SUNNYVALE, CA--(Marketwire - Jan 26, 2012) - Juniper Networks (NYSE: JNPR)
Q4 Financial Highlights:
- Revenue: $1,120.8 million, down 6% from Q4'10 and up 1% from Q3'11
- Operating Margin: 11.9% GAAP; 18.6% non-GAAP
- GAAP Net Income Per Share: $0.18 diluted
- Non-GAAP Net Income Per Share: $0.28 diluted, down 33% from Q4'10 and flat from Q3'11
2011 Financial Highlights:
- Revenue: $4,448.7 million, up 9% from 2010
- Operating Margin: 13.9% GAAP; 20.6% non-GAAP
- GAAP Net Income Per Share: $0.79 diluted
- Non-GAAP Net Income Per Share: $1.19 diluted, down 10% from 2010
Juniper Networks (NYSE: JNPR), the industry leader in network innovation, today reported preliminary financial results for the three and twelve months ended December 31, 2011, and provided its outlook for the three months ending March 31, 2012.
Net revenues for the fourth quarter of 2011 decreased 6% on a year-over-year basis, and increased 1% sequentially, to $1,120.8 million.
For the year ended December 31, 2011, Juniper's revenue increased 9% on a year-over-year basis to $4,448.7 million.
The Company posted GAAP net income of $96.2 million, or $0.18 per diluted share, and non-GAAP net income of $150.1 million, or $0.28 per diluted share, for the fourth quarter of 2011. Included in the GAAP diluted earnings per share was a $0.02 cents impact for restructuring and other charges. Non-GAAP net income per diluted share decreased 33% compared to the fourth quarter of 2010 and was flat compared to the third quarter of 2011.
For the year ended December 31, 2011, GAAP net income was $425.1 million, or $0.79 per diluted share, and non-GAAP net income was $644.6 million, or $1.19 per diluted share. Non-GAAP net income per diluted share for the year ended December 31, 2011 decreased 10% on a year-over-year basis. The reconciliation between GAAP and non-GAAP results of operations is provided in a table immediately following the Share-Based Compensation Related Payroll Tax by Category table below.
"While the fourth quarter was softer than we had anticipated primarily due to weak demand from service providers, Juniper delivered record revenues in a year where macro economic uncertainty increased as the year unfolded," said Kevin Johnson, president and CEO. "During the year, we introduced innovative new products across our portfolio that we believe will enable Juniper to continue to grow faster than the markets we serve. We are confident in our strategy and our innovation pipeline, and we remain committed to delivering differentiated solutions that are highly relevant to our customers."
Juniper's GAAP operating margin for the fourth quarter of 2011 was 11.9% compared to 12.4% in the third quarter of 2011, and 19.1% in the prior year fourth quarter. Non-GAAP operating margin for the fourth quarter of 2011 was 18.6% compared to 20.0% in the third quarter of 2011, and 24.5% in the prior year fourth quarter. For the fiscal year 2011, Juniper's GAAP operating margin was 13.9% compared to 18.8% for the prior fiscal year. Non-GAAP operating margin for the fiscal year 2011 was 20.6% compared to 24.0% in the fiscal year 2010.
"The December quarter was an atypical and unexpectedly weak finish to the year, with reduced spending by some of our largest customers," said Robyn Denholm, Juniper's chief financial officer. "While long-term industry fundamentals remain strong, we expect the near-term environment to remain challenging. We will invest in support of our strategy while continuing our focus on execution and prudent cost management."
Other Financial Highlights
Total cash, cash equivalents and investments as of the fourth quarter of 2011 was $4,292.4 million, compared to $4,130.3 million as of the third quarter of 2011 and $2,821.6 million as of the fourth quarter of 2010.
Juniper generated net cash from operations in the fourth quarter of 2011 of $243.6 million, compared to net cash provided by operations of $185.2 million in the third quarter of 2011, and $371.0 million in the fourth quarter of 2010. For the year ended December 31, 2011, Juniper generated net cash from operations of $986.7 million, compared to $812.3 million in 2010.
Days sales outstanding in accounts receivable ("DSO") was 46 days in the fourth quarter of 2011, compared to 36 days in the prior quarter and 45 days in the fourth quarter of 2010.
For the year ended December 31, 2011, Juniper repurchased 17.5 million shares, at an average share price of $30.93 per share, for a total of $541.2 million, which largely offset stock issued through our employee equity programs.
Capital expenditures, as well as depreciation and amortization of intangible assets expense during the fourth quarter of 2011, were $78.4 million and $43.3 million, respectively. Capital expenditures, as well as depreciation and amortization of intangible assets expense during the fiscal year 2011, were $266.3 million and $169.3 million, respectively.
Outlook
We believe the long-term demand fundamentals remain intact and we are confident about the growth potential of our new product portfolio. However, our outlook for the March quarter reflects near-term uncertainty in the macro-environment and the effect it may have on the level, timing, and prioritization of customer demand.
- Juniper estimates revenue for the first quarter ending March 31, 2012, to be in the range of $960 million to $990 million.
- Juniper estimates that its non-GAAP gross margin will be in the range of 63% and 64% in the first quarter.
- Juniper estimates that its non-GAAP operating expenses will increase in the first quarter compared to the fourth quarter 2011, primarily due to typical fringe-related employee expenses and variable compensation.
- Juniper expects its non-GAAP operating margin for the first quarter to be in the range of 11% and 13%.
- Juniper estimates that its non-GAAP net income per share will range between $0.11 and $0.14 on a diluted basis, assuming a flat share count and estimated non-GAAP tax rate of 29%. This tax rate includes an estimated $0.01 cent quarterly impact on non-GAAP earnings per share assuming no renewal of the R&D tax credit.
All forward-looking non-GAAP measures exclude estimates for amortization of intangible assets, share-based compensation expenses, acquisition related charges, restructuring charges, impairment charges, litigation settlement charges, gain or loss on equity investments, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and income tax effect of non-GAAP exclusions. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.
Conference Call Web Cast
Juniper Networks will host a conference call web cast today, January 26, 2012, at 2:00 p.m. (Pacific Time), to be broadcast live over the Internet at: http://www.juniper.net/company/investor/conferencecall.html.
To participate via telephone, in the U.S. the toll free dial-in number is 877-407-8033; outside of the U.S. dial +1-201-689-8033. Please call ten minutes prior to the scheduled conference call time. The webcast replay of the conference call will be archived on the Juniper Networks website.
About Juniper Networks
Juniper Networks is in the business of network innovation. From devices to data centers, from consumers to cloud providers, Juniper Networks delivers the software, silicon and systems that transform the experience and economics of networking. Additional information can be found at Juniper Networks (www.juniper.net).
Juniper Networks and Junos are registered trademarks of Juniper Networks, Inc. in the United States and other countries. The Juniper Networks and Junos logos are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks are the property of their respective owners.
Statements in this release concerning Juniper Networks' business outlook, economic and market outlook, future financial and operating results, and overall future prospects are forward-looking statements that involve a number of uncertainties and risks. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: general economic conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending and spending by communication service providers; the network capacity requirements of communication service providers; contractual terms that may result in the deferral of revenue; increases in and the effect of competition; the timing of orders and their fulfillment; manufacturing and supply chain constraints; ability to establish and maintain relationships with distributors, resellers and other partners; variations in the expected mix of products sold; changes in customer mix; changes in geography mix; customer and industry analyst perceptions of Juniper Networks and its technology, products and future prospects; delays in scheduled product availability; market acceptance of Juniper Networks products and services; rapid technological and market change; adoption of regulations or standards affecting Juniper Networks products, services or the networking industry; the ability to successfully acquire, integrate and manage businesses and technologies; product defects, returns or vulnerabilities; the ability to recruit and retain key personnel; significant effects of tax legislation and judicial or administrative interpretation of tax regulations; currency fluctuations; litigation; and other factors listed in Juniper Networks' most recent report on Form 10-Q filed with the Securities and Exchange Commission. All statements made in this press release are made only as of the date set forth at the beginning of this release. Juniper Networks undertakes no obligation to update the information in this release in the event facts or circumstances subsequently change after the date of this press release.
Juniper Networks believes that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to the company's financial condition and results of operations. For further information regarding why Juniper Networks believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the discussion below.
| |
|
| Juniper Networks, Inc. |
|
| Preliminary Condensed Consolidated Statements of Operations |
|
| (in thousands, except per share amounts) |
|
| (unaudited) |
|
| |
|
| |
|
Three Months Ended |
|
Twelve Months Ended |
|
| |
|
December 31, |
|
December 31, |
|
| |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product |
|
$ |
847,461 |
|
$ |
962,209 |
|
$ |
3,478,264 |
|
$ |
3,258,651 |
|
| |
Service |
|
|
273,296 |
|
|
227,732 |
|
|
970,445 |
|
|
834,615 |
|
| |
|
Total net revenues |
|
|
1,120,757 |
|
|
1,189,941 |
|
|
4,448,709 |
|
|
4,093,266 |
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Product |
|
| 310,537 |
|
|
299,699 |
|
|
1,155,283 |
|
|
1,000,865 |
|
| |
Service |
|
|
111,285 |
|
|
98,241 |
|
|
424,836 |
|
|
350,654 |
|
| |
|
Total cost of revenues |
|
|
421,822 |
|
|
397,940 |
|
|
1,580,119 |
|
|
1,351,519 |
|
| Gross margin |
|
|
698,935 |
|
|
792,001 |
|
|
2,868,590 |
|
|
2,741,747 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Research and development |
|
|
250,465 |
|
|
254,942 |
|
|
1,026,790 |
|
|
917,855 |
|
| |
Sales and marketing |
|
|
253,201 |
|
|
257,690 |
|
|
1,001,060 |
|
|
857,072 |
|
| |
General and administrative |
|
|
45,493 |
|
|
45,068 |
|
|
179,132 |
|
| 177,859 |
|
| |
Amortization of purchased intangible assets |
|
|
1,227 |
|
|
972 |
|
|
5,366 |
|
|
4,230 |
|
| |
Restructuring and other charges |
|
|
15,014 |
|
|
2,255 |
|
|
30,564 |
|
|
10,805 |
|
| |
Acquisition-related and other charges |
|
|
350 |
|
|
4,276 |
|
|
7,154 |
|
|
6,342 |
|
| |
|
Total operating expenses |
|
|
565,750 |
|
|
565,203 |
|
|
2,250,066 |
|
|
1,974,163 |
|
| Operating income |
|
|
133,185 |
|
|
226,798 |
|
|
618,524 |
|
|
767,584 |
|
| Other (expense) income, net |
|
|
(10,701 |
) |
|
4,841 |
|
|
(46,808 |
) |
|
10,570 |
|
| Income before income taxes and noncontrolling interest |
|
|
122,484 |
|
|
231,639 |
|
|
571,716 |
|
|
778,154 |
|
| Income tax provision |
|
|
26,321 | |
|
41,556 |
|
|
146,704 |
|
|
158,781 |
|
| Consolidated net income |
|
|
96,163 |
|
|
190,083 |
|
|
425,012 |
|
|
619,373 |
|
| Adjust for net loss (income) attributable to noncontrolling interest |
|
|
- |
|
|
150 |
|
|
124 |
|
|
(971 |
) |
| Net income attributable to Juniper Networks |
|
$ |
96,163 |
|
$ |
190,233 |
|
$ |
425,136 |
|
$ |
618,402 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per share attributable to Juniper Networks common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
$ |
0.18 |
|
$ |
0.36 |
|
$ |
0.80 |
|
$ |
1.18 |
|
| |
Diluted |
|
$ |
0.18 |
|
$ |
0.35 |
| $ |
0.79 |
|
$ |
1.15 |
|
| Shares used in computing net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
|
526,124 |
|
|
523,556 |
|
|
529,768 |
|
|
522,444 |
|
| |
Diluted |
|
|
533,335 |
|
|
541,464 |
|
|
541,417 |
|
|
538,790 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Juniper Networks, Inc. |
| Preliminary Net Revenues by Reportable Segment |
| (in thousands) |
| (unaudited) |
| |
| |
|
Three Months Ended |
|
Twelve Months Ended |
| |
|
December 31, |
|
December 31, |
| |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| Infrastructure: |
|
|
|
|
|
|
|
|
|
|
| |
| |
Routers - Product |
|
$ |
506,573 |
|
$ |
639,289 |
|
$ |
2,287,432 |
|
$ |
2,134,488 |
| |
Routers - Service |
|
|
174,297 |
|
|
144,377 |
|
|
606,934 |
|
|
521,248 |
| |
|
Infrastructure Revenue - Routers |
|
|
680,870 |
|
|
783,666 |
|
|
2,894,366 |
|
|
2,655,736 |
| |
Switches - Product |
|
|
157,053 |
|
|
118,363 |
|
|
493,149 |
|
|
377,096 |
| |
Switches - Service |
|
|
11,349 |
|
|
5,125 |
|
|
35,091 |
|
|
17,442 |
| |
|
Infrastructure Revenue - Switches |
|
|
168,402 |
|
|
123,488 |
|
|
528,240 |
|
|
394,538 |
| |
|
|
Total Infrastructure Revenue |
|
$ |
849,272 |
|
$ |
907,154 |
|
$ |
3,422,606 |
|
$ |
3,050,274 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Service Layer Technologies: | |
|
|
|
|
|
|
|
|
|
|
|
| |
Service Layer Technologies - Product |
|
$ |
183,835 |
|
$ |
204,557 |
|
$ |
697,683 |
|
$ |
747,067 |
| |
Service Layer Technologies - Service |
|
|
87,650 |
|
|
78,230 |
|
|
328,420 |
|
|
295,925 |
| |
|
Total Service Layer Technologies Revenue |
|
$ |
271,485 |
|
$ |
282,787 |
|
$ |
1,026,103 |
|
$ |
1,042,992 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Revenue |
|
$ |
1,120,757 |
|
$ |
1,189,941 |
|
$ |
4,448,709 |
|
$ |
4,093,266 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
| Juniper Networks, Inc. |
| Preliminary Net Revenues by Geographic Region |
| (in thousands) |
| (unaudited) |
| |
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
December 31, |
| |
2011 |
|
2010 |
|
2011 |
|
2010 |
| Americas |
$ |
521,157 |
|
$ |
580,120 |
|
$ |
2,238,049 |
|
$ |
2,095,556 |
| Europe, Middle East, and Africa |
|
399,612 |
|
|
359,761 |
|
|
1,339,779 |
|
|
1,189,266 |
| Asia Pacific |
|
199,988 |
|
|
250,060 |
|
|
870,881 |
|
|
808,444 |
| Total |
$ |
1,120,757 |
|
$ |
1,189,941 |
|
$ |
4,448,709 |
|
$ |
4,093,266 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Juniper Networks, Inc. |
| Preliminary Net Revenues by Market |
| (in thousands) |
| (unaudited) |
| |
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
December 31, |
| |
2011 |
|
2010 |
|
2011 | |
2010 |
| Service Provider |
$ |
676,505 |
|
$ |
783,841 |
|
$ |
2,833,035 |
|
$ |
2,631,486 |
| Enterprise |
|
444,252 |
|
|
406,100 |
|
|
1,615,674 |
|
|
1,461,780 |
| Total |
$ |
1,120,757 |
|
$ |
1,189,941 |
|
$ |
4,448,709 |
|
$ |
4,093,266 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Juniper Networks, Inc. |
| Preliminary Share-Based Compensation by Category |
| (in thousands) |
| (unaudited) |
| |
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
December 31, |
| |
2011 |
|
2010 |
|
2011 |
|
2010 |
| Cost of revenues - Product |
$ |
1,219 |
|
$ |
1,260 |
|
$ |
4,619 |
|
$ |
4,353 |
| Cost of revenues - Service |
|
3,626 |
|
|
3,632 |
|
|
15,736 |
|
|
13,523 |
| Research and development |
|
22,224 |
|
|
23,481 |
|
|
97,677 |
|
|
78,461 |
| Sales and marketing |
|
17,899 |
|
|
15,929 |
|
|
70,868 |
|
|
54,949 |
| General and administrative |
|
7,557 |
|
|
8,100 |
|
|
33,258 |
|
|
30,671 |
| Total |
$ |
52,525 |
|
$ |
52,402 |
|
$ |
222,158 |
|
$ |
181,957 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Juniper Networks, Inc. |
| Preliminary Share-Based Compensation Related Payroll Tax by Category |
| (in thousands) |
| (unaudited) |
| |
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
December 31, |
| |
2011 |
|
2010 |
|
2011 |
|
2010 |
| Cost of revenues - Product |
$ |
2 |
|
$ |
66 |
|
$ |
301 |
|
$ |
197 |
| Cost of revenues - Service |
|
4 |
|
|
319 |
|
|
942 |
|
|
689 |
| Research and development |
|
17 |
|
|
793 |
|
|
3,402 |
|
|
2,206 |
| Sales and marketing | |
52 |
|
|
1,177 |
|
|
4,100 |
|
|
2,912 |
| General and administrative |
|
8 |
|
|
182 |
|
|
501 |
|
|
429 |
| Total |
$ |
83 |
|
$ |
2,537 |
|
$ |
9,246 |
|
$ |
6,433 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Juniper Networks, Inc. |
|
| Reconciliation between GAAP and non-GAAP Financial Measures |
|
| (in thousands, except percentages) |
|
| (unaudited) |
|
| |
|
| |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
| |
|
|
|
December 31, |
|
|
December 31, |
|
| |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
| GAAP Cost of revenues - Product |
|
|
|
$ |
310,537 |
|
|
$ |
299,699 |
|
|
$ |
1,155,283 |
|
|
$ |
1,000,865 |
|
| Share-based compensation expense |
|
C | |
|
(1,219 |
) |
|
|
(1,260 |
) |
|
|
(4,619 |
) |
|
|
(4,353 |
) |
| Share-based compensation related payroll tax |
|
C |
|
|
(2 |
) |
|
|
(66 |
) |
|
|
(301 |
) |
|
|
(197 |
) |
| Amortization of purchased intangible assets |
|
A |
|
|
(5,693 |
) |
|
|
(2,554 |
) |
|
|
(21,767 |
) |
|
|
(4,301 |
) |
| Acquisition-related and other charges |
|
A,B |
|
|
- |
|
|
|
- |
|
|
|
(2,487 |
) |
|
|
- |
|
| Non-GAAP Cost of revenues - Product |
|
|
|
|
303,623 |
|
|
|
295,819 |
|
|
|
1,126,109 |
|
|
|
992,014 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Cost of revenues - Service |
|
|
|
|
111,285 |
|
|
|
98,241 | |
|
|
424,836 |
|
|
|
350,654 |
|
| Share-based compensation expense |
|
C |
|
|
(3,626 |
) |
|
|
(3,632 |
) |
|
|
(15,736 |
) |
|
|
(13,523 |
) |
| Share-based compensation related payroll tax |
|
C |
|
|
(4 |
) |
|
|
(319 |
) |
|
|
(942 |
) |
|
|
(689 |
) |
| Non-GAAP Cost of revenues - Service |
|
|
|
|
107,655 |
|
|
|
94,290 |
|
|
|
408,158 |
|
|
|
336,442 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Gross margin - Product |
|
|
|
|
536,924 |
|
|
|
662,510 |
|
|
|
2,322,981 |
|
|
|
2,257,786 |
|
| Share-based compensation expense |
|
C |
|
|
1,219 |
|
|
|
1,260 |
|
|
|
4,619 |
|
|
| 4,353 |
|
| Share-based compensation related payroll tax |
|
C |
|
|
2 |
|
|
|
66 |
|
|
|
301 |
|
|
|
197 |
|
| Amortization of purchased intangible assets |
|
A |
|
|
5,693 |
|
|
|
2,554 |
|
|
|
21,767 |
|
|
|
4,301 |
|
| Acquisition-related and other charges |
|
A,B |
|
|
- |
|
|
|
- |
|
|
|
2,487 |
|
|
|
- |
|
| Non-GAAP Gross margin - Product |
|
|
|
|
543,838 |
|
|
|
666,390 |
|
|
|
2,352,155 |
|
|
|
2,266,637 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Product gross margin as a % of product revenue |
|
|
|
|
63.4 |
% |
|
|
68.9 |
% |
|
|
66.8 |
% |
|
|
69.3 |
% |
| Share-based compensation expense as a % of product revenue |
|
C | |
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.2 |
% |
| Share-based compensation related payroll tax as a % of product revenue |
|
C |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
| Amortization of purchased intangible assets as a % of product revenue |
|
A |
|
|
0.7 |
% |
|
|
0.3 |
% |
|
|
0.6 |
% |
|
|
0.1 |
% |
| Acquisition-related and other charges as a % of product revenue |
|
A,B |
|
|
- |
% |
|
|
- |
% |
|
|
0.1 |
% |
|
|
- |
% |
| Non-GAAP Product gross margin as a % of product revenue |
|
|
|
|
64.2 |
% |
|
|
69.3 |
% |
|
|
67.6 |
% |
|
|
69.6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Gross margin - Service |
|
|
|
|
162,011 |
|
|
|
129,491 | |
|
|
545,609 |
|
|
|
483,961 |
|
| Share-based compensation expense |
|
C |
|
|
3,626 |
|
|
|
3,632 |
|
|
|
15,736 |
|
|
|
13,523 |
|
| Share-based compensation related payroll tax |
|
C |
|
|
4 |
|
|
|
319 |
|
|
|
942 |
|
|
|
689 |
|
| Non-GAAP Gross margin - Service |
|
|
|
$ |
165,641 |
|
|
$ |
133,442 |
|
|
$ |
562,287 |
|
|
$ |
498,173 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Service gross margin as a % of service revenue |
|
|
|
|
59.3 |
% |
|
|
56.9 |
% |
|
|
56.2 |
% |
|
|
58.0 |
% |
| Share-based compensation expense as a % of service revenue |
|
C |
|
|
1.3 |
% |
|
|
1.6 |
% |
|
|
1.6 |
% |
|
| 1.6 |
% |
| Share-based compensation related payroll tax as a % of service revenue |
|
C |
|
|
- |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
| Non-GAAP Service gross margin as a % of service revenue |
|
|
|
|
60.6 |
% |
|
|
58.6 |
% |
|
|
57.9 |
% |
|
|
59.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Juniper Networks, Inc. |
|
| Reconciliation between GAAP and non-GAAP Financial Measures |
|
| (in thousands, except percentages) |
|
| (unaudited) |
|
| |
|
| |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
| |
|
|
|
December 31, |
|
|
December 31, |
|
| |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
| GAAP Gross margin |
|
|
|
$ |
698,935 |
| |
$ |
792,001 |
|
|
$ |
2,868,590 |
|
|
$ |
2,741,747 |
|
| Share-based compensation expense |
|
C |
|
|
4,845 |
|
|
|
4,892 |
|
|
|
20,355 |
|
|
|
17,876 |
|
| Share-based compensation related payroll tax |
|
C |
|
|
6 |
|
|
|
385 |
|
|
|
1,243 |
|
|
|
886 |
|
| Amortization of purchased intangible assets |
|
A |
|
|
5,693 |
|
|
|
2,554 |
|
|
|
21,767 |
|
|
|
4,301 |
|
| Acquisition-related and other charges |
|
A,B |
|
|
- |
|
|
|
- |
|
|
|
2,487 |
|
|
|
- |
|
| Non-GAAP Gross margin |
|
|
|
|
709,479 |
|
|
|
799,832 |
|
|
|
2,914,442 |
|
|
|
2,764,810 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| GAAP Gross margin as a % of revenue |
|
|
|
|
62.4 |
% |
|
|
66.6 |
% |
|
|
64.5 |
% |
|
|
67.0 |
% |
| Share-based compensation expense as a % of revenue |
|
C |
|
|
0.4 |
% |
|
|
0.4 |
% |
|
|
0.5 |
% |
|
|
0.4 |
% |
| Share-based compensation related payroll tax as a % of revenue |
|
C |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
| Amortization of purchased intangible assets as a % of revenue |
|
A |
|
|
0.5 |
% |
|
|
0.2 |
% |
|
|
0.4 |
% |
|
|
0.1 |
% |
| Acquisition-related and other charges as a % of revenue |
|
A,B |
|
|
- |
% |
|
|
- |
% |
|
|
0.1 |
% |
|
|
- |
% |
| Non-GAAP Gross margin as a % of revenue |
|
|
|
|
63.3 |
% |
|
|
67.2 |
% |
|
|
65.5 |
% |
|
|
67.5 |
% |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Research and development expense |
|
|
|
|
250,465 |
|
|
|
254,942 |
|
|
|
1,026,790 |
|
|
|
917,855 |
|
| Share-based compensation expense |
|
C |
|
|
(22,224 |
) |
|
|
(23,481 |
) |
|
|
(97,677 |
) |
|
|
(78,461 |
) |
| Share-based compensation related payroll tax |
|
C |
|
|
(17 |
) |
|
|
(793 |
) |
|
|
(3,402 |
) |
|
|
(2,206 |
) |
| Non-GAAP Research and development expense |
|
|
|
|
228,224 |
|
|
|
230,668 |
|
|
|
925,711 |
|
|
|
837,188 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Sales and marketing expense |
|
|
|
|
253,201 |
|
| |
257,690 |
|
|
|
1,001,060 |
|
|
|
857,072 |
|
| Share-based compensation expense |
|
C |
|
|
(17,899 |
) |
|
|
(15,929 |
) |
|
|
(70,868 |
) |
|
|
(54,949 |
) |
| Share-based compensation related payroll tax |
|
C |
|
|
(52 |
) |
|
|
(1,177 |
) |
|
|
(4,100 |
) |
|
|
(2,912 |
) |
| Non-GAAP Sales and marketing expense |
|
|
|
|
235,250 |
|
|
|
240,584 |
|
|
|
926,092 |
|
|
|
799,211 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP General and administrative expense |
|
|
|
|
45,493 |
|
|
|
45,068 |
|
|
|
179,132 |
|
|
|
177,859 |
|
| Share-based compensation expense |
|
C |
|
|
(7,557 |
) |
|
|
(8,100 |
) |
|
|
(33,258 | ) |
|
|
(30,671 |
) |
| Share-based compensation related payroll tax |
|
C |
|
|
(8 |
) |
|
|
(182 |
) |
|
|
(501 |
) |
|
|
(429 |
) |
| Non-GAAP General and administrative expense |
|
|
|
|
37,928 |
|
|
|
36,786 |
|
|
|
145,373 |
|
|
|
146,759 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Operating expense |
|
|
|
|
565,750 |
|
|
|
565,203 |
|
|
|
2,250,066 |
|
|
|
1,974,163 |
|
| Share-based compensation expense |
|
C |
|
|
(47,680 |
) |
|
|
(47,510 |
) |
|
|
(201,803 |
) |
|
|
(164,081 |
) |
| Share-based compensation related payroll tax |
|
C |
|
|
(77 |
) |
|
|
(2,152 |
) |
|
|
(8,003 |
) |
|
|
(5,547 |
) |
| Amortization of purchased intangible assets | |
A |
|
|
(1,227 |
) |
|
|
(972 |
) |
|
|
(5,366 |
) |
|
|
(4,230 |
) |
| Restructuring and other charges |
|
B |
|
|
(15,014 |
) |
|
|
(2,255 |
) |
|
|
(30,564 |
) |
|
|
(10,805 |
) |
| Acquisition-related and other charges |
|
A,B |
|
|
(350 |
) |
|
|
(4,276 |
) |
|
|
(7,154 |
) |
|
|
(6,342 |
) |
| Non-GAAP Operating expense |
|
|
|
$ |
501,402 |
|
|
$ |
508,038 |
|
|
$ |
1,997,176 |
|
|
$ |
1,783,158 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Juniper Networks, Inc. |
|
| Reconciliation between GAAP and non-GAAP Financial Measures |
|
| (in thousands, except percentages) |
|
| (unaudited) |
|
| |
|
| |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
| |
|
|
|
December 31, |
|
|
December 31, |
|
| |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
| GAAP Operating income |
|
|
|
$ |
133,185 |
|
|
$ |
226,798 |
|
|
$ |
618,524 |
|
|
$ |
767,584 |
|
| Share-based compensation expense |
|
C |
|
|
52,525 |
|
|
|
52,402 |
|
|
|
222,158 |
|
|
|
181,957 |
|
| Share-based compensation related payroll tax |
|
C |
|
|
83 |
|
|
|
2,537 |
|
|
|
9,246 |
|
|
|
6,433 |
|
| Amortization of purchased intangible assets |
|
A |
|
|
6,920 |
|
|
|
3,526 |
|
|
|
27,133 |
|
|
|
8,531 |
|
| Restructuring and other charges |
|
B |
|
|
15,014 |
|
|
|
2,255 |
|
|
|
30,564 |
|
|
|
10,805 |
|
| Acquisition-related and other charges |
|
A,B |
|
|
350 |
| |
|
4,276 |
|
|
|
9,641 |
|
|
|
6,342 |
|
| Non-GAAP Operating income |
|
|
|
|
208,077 |
|
|
|
291,794 |
|
|
|
917,266 |
|
|
|
981,652 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Operating margin |
|
|
|
|
11.9 |
% |
|
|
19.1 |
% |
|
|
13.9 |
% |
|
|
18.8 |
% |
| Share-based compensation expense as a % of revenue |
|
C |
|
|
4.7 |
% |
|
|
4.3 |
% |
|
|
5.0 |
% |
|
|
4.3 |
% |
| Share-based compensation related payroll tax as a % of revenue |
|
C |
|
|
- |
% |
|
|
0.2 |
% |
|
|
0.2 |
% |
|
|
0.2 |
% |
| Amortization of purchased intangible assets as a % of revenue |
|
A |
|
|
0.7 |
% |
|
|
0.3 |
% |
|
|
0.6 |
% | |
|
0.2 |
% |
| Restructuring and other charges as a % of revenue |
|
B |
|
|
1.3 |
% |
|
|
0.2 |
% |
|
|
0.7 |
% |
|
|
0.3 |
% |
| Acquisition-related and other charges as a % of revenue |
|
A,B |
|
|
- |
% |
|
|
0.4 |
% |
|
|
0.2 |
% |
|
|
0.2 |
% |
| Non-GAAP Operating margin |
|
|
|
|
18.6 |
% |
|
|
24.5 |
% |
|
|
20.6 |
% |
|
|
24.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Other (expense) income, net |
|
E |
|
|
(10,701 |
) |
|
|
4,841 |
|
|
|
(46,808 |
) |
|
|
10,570 |
|
| (Gain)/loss on equity investments |
|
B |
|
|
(656 |
) |
|
|
(5,421 |
) |
|
|
326 |
|
|
|
(8,653 |
) |
| Non-GAAP Other (expense) income, net |
|
E |
|
|
(11,357 |
) |
|
|
(580 |
) |
|
|
(46,482 |
) |
|
|
1,917 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Income tax provision |
|
|
|
|
26,321 |
|
|
|
41,556 |
|
|
|
146,704 |
|
|
|
158,781 |
|
| Non-recurring income tax adjustment |
|
B |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
54,069 |
|
| Income tax effect of non-GAAP exclusions |
|
B |
|
|
20,282 |
|
|
|
21,219 |
|
|
|
79,579 |
|
|
|
59,258 |
|
| Non-GAAP Provision for income tax |
|
|
|
|
46,603 |
|
|
|
62,775 |
|
|
|
226,283 |
|
|
|
272,108 |
|
| Non-GAAP Income tax rate |
| |
|
|
23.7 |
% |
|
|
21.6 |
% |
|
|
26.0 |
% |
|
|
27.7 |
% |
| Non-GAAP Income before income taxes and noncontrolling interest* |
|
|
|
$ |
196,720 |
|
|
$ |
291,214 |
|
|
$ |
870,784 |
|
|
$ |
983,569 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| *Consists of non-GAAP operating income plus non-GAAP net other income and expense. |
| |
| |
| |
| Juniper Networks, Inc. |
|
| Reconciliation between GAAP and non-GAAP Financial Measures |
|
| (in thousands, except per share amounts and percentages) |
|
| (unaudited) |
|
| |
|
| |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
| |
|
|
|
December 31, |
|
|
December 31, |
|
| |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
| GAAP Net income attributable to Juniper Networks |
|
|
|
$ |
96,163 |
|
|
$ |
190,233 |
|
|
$ |
425,136 |
|
|
$ |
618,402 |
|
| Share-based compensation expense |
| C |
|
|
52,525 |
|
|
|
52,402 |
|
|
|
222,158 |
|
|
|
181,957 |
|
| Share-based compensation related payroll tax |
|
C |
|
|
83 |
|
|
|
2,537 |
|
|
|
9,246 |
|
|
|
6,433 |
|
| Amortization of purchased intangible assets |
|
A |
|
|
6,920 |
|
|
|
3,526 |
|
|
|
27,133 |
|
|
|
8,531 |
|
| Restructuring and other charges |
|
B |
|
|
15,014 |
|
|
|
2,255 |
|
|
|
30,564 |
|
|
|
10,805 |
|
| Acquisition-related and other charges |
|
A,B |
|
|
350 |
|
|
|
4,276 |
|
|
|
9,641 |
|
|
|
6,342 |
|
| (Gain)/loss on equity investments |
|
B |
|
|
(656 |
) |
|
|
(5,421 |
) |
|
|
326 |
|
|
|
(8,653 |
) |
| Non-recurring income tax adjustments |
|
B |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
(54,069 |
) |
| Income tax effect of non-GAAP exclusions |
|
B |
|
|
(20,282 |
) |
|
|
(21,219 |
) |
|
|
(79,579 |
) |
|
|
(59,258 |
) |
| Non-GAAP Net income |
|
|
|
$ |
150,117 |
|
|
$ |
228,589 |
|
|
$ |
644,625 |
|
|
$ |
710,490 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
D |
|
$ |
0.29 |
|
|
$ |
0.44 |
|
|
$ |
1.22 |
|
|
$ |
1.36 |
|
| Diluted |
|
D |
|
$ |
0.28 |
|
|
$ |
0.42 |
|
|
$ |
1.19 |
|
|
$ | 1.32 |
|
| Shares used in computing non-GAAP net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
D |
|
|
526,124 |
|
|
|
523,556 |
|
|
|
529,768 |
|
|
|
522,444 |
|
| Diluted |
|
D |
|
|
533,335 |
|
|
|
541,464 |
|
|
|
541,417 |
|
|
|
538,790 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Net income attributable to Juniper Networks as a % of revenue |
|
|
|
|
8.6 |
% |
|
|
16.0 |
% |
|
|
9.6 |
% |
|
|
15.1 |
% |
| Share-based compensation expense as a % of revenue |
|
C |
|
|
4.7 |
% |
|
|
4.4 |
% |
|
|
5.0 |
% |
|
|
4.4 |
% |
| Share-based compensation related payroll tax as a % of revenue |
|
C | |
|
- |
% |
|
|
0.2 |
% |
|
|
0.2 |
% |
|
|
0.2 |
% |
| Amortization of purchased intangible assets as a % of revenue |
|
A |
|
|
0.7 |
% |
|
|
0.3 |
% |
|
|
0.6 |
% |
|
|
0.2 |
% |
| Restructuring and other charges as a % of revenue |
|
B |
|
|
1.3 |
% |
|
|
0.2 |
% |
|
|
0.7 |
% |
|
|
0.3 |
% |
| Acquisition-related and other charges as a % of revenue |
|
A,B |
|
|
- |
% |
|
|
0.4 |
% |
|
|
0.2 |
% |
|
|
0.2 |
% |
| (Gain)/loss on equity investments |
|
B |
|
|
(0.1 |
)% |
|
|
(0.5 |
)% |
|
|
- |
% |
|
|
(0.2 |
)% |
| Non-recurring income tax adjustments as a % of revenue |
|
B |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
|
|
(1.3 |
)% |
| Income tax effect of non-GAAP exclusions as a % of revenue |
|
B |
|
|
(1.8 |
)% |
|
|
(1.8 |
)% |
|
|
(1.8 |
)% | |
|
(1.5 |
)% |
| Non-GAAP Net income as a % of revenue |
|
|
|
|
13.4 |
% |
|
|
19.2 |
% |
|
|
14.5 |
% |
|
|
17.4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discussion of Non-GAAP Financial Measures
The table above includes the following non-GAAP financial measures derived from our Preliminary Condensed Consolidated Statements of Operations: cost of product revenue; cost of service revenue; product gross margin; product gross margin as a percentage of product revenue; service gross margin; service gross margin as a percentage of service revenue; gross margin; gross margin as a percentage of revenue; research and development expense; sales and marketing expense; general and administrative expense; operating expense; operating income; operating margin; other income and expense, net; income before income taxes and noncontrolling interest; provision for income taxes; income tax rate; net income; net income per share and net income as a percentage of revenue. These measures are not presented in accordance with, nor are they a substitute for U.S. generally accepted accounting principles or GAAP. In addition, these measures may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes. The non-GAAP financial measures used in the table above should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future.
We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures presented above to be helpful in assessing the performance of the continuing operation of our business. By continuing operations we mean the ongoing revenue and expenses of the business excluding certain items that render comparisons with prior periods or analysis of on-going operating trends more difficult, such as expenses not directly related to the actual cash costs of development, sale, delivery or support of our products and services, or expenses that are reflected in periods unrelated to when the actual amounts were incurred or paid. Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides such readers with useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. In addition, we have historically reported non-GAAP results to the investment community and believe that continuing to provide non-GAAP measures provides investors with a tool for comparing results over time. In assessing the overall health of our business for the periods covered by the table above and, in particular, in evaluating the financial line items presented in the table above, we have excluded items in the following three general categories, each of which are described below: Acquisition-Related Charges, Other Items, and Share-Based Compensation Related Items. We also provide additional detail below regarding the shares used to calculate our non-GAAP net income per share. Notes identified for line items in the table above correspond to the appropriate note description below. Additionally, with respect to future financial guidance provided on a non-GAAP basis, we have excluded estimates for amortization of intangible assets, share based compensation expenses, acquisition related charges, restructuring charges, litigation settlement charges, gain or loss on equity investments, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and income tax effect of non-GAAP exclusions.
Note A: Acquisition-Related Charges. We exclude certain expense items resulting from acquisitions including the following, when applicable: (i) amortization of purchased intangible assets associated with our acquisitions; (ii) compensation related to acquisitions; and (iii) acquisition-related charges. The amortization of purchased intangible assets associated with our acquisitions results in our recording expenses in our GAAP financial statements that were already expensed by the acquired company before the acquisition and for which we have not expended cash. Moreover, had we internally developed the products acquired, the amortization of intangible assets, and the expenses of uncompleted research and development would have been expensed in prior periods. Accordingly, we analyze the performance of our operations in each period without regard to such expenses. In addition, acquisitions result in non-continuing operating expenses, which would not otherwise have been incurred by us in the normal course of our business operations. For example, we have incurred deferred compensation charges related to assumed options and transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees. We believe that providing non-GAAP information for acquisition-related expense items in addition to the corresponding GAAP information allows the users of our financial statements to better review and understand the historic and current results of our continuing operations, and also facilitates comparisons to less