Juniper Networks (NYSE: JNPR), the industry leader in network
innovation, today reported preliminary financial results for the
three months and twelve months ended December 31, 2014 and provided
its outlook for the three months ending March 31, 2015.
Q4 2014 Results:
Net revenues for the fourth quarter of 2014 decreased 14%
year-over-year and decreased 2% sequentially to $1,102 million
(normalized for Junos Pulse sale: decrease of 11% year-over-year
and a sequential increase of 1%).
During the quarter, the Company recorded an estimated $850
million non-cash goodwill impairment charge related to its security
reporting unit. As a result, the company recorded a GAAP net loss
of $769.6 million. Excluding this impairment charge, net income
would have been $80.4 million or $0.19 per share for the fourth
quarter of 2014, inclusive of a $0.07 impact from restructuring and
other charges, a $0.04 benefit from the renewal of the R&D tax
credit and a $0.05 benefit from the gain on the sale of Junos
Pulse.
Juniper’s operating margin for the fourth quarter of 2014
excluding the non-cash goodwill impairment decreased to 13.5% on a
GAAP basis, including a $29 million impact from restructuring and
other charges. Excluding these items the GAAP operating margin for
Q4 2014 would have been 16.1%, an increase from 15.3% in both the
third quarter of 2014 and the fourth quarter of 2013.
Non-GAAP operating margin for the fourth quarter of 2014
increased to 21.9% from 21.5% in the third quarter of 2014, and was
equal to the fourth quarter of 2013.
Non-GAAP net income was $179.3 million, or $0.41 per diluted
share for the fourth quarter of 2014. Non-GAAP net income per
diluted share increased 14% compared to the third quarter of 2014,
and decreased 5% compared to the fourth quarter of 2013.
Full Year 2014 Results:
For the year ended December 31, 2014, Juniper’s net revenues
decreased 1% on a year-over-year basis to $4,627 million
(normalized for Junos Pulse sale: revenues were essentially equal
year-over-year).
For fiscal year 2014, Juniper’s GAAP operating margin was
(9.1%). Excluding the non-cash goodwill impairment it decreased to
9.3% on a GAAP basis, including a $209 million impact from
restructuring and other charges. Excluding these items the GAAP
operating margin would have been 13.8%, compared to 12.1% for the
prior fiscal year.
Non-GAAP operating margin for fiscal year 2014 was 20.7%,
compared to 19.2% in fiscal year 2013.
For the year ended December 31, 2014, Juniper posted a GAAP net
loss of $334.3 million, which includes an estimated $850 million
impact from a non-cash goodwill impairment charge. Excluding this
impairment, net income would have been $515.7 million or $1.11 per
share for the year ended 2014, inclusive of a $0.45 impact from
restructuring and other charges, a $0.04 benefit from the renewal
of the R&D tax credit and a $0.04 benefit from the gain on the
sale of Junos Pulse.
Non-GAAP net income was $677.6 million, or $1.45 per diluted
share for fiscal year 2014. Non-GAAP net income per diluted share
for the year ended December 31, 2014 increased 13% on a
year-over-year basis.
The reconciliation between GAAP and non-GAAP results of
operations is provided in a table immediately following the
Preliminary Net Revenues by Market table below.
“2014 was a year of change for Juniper and I’m pleased with the
solid progress we made as we successfully streamlined our
organization, reduced costs, increased capital returns to our
shareholders and sharpened our focus on the fastest growing
segments of the market,” said Rami Rahim, chief executive officer
at Juniper Networks. “While we recognize that we have more work to
do to realize Juniper’s full potential, we’re energized as we enter
2015. Our customers and partners across our key verticals view
network innovation as fundamental to their business, and with a
strong innovation pipeline, we are confident in Juniper’s future
and see substantial opportunities to grow and deliver value in the
long term.”
“Despite the impact of a challenging near-term revenue
environment, we delivered improvements across key operational
metrics for both Q4 and the full year of 2014,” said Robyn Denholm,
chief financial and operations officer at Juniper Networks. “In
2015, our focus remains on improved execution, cost discipline and
our targeted growth initiatives in order to drive profitable growth
and long-term value for our shareholders. While we recorded a
non-cash goodwill impairment charge for our security reporting unit
during the quarter, it has no direct effect on our cash balance,
operating cash flows or business outlook. We remain relentlessly
focused on operational excellence as well as returning capital to
shareholders.”
Goodwill Impairment Charge
During the fourth quarter, the Company recorded a non-cash
goodwill impairment charge estimated at $850 million. Several
factors contributed to this impairment, including the continued
underperformance of the security reporting unit in 2014 as well as
the change in the Company’s security strategy and product
rationalizations. This amount represents Juniper’s preliminary
estimate of the impairment charge. As the Company finalizes its
reviews of the impairment analysis, adjustments to the estimated
goodwill impairment charge may be recorded.
Other Financial Highlights
Total cash, cash equivalents, and investments as of December 31,
2014 were $3,105 million, compared to $3,321 million as of
September 30, 2014, and $4,098 million as of December 31, 2013.
Juniper’s net cash flow from operations for the fourth quarter
of 2014 was $291 million, compared to $(79) million in the third
quarter of 2014, and $394 million in the fourth quarter of 2013.
For the year ended December 31, 2014, Juniper generated net cash
from operations of $763 million, compared to $846 million in
2013.
Days sales outstanding in accounts receivable or “DSO” was 49
days in the fourth quarter of 2014, compared to 49 days in the
prior quarter, and 41 days in the fourth quarter of 2013.
Capital expenditures were $52 million and depreciation and
amortization of intangible assets expense was $43 million during
the fourth quarter of 2014. During fiscal year 2014, capital
expenditures, as well as depreciation and amortization of
intangible assets expense, were $193 million and $178 million,
respectively.
Juniper’s Board of Directors has declared a quarterly cash
dividend of $0.10 per share to be paid on March 24, 2015 to
shareholders of record as of the close of business on March 3,
2015.
During the fourth quarter of 2014, the Company repurchased $500
million of common stock against its commitment to repurchase $1.5
billion by the end of Q2’15 and is committed to returning a total
of $4.1 billion through 2016. For the year ended December 31, 2014,
the Company repurchased 96.1 million shares, at an average share
price of $23.41 per share, for a total of $2.25 billion.
Outlook
The Company sees the long-term demand drivers for networking as
healthy and is confident in its innovation pipeline. However,
Juniper continues to expect the overall revenue environment to be
challenging throughout the first half of 2015, and as a result,
remains cautious on its revenue planning assumptions.
Juniper Networks estimates that for the quarter ending March 31,
2015:
- Revenues will be in the range of $1,020
million to $1,060 million.
- Non-GAAP gross margin will be
approximately 63.5%, plus or minus 0.5%.
- Non-GAAP operating expenses will be
$475 million, plus or minus $5 million.
- Non-GAAP operating margin will be
roughly 18% at the midpoint of revenue guidance.
- Non-GAAP net income per share will
range between $0.28 and $0.32 on a diluted basis. This assumes a
share count of 420 million and a non-GAAP tax rate of 27% for the
first quarter.
Juniper Networks estimates that for 2015:
- Non-GAAP operating expenses will be
$1,900 million, plus or minus $25 million, which is approximately
$115 million lower than the full year 2014 non-GAAP operating
expense levels.
- Capital Allocation: $1 billion of
aggregate share repurchases to be completed before the end of Q2’15
subject to Juniper raising additional debt financing.
All forward-looking non-GAAP measures exclude estimates for
amortization of intangible assets, share-based compensation
expenses, acquisition-related charges, restructuring and other
charges, impairment charges, professional services related to
non-routine stockholder matters, product quality-related
remediation charges, litigation settlement and resolution charges,
gain or loss on contract settlement, gain on the sale of Junos
Pulse, professional fees and other income and expenses associated
with the sale of Junos Pulse, gain or loss on equity investments,
retroactive impact of certain tax settlements, 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 Webcast
Juniper Networks will host a conference call webcast today,
January 27, 2015, at 2:00 pm (Pacific Standard Time), to be
broadcast live over the Internet at
http://investor.juniper.net/investor-relations/default.aspx.
To participate via telephone in the US, the toll free dial-in
number is 1-877-407-8033. Outside the US, dial +1-201-689-8033.
Please call 10 minutes prior to the scheduled conference call time.
The webcast replay will be archived on the Juniper Networks
website.
About Juniper Networks
Juniper Networks (NYSE: JNPR) delivers innovation across
routing, switching and security. From the network core down to
consumer devices, Juniper Networks’ innovations in software,
silicon and systems transform the experience and economics of
networking. Additional information can be found at Juniper Networks
(www.juniper.net) or connect with Juniper on Twitter and
Facebook.
Juniper Networks and Junos, are registered trademarks of Juniper
Networks, Inc. in the United States and other countries. The
Juniper Networks logo and the Junos logo are trademarks of Juniper
Networks, Inc. All other trademarks, service marks, registered
trademarks, or registered service marks are the property of their
respective owners.
Safe Harbor
Statements in this release concerning Juniper Networks' business
outlook, economic and market outlook, future financial and
operating results, capital return program, the expected amount of
the Company’s impairment charge, 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 and political
conditions globally or regionally; business and economic conditions
in the networking industry; changes in overall technology spending
and spending by communication service providers and major
customers; 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 settlements and resolutions; the
potential impact of activities related to the execution of capital
return and product rationalization; 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. The following
tables and reconciliations can also be found on our Investor
Relations website at
http://investor.juniper.net/investor-relations/default.aspx.
Juniper Networks, Inc.
Preliminary Condensed Consolidated
Statements of Operations
(in millions, except per share
amounts)
(unaudited)
Three Months Ended December 31, Twelve Months
Ended December 31, 2014 2013
2014 2013 Net revenues: Product
$ 794.0 $ 973.5 $ 3,408.7 $ 3,519.9 Service 307.6 300.1
1,218.4 1,149.2 Total net revenues 1,101.6
1,273.6 4,627.1 4,669.1 Cost of revenues: Product 310.9 351.6
1,286.8 1,276.6 Service 115.6 118.4 482.1
451.1 Total cost of revenues 426.5 470.0
1,768.9 1,727.7 Gross margin 675.1 803.6 2,858.2
2,941.4 Operating expenses: Research and development 233.5 258.7
1,006.2 1,043.2 Sales and marketing 243.0 283.2 1,023.6 1,075.9
General and administrative 40.6 48.2 231.1 217.3 Restructuring and
other charges 9.8 18.1 167.0 39.1 Impairment of goodwill 850.0
— 850.0 — Total operating expenses
1,376.9 608.2 3,277.9 2,375.5 Operating
(loss) income (701.8 ) 195.4 (419.7 ) 565.9 Other income (expense),
net 7.4 (10.2 ) 333.4 (40.4 ) (Loss) income before
income taxes (694.4 ) 185.2 (86.3 ) 525.5 Income tax provision 75.2
33.4 248.0 85.7 Net (loss) income $
(769.6 ) $ 151.8 $ (334.3 ) $ 439.8 Net (loss)
income per share: Basic $ (1.81 ) $ 0.30 $ (0.73 ) $ 0.88
Diluted $ (1.81 ) $ 0.30 $ (0.73 ) $ 0.86
Shares used in computing net income per share: Basic 426.1
498.2 457.4 501.8 Diluted 426.1 505.6
457.4 510.3 Cash dividends declared per common
stock $ 0.10 $ — $ 0.20 $ —
Juniper Networks, Inc.
Preliminary Net Revenues by Product and
Service
(in millions)
(unaudited)
Three Months Ended December 31, Twelve Months
Ended December 31, 2014 2013
2014 2013 Routing $ 523.1 $
617.8 $ 2,223.9 $ 2,318.0 Switching 174.4 198.7 721.2 638.0
Security 96.5 157.0 463.6 563.9 Total product
794.0 973.5 3,408.7 3,519.9 Total service 307.6 300.1
1,218.4 1,149.2 Total $ 1,101.6 $ 1,273.6
$ 4,627.1 $ 4,669.1
Juniper Networks, Inc.
Preliminary Net Revenues by Geographic
Region
(in millions)
(unaudited)
Three Months Ended December 31, Twelve Months
Ended December 31, 2014 2013
2014 2013 Americas $ 559.5 $
685.0 $ 2,630.3 $ 2,613.5 Europe, Middle East, and Africa
352.3 358.9 1,263.3 1,256.9 Asia Pacific 189.8 229.7
733.5 798.7 Total $ 1,101.6 $ 1,273.6 $
4,627.1 $ 4,669.1
Juniper Networks, Inc.
Preliminary Net Revenues by
Market
(in millions)
(unaudited)
Three Months Ended December 31, Twelve Months
Ended December 31, 2014 2013
2014 2013 Service Provider $ 744.4
$ 827.0 $ 3,100.4 $ 3,054.2 Enterprise 357.2
446.6 1,526.7 1,614.9 Total $ 1,101.6 $
1,273.6 $ 4,627.1 $ 4,669.1
Juniper Networks, Inc.
Reconciliation between GAAP and
non-GAAP Financial Measures
(in millions, except percentages and per
share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, 2014
September 30, 2014
December 31, 2013
December 31, 2014
December 31, 2013
GAAP operating (loss) income $ (701.8 ) $ 172.4 $ 195.4 $ (419.7 )
$ 565.9 GAAP operating margin (63.7 )% 15.3 % 15.3 % (9.1 )% 12.1 %
Share-based compensation expense C 54.6 65.3 63.9 240.0 244.6
Share-based payroll tax expense C 1.1 2.3 0.6 13.1 5.1 Amortization
of purchased intangible assets A 8.5 8.5 9.1 36.3 31.9
Restructuring and other charges (credit) B 29.2 (15.0 ) 18.9 208.6
47.5 Impairment of goodwill B 850.0 — — 850.0 — Memory-related,
supplier component remediation charge B — 7.0 — 20.7 —
Acquisition/divestiture-related charges A,B — 1.0 0.7 1.7 0.9
Professional services related to non-routine stockholder matters B
— — — 7.7 — Litigation charge B — — (10.3 ) —
— Non-GAAP operating income $ 241.6 $ 241.5 $ 278.3 $ 958.4
$ 895.9 Non-GAAP operating margin 21.9 % 21.5 % 21.9 % 20.7 % 19.2
% GAAP net (loss) income $ (769.6 ) $ 103.6 $ 151.8 $ (334.3
) $ 439.8 Share-based compensation expense C 54.6 65.3 63.9 240.0
244.6 Share-based payroll tax expense C 1.1 2.3 0.6 13.1 5.1
Amortization of purchased intangible assets A 8.5 8.5 9.1 36.3 31.9
Restructuring and other charges (credit) B 29.2 (15.0 ) 18.9 208.6
47.5 Impairment of goodwill B 850.0 — — 850.0 — Memory-related,
supplier component remediation charge B — 7.0 — 20.7 —
Acquisition/divestiture-related charges A,B — 1.0 0.7 1.7 0.9
Professional services related to non-routine stockholder matters B
— — — 7.7 — Litigation charge B — — (10.3 ) — — (Gain) loss on
equity investments B (0.6 ) 1.6 (2.4 ) (163.0 ) (8.2 ) Gain on
legal/contract settlement, net B — (10.8 ) — (206.1 ) — Gain on
sale of Junos Pulse B (19.6 ) — — (19.6 ) — Other B (2.0 ) 1.1 —
(0.9 ) — Income tax effect of non-GAAP exclusions B 27.7 0.8
(16.5 ) 23.4 (107.6 ) Non-GAAP net income $ 179.3
$ 165.4 $ 215.8 $ 677.6 $ 654.0
GAAP diluted net (loss) income per share $ (1.81 ) $ 0.23 $
0.30 $ (0.73 ) $ 0.86 Non-GAAP diluted net income per
share D $ 0.41 $ 0.36 $ 0.43 $ 1.45 $
1.28 Shares used in computing GAAP diluted net (loss) income
per share 426.1 454.8 505.6 457.4 510.3
Shares used in computing Non-GAAP diluted net income per
share 432.4 454.8 505.6 466.4 510.3
Discussion of Non-GAAP Financial Measures
This press release, including the tables above and below,
includes the following non-GAAP financial measures derived from our
Preliminary Condensed Consolidated Statements of Operations:
operating income; operating margin; net income; and net income per
share. 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
and other charges, impairment charges, professional services
related to non-routine stockholder matters, product quality-related
remediation charges, litigation settlement and resolution charges,
gain or loss on contract settlement, gain on the sale of Junos
Pulse, gain or loss on equity investments, retroactive impact of
certain tax settlements, 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; and (ii) 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. 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 acquisitive peer companies.
Note B: Other Items. We exclude
certain other items that are the result of either unique or
unplanned events including the following, when applicable: (i)
restructuring and other (credit) charges; (ii) impairment charges;
(iii) gain or loss on legal settlement, net of related transaction
costs; (iv) gain or loss on contract settlement; (v) gain on the
sale of Junos Pulse, professional fees and other income and
expenses associated with the sale of Junos Pulse; (vi) gain or loss
on equity investments; (vii) retroactive impacts of certain tax
settlements; (viii) non-recurring income tax adjustments; (ix)
valuation allowance on deferred tax assets (x) the income tax
effect on our financial statements of excluding items related to
our non-GAAP financial measures; (xi) professional services related
to non-routine stockholder matters; and (xii) memory-related,
supplier component remediation charge. It is difficult to estimate
the amount or timing of these items in advance. Restructuring and
impairment charges result from events, which arise from unforeseen
circumstances, which often occur outside of the ordinary course of
continuing operations. Although these events are reflected in our
GAAP financials, these unique transactions may limit the
comparability of our on-going operations with prior and future
periods. In the case of legal settlements, these gains or losses
are recorded in the period in which the matter is concluded or
resolved even though the subject matter of the underlying dispute
may relate to multiple or different periods. As such, we believe
that these expenses do not accurately reflect the underlying
performance of our continuing operations for the period in which
they are incurred. Similarly, the significant effects of
retroactive tax legislation are unique events that occur in periods
that are generally unrelated to the level of business activity to
which such settlement or legislation applies. We believe this
limits comparability with prior periods and that these expenses do
not accurately reflect the underlying performance of our continuing
business operations for the period in which they are incurred.
Whether we realize gains or losses on equity investments is based
primarily on the performance and market value of those independent
companies. Accordingly, we believe that these gains and losses do
not reflect the underlying performance of our continuing
operations. We also believe providing financial information with
and without the income tax effect of excluding items related to our
non-GAAP financial measures provide our management and users of the
financial statements with better clarity regarding the on-going
performance and future liquidity of our business. Because of these
factors, we assess our operating performance both with these
amounts included and excluded, and by providing this information,
we believe the users of our financial statements are better able to
understand the financial results of what we consider our continuing
operations.
Note C: Share-Based Compensation Related
Items. We provide non-GAAP information relative to our
expense for share-based compensation and related payroll tax. We
began to include share-based compensation expense in our GAAP
financial measures in accordance with Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Topic 718, Compensation - Stock Compensation (“FASB ASC Topic
718”), in January 2006. Because of varying available valuation
methodologies, subjective assumptions and the variety of award
types, which affect the calculations of share-based compensation,
we believe that the exclusion of share-based compensation allows
for more accurate comparisons of our operating results to our peer
companies. Further, we believe that excluding share-based
compensation expense allows for a more accurate comparison of our
financial results to previous periods during which our equity-based
awards were not required to be reflected in our income statement.
Share-based compensation is very different from other forms of
compensation. A cash salary or bonus has a fixed and unvarying cash
cost. For example, the expense associated with a $10,000 bonus is
equal to exactly $10,000 in cash regardless of when it is awarded
and who it is awarded by. In contrast, the expense associated with
an award of an option for 1,000 shares of share is unrelated to the
amount of compensation ultimately received by the employee; and the
cost to the company is based on a share-based compensation
valuation methodology and underlying assumptions that may vary over
time and that does not reflect any cash expenditure by the company
because no cash is expended. Furthermore, the expense associated
with granting an employee an option is spread over multiple years
unlike other compensation expenses which are more proximate to the
time of award or payment. For example, we may be recognizing
expense in a year where the stock option is significantly
underwater and is not going to be exercised or generate any
compensation for the employee. The expense associated with an award
of an option for 1,000 shares of stock by us in one quarter may
have a very different expense than an award of an identical number
of shares in a different quarter. Finally, the expense recognized
by us for such an option may be very different than the expense to
other companies for awarding a comparable option, which makes it
difficult to assess our operating performance relative to our
competitors. Similar to share-based compensation, payroll tax on
stock option exercises is dependent on our stock price and the
timing and exercise by employees of our share-based compensation,
over which our management has little control, and as such does not
correlate to the operation of our business. Because of these unique
characteristics of share-based compensation and the related payroll
tax, management excludes these expenses when analyzing the
organization's business performance. We also believe that
presentation of such non-GAAP information is important to enable
readers of our financial statements to compare current period
results with periods prior to the adoption of FASB ASC Topic
718.
Note D: Non-GAAP Net Income Per Share
Items. We provide diluted non-GAAP net income per share. The
diluted non-GAAP income per share includes additional dilution from
potential issuance of common stock, except when such issuances
would be anti-dilutive.
Juniper Networks, Inc.
Preliminary Condensed Consolidated
Balance Sheets
(in millions)
(unaudited)
December 31, 2014 December 31,
2013 ASSETS Current assets: Cash and cash equivalents
$ 1,639.6 $ 2,284.0 Short-term investments 332.2 561.9 Accounts
receivable, net of allowances 598.9 578.3 Deferred tax assets, net
147.0 79.8 Prepaid expenses and other current assets 254.2
199.9 Total current assets 2,971.9 3,703.9 Property and equipment,
net 904.3 882.3 Long-term investments 1,133.1 1,251.9 Restricted
cash and investments 46.0 89.5 Purchased intangible assets, net
62.4 106.9 Goodwill 2,981.5 4,057.7 Other long-term assets 303.9
233.8 Total assets $ 8,403.1 $ 10,326.0
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 234.6 $ 200.4 Accrued compensation 225.0 273.9
Deferred revenue 780.8 705.8 Other accrued liabilities 287.3
261.3 Total current liabilities 1,527.7 1,441.4 Long-term debt
1,349.0 999.3 Long-term deferred revenue 294.9 363.5 Long-term
income taxes payable 177.5 114.4 Other long-term liabilities 134.9
105.2 Total liabilities 3,484.0 3,023.8 Total stockholders'
equity 4,919.1 7,302.2 Total liabilities and stockholders'
equity $ 8,403.1 $ 10,326.0
Juniper Networks, Inc.
Preliminary Condensed Consolidated
Statements of Cash Flows
(in millions)
(unaudited)
Twelve Months Ended December 31, 2014
2013 Cash flows from operating
activities: Net (loss) income $ (334.3 ) $ 439.8 Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
Share-based compensation expense 240.0 244.6 Depreciation,
amortization, and accretion 186.1 189.9 Restructuring and other
charges 208.5 47.5 Deferred income taxes (16.9 ) 72.2 Impairment of
goodwill 850.0 — Gain on sale of Junos Pulse (19.6 ) — Gain on
investments, net (167.9 ) (11.3 ) Gain on legal settlement, net
(121.1 ) — Excess tax benefits from share-based compensation (9.4 )
(1.9 ) Loss on disposal of fixed assets 1.7 1.4 Changes in
operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net (16.8 ) (139.9 ) Prepaid expenses and
other assets (24.5 ) (126.0 ) Accounts payable 38.3 (8.9 ) Accrued
compensation (46.0 ) (5.4 ) Income taxes payable 51.0 (38.5 ) Other
accrued liabilities (100.8 ) 36.5 Deferred revenue 45.1
145.9 Net cash provided by operating activities 763.4
845.9
Cash flows from investing activities: Purchases
of property and equipment (192.9 ) (230.0 ) Proceeds from sale of
Junos Pulse 105.7 — Purchases of available-for-sale investments
(2,440.7 ) (1,776.0 ) Proceeds from sales of available-for-sale
investments 2,627.7 1,167.2 Proceeds from maturities of
available-for-sale investments 337.6 334.6 Purchases of trading
investments (4.1 ) (3.7 ) Proceeds from sales of privately-held
investments 4.9 9.4 Purchases of privately-held investments (21.7 )
(41.3 ) Payments for business acquisitions, net of cash and cash
equivalents acquired (27.1 ) (10.0 ) Purchase of licensed software
— (10.0 ) Changes in restricted cash 44.6 (1.2 ) Net cash
provided by (used in) investing activities 434.0 (561.0 )
Cash flows from financing activities: Proceeds from issuance
of common stock 159.8 141.7 Purchases and retirement of common
stock (2,262.5 ) (577.8 ) Issuance of long-term debt, net 346.5 —
Payment for capital lease obligation (0.4 ) (1.4 ) Customer
financing arrangements 9.0 33.9 Excess tax benefits from
share-based compensation 9.4 1.9 Payment of cash dividends (86.0 )
— Net cash used in financing activities (1,824.2 ) (401.7 )
Effect of foreign currency exchange rates on cash and cash
equivalents (17.6 ) (7.0 ) Net decrease in cash and cash
equivalents (644.4 ) (123.8 ) Cash and cash equivalents at
beginning of period 2,284.0 2,407.8 Cash and cash
equivalents at end of period $ 1,639.6 $ 2,284.0
Juniper Networks, Inc.
Cash, Cash Equivalents, and
Investments
(in millions)
(unaudited)
December 31, 2014 December 31,
2013 Cash and cash equivalents $ 1,639.6 $ 2,284.0
Short-term investments 332.2 561.9 Long-term investments 1,133.1
1,251.9 Total $ 3,104.9 $ 4,097.8
Investor RelationsJuniper NetworksCindy Ta,
408-936-6131cta@juniper.netorMedia RelationsJuniper
NetworksDanielle Hamel, 408-936-7817dhamel@juniper.net
Juniper Networks (NYSE:JNPR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Juniper Networks (NYSE:JNPR)
Historical Stock Chart
From Apr 2023 to Apr 2024