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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2017
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from_________ to_________
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Delaware
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77-0422528
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1133 Innovation Way
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Sunnyvale, California
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94089
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(Address of principal executive offices)
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(Zip code)
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(408) 745-2000
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(Registrant's telephone number, including area code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Table of Contents
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Page
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2017
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2016
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2017
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2016
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Net revenues:
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Product
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$
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869.7
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$
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928.2
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$
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2,615.8
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$
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2,543.3
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Service
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388.1
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357.1
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1,171.9
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1,061.2
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Total net revenues
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1,257.8
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1,285.3
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3,787.7
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3,604.5
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Cost of revenues:
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Product
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336.0
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349.6
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1,026.4
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955.8
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Service
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149.4
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136.2
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440.4
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401.9
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Total cost of revenues
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485.4
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485.8
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1,466.8
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1,357.7
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Gross margin
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772.4
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799.5
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2,320.9
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2,246.8
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Operating expenses:
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Research and development
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236.4
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251.8
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752.8
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750.7
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Sales and marketing
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232.5
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242.9
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716.6
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718.4
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General and administrative
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70.6
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54.0
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176.7
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172.0
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Restructuring charges
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2.0
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0.8
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29.4
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3.2
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Total operating expenses
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541.5
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549.5
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1,675.5
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1,644.3
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Operating income
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230.9
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250.0
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645.4
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602.5
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Other expense, net
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(5.1
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)
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(13.4
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)
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(33.8
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)
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(47.2
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)
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Income before income taxes
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225.8
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236.6
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611.6
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555.3
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Income tax provision
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60.1
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64.2
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157.3
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151.5
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Net income
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$
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165.7
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$
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172.4
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$
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454.3
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$
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403.8
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Net income per share:
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Basic
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$
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0.44
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$
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0.45
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$
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1.20
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$
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1.06
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Diluted
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$
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0.43
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$
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0.45
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$
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1.18
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$
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1.04
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Shares used in computing net income per share:
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Basic
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378.3
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381.0
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380.0
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382.3
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Diluted
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382.7
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384.5
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386.5
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387.9
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Cash dividends declared per common stock
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$
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0.10
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$
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0.10
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$
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0.30
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$
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0.30
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2017
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2016
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2017
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2016
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Net income
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$
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165.7
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$
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172.4
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$
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454.3
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$
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403.8
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Other comprehensive income (loss), net of taxes:
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Available-for-sale securities:
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Unrealized (losses) gains net of tax benefits of $0.5 and $0.2 during the three and nine months ended September 30, 2017, respectively, and tax provision of $0.3 and benefit of $0.4 for the corresponding periods of the fiscal year ended December 31, 2016 ("fiscal 2016"), respectively
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(0.2
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(0.6
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1.4
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5.4
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Reclassification adjustment for realized net gains included in net income, net of tax provision of $0.9 during both the three and nine months ended September 2017, respectively, and net of tax provisions of zero and $0.5 for the corresponding periods of fiscal 2016, respectively
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(1.9
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(0.3
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(2.0
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(1.1
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Net change on available-for-sale securities, net of taxes
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(2.1
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(0.9
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(0.6
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4.3
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Cash flow hedges:
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Unrealized gains (loss) net of tax provisions of $0.5 and $3.0, for the three and nine months ended September 30, 2017, respectively, and tax provisions of $0.6 and $1.2 for the corresponding periods of fiscal 2016, respectively
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6.3
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(0.3
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14.6
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3.6
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Reclassification adjustment for realized net gains included in net income, net of tax provisions of $0.8 and $1.7 during the three and nine months ended September 30, 2017, respectively, and tax provisions of $0.3 and $0.4 for the corresponding periods of fiscal 2016, respectively
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(2.5
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(0.9
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(2.4
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(1.0
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Net change on cash flow hedges, net of taxes
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3.8
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(1.2
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12.2
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2.6
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Change in foreign currency translation adjustments
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8.4
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(6.9
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19.3
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(1.1
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Other comprehensive income (loss), net of taxes
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10.1
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(9.0
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30.9
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5.8
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Comprehensive income
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$
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175.8
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$
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163.4
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$
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485.2
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$
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409.6
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September 30,
2017 |
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December 31,
2016 |
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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2,363.7
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$
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1,833.2
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Short-term investments
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922.0
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752.3
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Accounts receivable, net of allowances
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724.3
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1,054.1
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Prepaid expenses and other current assets
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273.3
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332.3
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Total current assets
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4,283.3
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3,971.9
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Property and equipment, net
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1,007.5
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1,063.8
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Long-term investments
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913.6
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1,071.8
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Restricted cash and investments
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64.9
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99.9
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Purchased intangible assets, net
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133.0
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130.2
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Goodwill
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3,096.2
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3,081.7
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Other long-term assets
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245.8
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237.2
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Total assets
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$
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9,744.3
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$
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9,656.5
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$
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205.4
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$
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221.0
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Accrued compensation
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166.2
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233.6
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Deferred revenue
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977.4
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1,032.0
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Other accrued liabilities
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236.3
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249.3
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Total current liabilities
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1,585.3
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1,735.9
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Long-term debt
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2,135.7
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2,133.7
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Long-term deferred revenue
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485.5
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449.1
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Long-term income taxes payable
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224.0
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209.2
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Other long-term liabilities
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155.7
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166.1
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Total liabilities
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4,586.2
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4,694.0
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Commitments and contingencies (Note 16)
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Stockholders' equity:
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Convertible preferred stock, $0.00001 par value; 10.0 shares authorized; none issued and outstanding
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—
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—
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Common stock, $0.00001 par value; 1,000.0 shares authorized; 377.2 shares and 381.1 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
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—
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—
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Additional paid-in capital
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8,211.0
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8,281.6
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Accumulated other comprehensive loss
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(6.4
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)
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(37.3
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)
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Accumulated deficit
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(3,046.5
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)
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(3,281.8
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)
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Total stockholders' equity
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5,158.1
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|
|
4,962.5
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Total liabilities and stockholders' equity
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$
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9,744.3
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$
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9,656.5
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Nine Months Ended September 30,
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||||||
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2017
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2016
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Cash flows from operating activities:
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|
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Net income
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$
|
454.3
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$
|
403.8
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Adjustments to reconcile net income to net cash provided by operating activities:
|
|
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|
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Share-based compensation expense
|
151.1
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|
162.1
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|
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Depreciation, amortization, and accretion
|
169.7
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|
151.9
|
|
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(Gain) loss on investments and disposal of fixed assets, net
|
(6.7
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)
|
|
1.6
|
|
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Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
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|
||||
Accounts receivable, net
|
331.9
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|
36.6
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Prepaid expenses and other assets
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51.2
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(22.2
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)
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Accounts payable
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(11.5
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)
|
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52.1
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|
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Accrued compensation
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(60.6
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)
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(77.0
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)
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Income taxes payable
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8.8
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(7.5
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)
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Other accrued liabilities
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(21.1
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)
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(49.8
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)
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Deferred revenue
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(21.2
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)
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124.7
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Net cash provided by operating activities
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1,045.9
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776.3
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Cash flows from investing activities:
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Purchases of property and equipment
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(97.6
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)
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(162.9
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)
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Purchases of available-for-sale investments
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(1,298.6
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)
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(1,251.9
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)
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Proceeds from sales of available-for-sale investments
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761.2
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985.1
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Proceeds from maturities and redemptions of available-for-sale investments
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521.3
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232.4
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Proceeds from Pulse note receivable
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75.0
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—
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Purchases of privately-held investments
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(9.8
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)
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(17.1
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)
|
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Proceeds from sales of privately-held investments
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1.3
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|
9.5
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Purchases of trading investments
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(3.9
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)
|
|
(4.3
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)
|
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Payments for business acquisitions, net of cash and cash equivalents acquired
|
(33.0
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)
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|
(96.7
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)
|
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Changes in restricted cash
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—
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(2.4
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)
|
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Net cash used in investing activities
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(84.1
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)
|
|
(308.3
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)
|
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Cash flows from financing activities:
|
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|
||||
Purchases and retirement of common stock
|
(395.5
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)
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|
(323.9
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)
|
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Proceeds from issuance of common stock
|
64.4
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|
59.7
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|
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Payment of cash dividends
|
(113.5
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)
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|
(114.4
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)
|
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Payment of debt
|
—
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(300.0
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)
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Issuance of debt, net
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—
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|
|
494.0
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|
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Payment of financing obligations
|
—
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(15.5
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)
|
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Net cash used in financing activities
|
(444.6
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)
|
|
(200.1
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)
|
||
Effect of foreign currency exchange rates on cash and cash equivalents
|
13.3
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|
|
0.2
|
|
||
Net increase in cash and cash equivalents
|
530.5
|
|
|
268.1
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|
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Cash and cash equivalents at beginning of period
|
1,833.2
|
|
|
1,420.9
|
|
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Cash and cash equivalents at end of period
|
$
|
2,363.7
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|
$
|
1,689.0
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•
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Forfeitures: The Company elected to account for forfeitures as they occur using a modified retrospective transition method,
rather than estimating forfeitures, resulting in a cumulative-effect adjustment of
$9.0 million
, which increased the January 1, 2017 opening accumulated deficit balance on the Condensed Consolidated Balance Sheets.
|
•
|
Income tax accounting: The Company is also required to record excess tax benefits and tax deficiencies related to stock- based compensation as income tax benefit or expense in the statement of operations prospectively when share-based awards vest or are settled. Upon adoption, the Company recognized the previously unrecognized excess tax benefits using the modified retrospective transition method, which resulted in no impact to the January 1, 2017 opening accumulated deficit balance as previously unrecognized excess tax effects were fully offset by a valuation allowance.
|
•
|
Cash flow presentation of excess tax benefits: The Company is required to classify excess tax benefits along with other income tax cash flows as an operating activity either prospectively or retrospectively. The Company elected to apply the change in presentation to the statements of cash flows retrospectively and no longer classify the excess tax benefits from share-based compensation as a financing activity. For the nine months ended September 30, 2016, the Company reclassified
$5.8 million
of excess tax benefits from share-based compensation to operating activities from financing activities.
|
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Amount
|
||
Net tangible assets
|
$
|
1.4
|
|
Existing technology intangible asset
(*)
|
15.4
|
|
|
Goodwill
|
16.7
|
|
|
Total
|
$
|
33.5
|
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||||
|
Amortized
Cost |
|
Gross Unrealized
Gains |
|
Gross Unrealized
Losses |
|
Estimated Fair
Value |
|
Amortized
Cost |
|
Gross Unrealized
Gains |
|
Gross Unrealized
Losses |
|
Estimated Fair
Value |
||||||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities
|
$
|
288.1
|
|
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
287.8
|
|
|
$
|
303.0
|
|
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
303.0
|
|
Certificates of deposit
|
50.0
|
|
|
—
|
|
|
—
|
|
|
50.0
|
|
|
66.1
|
|
|
—
|
|
|
—
|
|
|
66.1
|
|
||||||||
Commercial paper
|
124.0
|
|
|
—
|
|
|
—
|
|
|
124.0
|
|
|
147.7
|
|
|
—
|
|
|
—
|
|
|
147.7
|
|
||||||||
Corporate debt securities
|
834.1
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
834.1
|
|
|
846.5
|
|
|
0.4
|
|
|
(2.0
|
)
|
|
844.9
|
|
||||||||
Foreign government debt securities
|
64.8
|
|
|
—
|
|
|
(0.1
|
)
|
|
64.7
|
|
|
34.0
|
|
|
—
|
|
|
(0.1
|
)
|
|
33.9
|
|
||||||||
Time deposits
|
411.4
|
|
|
—
|
|
|
—
|
|
|
411.4
|
|
|
264.6
|
|
|
—
|
|
|
—
|
|
|
264.6
|
|
||||||||
U.S. government agency securities
|
156.9
|
|
|
—
|
|
|
(0.4
|
)
|
|
156.5
|
|
|
127.0
|
|
|
—
|
|
|
(0.3
|
)
|
|
126.7
|
|
||||||||
U.S. government securities
|
548.3
|
|
|
0.1
|
|
|
(0.4
|
)
|
|
548.0
|
|
|
390.7
|
|
|
0.1
|
|
|
(0.4
|
)
|
|
390.4
|
|
||||||||
Total fixed income securities
|
2,477.6
|
|
|
0.9
|
|
|
(2.0
|
)
|
|
2,476.5
|
|
|
2,179.6
|
|
|
0.7
|
|
|
(3.0
|
)
|
|
2,177.3
|
|
||||||||
Money market funds
|
990.7
|
|
|
—
|
|
|
—
|
|
|
990.7
|
|
|
592.2
|
|
|
—
|
|
|
—
|
|
|
592.2
|
|
||||||||
Mutual funds
|
8.2
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
8.0
|
|
|
—
|
|
|
—
|
|
|
8.0
|
|
||||||||
Publicly-traded equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
(0.7
|
)
|
|
4.6
|
|
||||||||
Total available-for-sale securities
|
3,476.5
|
|
|
0.9
|
|
|
(2.0
|
)
|
|
3,475.4
|
|
|
2,785.1
|
|
|
0.7
|
|
|
(3.7
|
)
|
|
2,782.1
|
|
||||||||
Trading securities in mutual funds
|
26.1
|
|
|
—
|
|
|
—
|
|
|
26.1
|
|
|
21.0
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
||||||||
Total
|
$
|
3,502.6
|
|
|
$
|
0.9
|
|
|
$
|
(2.0
|
)
|
|
$
|
3,501.5
|
|
|
$
|
2,806.1
|
|
|
$
|
0.7
|
|
|
$
|
(3.7
|
)
|
|
$
|
2,803.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported as:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
1,588.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,588.8
|
|
|
$
|
907.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
907.1
|
|
Restricted investments
|
77.1
|
|
|
—
|
|
|
—
|
|
|
77.1
|
|
|
71.9
|
|
|
—
|
|
|
—
|
|
|
71.9
|
|
||||||||
Short-term investments
|
922.3
|
|
|
0.1
|
|
|
(0.4
|
)
|
|
922.0
|
|
|
753.4
|
|
|
0.1
|
|
|
(1.2
|
)
|
|
752.3
|
|
||||||||
Long-term investments
|
914.4
|
|
|
0.8
|
|
|
(1.6
|
)
|
|
913.6
|
|
|
1,073.7
|
|
|
0.6
|
|
|
(2.5
|
)
|
|
1,071.8
|
|
||||||||
Total
|
$
|
3,502.6
|
|
|
$
|
0.9
|
|
|
$
|
(2.0
|
)
|
|
$
|
3,501.5
|
|
|
$
|
2,806.1
|
|
|
$
|
0.7
|
|
|
$
|
(3.7
|
)
|
|
$
|
2,803.1
|
|
|
Amortized
Cost
|
|
Estimated Fair
Value
|
||||
Due in less than one year
|
$
|
1,563.2
|
|
|
$
|
1,562.9
|
|
Due between one and five years
|
914.4
|
|
|
913.6
|
|
||
Total
|
$
|
2,477.6
|
|
|
$
|
2,476.5
|
|
|
As of September 30, 2017
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset-backed securities
|
$
|
224.2
|
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
224.2
|
|
|
$
|
(0.3
|
)
|
Corporate debt securities
|
361.6
|
|
|
(0.5
|
)
|
|
59.5
|
|
|
(0.3
|
)
|
|
421.1
|
|
|
(0.8
|
)
|
||||||
Foreign government debt securities
|
36.6
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
36.6
|
|
|
(0.1
|
)
|
||||||
U.S. government agency securities
|
89.0
|
|
|
(0.2
|
)
|
|
18.0
|
|
|
(0.2
|
)
|
|
107.0
|
|
|
(0.4
|
)
|
||||||
U.S. government securities
|
256.3
|
|
|
(0.4
|
)
|
|
1.8
|
|
|
—
|
|
|
258.1
|
|
|
(0.4
|
)
|
||||||
Total available-for-sale securities
|
$
|
967.7
|
|
|
$
|
(1.5
|
)
|
|
$
|
79.3
|
|
|
$
|
(0.5
|
)
|
|
$
|
1,047.0
|
|
|
$
|
(2.0
|
)
|
|
As of December 31, 2016
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset-backed securities
|
$
|
122.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
122.2
|
|
|
$
|
(0.2
|
)
|
Corporate debt securities
|
470.8
|
|
|
(1.9
|
)
|
|
76.7
|
|
|
(0.1
|
)
|
|
547.5
|
|
|
(2.0
|
)
|
||||||
Foreign government debt securities
|
20.3
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
20.3
|
|
|
(0.1
|
)
|
||||||
U.S. government agency securities
|
106.7
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
106.7
|
|
|
(0.3
|
)
|
||||||
U.S. government securities
|
254.1
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
254.1
|
|
|
(0.4
|
)
|
||||||
Total fixed income securities
|
974.1
|
|
|
(2.9
|
)
|
|
76.7
|
|
|
(0.1
|
)
|
|
1,050.8
|
|
|
(3.0
|
)
|
||||||
Publicly-traded equity securities
|
4.6
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|
(0.7
|
)
|
||||||
Total available-for-sale securities
|
$
|
978.7
|
|
|
$
|
(3.6
|
)
|
|
$
|
76.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
1,055.4
|
|
|
$
|
(3.7
|
)
|
|
Fair Value Measurements at
September 30, 2017 Using: |
|
|
|
Fair Value Measurements at
December 31, 2016 Using: |
|
|
||||||||||||||||||||||||
|
Quoted Prices in
Active Markets For Identical Assets (Level 1) |
|
Significant Other
Observable Remaining Inputs (Level 2) |
|
Significant Other
Unobservable Remaining Inputs (Level 3) |
|
Total
|
|
Quoted Prices in
Active Markets For Identical Assets (Level 1) |
|
Significant Other
Observable Remaining Inputs (Level 2) |
|
Significant Other
Unobservable Remaining Inputs (Level 3) |
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asset-backed securities
|
$
|
—
|
|
|
$
|
287.8
|
|
|
$
|
—
|
|
|
$
|
287.8
|
|
|
$
|
—
|
|
|
$
|
303.0
|
|
|
$
|
—
|
|
|
$
|
303.0
|
|
Certificates of deposit
|
—
|
|
|
50.0
|
|
|
—
|
|
|
50.0
|
|
|
—
|
|
|
66.1
|
|
|
—
|
|
|
66.1
|
|
||||||||
Commercial paper
|
—
|
|
|
124.0
|
|
|
—
|
|
|
124.0
|
|
|
—
|
|
|
147.7
|
|
|
—
|
|
|
147.7
|
|
||||||||
Corporate debt securities
|
—
|
|
|
834.1
|
|
|
—
|
|
|
834.1
|
|
|
—
|
|
|
844.9
|
|
|
—
|
|
|
844.9
|
|
||||||||
Foreign government debt securities
|
—
|
|
|
64.7
|
|
|
—
|
|
|
64.7
|
|
|
—
|
|
|
33.9
|
|
|
—
|
|
|
33.9
|
|
||||||||
Money market funds
|
990.7
|
|
|
—
|
|
|
—
|
|
|
990.7
|
|
|
592.2
|
|
|
—
|
|
|
—
|
|
|
592.2
|
|
||||||||
Mutual funds
|
8.2
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
8.0
|
|
|
—
|
|
|
—
|
|
|
8.0
|
|
||||||||
Publicly-traded equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
||||||||
Time deposits
|
—
|
|
|
411.4
|
|
|
—
|
|
|
411.4
|
|
|
—
|
|
|
264.6
|
|
|
—
|
|
|
264.6
|
|
||||||||
U.S. government agency securities
|
—
|
|
|
156.5
|
|
|
—
|
|
|
156.5
|
|
|
—
|
|
|
126.7
|
|
|
—
|
|
|
126.7
|
|
||||||||
U.S. government securities
|
343.7
|
|
|
204.3
|
|
|
—
|
|
|
548.0
|
|
|
345.0
|
|
|
45.4
|
|
|
—
|
|
|
390.4
|
|
||||||||
Total available-for-sale securities
|
1,342.6
|
|
|
2,132.8
|
|
|
—
|
|
|
3,475.4
|
|
|
949.8
|
|
|
1,832.3
|
|
|
—
|
|
|
2,782.1
|
|
||||||||
Trading securities in mutual funds
|
26.1
|
|
|
—
|
|
|
—
|
|
|
26.1
|
|
|
21.0
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
||||||||
Privately-held debt and redeemable preferred stock securities
|
—
|
|
|
—
|
|
|
42.3
|
|
|
42.3
|
|
|
—
|
|
|
—
|
|
|
43.7
|
|
|
43.7
|
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
—
|
|
|
8.5
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||||
Total assets measured at fair value
|
$
|
1,368.7
|
|
|
$
|
2,141.3
|
|
|
$
|
42.3
|
|
|
$
|
3,552.3
|
|
|
$
|
970.8
|
|
|
$
|
1,833.2
|
|
|
$
|
43.7
|
|
|
$
|
2,847.7
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets, reported as:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash equivalents
|
$
|
947.9
|
|
|
$
|
640.9
|
|
|
$
|
—
|
|
|
$
|
1,588.8
|
|
|
$
|
549.4
|
|
|
$
|
357.7
|
|
|
$
|
—
|
|
|
$
|
907.1
|
|
Restricted investments
|
77.1
|
|
|
—
|
|
|
—
|
|
|
77.1
|
|
|
71.9
|
|
|
—
|
|
|
—
|
|
|
71.9
|
|
||||||||
Short-term investments
|
231.9
|
|
|
690.1
|
|
|
—
|
|
|
922.0
|
|
|
178.0
|
|
|
574.3
|
|
|
—
|
|
|
752.3
|
|
||||||||
Long-term investments
|
111.8
|
|
|
801.8
|
|
|
—
|
|
|
913.6
|
|
|
171.5
|
|
|
900.3
|
|
|
—
|
|
|
1,071.8
|
|
||||||||
Prepaid expenses and other current assets
|
—
|
|
|
8.5
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||||
Other long-term assets
|
—
|
|
|
—
|
|
|
42.3
|
|
|
42.3
|
|
|
—
|
|
|
—
|
|
|
43.7
|
|
|
43.7
|
|
||||||||
Total assets measured at fair value
|
$
|
1,368.7
|
|
|
$
|
2,141.3
|
|
|
$
|
42.3
|
|
|
$
|
3,552.3
|
|
|
$
|
970.8
|
|
|
$
|
1,833.2
|
|
|
$
|
43.7
|
|
|
$
|
2,847.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total liabilities, reported as:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other accrued liabilities
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
As of
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
Cash flow hedges
|
$
|
231.6
|
|
|
$
|
172.0
|
|
Non-designated derivatives
|
147.1
|
|
|
—
|
|
||
Total
|
$
|
378.7
|
|
|
$
|
172.0
|
|
Balance as of December 31, 2016
|
$
|
3,081.7
|
|
Additions due to business combination
|
16.7
|
|
|
Other
(*)
|
(2.2
|
)
|
|
Balance as of September 30, 2017
|
$
|
3,096.2
|
|
|
As of
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
Production and service materials
|
$
|
72.6
|
|
|
$
|
75.6
|
|
Finished goods
|
18.3
|
|
|
19.9
|
|
||
Inventory
|
$
|
90.9
|
|
|
$
|
95.5
|
|
|
|
|
|
||||
Reported as:
|
|
|
|
||||
Prepaid expenses and other current assets
|
$
|
84.9
|
|
|
$
|
91.4
|
|
Other long-term assets
|
6.0
|
|
|
4.1
|
|
||
Total
|
$
|
90.9
|
|
|
$
|
95.5
|
|
•
|
extend the maturity date from April 1, 2016 to December 31, 2018;
|
•
|
provide that interest due on the Pulse Note through December 31, 2015 shall be paid in kind by increasing the outstanding principal amount of the note and increase the interest rate on the Pulse Note; and
|
•
|
require a minimum payment of
$75.0 million
on or prior to April 1, 2017, less any principal amount previously pre-paid to the Company.
|
•
|
extend the maturity date of the remaining outstanding amount of approximately
$58.0 million
from December 31, 2018 to September 30, 2022;
|
•
|
provide that interest due after April 1, 2017 can be paid in kind by increasing the outstanding principal amount of the note or paid in cash;
|
•
|
require the promissory note to be subordinated to other debt raised by the issuer; and
|
•
|
entitle the Company to additional financial considerations if the issuer of the note and its affiliates meet certain conditions.
|
Balance as of December 31, 2016
|
$
|
41.3
|
|
Provisions made during the period
|
29.6
|
|
|
Actual costs incurred during the period
|
(41.5
|
)
|
|
Balance as of September 30, 2017
|
$
|
29.4
|
|
|
As of
|
||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
Deferred product revenue:
|
|
|
|
||||
Undelivered product commitments and other product deferrals
|
$
|
309.3
|
|
|
$
|
302.4
|
|
Distributor inventory and other sell-through items
|
61.9
|
|
|
74.2
|
|
||
Deferred gross product revenue
|
371.2
|
|
|
376.6
|
|
||
Deferred cost of product revenue
|
(47.5
|
)
|
|
(53.7
|
)
|
||
Deferred product revenue, net
|
323.7
|
|
|
322.9
|
|
||
Deferred service revenue
|
1,139.2
|
|
|
1,158.2
|
|
||
Total
|
$
|
1,462.9
|
|
|
$
|
1,481.1
|
|
Reported as:
|
|
|
|
||||
Current
|
$
|
977.4
|
|
|
$
|
1,032.0
|
|
Long-term
|
485.5
|
|
|
449.1
|
|
||
Total
|
$
|
1,462.9
|
|
|
$
|
1,481.1
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest income
|
$
|
14.7
|
|
|
$
|
9.1
|
|
|
$
|
37.1
|
|
|
$
|
25.5
|
|
Interest expense
|
(25.3
|
)
|
|
(25.1
|
)
|
|
(75.6
|
)
|
|
(72.6
|
)
|
||||
Gain on investments, net
|
4.7
|
|
|
1.9
|
|
|
6.7
|
|
|
0.1
|
|
||||
Other
|
0.8
|
|
|
0.7
|
|
|
(2.0
|
)
|
|
(0.2
|
)
|
||||
Other expense, net
|
$
|
(5.1
|
)
|
|
$
|
(13.4
|
)
|
|
$
|
(33.8
|
)
|
|
$
|
(47.2
|
)
|
|
December 31, 2016
(*)
|
|
Charges
|
|
Cash
Payments
|
|
Other
|
|
September 30,
2017 |
||||||||||
Severance
|
$
|
0.7
|
|
|
$
|
26.0
|
|
|
$
|
(25.5
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
1.1
|
|
Contract terminations and other
|
0.5
|
|
|
3.4
|
|
|
(0.4
|
)
|
|
0.1
|
|
|
3.6
|
|
|||||
Total
|
$
|
1.2
|
|
|
$
|
29.4
|
|
|
$
|
(25.9
|
)
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
As of September 30, 2017
|
|||||
|
Amount
|
|
Effective Interest
Rates
|
|||
Senior Notes ("Notes"):
|
|
|
|
|||
3.125% fixed-rate notes, due February 2019
|
$
|
350.0
|
|
|
3.36
|
%
|
3.300% fixed-rate notes, due June 2020
|
300.0
|
|
|
3.47
|
%
|
|
4.600% fixed-rate notes, due March 2021
|
300.0
|
|
|
4.69
|
%
|
|
4.500% fixed-rate notes, due March 2024, issued March 2014
|
350.0
|
|
|
4.63
|
%
|
|
4.500% fixed-rate notes, due March 2024, issued February 2016
|
150.0
|
|
|
4.87
|
%
|
|
4.350% fixed-rate notes, due June 2025
|
300.0
|
|
|
4.47
|
%
|
|
5.950% fixed-rate notes, due March 2041
|
400.0
|
|
|
6.03
|
%
|
|
Total senior notes
|
2,150.0
|
|
|
|
||
Unaccreted discount and debt issuance costs
|
(14.3
|
)
|
|
|
||
Total
|
$
|
2,135.7
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Shares repurchased
|
5.0
|
|
|
4.9
|
|
|
13.5
|
|
|
13.5
|
|
||||
Average price per share
|
$
|
28.16
|
|
|
$
|
23.04
|
|
|
$
|
28.85
|
|
|
$
|
23.25
|
|
Amount repurchased
|
$
|
140.0
|
|
|
$
|
112.4
|
|
|
$
|
390.0
|
|
|
$
|
312.9
|
|
|
Unrealized
Gains (Losses)
on Available-for-
Sale Securities
(1)
|
|
Unrealized
(Losses) Gains
on Cash Flow
Hedges
(2)
|
|
Foreign
Currency
Translation
Adjustments
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
$
|
16.6
|
|
|
$
|
(4.5
|
)
|
|
$
|
(49.4
|
)
|
|
$
|
(37.3
|
)
|
Other comprehensive gains before reclassifications
|
1.4
|
|
|
14.6
|
|
|
19.3
|
|
|
35.3
|
|
||||
Amount reclassified from accumulated other comprehensive loss
|
(2.0
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
(4.4
|
)
|
||||
Other comprehensive (loss) gains, net
|
(0.6
|
)
|
|
12.2
|
|
|
19.3
|
|
|
30.9
|
|
||||
Balance as of September 30, 2017
|
$
|
16.0
|
|
|
$
|
7.7
|
|
|
$
|
(30.1
|
)
|
|
$
|
(6.4
|
)
|
(1)
|
The reclassifications out of accumulated other comprehensive loss during the
nine months ended
September 30, 2017
for realized gains on available-for-sale securities were not material, and were included in other expense, net, in the Condensed Consolidated Statements of Operations.
|
(2)
|
The reclassifications out of accumulated other comprehensive loss during the
nine months ended
September 30, 2017
for realized gains on cash flow hedges were not material, and were included within cost of revenues, research and development, sales and marketing, and general and administrative in the Condensed Consolidated Statements of Operations.
|
|
Outstanding Options
|
|||||||||||
|
Number of Shares
|
|
Weighted Average
Exercise Price
per Share
|
|
Weighted Average
Remaining
Contractual Term
(In Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance as of December 31, 2016
|
2.4
|
|
|
$
|
29.20
|
|
|
|
|
|
||
Exercised
|
(0.5
|
)
|
|
14.97
|
|
|
|
|
|
|||
Expired/Canceled
|
(0.8
|
)
|
|
31.09
|
|
|
|
|
|
|||
Balance as of September 30, 2017
|
1.1
|
|
|
$
|
34.31
|
|
|
1.1
|
|
$
|
3.1
|
|
|
|
|
|
|
|
|
|
|||||
As of September 30, 2017:
|
|
|
|
|
|
|
|
|||||
Vested and expected-to-vest options
|
1.1
|
|
|
$
|
34.31
|
|
|
1.1
|
|
$
|
3.1
|
|
Exercisable options
|
1.0
|
|
|
$
|
35.56
|
|
|
0.8
|
|
$
|
2.1
|
|
|
Outstanding RSUs, RSAs, and PSAs
|
|||||||||||
|
Number of Shares
|
|
Weighted Average
Grant-Date Fair
Value per Share
|
|
Weighted Average
Remaining
Contractual Term
(In Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance as of December 31, 2016
|
20.9
|
|
|
$
|
24.05
|
|
|
|
|
|
||
RSUs granted
(1)(3)
|
6.6
|
|
|
27.56
|
|
|
|
|
|
|||
RSUs assumed in acquisitions
|
0.1
|
|
|
26.91
|
|
|
|
|
|
|||
PSAs granted
(2)(3)
|
0.6
|
|
|
27.37
|
|
|
|
|
|
|||
RSUs vested
|
(6.0
|
)
|
|
23.81
|
|
|
|
|
|
|||
RSAs vested
|
(0.4
|
)
|
|
22.80
|
|
|
|
|
|
|||
PSAs vested
|
(0.5
|
)
|
|
24.29
|
|
|
|
|
|
|||
RSUs canceled
|
(1.5
|
)
|
|
24.57
|
|
|
|
|
|
|||
PSAs canceled
|
(0.5
|
)
|
|
25.11
|
|
|
|
|
|
|||
Balance as of September 30, 2017
|
19.3
|
|
|
$
|
25.23
|
|
|
1.1
|
|
$
|
537.1
|
|
(1)
|
Includes service-based and market-based RSUs.
|
(2)
|
The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee of the Board are achieved at target is
0.4 million
shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is
0
to
0.6 million
shares.
|
(3)
|
The grant date fair value of RSUs and PSAs were reduced by the present value of dividends expected to be paid on the underlying shares of common stock during the requisite and derived service period as these awards are not entitled to receive dividends until vested. During the
nine months ended
September 30, 2017
, the Company declared a quarterly cash dividend of
$0.10
per share of common stock on January 26, 2017, April 25, 2017, and July 25, 2017.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of revenues - Product
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
3.8
|
|
|
$
|
4.9
|
|
Cost of revenues - Service
|
3.9
|
|
|
3.5
|
|
|
13.5
|
|
|
11.3
|
|
||||
Research and development
|
18.5
|
|
|
27.2
|
|
|
67.4
|
|
|
89.0
|
|
||||
Sales and marketing
|
13.7
|
|
|
17.5
|
|
|
45.3
|
|
|
40.7
|
|
||||
General and administrative
|
7.4
|
|
|
5.9
|
|
|
21.1
|
|
|
17.1
|
|
||||
Total
|
$
|
45.0
|
|
|
$
|
55.6
|
|
|
$
|
151.1
|
|
|
$
|
163.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Stock options
|
$
|
0.2
|
|
|
$
|
1.5
|
|
|
$
|
0.5
|
|
|
$
|
3.7
|
|
RSUs, RSAs, and PSAs
|
41.0
|
|
|
50.3
|
|
|
138.9
|
|
|
147.6
|
|
||||
ESPP
|
3.8
|
|
|
3.8
|
|
|
11.7
|
|
|
11.7
|
|
||||
Total
|
$
|
45.0
|
|
|
$
|
55.6
|
|
|
$
|
151.1
|
|
|
$
|
163.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Routing
|
$
|
585.8
|
|
|
$
|
620.2
|
|
|
$
|
1,679.9
|
|
|
$
|
1,699.0
|
|
Switching
|
212.6
|
|
|
222.5
|
|
|
730.2
|
|
|
607.2
|
|
||||
Security
|
71.3
|
|
|
85.5
|
|
|
205.7
|
|
|
237.1
|
|
||||
Total product
|
869.7
|
|
|
928.2
|
|
|
2,615.8
|
|
|
2,543.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total service
|
388.1
|
|
|
357.1
|
|
|
1,171.9
|
|
|
1,061.2
|
|
||||
Total
|
$
|
1,257.8
|
|
|
$
|
1,285.3
|
|
|
$
|
3,787.7
|
|
|
$
|
3,604.5
|
|
•
|
Cloud: companies that are heavily reliant on the cloud for their business model’s success. As an example, customers in the cloud vertical can include cloud service providers as well as enterprises that provide software-as-a-service, infrastructure-as-a-service, or platform-as-a-service.
|
•
|
Telecom/Cable: includes wireline and wireless carriers and cable operators.
|
•
|
Strategic Enterprise: generally is comprised of financial services; national, federal, state, and local governments; research and educational institutions, and enterprises not represented in the Cloud vertical.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cloud
|
$
|
344.9
|
|
|
$
|
359.4
|
|
|
$
|
1,056.1
|
|
|
$
|
911.5
|
|
Telecom/Cable
|
576.9
|
|
|
599.4
|
|
|
1,707.8
|
|
|
1,688.5
|
|
||||
Strategic Enterprise
|
336.0
|
|
|
326.5
|
|
|
1,023.8
|
|
|
1,004.5
|
|
||||
Total
|
$
|
1,257.8
|
|
|
$
|
1,285.3
|
|
|
$
|
3,787.7
|
|
|
$
|
3,604.5
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Americas:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
668.8
|
|
|
$
|
684.6
|
|
|
$
|
2,076.0
|
|
|
$
|
1,924.9
|
|
Other
|
60.4
|
|
|
60.4
|
|
|
165.6
|
|
|
168.3
|
|
||||
Total Americas
|
729.2
|
|
|
745.0
|
|
|
2,241.6
|
|
|
2,093.2
|
|
||||
Europe, Middle East, and Africa
|
298.6
|
|
|
338.0
|
|
|
871.3
|
|
|
923.5
|
|
||||
Asia Pacific
|
230.0
|
|
|
202.3
|
|
|
674.8
|
|
|
587.8
|
|
||||
Total
|
$
|
1,257.8
|
|
|
$
|
1,285.3
|
|
|
$
|
3,787.7
|
|
|
$
|
3,604.5
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Income before income taxes
|
$
|
225.8
|
|
|
$
|
236.6
|
|
|
$
|
611.6
|
|
|
$
|
555.3
|
|
Income tax provision
|
$
|
60.1
|
|
|
$
|
64.2
|
|
|
$
|
157.3
|
|
|
$
|
151.5
|
|
Effective tax rate
|
26.6
|
%
|
|
27.1
|
%
|
|
25.7
|
%
|
|
27.3
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
165.7
|
|
|
$
|
172.4
|
|
|
$
|
454.3
|
|
|
$
|
403.8
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used to compute basic net income per share
|
378.3
|
|
|
381.0
|
|
|
380.0
|
|
|
382.3
|
|
||||
Dilutive effect of employee stock awards
|
4.4
|
|
|
3.5
|
|
|
6.5
|
|
|
5.6
|
|
||||
Weighted-average shares used to compute diluted net income per share
|
382.7
|
|
|
384.5
|
|
|
386.5
|
|
|
387.9
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.45
|
|
|
$
|
1.20
|
|
|
$
|
1.06
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.45
|
|
|
$
|
1.18
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares
|
1.0
|
|
|
2.7
|
|
|
1.2
|
|
|
2.7
|
|
•
|
Cloud: companies that are heavily reliant on the cloud for their business model’s success. As an example, customers in the cloud vertical can include cloud service providers as well as enterprises that provide software-as-a-service, infrastructure-as-a-service, or platform-as-a-service.
|
•
|
Telecom/Cable: includes wireline and wireless carriers and cable operators.
|
•
|
Strategic Enterprise: generally is comprised of financial services; national, federal, state, and local governments; research and educational institutions, and enterprises not represented in the Cloud vertical.
|
•
|
Junos Node Slicing: converges multiple concurrent network functions on the same physical routing infrastructure, letting customers optimize their infrastructure while offering differentiated services with enhanced operational and administrative isolation within a single chassis.
|
•
|
Universal Chassis: a breakthrough system allowing customers to standardize on a hardware platform across their data center, core, and network edge. We believe the system will create significant value for our customers by enhancing their return on investment through reduced costs.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||||||||||
Net revenues
|
$
|
1,257.8
|
|
|
$
|
1,285.3
|
|
|
$
|
(27.5
|
)
|
|
(2
|
)%
|
|
$
|
3,787.7
|
|
|
$
|
3,604.5
|
|
|
$
|
183.2
|
|
|
5
|
%
|
Gross margin
|
$
|
772.4
|
|
|
$
|
799.5
|
|
|
$
|
(27.1
|
)
|
|
(3
|
)%
|
|
$
|
2,320.9
|
|
|
$
|
2,246.8
|
|
|
$
|
74.1
|
|
|
3
|
%
|
Percentage of net revenues
|
61.4
|
%
|
|
62.2
|
%
|
|
|
|
|
|
61.3
|
%
|
|
62.3
|
%
|
|
|
|
|
||||||||||
Operating income
|
$
|
230.9
|
|
|
$
|
250.0
|
|
|
$
|
(19.1
|
)
|
|
(8
|
)%
|
|
$
|
645.4
|
|
|
$
|
602.5
|
|
|
$
|
42.9
|
|
|
7
|
%
|
Percentage of net revenues
|
18.4
|
%
|
|
19.5
|
%
|
|
|
|
|
|
17.0
|
%
|
|
16.7
|
%
|
|
|
|
|
||||||||||
Net income
|
$
|
165.7
|
|
|
$
|
172.4
|
|
|
$
|
(6.7
|
)
|
|
(4
|
)%
|
|
$
|
454.3
|
|
|
$
|
403.8
|
|
|
$
|
50.5
|
|
|
13
|
%
|
Percentage of net revenues
|
13.2
|
%
|
|
13.4
|
%
|
|
|
|
|
|
12.0
|
%
|
|
11.2
|
%
|
|
|
|
|
||||||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.45
|
|
|
$
|
(0.01
|
)
|
|
(2
|
)%
|
|
$
|
1.20
|
|
|
$
|
1.06
|
|
|
$
|
0.14
|
|
|
13
|
%
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.45
|
|
|
$
|
(0.02
|
)
|
|
(4
|
)%
|
|
$
|
1.18
|
|
|
$
|
1.04
|
|
|
$
|
0.14
|
|
|
13
|
%
|
Cash dividends declared per common stock
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
—
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating cash flows
|
|
|
|
|
|
|
|
|
$
|
1,045.9
|
|
|
$
|
776.3
|
|
|
$
|
269.6
|
|
|
35
|
%
|
|||||||
Stock repurchase plan activity
|
$
|
140.0
|
|
|
$
|
112.4
|
|
|
$
|
27.6
|
|
|
25
|
%
|
|
$
|
390.0
|
|
|
$
|
312.9
|
|
|
$
|
77.1
|
|
|
25
|
%
|
DSO
|
52
|
|
|
53
|
|
|
(1
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
September 30,
2017 |
|
December 31,
2016 |
|
$ Change
|
|
% Change
|
||||||||||||||
Deferred revenue
|
|
|
|
|
|
|
|
$
|
1,462.9
|
|
|
$
|
1,481.1
|
|
|
$
|
(18.2
|
)
|
|
(1
|
)%
|
||||||||
Product deferred revenue
|
|
|
|
|
|
|
|
$
|
323.7
|
|
|
$
|
322.9
|
|
|
$
|
0.8
|
|
|
—
|
%
|
•
|
Net Revenues:
Net revenues
decreased
during the three months ended
September 30, 2017
, compared to the same period in
2016
, due to a decline in product revenues across all technologies. Lower routing revenue was driven by the timing of deployments of Telecom/Cable customers. The decline in switching revenue was primarily due to delay in timing of certain large cloud customer deployments related to the architectural shift to more modern, cost efficient and scalable networks. Our security business continued to undergo product transitions from our legacy products to our newer product offerings, resulting in a decline in revenues. Service revenue grew 9% year-over-year, driven by strong demand for professional services and strong renewal and attach rates of support contracts.
|
•
|
Gross Margin
: Our gross margin as a percentage of net revenues decreased during the
three and nine
months ended
September 30, 2017
, compared to the same periods in
2016
, primarily due to customer mix and higher costs of certain memory components. The decrease was partially offset by improvements in our cost structure. Additionally, our gross margin as a percentage of net revenues for the nine month ended
September 30, 2017
, compared to the same period in 2016, was impacted by product mix related to the strong performance of switching and by charges related to certain supplier component remediation.
|
•
|
Operating Margin:
Our operating income as a percentage of net revenues decreased during the three months ended
September 30, 2017
, compared to the same period in
2016
, primarily due to the drivers described in the gross margin discussion above and lower net revenues, partially offset by a net decrease in our operating expenses from lower personnel-related costs and the effect of litigation settlement charges in 2017.
|
•
|
Capital Return:
During the
three and nine
months ended
September 30, 2017
, we repurchased
5.0 million
and
13.5 million
of shares of our common stock, respectively, and paid a quarterly cash dividend of $0.10 per share, for an aggregate amount of
$37.7 million
and
$113.5 million
, respectively.
|
•
|
Operating Cash Flow
s: Operating cash flows
increased
during the
nine months ended
September 30, 2017
, compared to the same period in
2016
, primarily due to an increase in cash collections from customers in the first half of 2017 due to higher invoicing activity during the fourth quarter of 2016, partially offset by higher payments for restructuring activities and an increase in cash paid for income taxes.
|
•
|
DSO:
DSO is calculated as the ratio of ending accounts receivable, net of allowances, divided by average daily net revenues for the preceding 90 days. DSO for the
third quarter
of
2017
decreased
one day, compared to the same period in
2016
.
|
•
|
Product Deferred Revenue:
Product deferred revenue increased as of
September 30, 2017
compared to
December 31, 2016
, primarily due to shipments that have not met certain revenue recognition criteria, partially offset by the recognition of previously deferred revenue related to the completion of delivery to an APAC Telecom customer in the first quarter of 2017.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Routing
|
$
|
585.8
|
|
|
$
|
620.2
|
|
|
$
|
(34.4
|
)
|
|
(6
|
)%
|
|
$
|
1,679.9
|
|
|
$
|
1,699.0
|
|
|
$
|
(19.1
|
)
|
|
(1
|
)%
|
Switching
|
212.6
|
|
|
222.5
|
|
|
(9.9
|
)
|
|
(4
|
)%
|
|
730.2
|
|
|
607.2
|
|
|
123.0
|
|
|
20
|
%
|
||||||
Security
|
71.3
|
|
|
85.5
|
|
|
(14.2
|
)
|
|
(17
|
)%
|
|
205.7
|
|
|
237.1
|
|
|
(31.4
|
)
|
|
(13
|
)%
|
||||||
Total Product
|
869.7
|
|
|
928.2
|
|
|
(58.5
|
)
|
|
(6
|
)%
|
|
2,615.8
|
|
|
2,543.3
|
|
|
72.5
|
|
|
3
|
%
|
||||||
Percentage of net revenues
|
69.1
|
%
|
|
72.2
|
%
|
|
|
|
|
|
69.1
|
%
|
|
70.6
|
%
|
|
|
|
|
||||||||||
Total Service
|
388.1
|
|
|
357.1
|
|
|
31.0
|
|
|
9
|
%
|
|
1,171.9
|
|
|
1,061.2
|
|
|
110.7
|
|
|
10
|
%
|
||||||
Percentage of net revenues
|
30.9
|
%
|
|
27.8
|
%
|
|
|
|
|
|
30.9
|
%
|
|
29.4
|
%
|
|
|
|
|
||||||||||
Total net revenues
|
$
|
1,257.8
|
|
|
$
|
1,285.3
|
|
|
$
|
(27.5
|
)
|
|
(2
|
)%
|
|
$
|
3,787.7
|
|
|
$
|
3,604.5
|
|
|
$
|
183.2
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cloud
|
$
|
344.9
|
|
|
$
|
359.4
|
|
|
$
|
(14.5
|
)
|
|
(4
|
)%
|
|
$
|
1,056.1
|
|
|
$
|
911.5
|
|
|
$
|
144.6
|
|
|
16
|
%
|
Percentage of net revenues
|
27.4
|
%
|
|
28.0
|
%
|
|
|
|
|
|
27.9
|
%
|
|
25.3
|
%
|
|
|
|
|
||||||||||
Telecom/Cable
|
576.9
|
|
|
599.4
|
|
|
(22.5
|
)
|
|
(4
|
)%
|
|
1,707.8
|
|
|
1,688.5
|
|
|
19.3
|
|
|
1
|
%
|
||||||
Percentage of net revenues
|
45.9
|
%
|
|
46.6
|
%
|
|
|
|
|
|
45.1
|
%
|
|
46.8
|
%
|
|
|
|
|
||||||||||
Strategic Enterprise
|
336.0
|
|
|
326.5
|
|
|
9.5
|
|
|
3
|
%
|
|
1,023.8
|
|
|
1,004.5
|
|
|
19.3
|
|
|
2
|
%
|
||||||
Percentage of net revenues
|
26.7
|
%
|
|
25.4
|
%
|
|
|
|
|
|
27.0
|
%
|
|
27.9
|
%
|
|
|
|
|
||||||||||
Total net revenues
|
$
|
1,257.8
|
|
|
$
|
1,285.3
|
|
|
$
|
(27.5
|
)
|
|
(2
|
)%
|
|
$
|
3,787.7
|
|
|
$
|
3,604.5
|
|
|
$
|
183.2
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Americas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
United States
|
$
|
668.8
|
|
|
$
|
684.6
|
|
|
$
|
(15.8
|
)
|
|
(2
|
)%
|
|
$
|
2,076.0
|
|
|
$
|
1,924.9
|
|
|
$
|
151.1
|
|
|
8
|
%
|
Other
|
60.4
|
|
|
60.4
|
|
|
—
|
|
|
—
|
%
|
|
165.6
|
|
|
168.3
|
|
|
(2.7
|
)
|
|
(2
|
)%
|
||||||
Total Americas
|
729.2
|
|
|
745.0
|
|
|
(15.8
|
)
|
|
(2
|
)%
|
|
2,241.6
|
|
|
2,093.2
|
|
|
148.4
|
|
|
7
|
%
|
||||||
Percentage of net revenues
|
58.0
|
%
|
|
58.0
|
%
|
|
|
|
|
|
59.2
|
%
|
|
58.1
|
%
|
|
|
|
|
||||||||||
EMEA
|
298.6
|
|
|
338.0
|
|
|
(39.4
|
)
|
|
(12
|
)%
|
|
871.3
|
|
|
923.5
|
|
|
(52.2
|
)
|
|
(6
|
)%
|
||||||
Percentage of net revenues
|
23.7
|
%
|
|
26.3
|
%
|
|
|
|
|
|
23.0
|
%
|
|
25.6
|
%
|
|
|
|
|
||||||||||
APAC
|
230.0
|
|
|
202.3
|
|
|
27.7
|
|
|
14
|
%
|
|
674.8
|
|
|
587.8
|
|
|
87.0
|
|
|
15
|
%
|
||||||
Percentage of net revenues
|
18.3
|
%
|
|
15.7
|
%
|
|
|
|
|
|
17.8
|
%
|
|
16.3
|
%
|
|
|
|
|
||||||||||
Total net revenues
|
$
|
1,257.8
|
|
|
$
|
1,285.3
|
|
|
$
|
(27.5
|
)
|
|
(2
|
)%
|
|
$
|
3,787.7
|
|
|
$
|
3,604.5
|
|
|
$
|
183.2
|
|
|
5
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Product gross margin
|
$
|
533.7
|
|
|
$
|
578.6
|
|
|
$
|
(44.9
|
)
|
|
(8
|
)%
|
|
$
|
1,589.4
|
|
|
$
|
1,587.5
|
|
|
$
|
1.9
|
|
|
—
|
%
|
Percentage of product revenues
|
61.4
|
%
|
|
62.3
|
%
|
|
|
|
|
|
60.8
|
%
|
|
62.4
|
%
|
|
|
|
|
||||||||||
Service gross margin
|
238.7
|
|
|
220.9
|
|
|
17.8
|
|
|
8
|
%
|
|
731.5
|
|
|
659.3
|
|
|
72.2
|
|
|
11
|
%
|
||||||
Percentage of service
revenues
|
61.5
|
%
|
|
61.9
|
%
|
|
|
|
|
|
62.4
|
%
|
|
62.1
|
%
|
|
|
|
|
||||||||||
Total gross margin
|
$
|
772.4
|
|
|
$
|
799.5
|
|
|
$
|
(27.1
|
)
|
|
(3
|
)%
|
|
$
|
2,320.9
|
|
|
$
|
2,246.8
|
|
|
$
|
74.1
|
|
|
3
|
%
|
Percentage of net revenues
|
61.4
|
%
|
|
62.2
|
%
|
|
|
|
|
|
61.3
|
%
|
|
62.3
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Research and development
|
$
|
236.4
|
|
|
$
|
251.8
|
|
|
$
|
(15.4
|
)
|
|
(6
|
)%
|
|
$
|
752.8
|
|
|
$
|
750.7
|
|
|
$
|
2.1
|
|
|
—
|
%
|
Percentage of net revenues
|
18.8
|
%
|
|
19.6
|
%
|
|
|
|
|
|
19.9
|
%
|
|
20.8
|
%
|
|
|
|
|
||||||||||
Sales and marketing
|
232.5
|
|
|
242.9
|
|
|
(10.4
|
)
|
|
(4
|
)%
|
|
716.6
|
|
|
718.4
|
|
|
(1.8
|
)
|
|
—
|
%
|
||||||
Percentage of net revenues
|
18.5
|
%
|
|
18.9
|
%
|
|
|
|
|
|
18.9
|
%
|
|
19.9
|
%
|
|
|
|
|
||||||||||
General and administrative
|
70.6
|
|
|
54.0
|
|
|
16.6
|
|
|
31
|
%
|
|
176.7
|
|
|
172.0
|
|
|
4.7
|
|
|
3
|
%
|
||||||
Percentage of net revenues
|
5.6
|
%
|
|
4.2
|
%
|
|
|
|
|
|
4.6
|
%
|
|
4.8
|
%
|
|
|
|
|
||||||||||
Restructuring charges
|
2.0
|
|
|
0.8
|
|
|
1.2
|
|
|
150
|
%
|
|
29.4
|
|
|
3.2
|
|
|
26.2
|
|
|
819
|
%
|
||||||
Percentage of net revenues
|
0.2
|
%
|
|
0.1
|
%
|
|
|
|
|
|
0.8
|
%
|
|
0.1
|
%
|
|
|
|
|
||||||||||
Total operating expenses
|
$
|
541.5
|
|
|
$
|
549.5
|
|
|
$
|
(8.0
|
)
|
|
(1
|
)%
|
|
$
|
1,675.5
|
|
|
$1,644.3
|
|
$
|
31.2
|
|
|
2
|
%
|
||
Percentage of net revenues
|
43.1
|
%
|
|
42.8
|
%
|
|
|
|
|
|
44.2
|
%
|
|
45.6
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Interest income
|
$
|
14.7
|
|
|
$
|
9.1
|
|
|
$
|
5.6
|
|
|
62
|
%
|
|
$
|
37.1
|
|
|
$
|
25.5
|
|
|
$
|
11.6
|
|
|
45
|
%
|
Interest expense
|
(25.3
|
)
|
|
(25.1
|
)
|
|
(0.2
|
)
|
|
1
|
%
|
|
(75.6
|
)
|
|
(72.6
|
)
|
|
(3.0
|
)
|
|
4
|
%
|
||||||
Gain on investments, net
|
4.7
|
|
|
1.9
|
|
|
2.8
|
|
|
147
|
%
|
|
6.7
|
|
|
0.1
|
|
|
6.6
|
|
|
N/M
|
|
||||||
Other
|
0.8
|
|
|
0.7
|
|
|
0.1
|
|
|
14
|
%
|
|
(2.0
|
)
|
|
(0.2
|
)
|
|
(1.8
|
)
|
|
N/M
|
|
||||||
Total other expense, net
|
$
|
(5.1
|
)
|
|
$
|
(13.4
|
)
|
|
$
|
8.3
|
|
|
(62
|
)%
|
|
$
|
(33.8
|
)
|
|
$
|
(47.2
|
)
|
|
$
|
13.4
|
|
|
(28
|
)%
|
Percentage of net revenues
|
(0.4
|
)%
|
|
(1.0
|
)%
|
|
|
|
|
|
(0.9
|
)%
|
|
(1.3
|
)%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
Income tax provision
|
$
|
60.1
|
|
|
$
|
64.2
|
|
|
$
|
(4.1
|
)
|
|
(6
|
)%
|
|
$
|
157.3
|
|
|
$
|
151.5
|
|
|
$
|
5.8
|
|
|
4
|
%
|
Effective tax rate
|
26.6
|
%
|
|
27.1
|
%
|
|
|
|
|
|
25.7
|
%
|
|
27.3
|
%
|
|
|
|
|
|
As of
|
|
|
|
|
|||||||||
|
September 30,
2017 |
|
December 31,
2016 |
|
$ Change
|
|
% Change
|
|||||||
Working capital
|
$
|
2,698.0
|
|
|
$
|
2,236.0
|
|
|
$
|
462.0
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
$
|
2,363.7
|
|
|
$
|
1,833.2
|
|
|
$
|
530.5
|
|
|
29
|
%
|
Short-term investments
|
922.0
|
|
|
752.3
|
|
|
169.7
|
|
|
23
|
%
|
|||
Long-term investments
|
913.6
|
|
|
1,071.8
|
|
|
(158.2
|
)
|
|
(15
|
)%
|
|||
Total cash, cash equivalents, and investments
|
4,199.3
|
|
|
3,657.3
|
|
|
542.0
|
|
|
15
|
%
|
|||
Long-term debt
|
2,135.7
|
|
|
2,133.7
|
|
|
2.0
|
|
|
—
|
%
|
|||
Cash, cash equivalents, and investments, net
|
$
|
2,063.6
|
|
|
$
|
1,523.6
|
|
|
$
|
540.0
|
|
|
35
|
%
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Net cash provided by operating activities
(*)
|
$
|
1,045.9
|
|
|
$
|
776.3
|
|
|
$
|
269.6
|
|
|
35
|
%
|
Net cash used in investing activities
|
$
|
(84.1
|
)
|
|
$
|
(308.3
|
)
|
|
$
|
224.2
|
|
|
(73
|
)%
|
Net cash used in financing activities
(*)
|
$
|
(444.6
|
)
|
|
$
|
(200.1
|
)
|
|
$
|
(244.5
|
)
|
|
122
|
%
|
•
|
the additional development efforts and costs required to create new software products and/or to make our disaggregated products compatible with multiple technologies;
|
•
|
the possibility that our new software products or disaggregated products may not achieve widespread customer adoption;
|
•
|
the potential that our strategy could erode our revenue and gross margins;
|
•
|
the impact on our financial results of longer periods of revenue recognition and changes in tax treatment associated with software sales;
|
•
|
the additional costs associated with regulatory compliance and changes we need to make to our distribution chain in connection with increased software sales;
|
•
|
the ability of our disaggregated hardware and software products to operate independently and/or to integrate with current and future third party products; and
|
•
|
issues with third party technologies used with our disaggregated products may be attributed to us.
|
•
|
changes in general IT spending,
|
•
|
the imposition of government controls, inclusive of critical infrastructure protection;
|
•
|
changes or limitations in trade protection laws or other regulatory requirements, which may affect our ability to import or export our products from various countries;
|
•
|
varying and potentially conflicting laws and regulations;
|
•
|
fluctuations in local economies;
|
•
|
wage inflation or a tightening of the labor market;
|
•
|
tax policies that could have a business impact;
|
•
|
potential import tariffs imposed by the United States and the possibility of reciprocal tariffs by foreign countries;
|
•
|
data privacy rules and other regulations that affect cross border data flow; and
|
•
|
the impact of the following on customer spending patterns: political considerations, unfavorable changes in tax treaties or laws, natural disasters, epidemic disease, labor unrest, earnings expatriation restrictions, misappropriation of
|
•
|
incur liens;
|
•
|
incur sale and leaseback transactions; and
|
•
|
consolidate or merge with or into, or sell substantially all of our assets to, another person.
|
•
|
maintenance of a leverage ratio no greater than 3.0x and an interest coverage ratio no less than 3.0x
|
•
|
covenants that limit or restrict the ability of the Company and its subsidiaries to, among other things, grant liens, merge or consolidate, dispose of all or substantially all of its assets, change their accounting or reporting policies, change their business and incur subsidiary indebtedness, in each case subject to customary exceptions for a credit facility of this size and type.
|
Period
|
|
Total Number
of Shares
Purchased
(1)
|
|
Average
Price Paid
per Share
(1)
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
(1)
|
|
Approximate Dollar
Value of Shares
that May Yet Be
Purchased
Under the Plans or
Programs
(1)
|
||||||
July 1 - July 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
469.7
|
|
August 1 - August 31, 2017
|
|
5.0
|
|
|
$
|
28.16
|
|
|
5.0
|
|
|
$
|
329.7
|
|
September 1 - September 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
329.7
|
|
Total
|
|
5.0
|
|
|
|
|
|
5.0
|
|
|
|
(1)
|
Shares were repurchased under our Board approved Stock Repurchase Program, which authorized us to purchase an aggregate of up to
$4.4 billion
of our common stock. Future share repurchases will be subject to a review of the circumstances in place at that time and will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. This program may be discontinued at any time.
|
Exhibit
Number
|
|
Description of Document
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
12.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101
|
|
The following materials from Juniper Network Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, and (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements*
|
|
|
|
101.INS
|
|
XBRL Instance Document*
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document*
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document*
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document*
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document*
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document*
|
*Filed herewith.
|
**Furnished herewith.
|
++Indicates management contract or compensatory plan, contract or arrangement.
|
|
|
Juniper Networks, Inc.
|
|
|
|
|
|
November 7, 2017
|
|
By:
|
/s/ Kenneth B. Miller
|
|
|
|
Kenneth B. Miller
|
|
|
|
Executive Vice President, Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
November 7, 2017
|
|
By:
|
/s/ Terrance F. Spidell
|
|
|
|
Terrance F. Spidell
|
|
|
|
Vice President, Corporate Controller and Chief Accounting Officer
(Duly Authorized Officer and Principal Accounting Officer)
|
|
|
|
|
|
/s/ Rami Rahim
|
|
August 9, 2017
|
|
|
Rami Rahim
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
Agreed and Accepted:
|
|
|
|
|
|
|
|
|
|
/s/ Anand Athreya
|
|
August 9, 2017
|
|
|
Anand Athreya
|
|
Date
|
|
|
Offer Component
|
Offer Amount
|
Currency
|
Frequency
|
Base Compensation
|
$500,000.00
|
USD
|
Annual
|
RSU
|
300,000.00
|
RSU
|
Standard Vesting
|
Hiring Bonus
|
$500,000.00
|
USD
|
One Time after starting
|
•
|
As for the equity portion, Juniper will take half of your bonus target set forth above and multiply it by 1.5 resulting in seventy-five percent (75%) of your bonus target to be paid in the form of equity. The vesting of this equity will be performance based (e.g., the achievement of corporate financial results). If the performance conditions are achieved, fifty percent (50%) of the equity award will vest in the first quarter of the following fiscal year for which the performance conditions relate to (e.g., 50% of the equity would vest in the first quarter of 2019 based on 2018 results) and the remaining fifty percent (50%) will vest the following year. This equity award will be subject to your acceptance of a performance share award agreement, which along with the Juniper equity incentive plan governing the award and applicable sub-plans, will set out additional terms and conditions of the grant.
|
•
|
As for the cash portion, the amount (if any) of the bonus that will be payable will be determined by the total funding level established by Juniper under the Plan, and then as further determined by the Committee. The bonus amount of cash that you would then be entitled to receive under the Plan is then offset by the half of your bonus target used to determine the equity grant for this Program.
|
/s/ Rami Rahim
|
|
|
|
|
|
I accept the terms of this letter:
|
|
|
|
Bikash Koley
|
|
|
|
|
|
|
|
|
|
/s/ Bikash Koley
|
|
June 29, 2017
|
|
|
Signature
|
|
|
Date Signed
|
|
|
|
|
|
|
Start Date:
|
August 14, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY
|
|
|
JUNIPER NETWORK, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brian Martin
|
|
|
|
Name:
|
Brian Martin
|
|
|
|
Title:
|
Senior Vice President, General Counsel
|
|
|
|
Date:
|
September 5, 2017
|
|
|
|
|
|
|
|
|
|
|
|
EMPLOYEE
|
|
By:
|
/s/ Bikash Koley
|
|
|
|
Name:
|
Bikash Koley
|
|
|
|
Date:
|
September 5, 2017
|
|
|
|
|
|
|
COMPANY
|
|
|
JUNIPER NETWORK, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brian Martin
|
|
|
|
Name:
|
Brian Martin
|
|
|
|
Title:
|
Senior Vice President, General Counsel
|
|
|
|
Date:
|
September 5, 2017
|
|
|
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EMPLOYEE
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Name:
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/s/ Bikash Koley
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Date:
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September 5, 2017
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Nine Months Ended
September 30,
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Years Ended December 31,
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2017
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2016
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2015
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2014
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2013
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2012
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Earnings for computation of ratio
(*)
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Income (loss) before income taxes and
before adjustment for noncontrolling interests in consolidated subsidiaries or income from equity investees
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$
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611.6
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$
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827.4
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$
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852.2
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$
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(86.3
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)
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$
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518.4
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$
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266.0
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Plus:
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Fixed charges
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84.3
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109.4
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98.5
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83.3
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76.1
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72.0
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Amortization of capitalized interest
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1.1
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1.3
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0.8
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0.5
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0.4
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—
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Less:
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Interest capitalized
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—
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(0.4
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(2.2
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(2.7
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(1.9
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)
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(7.1
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)
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Total earnings (loss)
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$
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697.0
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$
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937.7
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$
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949.3
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$
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(5.2
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)
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$
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593.0
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$
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330.9
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Fixed charges
(*)
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Interest expense
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$
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74.0
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$
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95.7
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$
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81.9
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$
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66.0
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$
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58.1
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$
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52.2
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Interest capitalized
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—
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0.4
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2.2
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2.7
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1.9
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—
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Amortized premiums, discounts, and capitalized expenses relating to indebtedness
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1.5
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1.9
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1.4
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0.8
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0.3
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0.8
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Estimate of interest within rental
expense
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8.8
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11.4
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13.0
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13.8
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15.8
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19.0
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Total fixed charges
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$
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84.3
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$
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109.4
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$
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98.5
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$
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83.3
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$
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76.1
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$
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72.0
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Ratio of earnings (loss) to fixed charges
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8.3x
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8.6x
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9.6x
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(0.1)x
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7.8x
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4.6x
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(*)
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For this ratio, both "earnings" and “fixed charges” conform to the calculation required by Item 503(d) of Regulation S-K.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Juniper Networks, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Juniper Networks, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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