Juniper Networks Reports Preliminary Third Quarter 2015

Juniper Networks Reports Preliminary Third Quarter 2015 Financial Results

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. The following tables and reconciliations can also be found on our Investor Relations website at http://investor.juniper.net.

Juniper Networks, Inc.
Preliminary Condensed Consolidated Statements of Operations
(in millions, except per share amounts)
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net revenues:
Product	$	925.4		$	809.5		$	2,589.2		$	2,614.7
Service	323.2			316.4			949.0			910.8
Total net revenues	1,248.6			1,125.9			3,538.2			3,525.5
Cost of revenues:
Product	322.6			290.0			923.1			975.9
Service	128.6			121.1			378.9			366.5
Total cost of revenues	451.2			411.1			1,302.0			1,342.4
Gross margin	797.4			714.8			2,236.2			2,183.1
Operating expenses:
Research and development	247.0			253.2			747.3			772.7
Sales and marketing	235.3			249.2			687.9			780.6
General and administrative	57.1			55.0			168.6			190.5
Restructuring and other (benefits) charges	—			(15.0		)	(0.5		)	157.2
Total operating expenses	539.4			542.4			1,603.3			1,901.0
Operating income	258.0			172.4			632.9			282.1
Other (expense) income, net	(8.4		)	(6.8		)	(41.3		)	326.0
Income before income taxes	249.6			165.6			591.6			608.1
Income tax provision	51.9			62.0			155.7			172.8
Net income	$	197.7		$	103.6		$	435.9		$	435.3

Net income per share:
Basic	$	0.52		$	0.23		$	1.11		$	0.93
Diluted	$	0.51		$	0.23		$	1.09		$	0.91
Shares used in computing net income per share:
Basic	382.8			448.4			393.2			468.1
Diluted	389.2			454.8			401.2			477.0
Cash dividends declared per common stock	$	0.10		$	0.10		$	0.30		$	0.10

Juniper Networks, Inc.
Preliminary Net Revenues by Product and Service
(in millions)
(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Routing	$	604.4	$	533.2	$	1,711.6	$	1,700.8
Switching	201.4		155.0		558.1		546.8
Security	119.6		121.3		319.5		367.1
Total product	925.4		809.5		2,589.2		2,614.7

Total service	323.2		316.4		949.0		910.8
Total	$	1,248.6	$	1,125.9	$	3,538.2	$	3,525.5

Juniper Networks, Inc.
Preliminary Net Revenues by Geographic Region
(in millions)
(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Americas	$	712.8	$	678.3	$	2,037.6	$	2,070.8
Europe, Middle East, and Africa	355.0		290.5		975.1		911.0
Asia Pacific	180.8		157.1		525.5		543.7
Total	$	1,248.6	$	1,125.9	$	3,538.2	$	3,525.5

Juniper Networks, Inc.
Preliminary Net Revenues by Market
(in millions)
(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Service Provider	$	804.3	$	741.5	$	2,356.6	$	2,356.0
Enterprise	444.3		384.4		1,181.6		1,169.5
Total	$	1,248.6	$	1,125.9	$	3,538.2	$	3,525.5

Juniper Networks, Inc.
Reconciliation between GAAP and non-GAAP Financial Measures
(in millions, except percentages and per share amounts)
(unaudited)

		Three Months Ended
		September 30,			June 30,			September 30,
		2015			2015			2014
GAAP operating income		$	258.0		$	243.1		$	172.4
GAAP operating margin		20.7		%	19.9		%	15.3		%
Share-based compensation expense	C	56.5			58.9			65.3
Share-based payroll tax expense	C	0.7			2.0			2.3
Amortization of purchased intangible assets	A	5.6			5.6			8.5
Restructuring and other benefits	B	(3.5		)	(1.9		)	(15.0		)
Memory-related, supplier component remediation charge	B	—			—			7.0
Divestiture-related charges	B	—			—			1.0
Other	B	0.5			0.5			—
Non-GAAP operating income		$	317.8		$	308.2		$	241.5
Non-GAAP operating margin		25.5		%	25.2		%	21.5		%

GAAP net income		$	197.7		$	158.0		$	103.6
Share-based compensation expense	C	56.5			58.9			65.3
Share-based payroll tax expense	C	0.7			2.0			2.3
Amortization of purchased intangible assets	A	5.6			5.6			8.5
Restructuring and other benefits	B	(3.5		)	(1.9		)	(15.0		)
Memory-related, supplier component remediation charge	B	—			—			7.0
Divestiture-related charges	B	—			—			1.0
(Gain) loss on equity investments	B	(7.3		)	—			1.6
Gain on legal/contract settlement, net	B	(4.0		)	—			(10.8		)
Income tax effect of non-GAAP exclusions	B	(22.4		)	(10.8		)	0.8
Other	B	(1.6		)	(3.0		)	1.1
Non-GAAP net income		$	221.7		$	208.8		$	165.4
GAAP diluted net income per share		$	0.51		$	0.40		$	0.23
Non-GAAP diluted net income per share	D	$	0.57		$	0.53		$	0.36
Shares used in computing diluted net income per share		389.2			397.2			454.8

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