x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2019 |
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 |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Stock, par value $0.00001 per share | JNPR | New York Stock Exchange |
Table of Contents | |
Page | |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net revenues: | |||||||
Product | $ | 618.7 | $ | 710.8 | |||
Service | 383.0 | 371.8 | |||||
Total net revenues | 1,001.7 | 1,082.6 | |||||
Cost of revenues: | |||||||
Product | 270.0 | 306.4 | |||||
Service | 149.4 | 157.8 | |||||
Total cost of revenues | 419.4 | 464.2 | |||||
Gross margin | 582.3 | 618.4 | |||||
Operating expenses: | |||||||
Research and development | 227.6 | 269.4 | |||||
Sales and marketing | 228.5 | 239.4 | |||||
General and administrative | 68.2 | 56.0 | |||||
Restructuring charges (benefits) | 15.3 | (1.9 | ) | ||||
Total operating expenses | 539.6 | 562.9 | |||||
Operating income | 42.7 | 55.5 | |||||
Other income (expense), net | 1.8 | (14.1 | ) | ||||
Income before income taxes | 44.5 | 41.4 | |||||
Income tax provision | 13.4 | 7.0 | |||||
Net income | $ | 31.1 | $ | 34.4 | |||
Net income per share: | |||||||
Basic | $ | 0.09 | $ | 0.10 | |||
Diluted | $ | 0.09 | $ | 0.10 | |||
Shares used in computing net income per share: | |||||||
Basic | 348.1 | 355.3 | |||||
Diluted | 352.7 | 360.6 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net income | $ | 31.1 | $ | 34.4 | |||
Other comprehensive (loss) income, net of tax: | |||||||
Available-for-sale debt securities: | |||||||
Change in net unrealized gains and losses, net of tax (provision) benefit of ($0.6) and $1.4, respectively | 1.8 | (2.0 | ) | ||||
Net realized losses reclassified into net income, net of tax provisions of zero and zero, respectively | — | 0.9 | |||||
Net change on available-for-sale debt securities, net of tax | 1.8 | (1.1 | ) | ||||
Cash flow hedges: | |||||||
Change in net unrealized gains and losses, net of tax provision of $1.3 and $0.3, respectively | 2.1 | 13.1 | |||||
Net realized (gains) losses reclassified into net income, net of tax provisions of $0.2 and $0.6, respectively | 1.2 | (5.1 | ) | ||||
Net change on cash flow hedges, net of tax | 3.3 | 8.0 | |||||
Change in foreign currency translation adjustments | 2.2 | 5.3 | |||||
Other comprehensive income, net of tax | 7.3 | 12.2 | |||||
Comprehensive income | $ | 38.4 | $ | 46.6 |
March 31, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,155.6 | $ | 2,489.0 | |||
Short-term investments | 1,227.4 | 1,070.1 | |||||
Accounts receivable, net of allowances | 645.4 | 754.6 | |||||
Prepaid expenses and other current assets | 281.2 | 268.1 | |||||
Total current assets | 4,309.6 | 4,581.8 | |||||
Property and equipment, net | 892.4 | 951.7 | |||||
Operating lease assets | 184.2 | — | |||||
Long-term investments | 119.7 | 199.0 | |||||
Purchased intangible assets, net | 113.5 | 118.5 | |||||
Goodwill | 3,109.3 | 3,108.8 | |||||
Other long-term assets | 409.2 | 403.5 | |||||
Total assets | $ | 9,137.9 | $ | 9,363.3 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 219.1 | $ | 208.8 | |||
Accrued compensation | 166.8 | 221.0 | |||||
Deferred revenue | 860.1 | 829.3 | |||||
Short-term portion of long-term debt | — | 349.9 | |||||
Other accrued liabilities | 243.1 | 233.5 | |||||
Total current liabilities | 1,489.1 | 1,842.5 | |||||
Long-term debt | 1,789.6 | 1,789.1 | |||||
Long-term deferred revenue | 370.8 | 384.3 | |||||
Long-term income taxes payable | 407.3 | 404.4 | |||||
Long-term operating lease liabilities | 176.7 | — | |||||
Other long-term liabilities | 53.2 | 119.8 | |||||
Total liabilities | 4,286.7 | 4,540.1 | |||||
Commitments and contingencies (Note 13) | |||||||
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; 352.0 shares and 346.4 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | — | — | |||||
Additional paid-in capital | 7,668.6 | 7,672.8 | |||||
Accumulated other comprehensive loss | (10.9 | ) | (18.2 | ) | |||
Accumulated deficit | (2,806.5 | ) | (2,831.4 | ) | |||
Total stockholders' equity | 4,851.2 | 4,823.2 | |||||
Total liabilities and stockholders' equity | $ | 9,137.9 | $ | 9,363.3 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 31.1 | $ | 34.4 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Share-based compensation expense | 33.9 | 70.4 | |||||
Depreciation, amortization, and accretion | 48.7 | 55.7 | |||||
Other | (2.2 | ) | 1.7 | ||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable, net | 108.6 | 170.8 | |||||
Prepaid expenses and other assets | 0.5 | (11.7 | ) | ||||
Accounts payable | 10.1 | (31.2 | ) | ||||
Accrued compensation | (54.9 | ) | (14.1 | ) | |||
Income taxes payable | (5.7 | ) | (7.6 | ) | |||
Other accrued liabilities | (27.9 | ) | (51.1 | ) | |||
Deferred revenue | 17.2 | 53.8 | |||||
Net cash provided by operating activities | 159.4 | 271.1 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (27.9 | ) | (42.2 | ) | |||
Purchases of available-for-sale debt securities | (884.4 | ) | (8.1 | ) | |||
Proceeds from sales of available-for-sale debt securities | 232.8 | 968.0 | |||||
Proceeds from maturities and redemptions of available-for-sale debt securities | 578.3 | 215.4 | |||||
Purchases of equity securities | (5.1 | ) | (2.0 | ) | |||
Proceeds from sales of equity securities | 2.2 | 3.3 | |||||
Subsequent payments related to acquisitions in prior years | — | (22.2 | ) | ||||
Net cash (used in) provided by investing activities | (104.1 | ) | 1,112.2 | ||||
Cash flows from financing activities: | |||||||
Repurchase and retirement of common stock | (2.9 | ) | (754.2 | ) | |||
Proceeds from issuance of common stock | 29.5 | 29.3 | |||||
Payment of dividends | (66.2 | ) | (62.1 | ) | |||
Change in customer financing arrangement | — | (16.6 | ) | ||||
Payment of debt | (350.0 | ) | — | ||||
Net cash used in financing activities | (389.6 | ) | (803.6 | ) | |||
Effect of foreign currency exchange rates on cash, cash equivalents, and restricted cash | 1.6 | 6.2 | |||||
Net increase in cash, cash equivalents, and restricted cash | (332.7 | ) | 585.9 | ||||
Cash, cash equivalents, and restricted cash at beginning of period | 2,505.8 | 2,059.1 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 2,173.1 | $ | 2,645.0 |
Three Months Ended March 31, 2019 | ||||||||||||||||||
Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||
Shares | ||||||||||||||||||
Balance at December 31, 2018 | 346.4 | $ | 7,672.8 | $ | (18.2 | ) | $ | (2,831.4 | ) | $ | 4,823.2 | |||||||
Net income | — | — | — | 31.1 | 31.1 | |||||||||||||
Other comprehensive income, net | — | — | 7.3 | — | 7.3 | |||||||||||||
Issuance of common stock | 5.7 | 29.5 | — | — | 29.5 | |||||||||||||
Repurchase and retirement of common stock | (0.1 | ) | (1.4 | ) | — | (1.5 | ) | (2.9 | ) | |||||||||
Share-based compensation expense | — | 33.9 | — | — | 33.9 | |||||||||||||
Payments of cash dividends ($0.19 per share of common stock) | — | (66.2 | ) | — | — | (66.2 | ) | |||||||||||
Cumulative adjustment upon adoption of Accounting Standards Update ("ASU") 2017-12 ("Topic 815"), net | — | — | — | 0.1 | 0.1 | |||||||||||||
Cumulative adjustment upon adoption of ASU 2016-02 ("Topic 842"), net | — | — | — | (4.8 | ) | (4.8 | ) | |||||||||||
Balance at March 31, 2019 | 352.0 | $ | 7,668.6 | $ | (10.9 | ) | $ | (2,806.5 | ) | $ | 4,851.2 | |||||||
Three Months Ended March 31, 2018 | ||||||||||||||||||
Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||
Shares | ||||||||||||||||||
Balance at December 31, 2017 | 365.5 | $ | 8,042.1 | $ | (5.4 | ) | $ | (3,355.8 | ) | $ | 4,680.9 | |||||||
Net income | — | — | — | 34.4 | 34.4 | |||||||||||||
Other comprehensive income, net | — | — | 12.2 | — | 12.2 | |||||||||||||
Issuance of common stock | 7.0 | 29.3 | — | — | 29.3 | |||||||||||||
Repurchase and retirement of common stock | (23.5 | ) | (314.4 | ) | — | (289.8 | ) | (604.2 | ) | |||||||||
Purchase of equity forward contract | — | (150.0 | ) | — | — | (150.0 | ) | |||||||||||
Share-based compensation expense | — | 70.6 | — | — | 70.6 | |||||||||||||
Payments of cash dividends ($0.18 per share of common stock) | — | (62.1 | ) | — | — | (62.1 | ) | |||||||||||
Cumulative adjustment upon adoption of ASU 2014-09 ("Topic 606"), net | — | — | — | 313.6 | 313.6 | |||||||||||||
Reclassification of tax effects upon adoption of ASU 2018-02 ("Topic 220"), net | — | — | 5.7 | (5.7 | ) | — | ||||||||||||
Balance at March 31, 2018 | 349.0 | $ | 7,615.5 | $ | 12.5 | $ | (3,303.3 | ) | $ | 4,324.7 |
December 31, 2018 | January 1, 2019 | ||||||||||
As reported | Adjustments due to ASC 842 | As adjusted | |||||||||
Assets: | |||||||||||
Prepaid expenses and other current assets | $ | 268.1 | $ | (1.4 | ) | $ | 266.7 | ||||
Property and equipment, net | 951.7 | (42.9 | ) | 908.8 | |||||||
Operating lease assets | — | 192.5 | 192.5 | ||||||||
Other long-term assets | 403.5 | 1.3 | 404.8 | ||||||||
Total assets | $ | 9,363.3 | $ | 149.5 | $ | 9,512.8 | |||||
Liabilities: | |||||||||||
Other accrued liabilities | $ | 233.5 | $ | 35.6 | $ | 269.1 | |||||
Long-term operating lease liabilities | — | 185.5 | 185.5 | ||||||||
Other long-term liabilities | 119.8 | (66.7 | ) | 53.1 | |||||||
Total liabilities | $ | 4,540.1 | $ | 154.4 | $ | 4,694.5 | |||||
Stockholders' equity: | |||||||||||
Accumulated deficit | $ | (2,831.4 | ) | $ | (4.9 | ) | $ | (2,836.3 | ) |
As of March 31, 2019 | As of December 31, 2018 | ||||||||||||||||||||||||||||||
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 | $ | 30.4 | $ | — | $ | (0.1 | ) | $ | 30.3 | $ | 46.8 | $ | — | $ | (0.3 | ) | $ | 46.5 | |||||||||||||
Certificates of deposit | 95.4 | — | — | 95.4 | 152.9 | — | — | 152.9 | |||||||||||||||||||||||
Commercial paper | 377.5 | — | — | 377.5 | 393.6 | — | — | 393.6 | |||||||||||||||||||||||
Corporate debt securities | 363.3 | — | (1.3 | ) | 362.0 | 416.1 | — | (3.1 | ) | 413.0 | |||||||||||||||||||||
Foreign government debt securities | 38.4 | — | (0.1 | ) | 38.3 | 20.0 | — | (0.1 | ) | 19.9 | |||||||||||||||||||||
Time deposits | 84.2 | — | — | 84.2 | 278.6 | — | — | 278.6 | |||||||||||||||||||||||
U.S. government agency securities | 25.7 | — | (0.1 | ) | 25.6 | 87.2 | — | (0.2 | ) | 87.0 | |||||||||||||||||||||
U.S. government securities | 746.6 | 0.1 | (0.3 | ) | 746.4 | 811.8 | — | (0.5 | ) | 811.3 | |||||||||||||||||||||
Total fixed income securities | 1,761.5 | 0.1 | (1.9 | ) | 1,759.7 | 2,207.0 | — | (4.2 | ) | 2,202.8 | |||||||||||||||||||||
Privately-held debt and redeemable preferred stock securities | 14.6 | 37.4 | — | 52.0 | 16.6 | 37.4 | — | 54.0 | |||||||||||||||||||||||
Total available-for-sale debt securities | $ | 1,776.1 | $ | 37.5 | $ | (1.9 | ) | $ | 1,811.7 | $ | 2,223.6 | $ | 37.4 | $ | (4.2 | ) | $ | 2,256.8 | |||||||||||||
Reported as: | |||||||||||||||||||||||||||||||
Cash equivalents | $ | 414.4 | $ | — | $ | — | $ | 414.4 | $ | 936.5 | $ | — | $ | — | $ | 936.5 | |||||||||||||||
Short-term investments | 1,226.7 | 0.1 | (1.2 | ) | 1,225.6 | 1,069.2 | — | (1.9 | ) | 1,067.3 | |||||||||||||||||||||
Long-term investments | 120.4 | — | (0.7 | ) | 119.7 | 201.3 | — | (2.3 | ) | 199.0 | |||||||||||||||||||||
Other long-term assets | 14.6 | 37.4 | — | 52.0 | 16.6 | 37.4 | — | 54.0 | |||||||||||||||||||||||
Total | $ | 1,776.1 | $ | 37.5 | $ | (1.9 | ) | $ | 1,811.7 | $ | 2,223.6 | $ | 37.4 | $ | (4.2 | ) | $ | 2,256.8 |
Amortized Cost | Estimated Fair Value | ||||||
Due in less than one year | $ | 1,641.1 | $ | 1,640.0 | |||
Due between one and five years | 120.4 | 119.7 | |||||
Total | $ | 1,761.5 | $ | 1,759.7 |
As of March 31, 2019 | |||||||||||||||||||||||
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 | $ | 0.2 | $ | — | $ | 27.7 | $ | (0.1 | ) | $ | 27.9 | $ | (0.1 | ) | |||||||||
Corporate debt securities | 47.3 | — | 278.1 | (1.3 | ) | 325.4 | (1.3 | ) | |||||||||||||||
Foreign government debt securities | 5.5 | — | 17.3 | (0.1 | ) | 22.8 | (0.1 | ) | |||||||||||||||
U.S. government agency securities | — | — | 23.6 | (0.1 | ) | 23.6 | (0.1 | ) | |||||||||||||||
U.S. government securities | 312.0 | — | 46.4 | (0.3 | ) | 358.4 | (0.3 | ) | |||||||||||||||
Total fixed income securities | $ | 365.0 | $ | — | $ | 393.1 | $ | (1.9 | ) | $ | 758.1 | $ | (1.9 | ) |
As of December 31, 2018 | |||||||||||||||||||||||
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 | $ | 3.1 | $ | — | $ | 43.0 | $ | (0.3 | ) | $ | 46.1 | $ | (0.3 | ) | |||||||||
Corporate debt securities | 72.6 | (0.1 | ) | 330.7 | (3.0 | ) | 403.3 | (3.1 | ) | ||||||||||||||
Foreign government debt securities | 1.5 | — | 18.4 | (0.1 | ) | 19.9 | (0.1 | ) | |||||||||||||||
U.S. government agency securities | 2.0 | — | 45.2 | (0.2 | ) | 47.2 | (0.2 | ) | |||||||||||||||
U.S. government securities | 344.0 | — | 63.5 | (0.5 | ) | 407.5 | (0.5 | ) | |||||||||||||||
Total fixed income securities | $ | 423.2 | $ | (0.1 | ) | $ | 500.8 | $ | (4.1 | ) | $ | 924.0 | $ | (4.2 | ) |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Equity investments with readily determinable fair value | |||||||
Money market funds(1) | $ | 836.7 | $ | 996.9 | |||
Mutual funds(2) | 26.2 | 24.3 | |||||
Publicly-traded equity securities | 1.8 | 2.8 | |||||
Equity investments without readily determinable fair value | 42.1 | 36.4 | |||||
Total equity securities | $ | 906.8 | $ | 1,060.4 | |||
Reported as: | |||||||
Cash equivalents | $ | 825.1 | $ | 985.3 | |||
Short-term investments | 1.8 | 2.8 | |||||
Prepaid expenses and other current assets | 11.2 | 10.9 | |||||
Other long-term assets | 68.7 | 61.4 | |||||
Total | $ | 906.8 | $ | 1,060.4 |
(1) | Balance includes $11.6 million and $11.6 million in restricted investments measured at fair value, related to the Company's acquisition-related escrow accounts as of March 31, 2019 and December 31, 2018, respectively. |
(2) | Balance relates to restricted investments measured at fair value related to the Company's Deferred Compensation Plan. |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Cash and cash equivalents | $ | 2,155.6 | $ | 2,489.0 | |||
Restricted cash included in Prepaid expenses and other current assets | 17.5 | 16.8 | |||||
Total cash, cash equivalents, and restricted cash | $ | 2,173.1 | $ | 2,505.8 |
Fair Value Measurements at March 31, 2019 | Fair Value Measurements at December 31, 2018 | ||||||||||||||||||||||||||||||
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 debt securities: | |||||||||||||||||||||||||||||||
Asset-backed securities | $ | — | $ | 30.3 | $ | — | $ | 30.3 | $ | — | $ | 46.5 | $ | — | $ | 46.5 | |||||||||||||||
Certificates of deposit | — | 95.4 | — | 95.4 | — | 152.9 | — | 152.9 | |||||||||||||||||||||||
Commercial paper | — | 377.5 | — | 377.5 | — | 393.6 | — | 393.6 | |||||||||||||||||||||||
Corporate debt securities | — | 362.0 | — | 362.0 | — | 413.0 | — | 413.0 | |||||||||||||||||||||||
Foreign government debt securities | — | 38.3 | — | 38.3 | — | 19.9 | — | 19.9 | |||||||||||||||||||||||
Time deposits | — | 84.2 | — | 84.2 | — | 278.6 | — | 278.6 | |||||||||||||||||||||||
U.S. government agency securities | — | 25.6 | — | 25.6 | — | 87.0 | — | 87.0 | |||||||||||||||||||||||
U.S. government securities | 412.9 | 333.5 | — | 746.4 | 352.8 | 458.5 | — | 811.3 | |||||||||||||||||||||||
Privately-held debt and redeemable preferred stock securities | — | — | 52.0 | 52.0 | — | — | 54.0 | 54.0 | |||||||||||||||||||||||
Total available-for-sale debt securities | 412.9 | 1,346.8 | 52.0 | 1,811.7 | 352.8 | 1,850.0 | 54.0 | 2,256.8 | |||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||
Money market funds | 836.7 | — | — | 836.7 | 996.9 | — | — | 996.9 | |||||||||||||||||||||||
Mutual funds | 26.2 | — | — | 26.2 | 24.3 | — | — | 24.3 | |||||||||||||||||||||||
Publicly-traded equity securities | 1.8 | — | — | 1.8 | 2.8 | — | — | 2.8 | |||||||||||||||||||||||
Total equity securities | 864.7 | — | — | 864.7 | 1,024.0 | — | — | 1,024.0 | |||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||||||||
Foreign exchange contracts | — | 8.4 | — | 8.4 | — | 5.3 | — | 5.3 | |||||||||||||||||||||||
Total assets measured at fair value | $ | 1,277.6 | $ | 1,355.2 | $ | 52.0 | $ | 2,684.8 | $ | 1,376.8 | $ | 1,855.3 | $ | 54.0 | $ | 3,286.1 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | — | $ | (5.8 | ) | $ | — | $ | (5.8 | ) | $ | — | $ | (7.1 | ) | $ | — | $ | (7.1 | ) | |||||||||||
Total liabilities measured at fair value | $ | — | $ | (5.8 | ) | $ | — | $ | (5.8 | ) | $ | — | $ | (7.1 | ) | $ | — | $ | (7.1 | ) | |||||||||||
Total assets, reported as: | |||||||||||||||||||||||||||||||
Cash equivalents | $ | 825.1 | $ | 414.4 | $ | — | $ | 1,239.5 | $ | 1,025.2 | $ | 896.6 | $ | — | $ | 1,921.8 | |||||||||||||||
Short-term investments | 406.2 | 821.2 | — | 1,227.4 | 297.5 | 772.6 | — | 1,070.1 | |||||||||||||||||||||||
Long-term investments | 8.5 | 111.2 | — | 119.7 | 18.2 | 180.8 | — | 199.0 | |||||||||||||||||||||||
Prepaid expenses and other current assets | 11.3 | 8.4 | — | 19.7 | 10.8 | 5.3 | — | 16.1 | |||||||||||||||||||||||
Other long-term assets | 26.5 | — | 52.0 | 78.5 | 25.1 | — | 54.0 | 79.1 | |||||||||||||||||||||||
Total assets measured at fair value | $ | 1,277.6 | $ | 1,355.2 | $ | 52.0 | $ | 2,684.8 | $ | 1,376.8 | $ | 1,855.3 | $ | 54.0 | $ | 3,286.1 | |||||||||||||||
Total liabilities, reported as: | |||||||||||||||||||||||||||||||
Other accrued liabilities | $ | — | $ | (5.8 | ) | $ | — | $ | (5.8 | ) | $ | — | $ | (7.1 | ) | $ | — | $ | (7.1 | ) | |||||||||||
Total liabilities measured at fair value | $ | — | $ | (5.8 | ) | $ | — | $ | (5.8 | ) | $ | — | $ | (7.1 | ) | $ | — | $ | (7.1 | ) |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Cash flow hedges | $ | 377.0 | $ | 497.7 | |||
Non-designated derivatives | 175.6 | 158.7 | |||||
Total | $ | 552.6 | $ | 656.4 |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Production and service materials | $ | 72.6 | $ | 60.6 | |||
Finished goods | 21.3 | 21.4 | |||||
Inventory | $ | 93.9 | $ | 82.0 | |||
Reported as: | |||||||
Prepaid expenses and other current assets | $ | 92.4 | $ | 80.6 | |||
Other long-term assets | 1.5 | 1.4 | |||||
Total | $ | 93.9 | $ | 82.0 |
Balance as of December 31, 2018 | $ | 28.0 | |
Provisions made during the period | 8.6 | ||
Actual costs incurred during the period | (7.7 | ) | |
Balance as of March 31, 2019 | $ | 28.9 |
As of | |||||||
March 31, 2019 | December 31, 2018 | ||||||
Deferred product revenue: | |||||||
Undelivered product commitments and other product deferrals | $ | 152.3 | $ | 163.3 | |||
Deferred gross product revenue | 152.3 | 163.3 | |||||
Deferred cost of product revenue | (12.7 | ) | (18.9 | ) | |||
Deferred product revenue, net | 139.6 | 144.4 | |||||
Deferred service revenue | 1,091.3 | 1,069.2 | |||||
Total | $ | 1,230.9 | $ | 1,213.6 | |||
Reported as: | |||||||
Current | $ | 860.1 | $ | 829.3 | |||
Long-term | 370.8 | 384.3 | |||||
Total | $ | 1,230.9 | $ | 1,213.6 |
Revenue Recognition Expected by Period | |||||||||||||||
Total | Less than 1 year | 1-3 years | More than 3 years | ||||||||||||
Product | $ | 152.3 | $ | 122.8 | $ | 26.0 | $ | 3.5 | |||||||
Service | 1,091.3 | 750.0 | 285.8 | 55.5 | |||||||||||
Total | $ | 1,243.6 | $ | 872.8 | $ | 311.8 | $ | 59.0 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Interest income | $ | 23.5 | $ | 14.9 | |||
Interest expense | (24.2 | ) | (26.0 | ) | |||
Gain (loss) on investments, net | 1.6 | (0.5 | ) | ||||
Other | 0.9 | (2.5 | ) | ||||
Other income (expense), net | $ | 1.8 | $ | (14.1 | ) |
December 31, 2018 | Charges | Cash Payments | Other | March 31, 2019 | |||||||||||||||
Severance | $ | 1.1 | $ | 15.1 | $ | (10.1 | ) | $ | (0.1 | ) | $ | 6.0 | |||||||
Facility consolidations | — | 0.2 | (0.1 | ) | (0.1 | ) | — | ||||||||||||
Total | $ | 1.1 | $ | 15.3 | $ | (10.2 | ) | $ | (0.2 | ) | $ | 6.0 |
Three Months Ended March 31, | |||||||
2019 | 2018(1)(2) | ||||||
Dividends | |||||||
Per share | $ | 0.19 | $ | 0.18 | |||
Amount | $ | 66.2 | $ | 62.1 | |||
Stock repurchases | |||||||
Shares | — | 23.3 | |||||
Average price per share | $ | — | $ | 25.80 | |||
Amount | $ | — | $ | 750.0 |
(1) | Shares repurchased under the 2018 Stock Repurchase Program. |
(2) | $750.0 million represents the full amount of the accelerated share repurchase program (the "ASR") for which 23.3 million shares were received initially during the first quarter of 2018, and an additional 6.0 million shares were received at final settlement during the third quarter of 2018. |
Unrealized Gains/Losses on Available-for- Sale Debt Securities | Unrealized Gains/Losses on Cash Flow Hedges | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance as of December 31, 2018 | $ | 25.5 | $ | (0.9 | ) | $ | (42.8 | ) | $ | (18.2 | ) | ||||
Other comprehensive income before reclassifications | 1.8 | 2.1 | 2.2 | 6.1 | |||||||||||
Amount reclassified from accumulated other comprehensive loss | — | 1.2 | — | 1.2 | |||||||||||
Other comprehensive income, net | 1.8 | 3.3 | 2.2 | 7.3 | |||||||||||
Balance as of March 31, 2019 | $ | 27.3 | $ | 2.4 | $ | (40.6 | ) | $ | (10.9 | ) |
Outstanding RSUs, RSAs and PSAs(4) | ||||||||||||
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, 2018 | 17.4 | $ | 25.32 | |||||||||
RSUs granted (1)(3) | 5.5 | 25.53 | ||||||||||
PSAs granted (2)(3) | 0.7 | 25.06 | ||||||||||
RSUs vested | (3.9 | ) | 26.00 | |||||||||
RSAs vested | (0.1 | ) | 23.13 | |||||||||
PSAs vested | (0.5 | ) | 26.76 | |||||||||
RSUs canceled | (0.8 | ) | 26.32 | |||||||||
PSAs canceled | (0.6 | ) | 23.25 | |||||||||
Balance as of March 31, 2019 | 17.7 | $ | 25.21 | 1.5 | $ | 467.8 |
(1) | Includes service-based and market-based RSUs. The number of shares subject to market-based condition 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 market-based condition that would be issued if market criteria determined by the Compensation Committee of the Board are achieved at target is 0.2 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is zero to 0.4 million shares. |
(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 zero to 0.7 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 three months ended March 31, 2019, the Company declared a quarterly cash dividend of $0.19 per share of common stock on January 29, 2019. |
(4) | 0.3 million shares of PSAs were modified during the three months ended March 31, 2019, which relate to PSAs granted in 2018 and PSAs assumed by the Company in connection with acquisitions consummated in 2016. Compensation cost resulting from the modifications totaled $7.7 million to be recognized over the remaining terms of the modified awards. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Shares purchased | 1.2 | 1.3 | |||||
Average exercise price per share | $ | 22.04 | $ | 22.23 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cost of revenues - Product | $ | 1.9 | $ | 1.9 | |||
Cost of revenues - Service | 4.5 | 4.8 | |||||
Research and development | 12.2 | 44.1 | |||||
Sales and marketing | 9.4 | 13.5 | |||||
General and administrative | 5.9 | 6.1 | |||||
Total | $ | 33.9 | $ | 70.4 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Stock options | $ | 0.1 | $ | 0.1 | |||
RSUs, RSAs, and PSAs | 29.1 | 65.6 | |||||
ESPP | 4.7 | 4.7 | |||||
Total | $ | 33.9 | $ | 70.4 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Routing | $ | 374.7 | $ | 408.1 | |||
Switching | 176.4 | 230.0 | |||||
Security | 67.6 | 72.7 | |||||
Total product | 618.7 | 710.8 | |||||
Total service | 383.0 | 371.8 | |||||
Total | $ | 1,001.7 | $ | 1,082.6 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cloud | $ | 223.1 | $ | 270.9 | |||
Service Provider | 435.6 | 480.1 | |||||
Enterprise | 343.0 | 331.6 | |||||
Total | $ | 1,001.7 | $ | 1,082.6 |
(*) | Certain insignificant prior-period amounts have been reclassified to conform to the current-period presentation. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Americas: | |||||||
United States | $ | 476.6 | $ | 532.3 | |||
Other | 67.0 | 55.3 | |||||
Total Americas | 543.6 | 587.6 | |||||
Europe, Middle East, and Africa | 286.2 | 308.0 | |||||
Asia Pacific | 171.9 | 187.0 | |||||
Total | $ | 1,001.7 | $ | 1,082.6 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Income before income taxes | $ | 44.5 | $ | 41.4 | |||
Income tax provision | $ | 13.4 | $ | 7.0 | |||
Effective tax rate | 30.1 | % | 16.9 | % |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Numerator: | |||||||
Net income | $ | 31.1 | $ | 34.4 | |||
Denominator: | |||||||
Weighted-average shares used to compute basic net income per share | 348.1 | 355.3 | |||||
Dilutive effect of employee stock awards | 4.6 | 5.3 | |||||
Weighted-average shares used to compute diluted net income per share | 352.7 | 360.6 | |||||
Net income per share | |||||||
Basic | $ | 0.09 | $ | 0.10 | |||
Diluted | $ | 0.09 | $ | 0.10 | |||
Anti-dilutive shares | 5.0 | 10.4 |
Three Months Ended March 31, 2019 | |||
Operating lease cost | $ | 11.9 | |
Variable lease cost | 3.1 | ||
Total lease cost | $ | 15.0 | |
Operating cash outflows from operating leases | $ | 11.6 | |
ROU assets obtained in exchange for new operating lease liabilities | $ | 0.6 | |
Weighted average remaining lease term (years) | 6.0 | ||
Weighted average discount rate | 4.4 | % |
Years Ending December 31, | Amount | ||
2019 | $ | 32.9 | |
2020 | 47.3 | ||
2021 | 40.4 | ||
2022 | 32.7 | ||
2023 | 29.8 | ||
Thereafter | 60.3 | ||
Total lease payments | 243.4 | ||
Less: interest | (30.0 | ) | |
Total | $ | 213.4 | |
Balance Sheet Information | |||
Other accrued liabilities | 36.7 | ||
Long-term operating lease liabilities | 176.7 | ||
Total | $ | 213.4 |
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Net revenues | $ | 1,001.7 | $ | 1,082.6 | $ | (80.9 | ) | (7 | )% | |||||
Gross margin | $ | 582.3 | $ | 618.4 | $ | (36.1 | ) | (6 | )% | |||||
Percentage of net revenues | 58.1 | % | 57.1 | % | ||||||||||
Operating income | $ | 42.7 | $ | 55.5 | $ | (12.8 | ) | (23 | )% | |||||
Percentage of net revenues | 4.3 | % | 5.1 | % | ||||||||||
Net income | $ | 31.1 | $ | 34.4 | $ | (3.3 | ) | (10 | )% | |||||
Percentage of net revenues | 3.1 | % | 3.2 | % | ||||||||||
Net income per share: | ||||||||||||||
Basic | $ | 0.09 | $ | 0.10 | $ | (0.01 | ) | (10 | )% | |||||
Diluted | $ | 0.09 | $ | 0.10 | $ | (0.01 | ) | (10 | )% | |||||
Operating cash flows | $ | 159.4 | $ | 271.1 | $ | (111.7 | ) | (41 | )% | |||||
Stock repurchase plan activity | $ | — | $ | 750.0 | $ | (750.0 | ) | (100 | )% | |||||
Cash dividends declared per common stock | $ | 0.19 | $ | 0.18 | $ | 0.01 | 6 | % | ||||||
DSO | 58 | 57 | 1 | 2 | % | |||||||||
As of | ||||||||||||||
March 31, 2019 | December 31, 2018 | $ Change | % Change | |||||||||||
Deferred revenue | $ | 1,230.9 | $ | 1,213.6 | $ | 17.3 | 1 | % | ||||||
Product deferred revenue | $ | 139.6 | $ | 144.4 | $ | (4.8 | ) | (3 | )% | |||||
Service deferred revenue | $ | 1,091.3 | $ | 1,069.2 | $ | 22.1 | 2 | % |
• | Net Revenues: Net revenues decreased during the three months ended March 31, 2019, compared to the same period in 2018, primarily due to lower routing and switching revenues from our Cloud and Service Provider verticals, partially offset by an increase in our Enterprise vertical. While Cloud capacity continued to grow year-over-year, the growth in units was not enough to offset the decline in average selling price, or ASP. We experienced a decline in our Service Provider business due to the timing of deployments. Our service net revenues increased during the three months ended March 31, 2019, compared to the same period in 2018, primarily due to strong renewal and attach rates of support contracts. |
• | Gross Margin: Our gross margin as a percentage of net revenues increased during the three months ended March 31, 2019, compared to the same period in 2018, primarily due to higher service revenues, growth from our software revenue, and lower service delivery costs. |
• | Operating Margin: Our operating income as a percentage of net revenues decreased during the three months ended March 31, 2019, compared to the same period in 2018, primarily due to the drivers described in the gross margin discussion above, partially offset by a net decrease in our operating expenses during the three months ended March 31, 2019, compared to the same period in 2018, as a result of lower personnel-related expenses, driven by a decrease in share-based compensation expense. |
• | Operating Cash Flows: Net cash provided by operations decreased during the three months ended March 31, 2019, compared to the same period in 2018. The decrease was primarily due to lower cash collections from customers as a result of lower invoicing, partially offset by a decrease in cash payments to suppliers. |
• | Capital Return: We continue to return capital to our stockholders. In the first quarter of 2019, we paid a quarterly dividend of $0.19 per share, for an aggregate amount of $66.2 million. |
• | 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 first quarter of 2019 slightly increased, compared to the same period in 2018, primarily due to lower revenues, partially offset by lower accounts receivable resulting from lower overall invoicing volume. |
• | Deferred Revenue: Total deferred revenue increased as of March 31, 2019, compared to December 31, 2018, primarily due to additional billings on support renewals, partially offset by the timing of the delivery of contractual commitments. |
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Routing | $ | 374.7 | $ | 408.1 | $ | (33.4 | ) | (8 | )% | |||||
Switching | 176.4 | 230.0 | (53.6 | ) | (23 | )% | ||||||||
Security | 67.6 | 72.7 | (5.1 | ) | (7 | )% | ||||||||
Total Product | 618.7 | 710.8 | (92.1 | ) | (13 | )% | ||||||||
Percentage of net revenues | 61.8 | % | 65.7 | % | ||||||||||
Total Service | 383.0 | 371.8 | 11.2 | 3 | % | |||||||||
Percentage of net revenues | 38.2 | % | 34.3 | % | ||||||||||
Total net revenues | $ | 1,001.7 | $ | 1,082.6 | $ | (80.9 | ) | (7 | )% | |||||
Cloud | $ | 223.1 | $ | 270.9 | $ | (47.8 | ) | (18 | )% | |||||
Percentage of net revenues | 22.3 | % | 25.0 | % | ||||||||||
Service Provider | 435.6 | 480.1 | (44.5 | ) | (9 | )% | ||||||||
Percentage of net revenues | 43.5 | % | 44.4 | % | ||||||||||
Enterprise | 343.0 | 331.6 | 11.4 | 3 | % | |||||||||
Percentage of net revenues | 34.2 | % | 30.6 | % | ||||||||||
Total net revenues | $ | 1,001.7 | $ | 1,082.6 | $ | (80.9 | ) | (7 | )% | |||||
Americas: | ||||||||||||||
United States | $ | 476.6 | $ | 532.3 | $ | (55.7 | ) | (10 | )% | |||||
Other | 67.0 | 55.3 | 11.7 | 21 | % | |||||||||
Total Americas | 543.6 | 587.6 | (44.0 | ) | (7 | )% | ||||||||
Percentage of net revenues | 54.2 | % | 54.3 | % | ||||||||||
EMEA | 286.2 | 308.0 | (21.8 | ) | (7 | )% | ||||||||
Percentage of net revenues | 28.6 | % | 28.4 | % | ||||||||||
APAC | 171.9 | 187.0 | (15.1 | ) | (8 | )% | ||||||||
Percentage of net revenues | 17.2 | % | 17.3 | % | ||||||||||
Total net revenues | $ | 1,001.7 | $ | 1,082.6 | $ | (80.9 | ) | (7 | )% |
(*) | Certain insignificant prior-period amounts have been reclassified to conform to the current-period presentation. |
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Product gross margin | $ | 348.7 | $ | 404.4 | $ | (55.7 | ) | (14 | )% | |||||
Percentage of product revenues | 56.4 | % | 56.9 | % | ||||||||||
Service gross margin | 233.6 | 214.0 | 19.6 | 9 | % | |||||||||
Percentage of service revenues | 61.0 | % | 57.6 | % | ||||||||||
Total gross margin | $ | 582.3 | $ | 618.4 | $ | (36.1 | ) | (6 | )% | |||||
Percentage of net revenues | 58.1 | % | 57.1 | % |
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Research and development | $ | 227.6 | $ | 269.4 | $ | (41.8 | ) | (16 | )% | |||||
Percentage of net revenues | 22.7 | % | 24.9 | % | ||||||||||
Sales and marketing | 228.5 | 239.4 | (10.9 | ) | (5 | )% | ||||||||
Percentage of net revenues | 22.8 | % | 22.1 | % | ||||||||||
General and administrative | 68.2 | 56.0 | 12.2 | 22 | % | |||||||||
Percentage of net revenues | 6.8 | % | 5.2 | % | ||||||||||
Restructuring charges (benefits) | 15.3 | (1.9 | ) | 17.2 | N/M | |||||||||
Percentage of net revenues | 1.6 | % | (0.2 | )% | ||||||||||
Total operating expenses | $ | 539.6 | $ | 562.9 | $ | (23.3 | ) | (4 | )% | |||||
Percentage of net revenues | 53.9 | % | 52.0 | % |
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Interest income | $ | 23.5 | $ | 14.9 | $ | 8.6 | 58 | % | ||||||
Interest expense | (24.2 | ) | (26.0 | ) | 1.8 | (7 | )% | |||||||
Gain (loss) on investments, net | 1.6 | (0.5 | ) | 2.1 | N/M | |||||||||
Other | 0.9 | (2.5 | ) | 3.4 | N/M | |||||||||
Total other income (expense), net | $ | 1.8 | $ | (14.1 | ) | $ | 15.9 | N/M | ||||||
Percentage of net revenues | 0.2 | % | (1.3 | )% |
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Income tax provision | $ | 13.4 | $ | 7.0 | $ | 6.4 | 91 | % | ||||||
Effective tax rate | 30.1 | % | 16.9 | % |
As of | ||||||||||||||
March 31, 2019 | December 31, 2018 | $ Change | % Change | |||||||||||
Working capital | $ | 2,820.5 | $ | 2,739.3 | $ | 81.2 | 3 | % | ||||||
Cash and cash equivalents | $ | 2,155.6 | $ | 2,489.0 | $ | (333.4 | ) | (13 | )% | |||||
Short-term investments | 1,227.4 | 1,070.1 | 157.3 | 15 | % | |||||||||
Long-term investments | 119.7 | 199.0 | (79.3 | ) | (40 | )% | ||||||||
Total cash, cash equivalents, and investments | 3,502.7 | 3,758.1 | (255.4 | ) | (7 | )% | ||||||||
Short-term portion of long-term debt | — | 349.9 | (349.9 | ) | N/M | |||||||||
Long-term debt | 1,789.6 | 1,789.1 | 0.5 | — | % | |||||||||
Cash, cash equivalents, and investments, net of debt | $ | 1,713.1 | $ | 1,619.1 | $ | 94.0 | 6 | % |
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Net cash provided by operating activities | $ | 159.4 | $ | 271.1 | $ | (111.7 | ) | (41 | )% | |||||
Net cash provided by (used in) investing activities | $ | (104.1 | ) | $ | 1,112.2 | $ | (1,216.3 | ) | (109 | )% | ||||
Net cash used in financing activities | $ | (389.6 | ) | $ | (803.6 | ) | $ | 414.0 | (52 | )% |
• | unpredictable ordering patterns and limited or reduced visibility into our customers’ spending plans and associated revenue; |
• | changes in customer mix; |
• | changes in the demand for our products and services; |
• | changes in the mix of products and services sold; |
• | changes in the mix of geographies in which our products and services are sold; |
• | changing market and economic conditions; |
• | current and potential customer, partner and supplier consolidation and concentration; |
• | price and product competition; |
• | long sales, qualification and implementation cycles; |
• | success in new and evolving markets and emerging technologies; |
• | how well we execute on our strategy and operating plans and the impact of changes in our business model that could result in significant restructuring charges; |
• | ability of our customers, channel partners, contract manufacturers and suppliers to purchase, market, sell, manufacture or supply our products (or components of our products) and services; |
• | financial stability of our customers, including the solvency of private sector customers and statutory authority for government customers to purchase goods and services; |
• | our ability to achieve targeted cost reductions; |
• | changes in tax laws or accounting rules, or interpretations thereof; |
• | changes in the amount and frequency of share repurchases or dividends; |
• | regional economic and political conditions; and |
• | seasonality. |
• | 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 possibility that our strategy could erode our revenue and gross margins; |
• | the impact on our financial results of longer periods of revenue recognition for certain types of software products |
• | 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; |
• | laws that restrict sales of products developed or manufactured outside of the country; |
• | 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; |
• | import tariffs imposed by the United States and reciprocal tariffs imposed 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 intellectual property, military actions, acts of terrorism, political and social unrest and difficulties in staffing and managing international operations. |
• | 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 (provided that the leverage ratio can be greater than 3.5x under material M&A for up to four quarters) 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. |
Exhibit Number | Description of Document | |
10.1 | ||
10.2 | ||
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 March 31, 2019, 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, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Changes in Stockholders' Equity, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text* | |
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. |
Juniper Networks, Inc. | |||
May 9, 2019 | By: | /s/ Kenneth B. Miller | |
Kenneth B. Miller | |||
Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Duly Authorized Officer and Principal Financial Officer and Principal Accounting Officer) |
ARTICLE I | |||
SECTION 1.01. Certain Defined Terms | 6 | ||
SECTION 1.02. Computation of Time Periods | 6 | ||
SECTION 1.03. Accounting Terms | 21 | ||
SECTION 1.04. Terms Generally; Other Interpretive Provisions | 21 | ||
ARTICLE II | |||
SECTION 2.01. The Advances | 22 | ||
SECTION 2.02. Making the Advances | 22 | ||
SECTION 2.03. Fees | 23 | ||
SECTION 2.04. Termination or Reduction of the Commitments | 24 | ||
SECTION 2.05. Repayment of Advances | 24 | ||
SECTION 2.06. Interest on Advances | 24 | ||
SECTION 2.07. Interest Rate Determination | 25 | ||
SECTION 2.08. Optional Conversion of Advances | 27 | ||
SECTION 2.09. Prepayments of Advances | 27 | ||
SECTION 2.10. Increased Costs | 27 | ||
SECTION 2.11. Illegality | 28 | ||
SECTION 2.12. Payments and Computations | 29 | ||
SECTION 2.13. Taxes | 30 | ||
SECTION 2.14. Sharing of Payments, Etc. | 33 | ||
SECTION 2.15. Evidence of Debt | 34 | ||
SECTION 2.16. Use of Proceeds | 34 | ||
SECTION 2.17. Mitigation Obligations; Replacement of Lenders | 34 | ||
SECTION 2.18. Defaulting Lenders | 35 |
SECTION 2.19. Increase in the Aggregate Commitments | 36 | ||
SECTION 2.20. Extension of Termination Date | 38 | ||
ARTICLE III | |||
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01 | 39 | ||
SECTION 3.02. Conditions Precedent to Each Borrowing. | 41 | ||
SECTION 3.03. Determinations Under Section 3.01 | 41 | ||
ARTICLE IV | |||
SECTION 4.01. Representations and Warranties of the Borrower | 41 | ||
SECTION 5.01. Affirmative Covenants | 43 | ||
SECTION 5.02. Negative Covenants | 46 | ||
SECTION 5.03. Financial Covenants | 48 | ||
ARTICLE VI | |||
SECTION 6.01. Events of Default | 48 | ||
ARTICLE VII | 50 | ||
SECTION 7.01. Authorization and Authority | 51 | ||
SECTION 7.02. Rights as a Lender | 51 | ||
SECTION 7.02. Duties of Agent; Exculpatory Provisions | 51 | ||
SECTION 7.04. Reliance by Agent | 52 | ||
SECTION 7.05. Delegation of Duties | 52 | ||
SECTION 7.06. Resignation of Agent | 52 | ||
SECTION 7.07. Non-Reliance on Agent and Other Lenders | 53 | ||
SECTION 7.08. No Other Duties, etc | 53 | ||
SECTION 7.09. Certain ERISA Matters | 53 | ||
ARTICLE VIII |
SECTION 8.01. Amendments, Etc. | 54 | ||
SECTION 8.02. Notices, Etc. | 55 | ||
SECTION 8.03. No Waiver; Remedies | 56 | ||
SECTION 8.04. Costs and Expenses | 56 | ||
SECTION 8.05. Right of Set-off | 58 | ||
SECTION 8.06. Binding Effect | 58 | ||
SECTION 8.07. Assignments and Participations | 59 | ||
SECTION 8.08. Confidentiality | 62 | ||
SECTION 8.09. Governing Law | 62 | ||
SECTION 8.10. Execution in Counterparts | 63 | ||
SECTION 8.11. Judgment | 63 | ||
SECTION 8.12. Jurisdiction, Etc. | 63 | ||
SECTION 8.13. Substitution of Currency | 64 | ||
SECTION 8.14. Patriot Act Notice | 64 | ||
SECTION 8.15. Other Relationships; No Fiduciary Duty | 64 | ||
SECTION 8.16. Acknowledgement and consent to Bail-In of EEA Financial Institutions | 64 | ||
SECTION 8.17. Waiver of Jury Trial | 66 | ||
Public Debt Rating S&P/Moody’s/Fitch | Applicable Margin for Base Rate Advances | Applicable Margin for Eurocurrency Rate Advances |
Level 1 A- / A3 /A- or above | 0.000% | 0.910% |
Level 2 BBB+ / Baa1 / BBB+ | 0.000% | 1.000% |
Level 3 BBB / Baa2 / BBB | 0.100% | 1.100% |
Level 4 BBB- / Baa3 / BBB- | 0.175% | 1.175% |
Level 5 Below Level 4 | 0.375% | 1.375% |
Public Debt Rating S&P/Moody’s/Fitch | Applicable Percentage |
Level 1 A- / A3 /A- or above | 0.090% |
Level 2 BBB+ / Baa1 / BBB+ | 0.125% |
Level 3 BBB / Baa2 / BBB | 0.150% |
Level 4 BBB- / Baa3 / BBB- | 0.200% |
Level 5 Below Level 4 | 0.250% |
Name of Initial Lender | Commitment | ||
Citibank, N.A. | $85,000,000 | ||
Bank of America, N.A. | $85,000,000 | ||
Barclays Bank PLC | $55,000,000 | ||
Credit Suisse AG, Cayman Islands Branch | $55,000,000 | ||
HSBC Bank USA, National Association | $55,000,000 | ||
JPMorgan Chase Bank, N.A. | $55,000,000 | ||
Mizuho Bank, Ltd. | $55,000,000 | ||
Wells Fargo Bank, National Association | $55,000,000 | ||
Total: | $500,000,000 |
Date | Amount of Advance | Amount of Principal Paid or Prepaid | Unpaid Principal Balance | Notation Made By |
1 | For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language. |
2 | For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language. |
3 | Select as appropriate. |
4 | Include bracketed language if there are either multiple Assignors or multiple Assignees. |
1. Assignor[s]: | ____________________________ |
____________________________ | |
[Assignor [is] [is not] a Defaulting Lender] | |
2. Assignee[s]: | ____________________________ |
____________________________ | |
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender] | |
3. Borrower(s): | Juniper Networks, Inc. |
4. Administrative Agent: | Citibank, N.A., as the administrative agent under the Credit Agreement |
5. Credit Agreement: | The Credit Agreement dated as of April 25, 2019 among Juniper Networks, Inc., the Lenders parties thereto, Citibank, N.A., as Administrative Agent, and the other agents parties thereto |
6. Assigned Interest[s]: |
Assignor[s]5 | Assignee[s]6 | Aggregate Amount of Commitment/ Advances for all Lenders7 | Amount of Commitment/ Advances Assigned8 | Percentage Assigned of Commitment/Advances8 | CUSIP Number |
$ | $ | % | |||
$ | $ | % | |||
$ | $ | % |
5 | List each Assignor, as appropriate. |
6 | List each Assignor, as appropriate. |
7 | Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. |
8 | Set forth, to at least 9 decimals, as a percentage of the Commitment/Advances of all Lenders thereunder. |
9 | To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date. |
By: | Title: |
By: | Title: |
By: | Title: |
By: | Title: |
10 | Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable). |
11 | Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable). |
12 | To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. |
13 | To be added only if the consent of the Borrower is required by the terms of the Credit Agreement. |
[NAME OF LENDER] |
By:____________________ Name: Title: |
[NAME OF PARTICIPANT] |
By:____________________ Name: Title: |
[NAME OF PARTICIPANT] |
By:____________________ Name: Title: |
[NAME OF LENDER] |
By:____________________ Name: Title: |
DATE: | April 29, 2019 |
TO: | Juniper Networks, Inc. |
Attention: | Chief Financial Officer |
Facsimile: | (408) 745-2100 |
Telephone: | (408) 745-2000 |
Email: | _______________ |
FROM: | JPMorgan Chase Bank, National Association, London Branch |
TELEPHONE: | (212) 622-2922 |
SUBJECT: | Share Repurchase Transaction |
General Terms: | |
Trade Date: | April 29, 2019 |
Seller: | Dealer |
Buyer: | Counterparty |
Shares: | The Common Stock, par value USD 0.00001 per share, of Counterparty (Ticker symbol “JNPR”). |
Prepayment: | Applicable. |
Prepayment Amount: | As specified in Schedule A |
Prepayment Date: | One Exchange Business Day following the Trade Date. |
Initial Shares: | As specified in Schedule A. |
Initial Share Delivery: | Dealer shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date being deemed to be a “Settlement Date” for purpose of such Section 9.4. |
Initial Share Delivery Date: | One Exchange Business Day following the Trade Date. |
Exchange: | The New York Stock Exchange. |
Related Exchange(s): | The primary U.S. exchange on which options or futures with respect to the Shares are traded. |
Calculation Agent: | Dealer; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder, upon a prior written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such a prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation; and provided further that no transferee of the Transaction in accordance with the terms of this Confirmation shall act as Calculation Agent with respect to such transferred Transaction without the prior consent of Counterparty, such consent not to be unreasonably withheld. Calculation Agent shall not be obligated to disclose any proprietary models or information, or other information that is subject to contractual, legal or regulatory obligations to no disclose such information, used by it for such determination or calculation. |
Valuation: | |
Trading Period: | The period of consecutive Scheduled Trading Days from, and including, the first Scheduled Trading Day following the Trade Date to, and including, the Maximum Maturity Date, as specified in Schedule A; provided that, with respect to the entire Transaction, Dealer may designate any Scheduled Trading Day on or after the Minimum Maturity Date (as specified in Schedule A) and prior to the Maximum Maturity Date as the last Scheduled Trading Day of the Trading Period (an “Acceleration”). Dealer shall notify Counterparty of any designation made pursuant to this provision on or prior to the Scheduled Trading Day immediately following such designated day; provided, that if Dealer expects that the Number of Shares to be Delivered will be a negative number as a result of any Acceleration prior to the Maximum Maturity Date, then Dealer shall use its commercially reasonable efforts to provide Counterparty notice of any such Acceleration at least two (2) Scheduled Trading Days prior to any such proposed Acceleration. |
Market Disruption Event: | Section 6.3(a) of the Equity Definitions shall be amended by deleting the words “at any time during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and replacing them with the words “at any time during the regular trading session on the Exchange, without regard to after hours or any other trading outside of the regular trading session hours”, by amending and restating clause (a)(iii) thereof in its entirety to read as follows: “(iii) an Early Closure that the Calculation Agent determines is material using a commercially reasonable manner” and by adding the words “or (iv) a Regulatory Disruption” after clause (a)(iii) as restated above. Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof. |
Final Termination Date: | As specified in Schedule A. |
Regulatory Disruption: | A “Regulatory Disruption” shall occur if Dealer determines, in good faith, that, based on advice of legal counsel, it is appropriate in light of legal, regulatory or self-regulatory requirements or related policies or procedures for Dealer (provided that such requirements, policies and procedures relate to legal, self-regulatory or regulatory issues and are generally applicable in similar situations and applied in a consistent manner in similar transactions) to refrain from all or any part of the market activity, in order to establish or maintain a commercially reasonable hedge position, in which it would otherwise engage in connection with the Transaction. Dealer shall notify Counterparty as soon as practicable (but in no event later than two Scheduled Trading Days) that a Regulatory Disruption has occurred or concluded and, in connection with giving notice that a Regulatory Disruption has concluded, the Scheduled Trading Days affected by such Regulatory Disruption (such notice, a “Disruption Notice”). For the avoidance of doubt, an e-mail notice to ________________ shall be deemed notice for the purpose of this provision. |
Disrupted Day: | The definition of “Disrupted Day” in Section 6.4 of the Equity Definitions shall be amended by adding the following sentence after the first sentence: “A Scheduled Trading Day on which a Related Exchange fails to open during its regular trading session will not be a Disrupted Day if the Calculation Agent determines that such failure will not have a material impact on Dealer’s ability to engage in or unwind any hedging transactions related to the Transaction”. |
Consequence of Disrupted Days: | Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs during the Trading Period, the Calculation Agent may in a good faith commercially reasonable manner postpone the Maximum Maturity Date and/or the Minimum Maturity Date; provided that in no event shall the Maximum Maturity Date be postponed to a date later than the Final Termination Date. If any Disputed Day occurs during the Trading Period, the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in whole, in which case the 10b-18 VWAP for such Disrupted Day shall not be included for purposes of determining the Forward Price or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the 10b-18 VWAP for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day taking into account the nature and duration of the relevant Market Disruption Event, and the weighting of the 10b-18 VWAPs for the relevant Exchange Business Days during the Trading Period shall be adjusted by the Calculation Agent in a commercially reasonable manner for purposes of determining the Forward Price, based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares. The Calculation Agent may determine that any day on which the Exchange is scheduled to close prior to its normal closing time shall be considered a Disrupted Day in whole. If a Disrupted Day occurs during the Trading Period or the Cash Settlement Pricing Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day (a “Disruption Event”), then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such Disruption Event to be an Additional Termination Event, with Counterparty as the sole Affected Party and the Transaction as the sole Affected Transaction. |
Valuation Date: | The last Scheduled Trading Day of the Trading Period. |
Settlement Terms: | |
Settlement Method Election: | Not Applicable; provided that if the Number of Shares to be Delivered is a negative number, Counterparty may elect Cash Settlement in lieu of Physical Settlement by written notice to Dealer delivered no later than 9:00 a.m. (New York City time) on the earlier of (i) the first Scheduled Trading Day immediately following notice of the designation of the final day of the Trading Period as a result of an Acceleration or (ii) the Maximum Maturity Date; provided that Counterparty on the date of such election shall be deemed to have represented as of such date that none of the Counterparty and its executive officers and directors is aware of any material nonpublic information regarding the Counterparty or Shares as of such date. |
Physical Settlement: | Applicable if the Number of Shares to be Delivered is (1) a positive number, in which case Dealer shall deliver to Counterparty on the Settlement Date the Number of Shares to be Delivered, or (2) a negative number and Counterparty does not make the election pursuant to the proviso under “Settlement Method Election” above, in which case Counterparty shall deliver to Dealer a number of Shares specified under “Physical Settlement by Counterparty” below, subject to paragraph 5(g) below. Section 9.11 of the Equity Definitions is hereby modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the Issuer of the Shares or the fact that any certificates representing such Shares contain a restrictive legend evidencing any such restrictions, obligations, limitations or requirements. |
Forward Price: | The amount equal to (i) the arithmetic average of the 10b-18 VWAPs for each Scheduled Trading Day in the Trading Period (subject to “Consequence of Disrupted Days” above) minus (ii) the Discount. |
Discount: | As specified in Schedule A. |
10b-18 VWAP: | (A) For any Scheduled Trading Day that is not a Disrupted Day, the Rule 10b-18 volume-weighted average price at which the Shares trade as reported in the composite transactions for all United States securities exchanges on which such Shares are traded (or, if applicable, any successor Exchange), excluding (i) trades that do not settle regular way, (ii) opening (regular way) reported trades in the consolidated system on such Scheduled Trading Day [(including, for the avoidance of doubt, the first reported trade on the Exchange following the scheduled open of trading on the Exchange)], (iii) trades that occur in the last ten minutes before the scheduled close of trading on the Exchange on such Scheduled Trading Day and ten minutes before the scheduled close of the primary trading in the market where the trade is effected, and (iv) trades on such Scheduled Trading Day that do not satisfy the requirements of Rule 10b-18(b)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as determined in good faith and a commercially reasonable manner by the Calculation Agent, or (B) for any Scheduled Trading Day that is a Disrupted Day, an amount determined in good faith and in a commercially reasonable manner by the Calculation Agent as the 10b-18 VWAP pursuant to “Consequence of Disrupted Days” above. Counterparty acknowledges that the Calculation Agent may refer to the Bloomberg Page “JNPR” <Equity> AQR SEC” (or any successor thereto) for any Scheduled Trading Day to determine the 10b‑18 VWAP. |
Number of Shares to be Delivered: | A number of Shares equal to the difference between (i) the Share Amount minus (ii) the Initial Shares; provided that a number of Shares less than a whole number shall be rounded upward. |
Share Amount: | The quotient of the Prepayment Amount divided by the Forward Price. |
Settlement Date: | Unless otherwise provided in Physical Settlement by Counterparty or Cash Settlement by Counterparty, the second Exchange Business Day immediately following the last Scheduled Trading Day of the Trading Period. |
Physical Settlement by Counterparty: | If Physical Settlement by Counterparty applies, Counterparty shall elect, subject to paragraph 5(f), that the shares delivered (“Physical Settlement Shares”) (and any Make-Whole Shares, as such term is defined below) shall be (i) sold in transactions registered under the Securities Act of 1933, as amended (the “Securities Act”) (“Free Shares”) with such election being conditional upon the agreement between Dealer and Counterparty of reasonable and customary underwriting terms for companies of a similar size or in a similar industry, including but not limited to customary indemnification and contribution and due diligence in a manner customarily performed for companies of a similar size or in a similar industry (subject to customary confidentiality agreements for transactions of this type) (the “Underwriting Agreement”), or (ii) sold in transactions exempt from registration under the Securities Act (“Restricted Shares”). No fractional Shares shall be delivered in connection with Physical Settlement by Counterparty, and the value of any fractional Share otherwise deliverable shall be rounded up to the nearest whole Share. All Physical Settlement Shares delivered shall be freely transferable and free and clear of any lien, charge or other encumbrance, other than in the case of Restricted Shares restrictions on transfers relating to the exemption from registration under the Securities Act. (a) If Counterparty elects to deliver Free Shares, Counterparty shall deliver a number of Free Shares equal to the absolute value of the Number of Shares to be Delivered on the Settlement Date. (b) If Counterparty elects to deliver Restricted Shares, Counterparty shall deliver to Dealer an initial number of Restricted Shares on the Cash Settlement Date (as defined below) as determined by the following formula: s p Where, s = the absolute value of the Cash Settlement Amount (as defined below); and p = the price per Share determined by Dealer in a commercially reasonable manner. In the case of this clause (b), on the Cash Settlement Date, a balance (the “Settlement Balance”) shall be established with an initial balance equal to the absolute value of the Cash Settlement Amount. Following the sale of the Restricted Shares by Dealer, the Settlement Balance shall be reduced by an amount equal to the aggregate proceeds (net of any commercially reasonable brokerage and customary private placement fees) received by Dealer upon the sale of the Restricted Shares. If following the sale of some but not all of the Restricted Shares, the Settlement Balance has been reduced to zero, no additional Restricted Shares shall be sold by Dealer and Dealer shall redeliver to Counterparty any remaining Restricted Shares. If following the sale of the Restricted Shares, the Settlement Balance has not been reduced to zero, then Counterparty shall, at its election, (i) promptly deliver to Dealer an additional number of Shares (the “Make-Whole Shares”) equal to (x) the Settlement Balance as of such date divided by (y) the price per Restricted Share determined by Dealer in a commercially reasonable manner (the “Make-Whole Price”), subject to paragraph 5(o), or (ii) promptly deliver to Dealer cash in an amount equal to the then remaining Settlement Balance. This provision shall be applied successively (provided that references to “Restricted Shares” herein shall be deemed to refer to the previous Make-Whole Shares) until the Settlement Balance is reduced to zero. |
Cash Settlement by Counterparty: | Applicable if the Number of Shares to be Delivered is a negative number and Counterparty makes the election above pursuant to the proviso under “Settlement Method Election”, in which case Counterparty shall pay Dealer the absolute value of the Cash Settlement Amount on the Cash Settlement Date. |
Cash Settlement Amount: | The product of (i) the Number of Shares to be Delivered multiplied by (ii) Cash Settlement Price. |
Cash Settlement Price: | The volume weighted average price at which Dealer or an Affiliate of Dealer executes purchases of a number of Shares equal to the absolute value of the Number of Shares to be Delivered during the Cash Settlement Pricing Period. |
Cash Settlement Pricing Period: | A number of Scheduled Trading Days following the Trading Period during which Dealer purchases a number of Shares, over a commercially reasonable period in order to unwind a commercially reasonable hedge position, equal to the absolute value of the Number of Shares to be Delivered. |
Cash Settlement Date: | The second Exchange Business Day immediately following the Cash Settlement Pricing Period. |
Settlement Currency: | USD |
Adjustments: | |
Method of Adjustment: | Calculation Agent Adjustment; provided that the Equity Definitions shall be amended by replacing the words “diluting or concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii) with the word “economic” and by adding the words “or the Transaction” after the words “theoretical value of the relevant Shares” in Section 11.2(a), 11.2(c) and 11.2(e)(vii); provided further that adjustments for any Potential Adjustment Event (other than pursuant to any Potential Adjustment Event defined in Sections 11.2(e)(i), 11.2(e)(ii)(A) and 11.2(e)(iii) of the Equity Definitions) may be made to account for changes in volatility, stock loan rate or liquidity relevant to the Shares or the Transaction; provided further that the parties agree that open market Share repurchases by Counterparty, if any, at the prevailing market price shall not be considered a Potential Adjustment Event. Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, a Dividend (as well as any regular quarterly dividend in an amount equal to or less than the Regular Dividend as specified in Schedule A (as defined below) shall not constitute a Potential Adjustment Event. For the avoidance of doubt, whenever the Calculation Agent, Determining Party, Seller or Dealer is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent, Determining Party, Seller or Dealer shall make such adjustment in a commercially reasonable manner by reference to the effect of such event on Dealer assuming that Dealer maintains a commercially reasonable Hedge Position. |
Extraordinary Events: | |
New Shares: | Section 12.1(i) of the Equity Definitions is hereby amended by deleting the text in clause (i) in its entirety and replacing it with the phrase “publicly quoted, traded or listed on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors) and”. |
Share-for-Share: | The definition of “Share-for-Share” set forth in Section 12.1(f) of the Equity Definitions is hereby amended by the deletion of the parenthetical in clause (i) thereof. |
Cancellation and Payment (Calculation Agent Determination): | Sections 12.2(e) and 12.3(d) and the first paragraph of Section 12.7(b) of the Equity Definitions shall be amended by inserting the words “or Share Forward Transaction” after the words “Option Transaction” in each place where such words appear therein. Section 12.7(c) shall be deleted from the Equity Definitions, and each reference in the Equity Definitions to “Section 12.7(c)” shall be replaced with a reference to “Section 12.7(b)”. |
Consequences of Merger Events: |
Merger Event: | Applicable; provided Section 12.1(b) of the Equity Definitions is hereby amended by (i) adding the words “or Issuer” after the words “relevant Shares”; and (ii) deleting the word “or” after the parenthetical in line 10 thereof; provided further that solely for the purposes of any event that could give rise to any adjustment to the Discount by the Calculation Agent under this Transaction, the definition of Merger Event is hereby amended by (1) deleting the remainder of Section 12.1(b) following the definition of “Reverse Merger” in subsection (iv) thereof; and (2) adding the words “(v) the sale or transfer of all or substantially all of the assets of the Issuer, (vi) any acquisition by Issuer or any of its subsidiaries where the estimated value of the aggregate consideration transferable by Issuer or its subsidiaries exceeds 50% of the market capitalization of the Issuer, in each case, as determined by the Calculation Agent, in its commercially reasonable discretion, as of the date such acquisition is first announced or (vii) any lease, exchange, transfer, disposition (including, without limitation, by way of spin-off or distribution) of assets (including, without limitation, any capital stock or other ownership interests or other ownership interest in the Issuer’s subsidiaries) or other similar event by Issuer or any of its subsidiaries where the estimated value of the aggregate consideration transferable to or receivable by Issuer or its subsidiaries exceeds 25% of the market capitalization of the Issuer, in each case, as determined by the Calculation Agent, in its commercially reasonable discretion, as of the date such transaction is first announced” after subsection (iv). |
Share-for-Share: | Modified Calculation Agent Adjustment. |
Share-for-Other: | Cancellation and Payment (Calculation Agent Determination). |
Share-for-Combined: | Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect Component Adjustment. |
Consequences of Tender Offers: | |
Tender Offer: | Applicable; provided that the definition of “Tender Offer” in Section 12.1 of the Equity Definitions will be amended by replacing the phrase “greater than 10% and less than 100% of the outstanding voting shares of the Issuer” in the third and fourth line thereof with “(a) greater than 10% and less than 100% of the outstanding Shares of the Issuer in the event that such Tender Offer is being made by the Issuer or any subsidiary thereof or (b) greater than 15% and less than 100% of the outstanding Shares of the Issuer in the event that such Tender Offer is being made by any entity or person other than the Issuer or any subsidiary thereof”. |
Share-for-Share: | Modified Calculation Agent Adjustment. |
Share-for-Other: | Modified Calculation Agent Adjustment. |
Share-for-Combined: | Modified Calculation Agent Adjustment. |
Modified Calculation Agent Adjustment: | The definition of “Modified Calculation Agent Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by (i) inserting the following after the phrase, “(including adjustments to account for changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or to the Transaction” and immediately prior to the close of the parenthesis: “from a commercially reasonable period of time prior to and including the applicable Announcement Date to the earlier of the Valuation Date, any Early Termination Date or any other date of cancellation of such Transaction” and (ii) deleting the phrase “expected dividends,” from such parenthetical provision. |
Announcement Date: | The definition of “Announcement Date” in Section 12.1 of the Equity Definitions shall be amended by (i) replacing the word “leads to the” in the third and the fifth lines thereof with the words “, if completed, would lead to a”; (ii) replacing the words “voting shares” in the fifth line thereof with the word “Shares”; and (iii) inserting the words “by any entity that is likely to be a party to the transaction” after the word “announcement” in the second and the fourth lines thereof; (iv) replacing the words “a firm” with the word “any” in the second and fourth lines thereof; (v) inserting the words “or to explore the possibility of engaging in” after the words “engage in” in the second line thereto; and (vi) inserting the words “or to explore the possibility of purchasing or otherwise obtaining” after the word “obtain” in the fourth line thereto. |
Announcement Event: | If an Announcement Event has occurred, the Calculation Agent shall have the right to determine the economic effect of the Announcement Event on the theoretical value of the Transaction (including without limitation any change in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction) (i) at a time that it deems appropriate, from the Announcement Date to the date of such determination (the “Determination Date”), and (ii) on the Valuation Date or on a date on which a payment amount is determined pursuant to Section 6 of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions, from the Exchange Business Day immediately preceding the Announcement Date or the Determination Date, as applicable, to the Valuation Date or the date on which a payment amount is determined pursuant to Section 6 of the Agreement or Sections 12.7 or 12.8 of the Equity Definitions. If any such economic effect is material, the Calculation Agent may either (i) adjust the terms of the Transaction to reflect such economic effect or (ii) terminate the Transaction, in which case the Determining Party will determine the Cancellation Amount payable by one party to the other; provided that the reference in Section 12.8(a) of the Equity Definitions to “Extraordinary Event” shall be replaced for this purpose with a reference to “Announcement Event.” “Announcement Event” shall mean the occurrence of the Announcement Date of a Merger Event or Tender Offer or of a potential Merger Event or potential Tender Offer, or any publicly announced change or amendment to any such announced transaction or event (including any announcement relating to the abandonment thereof); provided that if the Calculation Agent shall make any adjustment to the terms of the Share Forward Transaction upon the occurrence of a particular Announcement Event, then the Calculation Agent shall make an adjustment to the terms of the Share Forward Transaction upon any announcement regarding the same event that gave rise to the original Announcement Event, including, without limitation, regarding the abandonment of any such event. |
Composition of Combined Consideration: | Not Applicable; provided that, notwithstanding Sections 12.5(b) and 12.1(f) of the Equity Definitions, to the extent that the composition of the consideration for the relevant Shares pursuant to a Tender Offer or Merger Event could be elected by an actual holder of the Shares, the Calculation Agent will, in its commercially reasonable discretion, determine such composition. |
Nationalization, Insolvency or Delisting: | Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange. |
Additional Disruption Events: | |
Change in Law: | Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof with the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”. |
Failure to Deliver: | Not Applicable. |
Insolvency Filing: | Applicable; provided that the definition of “Insolvency Filing” in Section 12.9 of the Equity Definitions shall be amended by deleting the clause “provided that such proceedings instituted or petitions presented by creditors and not consented to by the Issuer shall not be deemed an Insolvency Filing” at the end of such definition and replacing it with the following: “; or it has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by a creditor and such proceeding is not dismissed, discharged, stayed or restrained in each case within 15 days of the institution or presentation thereof.” |
Hedging Disruption: | Applicable. |
Increased Cost of Hedging: | Applicable. |
Loss of Stock Borrow: | Applicable; provided that Sections 12.9(a)(vii) and 12.9(b)(iv) of the Equity Definitions are amended by deleting the words “at a rate equal to or less than the Maximum Stock Loan Rate” and replacing it with the words “at a Borrow Cost equal to or less than the Maximum Stock Loan Rate”. For purposes of Section 12.9 of the Equity Definitions, all references to “Hedging Shares” shall be deemed to be references to Dealer’s short position in respect of the Transaction. |
Borrow Cost: | The cost to borrow the relevant Shares, as determined by the Calculation Agent in a commercially reasonable manner on the relevant date of determination. Such costs shall include (a) the spread below FED-FUNDS earned on collateral posted in connection with such borrowed Shares, net of any costs or fees, and (b) any stock loan borrow fee payable for such Shares, expressed as fixed rate per annum. |
Maximum Stock Loan Rate: | 200 basis points. |
Increased Cost of Stock Borrow: | Applicable; provided that (a) Section 12.9(a)(viii) of the Equity Definitions shall be amended by deleting “rate to borrow Shares” and replacing it with “Borrow Cost” and (b) Section 12.9(b)(v) of the Equity Definitions shall be amended by (i) adding the word “or” immediately before the phrase “(B)”, (ii) deleting subsection (C) in its entirety, (iii) replacing “either party” in the penultimate sentence with “the Hedging Party”, and (iv) replacing the word “rate” in clauses (X) and (Y) of the final sentence therein with the words “Borrow Cost”. |
Initial Stock Loan Rate: | 25 basis points. |
FED FUNDS: | For any day, the rate set forth for such day opposite the caption “Overnight Bank Funding Rate”, as such rate is displayed on the page “[OBFR01] <Index> <GO>” on the BLOOMBERG Professional Service, or any successor page; provided that if no rate appears for any day on such page, the rate for the immediately preceding day for which a rate does so appear shall be used for such day. |
Hedging Party: | Dealer or an affiliate of Dealer that is involved in the hedging of the Transaction for all applicable Additional Disruption Events. |
Hedge Positions: | The definition of “Hedge Positions” in Section 13.2(b) of the Equity Definitions shall be amended by inserting the words “or an affiliate thereof” after the words “a party” in the third line. |
Determining Party: | Dealer for all applicable Extraordinary Events and any Announcement Event. |
Acknowledgments: | |
Non-Reliance: | Applicable. |
Agreements and Acknowledgments Regarding Hedging Activities: | Applicable. |
Additional Acknowledgments: | Applicable. |
(a) | Commodity Exchange Act. It is an “eligible contract participant” within the meaning of Section 1a(18) of the U.S. Commodity Exchange Act, as amended (the “CEA”). The Transaction has been subject to individual negotiation by the parties. The Transaction has not been executed or traded on a “trading facility” as defined in Section 1a(51) of the CEA; |
(b) | Securities Act. It is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or an “accredited investor” as defined in Section 2(a)(15)(ii) of the Securities Act; and |
(c) | ERISA. The assets used in the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the U.S. Internal Revenue Code (the “Code”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101. |
(a) | Reserved. |
(b) | Counterparty shall promptly provide written notice to Dealer upon obtaining knowledge of the occurrence of any event that would constitute an Event of Default, a Potential Adjustment Event, a Merger Event or any other Extraordinary Event; provided, however, that should Counterparty be in possession of material non-public information regarding Counterparty, Counterparty shall not communicate such information to Dealer; |
(c) | (A) Counterparty is acting for its own account, and it has made its own independent decisions to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary, (B) Counterparty is not relying on any communication (written or oral) of Dealer or any of its affiliates as investment advice or as a recommendation to enter into the Transaction (it being understood that information and explanations related to the terms and conditions of the Transaction shall not be considered investment advice or a recommendation to enter into the Transaction), and (C) no communication (written or oral) received from Dealer or any of its affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction; |
(d) | Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing, and (C) has total assets of at least USD 50,000,000 as of the date hereof; |
(e) | Counterparty’s financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness; |
(f) | Counterparty’s investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and Counterparty is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction; |
(g) | Counterparty is not as of the Trade Date, and shall not be after giving effect to the Transaction, “insolvent” (as such term is defined in Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase the number of Shares underlying with the Transaction in compliance with the laws of the jurisdiction of Counterparty’s incorporation or organization; |
(h) | the Transaction, and any repurchase of the Shares by Counterparty in connection with the Transaction, is pursuant to a publicly announced Share repurchase program that has been approved by Counterparty’s board of directors, a copy of such approval to be provided to Dealer upon request, (including engaging in related derivative transactions) and any such repurchase has been, or shall if so required be, publicly disclosed in its periodic filings under the Exchange Act and its financial statements and notes thereto; |
(i) | Counterparty understands, agrees and acknowledges that Dealer has no obligation or intention to register the Transaction under the Securities Act, any state securities law or other applicable federal securities law; |
(j) | (A) each of Counterparty’s filings under the Securities Act and the Exchange Act that are required to be filed have been filed and (B) as of the respective dates thereof and as of the Trade Date, such filings when considered as a whole (with the more recent such filings deemed to amend inconsistent statements contained in any earlier such filings) do not contain any misstatement of a material fact or omit any material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; |
(k) | Counterparty is not, and after giving effect to the Transaction will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended; |
(l) | Counterparty understands, agrees and acknowledges that no obligations of Dealer to it hereunder shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Dealer or any governmental agency; |
(m) | without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Dealer is not making any representations or warranties with respect to the treatment of the Transaction under any accounting standards, including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project; |
(n) | Counterparty is not entering into the Transaction for the purpose of (i) creating actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or (ii) manipulating the price of, or facilitating a distribution of, the Shares (or any security convertible into or exchangeable for the Shares); |
(o) | Counterparty has not entered into any obligation that would contractually limit it from effecting settlement under the Transaction and it agrees not to enter into any such obligation during the term of the Transaction; |
(p) | no federal, state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares other than any such law, rule, regulation or order that applies (A) to the beneficial ownership of Shares under the Exchange Act or (B) solely as a result of the business, identity, place of business or jurisdiction of organization of Dealer or any such affiliate; and |
(q) | the Available Share Number is equal to or greater than the Counterparty Maximum Share Number (each, as defined below), and any Shares delivered by Counterparty hereunder shall, when delivered in accordance with the terms hereof, be validly issued, fully paid and non-assessable. |
(a) | Calculations and Payment Date upon Early Termination. The parties acknowledge and agree that in calculating (a) the Close-Out Amount pursuant to Section 6 of the Agreement and (b) the amount due upon cancellation or termination of any Transaction (whether in whole or in part) pursuant to Article 12 of the Equity Definitions as a result of an Extraordinary Event, Dealer may (but need not) determine such amount based on (i) expected losses assuming a commercially reasonable (including, without limitation, with regard to reasonable legal and regulatory guidelines) risk bid were used to determine loss or (ii) the price at which one or more market participants would offer to sell to the Seller a block of Shares equal in number to the Seller’s hedge position in relation to the Transaction. Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement or Article 12 of the Equity Definitions, all amounts calculated as being due in respect of an Early Termination Date under Section 6(e) of the Agreement or upon cancellation or termination of the relevant Transaction under Article 12 of the Equity Definitions will be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to receive or deliver Shares or Termination Delivery Units in accordance with Section 5(m) hereof, such Shares or Termination Delivery Units shall be delivered on a date selected by Dealer as promptly as practicable. |
(b) | Rule 10b-18. |
(i) | Except as disclosed to Dealer in writing prior to the Trade Date, Counterparty represents and warrants to Dealer that it has not made any purchases of blocks by or for itself or any of its Affiliated Purchasers pursuant to the one block purchase per week exception in clause (b)(4) of Rule 10b-18 under the Exchange Act (“Rule 10b-18”) during each of the four calendar weeks preceding such date (“Rule 10b-18 purchase,” “blocks” and “Affiliated Purchaser”, each as defined in Rule 10b-18). |
(ii) | Counterparty agrees that it (A) will not, on any day during the Trading Period, any Cash Settlement Pricing Period (regardless of whether Cash Settlement by Counterparty applies) or any period (a “Share Termination Period”) beginning on the date of any cancellation or termination of the Transaction and ending on the date on which the Payment Obligation is satisfied or Termination Delivery Units are delivered pursuant to paragraph 5(m), as the case may be, make, or permit to be made (to the extent within Counterparty’s control), any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction (a “Public Announcement”) unless such public announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares; (B) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify Dealer following any such announcement that such announcement has been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide Dealer with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding |
(c) | Rule 10b5-1. It is the intent of the parties that the Transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(A) and (B) of the Exchange Act (“Rule 10b5-1”), and the parties agree that this Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c), and Counterparty shall take no action that results in the Transaction not so complying with such requirements. Without limiting the generality of the preceding sentence, Counterparty acknowledges and agrees that (A) Counterparty does not have, and shall not attempt to exercise, any influence over how, when or whether Dealer (or its affiliate) effects any purchases in connection with the Transaction, (B) during the Trading Period, any Cash Settlement Pricing Period (regardless of whether Cash Settlement by Counterparty applies) and any Share Termination Period neither Counterparty nor its officers or employees shall, directly or indirectly, communicate any information regarding Counterparty or the Shares to any employee of Dealer or its affiliates who is directly involved with the hedging of and trading with respect to the Transaction, (C) Counterparty is entering into the Transaction in good faith and not as part of a plan or scheme to evade compliance with federal securities laws including, without limitation, Rule 10b-5 under the Exchange Act (“Rule 10b-5”) and (D) Counterparty will not alter or deviate from this Confirmation or enter into or alter a corresponding or hedging transaction or position with respect to the Shares. Counterparty also acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer or director of Counterparty is aware of any material non-public information regarding Counterparty or the Shares. |
(d) | Company Purchases. Without the prior written consent of Dealer and except for purchases that are not solicited by or on behalf of Counterparty, its affiliates or affiliated purchasers (each as defined in Rule 10b-18 of the Exchange Act) or purchases executed by Dealer or an Affiliate of Dealer, Counterparty shall not purchase, and shall cause its affiliates or affiliated purchasers not to directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or enter into any derivative transaction that would reasonably be expected to result in any purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares during the Trading Period, any Cash Settlement Pricing Period (regardless of whether Cash Settlement by Counterparty applies) or any Share Termination Period; provided that this Section 5(d) shall not (i) limit the Counterparty’s ability, pursuant to its employee incentive plan or equity agreements or dividend reinvestment program, to re-acquire Shares in connection with the related equity transactions, (ii) limit Counterparty’s ability to withhold shares to cover tax liabilities associated with such equity transactions or (iii) limit Counterparty’s ability to grant stock and options to “affiliated partners” (as defined in Rule 10b-18) or the ability of such affiliated purchasers to acquire such stock or options, in connection with the Counterparty’s |
(e) | Regulation M. Counterparty is not on the date hereof, engaged in a distribution, as such term is used in Regulation M under the Exchange Act (“Regulation M”), of any securities of Counterparty, other than issuance of securities or activities exempted from Regulation M by reasons of Rule 101(b) and (c) and 102(b), (c) and (d) of Regulation M. Counterparty shall not, until the last date on which Shares or Termination Delivery Units are deliverable, or any cash is payable, by either party in respect of the Transaction, engage in any such distribution without prior notice to Dealer (a “Distribution Notice”); provided that Counterparty may only deliver up to three (3) Distribution Notices during the Trading Period. Counterparty acknowledges that delivery of a Distribution Notice could result in the occurrence of a Regulatory Disruption and shall comply with paragraph 5(c) above; provided that delivery of a Distribution Notice in accordance with this Section 5(e) (and the underlying distribution giving rise to such Distribution Notice) shall not be treated as a Potential Adjustment Event hereunder unless such Disruption Notice or Distribution Notices lead to more than eight Disrupted Days in the Trading Period. |
(f) | Additional Termination Events; Adjustment for Early Dividends. |
(i) | Notwithstanding any other provision hereof, an “Additional Termination Event” shall occur and Counterparty shall be the sole Affected Party pursuant to such Additional Termination Event if on any day occurring after the Trade Date and on or prior to the last Scheduled Trading Day in the Trading Period or, in any Cash Settlement Pricing Period (regardless of whether Cash Settlement by Counterparty applies) or any Share Termination Period: |
1. | Counterparty declares a distribution, issue or dividend to existing holders of the Shares with an ex-dividend date on or prior to the Valuation Date of (i) an extraordinary cash dividend (other than any regular quarterly dividend in an amount equal to or less than the Regular Dividend as specified in Schedule A), (ii) a regular quarterly dividend in an amount greater than the Regular Dividend as specified in Schedule A, (iii) securities or share capital of another issuer acquired or owned (directly or indirectly) by Counterparty as a result of a spin-off or other similar transaction or (iv) any other type of securities (other than Shares, which may constitute a Potential Adjustment Event), rights or warrants or other assets, in any case for no payment or for payment (cash or other consideration) at less than the prevailing market price as determined by Dealer (other than any dividend of any rights to holders of Shares pursuant to an adoption by Counterparty of a stockholder rights plan during the term of the Transaction; provided that any triggering or other event that results in such rights becoming separated or distributed shall constitute a Dividend hereunder) (any such distribution, issue or dividend, a “Dividend”). For avoidance of doubt, such Dividend will not be included in the Payment Obligation (as defined below); or |
2. | The price per Share, as determined by the Calculation Agent, on any Exchange Business Day falls below the Termination Price, as specified in Schedule A. In the case of this clause (ii), if Dealer so notifies Counterparty (notwithstanding Section 6(b) of the Agreement), such Exchange Business Day shall constitute the relevant Early Termination Date. |
(ii) | If on any day, occurring after the Trade Date and on or prior to the last Scheduled Trading Day in the Trading Period, Counterparty declares a distribution, issue or dividend to existing holders of the Shares with an ex-dividend date on or prior to the Valuation Date that is earlier than the expected ex-dividend date specified in Schedule A, the Calculation Agent shall in a good faith commercially reasonable manner make such adjustments to the exercise, settlement, payment or any other terms of the Transaction as the Calculation Agent determines appropriate to account for the economic effect on the Transaction of such event. |
(g) | Share Delivery Conditions. If Physical Settlement by Counterparty applies, Counterparty may deliver Free Shares in respect of its settlement obligations only if the following conditions have been satisfied (the “Registration Provisions”): (i) a registration statement (“Registration Statement”) (which may be a shelf registration statement filed pursuant to Rule 415 under the Securities Act) covering public resale by Dealer (or an affiliate thereof) of any Shares delivered by Counterparty to Dealer under such Physical Settlement by Counterparty (“Settlement Shares”) shall have been filed with, and declared effective by, the Securities and Exchange Commission no later than the Settlement Date and such Registration Statement continues to be in effect at all times to and including the date that Dealer or its affiliate(s) has fully and finally sold any Settlement Shares hereunder (“Distribution”) (provided that Dealer shall use its commercially reasonable efforts to complete such Distribution as soon as reasonably practicable), (ii) the contents of such Registration Statement and of any prospectus supplement to the prospectus included therein (including, without limitation, any sections describing the plan of distribution) shall be reasonably satisfactory to Dealer, (iii) Dealer shall have been afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for transactions involving companies of a similar size or in a similar industry pursuant to which Dealer (or an affiliate thereof) acts as an underwriter of equity securities and the results of such investigation are reasonably satisfactory to Dealer, in its commercially reasonable discretion (provided that Dealer shall enter into customary non-disclosure agreements in connection with such due diligence), and (iv) as of the Settlement Date, an agreement between Dealer and Counterparty of commercially reasonable and customary underwriting terms for companies of a similar size or in a similar industry, including but not limited to commercially reasonable underwriting fees and commissions, indemnification and contribution and reasonable due diligence (the “Underwriting Agreement”) shall have been entered into with Dealer in connection with the public resale of the Settlement Shares by Dealer (or an affiliate thereof). |
(h) | Transfer or Assignment. Counterparty may not transfer or assign any of its rights or obligations under the Transaction or the Agreement without the prior written consent of Dealer. Notwithstanding any provision of the Agreement to the contrary, Dealer may, subject to applicable law, freely transfer and assign (“Transfer”) all of its rights and obligations under the Transaction and the Agreement without the consent of Counterparty to (1) any affiliate of Dealer that has a credit rating that is not lower than the credit rating of Dealer immediately prior to the time of such proposed transfer or (2) an affiliate of Dealer whose obligations are guaranteed by Dealer. |
(i) | Dealer Maximum Share Delivery. Notwithstanding anything to the contrary in this Confirmation, in no event shall Dealer be required to deliver any Shares, or any Shares or other securities comprising Termination Delivery Units, in respect of any Transaction in excess of the Dealer Maximum Share Number set forth in Schedule A. |
(j) | Communications with Employees of J.P. Morgan Securities LLC. If Counterparty interacts with any employee of J.P. Morgan Securities LLC with respect to any Transaction, Counterparty is hereby notified that such employee will act solely as an authorized representative of JPMorgan Chase Bank, N.A. (and not as a representative of J.P. Morgan Securities LLC) in connection with such Transaction. |
(k) | No Netting or Setoff. Obligations under the Transaction shall not be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against any other obligations of the parties, whether arising under the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or otherwise, and no other obligations of the parties shall be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against obligations under the Transaction, whether arising under the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or otherwise, and each party hereby waives any such right of setoff, netting or recoupment. |
(l) | Staggered Settlement. Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver any Shares deliverable on such Nominal Settlement Date on two or more dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date (“Staggered Settlement”) as follows: (i) in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) or delivery times and how it will allocate the Shares it is required to deliver under the applicable settlement method above among the Staggered Settlement Dates or delivery times; and (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates shall be taken into account for purposes of determining the Number of Shares to be Delivered at the Nominal Settlement Date; provided that in no event shall any Staggered Settlement Date be postponed to a date later than the Final Termination Date; provided further that in no event shall any Staggered Settlement reduce the total Number of Shares to be Delivered that Dealer is obligated to deliver to Counterparty under this Transaction. |
(m) | Alternative Calculations and Counterparty Payment on Early Termination and on Certain Extraordinary Events. If Dealer owes Counterparty or if Counterparty owes Dealer any amount in connection with the Transaction (i) pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or “Announcement Event” above or (ii) pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Counterparty or Dealer, as the case may be, shall satisfy such Payment Obligation by delivery of Termination Delivery Units (as defined below) unless Counterparty gives irrevocable telephonic notice to Dealer of its election to the contrary, confirmed in writing within one Scheduled Trading Day, no later than noon New York time on the Early Termination Date or other date the Transaction is cancelled or terminated, as applicable, where such notice shall include a representation and warranty from Counterparty that it is not, as of the date of the telephonic notice and the date of such written notice, aware of any material non-public information concerning itself or the Shares and Dealer consents in writing to such election. Within a commercially reasonable period of time following the date on which the Payment Obligation would otherwise become due, Dealer shall deliver to Counterparty or Counterparty shall deliver to Dealer, as the case may be, a number of Termination Delivery Units having a fair market value (net of any commercially reasonable brokerage and underwriting commissions and fees, or any commercially reasonable customary private placement fees, in the case of a delivery of Termination Delivery Units by Counterparty) equal to the amount of such Payment Obligation, as determined by the Calculation Agent in its good faith and commercially reasonable discretion. If the provisions set forth in this paragraph are applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 (modified as described above) and 9.12 of the Equity Definitions shall be applicable, except that all references to “Shares” shall be read as references to “Termination Delivery Units.” Any purchases made by the Dealer to fulfill their delivery obligation of Shares or Termination Delivery Units pursuant to this paragraph 5(m) shall be made on Scheduled Trading Days. “Termination Delivery Units” means in the case of a Termination Event, Event of Default, Tender Offer, Announcement Event, Insolvency Filing, Reverse Merger or Delisting, one Share or, in the case of Nationalization, Insolvency or Merger Event (other than a Reverse Merger), a unit consisting of the number or amount of each type of property received by all or substantially all hypothetical holders of Shares (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or Merger Event; provided that if such Nationalization, Insolvency or Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. |
(n) | No Material Non-Public Information. On the Trade Date, Counterparty represents and warrants to Dealer that it is not aware of any material non-public information (as such term is used for the purposes of securities laws and regulations prohibiting trading on the basis of such information, including Section 10(b) of the Exchange Act and the Rules promulgated thereunder) concerning itself or the Shares. |
(o) | Counterparty Maximum Number of Shares. Notwithstanding anything to the contrary herein, the number of Shares issuable by Counterparty at settlement or pursuant to paragraph 5(m) shall not exceed the Counterparty Maximum Share Number, as specified in Schedule A, as adjusted by Calculation Agent to account for any subdivision, stock-split, stock combination, reclassification or similar dilutive or anti-dilutive event with respect to the Shares resulting from corporate action of the Issuer. Notwithstanding anything to the contrary herein or in the Equity Definitions, the Counterparty Maximum Share Number will not be adjusted on account of any event that (x) constitutes a Potential Adjustment Event solely on account of Section 11.2(e)(vii) of the Equity Definitions and (y) is not within Counterparty’s control; provided that if the Counterparty Maximum Share Number would exceed the number of Shares that have been authorized but unissued Shares that are not reserved for other purposes (the “Available Share Number”), Counterparty will use its commercially reasonable efforts to increase the Available Share Number to enable it to satisfy all obligations hereunder. |
(p) | Tax Disclosure. Notwithstanding anything to the contrary herein, in the Equity Definitions or in the Agreement, and notwithstanding any express or implied claims of exclusivity or proprietary rights, the parties (and each of their employees, representatives or other agents) are authorized to disclose to any and all persons, beginning immediately upon commencement of their discussions and without limitation of any kind, the tax treatment and tax structure of the Transaction, and all materials of any kind (including opinions or other tax analyses) that are provided by either party to the other relating to such tax treatment and tax structure other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws. |
(q) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’ right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction except in any U.S. bankruptcy proceedings of Counterparty; provided further that nothing in this paragraph shall limit or shall be deemed to limit Dealer’ rights in respect of any transactions other than the Transaction. |
(r) | No Collateral. Notwithstanding any provision of this Confirmation, the Agreement, Equity Definitions or any other agreement between the parties to the contrary, the obligations of Counterparty under the Transaction are not secured by any collateral. |
(s) | Securities Contract. The parties hereto agree and acknowledge that Dealer is one or more of a “financial institution” and “financial participant” within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment” (as such term is defined in Section 741(8) of the Bankruptcy Code) or a “transfer” within the meaning of Section 546 of the Bankruptcy Code and (B) that Dealer is entitled to the protections afforded by, among other sections, Section 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code. |
(t) | Wall Street Transparency and Accountability Act of 2010. The parties hereby agree that none of (i) Section 739 of the Wall Street Transparency and Accountability Act of 2010 (the “WSTAA”), (ii) any similar legal certainty provision included in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, (iii) the enactment of the WSTAA or any regulation under the WSTAA, (iv) any requirement under the WSTAA or (v) any amendment made by the WSTAA shall limit or otherwise impair either party’s right to terminate, renegotiate, modify, amend or supplement this Confirmation, any Transaction hereunder or the Agreement, as applicable, arising |
(u) | Termination Currency. The Termination Currency shall be USD. |
(v) | Right to Extend. Dealer may postpone any potential Valuation Date or postpone or extend any other date of valuation or delivery with respect to some or all of the relevant Shares, if Dealer determines, in its commercially reasonable discretion, that such postponement or extension is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or commercially reasonable hedge unwind activity hereunder in light of existing liquidity conditions (including but not limited to the liquidity in the stock borrow market) or to enable Dealer to effect purchases or sale of Shares in connection with its commercially reasonable hedging, commercially reasonable hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer; provided that in no event shall a Valuation Date be postponed to a date later than the Final Termination Date. |
(w) | Acknowledgement. Counterparty acknowledges that: |
(i) | during the term of any Transaction, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to the Transaction; |
(ii) | Dealer and its affiliates may also be active in the market for the Shares and derivatives linked to the Shares other than in connection with hedging activities in relation to the Transaction, including acting as agent or as principal and for its own account or on behalf of customers; |
(iii) | Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the 10b-18 VWAP; and |
(iv) | any market activities of Dealer and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and the 10b-18 VWAP, each in a manner that may be adverse to Counterparty. |
(x) | Governing Law. This Confirmation and the Agreement, and any claims, causes of action or disputes arising hereunder or thereunder or relating hereto or thereto, shall be governed by the laws of the State of New York (without reference to choice of law doctrine that would lead to the application of the laws of any jurisdiction other than New York). |
(y) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
(z) | U.S. Resolution Stay Protocol. The parties acknowledge and agree that (i) to the extent that prior to the date hereof both parties have adhered to the 2018 ISDA U.S. Resolution Stay Protocol (the “Protocol”), the terms of the Protocol are incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a Protocol Covered Agreement, Dealer shall be deemed a Regulated Entity and Counterparty shall be deemed an Adhering Party; (ii) to the extent that prior to the date hereof the parties have executed a separate agreement the effect of which is to amend the qualified financial contracts between them to conform with the requirements of the QFC Stay Rules (the “Bilateral Agreement”), the terms of the Bilateral Agreement are incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a Covered Agreement, Dealer shall be deemed a Covered Entity and Counterparty shall be deemed a Counterparty Entity; or (iii) if clause (i) and clause (ii) do not apply, the terms of Section 1 and Section 2 and the related defined terms (together, the “Bilateral Terms”) of the form of bilateral template entitled “Full-Length Omnibus (for use between U.S. G-SIBs and Corporate Groups)” published by ISDA on November 2, 2018 (currently available on the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy of which is available upon request), the effect of which is to amend the qualified financial contracts between the parties thereto to conform with the requirements of the QFC Stay Rules, are hereby incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a “Covered Agreement,” Dealer shall be deemed a “Covered Entity” and Counterparty shall be deemed a “Counterparty Entity.” In the event that, after the date of this Agreement, both parties hereto become adhering parties to the Protocol, the terms of the Protocol will replace the terms of this paragraph. In the event of any inconsistencies between this Agreement and the terms of the Protocol, the Bilateral Agreement or the Bilateral Terms (each, the “QFC Stay Terms”), as applicable, the QFC Stay Terms will govern. Terms used in this paragraph without definition shall have the meanings assigned to them under the QFC Stay Rules. For purposes of this paragraph, references to “this Agreement” include any related credit enhancements entered into between the parties or provided by one to the other. In addition, the parties agree that the terms of this paragraph shall be incorporated into any related covered affiliate credit enhancements, with all references to Dealer replaced by references to the covered affiliate support provider. |
(aa) | Reserved. |
(bb) | Reserved. |
(cc) | Part 2(b) of the ISDA Schedule – Payee Representation: |
(dd) | Part 3(a) of the ISDA Schedule – Tax Forms: |
Form/Document/Certificate | Date by which to be Delivered | |
Counterparty | A complete and duly executed W-9. | (i) Upon execution and delivery of this Agreement; (ii) promptly upon commercially reasonable demand by Dealer; and (iii) promptly upon learning that any such Form previously provided by Counterparty has become obsolete or incorrect. |
Dealer | A complete and duly executed W-9. | (i) Upon execution and delivery of this Agreement; and (ii) promptly upon learning that any such Form previously provided by Dealer has become obsolete or incorrect. |
(a) | Account for payments to Counterparty: |
(b) | Account for payments to Dealer: |
(a) | Address for notices or communications to Counterparty: |
(b) | Address for notices or communications to Dealer: |
By: | /s/ James B. Lee III Name: James B. Lee III Title: Executive Director |
By: | /s/ Kenneth B. Miller Name: Kenneth B. Miller Title: Executive Vice President and Chief Financial Officer |
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 |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
May 03, 2019 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | JUNIPER NETWORKS INC | |
Entity Central Index Key | 0001043604 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 344,325,417 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 31.1 | $ 34.4 |
Available-for-sale debt securities: | ||
Change in net unrealized gains and losses, net of tax (provision) benefit of ($0.6) and $1.4, respectively | 1.8 | (2.0) |
Net realized losses reclassified into net income, net of tax provisions of zero and zero, respectively | 0.0 | 0.9 |
Net change on available-for-sale debt securities, net of tax | 1.8 | (1.1) |
Cash flow hedges: | ||
Change in net unrealized gains and losses, net of tax provision of $1.3 and $0.3, respectively | 2.1 | 13.1 |
Net realized (gains) losses reclassified into net income, net of tax provisions of $0.2 and $0.6, respectively | 1.2 | (5.1) |
Net change on cash flow hedges, net of tax | 3.3 | 8.0 |
Change in foreign currency translation adjustments | 2.2 | 5.3 |
Other comprehensive income, net of tax | 7.3 | 12.2 |
Comprehensive income | $ 38.4 | $ 46.6 |
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) on available-for-sale securities, tax (provision) benefit | $ (0.6) | $ 1.4 |
Reclassification adjustment for realized net loss (gain) on available-for-sale securities included in net income, tax provisions | 0.0 | 0.0 |
Unrealized (loss) gain on cash flow hedges, tax (provision) benefit | (1.3) | (0.3) |
Reclassification adjustment for realized net loss (gain) on cash flow hedges included in net income, tax provisions (benefit) | $ 0.2 | $ 0.6 |
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
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) | 352,000,000 | 346,400,000 |
Common stock - outstanding (shares) | 352,000,000 | 346,400,000 |
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Mar. 22, 2019 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 |
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
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, 2018 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 months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, 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, 2018 (the "Form 10-K"). 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 |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Except for the change in certain policies upon adoption of the accounting standards 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 Standards Cloud Computing Arrangement: On January 1, 2019, the Company early adopted FASB ASU No. 2018-15 (Subtopic 350-40) Intangibles — Goodwill and Other-Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which provides guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a service contract. The Company has adopted the standard prospectively and had no material impact to all applicable implementation costs incurred after the adoption date. Derivatives and Hedging: On January 1, 2019, the Company adopted FASB ASU No. 2017-12 (Topic 815) Derivatives and Hedging — Targeted Improvements to Accounting for Hedging Activities, and an amendment thereafter, 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 Company adopted the standard under the modified retrospective approach, and its amendment and presentation and disclosure requirements on a prospective basis. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. See Note 5, Derivative Instruments for additional disclosures required upon adopting the standard. Amortization on Purchased Callable Debt Securities: On January 1, 2019, the Company adopted FASB 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 standard will not impact debt securities held at a discount. The Company adopted the standard under the modified retrospective approach. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. Leases: On January 1, 2019, the Company adopted FASB ASU No. 2016-02, Leases (Topic 842), and the related subsequent amendments ("ASC 842"), which require recognition by the lessees of right-of-use ("ROU") assets and lease liabilities for most leases on the Company's Consolidated Balance Sheets. The Company adopted the new standard under the modified retrospective approach, and recorded a cumulative-effect adjustment to the opening balance of accumulated deficit as of the effective date. Under the modified retrospective method, financial results reported in periods prior to 2019 are unchanged. The Company elected the package of practical expedients which did not require the reassessment of existing leases under the new guidance. The Company also elected not to separate non-lease components from lease components and to not recognize ROU assets and lease liabilities for short-term leases. The cumulative effect of the adjustments made to the Company's Condensed Consolidated Balance Sheet as of the adoption date is detailed as follows (in millions):
The adoption of the standard had no impact on the Company's Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows or debt-covenant compliance under its current agreements. See Note 13, Commitment and Contingencies, for additional disclosures required upon adopting the standard. Leases The Company determines if an arrangement is a lease at inception. The Company evaluates classification of leases at commencement and, as necessary, at modification. As of March 31, 2019, the Company did not have any finance leases. Operating leases are included in operating lease ROU assets, other accrued liabilities, and operating lease liabilities on the Company's Condensed Consolidated Balance Sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made prior to lease commencement and excludes lease incentives. Variable lease payments not dependent on an index or a rate, are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. The Company's lease terms are the noncancelable period including any rent-free periods provided by the lessor and include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. At lease inception, and in subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that are reasonably certain to be exercised. Lease costs are recognized on a straight-line basis over the lease term. The Company does not separate non-lease components from lease components for all underlying classes of assets. In addition, the Company does not recognize ROU assets and lease liabilities for short-term leases, which have a lease term of twelve months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. Lease cost for short-term leases is recognized on a straight-line basis over the lease term. Recent Accounting Standards Not Yet Adopted Fair Value Measurement: In August 2018, the FASB issued ASU No. 2018-13 (Topic 820) Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on a prospective basis for certain modified or new disclosure requirements, and all other amendments in the standard are to be applied on a retrospective basis. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of adoption on the Consolidated Financial Statements. Simplifying the Test for Goodwill Impairment: 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. The Company does not expect the adoption to have a material impact on the Consolidated Financial Statements. Credit Losses on Financial Instruments: 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. Further amendment issued by the FASB in November 2018 clarifies that receivables arising from operating leases are not within the scope of Topic 326 and should be accounted for in accordance with Topic 842. This pronouncement and its amendment are 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 of adoption on the Consolidated Financial Statements. |
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 Debt Securities The following table summarizes the Company's unrealized gains and losses and fair value of investments designated as available-for-sale debt securities as of March 31, 2019 and December 31, 2018 (in millions):
The following table presents the contractual maturities of the Company's total fixed income securities as of March 31, 2019 (in millions):
The following tables present the Company's total fixed income securities that were in an unrealized loss position as of March 31, 2019 and December 31, 2018 (in millions):
For available-for-sale debt securities that have unrealized losses, the Company assesses impairment by evaluating various factors, including 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 March 31, 2019, the Company had 382 investments in unrealized loss positions. The gross unrealized losses related to these investments were primarily due to changes in market interest rates. 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 months ended March 31, 2019 and March 31, 2018. During the three months ended March 31, 2019 and March 31, 2018, there were no material gross realized gains or losses from available-for-sale debt securities. Investments in Equity Securities The following table presents the Company's investments in equity securities as of March 31, 2019 and December 31, 2018 (in millions):
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For the three months ended March 31, 2019 and March 31, 2018, there were no material unrealized gains or losses recognized for equity investments. Restricted Cash and Investments As of March 31, 2019, the carrying value of restricted cash and investments was $55.3 million, of which $28.8 million was included in prepaid expenses and other current assets and $26.5 million was included in other long-term assets on the Condensed Consolidated Balance Sheet. The following table provides a reconciliation of cash, cash equivalents, and restricted cash included in the Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 (in millions):
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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 debt 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 months ended March 31, 2019, 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 months ended March 31, 2019, there were no significant activities related to privately-held debt and redeemable preferred stock securities. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain of the Company's assets, including intangible assets and goodwill, are measured at fair value on a nonrecurring basis, when they are deemed to be other-than temporarily impaired. There were no impairment charges recognized during the three months ended March 31, 2019. Equity investments without readily determinable fair value are measured at fair value, when they are deemed to be impaired or when there is an adjustment from observable price changes. For the three months ended March 31, 2019, there were no material impairment charges or adjustments resulting from observable price changes for equity investments without readily determinable fair value. As of March 31, 2019 and December 31, 2018, 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 March 31, 2019 and December 31, 2018, the estimated fair value of the Company's total outstanding debt in the Condensed Consolidated Balance Sheets was $1,856.2 million and $2,158.7 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, along with the accumulated interest paid in kind, of $69.0 million approximates its fair value as of March 31, 2019 and December 31, 2018. Notes receivable are generally classified as Level 3 asset due to the lack of observable inputs to determine fair value. The carrying value of a contract manufacturer deposit of $47.6 million, reported within other long-term assets, in the Condensed Consolidated Balance Sheets approximates its fair value as of March 31, 2019. See Note 6, Other Financial Information, for further information on the contract manufacturer deposit. |
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 forward contracts 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 March 31, 2019, an estimated $2.8 million of unrealized net gain within accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months. The Company recognized an unrealized gain of $3.4 million and $13.4 million in accumulated other comprehensive income for the effective portion of its derivative instruments for the three months ended March 31, 2019 and March 31, 2018, respectively. The Company reclassified a loss of $1.0 million and a gain of $5.6 million out of accumulated other comprehensive income to cost of revenues and operating expenses in the Condensed Consolidated Statements of Operations during the three months ended March 31, 2019 and March 31, 2018, respectively. See Note 4, 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 to three months. 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 months ended March 31, 2019 and March 31, 2018. |
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):
Deposit The Company has a non-interest bearing deposit balance of $47.6 million, net of an unamortized discount balance of $2.3 million, to a contract manufacturer per the terms of the agreement. The discount is calculated based on an imputed interest rate of 4.8% at March 31, 2019. The imputed interest will be amortized over the term of the deposit to interest income along with a corresponding charge to cost of revenues. The deposit is due on demand in the second quarter of 2020 and has been classified as other long-term assets on the Condensed Consolidated Balance Sheets. Warranties Changes during the three months ended March 31, 2019 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):
Revenue See Note 10, Segments, for disaggregated revenue by product and service, customer vertical, and geographic region. The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of March 31, 2019 and when the Company expects to recognize the amounts as revenue (in millions):
Deferred Commissions Deferred commissions were $26.1 million as of March 31, 2019. For the three months ended March 31, 2019, amortization expense for the deferred commissions was $34.9 million. There were no impairment charges recognized during the three months ended March 31, 2019. Other Income (Expense), Net Other income (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 2019, the Company initiated a restructuring plan (the "2019 Restructuring Plan") designed to realign its workforce with the Company's sales strategy, improve productivity, and enhance cost efficiencies. The 2019 Restructuring Plan consists of workforce reductions and facility closures. In connection with the 2019 Restructuring Plan, the Company recorded $15.1 million of severance costs and $0.2 million of facility consolidations, respectively, to restructuring charges in the Condensed Consolidated Statements of Operations during the three months ended March 31, 2019 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 for the Company's 2019 and prior year plans (in millions):
The Company expects to pay the remaining restructuring liabilities by the end of the third quarter of 2019. |
Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity The following table summarizes dividends paid, stock repurchases and retirements under the Company's stock repurchase program (in millions, except per share amounts):
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Cash Dividends on Shares of Common Stock During the three months ended March 31, 2019, the Company declared a quarterly cash dividend of $0.19 per share of common stock on January 29, 2019, which was paid on March 22, 2019 to stockholders of record on March 1, 2019. Any future dividends, and the establishment of record and payment dates, are subject to approval by the Board of Directors (the “Board”) of Juniper or an authorized committee thereof. See Note 14, Subsequent Event, for discussion of the Company's dividend declaration subsequent to March 31, 2019. Stock Repurchase Activities In January 2018, the Board approved a $2.0 billion share repurchase program ("2018 Stock Repurchase Program"). As part of the 2018 Stock Repurchase Program, in February 2018, the Company entered into an ASR to repurchase $750.0 million of its common stock. The Company made an up-front payment of $750.0 million pursuant to the ASR to repurchase its common stock. The aggregate number of shares ultimately repurchased of 29.3 million shares of common stock was determined based on a volume weighted average repurchase price, less an agreed upon discount, of $25.62 per share. As of March 31, 2019, there were $1.3 billion of authorized funds remaining under the 2018 Stock Repurchase Program. Future share repurchases under the 2018 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 Company's 2018 Stock Repurchase Program may be discontinued at any time. In addition to repurchases under the 2018 Stock Repurchase Program, the Company also repurchases common stock from certain employees in connection with the net issuance of shares to satisfy applicable tax withholding requirements upon the vesting of certain stock awards issued to such employees. Repurchases associated with tax withholdings were not material during the three months ended March 31, 2019 and March 31, 2018. Accumulated Other Comprehensive Loss, Net of Tax The components of accumulated other comprehensive loss, net of related taxes, for the three months ended March 31, 2019 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 its 2008 Employee Stock Purchase Plan (the “ESPP”) for all eligible employees. As of March 31, 2019, 11.4 million and 7.4 million shares were available for future issuance under the Company's 2015 Equity Incentive Plan (the "2015 Plan") and the ESPP, respectively. In connection with past acquisitions, the Company also assumed or substituted stock options, RSUs, RSAs, and PSAs. Restricted Stock Unit and Performance Share Award Activities The Company’s RSU and PSA activity and related information as of and for the three months ended March 31, 2019 were as follows (in millions, except per share amounts and years):
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Employee Stock Purchase Plan The following table summarizes employee stock purchases through the ESPP (in millions, except per share amounts):
On November 6, 2017, the Company’s Compensation Committee amended and restated the ESPP to provide that the offering period that began on February 1, 2018 would be for 24 months with four 6-month purchase periods. A new 24-month offering period will commence every six months thereafter. The purchase price for the Company’s common stock under the ESPP is 85% of the lower of the fair market value of the shares at (1) the beginning of the applicable offering period or (2) the end of each 6-month purchase period during such offering period. The ESPP will continue in effect until February 25, 2028, unless terminated earlier under the provisions of the ESPP. Share-Based Compensation Expense Share-based compensation expense associated with stock options, RSUs, restricted stock awards ("RSAs"), PSAs, and the 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 March 31, 2019, the total unrecognized compensation cost related to unvested share-based awards was $369.5 million to be recognized over a weighted-average period of 1.9 years. |
Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments The Company operates in one reportable segment. The Company's chief executive officer, who is the 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):
The following table presents net revenues by customer vertical(*) (in millions):
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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 Taxes | Income Taxes The following table provides details of income taxes (in millions, except percentages):
The Company's effective tax rate during the three months ended March 31, 2019 differs from the federal statutory rate of 21%, primarily due to the benefit of the federal research and development ("R&D") credit and foreign earnings taxed at lower rates partially offset in the U.S. by the Base Erosion and Anti-Abuse Tax and state income taxes. The increase in the rate reflects the inability to fully benefit the discrete charges in the period and the net impact of unrecognized tax benefits. The effective tax rate during the three months ended March 31, 2018 differs from the federal statutory rate of 21% primarily due to the net impact of previously unrecognized tax benefits. As of March 31, 2019, the total amount of gross unrecognized tax benefits was $181.6 million, of which $178.2 million, if recognized, would affect the 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 $30.4 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. |
Net Income Per Share |
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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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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. Leases The Company leases its facilities and certain equipment under non-cancelable operating leases that have remaining lease terms of 1 to 7 years and 1 to 3 years, respectively. Each leased facility is subject to an individual lease or sublease, which could provide various options to extend or terminate the lease agreement. Facilities are primarily comprised of corporate offices, data centers, and R&D facilities. Equipment includes vehicles and various office equipment. The Company also has variable lease payments that are primarily comprised of common area maintenance and utility charges. The Company's lease agreements do not contain any residual value guarantees or restrictive covenants. The components of lease costs and other information related to leases were as follows (in millions, except years and percentages):
As of March 31, 2019, future minimum operating lease payments for each of the next five years and thereafter is as follows (in millions):
Purchase Commitments with Contract Manufacturers and Suppliers In order to reduce manufacturing lead times and in the interest of having access to adequate component supply, the Company enters into agreements with contract manufacturers and certain suppliers to procure inventory based on the Company's requirements. A significant portion of the Company's purchase commitments arising from these agreements consists of firm and non-cancelable commitments. These purchase commitments totaled $632.4 million as of March 31, 2019. The Company establishes a liability in connection with purchase commitments related to quantities in excess of its demand forecasts or obsolete materials charges for components purchased by the contract manufacturers based on the Company’s demand forecast or customer orders. As of March 31, 2019, the Company had accrued $32.8 million based on its estimate of such charges. Indebtedness In February 2019, the Company paid the aggregate principal amount of $350.0 million on its 3.125% senior notes upon maturity. Legal Proceedings Investigations The Company previously disclosed that it has been the subject of investigations by the U.S. Securities and Exchange Commission ("SEC") and the U.S. Department of Justice ("DOJ") into possible violations by the Company of the U.S. Foreign Corrupt Practices Act. In cooperation with these investigations, the Company and the Audit Committee of the Board of Directors, with the assistance of outside counsel and other independent advisors, conducted a thorough internal investigation. As a result of its internal investigation, the Company made significant improvements in its internal controls and carried out a number of disciplinary actions. In the fourth quarter of 2017, the DOJ notified the Company that the DOJ has closed its investigation related to these matters without taking any action against the Company. The Company is continuing to fully cooperate with the SEC’s ongoing investigation, and based on the Company’s recent communications with the Staff of the SEC, the Company believes that it is likely that the Staff of the SEC will seek to bring an enforcement action against the Company. The Company believes it is probable that it could incur a loss and has established an estimated legal reserve of $12.0 million related to the ongoing SEC investigation; however, as discussions are continuing, there can be no assurance as to the timing or the terms of any final resolution of this matter. 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 Event |
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Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Mist Acquisition On April 1, 2019, the Company completed the acquisition of Mist Systems, Inc. (“Mist”), a software company that provides cloud-managed wireless networks powered by artificial intelligence ("AI") for approximately $365.0 million in cash consideration, subject to adjustments for cash on hand, up to a certain limit, indebtedness, and certain other closing adjustments. A portion of the consideration includes certain share-based awards attributable to services prior to the acquisition. Credit Facility In April 2019, the Company entered into a new credit agreement with certain institutional lenders that provides for a five-year $500.0 million unsecured revolving credit facility (the "Revolving Credit Facility"), with an option to increase the Revolving Credit Facility by up to an additional $200.0 million, subject to the lenders' approval. The Revolving Credit Facility will terminate in April 2024, subject to two one-year maturity extension options, on the terms and conditions set forth in the Revolving Credit Facility. Dividend Declaration On April 25, 2019, the Company announced that the Board declared a cash dividend of $0.19 per share of common stock to be paid on June 24, 2019 to stockholders of record as of the close of business on June 3, 2019. Stock Repurchase Activities The Board also authorized the Company to enter into an ASR for an amount up to $300.0 million under the 2018 Stock Repurchase Program. On April 29, 2019, the Company entered into an ASR with a financial institution, to repurchase an aggregate of approximately $300.0 million of the Company’s outstanding common stock. The Company made an up-front payment of $300.0 million pursuant to the ASR and received and retired an initial 8.6 million shares of the Company’s common stock for an aggregate price of $240.0 million based on the market value of the Company’s common stock on the date of the transaction. The Company has an aggregate of $1.0 billion of authorized funds remaining under the 2018 Stock Repurchase Program, as of the filing of this Quarterly Report on Form 10-Q. Future share repurchases under the 2018 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 Company's 2018 Stock Repurchase Program may be discontinued at any time. Restructuring In April 2019, the Company amended the 2019 Restructuring Plan to implement certain additional organizational changes resulting in a realignment of the Company's workforce. As a result, the Company expects to record severance charges of approximately $6.0 million to $7.5 million related to headcount reductions in the second quarter of 2019. |
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, 2018 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 months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, 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, 2018 (the "Form 10-K"). 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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Recently Adopted Accounting Standards and Recent Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards Cloud Computing Arrangement: On January 1, 2019, the Company early adopted FASB ASU No. 2018-15 (Subtopic 350-40) Intangibles — Goodwill and Other-Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which provides guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a service contract. The Company has adopted the standard prospectively and had no material impact to all applicable implementation costs incurred after the adoption date. Derivatives and Hedging: On January 1, 2019, the Company adopted FASB ASU No. 2017-12 (Topic 815) Derivatives and Hedging — Targeted Improvements to Accounting for Hedging Activities, and an amendment thereafter, 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 Company adopted the standard under the modified retrospective approach, and its amendment and presentation and disclosure requirements on a prospective basis. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. See Note 5, Derivative Instruments for additional disclosures required upon adopting the standard. Amortization on Purchased Callable Debt Securities: On January 1, 2019, the Company adopted FASB 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 standard will not impact debt securities held at a discount. The Company adopted the standard under the modified retrospective approach. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. Leases: On January 1, 2019, the Company adopted FASB ASU No. 2016-02, Leases (Topic 842), and the related subsequent amendments ("ASC 842"), which require recognition by the lessees of right-of-use ("ROU") assets and lease liabilities for most leases on the Company's Consolidated Balance Sheets. The Company adopted the new standard under the modified retrospective approach, and recorded a cumulative-effect adjustment to the opening balance of accumulated deficit as of the effective date. Under the modified retrospective method, financial results reported in periods prior to 2019 are unchanged. The Company elected the package of practical expedients which did not require the reassessment of existing leases under the new guidance. The Company also elected not to separate non-lease components from lease components and to not recognize ROU assets and lease liabilities for short-term leases. The cumulative effect of the adjustments made to the Company's Condensed Consolidated Balance Sheet as of the adoption date is detailed as follows (in millions):
The adoption of the standard had no impact on the Company's Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows or debt-covenant compliance under its current agreements. See Note 13, Commitment and Contingencies, for additional disclosures required upon adopting the standard. Leases The Company determines if an arrangement is a lease at inception. The Company evaluates classification of leases at commencement and, as necessary, at modification. As of March 31, 2019, the Company did not have any finance leases. Operating leases are included in operating lease ROU assets, other accrued liabilities, and operating lease liabilities on the Company's Condensed Consolidated Balance Sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made prior to lease commencement and excludes lease incentives. Variable lease payments not dependent on an index or a rate, are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. The Company's lease terms are the noncancelable period including any rent-free periods provided by the lessor and include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. At lease inception, and in subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that are reasonably certain to be exercised. Lease costs are recognized on a straight-line basis over the lease term. The Company does not separate non-lease components from lease components for all underlying classes of assets. In addition, the Company does not recognize ROU assets and lease liabilities for short-term leases, which have a lease term of twelve months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. Lease cost for short-term leases is recognized on a straight-line basis over the lease term. Recent Accounting Standards Not Yet Adopted Fair Value Measurement: In August 2018, the FASB issued ASU No. 2018-13 (Topic 820) Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on a prospective basis for certain modified or new disclosure requirements, and all other amendments in the standard are to be applied on a retrospective basis. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of adoption on the Consolidated Financial Statements. Simplifying the Test for Goodwill Impairment: 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. The Company does not expect the adoption to have a material impact on the Consolidated Financial Statements. Credit Losses on Financial Instruments: 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. Further amendment issued by the FASB in November 2018 clarifies that receivables arising from operating leases are not within the scope of Topic 326 and should be accounted for in accordance with Topic 842. This pronouncement and its amendment are 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 of adoption on the Consolidated Financial Statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of new accounting pronouncements and changes in accounting principles | The cumulative effect of the adjustments made to the Company's Condensed Consolidated Balance Sheet as of the adoption date is detailed as follows (in millions):
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Cash Equivalents and Investments (Tables) |
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Cash Equivalents and Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains and losses and fair value of available-for-sale debt securities | The following table summarizes the Company's unrealized gains and losses and fair value of investments designated as available-for-sale debt securities as of March 31, 2019 and December 31, 2018 (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 March 31, 2019 (in millions):
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Available-for-sale securities in unrealized loss position | The following tables present the Company's total fixed income securities that were in an unrealized loss position as of March 31, 2019 and December 31, 2018 (in millions):
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Schedule of investments in equity securities | The following table presents the Company's investments in equity securities as of March 31, 2019 and December 31, 2018 (in millions):
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Schedule of reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash included in the Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 (in millions):
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Fair Value Measurements (Tables) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
|
Derivative Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Other Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Total inventory consisted of the following (in millions):
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Warranties | Changes during the three months ended March 31, 2019 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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Performance obligation | The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of March 31, 2019 and when the Company expects to recognize the amounts as revenue (in millions):
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Other income (expense), net | Other income (expense), net, consisted of the following (in millions):
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Restructuring (Benefits) Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring liabilities | The following table provides a summary of changes in the restructuring liabilities for the Company's 2019 and prior year plans (in millions):
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Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of dividends paid and stock repurchases and retirements under stock repurchase program | The following table summarizes dividends paid, stock repurchases and retirements under the Company's stock repurchase program (in millions, except per share amounts):
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Components of accumulated other comprehensive loss, net of taxes | The components of accumulated other comprehensive loss, net of related taxes, for the three months ended March 31, 2019 were as follows (in millions):
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Employee Benefit Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of nonvested share activity | The Company’s RSU and PSA activity and related information as of and for the three months ended March 31, 2019 were as follows (in millions, except per share amounts and years):
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Summary of employee stock purchases through the ESPP | The following table summarizes employee stock purchases through the ESPP (in millions, except per share amounts):
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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, restricted stock awards ("RSAs"), PSAs, and the 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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information for each segment | The following table presents net revenues by product and service (in millions):
The following table presents net revenues by customer vertical(*) (in millions):
________________________________
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Disaggregation of revenue | The following table presents net revenues by product and service (in millions):
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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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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of effective income tax rate reconciliation | The following table provides details of income taxes (in millions, except percentages):
|
Net Income Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted 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 (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of lease costs and other information related to leases | The components of lease costs and other information related to leases were as follows (in millions, except years and percentages):
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Future minimum operating lease payments | As of March 31, 2019, future minimum operating lease payments for each of the next five years and thereafter is as follows (in millions):
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Supplemental balance sheet information related to leases | As of March 31, 2019, future minimum operating lease payments for each of the next five years and thereafter is as follows (in millions):
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Cash Equivalents and Investments - Maturities of Fixed Income Securities (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Amortized Cost | ||
Amortized Cost | $ 1,776.1 | $ 2,223.6 |
Estimated Fair Value | ||
Total | 1,811.7 | 2,256.8 |
Fixed Income Securities | ||
Amortized Cost | ||
Due in less than one year | 1,641.1 | |
Due between one and five years | 120.4 | |
Amortized Cost | 1,761.5 | 2,207.0 |
Estimated Fair Value | ||
Due in less than one year | 1,640.0 | |
Due between one and five years | 119.7 | |
Total | $ 1,759.7 | $ 2,202.8 |
Cash Equivalents and Investments - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
Investment
|
Mar. 31, 2018
USD ($)
|
|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total investments in unrealized loss position | Investment | 382 | |
Available-for-sale debt securities, gross realized gain | $ 0 | $ 0 |
Available-for-sale debt securities, gross realized loss | 0 | 0 |
Equity investments, unrealized gains | 0 | 0 |
Equity investments, unrealized losses | 0 | 0 |
Restricted cash and investments | 55,300,000 | |
Prepaid expenses and other current assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and investments | 28,800,000 | |
Other long-term assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and investments | 26,500,000 | |
Debt Securities | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
OTTI, associated with credit losses | $ 0 | $ 0 |
Cash Equivalents and Investments - Cash and Cash Equivalents (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Cash Equivalents and Investments [Abstract] | ||||
Cash and cash equivalents | $ 2,155.6 | $ 2,489.0 | ||
Restricted cash | 17.5 | 16.8 | ||
Total cash, cash equivalents, and restricted cash | $ 2,173.1 | $ 2,505.8 | $ 2,645.0 | $ 2,059.1 |
Other Financial Information - Inventories, Net (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Schedule Of Inventory [Line Items] | ||
Production and service materials | $ 72.6 | $ 60.6 |
Finished goods | 21.3 | 21.4 |
Inventory | 93.9 | 82.0 |
Prepaid expenses and other current assets | ||
Schedule Of Inventory [Line Items] | ||
Inventory | 92.4 | 80.6 |
Other long-term assets | ||
Schedule Of Inventory [Line Items] | ||
Inventory | $ 1.5 | $ 1.4 |
Other Financial Information - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Other Financial Information [Abstract] | |
Contract manufacturer deposit (non-interest bearing) | $ 47,600,000 |
Non-interest bearing deposit to contract manufacturer, unamortized discount | $ 2,300,000 |
Non-interest bearing deposit to contract manufacturer, imputed interest rate | 4.80% |
Deferred commission | $ 26,100,000 |
Amortization of deferred commission | 34,900,000 |
Impairment loss | $ 0 |
Other Financial Information - Warranties (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance as of December 31, 2018 | $ 28.0 |
Provisions made during the period | 8.6 |
Actual costs incurred during the period | (7.7) |
Balance as of March 31, 2019 | $ 28.9 |
Other Financial Information - Deferred Revenue (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Reported as: | ||
Current | $ 860.1 | $ 829.3 |
Long-term | 370.8 | 384.3 |
Deferred revenue | 1,230.9 | 1,213.6 |
Undelivered product commitments and other product deferrals | ||
Deferred product revenue: | ||
Deferred gross product revenue | 152.3 | 163.3 |
Product | ||
Deferred product revenue: | ||
Deferred gross product revenue | 152.3 | 163.3 |
Deferred cost of product revenue | (12.7) | (18.9) |
Reported as: | ||
Deferred revenue | 139.6 | 144.4 |
Service | ||
Reported as: | ||
Deferred revenue | $ 1,091.3 | $ 1,069.2 |
Other Financial Information - Other Income (Expense), Net (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Other Financial Information [Abstract] | ||
Interest income | $ 23.5 | $ 14.9 |
Interest expense | (24.2) | (26.0) |
Gain (loss) on investments, net | 1.6 | (0.5) |
Other | 0.9 | (2.5) |
Other income (expense), net | $ 1.8 | $ (14.1) |
Restructuring Charges - Narrative (Details) - 2019 Restructuring Plan $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Severance costs | $ 15.1 |
Facility consolidations | $ 0.2 |
Restructuring Charges - Changes to Restructuring Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Restructuring Reserve [Roll Forward] | ||
Charges/ (Benefits) | $ 15.3 | $ (1.9) |
2019 Restructuring Plan | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring liability, beginning balance | 1.1 | |
Charges/ (Benefits) | 15.3 | |
Cash Payments | (10.2) | |
Other | (0.2) | |
Restructuring liability, ending balance | 6.0 | |
2019 Restructuring Plan | Severance | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring liability, beginning balance | 1.1 | |
Charges/ (Benefits) | 15.1 | |
Cash Payments | (10.1) | |
Other | (0.1) | |
Restructuring liability, ending balance | 6.0 | |
2019 Restructuring Plan | Facility consolidations | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring liability, beginning balance | 0.0 | |
Charges/ (Benefits) | 0.2 | |
Cash Payments | (0.1) | |
Other | (0.1) | |
Restructuring liability, ending balance | $ 0.0 |
Equity - Summary of Dividends Paid and Stock Repurchases and Reitrements (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 22, 2019 |
Jan. 29, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Sep. 30, 2018 |
|
Dividends | ||||||
Per share (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 | |||
Per share, declared (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 | |||
Amount | $ 66.2 | $ 62.1 | ||||
Stock repurchases | ||||||
Amount | 2.9 | 604.2 | ||||
Repurchase and retirement of common stock | $ 2.9 | $ 754.2 | ||||
Stock Repurchase Program 2018 | ||||||
Stock repurchases | ||||||
Shares (in shares) | 0.0 | 23.3 | ||||
Average price per share (in dollars per share) | $ 0.00 | $ 25.80 | ||||
Amount | $ 0.0 | $ 750.0 | ||||
Shares received (in shares) | 0.0 | 23.3 | ||||
Accelerated Share Repurchase Program | ||||||
Stock repurchases | ||||||
Shares (in shares) | 29.3 | 6.0 | 23.3 | |||
Average price per share (in dollars per share) | $ 25.62 | |||||
Repurchase and retirement of common stock | $ 750.0 | |||||
Shares received (in shares) | 29.3 | 6.0 | 23.3 |
Equity - Cash Dividends on Shares of Common Stock (Details) - $ / shares |
3 Months Ended | |||
---|---|---|---|---|
Mar. 22, 2019 |
Jan. 29, 2019 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Stockholders' Equity Note [Abstract] | ||||
Cash dividends declared per share of common stock (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 | |
Cash dividends paid per share of common stock (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 |
Equity - Stock Repurchase Activities (Details) - USD ($) $ / shares in Units, shares in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Sep. 30, 2018 |
Feb. 28, 2018 |
Jan. 31, 2018 |
|
Accelerated Share Repurchases [Line Items] | ||||||
Payment to repurchase stock | $ 2,900,000 | $ 754,200,000 | ||||
Stock Repurchase Program 2018 | ||||||
Accelerated Share Repurchases [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 2,000,000,000 | |||||
Stock repurchased and retired (in shares) | 0.0 | 23.3 | ||||
Average price per share (in dollars per share) | $ 0.00 | $ 25.80 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 1,300,000,000 | |||||
Accelerated Share Repurchase Program | ||||||
Accelerated Share Repurchases [Line Items] | ||||||
Stock repurchase program, authorized amount | $ 750,000,000 | |||||
Payment to repurchase stock | $ 750,000,000 | |||||
Stock repurchased and retired (in shares) | 29.3 | 6.0 | 23.3 | |||
Average price per share (in dollars per share) | $ 25.62 |
Employee Benefit Plans - Equity Incentive Plan (Details) shares in Millions |
Mar. 31, 2019
shares
|
---|---|
Equity incentive plan 2015 | |
Share-Based Compensation Plans | |
Number of shares available for future issuance | 11.4 |
Employee stock purchase plan 2008 | |
Share-Based Compensation Plans | |
Number of shares available for future issuance | 7.4 |
Employee Benefit Plans - Employee Stock Purchase Plan (Details) shares in Millions |
3 Months Ended | ||
---|---|---|---|
Nov. 06, 2017
period
|
Mar. 31, 2019
$ / shares
shares
|
Mar. 31, 2018
$ / shares
shares
|
|
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
ESPP offering period duration | 24 months | ||
ESPP, number of purchase period | period | 4 | ||
ESPP. purchase period | 6 months | ||
ESPP, purchase price of common stock | 85.00% | ||
Employee stock purchase plan 2008 | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Shares purchased (in shares) | shares | 1.2 | 1.3 | |
Average exercise price per share (in dollars per share) | $ / shares | $ 22.04 | $ 22.23 |
Employee Benefit Plans - Share Based Compensation by Share Based Payment Award Types (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unrecognized compensation cost | $ 369.5 |
Unrecognized compensation, weighted average recognition period | 1 year 10 months 25 days |
Segments - Revenue by Product (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
segment
|
Mar. 31, 2018
USD ($)
Reportable_Segment
|
|
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 1 | 1 |
Total net revenues | $ 1,001.7 | $ 1,082.6 |
Product | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 618.7 | 710.8 |
Routing | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 374.7 | 408.1 |
Switching | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 176.4 | 230.0 |
Security | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 67.6 | 72.7 |
Service | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 383.0 | $ 371.8 |
Segments - Revenues by Customer Vertical (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 1,001.7 | $ 1,082.6 |
Cloud | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 223.1 | 270.9 |
Service Provider | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 435.6 | 480.1 |
Enterprise | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 343.0 | $ 331.6 |
Segments - Geographic (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 1,001.7 | $ 1,082.6 |
Total Americas | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 543.6 | 587.6 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 476.6 | 532.3 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 67.0 | 55.3 |
Europe, Middle East, and Africa | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 286.2 | 308.0 |
Asia Pacific | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 171.9 | $ 187.0 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 44.5 | $ 41.4 |
Income tax provision | $ 13.4 | $ 7.0 |
Effective tax rate | 30.10% | 16.90% |
Federal statutory rate | 21.00% | |
Unrecognized tax benefits | $ 181.6 | |
Unrecognized tax benefits, if recognized, would affect the effective tax rate | 178.2 | |
Unrecognized tax benefits could decrease up to | $ 30.4 |
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Numerator: | ||
Net income | $ 31.1 | $ 34.4 |
Denominator: | ||
Weighted-average shares used to compute basic net income per share (in shares) | 348.1 | 355.3 |
Dilutive effect of employee stock awards (in shares) | 4.6 | 5.3 |
Weighted-average shares used to compute diluted net income per share (in shares) | 352.7 | 360.6 |
Net income per share | ||
Basic (in dollars per share) | $ 0.09 | $ 0.10 |
Diluted, (in dollars per share) | $ 0.09 | $ 0.10 |
Anti-dilutive shares (in shares) | 5.0 | 10.4 |
Commitments and Contingencies - Leases Additional Information (Details) |
Mar. 31, 2019 |
---|---|
Minimum | Corporate offices, data centers, and R&D facilities | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 1 year |
Minimum | Vehicles and various office equipment | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 1 year |
Maximum | Corporate offices, data centers, and R&D facilities | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 7 years |
Maximum | Vehicles and various office equipment | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 3 years |
Commitments and Contingencies - Components of Lease Costs and Other Information Related to Leases (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease cost | $ 11.9 |
Variable lease cost | 3.1 |
Total lease cost | 15.0 |
Operating cash outflows from operating leases | 11.6 |
ROU assets obtained in exchange for new operating lease liabilities | $ 0.6 |
Weighted average remaining lease term (years) | 6 years |
Weighted average discount rate | 4.40% |
Commitments and Contingencies - Future Minimum Operating Lease Payments and Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Jan. 01, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
2019 | $ 32.9 | |
2020 | 47.3 | |
2021 | 40.4 | |
2022 | 32.7 | |
2023 | 29.8 | |
Thereafter | 60.3 | |
Total lease payments | 243.4 | |
Less: interest | (30.0) | |
Total | 213.4 | |
Current operating lease liabilities | 36.7 | |
Long-term operating lease liabilities | $ 176.7 | $ 185.5 |
Commitments and Contingencies - Commitments (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligation | $ 632.4 |
Excess purchase commitments and obsolete materials liability | $ 32.8 |
Commitments and Contingencies - Investigations (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Investigations by U.S. Securities and Exchange Commission (SEC) and U.S. Department of Justice (DOJ) | Pending Litigation | |
Loss Contingencies [Line Items] | |
Estimated legal reserve | $ 12.0 |
Commitments and Contingencies - Debt (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 28, 2019 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Debt Instrument [Line Items] | |||
Payment of debt | $ 350.0 | $ 0.0 | |
3.125% fixed-rate notes (2019 Notes) | |||
Debt Instrument [Line Items] | |||
Payment of debt | $ 350.0 | ||
Stated interest rate | 3.125% |
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