JUNIPER NETWORKS INC, 10-Q filed on 7/30/2021
Quarterly Report
v3.21.2
Cover Page - shares
6 Months Ended
Jun. 30, 2021
Jul. 28, 2021
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2021  
Document Transition Report false  
Entity File Number 001-34501  
Entity Registrant Name JUNIPER NETWORKS, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 77-0422528  
Entity Address, Address Line One 1133 Innovation Way  
Entity Address, City or Town Sunnyvale,  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 94089  
City Area Code 408  
Local Phone Number 745-2000  
Title of 12(b) Security Common Stock, par value $0.00001 per share  
Trading Symbol JNPR  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   325,151,821
Entity Central Index Key 0001043604  
Amendment Flag false  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q2  
Current Fiscal Year End Date --12-31  
v3.21.2
Condensed Consolidated Statements of Operations - USD ($)
shares in Millions, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Total net revenues $ 1,172.3 $ 1,086.3 $ 2,246.7 $ 2,084.3
Cost of revenues:        
Total cost of revenues 490.4 466.7 949.2 885.4
Gross margin 681.9 619.6 1,297.5 1,198.9
Operating expenses:        
Research and development 245.8 241.0 500.5 473.5
Sales and marketing 257.8 224.2 510.5 463.4
General and administrative 71.0 59.1 132.1 118.4
Restructuring charges 21.6 4.8 40.9 13.7
Total operating expenses 596.2 529.1 1,184.0 1,069.0
Operating income 85.7 90.5 113.5 129.9
Loss on extinguishment of debt 0.0 0.0 (60.6) 0.0
Other expense, net (10.9) (4.4) (15.9) (15.5)
Income before income taxes 74.8 86.1 37.0 114.4
Income tax provision 12.8 24.9 6.1 32.8
Net income $ 62.0 $ 61.2 $ 30.9 $ 81.6
Net income per share:        
Basic (in dollars per share) $ 0.19 $ 0.18 $ 0.09 $ 0.25
Diluted, (in dollars per share) $ 0.19 $ 0.18 $ 0.09 $ 0.24
Weighted-average shares used to compute net income per share:        
Basic (in shares) 324.5 331.0 325.4 330.9
Diluted (in shares) 330.4 333.1 331.5 334.7
Product        
Total net revenues $ 759.2 $ 692.3 $ 1,431.6 $ 1,301.1
Cost of revenues:        
Total cost of revenues 350.4 321.7 666.9 590.7
Service        
Total net revenues 413.1 394.0 815.1 783.2
Cost of revenues:        
Total cost of revenues $ 140.0 $ 145.0 $ 282.3 $ 294.7
v3.21.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of Comprehensive Income [Abstract]        
Net income $ 62.0 $ 61.2 $ 30.9 $ 81.6
Available-for-sale debt securities:        
Change in net unrealized gains, net 1.3 8.7 0.1 5.7
Net realized (gains) and losses reclassified into net income, net (0.2) (0.2) (1.0) 0.3
Net change on available-for-sale debt securities, net 1.1 8.5 (0.9) 6.0
Cash flow hedges:        
Change in net unrealized gains and (losses), net of tax benefit (provision) of $7.2 and $(7.3) during the three and six months ended June 30, 2021, respectively, and tax benefit (provision) of $(1.8) and $2.4 for the comparable periods in 2020, respectively (19.7) 16.1 18.8 (8.8)
Net realized (gains) and losses reclassified into net income, net (7.2) 6.1 (16.1) 7.5
Net change on cash flow hedges, net (26.9) 22.2 2.7 (1.3)
Change in foreign currency translation adjustments 0.4 5.6 (1.5) (9.1)
Other comprehensive income (loss), net (25.4) 36.3 0.3 (4.4)
Comprehensive income $ 36.6 $ 97.5 $ 31.2 $ 77.2
v3.21.2
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of Comprehensive Income [Abstract]        
Unrealized (loss) gain on cash flow hedges, tax benefit (provision) $ 7.2 $ (1.8) $ (7.3) $ 2.4
v3.21.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Jun. 30, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 986.7 $ 1,361.9
Short-term investments 335.5 412.1
Accounts receivable, net of allowances 768.3 964.1
Inventory* [1] 211.5 210.2
Prepaid expenses and other current assets* [1] 344.1 322.9
Total current assets 2,646.1 3,271.2
Property and equipment, net 725.1 762.3
Operating lease assets 180.9 184.6
Long-term investments 493.2 656.6
Purchased intangible assets, net 315.3 266.7
Goodwill 3,754.1 3,669.6
Other long-term assets 608.7 567.3
Total assets 8,723.4 9,378.3
Current liabilities:    
Accounts payable 259.8 277.0
Accrued compensation 264.2 270.7
Deferred revenue 891.2 867.3
Short-term portion of long-term debt 0.0 421.5
Other accrued liabilities 275.7 324.6
Total current liabilities 1,690.9 2,161.1
Long-term debt 1,694.4 1,705.8
Long-term deferred revenue 440.1 418.5
Long-term income taxes payable 324.5 312.5
Long-term operating lease liabilities 160.7 163.5
Other long-term liabilities 71.9 73.4
Total liabilities 4,382.5 4,834.8
Commitments and contingencies (Note 15)
Stockholders' equity:    
Preferred stock, $0.00001 par value; 10.0 shares authorized; none issued and outstanding 0.0 0.0
Common stock, $0.00001 par value; 1,000.0 shares authorized; 324.0 shares and 327.7 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively 0.0 0.0
Additional paid-in capital 7,042.8 7,156.9
Accumulated other comprehensive income 55.9 55.6
Accumulated deficit (2,757.8) (2,669.0)
Total stockholders' equity 4,340.9 4,543.5
Total liabilities and stockholders' equity $ 8,723.4 $ 9,378.3
[1] The prior period amount has been reclassified to conform to the current period presentation. Previously, Inventory was reported as Prepaid expenses and other current assets.
v3.21.2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2021
Dec. 31, 2020
Statement of Financial Position [Abstract]    
Preferred stock - par value (in dollars per share) $ 0.00001 $ 0.00001
Preferred stock - shares authorized (in shares) 10,000,000.0 10,000,000.0
Preferred stock - issued (in shares) 0 0
Preferred stock - outstanding (in shares) 0 0
Common stock - par value (in dollars per share) $ 0.00001 $ 0.00001
Common stock - shares authorized (in shares) 1,000,000,000.0 1,000,000,000.0
Common stock - issued (in shares) 324,000,000.0 327,700,000
Common stock - outstanding (in shares) 324,000,000.0 327,700,000
v3.21.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Cash flows from operating activities:    
Net income $ 30.9 $ 81.6
Adjustments to reconcile net income to net cash provided by operating activities:    
Share-based compensation expense 108.0 86.0
Depreciation, amortization, and accretion 120.9 106.0
Operating lease assets expense 24.8 21.0
Loss on extinguishment of debt 60.6 0.0
Other 4.7 3.8
Changes in operating assets and liabilities, net of acquisitions:    
Accounts receivable, net 195.1 124.7
Prepaid expenses and other assets (55.4) (38.7)
Accounts payable (18.5) 20.6
Accrued compensation (4.4) (11.7)
Income taxes payable (3.4) 0.9
Other accrued liabilities (71.8) (14.2)
Deferred revenue 45.5 (10.2)
Net cash provided by operating activities 437.0 369.8
Cash flows from investing activities:    
Purchases of property and equipment (41.1) (43.8)
Purchases of available-for-sale debt securities (314.4) (546.2)
Proceeds from sales of available-for-sale debt securities 352.3 156.9
Proceeds from maturities and redemptions of available-for-sale debt securities 200.5 622.7
Purchases of equity securities (6.1) (3.6)
Proceeds from sales of equity securities 5.0 3.7
Payments for business acquisitions, net of cash and cash equivalents acquired (175.0) (0.2)
Other (0.6) 0.0
Net cash provided by investing activities 20.6 189.5
Cash flows from financing activities:    
Repurchase and retirement of common stock (243.1) (205.3)
Proceeds from issuance of common stock 28.9 27.6
Payment of dividends (129.9) (131.8)
Payment of debt (423.8) 0.0
Payment for debt extinguishment costs (58.3) 0.0
Other (3.4) 4.8
Net cash used in financing activities (829.6) (304.7)
Effect of foreign currency exchange rates on cash, cash equivalents, and restricted cash (1.6) (9.9)
Net (decrease) increase in cash, cash equivalents, and restricted cash (373.6) 244.7
Cash, cash equivalents, and restricted cash at beginning of period 1,383.0 1,276.5
Cash, cash equivalents, and restricted cash at end of period $ 1,009.4 $ 1,521.2
v3.21.2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)
shares in Millions, $ in Millions
Total
Shares
Common Stock and Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Balance (in shares) at Dec. 31, 2019   335.9      
Balance at Dec. 31, 2019 $ 4,610.6   $ 7,370.5 $ (18.5) $ (2,741.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 81.6       81.6
Other comprehensive income (loss), net (4.4)     (4.4)  
Issuance of common stock (in shares)   6.4      
Issuance of common stock 27.6   27.6    
Repurchase and retirement of common stock (in shares)   (10.6)      
Repurchase and retirement of common stock (245.3)   (136.6)   (108.7)
Purchase of forward contract under accelerated share repurchase program ("ASR") 40.0        
Share-based compensation expense 86.0   86.0    
Payments of cash dividends (131.8)   (131.8)    
Balance (in shares) at Jun. 30, 2020   331.7      
Balance at Jun. 30, 2020 4,464.3   7,255.7 (22.9) (2,768.5)
Balance (in shares) at Mar. 31, 2020   331.0      
Balance at Mar. 31, 2020 4,390.7   7,281.3 (59.2) (2,831.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 61.2       61.2
Other comprehensive income (loss), net 36.3     36.3  
Issuance of common stock (in shares)   0.8      
Issuance of common stock 0.5   0.5    
Repurchase and retirement of common stock (in shares)   (0.1)      
Repurchase and retirement of common stock (2.1)   (3.8)   1.7
Share-based compensation expense 44.0   44.0    
Payments of cash dividends (66.3)   (66.3)    
Balance (in shares) at Jun. 30, 2020   331.7      
Balance at Jun. 30, 2020 4,464.3   7,255.7 (22.9) (2,768.5)
Balance (in shares) at Dec. 31, 2020   327.7      
Balance at Dec. 31, 2020 4,543.5   7,156.9 55.6 (2,669.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 30.9       30.9
Other comprehensive income (loss), net 0.3     0.3  
Issuance of common stock (in shares)   5.8      
Issuance of common stock 31.6   31.6    
Repurchase and retirement of common stock (in shares)   (9.5)      
Repurchase and retirement of common stock (243.1)   (123.4)   (119.7)
Share-based compensation expense 107.6   107.6    
Payments of cash dividends (129.9)   (129.9)    
Balance (in shares) at Jun. 30, 2021   324.0      
Balance at Jun. 30, 2021 4,340.9   7,042.8 55.9 (2,757.8)
Balance (in shares) at Mar. 31, 2021   327.4      
Balance at Mar. 31, 2021 4,429.6   7,110.9 81.3 (2,762.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 62.0       62.0
Other comprehensive income (loss), net (25.4)     (25.4)  
Issuance of common stock (in shares)   0.8      
Issuance of common stock 0.5   0.5    
Repurchase and retirement of common stock (in shares)   (4.2)      
Repurchase and retirement of common stock (111.2)   (54.0)   (57.2)
Share-based compensation expense 50.1   50.1    
Payments of cash dividends (64.7)   (64.7)    
Balance (in shares) at Jun. 30, 2021   324.0      
Balance at Jun. 30, 2021 $ 4,340.9   $ 7,042.8 $ 55.9 $ (2,757.8)
v3.21.2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of Stockholders' Equity [Abstract]        
Cash dividends (in dollars per share) $ 0.20 $ 0.20 $ 0.40 $ 0.40
v3.21.2
Basis of Presentation and Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies
Note 1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Financial Statements of Juniper Networks, Inc. (the “Company” or “Juniper”) were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all information and footnotes required by U.S. GAAP for complete financial statements. The Condensed Consolidated Balance Sheet as of December 31, 2020 has been derived from the audited Consolidated Financial Statements at that date. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, or any future period.

These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the "Form 10-K"). We have evaluated all subsequent events through the date these condensed consolidated financial statements were issued.

The preparation of the financial statements and related disclosures in accordance with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates under different assumptions or conditions.

Summary of Significant Accounting Policies

Except for the change in certain policies upon adoption of the accounting standards described below, there have been no significant changes to the Company's significant accounting policies described in Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies, in Notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K for the fiscal year ended December 31, 2020.

Recently Adopted Accounting Standards

Simplifying the Accounting for Income Taxes: On January 1, 2021, the Company adopted ASU No. 2019-12 (Topic 740) Income Taxes — Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects related to accounting for income taxes. Upon adoption, the standard did not have a material impact on the Condensed Consolidated Financial Statements.

Recent Accounting Standards Not Yet Adopted

Reference Rate Reform: In March 2020, the FASB issued ASU No. 2020-04 (Topic 848), Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. In January 2021, the FASB issued ASU No. 2021-01 (Topic 848), Reference Rate Reform: Scope, which refines the scope of Topic 848 and clarifies some of its guidance. The amendments were effective upon issuance and may be applied through December 31, 2022, to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the impact of the transition and disclosure requirements of the standard on its Condensed Consolidated Financial Statements.
v3.21.2
Business Combinations
6 Months Ended
Jun. 30, 2021
Business Combinations [Abstract]  
Business Combinations
Note 2. Business Combinations

On January 27, 2021, the Company acquired 100% ownership of Apstra, Inc. ("Apstra"), a company that provides intent-based networking, open programmability and automated closed loop assurance for the management of data center networks. The purchase consideration was $179.4 million, consisting of $176.7 million in cash and $2.7 million in share-based awards attributable to services prior to the acquisition. The acquisition is expected to expand upon the Company's data center networking portfolio to advance its vision to transform data center operations.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed at the acquisition date (in millions):
Amount
Cash and cash equivalents$1.8 
Goodwill84.0 
Intangible assets87.8 
Other assets acquired12.6 
Liabilities assumed(6.8)
Total$179.4 

The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and will not be deductible for income tax purposes.

The following table summarizes the fair value of the separately identifiable intangible assets at the time of acquisition (in millions):
Amount
Intangible assets(*):
Developed technology$80.5 
Customer relationships7.3 
Total intangible assets acquired$87.8 
 ________________________________
(*) Estimated useful life assigned to Developed Technology and Customer Relationships is 5 and 1.5 years, respectively.

Acquisition-related costs were not material during the three and six months ended June 30, 2021, and were expensed in the period incurred within general and administrative expense in the Company's Condensed Consolidated Statements of Operations.

The Company's Condensed Consolidated Financial Statements include the operating results of this business combination from the date of acquisition. Pro forma results of operations for this acquisition have not been presented, as the financial impact to the Company's consolidated results of operations is not material. The preliminary purchase price allocation is subject to potential measurement period adjustments relating to certain tax and legal matters.
v3.21.2
Cash Equivalents and Investments
6 Months Ended
Jun. 30, 2021
Cash Equivalents and Investments [Abstract]  
Cash Equivalents and Investments
Note 3. Cash Equivalents and Investments

Investments in Available-for-Sale Debt Securities

The following table summarizes the Company's unrealized gains and losses and fair value of investments designated as available-for-sale debt securities as of June 30, 2021 and December 31, 2020 (in millions):
As of June 30, 2021As of December 31, 2020
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$90.8 $0.1 $(0.1)$90.8 $76.5 $0.2 $— $76.7 
Certificates of deposit15.3 — — 15.3 32.9 — — 32.9 
Commercial paper78.2 — — 78.2 89.3 — — 89.3 
Corporate debt securities482.8 2.8 (0.2)485.4 632.0 5.5 (0.1)637.4 
Foreign government debt securities
7.6 — — 7.6 4.6 — — 4.6 
Time deposits64.2 — — 64.2 255.6 — — 255.6 
U.S. government agency securities
26.6 0.1 — 26.7 65.3 0.2 — 65.5 
U.S. government securities146.6 0.4 — 147.0 232.8 1.0 — 233.8 
Total fixed income securities
912.1 3.4 (0.3)915.2 1,389.0 6.9 (0.1)1,395.8 
Privately-held debt and redeemable preferred stock securities
21.2 39.9 — 61.1 18.3 37.4 — 55.7 
Total available-for-sale debt securities
$933.3 $43.3 $(0.3)$976.3 $1,407.3 $44.3 $(0.1)$1,451.5 
Reported as:
Cash equivalents$93.7 $— $— $93.7 $333.7 $— $— $333.7 
Short-term investments327.2 1.1 — 328.3 404.3 1.2 — 405.5 
Long-term investments491.2 2.3 (0.3)493.2 651.0 5.7 (0.1)656.6 
Other long-term assets21.2 39.9 — 61.1 18.3 37.4 — 55.7 
Total$933.3 $43.3 $(0.3)$976.3 $1,407.3 $44.3 $(0.1)$1,451.5 


The following table presents the contractual maturities of the Company's total fixed income securities as of June 30, 2021 (in millions):
 Amortized
Cost
Estimated Fair
Value
Due in less than one year$420.9 $422.0 
Due between one and five years491.2 493.2 
Total$912.1 $915.2 


For available-for-sale debt securities that have unrealized losses, the Company assesses impairment by evaluating various factors, including whether (i) it has the intention to sell any of these investments and (ii) whether it is more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. The Company periodically assesses performance indicators of the investment by evaluating various factors such as (i) changes in the credit ratings and (ii) review of the issuer. As of June 30, 2021, the Company's unrealized loss of $0.3 million resulted from 147 investments that
were in an unrealized loss position for less than 12 months. The gross unrealized losses related to these investments were primarily due to changes in market interest rates. The Company anticipates that it will recover the entire amortized cost basis of such available-for-sale debt securities and has determined that no allowance for credit losses was required to be recognized during the three and six months ended June 30, 2021 and June 30, 2020.

During the three and six months ended June 30, 2021 and June 30, 2020, there were no material gross realized gains or losses from available-for-sale debt securities.

Investments in Equity Securities

The following table presents the Company's investments in equity securities as of June 30, 2021 and December 31, 2020 (in millions):
As of
June 30,
2021
December 31,
2020
Equity investments with readily determinable fair value:
Money market funds$387.1 $536.6 
Mutual funds31.9 29.3 
Publicly-traded equity securities7.2 6.6 
Equity investments without readily determinable fair value:145.1 146.2 
Total equity securities$571.3 $718.7 
Reported as:
Cash equivalents$370.3 $519.8 
Short-term investments7.2 6.6 
Prepaid expenses and other current assets10.4 9.9 
Other long-term assets183.4 182.4 
Total$571.3 $718.7 

For the three and six months ended June 30, 2021 and June 30, 2020, there were no material unrealized gains or losses recognized for equity investments.

Restricted Cash and Investments

The Company has restricted cash and investments for: (i) amounts held in escrow accounts, as required in connection with certain acquisitions completed primarily in 2020 and 2021; (ii) amounts held under the Company's short-term disability plan in California; and (iii) amounts under the Company's non-qualified deferred compensation plan for senior-level employees. Restricted investments consist of equity investments. As of June 30, 2021, the carrying value of restricted cash and investments was $71.3 million, of which $29.4 million was included in prepaid expenses and other current assets, and $41.9 million was included in other long-term assets on the Condensed Consolidated Balance Sheet.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash included in the Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (in millions):
As of
June 30,
2021
December 31,
2020
Cash and cash equivalents$986.7 $1,361.9 
Restricted cash included in Prepaid expenses and other current assets19.0 19.2 
Restricted cash included in Other long-term assets3.7 1.9 
Total cash, cash equivalents, and restricted cash$1,009.4 $1,383.0 
v3.21.2
Fair Value Measurements
6 Months Ended
Jun. 30, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Note 4. Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table provides a summary of assets and liabilities measured at fair value on a recurring basis and as reported in the Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (in millions):
Fair Value Measurements at
June 30, 2021
Fair Value Measurements at
December 31, 2020
Quoted Prices in
Active Markets For
Identical Assets
(Level 1)
Significant Other
Observable
Remaining Inputs
(Level 2)
Significant Other
Unobservable
Remaining Inputs
(Level 3)
TotalQuoted Prices in
Active Markets For
Identical Assets
(Level 1)
Significant Other
Observable
Remaining Inputs
(Level 2)
Significant Other
Unobservable
Remaining Inputs
(Level 3)
Total
Assets:
Available-for-sale debt securities:
Asset-backed securities$— $90.8 $— $90.8 $— $76.7 $— $76.7 
Certificates of deposit— 15.3 — 15.3 — 32.9 — 32.9 
Commercial paper— 78.2 — 78.2 — 89.3 — 89.3 
Corporate debt securities — 485.4 — 485.4 — 637.4 — 637.4 
Foreign government debt securities
— 7.6 — 7.6 — 4.6 — 4.6 
Time deposits— 64.2 — 64.2 — 255.6 — 255.6 
U.S. government agency securities
— 26.7 — 26.7 — 65.5 — 65.5 
U.S. government securities
102.9 44.1 — 147.0 140.0 93.8 — 233.8 
Privately-held debt and redeemable preferred stock securities
— — 61.1 61.1 — — 55.7 55.7 
Total available-for-sale debt securities
102.9 812.3 61.1 976.3 140.0 1,255.8 55.7 1,451.5 
Equity securities:
Money market funds387.1 — — 387.1 536.6 — — 536.6 
Mutual funds31.9 — — 31.9 29.3 — — 29.3 
Publicly-traded equity securities7.2 — — 7.2 6.6 — — 6.6 
Total equity securities
426.2 — — 426.2 572.5 — — 572.5 
Derivative assets:
Foreign exchange contracts
— 29.2 — 29.2 — 38.0 — 38.0 
Interest rate contracts
— 61.7 — 61.7 — 51.0 — 51.0 
Total derivative assets
— 90.9 — 90.9 — 89.0 — 89.0 
Total assets measured at fair value on a recurring basis
$529.1 $903.2 $61.1 $1,493.4 $712.5 $1,344.8 $55.7 $2,113.0 
Liabilities:
Derivative liabilities:
Foreign exchange contracts
$— $(5.9)$— $(5.9)$— $(0.5)$— $(0.5)
Total derivative liabilities— (5.9)— (5.9)— (0.5)— (0.5)
Total liabilities measured at fair value on a recurring basis
$— $(5.9)$— $(5.9)$— $(0.5)$— $(0.5)
Fair Value Measurements at
June 30, 2021
Fair Value Measurements at
December 31, 2020
Quoted Prices in
Active Markets For
Identical Assets
(Level 1)
Significant Other
Observable
Remaining Inputs
(Level 2)
Significant Other
Unobservable
Remaining Inputs
(Level 3)
TotalQuoted Prices in
Active Markets For
Identical Assets
(Level 1)
Significant Other
Observable
Remaining Inputs
(Level 2)
Significant Other
Unobservable
Remaining Inputs
(Level 3)
Total
Total assets, reported as:
Cash equivalents$370.3 $93.7 $— $464.0 $519.8 $333.7 $— $853.5 
Short-term investments85.7 249.8 — 335.5 101.0 311.1 — 412.1 
Long-term investments24.4 468.8 — 493.2 45.6 611.0 — 656.6 
Prepaid expenses and other current assets
10.5 22.5 — 33.0 9.9 28.0 — 37.9 
Other long-term assets38.2 68.4 61.1 167.7 36.2 61.0 55.7 152.9 
Total assets measured at fair value
$529.1 $903.2 $61.1 $1,493.4 $712.5 $1,344.8 $55.7 $2,113.0 
Total liabilities, reported as:
Other accrued liabilities$— $(2.9)$— $(2.9)$— $(0.3)$— $(0.3)
Other long-term liabilities— (3.0)— (3.0)— (0.2)— (0.2)
Total liabilities measured at fair value on a recurring basis
$— $(5.9)$— $(5.9)$— $(0.5)$— $(0.5)

The Company's Level 2 available-for-sale debt securities are priced using quoted market prices for similar instruments or non-binding market prices that are corroborated by observable market data. The Company uses inputs such as actual trade data, benchmark yields, broker/dealer quotes, or alternative pricing sources with reasonable levels of price transparency, which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of these assets. The Company's derivative instruments are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs. During the three and six months ended June 30, 2021, the Company had no transfers into or out of Level 3 of the fair value hierarchy of its assets or liabilities measured at fair value.

The Company's privately-held debt and redeemable preferred stock securities are classified as Level 3 assets due to the lack of observable inputs to determine fair value. The Company estimates the fair value of its privately-held debt and redeemable preferred stock securities on a recurring basis using an analysis of the financial condition and near-term prospects of the investee, including recent valuations at the time of financing activities and the investee's capital structure. During the three and six months ended June 30, 2021, there were no significant activities related to privately-held debt and redeemable preferred stock securities.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Company's investments in equity securities without readily determinable fair value are classified as Level 3 assets due to the lack of observable inputs to determine fair value. The Company estimates the fair value on a nonrecurring basis (i.e. when an observable transaction occurs) using an analysis of the financial condition and near-term prospects of the investee, including recent financing activities and the investee's capital structure. As of June 30, 2021, there have been no material upward or downward adjustments for price changes to the equity securities without readily determinable fair value.

Certain of the Company's assets, including intangible assets and goodwill, are measured at fair value on a nonrecurring basis. There were no significant impairment charges recognized during the three and six months ended June 30, 2021.

As of June 30, 2021 and December 31, 2020, the Company had no liabilities required to be measured at fair value on a nonrecurring basis.
Assets and Liabilities Not Measured at Fair ValueThe carrying amounts of the Company's accounts receivable, accounts payable, and other accrued liabilities approximate fair value due to their short maturities. As of June 30, 2021 and December 31, 2020, the estimated fair value of the Company's total outstanding debt in the Condensed Consolidated Balance Sheets was $1,873.4 million and $2,386.6 million, respectively, based on observable market inputs (Level 2). The net carrying value of a contract manufacturer deposit of $66.4 million, reported within other long-term assets, in the Condensed Consolidated Balance Sheets approximates its fair value as of June 30, 2021. See Note 7, Other Financial Information, for further information on the contract manufacturer deposit.
v3.21.2
Derivative Instruments
6 Months Ended
Jun. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
Note 5. Derivative Instruments

The Company uses derivative instruments to manage a variety of risks, including risks related to fluctuations in foreign currency exchange rates and interest rates on debt instruments. We do not use derivative financial instruments for speculative purposes.

The notional amount of the Company's derivatives is summarized as follows (in millions):
 As of
 June 30,
2021
December 31,
2020
Designated derivatives:
Cash flow hedges:
Foreign currency contracts
$811.0 $722.1 
Interest rate lock contracts
650.0 650.0 
Fair value hedges:
Interest rate swap contracts
600.0 300.0 
Total designated derivatives
2,061.0 1,672.1 
Non-designated derivatives125.3 174.1 
Total$2,186.3 $1,846.2 

The fair value of derivative instruments on the Condensed Consolidated Balance Sheets was as follows:
 As of
 Balance Sheet ClassificationJune 30,
2021
December 31,
2020
Derivative assets:
Derivatives designated as hedging instruments:
Foreign currency contracts Other current assets$21.4 $27.8 
Foreign currency contracts Other long-term assets6.7 10.0 
Interest rate lock contracts Other long-term assets53.7 30.7 
Interest rate swap contractsOther long-term assets8.0 20.3 
Total derivatives designated as hedging instruments$89.8 $88.8 
Derivatives not designated as hedging instrumentsOther current assets1.1 0.2 
Total derivative assets$90.9 $89.0 
Derivative liabilities:
Derivatives designated as hedging instruments:
Foreign currency contracts Other accrued liabilities$2.7 $0.2 
Foreign currency contracts Other long-term liabilities3.0 0.2 
Total derivatives designated as hedging instruments$5.7 $0.4 
Derivatives not designated as hedging instrumentsOther accrued liabilities0.2 0.1 
Total derivative liabilities$5.9 $0.5 
Designated Derivatives

The Company uses foreign currency forward contracts to hedge the Company's planned cost of revenues and operating expenses denominated in foreign currencies. These derivatives are designated as cash flow hedges and typically have maturities of thirty-six months or less.

The Company enters into interest rate swaps, designated as fair value hedges, to convert the fixed interest rates of certain Senior Notes to floating interest rates. In April 2021, the Company entered into swaps for an aggregate notional amount of $300.0 million for its fixed-rate 2030 Notes in addition to the swaps entered in 2019 for an aggregate notional amount of $300.0 million for its fixed-rate 2041 Notes. The interest rate swaps will expire within ten years.

In 2020, the Company entered into interest rate locks with large financial institutions, which fix the benchmark interest rates of future debt issuance for an aggregate notional amount of $650.0 million. These contracts are designated as cash flow hedges and are expected to terminate within five years or less.

Effect of Derivative Instruments on the Consolidated Statements of Operations

For cash flow hedges, the Company recognized an unrealized loss of $26.9 million and an unrealized gain of $26.1 million in accumulated other comprehensive income for the effective portion of its derivative instruments for the three and six months ended June 30, 2021, respectively. The Company recognized an unrealized gain of $17.9 million and an unrealized loss of $11.2 million in accumulated other comprehensive income for the effective portion of its derivative instruments for the three and six months ended June 30, 2020, respectively.

For foreign currency forward contracts, the Company reclassified a gain of $8.1 million and $18.1 million out of accumulated other comprehensive income to cost of revenues and operating expenses in the Condensed Consolidated Statements of Operations during the three and six months ended June 30, 2021, respectively, and a loss of $6.9 million and $8.3 million for the comparable periods ended June 30, 2020, respectively. As of June 30, 2021, an estimated $18.7 million of unrealized net gain within accumulated other comprehensive loss is expected to be reclassified into earnings within the next twelve months.

Non-Designated Derivatives

The Company also uses foreign currency forward contracts to mitigate variability in gains and losses generated from the remeasurement of certain monetary assets and liabilities denominated in foreign currencies. These foreign exchange forward contracts typically have maturities of approximately one to four months. The outstanding non-designated derivative instruments are carried at fair value. Changes in the fair value of these derivatives, which were recorded in other expense, net within the Condensed Consolidated Statements of Operations, were not material during the three and six months ended June 30, 2021 and June 30, 2020.
v3.21.2
Goodwill and Purchased Intangible Assets
6 Months Ended
Jun. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Purchased Intangible Assets
Note 6. Goodwill and Purchased Intangible Assets

Goodwill

The Company's goodwill activity during the six months ended June 30, 2021 was as follows (in millions):
 Total
December 31, 2020$3,669.6 
Additions due to business combinations84.5 
June 30, 2021
$3,754.1 

There were no impairments to goodwill during the three and six ended June 30, 2021 and June 30, 2020, respectively.

Purchased Intangible Assets

The Company’s purchased intangible assets, net, were as follows (in millions):
As of June 30, 2021
As of December 31, 2020
GrossAccumulated
Amortization
Accumulated Impairments and
Other Charges
NetGrossAccumulated
Amortization
Accumulated Impairments and
Other Charges
Net
Finite-lived intangible assets:
Technologies and patents$903.8 $(628.9)$(55.1)$219.8 $823.5 $(598.2)$(55.1)$170.2 
Customer relationships136.3 (91.3)(2.8)42.2 129.2 (84.4)(2.8)42.0 
Trade names and other9.6 (5.3)— 4.3 9.6 (4.1)— 5.5 
Total1,049.7 (725.5)(57.9)266.3 962.3 (686.7)(57.9)217.7 
Indefinite-lived intangible assets:
In-process research and development49.0 — — 49.0 49.0 — — 49.0 
Total purchased intangible assets$1,098.7 $(725.5)$(57.9)$315.3 $1,011.3 $(686.7)$(57.9)$266.7 

Amortization expense related to purchased intangible assets with finite lives was $19.8 million and $38.8 million for the three and six months ended June 30, 2021. Amortization expense related to purchased intangible assets with finite lives was $9.4 million and $19.3 million for the three and six months ended June 30, 2020. There were no significant impairment charges related to purchased intangible assets for the three and six months ended June 30, 2021 and June 30, 2020, respectively.

As of June 30, 2021, the estimated future amortization expense of purchased intangible assets with finite lives is as follows (in millions):
Years Ending December 31,Amount
Remainder of 2021$40.3 
202272.8 
202366.9 
202447.4 
202537.8 
Thereafter1.1 
Total$266.3 
v3.21.2
Other Financial Information
6 Months Ended
Jun. 30, 2021
Other Financial Information [Abstract]  
Other Financial Information
Note 7. Other Financial Information

Total Inventory

Total inventory consisted of the following (in millions):
As of
June 30,
2021
December 31,
2020
Production and service materials$167.5 $158.1 
Finished goods54.8 63.8 
Total inventory$222.3 $221.9 
Reported as:
Inventory$211.5 $210.2 
Other long-term assets10.8 11.7 
Total inventory$222.3 $221.9 

Deposit

The Company has a non-interest bearing deposit balance of $66.4 million, net of an unamortized discount balance of $4.7 million, to a contract manufacturer. The discount is calculated based on an imputed interest rate of 5.1% at June 30, 2021. The imputed interest will be amortized over the term of the deposit to interest income along with a corresponding charge to cost of revenues. The deposit is classified as other long-term asset on the Condensed Consolidated Balance Sheets.

Warranties

Changes during the six months ended June 30, 2021 in the Company’s warranty reserve as reported within other accrued liabilities in the Condensed Consolidated Balance Sheets were as follows (in millions):
Balance as of December 31, 2020$30.2 
Provisions made during the period19.4 
Actual costs incurred during the period(18.8)
Balance as of June 30, 2021
$30.8 
Revenue

See Note 12, Segments, for disaggregated revenue by product and service, customer vertical, and geographic region.

Product revenue of $14.2 million and $42.9 million included in deferred revenue at January 1, 2021 was recognized during the three and six months ended June 30, 2021, respectively. Service revenue of $212.5 million and $490.2 million included in deferred revenue at January 1, 2021 was recognized during the three and six months ended June 30, 2021, respectively.

The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of June 30, 2021 and when the Company expects to recognize the amounts as revenue (in millions):
Revenue Recognition Expected by Period
TotalLess than 1 year1-3 yearsMore than 3 years
Product$120.9 $102.3 $15.5 $3.1 
Service(*)
1,225.2 798.3 350.2 76.7 
Total$1,346.1 $900.6 $365.7 $79.8 
________________________________
(*)     Represents unearned service revenue allocated to the performance obligations not delivered or partially delivered as of June 30, 2021. The unearned service revenue is comprised of deferred revenue and non-cancellable contract revenue, which has not been invoiced yet.

Deferred Commissions

Deferred commissions were $30.6 million as of June 30, 2021. For the three and six months ended June 30, 2021, amortization expense for the deferred commissions was $42.5 million and $82.9 million, and there were no impairment charges recognized.

Other Expense, Net

Other expense, net, consisted of the following (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Interest income $3.4 $9.3 $7.5 $24.4 
Interest expense(12.6)(19.3)(26.3)(39.5)
(Loss) gain on investments, net(1.2)6.5 2.6 0.7 
Other(0.5)(0.9)0.3 (1.1)
Other expense, net$(10.9)$(4.4)$(15.9)$(15.5)
v3.21.2
Restructuring Charges
6 Months Ended
Jun. 30, 2021
Restructuring and Related Activities [Abstract]  
Restructuring Charges
Note 8. Restructuring Charges

During the first quarter of 2021, the Company initiated a restructuring plan (the "2021 Restructuring Plan") driven by recent acquisitions and strategic changes and designed to enable reinvestment in certain key priority areas, which resulted in severance, facility consolidations, contract terminations, and other exit related costs. The 2021 Restructuring Plan activities are expected to be substantially completed during the first half of 2022.

During the three and six months ended June 30, 2021, the Company recorded a $0.9 million benefit and $13.8 million charge related to severance for workforce reductions and $2.3 million and $6.9 million in facility consolidation costs, respectively. During the second quarter of 2021, the Company also recorded $20.2 million in contract termination and other costs, which included $5.3 million in impairment charges associated with the restructuring activities. These costs were reported as restructuring charges in the Condensed Consolidated Statements of Operations.

Restructuring liabilities are reported within other accrued liabilities in the Condensed Consolidated Balance Sheets. The following table provides a summary of changes in the restructuring liabilities for the Company's 2021 Restructuring Plan and prior year plan (in millions):
December 31,
2020
ChargesCash
Payments

Other
June 30,
2021
Severance$50.7 $13.8 $(62.9)$1.0 $2.6 
Facility consolidations— 6.9 (0.2)(6.3)0.4 
Contract terminations and other— 20.2 — (5.3)14.9 
Total$50.7 $40.9 $(63.1)$(10.6)$17.9 
v3.21.2
Debt
6 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Debt
Note 9. Debt

Debt

The following table summarizes the Company's total debt (in millions, except percentages):
 As of
 Maturity DateEffective Interest RatesJune 30,
2021
December 31,
2020
Senior Notes ("Notes"):
4.500% fixed-rate notes ("2024 Notes")
March 20244.70 %$— $265.8 
4.350% fixed-rate notes ("2025-I Notes")
June 20254.47 %— 158.0 
1.200% fixed-rate notes ("2025-II Notes")
December 20251.37 %400.0 400.0 
3.750% fixed-rate notes ("2029 Notes")
August 20293.86 %500.0 500.0 
2.000% fixed-rate notes ("2030 Notes")
December 20302.12 %400.0 400.0 
5.950% fixed-rate notes ("2041 Notes")
March 20416.03 %400.0 400.0 
Total Notes1,700.0 2,123.8 
Unaccreted discount and debt issuance costs(13.6)(16.8)
Hedge accounting fair value adjustments(*)
8.0 20.3 
Total$1,694.4 $2,127.3 
________________________________
(*)     Represents the fair value adjustments for interest rate swaps with an aggregate notional amount of $600.0 million. These interest rate swaps convert the fixed interest rates of certain Senior Notes to floating interest rates and are designated as fair value hedges. See Note 5, Derivative Instruments, for a discussion of the Company's interest rate swaps.

In January 2021, the Company redeemed the remaining $265.8 million of its outstanding 2024 Notes and the remaining $158.0 million of its outstanding 2025-I Notes, for a principal redemption amount in the aggregate of $482.1 million, plus accrued interest. The repayments resulted in a loss on extinguishment of debt of $60.6 million, consisting primarily of a premium on the early redemption and acceleration of unamortized debt discount and fees on the redeemed debt.

The Notes above are the Company’s senior unsecured and unsubordinated obligations, ranking equally in right of payment to all of the Company’s existing and future senior unsecured and unsubordinated indebtedness, and senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated to the Notes.

Interest on the Notes is payable in cash semiannually. The effective interest rates for the Notes include the interest on the Notes, accretion of the discount, and amortization of issuance costs. The indenture and the supplemental indentures (together, the "indentures") that govern the Notes also contain various covenants, including limitations on the Company's ability to incur liens or enter into sale-leaseback transactions over certain dollar thresholds.

As of June 30, 2021, the Company was in compliance with all covenants in the indentures governing the Notes.

Revolving Credit Facility

The Company has an unsecured revolving credit facility that will expire in April 2024, which enables borrowings of up to $500.0 million, with an option to increase the amount of the credit facility by up to an additional $200.0 million, subject to the lenders' approval. The credit facility will terminate in April 2024. As of June 30, 2021, the Company was in compliance with all covenants and no amounts were outstanding under our credit facility.
v3.21.2
Equity
6 Months Ended
Jun. 30, 2021
Stockholders' Equity Note [Abstract]  
Equity
Note 10. Equity

The following table summarizes dividends paid and stock repurchases under the Company's stock repurchase program (in millions, except per share amounts):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Dividends:
Per share
$0.20 $0.20 $0.40 $0.40 
Amount
$64.7 $66.3 $129.9 $131.8 
Repurchased under the 2018 Stock Repurchase Program:
Shares
4.2 — 9.3 10.3 
Average price per share(*)
$26.34 $— $25.30 $23.83 
Amount
$110.0 $— $235.0 $200.0 
________________________________
(*)    $23.83 average price per share for the six months ended June 30, 2020 includes $200.0 million in open market purchases, and settlement of the forward contract of $40.0 million under the ASR, which was initiated during the fourth quarter of 2019.

Cash Dividends on Shares of Common Stock

During the three and six months ended June 30, 2021, the Company declared and paid a quarterly cash dividend of $0.20 per common share, totaling $64.7 million and $129.9 million, respectively, on its outstanding common stock. Any future dividends, and the establishment of record and payment dates, are subject to approval by the Board of Directors (the “Board”) of Juniper or an authorized committee thereof. See Note 16, Subsequent Events, for discussion of the Company's dividend declaration subsequent to June 30, 2021.

Stock Repurchase Activities

During the six months ended June 30, 2021, the Company repurchased 9.3 million shares of its common stock in the open market for an aggregate purchase price of $235.0 million at an average price of $25.30 per share, under the 2018 Stock Repurchase Program.

As of June 30, 2021, there was approximately $1.1 billion of authorized funds remaining under the 2018 Stock Repurchase Program.

Future share repurchases under the 2018 Stock Repurchase Program will be subject to a review of the circumstances at that time and will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements.

In addition to repurchases under the 2018 Stock Repurchase Program, the Company also withholds shares of common stock from certain employees in connection with the vesting of stock awards issued to such employees to satisfy applicable tax withholding requirements. Such withheld shares are treated as common stock repurchases in the Company's financial statements as they reduce the number of shares that would have been issued upon vesting. Repurchases associated with tax withholdings were not material during the three and six months ended June 30, 2021 and June 30, 2020.
Accumulated Other Comprehensive Income, Net of Tax

The components of accumulated other comprehensive income, net of related taxes, for the six months ended June 30, 2021 were as follows (in millions):
Unrealized
Gains/Losses
on Available-for-
Sale Debt Securities
Unrealized
 Gains/Losses
on Cash Flow
Hedges