other assets | 51.2 | (22.2 | ) | ||||
Accounts payable | (11.5 | ) | 52.1 | ||||
Accrued compensation | (60.6 | ) | (77.0 | ) | |||
Income taxes payable | 8.8 | (7.5 | ) | ||||
Other accrued liabilities | (21.1 | ) | (49.8 | ) | |||
Deferred revenue | (21.2 | ) | 124.7 | ||||
Net cash provided by operating activities | 1,045.9 | 776.3 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (97.6 | ) | (162.9 | ) | |||
Purchases of available-for-sale investments | (1,298.6 | ) | (1,251.9 | ) | |||
Proceeds from sales of available-for-sale investments | 761.2 | 985.1 | |||||
Proceeds from maturities and redemptions of available-for-sale investments | 521.3 | 232.4 | |||||
Proceeds from Pulse note receivable | 75.0 | — | |||||
Purchases of privately-held investments | (9.8 | ) | (17.1 | ) | |||
Proceeds from sales of privately-held investments | 1.3 | 9.5 | |||||
Purchases of trading investments | (3.9 | ) | (4.3 | ) | |||
Payments for business acquisitions, net of cash and cash equivalents acquired | (33.0 | ) | (96.7 | ) | |||
Changes in restricted cash | — | (2.4 | ) | ||||
Net cash used in investing activities | (84.1 | ) | (308.3 | ) | |||
Cash flows from financing activities: | |||||||
Purchases and retirement of common stock | (395.5 | ) | (323.9 | ) | |||
Proceeds from issuance of common stock | 64.4 | 59.7 | |||||
Payment of cash dividends | (113.5 | ) | (114.4 | ) | |||
Payment of debt | — | (300.0 | ) | ||||
Issuance of debt, net | — | 494.0 | |||||
Payment of financing obligations | — | (15.5 | ) | ||||
Net cash used in financing activities | (444.6 | ) | (200.1 | ) | |||
Effect of foreign currency exchange rates on cash and cash equivalents | 13.3 | 0.2 | |||||
Net increase in cash and cash equivalents | 530.5 | 268.1 | |||||
Cash and cash equivalents at beginning of period | 1,833.2 | 1,420.9 | |||||
Cash and cash equivalents at end of period | $ | 2,363.7 | $ | 1,689.0 |
• | Forfeitures: The Company elected to account for forfeitures as they occur using a modified retrospective transition method, rather than estimating forfeitures, resulting in a cumulative-effect adjustment of $9.0 million, which increased the January 1, 2017 opening accumulated deficit balance on the Condensed Consolidated Balance Sheets. |
• | Income tax accounting: The Company is also required to record excess tax benefits and tax deficiencies related to stock- based compensation as income tax benefit or expense in the statement of operations prospectively when share-based awards vest or are settled. Upon adoption, the Company recognized the previously unrecognized excess tax benefits using the modified retrospective transition method, which resulted in no impact to the January 1, 2017 opening accumulated deficit balance as previously unrecognized excess tax effects were fully offset by a valuation allowance. |
• | Cash flow presentation of excess tax benefits: The Company is required to classify excess tax benefits along with other income tax cash flows as an operating activity either prospectively or retrospectively. The Company elected to apply the change in presentation to the statements of cash flows retrospectively and no longer classify the excess tax benefits from share-based compensation as a financing activity. For the nine months ended September 30, 2016, the Company reclassified $5.8 million of excess tax benefits from share-based compensation to operating activities from financing activities. |
Amount | |||
Net tangible assets | $ | 1.4 | |
Existing technology intangible asset(*) | 15.4 | ||
Goodwill | 16.7 | ||
Total | $ | 33.5 |
As of September 30, 2017 | As of December 31, 2016 | ||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||||||||
Asset-backed securities | $ | 288.1 | $ | — | $ | (0.3 | ) | $ | 287.8 | $ | 303.0 | $ | 0.2 | $ | (0.2 | ) | $ | 303.0 | |||||||||||||
Certificates of deposit | 50.0 | — | — | 50.0 | 66.1 | — | — | 66.1 | |||||||||||||||||||||||
Commercial paper | 124.0 | — | — | 124.0 | 147.7 | — | — | 147.7 | |||||||||||||||||||||||
Corporate debt securities | 834.1 | 0.8 | (0.8 | ) | 834.1 | 846.5 | 0.4 | (2.0 | ) | 844.9 | |||||||||||||||||||||
Foreign government debt securities | 64.8 | — | (0.1 | ) | 64.7 | 34.0 | — | (0.1 | ) | 33.9 | |||||||||||||||||||||
Time deposits | 411.4 | — | — | 411.4 | 264.6 | — | — | 264.6 | |||||||||||||||||||||||
U.S. government agency securities | 156.9 | — | (0.4 | ) | 156.5 | 127.0 | — | (0.3 | ) | 126.7 | |||||||||||||||||||||
U.S. government securities | 548.3 | 0.1 | (0.4 | ) | 548.0 | 390.7 | 0.1 | (0.4 | ) | 390.4 | |||||||||||||||||||||
Total fixed income securities | 2,477.6 | 0.9 | (2.0 | ) | 2,476.5 | 2,179.6 | 0.7 | (3.0 | ) | 2,177.3 | |||||||||||||||||||||
Money market funds | 990.7 | — | — | 990.7 | 592.2 | — | — | 592.2 | |||||||||||||||||||||||
Mutual funds | 8.2 | — | — | 8.2 | 8.0 | — | — | 8.0 | |||||||||||||||||||||||
Publicly-traded equity securities | — | — | — | — | 5.3 | — | (0.7 | ) | 4.6 | ||||||||||||||||||||||
Total available-for-sale securities | 3,476.5 | 0.9 | (2.0 | ) | 3,475.4 | 2,785.1 | 0.7 | (3.7 | ) | 2,782.1 | |||||||||||||||||||||
Trading securities in mutual funds | 26.1 | — | — | 26.1 | 21.0 | — | — | 21.0 | |||||||||||||||||||||||
Total | $ | 3,502.6 | $ | 0.9 | $ | (2.0 | ) | $ | 3,501.5 | $ | 2,806.1 | $ | 0.7 | $ | (3.7 | ) | $ | 2,803.1 | |||||||||||||
Reported as: | |||||||||||||||||||||||||||||||
Cash equivalents | $ | 1,588.8 | $ | — | $ | — | $ | 1,588.8 | $ | 907.1 | $ | — | $ | — | $ | 907.1 | |||||||||||||||
Restricted investments | 77.1 | — | — | 77.1 | 71.9 | — | — | 71.9 | |||||||||||||||||||||||
Short-term investments | 922.3 | 0.1 | (0.4 | ) | 922.0 | 753.4 | 0.1 | (1.2 | ) | 752.3 | |||||||||||||||||||||
Long-term investments | 914.4 | 0.8 | (1.6 | ) | 913.6 | 1,073.7 | 0.6 | (2.5 | ) | 1,071.8 | |||||||||||||||||||||
Total | $ | 3,502.6 | $ | 0.9 | $ | (2.0 | ) | $ | 3,501.5 | $ | 2,806.1 | $ | 0.7 | $ | (3.7 | ) | $ | 2,803.1 |
Amortized Cost | Estimated Fair Value | ||||||
Due in less than one year | $ | 1,563.2 | $ | 1,562.9 | |||
Due between one and five years | 914.4 | 913.6 | |||||
Total | $ | 2,477.6 | $ | 2,476.5 |
As of September 30, 2017 | |||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Asset-backed securities | $ | 224.2 | $ | (0.3 | ) | $ | — | $ | — | $ | 224.2 | $ | (0.3 | ) | |||||||||
Corporate debt securities | 361.6 | (0.5 | ) | 59.5 | (0.3 | ) | 421.1 | (0.8 | ) | ||||||||||||||
Foreign government debt securities | 36.6 | (0.1 | ) | — | — | 36.6 | (0.1 | ) | |||||||||||||||
U.S. government agency securities | 89.0 | (0.2 | ) | 18.0 | (0.2 | ) | 107.0 | (0.4 | ) | ||||||||||||||
U.S. government securities | 256.3 | (0.4 | ) | 1.8 | — | 258.1 | (0.4 | ) | |||||||||||||||
Total available-for-sale securities | $ | 967.7 | $ | (1.5 | ) | $ | 79.3 | $ | (0.5 | ) | $ | 1,047.0 | $ | (2.0 | ) |
As of December 31, 2016 | |||||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Asset-backed securities | $ | 122.2 | $ | (0.2 | ) | $ | — | $ | — | $ | 122.2 | $ | (0.2 | ) | |||||||||
Corporate debt securities | 470.8 | (1.9 | ) | 76.7 | (0.1 | ) | 547.5 | (2.0 | ) | ||||||||||||||
Foreign government debt securities | 20.3 | (0.1 | ) | — | — | 20.3 | (0.1 | ) | |||||||||||||||
U.S. government agency securities | 106.7 | (0.3 | ) | — | — | 106.7 | (0.3 | ) | |||||||||||||||
U.S. government securities | 254.1 | (0.4 | ) | — | — | 254.1 | (0.4 | ) | |||||||||||||||
Total fixed income securities | 974.1 | (2.9 | ) | 76.7 | (0.1 | ) | 1,050.8 | (3.0 | ) | ||||||||||||||
Publicly-traded equity securities | 4.6 | (0.7 | ) | — | — | 4.6 | (0.7 | ) | |||||||||||||||
Total available-for-sale securities | $ | 978.7 | $ | (3.6 | ) | $ | 76.7 | $ | (0.1 | ) | $ | 1,055.4 | $ | (3.7 | ) |
Fair Value Measurements at September 30, 2017 Using: | Fair Value Measurements at December 31, 2016 Using: | ||||||||||||||||||||||||||||||
Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Remaining Inputs (Level 2) | Significant Other Unobservable Remaining Inputs (Level 3) | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Remaining Inputs (Level 2) | Significant Other Unobservable Remaining Inputs (Level 3) | Total | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||||
Asset-backed securities | $ | — | $ | 287.8 | $ | — | $ | 287.8 | $ | — | $ | 303.0 | $ | — | $ | 303.0 | |||||||||||||||
Certificates of deposit | — | 50.0 | — | 50.0 | — | 66.1 | — | 66.1 | |||||||||||||||||||||||
Commercial paper | — | 124.0 | — | 124.0 | — | 147.7 | — | 147.7 | |||||||||||||||||||||||
Corporate debt securities | — | 834.1 | — | 834.1 | — | 844.9 | — | 844.9 | |||||||||||||||||||||||
Foreign government debt securities | — | 64.7 | — | 64.7 | — | 33.9 | — | 33.9 | |||||||||||||||||||||||
Money market funds | 990.7 | — | — | 990.7 | 592.2 | — | — | 592.2 | |||||||||||||||||||||||
Mutual funds | 8.2 | — | — | 8.2 | 8.0 | — | — | 8.0 | |||||||||||||||||||||||
Publicly-traded equity securities | — | — | — | — | 4.6 | — | — | 4.6 | |||||||||||||||||||||||
Time deposits | — | 411.4 | — | 411.4 | — | 264.6 | — | 264.6 | |||||||||||||||||||||||
U.S. government agency securities | — | 156.5 | — | 156.5 | — | 126.7 | — | 126.7 | |||||||||||||||||||||||
U.S. government securities | 343.7 | 204.3 | — | 548.0 | 345.0 | 45.4 | — | 390.4 | |||||||||||||||||||||||
Total available-for-sale securities | 1,342.6 | 2,132.8 | — | 3,475.4 | 949.8 | 1,832.3 | — | 2,782.1 | |||||||||||||||||||||||
Trading securities in mutual funds | 26.1 | — | — | 26.1 | 21.0 | — | — | 21.0 | |||||||||||||||||||||||
Privately-held debt and redeemable preferred stock securities | — | — | 42.3 | 42.3 | — | — | 43.7 | 43.7 | |||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||||||||
Foreign exchange contracts | — | 8.5 | — | 8.5 | — | 0.9 | — | 0.9 | |||||||||||||||||||||||
Total assets measured at fair value | $ | 1,368.7 | $ | 2,141.3 | $ | 42.3 | $ | 3,552.3 | $ | 970.8 | $ | 1,833.2 | $ | 43.7 | $ | 2,847.7 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | — | $ | (0.6 | ) | $ | — | $ | (0.6 | ) | $ | — | $ | (4.9 | ) | $ | — | $ | (4.9 | ) | |||||||||||
Total liabilities measured at fair value | $ | — | $ | (0.6 | ) | $ | — | $ | (0.6 | ) | $ | — | $ | (4.9 | ) | $ | — | $ | (4.9 | ) | |||||||||||
Total assets, reported as: | |||||||||||||||||||||||||||||||
Cash equivalents | $ | 947.9 | $ | 640.9 | $ | — | $ | 1,588.8 | $ | 549.4 | $ | 357.7 | $ | — | $ | 907.1 | |||||||||||||||
Restricted investments | 77.1 | — | — | 77.1 | 71.9 | — | — | 71.9 | |||||||||||||||||||||||
Short-term investments | 231.9 | 690.1 | — | 922.0 | 178.0 | 574.3 | — | 752.3 | |||||||||||||||||||||||
Long-term investments | 111.8 | 801.8 | — | 913.6 | 171.5 | 900.3 | — | 1,071.8 | |||||||||||||||||||||||
Prepaid expenses and other current assets | — | 8.5 | — | 8.5 | — | 0.9 | — | 0.9 | |||||||||||||||||||||||
Other long-term assets | — | — | 42.3 | 42.3 | — | — | 43.7 | 43.7 | |||||||||||||||||||||||
Total assets measured at fair value | $ | 1,368.7 | $ | 2,141.3 | $ | 42.3 | $ | 3,552.3 | $ | 970.8 | $ | 1,833.2 | $ | 43.7 | $ | 2,847.7 | |||||||||||||||
Total liabilities, reported as: | |||||||||||||||||||||||||||||||
Other accrued liabilities | $ | — | $ | (0.6 | ) | $ | — | $ | (0.6 | ) | $ | — | $ | (4.9 | ) | $ | — | $ | (4.9 | ) | |||||||||||
Total liabilities measured at fair value | $ | — | $ | (0.6 | ) | $ | — | $ | (0.6 | ) | $ | — | $ | (4.9 | ) | $ | — | $ | (4.9 | ) |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Cash flow hedges | $ | 231.6 | $ | 172.0 | |||
Non-designated derivatives | 147.1 | — | |||||
Total | $ | 378.7 | $ | 172.0 |
Balance as of December 31, 2016 | $ | 3,081.7 | |
Additions due to business combination | 16.7 | ||
Other(*) | (2.2 | ) | |
Balance as of September 30, 2017 | $ | 3,096.2 |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Production and service materials | $ | 72.6 | $ | 75.6 | |||
Finished goods | 18.3 | 19.9 | |||||
Inventory | $ | 90.9 | $ | 95.5 | |||
Reported as: | |||||||
Prepaid expenses and other current assets | $ | 84.9 | $ | 91.4 | |||
Other long-term assets | 6.0 | 4.1 | |||||
Total | $ | 90.9 | $ | 95.5 |
• | extend the maturity date from April 1, 2016 to December 31, 2018; |
• | provide that interest due on the Pulse Note through December 31, 2015 shall be paid in kind by increasing the outstanding principal amount of the note and increase the interest rate on the Pulse Note; and |
• | require a minimum payment of $75.0 million on or prior to April 1, 2017, less any principal amount previously pre-paid to the Company. |
• | extend the maturity date of the remaining outstanding amount of approximately $58.0 million from December 31, 2018 to September 30, 2022; |
• | provide that interest due after April 1, 2017 can be paid in kind by increasing the outstanding principal amount of the note or paid in cash; |
• | require the promissory note to be subordinated to other debt raised by the issuer; and |
• | entitle the Company to additional financial considerations if the issuer of the note and its affiliates meet certain conditions. |
Balance as of December 31, 2016 | $ | 41.3 | |
Provisions made during the period | 29.6 | ||
Actual costs incurred during the period | (41.5 | ) | |
Balance as of September 30, 2017 | $ | 29.4 |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Deferred product revenue: | |||||||
Undelivered product commitments and other product deferrals | $ | 309.3 | $ | 302.4 | |||
Distributor inventory and other sell-through items | 61.9 | 74.2 | |||||
Deferred gross product revenue | 371.2 | 376.6 | |||||
Deferred cost of product revenue | (47.5 | ) | (53.7 | ) | |||
Deferred product revenue, net | 323.7 | 322.9 | |||||
Deferred service revenue | 1,139.2 | 1,158.2 | |||||
Total | $ | 1,462.9 | $ | 1,481.1 | |||
Reported as: | |||||||
Current | $ | 977.4 | $ | 1,032.0 | |||
Long-term | 485.5 | 449.1 | |||||
Total | $ | 1,462.9 | $ | 1,481.1 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest income | $ | 14.7 | $ | 9.1 | $ | 37.1 | $ | 25.5 | |||||||
Interest expense | (25.3 | ) | (25.1 | ) | (75.6 | ) | (72.6 | ) | |||||||
Gain on investments, net | 4.7 | 1.9 | 6.7 | 0.1 | |||||||||||
Other | 0.8 | 0.7 | (2.0 | ) | (0.2 | ) | |||||||||
Other expense, net | $ | (5.1 | ) | $ | (13.4 | ) | $ | (33.8 | ) | $ | (47.2 | ) |
December 31, 2016(*) | Charges | Cash Payments | Other | September 30, 2017 | |||||||||||||||
Severance | $ | 0.7 | $ | 26.0 | $ | (25.5 | ) | $ | (0.1 | ) | $ | 1.1 | |||||||
Contract terminations and other | 0.5 | 3.4 | (0.4 | ) | 0.1 | 3.6 | |||||||||||||
Total | $ | 1.2 | $ | 29.4 | $ | (25.9 | ) | $ | — | $ | 4.7 |
As of September 30, 2017 | ||||||
Amount | Effective Interest Rates | |||||
Senior Notes ("Notes"): | ||||||
3.125% fixed-rate notes, due February 2019 | $ | 350.0 | 3.36 | % | ||
3.300% fixed-rate notes, due June 2020 | 300.0 | 3.47 | % | |||
4.600% fixed-rate notes, due March 2021 | 300.0 | 4.69 | % | |||
4.500% fixed-rate notes, due March 2024, issued March 2014 | 350.0 | 4.63 | % | |||
4.500% fixed-rate notes, due March 2024, issued February 2016 | 150.0 | 4.87 | % | |||
4.350% fixed-rate notes, due June 2025 | 300.0 | 4.47 | % | |||
5.950% fixed-rate notes, due March 2041 | 400.0 | 6.03 | % | |||
Total senior notes | 2,150.0 | |||||
Unaccreted discount and debt issuance costs | (14.3 | ) | ||||
Total | $ | 2,135.7 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Shares repurchased | 5.0 | 4.9 | 13.5 | 13.5 | |||||||||||
Average price per share | $ | 28.16 | $ | 23.04 | $ | 28.85 | $ | 23.25 | |||||||
Amount repurchased | $ | 140.0 | $ | 112.4 | $ | 390.0 | $ | 312.9 |
Unrealized Gains (Losses) on Available-for- Sale Securities(1) | Unrealized (Losses) Gains on Cash Flow Hedges(2) | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance as of December 31, 2016 | $ | 16.6 | $ | (4.5 | ) | $ | (49.4 | ) | $ | (37.3 | ) | ||||
Other comprehensive gains before reclassifications | 1.4 | 14.6 | 19.3 | 35.3 | |||||||||||
Amount reclassified from accumulated other comprehensive loss | (2.0 | ) | (2.4 | ) | — | (4.4 | ) | ||||||||
Other comprehensive (loss) gains, net | (0.6 | ) | 12.2 | 19.3 | 30.9 | ||||||||||
Balance as of September 30, 2017 | $ | 16.0 | $ | 7.7 | $ | (30.1 | ) | $ | (6.4 | ) |
(1) | The reclassifications out of accumulated other comprehensive loss during the nine months ended September 30, 2017 for realized gains on available-for-sale securities were not material, and were included in other expense, net, in the Condensed Consolidated Statements of Operations. |
(2) | The reclassifications out of accumulated other comprehensive loss during the nine months ended September 30, 2017 for realized gains on cash flow hedges were not material, and were included within cost of revenues, research and development, sales and marketing, and general and administrative in the Condensed Consolidated Statements of Operations. |
Outstanding Options | ||||||||||||
Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
Balance as of December 31, 2016 | 2.4 | $ | 29.20 | |||||||||
Exercised | (0.5 | ) | 14.97 | |||||||||
Expired/Canceled | (0.8 | ) | 31.09 | |||||||||
Balance as of September 30, 2017 | 1.1 | $ | 34.31 | 1.1 | $ | 3.1 | ||||||
As of September 30, 2017: | ||||||||||||
Vested and expected-to-vest options | 1.1 | $ | 34.31 | 1.1 | $ | 3.1 | ||||||
Exercisable options | 1.0 | $ | 35.56 | 0.8 | $ | 2.1 |
Outstanding RSUs, RSAs, and PSAs | ||||||||||||
Number of Shares | Weighted Average Grant-Date Fair Value per Share | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
Balance as of December 31, 2016 | 20.9 | $ | 24.05 | |||||||||
RSUs granted (1)(3) | 6.6 | 27.56 | ||||||||||
RSUs assumed in acquisitions | 0.1 | 26.91 | ||||||||||
PSAs granted (2)(3) | 0.6 | 27.37 | ||||||||||
RSUs vested | (6.0 | ) | 23.81 | |||||||||
RSAs vested | (0.4 | ) | 22.80 | |||||||||
PSAs vested | (0.5 | ) | 24.29 | |||||||||
RSUs canceled | (1.5 | ) | 24.57 | |||||||||
PSAs canceled | (0.5 | ) | 25.11 | |||||||||
Balance as of September 30, 2017 | 19.3 | $ | 25.23 | 1.1 | $ | 537.1 |
(1) | Includes service-based and market-based RSUs. |
(2) | The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee of the Board are achieved at target is 0.4 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 to 0.6 million shares. |
(3) | The grant date fair value of RSUs and PSAs were reduced by the present value of dividends expected to be paid on the underlying shares of common stock during the requisite and derived service period as these awards are not entitled to receive dividends until vested. During the nine months ended September 30, 2017, the Company declared a quarterly cash dividend of $0.10 per share of common stock on January 26, 2017, April 25, 2017, and July 25, 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of revenues - Product | $ | 1.5 | $ | 1.5 | $ | 3.8 | $ | 4.9 | |||||||
Cost of revenues - Service | 3.9 | 3.5 | 13.5 | 11.3 | |||||||||||
Research and development | 18.5 | 27.2 | 67.4 | 89.0 | |||||||||||
Sales and marketing | 13.7 | 17.5 | 45.3 | 40.7 | |||||||||||
General and administrative | 7.4 | 5.9 | 21.1 | 17.1 | |||||||||||
Total | $ | 45.0 | $ | 55.6 | $ | 151.1 | $ | 163.0 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Stock options | $ | 0.2 | $ | 1.5 | $ | 0.5 | $ | 3.7 | |||||||
RSUs, RSAs, and PSAs | 41.0 | 50.3 | 138.9 | 147.6 | |||||||||||
ESPP | 3.8 | 3.8 | 11.7 | 11.7 | |||||||||||
Total | $ | 45.0 | $ | 55.6 | $ | 151.1 | $ | 163.0 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Routing | $ | 585.8 | $ | 620.2 | $ | 1,679.9 | $ | 1,699.0 | |||||||
Switching | 212.6 | 222.5 | 730.2 | 607.2 | |||||||||||
Security | 71.3 | 85.5 | 205.7 | 237.1 | |||||||||||
Total product | 869.7 | 928.2 | 2,615.8 | 2,543.3 | |||||||||||
Total service | 388.1 | 357.1 | 1,171.9 | 1,061.2 | |||||||||||
Total | $ | 1,257.8 | $ | 1,285.3 | $ | 3,787.7 | $ | 3,604.5 |
• | Cloud: companies that are heavily reliant on the cloud for their business model’s success. As an example, customers in the cloud vertical can include cloud service providers as well as enterprises that provide software-as-a-service, infrastructure-as-a-service, or platform-as-a-service. |
• | Telecom/Cable: includes wireline and wireless carriers and cable operators. |
• | Strategic Enterprise: generally is comprised of financial services; national, federal, state, and local governments; research and educational institutions, and enterprises not represented in the Cloud vertical. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cloud | $ | 344.9 | $ | 359.4 | $ | 1,056.1 | $ | 911.5 | |||||||
Telecom/Cable | 576.9 | 599.4 | 1,707.8 | 1,688.5 | |||||||||||
Strategic Enterprise | 336.0 | 326.5 | 1,023.8 | 1,004.5 | |||||||||||
Total | $ | 1,257.8 | $ | 1,285.3 | $ | 3,787.7 | $ | 3,604.5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Americas: | |||||||||||||||
United States | $ | 668.8 | $ | 684.6 | $ | 2,076.0 | $ | 1,924.9 | |||||||
Other | 60.4 | 60.4 | 165.6 | 168.3 | |||||||||||
Total Americas | 729.2 | 745.0 | 2,241.6 | 2,093.2 | |||||||||||
Europe, Middle East, and Africa | 298.6 | 338.0 | 871.3 | 923.5 | |||||||||||
Asia Pacific | 230.0 | 202.3 | 674.8 | 587.8 | |||||||||||
Total | $ | 1,257.8 | $ | 1,285.3 | $ | 3,787.7 | $ | 3,604.5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income before income taxes | $ | 225.8 | $ | 236.6 | $ | 611.6 | $ | 555.3 | |||||||
Income tax provision | $ | 60.1 | $ | 64.2 | $ | 157.3 | $ | 151.5 | |||||||
Effective tax rate | 26.6 | % | 27.1 | % | 25.7 | % | 27.3 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 165.7 | $ | 172.4 | $ | 454.3 | $ | 403.8 | |||||||
Denominator: | |||||||||||||||
Weighted-average shares used to compute basic net income per share | 378.3 | 381.0 | 380.0 | 382.3 | |||||||||||
Dilutive effect of employee stock awards | 4.4 | 3.5 | 6.5 | 5.6 | |||||||||||
Weighted-average shares used to compute diluted net income per share | 382.7 | 384.5 | 386.5 | 387.9 | |||||||||||
Net income per share | |||||||||||||||
Basic | $ | 0.44 | $ | 0.45 | $ | 1.20 | $ | 1.06 | |||||||
Diluted | $ | 0.43 | $ | 0.45 | $ | 1.18 | $ | 1.04 | |||||||
Anti-dilutive shares | 1.0 | 2.7 | 1.2 | 2.7 |
• | Cloud: companies that are heavily reliant on the cloud for their business model’s success. As an example, customers in the cloud vertical can include cloud service providers as well as enterprises that provide software-as-a-service, infrastructure-as-a-service, or platform-as-a-service. |
• | Telecom/Cable: includes wireline and wireless carriers and cable operators. |
• | Strategic Enterprise: generally is comprised of financial services; national, federal, state, and local governments; research and educational institutions, and enterprises not represented in the Cloud vertical. |
• | Junos Node Slicing: converges multiple concurrent network functions on the same physical routing infrastructure, letting customers optimize their infrastructure while offering differentiated services with enhanced operational and administrative isolation within a single chassis. |
• | Universal Chassis: a breakthrough system allowing customers to standardize on a hardware platform across their data center, core, and network edge. We believe the system will create significant value for our customers by enhancing their return on investment through reduced costs. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | Change | % Change | 2017 | 2016 | Change | % Change | ||||||||||||||||||||||
Net revenues | $ | 1,257.8 | $ | 1,285.3 | $ | (27.5 | ) | (2 | )% | $ | 3,787.7 | $ | 3,604.5 | $ | 183.2 | 5 | % | ||||||||||||
Gross margin | $ | 772.4 | $ | 799.5 | $ | (27.1 | ) | (3 | )% | $ | 2,320.9 | $ | 2,246.8 | $ | 74.1 | 3 | % | ||||||||||||
Percentage of net revenues | 61.4 | % | 62.2 | % | 61.3 | % | 62.3 | % | |||||||||||||||||||||
Operating income | $ | 230.9 | $ | 250.0 | $ | (19.1 | ) | (8 | )% | $ | 645.4 | $ | 602.5 | $ | 42.9 | 7 | % | ||||||||||||
Percentage of net revenues | 18.4 | % | 19.5 | % | 17.0 | % | 16.7 | % | |||||||||||||||||||||
Net income | $ | 165.7 | $ | 172.4 | $ | (6.7 | ) | (4 | )% | $ | 454.3 | $ | 403.8 | $ | 50.5 | 13 | % | ||||||||||||
Percentage of net revenues | 13.2 | % | 13.4 | % | 12.0 | % | 11.2 | % | |||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||
Basic | $ | 0.44 | $ | 0.45 | $ | (0.01 | ) | (2 | )% | $ | 1.20 | $ | 1.06 | $ | 0.14 | 13 | % | ||||||||||||
Diluted | $ | 0.43 | $ | 0.45 | $ | (0.02 | ) | (4 | )% | $ | 1.18 | $ | 1.04 | $ | 0.14 | 13 | % | ||||||||||||
Cash dividends declared per common stock | $ | 0.10 | $ | 0.10 | $ | — | — | % | $ | 0.30 | $ | 0.30 | $ | — | — | % | |||||||||||||
Operating cash flows | $ | 1,045.9 | $ | 776.3 | $ | 269.6 | 35 | % | |||||||||||||||||||||
Stock repurchase plan activity | $ | 140.0 | $ | 112.4 | $ | 27.6 | 25 | % | $ | 390.0 | $ | 312.9 | $ | 77.1 | 25 | % | |||||||||||||
DSO | 52 | 53 | (1 | ) | (2 | )% | |||||||||||||||||||||||
September 30, 2017 | December 31, 2016 | $ Change | % Change | ||||||||||||||||||||||||||
Deferred revenue | $ | 1,462.9 | $ | 1,481.1 | $ | (18.2 | ) | (1 | )% | ||||||||||||||||||||
Product deferred revenue | $ | 323.7 | $ | 322.9 | $ | 0.8 | — | % |
• | Net Revenues: Net revenues decreased during the three months ended September 30, 2017, compared to the same period in 2016, due to a decline in product revenues across all technologies. Lower routing revenue was driven by the timing of deployments of Telecom/Cable customers. The decline in switching revenue was primarily due to delay in timing of certain large cloud customer deployments related to the architectural shift to more modern, cost efficient and scalable networks. Our security business continued to undergo product transitions from our legacy products to our newer product offerings, resulting in a decline in revenues. Service revenue grew 9% year-over-year, driven by strong demand for professional services and strong renewal and attach rates of support contracts. |
• | Gross Margin: Our gross margin as a percentage of net revenues decreased during the three and nine months ended September 30, 2017, compared to the same periods in 2016, primarily due to customer mix and higher costs of certain memory components. The decrease was partially offset by improvements in our cost structure. Additionally, our gross margin as a percentage of net revenues for the nine month ended September 30, 2017, compared to the same period in 2016, was impacted by product mix related to the strong performance of switching and by charges related to certain supplier component remediation. |
• | Operating Margin: Our operating income as a percentage of net revenues decreased during the three months ended September 30, 2017, compared to the same period in 2016, primarily due to the drivers described in the gross margin discussion above and lower net revenues, partially offset by a net decrease in our operating expenses from lower personnel-related costs and the effect of litigation settlement charges in 2017. |
• | Capital Return: During the three and nine months ended September 30, 2017, we repurchased 5.0 million and 13.5 million of shares of our common stock, respectively, and paid a quarterly cash dividend of $0.10 per share, for an aggregate amount of $37.7 million and $113.5 million, respectively. |
• | Operating Cash Flows: Operating cash flows increased during the nine months ended September 30, 2017, compared to the same period in 2016, primarily due to an increase in cash collections from customers in the first half of 2017 due to higher invoicing activity during the fourth quarter of 2016, partially offset by higher payments for restructuring activities and an increase in cash paid for income taxes. |
• | DSO: DSO is calculated as the ratio of ending accounts receivable, net of allowances, divided by average daily net revenues for the preceding 90 days. DSO for the third quarter of 2017 decreased one day, compared to the same period in 2016. |
• | Product Deferred Revenue: Product deferred revenue increased as of September 30, 2017 compared to December 31, 2016, primarily due to shipments that have not met certain revenue recognition criteria, partially offset by the recognition of previously deferred revenue related to the completion of delivery to an APAC Telecom customer in the first quarter of 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | ||||||||||||||||||||||
Routing | $ | 585.8 | $ | 620.2 | $ | (34.4 | ) | (6 | )% | $ | 1,679.9 | $ | 1,699.0 | $ | (19.1 | ) | (1 | )% | |||||||||||
Switching | 212.6 | 222.5 | (9.9 | ) | (4 | )% | 730.2 | 607.2 | 123.0 | 20 | % | ||||||||||||||||||
Security | 71.3 | 85.5 | (14.2 | ) | (17 | )% | 205.7 | 237.1 | (31.4 | ) | (13 | )% | |||||||||||||||||
Total Product | 869.7 | 928.2 | (58.5 | ) | (6 | )% | 2,615.8 | 2,543.3 | 72.5 | 3 | % | ||||||||||||||||||
Percentage of net revenues | 69.1 | % | 72.2 | % | 69.1 | % | 70.6 | % | |||||||||||||||||||||
Total Service | 388.1 | 357.1 | 31.0 | 9 | % | 1,171.9 | 1,061.2 | 110.7 | 10 | % | |||||||||||||||||||
Percentage of net revenues | 30.9 | % | 27.8 | % | 30.9 | % | 29.4 | % | |||||||||||||||||||||
Total net revenues | $ | 1,257.8 | $ | 1,285.3 | $ | (27.5 | ) | (2 | )% | $ | 3,787.7 | $ | 3,604.5 | $ | 183.2 | 5 | % | ||||||||||||
Cloud | $ | 344.9 | $ | 359.4 | $ | (14.5 | ) | (4 | )% | $ | 1,056.1 | $ | 911.5 | $ | 144.6 | 16 | % | ||||||||||||
Percentage of net revenues | 27.4 | % | 28.0 | % | 27.9 | % | 25.3 | % | |||||||||||||||||||||
Telecom/Cable | 576.9 | 599.4 | (22.5 | ) | (4 | )% | 1,707.8 | 1,688.5 | 19.3 | 1 | % | ||||||||||||||||||
Percentage of net revenues | 45.9 | % | 46.6 | % | 45.1 | % | 46.8 | % | |||||||||||||||||||||
Strategic Enterprise | 336.0 | 326.5 | 9.5 | 3 | % | 1,023.8 | 1,004.5 | 19.3 | 2 | % | |||||||||||||||||||
Percentage of net revenues | 26.7 | % | 25.4 | % | 27.0 | % | 27.9 | % | |||||||||||||||||||||
Total net revenues | $ | 1,257.8 | $ | 1,285.3 | $ | (27.5 | ) | (2 | )% | $ | 3,787.7 | $ | 3,604.5 | $ | 183.2 | 5 | % | ||||||||||||
Americas: | |||||||||||||||||||||||||||||
United States | $ | 668.8 | $ | 684.6 | $ | (15.8 | ) | (2 | )% | $ | 2,076.0 | $ | 1,924.9 | $ | 151.1 | 8 | % | ||||||||||||
Other | 60.4 | 60.4 | — | — | % | 165.6 | 168.3 | (2.7 | ) | (2 | )% | ||||||||||||||||||
Total Americas | 729.2 | 745.0 | (15.8 | ) | (2 | )% | 2,241.6 | 2,093.2 | 148.4 | 7 | % | ||||||||||||||||||
Percentage of net revenues | 58.0 | % | 58.0 | % | 59.2 | % | 58.1 | % | |||||||||||||||||||||
EMEA | 298.6 | 338.0 | (39.4 | ) | (12 | )% | 871.3 | 923.5 | (52.2 | ) | (6 | )% | |||||||||||||||||
Percentage of net revenues | 23.7 | % | 26.3 | % | 23.0 | % | 25.6 | % | |||||||||||||||||||||
APAC | 230.0 | 202.3 | 27.7 | 14 | % | 674.8 | 587.8 | 87.0 | 15 | % | |||||||||||||||||||
Percentage of net revenues | 18.3 | % | 15.7 | % | 17.8 | % | 16.3 | % | |||||||||||||||||||||
Total net revenues | $ | 1,257.8 | $ | 1,285.3 | $ | (27.5 | ) | (2 | )% | $ | 3,787.7 | $ | 3,604.5 | $ | 183.2 | 5 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | ||||||||||||||||||||||
Product gross margin | $ | 533.7 | $ | 578.6 | $ | (44.9 | ) | (8 | )% | $ | 1,589.4 | $ | 1,587.5 | $ | 1.9 | — | % | ||||||||||||
Percentage of product revenues | 61.4 | % | 62.3 | % | 60.8 | % | 62.4 | % | |||||||||||||||||||||
Service gross margin | 238.7 | 220.9 | 17.8 | 8 | % | 731.5 | 659.3 | 72.2 | 11 | % | |||||||||||||||||||
Percentage of service revenues | 61.5 | % | 61.9 | % | 62.4 | % | 62.1 | % | |||||||||||||||||||||
Total gross margin | $ | 772.4 | $ | 799.5 | $ | (27.1 | ) | (3 | )% | $ | 2,320.9 | $ | 2,246.8 | $ | 74.1 | 3 | % | ||||||||||||
Percentage of net revenues | 61.4 | % | 62.2 | % | 61.3 | % | 62.3 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | ||||||||||||||||||||||
Research and development | $ | 236.4 | $ | 251.8 | $ | (15.4 | ) | (6 | )% | $ | 752.8 | $ | 750.7 | $ | 2.1 | — | % | ||||||||||||
Percentage of net revenues | 18.8 | % | 19.6 | % | 19.9 | % | 20.8 | % | |||||||||||||||||||||
Sales and marketing | 232.5 | 242.9 | (10.4 | ) | (4 | )% | 716.6 | 718.4 | (1.8 | ) | — | % | |||||||||||||||||
Percentage of net revenues | 18.5 | % | 18.9 | % | 18.9 | % | 19.9 | % | |||||||||||||||||||||
General and administrative | 70.6 | 54.0 | 16.6 | 31 | % | 176.7 | 172.0 | 4.7 | 3 | % | |||||||||||||||||||
Percentage of net revenues | 5.6 | % | 4.2 | % | 4.6 | % | 4.8 | % | |||||||||||||||||||||
Restructuring charges | 2.0 | 0.8 | 1.2 | 150 | % | 29.4 | 3.2 | 26.2 | 819 | % | |||||||||||||||||||
Percentage of net revenues | 0.2 | % | 0.1 | % | 0.8 | % | 0.1 | % | |||||||||||||||||||||
Total operating expenses | $ | 541.5 | $ | 549.5 | $ | (8.0 | ) | (1 | )% | $ | 1,675.5 | $1,644.3 | $ | 31.2 | 2 | % | |||||||||||||
Percentage of net revenues | 43.1 | % | 42.8 | % | 44.2 | % | 45.6 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | ||||||||||||||||||||||
Interest income | $ | 14.7 | $ | 9.1 | $ | 5.6 | 62 | % | $ | 37.1 | $ | 25.5 | $ | 11.6 | 45 | % | |||||||||||||
Interest expense | (25.3 | ) | (25.1 | ) | (0.2 | ) | 1 | % | (75.6 | ) | (72.6 | ) | (3.0 | ) | 4 | % | |||||||||||||
Gain on investments, net | 4.7 | 1.9 | 2.8 | 147 | % | 6.7 | 0.1 | 6.6 | N/M | ||||||||||||||||||||
Other | 0.8 | 0.7 | 0.1 | 14 | % | (2.0 | ) | (0.2 | ) | (1.8 | ) | N/M | |||||||||||||||||
Total other expense, net | $ | (5.1 | ) | $ | (13.4 | ) | $ | 8.3 | (62 | )% | $ | (33.8 | ) | $ | (47.2 | ) | $ | 13.4 | (28 | )% | |||||||||
Percentage of net revenues | (0.4 | )% | (1.0 | )% | (0.9 | )% | (1.3 | )% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | ||||||||||||||||||||||
Income tax provision | $ | 60.1 | $ | 64.2 | $ | (4.1 | ) | (6 | )% | $ | 157.3 | $ | 151.5 | $ | 5.8 | 4 | % | ||||||||||||
Effective tax rate | 26.6 | % | 27.1 | % | 25.7 | % | 27.3 | % |
As of | ||||||||||||||
September 30, 2017 | December 31, 2016 | $ Change | % Change | |||||||||||
Working capital | $ | 2,698.0 | $ | 2,236.0 | $ | 462.0 | 21 | % | ||||||
Cash and cash equivalents | $ | 2,363.7 | $ | 1,833.2 | $ | 530.5 | 29 | % | ||||||
Short-term investments | 922.0 | 752.3 | 169.7 | 23 | % | |||||||||
Long-term investments | 913.6 | 1,071.8 | (158.2 | ) | (15 | )% | ||||||||
Total cash, cash equivalents, and investments | 4,199.3 | 3,657.3 | 542.0 | 15 | % | |||||||||
Long-term debt | 2,135.7 | 2,133.7 | 2.0 | — | % | |||||||||
Cash, cash equivalents, and investments, net | $ | 2,063.6 | $ | 1,523.6 | $ | 540.0 | 35 | % |
Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
Net cash provided by operating activities(*) | $ | 1,045.9 | $ | 776.3 | $ | 269.6 | 35 | % | ||||||
Net cash used in investing activities | $ | (84.1 | ) | $ | (308.3 | ) | $ | 224.2 | (73 | )% | ||||
Net cash used in financing activities(*) | $ | (444.6 | ) | $ | (200.1 | ) | $ | (244.5 | ) | 122 | % |
• | the additional development efforts and costs required to create new software products and/or to make our disaggregated products compatible with multiple technologies; |
• | the possibility that our new software products or disaggregated products may not achieve widespread customer adoption; |
• | the potential that our strategy could erode our revenue and gross margins; |
• | the impact on our financial results of longer periods of revenue recognition and changes in tax treatment associated with software sales; |
• | the additional costs associated with regulatory compliance and changes we need to make to our distribution chain in connection with increased software sales; |
• | the ability of our disaggregated hardware and software products to operate independently and/or to integrate with current and future third party products; and |
• | issues with third party technologies used with our disaggregated products may be attributed to us. |
• | changes in general IT spending, |
• | the imposition of government controls, inclusive of critical infrastructure protection; |
• | changes or limitations in trade protection laws or other regulatory requirements, which may affect our ability to import or export our products from various countries; |
• | varying and potentially conflicting laws and regulations; |
• | fluctuations in local economies; |
• | wage inflation or a tightening of the labor market; |
• | tax policies that could have a business impact; |
• | potential import tariffs imposed by the United States and the possibility of reciprocal tariffs by foreign countries; |
• | data privacy rules and other regulations that affect cross border data flow; and |
• | the impact of the following on customer spending patterns: political considerations, unfavorable changes in tax treaties or laws, natural disasters, epidemic disease, labor unrest, earnings expatriation restrictions, misappropriation of |
• | incur liens; |
• | incur sale and leaseback transactions; and |
• | consolidate or merge with or into, or sell substantially all of our assets to, another person. |
• | maintenance of a leverage ratio no greater than 3.0x and an interest coverage ratio no less than 3.0x |
• | covenants that limit or restrict the ability of the Company and its subsidiaries to, among other things, grant liens, merge or consolidate, dispose of all or substantially all of its assets, change their accounting or reporting policies, change their business and incur subsidiary indebtedness, in each case subject to customary exceptions for a credit facility of this size and type. |
Period | Total Number of Shares Purchased(1) | Average Price Paid per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||
July 1 - July 31, 2017 | — | $ | — | — | $ | 469.7 | ||||||||
August 1 - August 31, 2017 | 5.0 | $ | 28.16 | 5.0 | $ | 329.7 | ||||||||
September 1 - September 30, 2017 | — | $ | — | — | $ | 329.7 | ||||||||
Total | 5.0 | 5.0 |
(1) | Shares were repurchased under our Board approved Stock Repurchase Program, which authorized us to purchase an aggregate of up to $4.4 billion of our common stock. Future share repurchases 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. |
Exhibit Number | Description of Document | |
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
12.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101 | The following materials from Juniper Network Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, and (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements* | |
101.INS | XBRL Instance Document* | |
101.SCH | XBRL Taxonomy Extension Schema Document* | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |
*Filed herewith. |
**Furnished herewith. |
++Indicates management contract or compensatory plan, contract or arrangement. |
Juniper Networks, Inc. | |||
November 7, 2017 | By: | /s/ Kenneth B. Miller | |
Kenneth B. Miller | |||
Executive Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) | |||
November 7, 2017 | By: | /s/ Terrance F. Spidell | |
Terrance F. Spidell | |||
Vice President, Corporate Controller and Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer) |
/s/ Rami Rahim | August 9, 2017 | |||
Rami Rahim | Date | |||
Agreed and Accepted: | ||||
/s/ Anand Athreya | August 9, 2017 | |||
Anand Athreya | Date |
Offer Component | Offer Amount | Currency | Frequency |
Base Compensation | $500,000.00 | USD | Annual |
RSU | 300,000.00 | RSU | Standard Vesting |
Hiring Bonus | $500,000.00 | USD | One Time after starting |
• | As for the equity portion, Juniper will take half of your bonus target set forth above and multiply it by 1.5 resulting in seventy-five percent (75%) of your bonus target to be paid in the form of equity. The vesting of this equity will be performance based (e.g., the achievement of corporate financial results). If the performance conditions are achieved, fifty percent (50%) of the equity award will vest in the first quarter of the following fiscal year for which the performance conditions relate to (e.g., 50% of the equity would vest in the first quarter of 2019 based on 2018 results) and the remaining fifty percent (50%) will vest the following year. This equity award will be subject to your acceptance of a performance share award agreement, which along with the Juniper equity incentive plan governing the award and applicable sub-plans, will set out additional terms and conditions of the grant. |
• | As for the cash portion, the amount (if any) of the bonus that will be payable will be determined by the total funding level established by Juniper under the Plan, and then as further determined by the Committee. The bonus amount of cash that you would then be entitled to receive under the Plan is then offset by the half of your bonus target used to determine the equity grant for this Program. |
/s/ Rami Rahim |
I accept the terms of this letter: |
Bikash Koley | ||||
/s/ Bikash Koley | June 29, 2017 | |||
Signature | Date Signed | |||
Start Date: | August 14, 2017 | |||
COMPANY | JUNIPER NETWORK, INC. | |||
By: | /s/ Brian Martin | |||
Name: | Brian Martin | |||
Title: | Senior Vice President, General Counsel | |||
Date: | September 5, 2017 | |||
EMPLOYEE | By: | /s/ Bikash Koley | ||
Name: | Bikash Koley | |||
Date: | September 5, 2017 | |||
Juniper Network, Inc. | |||||
Date: __________, 20_____ | By | ||||
Name: | |||||
Title: | |||||
, an individual | |||||
Date: __________, 20_____ | |||||
COMPANY | JUNIPER NETWORK, INC. | |||
By: | /s/ Brian Martin | |||
Name: | Brian Martin | |||
Title: | Senior Vice President, General Counsel | |||
Date: | September 5, 2017 | |||
EMPLOYEE | Name: | /s/ Bikash Koley | ||
Date: | September 5, 2017 | |||
Nine Months Ended September 30, | Years Ended December 31, | ||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||
Earnings for computation of ratio(*): | |||||||||||||||||||||||
Income (loss) before income taxes and before adjustment for noncontrolling interests in consolidated subsidiaries or income from equity investees | $ | 611.6 | $ | 827.4 | $ | 852.2 | $ | (86.3 | ) | $ | 518.4 | $ | 266.0 | ||||||||||
Plus: | |||||||||||||||||||||||
Fixed charges | 84.3 | 109.4 | 98.5 | 83.3 | 76.1 | 72.0 | |||||||||||||||||
Amortization of capitalized interest | 1.1 | 1.3 | 0.8 | 0.5 | 0.4 | — | |||||||||||||||||
Less: | |||||||||||||||||||||||
Interest capitalized | — | (0.4 | ) | (2.2 | ) | (2.7 | ) | (1.9 | ) | (7.1 | ) | ||||||||||||
Total earnings (loss) | $ | 697.0 | $ | 937.7 | $ | 949.3 | $ | (5.2 | ) | $ | 593.0 | $ | 330.9 | ||||||||||
Fixed charges(*): | |||||||||||||||||||||||
Interest expense | $ | 74.0 | $ | 95.7 | $ | 81.9 | $ | 66.0 | $ | 58.1 | $ | 52.2 | |||||||||||
Interest capitalized | — | 0.4 | 2.2 | 2.7 | 1.9 | — | |||||||||||||||||
Amortized premiums, discounts, and capitalized expenses relating to indebtedness | 1.5 | 1.9 | 1.4 | 0.8 | 0.3 | 0.8 | |||||||||||||||||
Estimate of interest within rental expense | 8.8 | 11.4 | 13.0 | 13.8 | 15.8 | 19.0 | |||||||||||||||||
Total fixed charges | $ | 84.3 | $ | 109.4 | $ | 98.5 | $ | 83.3 | $ | 76.1 | $ | 72.0 | |||||||||||
Ratio of earnings (loss) to fixed charges | 8.3x | 8.6x | 9.6x | (0.1)x | 7.8x | 4.6x |
(*) | For this ratio, both "earnings" and “fixed charges” conform to the calculation required by Item 503(d) of Regulation S-K. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Juniper Networks, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Juniper Networks, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 03, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | JUNIPER NETWORKS INC | |
Entity Central Index Key | 0001043604 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 374,928,303 |
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Net revenues: | ||||
Product | $ 869.7 | $ 928.2 | $ 2,615.8 | $ 2,543.3 |
Service | 388.1 | 357.1 | 1,171.9 | 1,061.2 |
Total net revenues | 1,257.8 | 1,285.3 | 3,787.7 | 3,604.5 |
Cost of revenues: | ||||
Product | 336.0 | 349.6 | 1,026.4 | 955.8 |
Service | 149.4 | 136.2 | 440.4 | 401.9 |
Total cost of revenues | 485.4 | 485.8 | 1,466.8 | 1,357.7 |
Gross margin | 772.4 | 799.5 | 2,320.9 | 2,246.8 |
Operating expenses: | ||||
Research and development | 236.4 | 251.8 | 752.8 | 750.7 |
Sales and marketing | 232.5 | 242.9 | 716.6 | 718.4 |
General and administrative | 70.6 | 54.0 | 176.7 | 172.0 |
Restructuring charges | 2.0 | 0.8 | 29.4 | 3.2 |
Total operating expenses | 541.5 | 549.5 | 1,675.5 | 1,644.3 |
Operating income | 230.9 | 250.0 | 645.4 | 602.5 |
Other expense, net | (5.1) | (13.4) | (33.8) | (47.2) |
Income before income taxes | 225.8 | 236.6 | 611.6 | 555.3 |
Income tax provision | 60.1 | 64.2 | 157.3 | 151.5 |
Net income | $ 165.7 | $ 172.4 | $ 454.3 | $ 403.8 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.44 | $ 0.45 | $ 1.20 | $ 1.06 |
Diluted, (in dollars per share) | $ 0.43 | $ 0.45 | $ 1.18 | $ 1.04 |
Shares used in computing net income per share: | ||||
Basic (in shares) | 378.3 | 381.0 | 380.0 | 382.3 |
Diluted (in shares) | 382.7 | 384.5 | 386.5 | 387.9 |
Cash dividends declared per common stock (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 |
Condensed Consolidated Balance Sheets (Parentheticals) (Unaudited) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Convertible preferred stock - par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Convertible preferred stock - shares authorized (shares) | 10,000,000 | 10,000,000 |
Convertible preferred stock - issued (shares) | 0 | 0 |
Convertible preferred stock - outstanding (shares) | 0 | 0 |
Common stock - par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock - shares authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock - issued (shares) | 377,200,000 | 381,100,000 |
Common stock - outstanding (shares) | 377,200,000 | 381,100,000 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation The unaudited Condensed Consolidated Financial Statements of Juniper Networks, Inc. (the “Company” or “Juniper”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The Condensed Consolidated Balance Sheet as of December 31, 2016, has been derived from the audited Consolidated Financial Statements at that date. 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 nine months ended September 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or any future period. The information included in this Quarterly Report on Form 10-Q (“Report”) 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, 2016 (the "Form 10-K"). Excess tax benefits from share-based compensation in prior periods have been reclassified to conform to the current-period presentation in the Condensed Consolidated Statements of Cash Flows upon adoption of the accounting standard described in Note 2, Summary of Significant Accounting Policies. In addition, certain other amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current-period presentation. The preparation of the financial statements and related disclosures in accordance with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates under different assumptions or conditions. |
Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Except for the change in certain policies related to share-based compensation upon adoption of the accounting standard described below, there have been no material changes to the Company's significant accounting policies, compared to the accounting policies described in Note 2, Significant Accounting Policies, in Notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K. Recently Adopted Accounting Standard On January 1, 2017, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-09 (Topic 718) Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeiture, statutory tax withholding requirements, and classification on the statement of cash flows. The impact of the adoption on the Company's Condensed Consolidated Financial Statements was as follows:
Recent Accounting Standards Not Yet Effective In August 2017, the FASB issued ASU No. 2017-12 (Topic 815) Derivatives and Hedging — Targeted Improvements to Accounting for Hedging Activities, which expands an entity's ability to hedge financial and nonfinancial risk components and amends how companies assess effectiveness as well as changes the presentation and disclosure requirements. The new standard is to be applied on a modified retrospective basis and is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of adoption on the Consolidated Financial Statements. In May 2017, the FASB issued ASU No. 2017-09 (Topic 718) Compensation—Stock Compensation: Scope of Modification Accounting, which provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new standard is effective on a prospective basis for interim and annual periods beginning after December 15, 2017, with early adoption permitted. In March 2017, the FASB issued ASU No. 2017-08 Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities which shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The ASU will not impact debt securities held at a discount. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, and is to be applied on a modified retrospective basis with early adoption permitted. The Company is currently evaluating the impact of adoption on the Consolidated Financial Statements. In February 2017, the FASB issued ASU No. 2017-05 Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which amends guidance on how entities account for the derecognition of a nonfinancial asset or an in substance nonfinancial asset that is not a business. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, and is to be applied on either a retrospective or modified retrospective basis with early adoption permitted. The adoption of this standard will not have a material impact on the Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04 (Topic 350) Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment, which removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This ASU will be applied on a prospective basis and is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, 2017. In January 2017, the FASB issued ASU No. 2017-01 (Topic 805) Business Combinations: Clarifying the Definition of a Business, which clarifies the definition of a business and assists entities with evaluating when a set of transferred assets and activities is a business. This ASU is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted and will be applied on a prospective basis. In November 2016, the FASB issued ASU No. 2016-18 (Topic 230) Statement of Cash Flow: Restricted Cash, which provides guidance on the classification of restricted cash to be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts on the statement of cash flows. The amendments of this ASU are effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The standard must be applied retrospectively to all periods presented. The adoption of this standard will not have a material impact on the cash flow activity presented on the Company's Consolidated Statements of Cash Flows. In October 2016, the FASB issued ASU No. 2016-16 (Topic 740) Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This ASU will be effective for annual and interim reporting periods beginning after December 15, 2017 and is to be applied on a modified retrospective basis. Early adoption is permitted. The adoption of this standard will not have a material impact on the Consolidated Financial Statements. In August 2016, the FASB issued ASU No. 2016-15 (Topic 230) Statement of Cash Flow: Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This pronouncement is effective for interim and annual reporting periods beginning after December 15, 2017 and will be applied on a retrospective basis. Early adoption is permitted. The adoption of this standard will not have a material impact on the Company's Consolidated Statements of Cash Flows. In June 2016, the FASB issued ASU No. 2016-13 (Topic 326) Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which provides more decision-useful information about the expected credit losses on financial instruments and changes the loss impairment methodology. This pronouncement is effective for reporting periods beginning after December 15, 2019, and interim periods within those fiscal years, using a modified retrospective adoption method. Early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its Consolidated Financial Statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases, which requires recognition of lease assets and lease liabilities on the balance sheet by lessees for leases classified as operating leases with a lease term of more than twelve months. This ASU should be applied on a modified retrospective basis and is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard and has commenced the assessment phase to determine the approach for implementing this standard. The adoption of this standard is expected to have a material impact on the Company's Consolidated Balance Sheets and disclosures. The Company is still evaluating the impact this standard will have on the Consolidated Statements of Operations. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which changes how entities measure equity investments and present changes in the fair value of financial liabilities measured under the fair value option. The guidance also updates certain presentation and disclosure requirements. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This ASU is to be applied on a prospective basis for amendments related to equity securities without readily determinable fair values, and all other amendments in this standard will be applied on a modified retrospective basis. For equity securities without readily determinable fair values, we expect to elect the measurement alternative, defined as cost, less impairments, adjusted by observable price changes. The Company does not anticipate that the adoption of the amendments that will be applied on a modified retrospective basis will have a material impact on the Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09 (Topic 606)—Revenue from Contracts with Customers and several amendments thereafter (“ASU 2014-09”), which provides guidance for revenue recognition that will supersede the revenue recognition requirements in Topic 605, and most industry specific guidance. The core principle for ASU 2014-09 is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017. The Company intends to adopt ASU 2014-09 on January 1, 2018 retrospectively, applying the amendments to each prior reporting period presented and currently remains on schedule with its implementation and the preparation of its prior-period financial statements. Upon adoption, the Company expects a material impact to the opening balance sheet as of January 1, 2016 related to the cumulative effect of adopting this standard, primarily due to the application of the new guidance in the areas of distributor sales, software revenue, contract acquisition costs, variable consideration, and revenue allocation. The Company continues to assess the impact of ASU 2014-09 including any changes to systems, processes, and the control environment as it works through the adoption in 2017, and there remain areas still to be fully concluded upon. In addition, there are ongoing interpretive reviews, which may alter the Company's conclusions on key accounting assessments and the financial impact of ASU 2014-09 on the Company's Consolidated Financial Statements. For further information, refer to Note 2, Significant Accounting Policies, in Notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K. |
Business Combinations |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||
Business Combinations | Business Combinations On September 18, 2017, the Company acquired 100% of Cyphort, Inc. ("Cyphort") for $33.5 million of cash. The acquisition of Cyphort, a software company providing security analytics for advanced threat defense, is expected to strengthen Juniper's security product portfolio. The following table summarizes the estimated fair value of the assets acquired at the acquisition date (in millions, except years):
________________________________ (*) Weighted average estimated useful life of 5 years. Under the terms of the acquisition agreement with Cyphort, the Company assumed certain share-based awards for continuing employees, which were granted in contemplation of future services. The fair value of these share-based awards was $3.8 million, which will be expensed as share-based compensation over the remaining service period. Acquisition-related costs were not material during the three and nine months ended September 30, 2017 and were expensed in the period incurred within general and administrative expense in the Company's Condensed Consolidated Statements of Operations. The operating results of this business combination from the date of acquisition were not material to the Company's consolidated balance sheets and results of operations. Pro forma results of operations for this acquisition have not been presented, as the financial impact to the Company's consolidated results of operations is not material. The primary areas of the preliminary purchase price allocation that are subject to change relate to certain legal and income tax matters. |
Cash Equivalents and Investments |
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Cash Equivalents and Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Investments | Cash Equivalents and Investments Investments in Available-for-Sale and Trading Securities The following table summarizes the Company's unrealized gains and losses and fair value of investments designated as available-for-sale and trading securities as of September 30, 2017 and December 31, 2016 (in millions):
The following table presents the contractual maturities of the Company's total fixed income securities as of September 30, 2017 (in millions):
The following tables present the Company's available-for-sale securities that were in an unrealized loss position as of September 30, 2017 and December 31, 2016 (in millions):
The Company had 582 and 494 investments in unrealized loss positions as of September 30, 2017 and December 31, 2016, respectively. The gross unrealized losses related to these investments were primarily due to changes in market interest rates and stock prices. For available-for-sale debt securities that have unrealized losses, the Company evaluates whether (i) it has the intention to sell any of these investments and (ii) whether it is more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. As of September 30, 2017, the Company anticipates that it will recover the entire amortized cost basis of such available-for-sale debt securities and has determined that no other-than-temporary impairments associated with credit losses were required to be recognized during the three and nine months ended September 30, 2017. During the three and nine months ended September 30, 2016, there were no other-than-temporary impairments associated with these investments. During the three and nine months ended September 30, 2017 and September 30, 2016, there were no material gross realized gains or losses from either available-for-sale securities or from trading securities. Restricted Cash and Investments There have been no material changes to the composition of the Company's restricted cash and investments as described in Note 4, Cash Equivalents and Investments, in Notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K. The restricted investments are designated as available-for-sale securities except relating to the non-qualified deferred compensation plan which are designated as trading securities. As of September 30, 2017, total restricted cash and investments was $123.2 million, of which $58.3 million was included in prepaid expenses and other current assets and $64.9 million was included in restricted cash and investments on the Condensed Consolidated Balance Sheets. Investments in Privately-Held Companies As of September 30, 2017 and December 31, 2016, the carrying values of the Company's investments in privately-held companies of $72.5 million and $62.7 million, respectively, were included in other long-term assets in the Condensed Consolidated Balance Sheets. These investments include debt and redeemable preferred stock securities that are carried at fair value, and non-redeemable preferred stock and common stock securities that are carried at cost. As of September 30, 2017 and December 31, 2016, the carrying value of the investments accounted for under the cost method were $30.2 million and $19.0 million, respectively. See Note 5, Fair Value Measurements, for the Company's investments in privately-held companies that are carried at fair value. The Company adjusts the carrying value for its investments in privately-held companies that are carried at cost for any impairment if the fair value is less than the carrying value of the respective assets on an other-than-temporary basis. There were no impairment charges for the three and nine months ended September 30, 2017. During the three and nine months ended September 30, 2016, the Company determined that certain investments in privately-held companies were other than-temporarily impaired, resulting in impairment charges of $4.5 million and $9.6 million, that were recorded within other expense, net in the Condensed Consolidated Statement of Operations. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table provides a summary of assets and liabilities measured at fair value on a recurring basis and as reported in the Condensed Consolidated Balance Sheets (in millions):
The Company's Level 2 available-for-sale fixed income securities are priced using quoted market prices for similar instruments or non-binding market prices that are corroborated by observable market data. The Company uses inputs such as actual trade data, benchmark yields, broker/dealer quotes, or alternative pricing sources with reasonable levels of price transparency which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of these assets. The Company's derivative instruments are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs. The Company's policy is to recognize asset or liability transfers among Level 1, Level 2, and Level 3 at the beginning of the quarter in which a change in circumstances resulted in a transfer. During the three and nine months ended September 30, 2017, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. All of the Company's privately-held debt and redeemable preferred stock securities are classified as Level 3 assets due to the lack of observable inputs to determine fair value. The Company estimates the fair value of its privately-held debt and redeemable preferred stock securities on a recurring basis using an analysis of the financial condition and near-term prospects of the investee, including recent financing activities and the investee's capital structure. During the three and nine months ended September 30, 2017, there were no purchases, sales, gains, or losses related to privately-held debt and redeemable preferred stocks securities. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis As of September 30, 2017, the Company had no assets required to be measured at fair value on a nonrecurring basis. Investments in privately-held companies, which are normally carried at cost, are measured at fair value on a nonrecurring basis due to events and circumstances that the Company identifies as materially impacting the carrying value of the investments. As of December 31, 2016, certain investments in privately-held companies with a carrying value of $1.6 million were impaired and written-down to their fair value of zero and were classified as Level 3 assets due to lack of observable inputs to determine fair value. The Company estimates the fair value of its investments in privately-held companies using an analysis of the financial condition and near-term prospects of the investee, including recent financing activities and the investee's capital structure. The impairment charge was recorded to other expense, net in the Condensed Consolidated Statements of Operations. As of September 30, 2017 and December 31, 2016, the Company had no liabilities required to be measured at fair value on a nonrecurring basis. Assets and Liabilities Not Measured at Fair Value The carrying amounts of the Company's accounts receivable, accounts payable, and other accrued liabilities approximate fair value due to their short maturities. As of September 30, 2017 and December 31, 2016, the estimated fair value of the Company's long-term debt in the Condensed Consolidated Balance Sheets was $2,274.8 million and $2,215.7 million, respectively, based on observable market inputs (Level 2). The carrying value of the promissory note issued to the Company in connection with the previously completed sale of Junos Pulse (the “Pulse Note”), of $58.5 million and $132.9 million approximates its fair value as of September 30, 2017 and December 31, 2016. The Pulse Note is classified as a Level 3 asset due to the lack of observable inputs to determine fair value. See Note 8, Other Financial Information, for further information on the Pulse Note. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments The Company uses derivatives to partially offset its market exposure to fluctuations in certain foreign currencies and does not enter into derivatives for speculative or trading purposes. The notional amount of the Company's foreign currency derivatives are summarized as follows (in millions):
Cash Flow Hedges The Company uses foreign currency forwards to hedge the Company's planned cost of revenues and operating expenses denominated in foreign currencies. These derivatives are designated as cash flow hedges. Execution of cash flow hedge derivatives typically occurs every month with maturities of eighteen months or less. As of September 30, 2017, an estimated $8.8 million of existing gains or losses within accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months. The Company recognized an unrealized gain of $6.8 million and $17.6 million in accumulated other comprehensive loss for the effective portion of its derivative instruments for the three and nine months ended September 30, 2017, respectively; and unrealized gains of $0.3 million and $4.8 million for the corresponding periods of the fiscal year ended December 31, 2016, respectively. The amounts reclassified out of accumulated other comprehensive loss to cost of revenues and operating expense in the Condensed Consolidated Statements of Operations was not material during the three and nine months ended September 30, 2017 and September 30, 2016. The ineffective portion of the Company's derivative instruments recognized in its Condensed Consolidated Statements of Operations was not material during the three and nine months ended September 30, 2017 and September 30, 2016. See Note 5, Fair Value Measurements, for the fair values of the Company's derivative instruments in the Condensed Consolidated Balance Sheets. Non-Designated Derivatives The Company also uses foreign currency forward contracts to mitigate variability in gains and losses generated from the remeasurement of certain monetary assets and liabilities denominated in foreign currencies. These foreign exchange forward contracts typically have maturities of approximately one month. The outstanding non-designated derivative instruments are carried at fair value. Changes in the fair value of these derivatives recorded in other expense, net within the Condensed Consolidated Statements of Operations were not material during the three and nine months ended September 30, 2017 and September 30, 2016. |
Goodwill and Purchased Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets Goodwill The following table presents goodwill activity (in millions):
________________________________ (*) Other primarily consists of certain purchase accounting adjustments related to previously completed business combinations. Purchased Intangible Assets The Company’s purchased intangible assets as of September 30, 2017 and December 31, 2016, were $133.0 million and $130.2 million, respectively. The balance as of September 30, 2017 includes $15.4 million of purchased intangible assets related to the acquisition of Cyphort. See Note 3, Business Combinations, for further details. Amortization expense was $4.1 million and $12.6 million during the three and nine months ended September 30, 2017, respectively, and $4.8 million and $12.9 million during the three and nine months ended September 30, 2016, respectively. |
Other Financial Information |
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Other Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Financial Information | Other Financial Information Inventory Total inventory consisted of the following (in millions):
Note Receivable In October 2014, the Company completed the sale of its Junos Pulse product portfolio. The Company received total consideration of $230.7 million, of which $105.7 million was in cash, net of a $19.3 million working capital adjustment, and $125.0 million was in the form of a non-contingent interest-bearing promissory note due to the Company on April 1, 2016. In October 2015, the Company and the issuer of the Pulse Note mutually agreed to amend the original terms of the Pulse Note to, among other things:
In May 2017, the Company received payment of $75.0 million and the outstanding interest due. The Company and the issuer of the Pulse Note further mutually agreed to amend the terms of the Pulse Note to, among other things:
The Company considers notes receivable to be impaired when, based on current information and events, it is probable that the Company will not be able to collect the scheduled payments of principal or interest when due. No impairment charge was required for the Pulse Note as of September 30, 2017. The outstanding balance of the Pulse Note, along with the accumulated interest paid in kind, of $58.5 million as of September 30, 2017 is classified as a long-term asset based on expected collection beyond twelve months from the Condensed Consolidated Balance Sheet date. During the three and nine months ended September 30, 2017, the interest income on the Pulse Note was $1.6 million and $6.5 million, respectively. During the three and nine months ended and September 30, 2016, the related amount of interest income recognized was $2.7 million and $8.0 million, respectively. Warranties Changes during the nine months ended September 30, 2017 in the Company’s warranty reserve as reported within other accrued liabilities in the Condensed Consolidated Balance Sheets were as follows (in millions):
Deferred Revenue Details of the Company's deferred revenue, as reported in the Condensed Consolidated Balance Sheets, were as follows (in millions):
Other Expense, Net Other expense, net, consisted of the following (in millions):
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Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | Restructuring Charges During the first quarter of 2017, the Company initiated a restructuring plan (the “2017 Restructuring Plan”) to realign its workforce and increase operational efficiencies. During the second quarter of 2017, the Company undertook certain further actions under the 2017 Restructuring Plan, resulting in additional severance and contract termination costs that were recorded to restructuring charges in the Condensed Consolidated Statement of Operations. During the three and nine months ended September 30, 2017, the Company recorded $0.6 million and $26.0 million of severance costs, and $1.4 million and $3.4 million of contract terminations, respectively, that were recorded to restructuring charges in the Condensed Consolidated Statement of Operations. See Note 17, Subsequent Events, for discussion of the Company's restructuring activity subsequent to September 30, 2017. Restructuring liabilities are reported within other accrued liabilities in the Condensed Consolidated Balance Sheets. The following table provides a summary of changes in the restructuring liabilities primarily related to the 2017 Restructuring Plan initiated in February 2017 (in millions):
________________________________ (*) Consists of costs in connection with a prior restructuring plan that is substantially complete. |
Debt and Financing |
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Debt Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Financing | Debt and Financing Debt The Company's long-term debt is summarized as follows (in millions, except percentages):
The Notes above are the Company’s senior unsecured and unsubordinated obligations, ranking equally in right of payment to all of the Company’s existing and future senior unsecured and unsubordinated indebtedness and senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated to the Notes. Interest on the Notes is payable in cash semiannually. The Company may redeem, either in whole or in part, the Senior Notes due 2020 at any time on or after May 15, 2020, the Senior Notes due 2025 at any time on or after March 15, 2025, and the other Notes at any time, in each case, according to the terms of the indentures governing the Notes. In the event of a change of control repurchase event, the holders of the Notes may require the Company to repurchase for cash all or part of the Notes at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any. The indentures that govern the Notes also contain various covenants, including limitations on the Company's ability to incur liens or enter into sale-leaseback transactions over certain dollar thresholds. As of September 30, 2017, the Company was in compliance with all covenants in the indentures governing the Notes. Revolving Credit Facility In June 2014, the Company entered into a Credit Agreement (“Credit Agreement”) with certain institutional lenders that provides for a $500.0 million unsecured revolving credit facility, with an option to increase the amount of the credit facility by up to an additional $200.0 million, subject to certain conditions. Revolving loans may be borrowed, repaid and reborrowed until June 27, 2019, at which time all amounts borrowed must be repaid. Borrowings under the Credit Agreement will bear interest at either i) a floating rate per annum equal to the base rate plus a margin of between 0.00% and 0.50%, depending on the Company's public debt rating or ii) a per annum rate equal to the reserve adjusted Eurocurrency rate, plus a margin of between 0.90% and 1.50%, depending on the Company's public debt rating. As of September 30, 2017, the Company was in compliance with all covenants in the Credit Agreement, and no amounts were outstanding. Financing Arrangements The Company provides certain customers with access to extended financing arrangements that allow for longer payment terms than those typically provided by the Company by factoring accounts receivable to third-party financing providers (“financing providers”). The program does not and is not intended to affect the timing of the Company's revenue recognition. Under the financing arrangements, proceeds from the financing providers are due to the Company within 1 to 90 days from the sale of the receivable. In these transactions with the financing providers, the Company surrenders control over the transferred assets. Pursuant to the financing arrangements for the sale of receivables, the Company sold net receivables of $77.3 million and $132.6 million during the three and nine months ended September 30, 2017, respectively, and $59.3 million and $73.4 million during the three and nine months ended September 30, 2016, respectively. The Company received cash proceeds from financing providers of $57.6 million and $113.3 million during the three and nine months ended September 30, 2017, respectively, and $30.0 million and $40.8 million during the three and nine months ended September 30, 2016, respectively. As of September 30, 2017 and December 31, 2016, the amounts owed by the financing providers were $32.9 million and $13.6 million, respectively, which were recorded in accounts receivable in the Condensed Consolidated Balance Sheets. |
Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Cash Dividends on Shares of Common Stock During the nine months ended September 30, 2017, the Company declared a quarterly cash dividend of $0.10 per share of common stock on January 26, 2017, April 25, 2017 and July 25, 2017, which was paid on March 22, 2017, June 22, 2017 and September 22, 2017, respectively, to stockholders of record on March 1, 2017, June 1, 2017, and September 1, 2017, respectively, in the aggregate amount of $113.5 million. Any future dividends, and the establishment of record and payment dates, are subject to approval by the Board of Directors (the “Board”) of the Company or an authorized committee thereof. See Note 17, Subsequent Events, for discussion of the Company's dividend declaration subsequent to September 30, 2017. Stock Repurchase Activities In 2014 and 2015, the Board approved a stock repurchase program that authorized the Company to repurchase up to $2.1 billion of its common stock, including $1.2 billion pursuant to an accelerated share repurchase program, and subsequent increases to the authorization totaling $1.8 billion (“Stock Repurchase Program”). In February 2017, the Board authorized an additional $500.0 million increase to the Stock Repurchase Program for a total of $4.4 billion. The following table summarizes the Company's repurchases and retirements of its common stock under its Stock Repurchase Program (in millions, except per share amounts):
As of September 30, 2017, there was $329.7 million of authorized funds remaining under the Stock Repurchase Program. Future share repurchases under the Stock Repurchase Program will be subject to a review of the circumstances 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. The Stock Repurchase Program may be discontinued at any time. See Note 17, Subsequent Events, for discussion of the Company's stock repurchase activity subsequent to September 30, 2017. In addition to repurchases under the Stock Repurchase Program, the Company also repurchases common stock from certain employees in connection with the net issuance of shares to satisfy minimum tax withholding obligations upon the vesting of certain stock awards issued to such employees. Repurchases associated with tax withholdings were not material during the three and nine months ended September 30, 2017. Repurchases associated with tax withholdings were $1.4 million and $11.0 million for the three and nine months ended September 30, 2016. Accumulated Other Comprehensive Loss, Net of Tax The components of accumulated other comprehensive loss, net of related taxes, for the nine months ended September 30, 2017 were as follows (in millions):
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Employee Benefit Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans Equity Incentive Plans The Company has stock-based compensation plans pursuant to which it has granted stock options, restricted stock units (“RSUs”), and performance share awards (“PSAs”). The Company also maintains the Company's 2008 Employee Stock Purchase Plan (the “ESPP”) for all eligible employees. As of September 30, 2017, 35.3 million and 11.2 million shares were available for future issuance under the Company's 2015 Equity Incentive Plan (the "2015 Plan") and the ESPP, respectively, which includes an additional 23.0 million shares under the 2015 Plan and 9.0 million shares under the ESPP that were approved by the Company's stockholders in May 2017. Stock Option Activities The following table summarizes the Company’s stock option activity and related information as of and for the nine months ended September 30, 2017 (in millions, except for per share amounts and years):
Restricted Stock Unit, Restricted Stock Award, and Performance Share Award Activities The Company’s RSU, restricted stock award ("RSA"), and PSA activity and related information as of and for the nine months ended September 30, 2017 were as follows (in millions, except per share amounts and years):
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Employee Stock Purchase Plan The ESPP is implemented in a series of offering periods, each currently six months in duration, or such other period as determined by the Board. Employees purchased approximately 1.2 million and 2.7 million shares of common stock through the ESPP at an average exercise price of $22.79 and $20.83 per share during the three and nine months ended September 30, 2017, respectively. Employees purchased approximately 1.4 million and 2.7 million shares of common stock through the ESPP at an average exercise price of $19.29 and $19.66 per share during the three and nine months ended September 30, 2016, respectively. Share-Based Compensation Expense Share-based compensation expense associated with stock options, RSUs, RSAs, PSAs, and ESPP was recorded in the following cost and expense categories in the Condensed Consolidated Statements of Operations (in millions):
The following table summarizes share-based compensation expense by award type (in millions):
As of September 30, 2017, the unrecognized compensation cost related to unvested stock options, RSUs, RSAs, and PSAs was $309.8 million to be recognized over a weighted-average period of 1.6 years. |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments The Company operates in one reportable segment. Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance, accompanied by disaggregated information about net revenues by product and service, customer vertical, and geographic region as presented below. The following table presents net revenues by product and service (in millions):
In the first quarter of 2017, the Company began reporting revenue on the following key customer verticals: Cloud, Telecom/Cable, and Strategic Enterprise. A summary of the types of customers included in these verticals is as follows:
The following table presents net revenues by customer vertical (in millions):
The Company attributes revenues to geographic region based on the customer’s shipping address. The following table presents net revenues by geographic region (in millions):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The following table provides details of income taxes (in millions, except percentages):
The Company's effective tax rates during the three and nine months ended September 30, 2017 and September 30, 2016, differ from the statutory rate primarily due to the benefit of the Section 199 deduction for U.S. production activities, the federal research and development credit, and earnings in foreign jurisdictions, which are subject to lower tax rates. Additionally, the Company's effective tax rates for the three and nine months ended September 30, 2017 were also impacted by the benefit from restructuring charges and excess tax benefits related to share-based compensation. As of September 30, 2017, the total amount of gross unrecognized tax benefits was $236.7 million, of which $204.2 million, if recognized, would favorably affect the Company's effective tax rate. The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. It is reasonably possible that the balance of unrecognized tax benefits could decrease up to $67.0 million within the next twelve months due to lapses of applicable statutes of limitations and the completion of tax review cycles in various tax jurisdictions. The balance primarily relates to matters involving U.S and non-U.S taxation of cross-border transactions and the utilization of losses. |
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Net Income Per Share | Net Income per Share The Company computed basic and diluted net income per share as follows (in millions, except per share amounts):
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Commitments and Contingencies |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Except for the items below, there have been no material changes to the Company's commitments compared to the commitments described in Note 16, Commitments and Contingencies, in Notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K. Clock-Signal, Supplier Component Remediation Liability As of September 30, 2017 and December 31, 2016, the Company had approximately $0.8 million and $10.8 million, respectively, in other accrued liabilities on the Condensed Consolidated Balance Sheets for the expected remediation costs for certain products containing a defect in a clock-signal component manufactured by a third-party supplier. The Company has been advised by the component supplier that components may begin to fail after the product has been in operation for 18 months. The Company is in the process of implementing the remediation with its customers. Guarantees 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 solely, or in combination with other third party products, infringe the intellectual property rights of a third-party. As of September 30, 2017 and December 31, 2016, the Company recorded $20.1 million and $28.9 million, respectively, for such indemnification obligations in other accrued liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. During the nine months ended September 30, 2017, $15.0 million of indemnification obligations expired and were therefore released. Legal Proceedings Investigations The U.S. Securities and Exchange Commission ("SEC") and the U.S. Department of Justice ("DOJ") are conducting investigations into possible violations by the Company of the U.S. Foreign Corrupt Practices Act ("FCPA"). The Company is cooperating with these agencies regarding these matters. The Company’s Audit Committee, with the assistance of independent advisors, has been investigating and conducting a thorough review of possible violations of the FCPA, and has made recommendations for remedial measures, including employee disciplinary actions in foreign jurisdictions, which the Company has implemented and continues to implement. The Company is unable to predict the duration, scope or outcome of the SEC and DOJ investigations, but believes that an adverse outcome is reasonably possible. However, the Company is not able to estimate a reasonable range of possible loss. The SEC and/or DOJ could take action against the Company or the Company could agree to settle. In such event, the Company could be required to pay substantial fines and sanctions and/or implement additional remedial measures; in addition, it may be determined that the Company violated the FCPA. Other Litigations and Investigations In addition to the investigations discussed above, the Company is involved in other investigations, disputes, litigations, and legal proceedings. The Company records an accrual for loss contingencies for legal proceedings when it believes that an unfavorable outcome is both (a) probable and (b) the amount or range of any possible loss is reasonably estimable. The Company intends to aggressively defend itself in these matters, and while there can be no assurances and the outcome of these matters is currently not determinable, the Company currently believes that none of these existing claims or proceedings are likely to have a material adverse effect on its financial position. Notwithstanding the foregoing, there are many uncertainties associated with any litigation and these matters or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could adversely affect gross margins in future periods. If any of those events were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company's estimates, if any, which could result in the need to adjust the liability and record additional expenses. |
Subsequent Events |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Restructuring Activities Subsequent to September 30, 2017, the Company amended the 2017 Restructuring Plan to further realign its workforce. The Company expects to record severance charges of approximately $23.0 million to $27.0 million related to headcount reductions in the fourth quarter of 2017. Dividend Declaration On October 24, 2017, the Company announced that it had declared a cash dividend of $0.10 per share of common stock payable on December 22, 2017 to stockholders of record as of the close of business on December 1, 2017. Stock Repurchase Activities Subsequent to September 30, 2017, through the filing of this Report, the Company repurchased 4.0 million shares of its common stock, for an aggregate purchase price of $100.0 million at an average price of $24.80 per share, under the Stock Repurchase Program. Repurchases of approximately 3.6 million shares were settled prior to the filing of this Report and the remaining shares will be settled after the filing date. The Company has an aggregate of $229.7 million of authorized funds remaining under the Stock Repurchase Program, as of the filing date. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation The unaudited Condensed Consolidated Financial Statements of Juniper Networks, Inc. (the “Company” or “Juniper”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The Condensed Consolidated Balance Sheet as of December 31, 2016, has been derived from the audited Consolidated Financial Statements at that date. 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 nine months ended September 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or any future period. The information included in this Quarterly Report on Form 10-Q (“Report”) 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, 2016 (the "Form 10-K"). Excess tax benefits from share-based compensation in prior periods have been reclassified to conform to the current-period presentation in the Condensed Consolidated Statements of Cash Flows upon adoption of the accounting standard described in Note 2, Summary of Significant Accounting Policies. In addition, certain other amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current-period presentation. The preparation of the financial statements and related disclosures in accordance with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates under different assumptions or conditions. |
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Recent accounting pronouncements | Recently Adopted Accounting Standard On January 1, 2017, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-09 (Topic 718) Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeiture, statutory tax withholding requirements, and classification on the statement of cash flows. The impact of the adoption on the Company's Condensed Consolidated Financial Statements was as follows:
Recent Accounting Standards Not Yet Effective In August 2017, the FASB issued ASU No. 2017-12 (Topic 815) Derivatives and Hedging — Targeted Improvements to Accounting for Hedging Activities, which expands an entity's ability to hedge financial and nonfinancial risk components and amends how companies assess effectiveness as well as changes the presentation and disclosure requirements. The new standard is to be applied on a modified retrospective basis and is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of adoption on the Consolidated Financial Statements. In May 2017, the FASB issued ASU No. 2017-09 (Topic 718) Compensation—Stock Compensation: Scope of Modification Accounting, which provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new standard is effective on a prospective basis for interim and annual periods beginning after December 15, 2017, with early adoption permitted. In March 2017, the FASB issued ASU No. 2017-08 Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities which shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The ASU will not impact debt securities held at a discount. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, and is to be applied on a modified retrospective basis with early adoption permitted. The Company is currently evaluating the impact of adoption on the Consolidated Financial Statements. In February 2017, the FASB issued ASU No. 2017-05 Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which amends guidance on how entities account for the derecognition of a nonfinancial asset or an in substance nonfinancial asset that is not a business. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, and is to be applied on either a retrospective or modified retrospective basis with early adoption permitted. The adoption of this standard will not have a material impact on the Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04 (Topic 350) Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment, which removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This ASU will be applied on a prospective basis and is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, 2017. In January 2017, the FASB issued ASU No. 2017-01 (Topic 805) Business Combinations: Clarifying the Definition of a Business, which clarifies the definition of a business and assists entities with evaluating when a set of transferred assets and activities is a business. This ASU is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted and will be applied on a prospective basis. In November 2016, the FASB issued ASU No. 2016-18 (Topic 230) Statement of Cash Flow: Restricted Cash, which provides guidance on the classification of restricted cash to be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts on the statement of cash flows. The amendments of this ASU are effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The standard must be applied retrospectively to all periods presented. The adoption of this standard will not have a material impact on the cash flow activity presented on the Company's Consolidated Statements of Cash Flows. In October 2016, the FASB issued ASU No. 2016-16 (Topic 740) Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This ASU will be effective for annual and interim reporting periods beginning after December 15, 2017 and is to be applied on a modified retrospective basis. Early adoption is permitted. The adoption of this standard will not have a material impact on the Consolidated Financial Statements. In August 2016, the FASB issued ASU No. 2016-15 (Topic 230) Statement of Cash Flow: Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This pronouncement is effective for interim and annual reporting periods beginning after December 15, 2017 and will be applied on a retrospective basis. Early adoption is permitted. The adoption of this standard will not have a material impact on the Company's Consolidated Statements of Cash Flows. In June 2016, the FASB issued ASU No. 2016-13 (Topic 326) Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which provides more decision-useful information about the expected credit losses on financial instruments and changes the loss impairment methodology. This pronouncement is effective for reporting periods beginning after December 15, 2019, and interim periods within those fiscal years, using a modified retrospective adoption method. Early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its Consolidated Financial Statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases, which requires recognition of lease assets and lease liabilities on the balance sheet by lessees for leases classified as operating leases with a lease term of more than twelve months. This ASU should be applied on a modified retrospective basis and is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard and has commenced the assessment phase to determine the approach for implementing this standard. The adoption of this standard is expected to have a material impact on the Company's Consolidated Balance Sheets and disclosures. The Company is still evaluating the impact this standard will have on the Consolidated Statements of Operations. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which changes how entities measure equity investments and present changes in the fair value of financial liabilities measured under the fair value option. The guidance also updates certain presentation and disclosure requirements. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This ASU is to be applied on a prospective basis for amendments related to equity securities without readily determinable fair values, and all other amendments in this standard will be applied on a modified retrospective basis. For equity securities without readily determinable fair values, we expect to elect the measurement alternative, defined as cost, less impairments, adjusted by observable price changes. The Company does not anticipate that the adoption of the amendments that will be applied on a modified retrospective basis will have a material impact on the Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09 (Topic 606)—Revenue from Contracts with Customers and several amendments thereafter (“ASU 2014-09”), which provides guidance for revenue recognition that will supersede the revenue recognition requirements in Topic 605, and most industry specific guidance. The core principle for ASU 2014-09 is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017. The Company intends to adopt ASU 2014-09 on January 1, 2018 retrospectively, applying the amendments to each prior reporting period presented and currently remains on schedule with its implementation and the preparation of its prior-period financial statements. Upon adoption, the Company expects a material impact to the opening balance sheet as of January 1, 2016 related to the cumulative effect of adopting this standard, primarily due to the application of the new guidance in the areas of distributor sales, software revenue, contract acquisition costs, variable consideration, and revenue allocation. The Company continues to assess the impact of ASU 2014-09 including any changes to systems, processes, and the control environment as it works through the adoption in 2017, and there remain areas still to be fully concluded upon. In addition, there are ongoing interpretive reviews, which may alter the Company's conclusions on key accounting assessments and the financial impact of ASU 2014-09 on the Company's Consolidated Financial Statements. For further information, refer to Note 2, Significant Accounting Policies, in Notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K. |
Business Combinations (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair value of the assets acquired at the acquisition date (in millions, except years):
________________________________ (*) Weighted average estimated useful life of 5 years. |
Cash Equivalents and Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains and losses and fair value of available-for-sale and trading securities | The following table summarizes the Company's unrealized gains and losses and fair value of investments designated as available-for-sale and trading securities as of September 30, 2017 and December 31, 2016 (in millions):
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Maturities of fixed income securities | The following table presents the contractual maturities of the Company's total fixed income securities as of September 30, 2017 (in millions):
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Available-for-sale securities in unrealized loss position | The following tables present the Company's available-for-sale securities that were in an unrealized loss position as of September 30, 2017 and December 31, 2016 (in millions):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | The following table provides a summary of assets and liabilities measured at fair value on a recurring basis and as reported in the Condensed Consolidated Balance Sheets (in millions):
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Derivative Instruments (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative instruments | The notional amount of the Company's foreign currency derivatives are summarized as follows (in millions):
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Goodwill and Purchased Intangible Assets (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Goodwill | The following table presents goodwill activity (in millions):
________________________________ (*) Other primarily consists of certain purchase accounting adjustments related to previously completed business combinations. |
Other Financial Information (Tables) |
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Other Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Total inventory consisted of the following (in millions):
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Warranties | Changes during the nine months ended September 30, 2017 in the Company’s warranty reserve as reported within other accrued liabilities in the Condensed Consolidated Balance Sheets were as follows (in millions):
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Deferred revenue | Details of the Company's deferred revenue, as reported in the Condensed Consolidated Balance Sheets, were as follows (in millions):
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Other expense, net | Other expense, net, consisted of the following (in millions):
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Restructuring Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring liabilities | Restructuring liabilities are reported within other accrued liabilities in the Condensed Consolidated Balance Sheets. The following table provides a summary of changes in the restructuring liabilities primarily related to the 2017 Restructuring Plan initiated in February 2017 (in millions):
________________________________ (*) Consists of costs in connection with a prior restructuring plan that is substantially complete. |
Debt and Financing (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | The Company's long-term debt is summarized as follows (in millions, except percentages):
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Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Repurchase Agreements | The following table summarizes the Company's repurchases and retirements of its common stock under its Stock Repurchase Program (in millions, except per share amounts):
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Components of accumulated other comprehensive income, net of taxes | The components of accumulated other comprehensive loss, net of related taxes, for the nine months ended September 30, 2017 were as follows (in millions):
________________________________
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Employee Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation, stock options, activity | The following table summarizes the Company’s stock option activity and related information as of and for the nine months ended September 30, 2017 (in millions, except for per share amounts and years):
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Schedule of nonvested share activity | The Company’s RSU, restricted stock award ("RSA"), and PSA activity and related information as of and for the nine months ended September 30, 2017 were as follows (in millions, except per share amounts and years):
________________________________
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Schedule of employee service share-based compensation, allocation of recognized period costs | Share-based compensation expense associated with stock options, RSUs, RSAs, PSAs, and ESPP was recorded in the following cost and expense categories in the Condensed Consolidated Statements of Operations (in millions):
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Disclosure of share-based compensation arrangements by share-based payment award | The following table summarizes share-based compensation expense by award type (in millions):
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Segments (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information for each segment | The following table presents net revenues by customer vertical (in millions):
The following table presents net revenues by product and service (in millions):
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Net revenues by geographic region | The Company attributes revenues to geographic region based on the customer’s shipping address. The following table presents net revenues by geographic region (in millions):
|
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of effective income tax rate reconciliation | The following table provides details of income taxes (in millions, except percentages):
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Net Income Per Share (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share, basic and diluted | The Company computed basic and diluted net income per share as follows (in millions, except per share amounts):
|
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Jan. 01, 2017 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by operating activities | $ 1,045.9 | $ 776.3 | |
Net cash used in financing activities | $ (444.6) | (200.1) | |
Accounting Standards Update 2016-09, Excess Tax Benefit Component | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by operating activities | 5.8 | ||
Net cash used in financing activities | $ (5.8) | ||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | Additional Paid-in Capital | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustment | $ 9.0 |
Business Combinations - Narrative (Details) - Cyphort $ in Millions |
Sep. 18, 2017
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Voting interests acquired (percentage) | 100.00% |
Fair value of grants acquired | $ 3.8 |
Payments to acquire businesses | $ 33.5 |
Business Combinations - Purchase Price Allocation (Details) - Cyphort $ in Millions |
Sep. 18, 2017
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Net tangible assets | $ 1.4 |
Existing technology intangible asset() | 15.4 |
Goodwill, Gross | 16.7 |
Total | $ 33.5 |
Weighted Average Estimated Useful Life (in Years) | 5 years |
Cash Equivalents and Investments - Maturities of Fixed Income Investments (Details) $ in Millions |
Sep. 30, 2017
USD ($)
|
---|---|
Schedule of Fixed Income Securities Maturities [Abstract] | |
Amortized cost due within one year | $ 1,563.2 |
Amortized cost due between one and five years | 914.4 |
Total investments, amortized cost | 2,477.6 |
Estimated fair value due within one year | 1,562.9 |
Estimated fair value due between one and five year | 913.6 |
Total investments, estimated fair value | $ 2,476.5 |
Derivative Instruments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Derivatives, Notional Amount [Line Items] | |||||
Notional amount of foreign currency derivatives | $ 378.7 | $ 378.7 | $ 172.0 | ||
Non-designated derivatives | |||||
Derivatives, Notional Amount [Line Items] | |||||
Notional amount of foreign currency derivatives | 147.1 | $ 147.1 | 0.0 | ||
Maturities of cash flow hedge derivatives | 1 month | ||||
Cash flow hedges | Designated as hedge | |||||
Derivatives, Notional Amount [Line Items] | |||||
Notional amount of foreign currency derivatives | 231.6 | $ 231.6 | $ 172.0 | ||
Maturities of cash flow hedge derivatives | 18 months | ||||
Gains or losses is expected to be reclassified into earnings within the next 12 months | $ 8.8 | ||||
Foreign exchange contracts | Cash flow hedges | |||||
Derivatives, Notional Amount [Line Items] | |||||
Derivative instruments, gain (loss) recognized in other comprehensive income (loss), Effective portion | $ 6.8 | $ 0.3 | $ 17.6 | $ 4.8 |
Goodwill and Purchased Intangible Assets - Goodwill (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of December 31, 2016 | $ 3,081.7 |
Additions due to business combination | 16.7 |
Other | (2.2) |
Balance as of September 30, 2017 | $ 3,096.2 |
Goodwill and Purchased Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 18, 2017 |
Dec. 31, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | ||||||
Purchased intangible assets, net | $ 133.0 | $ 133.0 | $ 130.2 | |||
Amortization of intangible assets | $ 4.1 | $ 4.8 | $ 12.6 | $ 12.9 | ||
Cyphort | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible acquired | $ 15.4 |
Other Financial Information - Inventories, Net (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Schedule Of Inventory [Line Items] | ||
Production and service materials | $ 72.6 | $ 75.6 |
Finished goods | 18.3 | 19.9 |
Inventory | 90.9 | 95.5 |
Prepaid expenses and other current assets | ||
Schedule Of Inventory [Line Items] | ||
Inventory | 84.9 | 91.4 |
Other Noncurrent Assets | ||
Schedule Of Inventory [Line Items] | ||
Inventory | $ 6.0 | $ 4.1 |
Other Financial Information - Other Long Term Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 01, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Oct. 01, 2014 |
|
Other Financial Information [Line Items] | ||||||||
Proceeds from Pulse note receivable | $ 75.0 | $ 0.0 | ||||||
Junos Pulse | ||||||||
Other Financial Information [Line Items] | ||||||||
Consideration | $ 230.7 | |||||||
Cash Consideration | 105.7 | |||||||
Working capital adjustment | 19.3 | |||||||
Note receivable carrying value | $ 125.0 | |||||||
Proceeds from Pulse note receivable | $ 75.0 | |||||||
Note receivable | $ 58.0 | $ 58.5 | 58.5 | $ 132.9 | ||||
Interest income | $ 1.6 | $ 2.7 | $ 6.5 | $ 8.0 | ||||
Prepaid expenses and other current assets | Junos Pulse | ||||||||
Other Financial Information [Line Items] | ||||||||
Note receivable carrying value | $ 75.0 |
Other Financial Information - Warranties (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance as of December 31, 2016 | $ 41.3 |
Provisions made during the period | 29.6 |
Actual costs incurred during the period | (41.5) |
Balance as of September 30, 2017 | $ 29.4 |
Other Financial Information - Other Income (Expense), Net (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Other Financial Information [Abstract] | ||||
Interest income | $ 14.7 | $ 9.1 | $ 37.1 | $ 25.5 |
Interest expense | (25.3) | (25.1) | (75.6) | (72.6) |
Gain on investments, net | 4.7 | 1.9 | 6.7 | 0.1 |
Other | 0.8 | 0.7 | (2.0) | (0.2) |
Other expense, net | $ (5.1) | $ (13.4) | $ (33.8) | $ (47.2) |
Restructuring Charges (Charges and Changes to Restructuring)(Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Restructuring Reserve [Roll Forward] | ||||
Restructuring liability, beginning balance | $ 1.2 | |||
Charges | $ 2.0 | $ 0.8 | 29.4 | $ 3.2 |
Cash Payments | (25.9) | |||
Other | 0.0 | |||
Restructuring liability, ending balance | 4.7 | 4.7 | ||
Severance | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring liability, beginning balance | 0.7 | |||
Charges | 26.0 | |||
Cash Payments | (25.5) | |||
Other | (0.1) | |||
Restructuring liability, ending balance | 1.1 | 1.1 | ||
Severance | 2017 Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Charges | 0.6 | 26.0 | ||
Contract terminations and other | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring liability, beginning balance | 0.5 | |||
Charges | 3.4 | |||
Cash Payments | (0.4) | |||
Other | 0.1 | |||
Restructuring liability, ending balance | 3.6 | 3.6 | ||
Contract terminations and other | 2017 Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Charges | $ 1.4 | $ 3.4 |
Debt and Financing - Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) |
Jun. 27, 2014 |
Sep. 30, 2017 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Revolving credit facility limit | $ 500,000,000.0 | |
Revolving credit facility, additional borrowing capacity | $ 200,000,000 | |
Line of credit, outstanding | $ 0 | |
Base Rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.00% | |
Base Rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Eurodollar | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.90% | |
Eurodollar | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.50% |
Debt and Financing - Customer Financing Arrangements (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Debt Instrument [Line Items] | |||||
Sale of receivable | $ 77.3 | $ 59.3 | $ 132.6 | $ 73.4 | |
Proceeds from sale and collection of receivables | 57.6 | $ 30.0 | 113.3 | $ 40.8 | |
Receivables from sale of receivables | $ 32.9 | $ 32.9 | $ 13.6 | ||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Number of days due from receivable | 1 day | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Number of days due from receivable | 90 days |
Equity - Cash Dividends on Shares of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 25, 2017 |
Apr. 25, 2017 |
Jan. 26, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Stockholders' Equity Note [Abstract] | |||||||
Cash dividends declared per common stock (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 |
Common stock dividends paid | $ 113.5 |
Employee Benefit Plans - Share Based Compensation by Share Based Payment Award Types (Details) - Restricted Stock Units, Restricted Stock Award and Performance Share Award $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 309.8 |
Weighted Average Period (In Years) | 1 year 7 months 18 days |
Segments (Revenue by product) (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
segment
|
Sep. 30, 2016
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Product | $ 869.7 | $ 928.2 | $ 2,615.8 | $ 2,543.3 |
Service | 388.1 | 357.1 | 1,171.9 | 1,061.2 |
Total net revenues | 1,257.8 | 1,285.3 | 3,787.7 | 3,604.5 |
Routing | ||||
Segment Reporting Information [Line Items] | ||||
Product | 585.8 | 620.2 | 1,679.9 | 1,699.0 |
Switching | ||||
Segment Reporting Information [Line Items] | ||||
Product | 212.6 | 222.5 | 730.2 | 607.2 |
Security | ||||
Segment Reporting Information [Line Items] | ||||
Product | 71.3 | 85.5 | 205.7 | 237.1 |
Total product | ||||
Segment Reporting Information [Line Items] | ||||
Product | 869.7 | 928.2 | 2,615.8 | 2,543.3 |
Total service | ||||
Segment Reporting Information [Line Items] | ||||
Service | $ 388.1 | $ 357.1 | $ 1,171.9 | $ 1,061.2 |
Segments - Revenues by Customer Vertical (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 1,257.8 | $ 1,285.3 | $ 3,787.7 | $ 3,604.5 |
Cloud | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 344.9 | 359.4 | 1,056.1 | 911.5 |
Telecom/Cable | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 576.9 | 599.4 | 1,707.8 | 1,688.5 |
Strategic Enterprise | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 336.0 | $ 326.5 | $ 1,023.8 | $ 1,004.5 |
Segments - Geographic (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 1,257.8 | $ 1,285.3 | $ 3,787.7 | $ 3,604.5 |
Total Americas | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 729.2 | 745.0 | 2,241.6 | 2,093.2 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 668.8 | 684.6 | 2,076.0 | 1,924.9 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 60.4 | 60.4 | 165.6 | 168.3 |
Europe, Middle East, and Africa | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 298.6 | 338.0 | 871.3 | 923.5 |
Asia Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 230.0 | $ 202.3 | $ 674.8 | $ 587.8 |
Income Taxes (Details of Income Taxes) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 225.8 | $ 236.6 | $ 611.6 | $ 555.3 |
Income tax provision | $ 60.1 | $ 64.2 | $ 157.3 | $ 151.5 |
Effective tax rate | 26.60% | 27.10% | 25.70% | 27.30% |
Unrecognized tax benefits | $ 236.7 | $ 236.7 | ||
Unrecognized tax benefits that would impact effective tax rate | 204.2 | 204.2 | ||
Unrecognized tax benefits could decrease up to | $ 67.0 | $ 67.0 |
Net Income Per Share (Basic and Diluted Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Numerator: | ||||
Net income | $ 165.7 | $ 172.4 | $ 454.3 | $ 403.8 |
Denominator: | ||||
Weighted-average shares used to compute basic net income per share (in shares) | 378.3 | 381.0 | 380.0 | 382.3 |
Dilutive effect of employee stock awards (in shares) | 4.4 | 3.5 | 6.5 | 5.6 |
Weighted-average shares used to compute diluted net income per share (in shares) | 382.7 | 384.5 | 386.5 | 387.9 |
Net income per share | ||||
Basic (in dollars per share) | $ 0.44 | $ 0.45 | $ 1.20 | $ 1.06 |
Diluted, (in dollars per share) | $ 0.43 | $ 0.45 | $ 1.18 | $ 1.04 |
Anti-dilutive shares | 1.0 | 2.7 | 1.2 | 2.7 |
Commitments and Contingencies - Commitments (Details) - Damages from Product Defects - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Loss Contingencies [Line Items] | ||
Supplier component remediation liability | $ 0.8 | $ 10.8 |
Supplier component remediation, estimated period that components may begin to fail | 18 months |
Commitments and Contingencies - Guarantees (Details) - Indemnification Agreement - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Guarantor Obligations [Line Items] | ||
Guarantor obligations, current carrying value | $ 20.1 | $ 28.9 |
Guarantor obligations, reversal of accrual recorded previously | $ 15.0 |
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