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Estimated Useful Life (years) | |
Computers, equipment, and software | 3 to 7 |
Furniture and fixtures | 5 to 7 |
Building and building improvements | 7 to 40 |
Land improvements | 5 to 40 |
Leasehold improvements | Lease term, not to exceed 10 years |
• | Persuasive evidence of an arrangement exists. The Company generally relies upon sales contracts or agreements, and customer purchase orders to determine the existence of an arrangement. |
• | Delivery has occurred. The Company uses shipping terms and related documents, or written evidence of customer acceptance, when applicable, to verify delivery or performance. |
• | Sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on the payment terms and whether the sales price is subject to refund or adjustment. |
• | Collectability is reasonably assured. The Company assesses collectability based on creditworthiness of customers as determined by its credit checks, their payment histories, or changes in circumstances that indicate that collectability is not reasonably assured. |
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2014 Acquisition | 2013 Acquisition | ||||||
Net tangible assets acquired | $ | — | $ | 0.1 | |||
Net liabilities acquired | (2.7 | ) | — | ||||
Intangible assets acquired | 17.8 | 9.9 | |||||
Goodwill | 13.6 | — | |||||
Total | $ | 28.7 | $ | 10.0 | |||
Weighted Average Estimated Useful Life (In Years) | Amount | ||||
Existing technology | 7 | $ | 10.7 | ||
Customer relationships | 7 | 6.0 | |||
Trade name | 4 | 0.6 | |||
Backlog | 1 | 0.2 | |||
Non-compete agreements | 2 | 0.3 | |||
Total | 7 | $ | 17.8 | ||
|
|||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
As of December 31, 2015 | |||||||||||||||
Fixed income securities: | |||||||||||||||
Asset-backed securities | $ | 312.2 | $ | — | $ | (0.5 | ) | $ | 311.7 | ||||||
Certificates of deposit | 9.6 | — | — | 9.6 | |||||||||||
Commercial paper | 17.7 | — | — | 17.7 | |||||||||||
Corporate debt securities | 913.8 | 0.2 | (2.6 | ) | 911.4 | ||||||||||
Foreign government debt securities | 16.5 | — | — | 16.5 | |||||||||||
Government-sponsored enterprise obligations | 204.1 | — | (0.4 | ) | 203.7 | ||||||||||
U.S. government securities | 278.0 | — | (0.4 | ) | 277.6 | ||||||||||
Total fixed income securities | 1,751.9 | 0.2 | (3.9 | ) | 1,748.2 | ||||||||||
Money market funds | 29.7 | — | — | 29.7 | |||||||||||
Mutual funds | 6.1 | 0.1 | — | 6.2 | |||||||||||
Publicly-traded equity securities | 8.7 | 0.8 | (0.7 | ) | 8.8 | ||||||||||
Total available-for-sale securities | 1,796.4 | 1.1 | (4.6 | ) | 1,792.9 | ||||||||||
Trading securities in mutual funds(1) | 17.7 | — | — | 17.7 | |||||||||||
Total | $ | 1,814.1 | $ | 1.1 | $ | (4.6 | ) | $ | 1,810.6 | ||||||
Reported as: | |||||||||||||||
Cash equivalents | $ | 3.4 | $ | — | $ | — | $ | 3.4 | |||||||
Restricted investments | 35.8 | 0.1 | — | 35.9 | |||||||||||
Short-term investments | 527.2 | 0.9 | (1.0 | ) | 527.1 | ||||||||||
Long-term investments | 1,247.7 | 0.1 | (3.6 | ) | 1,244.2 | ||||||||||
Total | $ | 1,814.1 | $ | 1.1 | $ | (4.6 | ) | $ | 1,810.6 | ||||||
(1) | Balance includes the Company's non-qualified deferred compensation plan assets. |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
As of December 31, 2014 | |||||||||||||||
Fixed income securities: | |||||||||||||||
Asset-backed securities | $ | 269.3 | $ | — | $ | (0.3 | ) | $ | 269.0 | ||||||
Certificates of deposit | 10.6 | — | — | 10.6 | |||||||||||
Commercial paper | 20.3 | — | — | 20.3 | |||||||||||
Corporate debt securities | 738.6 | 0.5 | (1.1 | ) | 738.0 | ||||||||||
Foreign government debt securities | 24.6 | — | — | 24.6 | |||||||||||
Government-sponsored enterprise obligations | 162.2 | — | (0.1 | ) | 162.1 | ||||||||||
U.S. government securities | 246.1 | — | (0.1 | ) | 246.0 | ||||||||||
Total fixed income securities | 1,471.7 | 0.5 | (1.6 | ) | 1,470.6 | ||||||||||
Money market funds | 594.2 | — | — | 594.2 | |||||||||||
Mutual funds | 3.9 | 0.1 | — | 4.0 | |||||||||||
Publicly-traded equity securities | 2.1 | — | (0.1 | ) | 2.0 | ||||||||||
Total available-for-sale securities | 2,071.9 | 0.6 | (1.7 | ) | 2,070.8 | ||||||||||
Trading securities in mutual funds(1) | 16.3 | — | — | 16.3 | |||||||||||
Total | $ | 2,088.2 | $ | 0.6 | $ | (1.7 | ) | $ | 2,087.1 | ||||||
Reported as: | |||||||||||||||
Cash equivalents | $ | 576.6 | $ | — | $ | — | $ | 576.6 | |||||||
Restricted investments | 45.2 | — | — | 45.2 | |||||||||||
Short-term investments | 332.2 | 0.2 | (0.2 | ) | 332.2 | ||||||||||
Long-term investments | 1,134.2 | 0.4 | (1.5 | ) | 1,133.1 | ||||||||||
Total | $ | 2,088.2 | $ | 0.6 | $ | (1.7 | ) | $ | 2,087.1 | ||||||
(1) | Balance includes the Company's non-qualified deferred compensation plan assets. |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Due in less than one year | $ | 504.1 | $ | 0.1 | $ | (0.3 | ) | $ | 503.9 | ||||||
Due between one and five years | 1,247.8 | 0.1 | (3.6 | ) | 1,244.3 | ||||||||||
Total | $ | 1,751.9 | $ | 0.2 | $ | (3.9 | ) | $ | 1,748.2 | ||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
As of December 31, 2015 | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Asset-backed securities | $ | 274.2 | $ | (0.4 | ) | $ | 30.8 | $ | (0.1 | ) | $ | 305.0 | $ | (0.5 | ) | ||||||||
Certificates of deposit(1) | 3.3 | — | — | — | 3.3 | — | |||||||||||||||||
Corporate debt securities | 687.9 | (2.3 | ) | 58.9 | (0.3 | ) | 746.8 | (2.6 | ) | ||||||||||||||
Foreign government debt securities(1) | 9.5 | — | — | — | 9.5 | — | |||||||||||||||||
Government-sponsored enterprise obligations | 185.3 | (0.4 | ) | — | — | 185.3 | (0.4 | ) | |||||||||||||||
U.S. government securities | 259.3 | (0.4 | ) | — | — | 259.3 | (0.4 | ) | |||||||||||||||
Total fixed income securities | 1,419.5 | (3.5 | ) | 89.7 | (0.4 | ) | 1,509.2 | (3.9 | ) | ||||||||||||||
Publicly-traded equity securities | 2.1 | (0.7 | ) | — | — | 2.1 | (0.7 | ) | |||||||||||||||
Total available-for sale securities | $ | 1,421.6 | $ | (4.2 | ) | $ | 89.7 | $ | (0.4 | ) | $ | 1,511.3 | $ | (4.6 | ) | ||||||||
(1) | Balances less than 12 months include investments that were in an immaterial unrealized loss position as of December 31, 2015. |
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Asset-backed securities | $ | 221.9 | $ | (0.3 | ) | $ | — | $ | — | $ | 221.9 | $ | (0.3 | ) | |||||||||
Corporate debt securities | 515.9 | (1.1 | ) | — | — | 515.9 | (1.1 | ) | |||||||||||||||
Foreign government debt securities(1) | 24.6 | — | — | — | 24.6 | — | |||||||||||||||||
Government-sponsored enterprise obligations | 113.8 | (0.1 | ) | — | — | 113.8 | (0.1 | ) | |||||||||||||||
U.S. government securities | 189.0 | (0.1 | ) | — | — | 189.0 | (0.1 | ) | |||||||||||||||
Total fixed income securities | 1,065.2 | (1.6 | ) | — | — | 1,065.2 | (1.6 | ) | |||||||||||||||
Publicly-traded equity securities | 2.0 | (0.1 | ) | — | — | 2.0 | (0.1 | ) | |||||||||||||||
Total available-for-sale securities | $ | 1,067.2 | $ | (1.7 | ) | $ | — | $ | — | $ | 1,067.2 | $ | (1.7 | ) | |||||||||
(1) | Balances less than 12 months include investments that were in an immaterial unrealized loss position as of December 31, 2014. |
|
|||
Fair Value Measurements at December 31, 2015 Using: | |||||||||||||||
Quoted Prices in Active Markets For Identical Assets | Significant Other Observable Remaining Inputs | Significant Other Unobservable Remaining Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Assets measured at fair value: | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Asset-backed securities | $ | — | $ | 311.7 | $ | — | $ | 311.7 | |||||||
Certificates of deposit | — | 9.6 | — | 9.6 | |||||||||||
Commercial paper | — | 17.7 | — | 17.7 | |||||||||||
Corporate debt securities | — | 911.4 | — | 911.4 | |||||||||||
Foreign government debt securities | — | 16.5 | — | 16.5 | |||||||||||
Government-sponsored enterprise obligations | — | 203.7 | — | 203.7 | |||||||||||
Money market funds (1) | 29.7 | — | — | 29.7 | |||||||||||
Mutual funds (2) | 6.2 | — | — | 6.2 | |||||||||||
Publicly-traded equity securities | 8.8 | — | — | 8.8 | |||||||||||
U.S. government securities | 247.3 | 30.3 | — | 277.6 | |||||||||||
Total available-for-sale securities | 292.0 | 1,500.9 | — | 1,792.9 | |||||||||||
Trading securities in mutual funds (3) | 17.7 | — | — | 17.7 | |||||||||||
Privately-held debt and redeemable preferred stock securities | — | — | 60.2 | 60.2 | |||||||||||
Derivative assets: | |||||||||||||||
Foreign exchange contracts | — | 0.4 | — | 0.4 | |||||||||||
Total assets measured at fair value | $ | 309.7 | $ | 1,501.3 | $ | 60.2 | $ | 1,871.2 | |||||||
Liabilities measured at fair value: | |||||||||||||||
Derivative liabilities: | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
Total assets measured at fair value, reported as: | |||||||||||||||
Cash equivalents | $ | — | $ | 3.4 | $ | — | $ | 3.4 | |||||||
Restricted investments | 35.9 | — | — | 35.9 | |||||||||||
Short-term investments | 108.2 | 418.9 | — | 527.1 | |||||||||||
Long-term investments | 165.6 | 1,078.6 | — | 1,244.2 | |||||||||||
Prepaid expenses and other current assets | — | 0.4 | — | 0.4 | |||||||||||
Other long-term assets | — | — | 60.2 | 60.2 | |||||||||||
Total assets measured at fair value | $ | 309.7 | $ | 1,501.3 | $ | 60.2 | $ | 1,871.2 | |||||||
Total liabilities measured at fair value, reported as: | |||||||||||||||
Other accrued liabilities | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
(1) | Balance includes $29.7 million of restricted investments measured at fair market value, related to the Company's D&O trust and acquisitions related escrows. |
(2) | Balance relates to the restricted investments measured at fair market value of the Company's India Gratuity Trust. |
(3) | Balance relates to the investments measured at fair value related to the Company's non-qualified deferred compensation plan assets. |
Fair Value Measurements at December 31, 2014 Using: | |||||||||||||||
Quoted Prices in Active Markets For Identical Assets | Significant Other Observable Remaining Inputs | Significant Other Unobservable Remaining Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Assets measured at fair value: | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Asset-backed securities | $ | — | $ | 269.0 | $ | — | $ | 269.0 | |||||||
Certificates of deposit | — | 10.6 | — | 10.6 | |||||||||||
Commercial paper | — | 20.3 | — | 20.3 | |||||||||||
Corporate debt securities | — | 738.0 | — | 738.0 | |||||||||||
Foreign government debt securities | — | 24.6 | — | 24.6 | |||||||||||
Government-sponsored enterprise obligations | — | 162.1 | — | 162.1 | |||||||||||
Money market funds (1) | 594.2 | — | — | 594.2 | |||||||||||
Mutual funds (2) | 4.0 | — | — | 4.0 | |||||||||||
Publicly-traded equity securities | 2.0 | — | — | 2.0 | |||||||||||
U.S. government securities | 246.0 | — | — | 246.0 | |||||||||||
Total available-for-sale securities | 846.2 | 1,224.6 | — | 2,070.8 | |||||||||||
Trading securities in mutual funds (3) | 16.3 | — | — | 16.3 | |||||||||||
Privately-held debt and redeemable preferred stock securities | — | — | 47.5 | 47.5 | |||||||||||
Derivative assets: | |||||||||||||||
Foreign exchange contracts | — | 0.1 | — | 0.1 | |||||||||||
Total assets measured at fair value | $ | 862.5 | $ | 1,224.7 | $ | 47.5 | $ | 2,134.7 | |||||||
Liabilities measured at fair value: | |||||||||||||||
Derivative liabilities: | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
Total assets measured at fair value, reported as: | |||||||||||||||
Cash equivalents | $ | 552.9 | $ | 23.7 | $ | — | $ | 576.6 | |||||||
Restricted investments | 45.2 | — | — | 45.2 | |||||||||||
Short-term investments | 87.0 | 245.2 | — | 332.2 | |||||||||||
Long-term investments | 177.4 | 955.7 | — | 1,133.1 | |||||||||||
Prepaid expenses and other current assets | — | 0.1 | — | 0.1 | |||||||||||
Other long-term assets | — | — | 47.5 | 47.5 | |||||||||||
Total assets measured at fair value | $ | 862.5 | $ | 1,224.7 | $ | 47.5 | $ | 2,134.7 | |||||||
Total liabilities measured at fair value, reported as: | |||||||||||||||
Other accrued liabilities | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
(1) | Balance includes $41.3 million of restricted investments measured at fair market value, related to the Company's D&O trust and acquisition related escrows. |
(2) | Balance relates to the restricted investments measured at fair market value of the Company's India Gratuity Trust. |
(3) | Balance relates to the investments measured at fair value related to the Company's non-qualified deferred compensation plan assets. |
|
|||
As of December 31, | |||||||
2015 | 2014 | ||||||
Cash flow hedges | $ | 116.8 | $ | 160.7 | |||
Non-designated derivatives | 71.8 | 78.0 | |||||
Total | $ | 188.6 | $ | 238.7 | |||
|
|||
Total | |||
December 31, 2013 | $ | 4,057.7 | |
Additions due to business combination | 13.6 | ||
Impairment | (850.0 | ) | |
Divestiture | (239.8 | ) | |
December 31, 2014 | 2,981.5 | ||
Other | (0.2 | ) | |
December 31, 2015 | $ | 2,981.3 | |
Gross | Accumulated Amortization | Accumulated Impairments and Other Charges | Net | ||||||||||||
As of December 31, 2015 | |||||||||||||||
Intangible assets with finite lives: | |||||||||||||||
Technologies and patents | $ | 567.7 | $ | (491.8 | ) | $ | (49.9 | ) | $ | 26.0 | |||||
Customer contracts, support agreements, and related relationships | 78.1 | (67.8 | ) | (2.8 | ) | 7.5 | |||||||||
Other | 1.1 | (0.7 | ) | — | 0.4 | ||||||||||
Total purchased intangible assets | $ | 646.9 | $ | (560.3 | ) | $ | (52.7 | ) | $ | 33.9 | |||||
As of December 31, 2014 | |||||||||||||||
Intangible assets with finite lives: | |||||||||||||||
Technologies and patents | $ | 567.7 | $ | (466.1 | ) | $ | (49.9 | ) | $ | 51.7 | |||||
Customer contracts, support agreements, and related relationships | 78.1 | (65.2 | ) | (2.8 | ) | 10.1 | |||||||||
Other | 1.1 | (0.5 | ) | — | 0.6 | ||||||||||
Total purchased intangible assets | $ | 646.9 | $ | (531.8 | ) | $ | (52.7 | ) | $ | 62.4 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cost of revenues | $ | 24.6 | $ | 30.9 | $ | 27.3 | |||||
Operating expenses: | |||||||||||
Sales and marketing | 2.8 | 4.2 | 3.4 | ||||||||
General and administrative | 1.1 | 1.2 | 1.2 | ||||||||
Total operating expenses | 3.9 | 5.4 | 4.6 | ||||||||
Total | $ | 28.5 | $ | 36.3 | $ | 31.9 | |||||
Years Ending December 31, | Amount | ||
2016 | $ | 11.6 | |
2017 | 7.0 | ||
2018 | 5.1 | ||
2019 | 4.9 | ||
2020 | 4.8 | ||
Thereafter | 0.5 | ||
Total | $ | 33.9 | |
|
|||
As of December 31, | |||||||
2015 | 2014 | ||||||
Production materials | $ | 61.9 | $ | 38.3 | |||
Finished goods | 13.1 | 24.2 | |||||
Inventories | $ | 75.0 | $ | 62.5 | |||
As of December 31, | |||||||
2015 | 2014 | ||||||
Computers and equipment | $ | 915.1 | $ | 806.1 | |||
Software | 169.1 | 161.2 | |||||
Leasehold improvements | 203.4 | 179.5 | |||||
Furniture and fixtures | 43.2 | 33.7 | |||||
Building and building improvements | 246.1 | 238.4 | |||||
Land and land improvements | 241.1 | 241.0 | |||||
Construction-in-process (1) | 158.2 | 70.3 | |||||
Property and equipment, gross | 1,976.2 | 1,730.2 | |||||
Accumulated depreciation | (955.2 | ) | (825.9 | ) | |||
Property and equipment, net | $ | 1,021.0 | $ | 904.3 | |||
As of December 31, | |||||||
2015 | 2014 | ||||||
Privately-held investments | $ | 102.4 | $ | 89.9 | |||
Licensed software | 7.1 | 8.6 | |||||
Federal income tax receivable | 28.9 | 20.0 | |||||
Customer financing receivable | — | 16.9 | |||||
Inventory | 8.4 | 8.0 | |||||
Prepaid costs, deposits, and other(1) | 110.5 | 75.1 | |||||
Promissory note, including principal and accrued interest, in connection with the sale of Junos Pulse | 132.9 | 125.0 | |||||
Other long-term assets(1) | $ | 390.2 | $ | 343.5 | |||
(1) | During the year ended December 31, 2015, the Company early adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the Consolidated Balance Sheets. Certain amounts in the prior-year Consolidated Financial Statements were retrospectively adjusted to conform to the current-year presentation. |
As of December 31, | |||||||
2015 | 2014 | ||||||
Beginning balance | $ | 28.7 | $ | 28.0 | |||
Provisions made during the period, net | 27.9 | 28.6 | |||||
Actual costs incurred during the period | (28.2 | ) | (27.9 | ) | |||
Ending balance | $ | 28.4 | $ | 28.7 | |||
As of December 31, | |||||||
2015 | 2014 | ||||||
Deferred product revenue: | |||||||
Undelivered product commitments and other product deferrals | $ | 210.1 | $ | 180.3 | |||
Distributor inventory and other sell-through items | 81.8 | 103.7 | |||||
Deferred gross product revenue | 291.9 | 284.0 | |||||
Deferred cost of product revenue | (51.6 | ) | (58.4 | ) | |||
Deferred product revenue, net | 240.3 | 225.6 | |||||
Deferred service revenue | 927.8 | 850.1 | |||||
Total | $ | 1,168.1 | $ | 1,075.7 | |||
Reported as: | |||||||
Current | $ | 822.9 | $ | 780.8 | |||
Long-term | 345.2 | 294.9 | |||||
Total | $ | 1,168.1 | $ | 1,075.7 | |||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Interest income | $ | 21.8 | $ | 10.0 | $ | 8.7 | |||||
Interest expense | (83.3 | ) | (66.9 | ) | (58.4 | ) | |||||
Net gain on legal settlement | — | 196.1 | — | ||||||||
Gain on investments | 6.8 | 167.9 | 11.3 | ||||||||
Gain on sale of Junos Pulse | — | 19.6 | — | ||||||||
Other | (5.1 | ) | 6.7 | (2.0 | ) | ||||||
Other (expense) income, net | $ | (59.8 | ) | $ | 333.4 | $ | (40.4 | ) | |||
|
|||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Severance | $ | 0.4 | $ | 52.6 | $ | 22.9 | |||||
Facilities | (1.0 | ) | 14.4 | 10.0 | |||||||
Contract terminations and other | — | 2.3 | 14.6 | ||||||||
Asset impairments and write-downs | (3.5 | ) | 139.2 | — | |||||||
Total | $ | (4.1 | ) | $ | 208.5 | $ | 47.5 | ||||
Reported as: | |||||||||||
Cost of revenues | $ | (3.5 | ) | $ | 41.5 | $ | 8.4 | ||||
Restructuring and other (benefits) charges | (0.6 | ) | 167.0 | 39.1 | |||||||
Total | $ | (4.1 | ) | $ | 208.5 | $ | 47.5 | ||||
December 31, 2014 | Charges | Cash Payments | Non-cash Settlements and Other | December 31, 2015 | |||||||||||||||
Severance | $ | 9.4 | $ | 0.4 | $ | (8.2 | ) | $ | (1.6 | ) | $ | — | |||||||
Facilities | 7.4 | (1.0 | ) | (2.3 | ) | (1.3 | ) | 2.8 | |||||||||||
Contract terminations and other | 0.2 | (3.5 | ) | — | 3.3 | — | |||||||||||||
Total | $ | 17.0 | $ | (4.1 | ) | $ | (10.5 | ) | $ | 0.4 | $ | 2.8 | |||||||
|
|||
As of December 31, 2015 | ||||||
Amount | Effective Interest Rates | |||||
Senior notes: | ||||||
3.10% fixed-rate notes, due March 2016 | $ | 300.0 | 3.25 | % | ||
3.30% fixed-rate notes, due June 2020 | 300.0 | 3.47 | % | |||
4.60% fixed-rate notes, due March 2021 | 300.0 | 4.69 | % | |||
4.50% fixed-rate notes, due March 2024 | 350.0 | 4.63 | % | |||
4.35% fixed-rate notes, due June 2025 | 300.0 | 4.47 | % | |||
5.95% fixed-rate notes, due March 2041 | 400.0 | 6.03 | % | |||
Total senior notes | 1,950.0 | |||||
Unaccreted discount | (1.3 | ) | ||||
Total | $ | 1,948.7 | ||||
Reported as: | ||||||
Short-term debt | $ | 299.9 | ||||
Long-term debt | 1,648.8 | |||||
Total | $ | 1,948.7 | ||||
|
|||
Shares Repurchased | Average price per share | Amount Repurchased | ||||||||
2015 | ||||||||||
Repurchases under stock repurchase program | 45.4 | $ | 25.16 | $ | 1,142.5 | |||||
Repurchases for tax withholding | 0.4 | $ | 26.70 | $ | 11.1 | |||||
2014 | ||||||||||
Repurchases under stock repurchase program | 46.8 | $ | 22.42 | $ | 1,050.0 | |||||
Accelerated share repurchase(1) | 49.3 | $ | 24.35 | $ | 1,200.0 | |||||
Repurchases for tax withholding | 0.6 | $ | 19.69 | $ | 12.5 | |||||
2013 | ||||||||||
Repurchases under stock repurchase program | 28.9 | $ | 19.76 | $ | 570.6 | |||||
Repurchases for tax withholding | 0.4 | $ | 20.23 | $ | 7.2 | |||||
(1) | As part of the 2014 Stock Repurchase Program, the Company entered into two separate accelerated share repurchase agreements (collectively, the "ASR") with two financial institutions to repurchase $1.2 billion of the Company's common stock. The Company made an up-front payment of $1.2 billion pursuant to the ASR to repurchase the Company's common stock. The aggregate number of shares ultimately purchased was determined based on a volume weighted average repurchase price, less an agreed upon discount. The shares received with respect to the ASR have been retired. Retired shares return to authorized but unissued shares of common stock. |
Unrealized Gains (Losses) on Available-for- Sale Securities(1) | Unrealized Gains (Losses) on Cash Flow Hedges(2) | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance as of December 31, 2013 | $ | 66.2 | $ | 2.2 | $ | (3.8 | ) | $ | 64.6 | ||||||
Other comprehensive gain (loss) before reclassifications | 48.7 | (4.1 | ) | (14.2 | ) | 30.4 | |||||||||
Amount reclassified from accumulated other comprehensive income | (106.5 | ) | (2.3 | ) | — | (108.8 | ) | ||||||||
Other comprehensive loss | (57.8 | ) | (6.4 | ) | (14.2 | ) | (78.4 | ) | |||||||
Balance as of December 31, 2014 | $ | 8.4 | $ | (4.2 | ) | $ | (18.0 | ) | $ | (13.8 | ) | ||||
Other comprehensive gain (loss) before reclassifications | 9.1 | (6.7 | ) | (16.9 | ) | (14.5 | ) | ||||||||
Amount reclassified from accumulated other comprehensive income | (0.5 | ) | 9.6 | — | 9.1 | ||||||||||
Other comprehensive gain (loss), net | 8.6 | 2.9 | (16.9 | ) | (5.4 | ) | |||||||||
Balance as of December 31, 2015 | $ | 17.0 | $ | (1.3 | ) | $ | (34.9 | ) | $ | (19.2 | ) | ||||
(1) | The reclassifications out of accumulated other comprehensive income, net of tax during the years ended December 31, 2015 and December 31, 2014 for realized gains on available-for-sale securities of $0.5 million and $104.3 million, respectively, are included in other (expense) income, net, in the Consolidated Statements of Operations. |
(2) | The reclassifications out of accumulated other comprehensive (loss) income, net of tax during the year ended December 31, 2015 for realized losses on cash flow hedges are included within cost of revenues of $2.9 million, research and development of $0.2 million, sales and marketing of $6.0 million, and general and administrative of $0.5 million in the Consolidated Statements of Operations. The reclassifications out of accumulated other comprehensive income during the year ended December 31, 2014 for realized gains on cash flow hedges are included within research and development of $1.4 million, sales and marketing of $0.3 million, and general and administrative of $0.7 million and for realized losses within cost of revenues of $0.1 million for which the hedged transactions relate in the Consolidated Statements of Operations. |
|
|||
Outstanding Options | ||||||||||||
Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
Balance as of December 31, 2012 | 34.1 | $ | 24.13 | 3.1 | $ | 52.5 | ||||||
Canceled | (1.3 | ) | 29.56 | |||||||||
Exercised | (5.6 | ) | 15.58 | |||||||||
Expired | (4.1 | ) | 28.35 | |||||||||
Balance as of December 31, 2013 | 23.1 | $ | 25.15 | 2.4 | $ | 44.6 | ||||||
Canceled | (0.6 | ) | 30.15 | |||||||||
Exercised | (5.4 | ) | 19.76 | |||||||||
Expired | (7.2 | ) | 29.11 | |||||||||
Balance as of December 31, 2014 | 9.9 | $ | 24.87 | 2.0 | $ | 24.7 | ||||||
Canceled | (0.1 | ) | 23.65 | |||||||||
Exercised | (3.5 | ) | 19.78 | |||||||||
Expired | (2.7 | ) | 27.99 | |||||||||
Balance as of December 31, 2015 | 3.6 | $ | 27.52 | 2.1 | $ | 16.6 | ||||||
As of December 31, 2015: | ||||||||||||
Vested and expected-to-vest options | 3.6 | $ | 27.58 | 2.1 | $ | 16.3 | ||||||
Exercisable options | 3.4 | $ | 28.82 | 1.8 | $ | 12.1 | ||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Price (In dollars) | Number Outstanding (In millions) | Weighted Average Remaining Contractual Life (In years) | Weighted Average Exercise Price (In dollars) | Number Exercisable (In millions) | Weighted Average Exercise Price (In dollars) | |||||||||||
$0.03 - $14.68 | 0.4 | 5.3 | $ | 3.38 | 0.3 | $ | 4.94 | |||||||||
$15.09 - $18.45 | 0.4 | 0.7 | 15.58 | 0.3 | 15.47 | |||||||||||
$18.49 - $26.10 | 0.4 | 2.3 | 24.11 | 0.3 | 24.19 | |||||||||||
$26.39 - $27.44 | 0.5 | 1.0 | 26.97 | 0.5 | 26.97 | |||||||||||
$27.62 - $29.33 | 0.1 | 2.0 | 28.88 | 0.1 | 28.88 | |||||||||||
$29.89 - $29.89 | 0.5 | 1.2 | 29.89 | 0.5 | 29.89 | |||||||||||
$30.01 - $36.49 | 0.4 | 1.9 | 32.76 | 0.4 | 32.76 | |||||||||||
$38.93 - $38.93 | 0.1 | 2.4 | 38.93 | 0.1 | 38.93 | |||||||||||
$40.26 - $40.26 | 0.5 | 2.2 | 40.26 | 0.6 | 40.26 | |||||||||||
$44.00 - $44.00 | 0.3 | 2.1 | 44.00 | 0.3 | 44.00 | |||||||||||
$0.03 - $44.00 | 3.6 | 2.1 | $ | 27.52 | 3.4 | $ | 28.82 | |||||||||
Outstanding RSUs, RSAs, and PSAs | ||||||||||||
Number of Shares | Weighted Average Grant-Date Fair Value per Share | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
Balance as of December 31, 2012 | 26.8 | $ | 27.76 | 1.7 | $ | 565.0 | ||||||
RSUs granted | 10.3 | 20.32 | ||||||||||
PSAs granted(1) | 2.2 | 21.27 | ||||||||||
RSUs vested(2) | (6.1 | ) | 26.15 | |||||||||
PSAs vested(2) | (1.1 | ) | 28.52 | |||||||||
RSAs vested(2) | (1.6 | ) | 19.59 | |||||||||
RSUs canceled | (3.4 | ) | 22.99 | |||||||||
PSAs canceled | (1.7 | ) | 29.10 | |||||||||
Balance as of December 31, 2013 | 25.4 | $ | 23.44 | 1.1 | $ | 573.5 | ||||||
RSUs granted(3)(6) | 10.0 | 22.52 | ||||||||||
RSUs assumed(4) | 0.4 | 22.66 | ||||||||||
RSAs assumed(4) | 0.9 | 22.66 | ||||||||||
PSAs granted(5)(6) | 1.4 | 24.25 | ||||||||||
PSAs assumed(4) | 0.2 | 22.66 | ||||||||||
RSUs vested(2) | (7.3 | ) | 22.98 | |||||||||
RSAs vested(2) | (1.4 | ) | 19.59 | |||||||||
PSAs vested(2) | (1.1 | ) | 36.19 | |||||||||
RSUs canceled | (4.0 | ) | 21.63 | |||||||||
PSAs canceled | (3.2 | ) | 30.43 | |||||||||
Balance as of December 31, 2014 | 21.3 | $ | 22.05 | 1.1 | $ | 475.0 | ||||||
RSUs granted(3)(6) | 8.9 | 23.41 | ||||||||||
PSAs granted(6)(7) | 1.0 | 23.76 | ||||||||||
RSUs vested(2) | (7.2 | ) | 22.58 | |||||||||
RSAs vested(2) | (1.8 | ) | 20.13 | |||||||||
PSAs vested(2) | (0.3 | ) | 22.52 | |||||||||
RSUs canceled | (2.3 | ) | 22.18 | |||||||||
PSAs canceled | (1.0 | ) | 22.27 | |||||||||
Balance at December 31, 2015 | 18.6 | $ | 22.71 | 1.1 | $ | 514.1 | ||||||
As of December 31, 2015 | ||||||||||||
Vested and expected-to-vest RSUs, RSAs, and PSAs | 15.3 | $ | 22.59 | 1.0 | $ | 421.3 | ||||||
(1) | The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee (or an authorized subcommittee) are achieved at target is 1.1 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 to 2.2 million shares. |
(2) | Total fair value of RSUs, RSAs, and PSAs vested during 2015, 2014, and 2013 was $202.7 million, $238.5 million, and $221.5 million, respectively. |
(3) | Includes service-based and market-based RSUs granted under the 2006 Plan and 2015 Plan according to their terms. |
(4) | RSUs, RSAs, and PSAs assumed in connection with the acquisition of WANDL Inc. |
(5) | The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee (or an authorized subcommittee) are achieved at target is 0.7 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 to 1.4 million shares. |
(6) | On February 20, 2014, the Company announced its intention to initiate a quarterly cash dividend of $0.10 per share of common stock in the third quarter of 2014. As a result of the Company's announcement, the grant date fair value of RSUs and PSAs granted after the announcement date were reduced by the present value of the dividends expected to be paid on the underlying shares of common stock during the requisite and derived service period as these awards are not entitled to receive dividends until vested. |
(7) | The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee (or an authorized subcommittee) are achieved at target is 0.7 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 to 1.0 million shares. |
Number of Shares | ||
Balance as of December 31, 2014 | 47.8 | |
RSUs and PSAs granted (1) | (20.7 | ) |
RSUs and PSAs canceled (1)(2) | 7.0 | |
Options canceled (2) | 0.1 | |
Options expired (2) | 2.7 | |
Shares discontinued (3) | (38.2 | ) |
Shares authorized under the 2015 Plan | 38.0 | |
Balance as of December 31, 2015 | 36.7 | |
(1) | RSUs and PSAs with a per share or unit purchase price lower than 100% of the fair market value of the Company's common stock on the day of the grant under the 2015 Plan and the 2006 Plan are counted against shares authorized under the plan as two and one-tenth shares of common stock for each share subject to such award. The number of shares subject to PSAs granted represents the maximum number of shares that may be issued pursuant to the award over its full term. |
(2) | Canceled or expired options under the 2006 Plan and the 1996 Plan and canceled RSUs and PSAs under the 2006 Plan are no longer available for future grant under such plans; however, the number of shares available for grant under the 2015 Plan will be increased by the amount of such canceled or expired options, RSUs or PSAs, as applicable, up to a maximum of 29.0 million additional shares of common stock, pursuant to the terms of the 2015 Plan. |
(3) | Authorized shares not subject to outstanding awards under the 2006 Plan were canceled on May 19, 2015, following the approval by the Company’s stockholders of the 2015 Plan. Effective May 19, 2015, no additional awards are issuable under the 2006 Plan. |
Years Ended December 31, | |||||
2015 | 2014 | 2013 | |||
ESPP(1): | |||||
Volatility | 29% | 30% | 36% | ||
Risk-free interest rate | 0.1% | 0.1% | 0.1% | ||
Expected life (years) | 0.5 | 0.5 | 0.5 | ||
Dividend yield | 1.7% | 0% - 1.8% | — | ||
Weighted-average fair value per share | $5.63 | $5.72 | $5.54 | ||
Market-based RSUs(2) | |||||
Volatility | 34% | 36% | — | ||
Risk-free interest rate | 1.4% | 1.6% | — | ||
Dividend yield | 1.8% | 0% - 2.0% | — | ||
Weighted-average fair value per share | $14.97 | $16.89 | — | ||
(1) | The Black-Scholes-Merton option-pricing model is utilized to estimate the fair value of ESPP. |
(2) | The fair value of market-based RSUs utilizes the Monte Carlo simulation option pricing model. The Company amortizes the fair value of these awards over the derived service period adjusted for estimated forfeitures for each separately vesting tranche of the award. Provided that the derived service is rendered, the total fair value of the market-based RSUs at the date of grant is recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria. |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cost of revenues - Product | $ | 5.6 | $ | 5.0 | $ | 4.7 | |||||
Cost of revenues - Service | 13.8 | 14.2 | 15.4 | ||||||||
Research and development | 125.4 | 134.5 | 127.6 | ||||||||
Sales and marketing | 45.6 | 60.2 | 70.9 | ||||||||
General and administrative | 26.9 | 26.1 | 26.0 | ||||||||
Total | $ | 217.3 | $ | 240.0 | $ | 244.6 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Stock options | $ | 6.6 | $ | 14.9 | $ | 31.5 | |||||
RSUs, RSAs, and PSAs | 197.3 | 209.7 | 196.8 | ||||||||
ESPP | 13.4 | 15.4 | 16.3 | ||||||||
Total | $ | 217.3 | $ | 240.0 | $ | 244.6 | |||||
Unrecognized Compensation Cost | Weighted Average Period (In Years) | ||||
Stock options | $ | 2.1 | 0.6 | ||
RSUs, RSAs, and PSAs | $ | 211.2 | 1.7 | ||
|
|||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Routing | $ | 2,359.2 | $ | 2,223.9 | $ | 2,318.0 | |||||
Switching | 768.3 | 721.2 | 638.0 | ||||||||
Security | 435.6 | 463.6 | 563.9 | ||||||||
Total product | 3,563.1 | 3,408.7 | 3,519.9 | ||||||||
Total service | 1,294.7 | 1,218.4 | 1,149.2 | ||||||||
Total | $ | 4,857.8 | $ | 4,627.1 | $ | 4,669.1 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Americas: | |||||||||||
United States | $ | 2,568.6 | $ | 2,410.6 | $ | 2,381.5 | |||||
Other | 223.6 | 219.7 | 232.0 | ||||||||
Total Americas | 2,792.2 | 2,630.3 | 2,613.5 | ||||||||
Europe, Middle East, and Africa | 1,320.3 | 1,263.3 | 1,256.9 | ||||||||
Asia Pacific | 745.3 | 733.5 | 798.7 | ||||||||
Total | $ | 4,857.8 | $ | 4,627.1 | $ | 4,669.1 | |||||
As of December 31, | |||||||
2015 | 2014 | ||||||
United States | $ | 925.5 | $ | 871.7 | |||
International | 129.4 | 95.0 | |||||
Property and equipment, net and purchased intangible assets, net | $ | 1,054.9 | $ | 966.7 | |||
|
|||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Domestic | $ | 456.3 | $ | (509.7 | ) | $ | 248.7 | ||||
Foreign | 395.9 | 423.4 | 276.8 | ||||||||
Total pretax (loss) income | $ | 852.2 | $ | (86.3 | ) | $ | 525.5 | ||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Current provision (benefit): | |||||||||||
Federal | $ | 181.4 | $ | 180.1 | $ | (12.9 | ) | ||||
States | 15.9 | 15.2 | (5.0 | ) | |||||||
Foreign | 43.3 | 33.7 | 32.5 | ||||||||
Total current provision (benefit) | 240.6 | 229.0 | 14.6 | ||||||||
Deferred provision (benefit): | |||||||||||
Federal | (16.7 | ) | 17.3 | 51.2 | |||||||
States | (0.4 | ) | 1.2 | (2.7 | ) | ||||||
Foreign | (5.0 | ) | 0.5 | 22.6 | |||||||
Total deferred provision (benefit) | (22.1 | ) | 19.0 | 71.1 | |||||||
Income tax benefits attributable to employee stock plan activity | — | — | — | ||||||||
Total provision (benefit) for income taxes | $ | 218.5 | $ | 248.0 | $ | 85.7 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Expected (benefit) provision at 35% rate | $ | 298.3 | $ | (30.2 | ) | $ | 184.0 | ||||
State taxes (benefit), net of federal benefit | 8.9 | 9.5 | (3.6 | ) | |||||||
Foreign income at different tax rates | (68.9 | ) | (90.2 | ) | (37.7 | ) | |||||
R&D tax credits | (12.7 | ) | (17.1 | ) | (32.5 | ) | |||||
Share-based compensation | 13.2 | 25.3 | 25.6 | ||||||||
Non-deductible goodwill impairment | — | 297.5 | — | ||||||||
Gain on sale of Junos Pulse | — | 75.6 | — | ||||||||
Release of valuation allowance | — | (22.8 | ) | — | |||||||
Settlement with tax authorities | — | — | (28.3 | ) | |||||||
Domestic production activities | (15.1 | ) | (6.8 | ) | (26.3 | ) | |||||
Non-deductible compensation | 3.7 | 3.2 | 1.5 | ||||||||
Cost sharing adjustment | (13.2 | ) | — | — | |||||||
Other | 4.3 | 4.0 | 3.0 | ||||||||
Total provision for income taxes | $ | 218.5 | $ | 248.0 | $ | 85.7 | |||||
As of December 31, | |||||||
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Net operating loss carry-forwards | $ | 1.0 | $ | 1.3 | |||
Foreign tax credit carry-forwards | 75.4 | 69.7 | |||||
Research and other credit carry-forwards | 128.7 | 122.5 | |||||
Deferred revenue | 109.3 | 104.9 | |||||
Stock-based compensation | 49.1 | 55.8 | |||||
Cost sharing adjustment | 70.1 | — | |||||
Reserves and accruals not currently deductible | 173.9 | 129.8 | |||||
Other | 19.2 | 19.8 | |||||
Total deferred tax assets | 626.7 | 503.8 | |||||
Valuation allowance | (146.2 | ) | (144.5 | ) | |||
Deferred tax assets, net of valuation allowance | 480.5 | 359.3 | |||||
Deferred tax liabilities: | |||||||
Property and equipment basis differences | (44.1 | ) | (35.6 | ) | |||
Purchased intangibles | (3.1 | ) | (16.7 | ) | |||
Unremitted foreign earnings | (365.4 | ) | (260.6 | ) | |||
Deferred compensation and other | (12.0 | ) | (5.1 | ) | |||
Other | — | — | |||||
Total deferred tax liabilities | (424.6 | ) | (318.0 | ) | |||
Net deferred tax assets(1) | $ | 55.9 | $ | 41.3 | |||
(1) | During the year ended December 31, 2015, the Company early adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the Consolidated Balance Sheets. Certain amounts in the prior-year Consolidated Financial Statements were retrospectively adjusted to conform to the current-year presentation. |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Balance at beginning of year | $ | 199.2 | $ | 137.6 | $ | 136.1 | |||||
Tax positions related to current year: | |||||||||||
Additions | 18.1 | 62.5 | 15.8 | ||||||||
Tax positions related to prior years: | |||||||||||
Additions | 5.3 | 0.6 | 22.6 | ||||||||
Reductions | (2.9 | ) | — | (2.2 | ) | ||||||
Settlements | — | — | (31.1 | ) | |||||||
Lapses in statutes of limitations | (3.6 | ) | (1.5 | ) | (3.6 | ) | |||||
Balance at end of year | $ | 216.1 | $ | 199.2 | $ | 137.6 | |||||
|
|||
Years Ending December 31, | Amount | ||
2016 | $ | 35.7 | |
2017 | 25.6 | ||
2018 | 18.6 | ||
2019 | 10.3 | ||
2020 | 7.8 | ||
Thereafter | 15.7 | ||
Total | $ | 113.7 | |
|
|||
Year Ended December 31, 2015 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Net revenues: | ||||||||||||||||
Product | $ | 764.1 | $ | 899.7 | $ | 925.4 | $ | 973.9 | ||||||||
Service | 303.3 | 322.5 | 323.2 | 345.7 | ||||||||||||
Total net revenues | 1,067.4 | 1,222.2 | 1,248.6 | 1,319.6 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Product | 288.8 | 311.7 | 322.6 | 346.5 | ||||||||||||
Service | 121.3 | 129.0 | 128.6 | 130.7 | ||||||||||||
Total cost of revenues | 410.1 | 440.7 | 451.2 | 477.2 | ||||||||||||
Gross margin | 657.3 | 781.5 | 797.4 | 842.4 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 248.7 | 251.6 | 247.0 | 247.2 | ||||||||||||
Sales and marketing | 220.2 | 232.4 | 235.3 | 255.9 | ||||||||||||
General and administrative | 55.2 | 56.3 | 57.1 | 60.3 | ||||||||||||
Restructuring and other charges (benefit) | 1.4 | (1.9 | ) | — | (0.1 | ) | ||||||||||
Total operating expenses | 525.5 | 538.4 | 539.4 | 563.3 | ||||||||||||
Operating income | 131.8 | 243.1 | 258.0 | 279.1 | ||||||||||||
Other expense, net(1)(3) | (15.8 | ) | (17.1 | ) | (8.4 | ) | (18.5 | ) | ||||||||
Income before income taxes | 116.0 | 226.0 | 249.6 | 260.6 | ||||||||||||
Income tax provision(2) | 35.8 | 68.0 | 51.9 | 62.8 | ||||||||||||
Net income | $ | 80.2 | $ | 158.0 | $ | 197.7 | $ | 197.8 | ||||||||
Net income per share:(4) | ||||||||||||||||
Basic | $ | 0.20 | $ | 0.41 | $ | 0.52 | $ | 0.52 | ||||||||
Diluted | $ | 0.19 | $ | 0.40 | $ | 0.51 | $ | 0.51 | ||||||||
Cash dividends declared per common stock(5) | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||||
(1) | During the first quarter of 2015, the Company issued $300.0 million aggregate principal amount of 3.30% senior notes due 2020 and $300.0 million aggregate principal amount of 4.35% senior notes due 2025. As a result, the Company recorded interest expense of $19.1 million, related to long-term debt issued in 2015 in other expense, net during the year ended December 31, 2015. |
(2) | Includes approximately $13.2 million net benefit of cumulative adjustment related to the change in treatment of share-based compensation as a result of the U.S. Tax Court decision in Altera Corporation et al., or Altera, v. Commissioner. See Note 14, Income Taxes, in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Report for further information. |
(3) | During the fourth quarter of 2015, the Company recorded a gain on privately held investments of $7.3 million in other expense, net. |
(4) | Net income per share is computed independently. Therefore, the sum of the quarterly net income per share may not equal the total computed for the year or any cumulative interim period. |
(5) | On January 27, 2015, April 23, 2015, July 23, 2015 and on October 22, 2015, the company declared a quarterly cash dividend of $0.10 per share of common stock to stockholders on record as of the close of business March 3, 2015, June 2, 2015, September 1, 2015, and December 1, 2015, respectively. |
Year Ended December 31, 2014 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Net revenues: | ||||||||||||||||
Product | $ | 876.0 | $ | 929.2 | $ | 809.5 | $ | 794.0 | ||||||||
Service | 294.1 | 300.3 | 316.4 | 307.6 | ||||||||||||
Total net revenues | 1,170.1 | 1,229.5 | 1,125.9 | 1,101.6 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Product | 326.6 | 359.3 | 290.0 | 310.9 | ||||||||||||
Service | 123.4 | 122.0 | 121.1 | 115.6 | ||||||||||||
Total cost of revenues (1) | 450.0 | 481.3 | 411.1 | 426.5 | ||||||||||||
Gross margin | 720.1 | 748.2 | 714.8 | 675.1 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 264.0 | 255.5 | 253.2 | 233.5 | ||||||||||||
Sales and marketing | 273.4 | 258.0 | 249.2 | 243.0 | ||||||||||||
General and administrative | 74.9 | 60.6 | 55.0 | 40.6 | ||||||||||||
Restructuring and other charges (benefits)(1) | 114.0 | 58.2 | (15.0 | ) | 9.8 | |||||||||||
Impairment of goodwill(2) | — | — | — | 850.0 | ||||||||||||
Total operating expenses | 726.3 | 632.3 | 542.4 | 1,376.9 | ||||||||||||
Operating (loss) income | (6.2 | ) | 115.9 | 172.4 | (701.8 | ) | ||||||||||
Other income (expense), net(3) | 154.2 | 178.6 | (6.8 | ) | 7.4 | |||||||||||
Income (loss) before income taxes | 148.0 | 294.5 | 165.6 | (694.4 | ) | |||||||||||
Income tax provision | 37.4 | 73.4 | 62.0 | 75.2 | ||||||||||||
Net income (loss) | $ | 110.6 | $ | 221.1 | $ | 103.6 | $ | (769.6 | ) | |||||||
Net income (loss) per share:(4) | ||||||||||||||||
Basic | $ | 0.23 | $ | 0.47 | $ | 0.23 | $ | (1.81 | ) | |||||||
Diluted | $ | 0.22 | $ | 0.46 | $ | 0.23 | $ | (1.81 | ) | |||||||
Cash dividends declared per common stock(5) | $ | — | $ | — | $ | 0.10 | $ | 0.10 | ||||||||
(1) | In the first quarter of 2014, the company initiated a 2014 Restructuring Plan, which consisted of $84.7 million asset write-downs, $28.0 million of severance costs, and $0.8 million of contract terminations that were recorded in restructuring and other charges. In addition, the Company recorded inventory write-downs related to the acceleration of the end-of-service life of certain products totaling $8.4 million to cost of revenues. In the second quarter, the Company recorded $9.9 million of severance costs, $37.6 million of facility consolidation and closures, $8.9 million of asset write-downs, and $1.5 million of contract terminations that were recorded to restructuring and other charges. The Company also recorded inventory write-downs of $11.5 million and a charge related to products with contract manufacturers of $2.3 million for acceleration of the end-of-life service of certain products to cost of revenues. In the third quarter, the Company recorded $7.1 million of severance costs, a benefit of $25.0 million of facility consolidation and closures as a result of a lease assignment, and $2.9 million of asset write-downs, that were recorded to restructuring and other (credit) charges. In the fourth quarter, the Company recorded $6.9 million in severance costs, $1.6 million of facility consolidation and closures, and $20.6 million in asset impairment and write-downs. |
(2) | During the fourth quarter of 2014, the Company recorded an $850.0 million goodwill impairment charge related to its Security reporting unit. |
(3) | In the first quarter of 2014, the Company recorded a gain of $163.0 million related to the sale of investments which were converted from privately-held investments to publicly-traded equity upon initial public offering. In the second quarter, the Company entered into a settlement agreement with Palo Alto Networks, which resulted in a realized gain on legal settlement of $195.3 million, net of legal fees. All such Palo Alto Networks securities were sold in the third quarter, and the Company recorded an additional $0.8 million gain. In the fourth quarter, the Company recorded a gain of $19.6 million on the sale of Junos Pulse. |
(4) | Net income (loss) per share is computed independently. Therefore, the sum of the quarterly net income per share may not equal the total computed for the year or any cumulative interim period. |
(5) | On July 22, 2014 and October 23, 2014 the company declared a quarterly cash dividend of $0.10 per share of common stock to stockholders on record as of the close of business September 2, 2014 and December 2, 2014, respectively. |
|
|||
|
|||
Allowance for Doubtful Accounts | Balance at Beginning of Year | Charged to (Reversed from) Costs and Expenses | Write-offs, Net of Recoveries | Balance at End of Year | |||||||||||
2015 | $ | 4.7 | $ | 6.5 | $ | (1.9 | ) | $ | 9.3 | ||||||
2014 | $ | 5.4 | $ | (0.7 | ) | $ | — | $ | 4.7 | ||||||
2013 | $ | 9.5 | $ | (3.8 | ) | $ | (0.3 | ) | $ | 5.4 | |||||
Additions | |||||||||||||||||||
Sales Return Reserve | Balance at Beginning of Year | Charged as a Reduction in Revenues | Charged to Other Accounts | Used | Balance at End of Year | ||||||||||||||
2015 | $ | 50.2 | $ | 65.4 | $ | 92.6 | $ | (137.0 | ) | $ | 71.2 | ||||||||
2014 | $ | 49.0 | $ | 53.2 | $ | 80.9 | $ | (132.9 | ) | $ | 50.2 | ||||||||
2013 | $ | 52.7 | $ | 35.0 | $ | 61.5 | $ | (100.2 | ) | $ | 49.0 | ||||||||
|
|||
Estimated Useful Life (years) | |
Computers, equipment, and software | 3 to 7 |
Furniture and fixtures | 5 to 7 |
Building and building improvements | 7 to 40 |
Land improvements | 5 to 40 |
Leasehold improvements | Lease term, not to exceed 10 years |
• | Persuasive evidence of an arrangement exists. The Company generally relies upon sales contracts or agreements, and customer purchase orders to determine the existence of an arrangement. |
• | Delivery has occurred. The Company uses shipping terms and related documents, or written evidence of customer acceptance, when applicable, to verify delivery or performance. |
• | Sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on the payment terms and whether the sales price is subject to refund or adjustment. |
• | Collectability is reasonably assured. The Company assesses collectability based on creditworthiness of customers as determined by its credit checks, their payment histories, or changes in circumstances that indicate that collectability is not reasonably assured. |
|
|||
Estimated Useful Life (years) | |
Computers, equipment, and software | 3 to 7 |
Furniture and fixtures | 5 to 7 |
Building and building improvements | 7 to 40 |
Land improvements | 5 to 40 |
Leasehold improvements | Lease term, not to exceed 10 years |
|
|||
2014 Acquisition | 2013 Acquisition | ||||||
Net tangible assets acquired | $ | — | $ | 0.1 | |||
Net liabilities acquired | (2.7 | ) | — | ||||
Intangible assets acquired | 17.8 | 9.9 | |||||
Goodwill | 13.6 | — | |||||
Total | $ | 28.7 | $ | 10.0 | |||
Weighted Average Estimated Useful Life (In Years) | Amount | ||||
Existing technology | 7 | $ | 10.7 | ||
Customer relationships | 7 | 6.0 | |||
Trade name | 4 | 0.6 | |||
Backlog | 1 | 0.2 | |||
Non-compete agreements | 2 | 0.3 | |||
Total | 7 | $ | 17.8 | ||
|
|||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
As of December 31, 2015 | |||||||||||||||
Fixed income securities: | |||||||||||||||
Asset-backed securities | $ | 312.2 | $ | — | $ | (0.5 | ) | $ | 311.7 | ||||||
Certificates of deposit | 9.6 | — | — | 9.6 | |||||||||||
Commercial paper | 17.7 | — | — | 17.7 | |||||||||||
Corporate debt securities | 913.8 | 0.2 | (2.6 | ) | 911.4 | ||||||||||
Foreign government debt securities | 16.5 | — | — | 16.5 | |||||||||||
Government-sponsored enterprise obligations | 204.1 | — | (0.4 | ) | 203.7 | ||||||||||
U.S. government securities | 278.0 | — | (0.4 | ) | 277.6 | ||||||||||
Total fixed income securities | 1,751.9 | 0.2 | (3.9 | ) | 1,748.2 | ||||||||||
Money market funds | 29.7 | — | — | 29.7 | |||||||||||
Mutual funds | 6.1 | 0.1 | — | 6.2 | |||||||||||
Publicly-traded equity securities | 8.7 | 0.8 | (0.7 | ) | 8.8 | ||||||||||
Total available-for-sale securities | 1,796.4 | 1.1 | (4.6 | ) | 1,792.9 | ||||||||||
Trading securities in mutual funds(1) | 17.7 | — | — | 17.7 | |||||||||||
Total | $ | 1,814.1 | $ | 1.1 | $ | (4.6 | ) | $ | 1,810.6 | ||||||
Reported as: | |||||||||||||||
Cash equivalents | $ | 3.4 | $ | — | $ | — | $ | 3.4 | |||||||
Restricted investments | 35.8 | 0.1 | — | 35.9 | |||||||||||
Short-term investments | 527.2 | 0.9 | (1.0 | ) | 527.1 | ||||||||||
Long-term investments | 1,247.7 | 0.1 | (3.6 | ) | 1,244.2 | ||||||||||
Total | $ | 1,814.1 | $ | 1.1 | $ | (4.6 | ) | $ | 1,810.6 | ||||||
(1) | Balance includes the Company's non-qualified deferred compensation plan assets. |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
As of December 31, 2014 | |||||||||||||||
Fixed income securities: | |||||||||||||||
Asset-backed securities | $ | 269.3 | $ | — | $ | (0.3 | ) | $ | 269.0 | ||||||
Certificates of deposit | 10.6 | — | — | 10.6 | |||||||||||
Commercial paper | 20.3 | — | — | 20.3 | |||||||||||
Corporate debt securities | 738.6 | 0.5 | (1.1 | ) | 738.0 | ||||||||||
Foreign government debt securities | 24.6 | — | — | 24.6 | |||||||||||
Government-sponsored enterprise obligations | 162.2 | — | (0.1 | ) | 162.1 | ||||||||||
U.S. government securities | 246.1 | — | (0.1 | ) | 246.0 | ||||||||||
Total fixed income securities | 1,471.7 | 0.5 | (1.6 | ) | 1,470.6 | ||||||||||
Money market funds | 594.2 | — | — | 594.2 | |||||||||||
Mutual funds | 3.9 | 0.1 | — | 4.0 | |||||||||||
Publicly-traded equity securities | 2.1 | — | (0.1 | ) | 2.0 | ||||||||||
Total available-for-sale securities | 2,071.9 | 0.6 | (1.7 | ) | 2,070.8 | ||||||||||
Trading securities in mutual funds(1) | 16.3 | — | — | 16.3 | |||||||||||
Total | $ | 2,088.2 | $ | 0.6 | $ | (1.7 | ) | $ | 2,087.1 | ||||||
Reported as: | |||||||||||||||
Cash equivalents | $ | 576.6 | $ | — | $ | — | $ | 576.6 | |||||||
Restricted investments | 45.2 | — | — | 45.2 | |||||||||||
Short-term investments | 332.2 | 0.2 | (0.2 | ) | 332.2 | ||||||||||
Long-term investments | 1,134.2 | 0.4 | (1.5 | ) | 1,133.1 | ||||||||||
Total | $ | 2,088.2 | $ | 0.6 | $ | (1.7 | ) | $ | 2,087.1 | ||||||
(1) | Balance includes the Company's non-qualified deferred compensation plan assets. |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Due in less than one year | $ | 504.1 | $ | 0.1 | $ | (0.3 | ) | $ | 503.9 | ||||||
Due between one and five years | 1,247.8 | 0.1 | (3.6 | ) | 1,244.3 | ||||||||||
Total | $ | 1,751.9 | $ | 0.2 | $ | (3.9 | ) | $ | 1,748.2 | ||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
As of December 31, 2015 | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Asset-backed securities | $ | 274.2 | $ | (0.4 | ) | $ | 30.8 | $ | (0.1 | ) | $ | 305.0 | $ | (0.5 | ) | ||||||||
Certificates of deposit(1) | 3.3 | — | — | — | 3.3 | — | |||||||||||||||||
Corporate debt securities | 687.9 | (2.3 | ) | 58.9 | (0.3 | ) | 746.8 | (2.6 | ) | ||||||||||||||
Foreign government debt securities(1) | 9.5 | — | — | — | 9.5 | — | |||||||||||||||||
Government-sponsored enterprise obligations | 185.3 | (0.4 | ) | — | — | 185.3 | (0.4 | ) | |||||||||||||||
U.S. government securities | 259.3 | (0.4 | ) | — | — | 259.3 | (0.4 | ) | |||||||||||||||
Total fixed income securities | 1,419.5 | (3.5 | ) | 89.7 | (0.4 | ) | 1,509.2 | (3.9 | ) | ||||||||||||||
Publicly-traded equity securities | 2.1 | (0.7 | ) | — | — | 2.1 | (0.7 | ) | |||||||||||||||
Total available-for sale securities | $ | 1,421.6 | $ | (4.2 | ) | $ | 89.7 | $ | (0.4 | ) | $ | 1,511.3 | $ | (4.6 | ) | ||||||||
(1) | Balances less than 12 months include investments that were in an immaterial unrealized loss position as of December 31, 2015. |
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||
Asset-backed securities | $ | 221.9 | $ | (0.3 | ) | $ | — | $ | — | $ | 221.9 | $ | (0.3 | ) | |||||||||
Corporate debt securities | 515.9 | (1.1 | ) | — | — | 515.9 | (1.1 | ) | |||||||||||||||
Foreign government debt securities(1) | 24.6 | — | — | — | 24.6 | — | |||||||||||||||||
Government-sponsored enterprise obligations | 113.8 | (0.1 | ) | — | — | 113.8 | (0.1 | ) | |||||||||||||||
U.S. government securities | 189.0 | (0.1 | ) | — | — | 189.0 | (0.1 | ) | |||||||||||||||
Total fixed income securities | 1,065.2 | (1.6 | ) | — | — | 1,065.2 | (1.6 | ) | |||||||||||||||
Publicly-traded equity securities | 2.0 | (0.1 | ) | — | — | 2.0 | (0.1 | ) | |||||||||||||||
Total available-for-sale securities | $ | 1,067.2 | $ | (1.7 | ) | $ | — | $ | — | $ | 1,067.2 | $ | (1.7 | ) | |||||||||
(1) | Balances less than 12 months include investments that were in an immaterial unrealized loss position as of December 31, 2014. |
|
|||
Fair Value Measurements at December 31, 2015 Using: | |||||||||||||||
Quoted Prices in Active Markets For Identical Assets | Significant Other Observable Remaining Inputs | Significant Other Unobservable Remaining Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Assets measured at fair value: | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Asset-backed securities | $ | — | $ | 311.7 | $ | — | $ | 311.7 | |||||||
Certificates of deposit | — | 9.6 | — | 9.6 | |||||||||||
Commercial paper | — | 17.7 | — | 17.7 | |||||||||||
Corporate debt securities | — | 911.4 | — | 911.4 | |||||||||||
Foreign government debt securities | — | 16.5 | — | 16.5 | |||||||||||
Government-sponsored enterprise obligations | — | 203.7 | — | 203.7 | |||||||||||
Money market funds (1) | 29.7 | — | — | 29.7 | |||||||||||
Mutual funds (2) | 6.2 | — | — | 6.2 | |||||||||||
Publicly-traded equity securities | 8.8 | — | — | 8.8 | |||||||||||
U.S. government securities | 247.3 | 30.3 | — | 277.6 | |||||||||||
Total available-for-sale securities | 292.0 | 1,500.9 | — | 1,792.9 | |||||||||||
Trading securities in mutual funds (3) | 17.7 | — | — | 17.7 | |||||||||||
Privately-held debt and redeemable preferred stock securities | — | — | 60.2 | 60.2 | |||||||||||
Derivative assets: | |||||||||||||||
Foreign exchange contracts | — | 0.4 | — | 0.4 | |||||||||||
Total assets measured at fair value | $ | 309.7 | $ | 1,501.3 | $ | 60.2 | $ | 1,871.2 | |||||||
Liabilities measured at fair value: | |||||||||||||||
Derivative liabilities: | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
Total assets measured at fair value, reported as: | |||||||||||||||
Cash equivalents | $ | — | $ | 3.4 | $ | — | $ | 3.4 | |||||||
Restricted investments | 35.9 | — | — | 35.9 | |||||||||||
Short-term investments | 108.2 | 418.9 | — | 527.1 | |||||||||||
Long-term investments | 165.6 | 1,078.6 | — | 1,244.2 | |||||||||||
Prepaid expenses and other current assets | — | 0.4 | — | 0.4 | |||||||||||
Other long-term assets | — | — | 60.2 | 60.2 | |||||||||||
Total assets measured at fair value | $ | 309.7 | $ | 1,501.3 | $ | 60.2 | $ | 1,871.2 | |||||||
Total liabilities measured at fair value, reported as: | |||||||||||||||
Other accrued liabilities | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (1.3 | ) | $ | — | $ | (1.3 | ) | |||||
(1) | Balance includes $29.7 million of restricted investments measured at fair market value, related to the Company's D&O trust and acquisitions related escrows. |
(2) | Balance relates to the restricted investments measured at fair market value of the Company's India Gratuity Trust. |
(3) | Balance relates to the investments measured at fair value related to the Company's non-qualified deferred compensation plan assets. |
Fair Value Measurements at December 31, 2014 Using: | |||||||||||||||
Quoted Prices in Active Markets For Identical Assets | Significant Other Observable Remaining Inputs | Significant Other Unobservable Remaining Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Assets measured at fair value: | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Asset-backed securities | $ | — | $ | 269.0 | $ | — | $ | 269.0 | |||||||
Certificates of deposit | — | 10.6 | — | 10.6 | |||||||||||
Commercial paper | — | 20.3 | — | 20.3 | |||||||||||
Corporate debt securities | — | 738.0 | — | 738.0 | |||||||||||
Foreign government debt securities | — | 24.6 | — | 24.6 | |||||||||||
Government-sponsored enterprise obligations | — | 162.1 | — | 162.1 | |||||||||||
Money market funds (1) | 594.2 | — | — | 594.2 | |||||||||||
Mutual funds (2) | 4.0 | — | — | 4.0 | |||||||||||
Publicly-traded equity securities | 2.0 | — | — | 2.0 | |||||||||||
U.S. government securities | 246.0 | — | — | 246.0 | |||||||||||
Total available-for-sale securities | 846.2 | 1,224.6 | — | 2,070.8 | |||||||||||
Trading securities in mutual funds (3) | 16.3 | — | — | 16.3 | |||||||||||
Privately-held debt and redeemable preferred stock securities | — | — | 47.5 | 47.5 | |||||||||||
Derivative assets: | |||||||||||||||
Foreign exchange contracts | — | 0.1 | — | 0.1 | |||||||||||
Total assets measured at fair value | $ | 862.5 | $ | 1,224.7 | $ | 47.5 | $ | 2,134.7 | |||||||
Liabilities measured at fair value: | |||||||||||||||
Derivative liabilities: | |||||||||||||||
Foreign exchange contracts | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
Total assets measured at fair value, reported as: | |||||||||||||||
Cash equivalents | $ | 552.9 | $ | 23.7 | $ | — | $ | 576.6 | |||||||
Restricted investments | 45.2 | — | — | 45.2 | |||||||||||
Short-term investments | 87.0 | 245.2 | — | 332.2 | |||||||||||
Long-term investments | 177.4 | 955.7 | — | 1,133.1 | |||||||||||
Prepaid expenses and other current assets | — | 0.1 | — | 0.1 | |||||||||||
Other long-term assets | — | — | 47.5 | 47.5 | |||||||||||
Total assets measured at fair value | $ | 862.5 | $ | 1,224.7 | $ | 47.5 | $ | 2,134.7 | |||||||
Total liabilities measured at fair value, reported as: | |||||||||||||||
Other accrued liabilities | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
Total liabilities measured at fair value | $ | — | $ | (3.9 | ) | $ | — | $ | (3.9 | ) | |||||
(1) | Balance includes $41.3 million of restricted investments measured at fair market value, related to the Company's D&O trust and acquisition related escrows. |
(2) | Balance relates to the restricted investments measured at fair market value of the Company's India Gratuity Trust. |
(3) | Balance relates to the investments measured at fair value related to the Company's non-qualified deferred compensation plan assets. |
|
|||
As of December 31, | |||||||
2015 | 2014 | ||||||
Cash flow hedges | $ | 116.8 | $ | 160.7 | |||
Non-designated derivatives | 71.8 | 78.0 | |||||
Total | $ | 188.6 | $ | 238.7 | |||
|
|||
Total | |||
December 31, 2013 | $ | 4,057.7 | |
Additions due to business combination | 13.6 | ||
Impairment | (850.0 | ) | |
Divestiture | (239.8 | ) | |
December 31, 2014 | 2,981.5 | ||
Other | (0.2 | ) | |
December 31, 2015 | $ | 2,981.3 | |
Gross | Accumulated Amortization | Accumulated Impairments and Other Charges | Net | ||||||||||||
As of December 31, 2015 | |||||||||||||||
Intangible assets with finite lives: | |||||||||||||||
Technologies and patents | $ | 567.7 | $ | (491.8 | ) | $ | (49.9 | ) | $ | 26.0 | |||||
Customer contracts, support agreements, and related relationships | 78.1 | (67.8 | ) | (2.8 | ) | 7.5 | |||||||||
Other | 1.1 | (0.7 | ) | — | 0.4 | ||||||||||
Total purchased intangible assets | $ | 646.9 | $ | (560.3 | ) | $ | (52.7 | ) | $ | 33.9 | |||||
As of December 31, 2014 | |||||||||||||||
Intangible assets with finite lives: | |||||||||||||||
Technologies and patents | $ | 567.7 | $ | (466.1 | ) | $ | (49.9 | ) | $ | 51.7 | |||||
Customer contracts, support agreements, and related relationships | 78.1 | (65.2 | ) | (2.8 | ) | 10.1 | |||||||||
Other | 1.1 | (0.5 | ) | — | 0.6 | ||||||||||
Total purchased intangible assets | $ | 646.9 | $ | (531.8 | ) | $ | (52.7 | ) | $ | 62.4 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cost of revenues | $ | 24.6 | $ | 30.9 | $ | 27.3 | |||||
Operating expenses: | |||||||||||
Sales and marketing | 2.8 | 4.2 | 3.4 | ||||||||
General and administrative | 1.1 | 1.2 | 1.2 | ||||||||
Total operating expenses | 3.9 | 5.4 | 4.6 | ||||||||
Total | $ | 28.5 | $ | 36.3 | $ | 31.9 | |||||
Years Ending December 31, | Amount | ||
2016 | $ | 11.6 | |
2017 | 7.0 | ||
2018 | 5.1 | ||
2019 | 4.9 | ||
2020 | 4.8 | ||
Thereafter | 0.5 | ||
Total | $ | 33.9 | |
|
|||
As of December 31, | |||||||
2015 | 2014 | ||||||
Production materials | $ | 61.9 | $ | 38.3 | |||
Finished goods | 13.1 | 24.2 | |||||
Inventories | $ | 75.0 | $ | 62.5 | |||
As of December 31, | |||||||
2015 | 2014 | ||||||
Computers and equipment | $ | 915.1 | $ | 806.1 | |||
Software | 169.1 | 161.2 | |||||
Leasehold improvements | 203.4 | 179.5 | |||||
Furniture and fixtures | 43.2 | 33.7 | |||||
Building and building improvements | 246.1 | 238.4 | |||||
Land and land improvements | 241.1 | 241.0 | |||||
Construction-in-process (1) | 158.2 | 70.3 | |||||
Property and equipment, gross | 1,976.2 | 1,730.2 | |||||
Accumulated depreciation | (955.2 | ) | (825.9 | ) | |||
Property and equipment, net | $ | 1,021.0 | $ | 904.3 | |||
As of December 31, | |||||||
2015 | 2014 | ||||||
Privately-held investments | $ | 102.4 | $ | 89.9 | |||
Licensed software | 7.1 | 8.6 | |||||
Federal income tax receivable | 28.9 | 20.0 | |||||
Customer financing receivable | — | 16.9 | |||||
Inventory | 8.4 | 8.0 | |||||
Prepaid costs, deposits, and other(1) | 110.5 | 75.1 | |||||
Promissory note, including principal and accrued interest, in connection with the sale of Junos Pulse | 132.9 | 125.0 | |||||
Other long-term assets(1) | $ | 390.2 | $ | 343.5 | |||
(1) | During the year ended December 31, 2015, the Company early adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the Consolidated Balance Sheets. Certain amounts in the prior-year Consolidated Financial Statements were retrospectively adjusted to conform to the current-year presentation. |
As of December 31, | |||||||
2015 | 2014 | ||||||
Beginning balance | $ | 28.7 | $ | 28.0 | |||
Provisions made during the period, net | 27.9 | 28.6 | |||||
Actual costs incurred during the period | (28.2 | ) | (27.9 | ) | |||
Ending balance | $ | 28.4 | $ | 28.7 | |||
As of December 31, | |||||||
2015 | 2014 | ||||||
Deferred product revenue: | |||||||
Undelivered product commitments and other product deferrals | $ | 210.1 | $ | 180.3 | |||
Distributor inventory and other sell-through items | 81.8 | 103.7 | |||||
Deferred gross product revenue | 291.9 | 284.0 | |||||
Deferred cost of product revenue | (51.6 | ) | (58.4 | ) | |||
Deferred product revenue, net | 240.3 | 225.6 | |||||
Deferred service revenue | 927.8 | 850.1 | |||||
Total | $ | 1,168.1 | $ | 1,075.7 | |||
Reported as: | |||||||
Current | $ | 822.9 | $ | 780.8 | |||
Long-term | 345.2 | 294.9 | |||||
Total | $ | 1,168.1 | $ | 1,075.7 | |||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Interest income | $ | 21.8 | $ | 10.0 | $ | 8.7 | |||||
Interest expense | (83.3 | ) | (66.9 | ) | (58.4 | ) | |||||
Net gain on legal settlement | — | 196.1 | — | ||||||||
Gain on investments | 6.8 | 167.9 | 11.3 | ||||||||
Gain on sale of Junos Pulse | — | 19.6 | — | ||||||||
Other | (5.1 | ) | 6.7 | (2.0 | ) | ||||||
Other (expense) income, net | $ | (59.8 | ) | $ | 333.4 | $ | (40.4 | ) | |||
|
|||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Severance | $ | 0.4 | $ | 52.6 | $ | 22.9 | |||||
Facilities | (1.0 | ) | 14.4 | 10.0 | |||||||
Contract terminations and other | — | 2.3 | 14.6 | ||||||||
Asset impairments and write-downs | (3.5 | ) | 139.2 | — | |||||||
Total | $ | (4.1 | ) | $ | 208.5 | $ | 47.5 | ||||
Reported as: | |||||||||||
Cost of revenues | $ | (3.5 | ) | $ | 41.5 | $ | 8.4 | ||||
Restructuring and other (benefits) charges | (0.6 | ) | 167.0 | 39.1 | |||||||
Total | $ | (4.1 | ) | $ | 208.5 | $ | 47.5 | ||||
December 31, 2014 | Charges | Cash Payments | Non-cash Settlements and Other | December 31, 2015 | |||||||||||||||
Severance | $ | 9.4 | $ | 0.4 | $ | (8.2 | ) | $ | (1.6 | ) | $ | — | |||||||
Facilities | 7.4 | (1.0 | ) | (2.3 | ) | (1.3 | ) | 2.8 | |||||||||||
Contract terminations and other | 0.2 | (3.5 | ) | — | 3.3 | — | |||||||||||||
Total | $ | 17.0 | $ | (4.1 | ) | $ | (10.5 | ) | $ | 0.4 | $ | 2.8 | |||||||
|
|||
As of December 31, 2015 | ||||||
Amount | Effective Interest Rates | |||||
Senior notes: | ||||||
3.10% fixed-rate notes, due March 2016 | $ | 300.0 | 3.25 | % | ||
3.30% fixed-rate notes, due June 2020 | 300.0 | 3.47 | % | |||
4.60% fixed-rate notes, due March 2021 | 300.0 | 4.69 | % | |||
4.50% fixed-rate notes, due March 2024 | 350.0 | 4.63 | % | |||
4.35% fixed-rate notes, due June 2025 | 300.0 | 4.47 | % | |||
5.95% fixed-rate notes, due March 2041 | 400.0 | 6.03 | % | |||
Total senior notes | 1,950.0 | |||||
Unaccreted discount | (1.3 | ) | ||||
Total | $ | 1,948.7 | ||||
Reported as: | ||||||
Short-term debt | $ | 299.9 | ||||
Long-term debt | 1,648.8 | |||||
Total | $ | 1,948.7 | ||||
|
|||
Shares Repurchased | Average price per share | Amount Repurchased | ||||||||
2015 | ||||||||||
Repurchases under stock repurchase program | 45.4 | $ | 25.16 | $ | 1,142.5 | |||||
Repurchases for tax withholding | 0.4 | $ | 26.70 | $ | 11.1 | |||||
2014 | ||||||||||
Repurchases under stock repurchase program | 46.8 | $ | 22.42 | $ | 1,050.0 | |||||
Accelerated share repurchase(1) | 49.3 | $ | 24.35 | $ | 1,200.0 | |||||
Repurchases for tax withholding | 0.6 | $ | 19.69 | $ | 12.5 | |||||
2013 | ||||||||||
Repurchases under stock repurchase program | 28.9 | $ | 19.76 | $ | 570.6 | |||||
Repurchases for tax withholding | 0.4 | $ | 20.23 | $ | 7.2 | |||||
(1) | As part of the 2014 Stock Repurchase Program, the Company entered into two separate accelerated share repurchase agreements (collectively, the "ASR") with two financial institutions to repurchase $1.2 billion of the Company's common stock. The Company made an up-front payment of $1.2 billion pursuant to the ASR to repurchase the Company's common stock. The aggregate number of shares ultimately purchased was determined based on a volume weighted average repurchase price, less an agreed upon discount. The shares received with respect to the ASR have been retired. Retired shares return to authorized but unissued shares of common stock. |
Unrealized Gains (Losses) on Available-for- Sale Securities(1) | Unrealized Gains (Losses) on Cash Flow Hedges(2) | Foreign Currency Translation Adjustments | Total | ||||||||||||
Balance as of December 31, 2013 | $ | 66.2 | $ | 2.2 | $ | (3.8 | ) | $ | 64.6 | ||||||
Other comprehensive gain (loss) before reclassifications | 48.7 | (4.1 | ) | (14.2 | ) | 30.4 | |||||||||
Amount reclassified from accumulated other comprehensive income | (106.5 | ) | (2.3 | ) | — | (108.8 | ) | ||||||||
Other comprehensive loss | (57.8 | ) | (6.4 | ) | (14.2 | ) | (78.4 | ) | |||||||
Balance as of December 31, 2014 | $ | 8.4 | $ | (4.2 | ) | $ | (18.0 | ) | $ | (13.8 | ) | ||||
Other comprehensive gain (loss) before reclassifications | 9.1 | (6.7 | ) | (16.9 | ) | (14.5 | ) | ||||||||
Amount reclassified from accumulated other comprehensive income | (0.5 | ) | 9.6 | — | 9.1 | ||||||||||
Other comprehensive gain (loss), net | 8.6 | 2.9 | (16.9 | ) | (5.4 | ) | |||||||||
Balance as of December 31, 2015 | $ | 17.0 | $ | (1.3 | ) | $ | (34.9 | ) | $ | (19.2 | ) | ||||
(1) | The reclassifications out of accumulated other comprehensive income, net of tax during the years ended December 31, 2015 and December 31, 2014 for realized gains on available-for-sale securities of $0.5 million and $104.3 million, respectively, are included in other (expense) income, net, in the Consolidated Statements of Operations. |
(2) | The reclassifications out of accumulated other comprehensive (loss) income, net of tax during the year ended December 31, 2015 for realized losses on cash flow hedges are included within cost of revenues of $2.9 million, research and development of $0.2 million, sales and marketing of $6.0 million, and general and administrative of $0.5 million in the Consolidated Statements of Operations. The reclassifications out of accumulated other comprehensive income during the year ended December 31, 2014 for realized gains on cash flow hedges are included within research and development of $1.4 million, sales and marketing of $0.3 million, and general and administrative of $0.7 million and for realized losses within cost of revenues of $0.1 million for which the hedged transactions relate in the Consolidated Statements of Operations. |
|
|||
Outstanding Options | ||||||||||||
Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
Balance as of December 31, 2012 | 34.1 | $ | 24.13 | 3.1 | $ | 52.5 | ||||||
Canceled | (1.3 | ) | 29.56 | |||||||||
Exercised | (5.6 | ) | 15.58 | |||||||||
Expired | (4.1 | ) | 28.35 | |||||||||
Balance as of December 31, 2013 | 23.1 | $ | 25.15 | 2.4 | $ | 44.6 | ||||||
Canceled | (0.6 | ) | 30.15 | |||||||||
Exercised | (5.4 | ) | 19.76 | |||||||||
Expired | (7.2 | ) | 29.11 | |||||||||
Balance as of December 31, 2014 | 9.9 | $ | 24.87 | 2.0 | $ | 24.7 | ||||||
Canceled | (0.1 | ) | 23.65 | |||||||||
Exercised | (3.5 | ) | 19.78 | |||||||||
Expired | (2.7 | ) | 27.99 | |||||||||
Balance as of December 31, 2015 | 3.6 | $ | 27.52 | 2.1 | $ | 16.6 | ||||||
As of December 31, 2015: | ||||||||||||
Vested and expected-to-vest options | 3.6 | $ | 27.58 | 2.1 | $ | 16.3 | ||||||
Exercisable options | 3.4 | $ | 28.82 | 1.8 | $ | 12.1 | ||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Price (In dollars) | Number Outstanding (In millions) | Weighted Average Remaining Contractual Life (In years) | Weighted Average Exercise Price (In dollars) | Number Exercisable (In millions) | Weighted Average Exercise Price (In dollars) | |||||||||||
$0.03 - $14.68 | 0.4 | 5.3 | $ | 3.38 | 0.3 | $ | 4.94 | |||||||||
$15.09 - $18.45 | 0.4 | 0.7 | 15.58 | 0.3 | 15.47 | |||||||||||
$18.49 - $26.10 | 0.4 | 2.3 | 24.11 | 0.3 | 24.19 | |||||||||||
$26.39 - $27.44 | 0.5 | 1.0 | 26.97 | 0.5 | 26.97 | |||||||||||
$27.62 - $29.33 | 0.1 | 2.0 | 28.88 | 0.1 | 28.88 | |||||||||||
$29.89 - $29.89 | 0.5 | 1.2 | 29.89 | 0.5 | 29.89 | |||||||||||
$30.01 - $36.49 | 0.4 | 1.9 | 32.76 | 0.4 | 32.76 | |||||||||||
$38.93 - $38.93 | 0.1 | 2.4 | 38.93 | 0.1 | 38.93 | |||||||||||
$40.26 - $40.26 | 0.5 | 2.2 | 40.26 | 0.6 | 40.26 | |||||||||||
$44.00 - $44.00 | 0.3 | 2.1 | 44.00 | 0.3 | 44.00 | |||||||||||
$0.03 - $44.00 | 3.6 | 2.1 | $ | 27.52 | 3.4 | $ | 28.82 | |||||||||
Outstanding RSUs, RSAs, and PSAs | ||||||||||||
Number of Shares | Weighted Average Grant-Date Fair Value per Share | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
Balance as of December 31, 2012 | 26.8 | $ | 27.76 | 1.7 | $ | 565.0 | ||||||
RSUs granted | 10.3 | 20.32 | ||||||||||
PSAs granted(1) | 2.2 | 21.27 | ||||||||||
RSUs vested(2) | (6.1 | ) | 26.15 | |||||||||
PSAs vested(2) | (1.1 | ) | 28.52 | |||||||||
RSAs vested(2) | (1.6 | ) | 19.59 | |||||||||
RSUs canceled | (3.4 | ) | 22.99 | |||||||||
PSAs canceled | (1.7 | ) | 29.10 | |||||||||
Balance as of December 31, 2013 | 25.4 | $ | 23.44 | 1.1 | $ | 573.5 | ||||||
RSUs granted(3)(6) | 10.0 | 22.52 | ||||||||||
RSUs assumed(4) | 0.4 | 22.66 | ||||||||||
RSAs assumed(4) | 0.9 | 22.66 | ||||||||||
PSAs granted(5)(6) | 1.4 | 24.25 | ||||||||||
PSAs assumed(4) | 0.2 | 22.66 | ||||||||||
RSUs vested(2) | (7.3 | ) | 22.98 | |||||||||
RSAs vested(2) | (1.4 | ) | 19.59 | |||||||||
PSAs vested(2) | (1.1 | ) | 36.19 | |||||||||
RSUs canceled | (4.0 | ) | 21.63 | |||||||||
PSAs canceled | (3.2 | ) | 30.43 | |||||||||
Balance as of December 31, 2014 | 21.3 | $ | 22.05 | 1.1 | $ | 475.0 | ||||||
RSUs granted(3)(6) | 8.9 | 23.41 | ||||||||||
PSAs granted(6)(7) | 1.0 | 23.76 | ||||||||||
RSUs vested(2) | (7.2 | ) | 22.58 | |||||||||
RSAs vested(2) | (1.8 | ) | 20.13 | |||||||||
PSAs vested(2) | (0.3 | ) | 22.52 | |||||||||
RSUs canceled | (2.3 | ) | 22.18 | |||||||||
PSAs canceled | (1.0 | ) | 22.27 | |||||||||
Balance at December 31, 2015 | 18.6 | $ | 22.71 | 1.1 | $ | 514.1 | ||||||
As of December 31, 2015 | ||||||||||||
Vested and expected-to-vest RSUs, RSAs, and PSAs | 15.3 | $ | 22.59 | 1.0 | $ | 421.3 | ||||||
(1) | The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee (or an authorized subcommittee) are achieved at target is 1.1 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 to 2.2 million shares. |
(2) | Total fair value of RSUs, RSAs, and PSAs vested during 2015, 2014, and 2013 was $202.7 million, $238.5 million, and $221.5 million, respectively. |
(3) | Includes service-based and market-based RSUs granted under the 2006 Plan and 2015 Plan according to their terms. |
(4) | RSUs, RSAs, and PSAs assumed in connection with the acquisition of WANDL Inc. |
(5) | The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee (or an authorized subcommittee) are achieved at target is 0.7 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 to 1.4 million shares. |
(6) | On February 20, 2014, the Company announced its intention to initiate a quarterly cash dividend of $0.10 per share of common stock in the third quarter of 2014. As a result of the Company's announcement, the grant date fair value of RSUs and PSAs granted after the announcement date were reduced by the present value of the dividends expected to be paid on the underlying shares of common stock during the requisite and derived service period as these awards are not entitled to receive dividends until vested. |
(7) | The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee (or an authorized subcommittee) are achieved at target is 0.7 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is 0 to 1.0 million shares. |
Number of Shares | ||
Balance as of December 31, 2014 | 47.8 | |
RSUs and PSAs granted (1) | (20.7 | ) |
RSUs and PSAs canceled (1)(2) | 7.0 | |
Options canceled (2) | 0.1 | |
Options expired (2) | 2.7 | |
Shares discontinued (3) | (38.2 | ) |
Shares authorized under the 2015 Plan | 38.0 | |
Balance as of December 31, 2015 | 36.7 | |
(1) | RSUs and PSAs with a per share or unit purchase price lower than 100% of the fair market value of the Company's common stock on the day of the grant under the 2015 Plan and the 2006 Plan are counted against shares authorized under the plan as two and one-tenth shares of common stock for each share subject to such award. The number of shares subject to PSAs granted represents the maximum number of shares that may be issued pursuant to the award over its full term. |
(2) | Canceled or expired options under the 2006 Plan and the 1996 Plan and canceled RSUs and PSAs under the 2006 Plan are no longer available for future grant under such plans; however, the number of shares available for grant under the 2015 Plan will be increased by the amount of such canceled or expired options, RSUs or PSAs, as applicable, up to a maximum of 29.0 million additional shares of common stock, pursuant to the terms of the 2015 Plan. |
(3) | Authorized shares not subject to outstanding awards under the 2006 Plan were canceled on May 19, 2015, following the approval by the Company’s stockholders of the 2015 Plan. Effective May 19, 2015, no additional awards are issuable under the 2006 Plan. |
Years Ended December 31, | |||||
2015 | 2014 | 2013 | |||
ESPP(1): | |||||
Volatility | 29% | 30% | 36% | ||
Risk-free interest rate | 0.1% | 0.1% | 0.1% | ||
Expected life (years) | 0.5 | 0.5 | 0.5 | ||
Dividend yield | 1.7% | 0% - 1.8% | — | ||
Weighted-average fair value per share | $5.63 | $5.72 | $5.54 | ||
Market-based RSUs(2) | |||||
Volatility | 34% | 36% | — | ||
Risk-free interest rate | 1.4% | 1.6% | — | ||
Dividend yield | 1.8% | 0% - 2.0% | — | ||
Weighted-average fair value per share | $14.97 | $16.89 | — | ||
(1) | The Black-Scholes-Merton option-pricing model is utilized to estimate the fair value of ESPP. |
(2) | The fair value of market-based RSUs utilizes the Monte Carlo simulation option pricing model. The Company amortizes the fair value of these awards over the derived service period adjusted for estimated forfeitures for each separately vesting tranche of the award. Provided that the derived service is rendered, the total fair value of the market-based RSUs at the date of grant is recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria. |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cost of revenues - Product | $ | 5.6 | $ | 5.0 | $ | 4.7 | |||||
Cost of revenues - Service | 13.8 | 14.2 | 15.4 | ||||||||
Research and development | 125.4 | 134.5 | 127.6 | ||||||||
Sales and marketing | 45.6 | 60.2 | 70.9 | ||||||||
General and administrative | 26.9 | 26.1 | 26.0 | ||||||||
Total | $ | 217.3 | $ | 240.0 | $ | 244.6 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Stock options | $ | 6.6 | $ | 14.9 | $ | 31.5 | |||||
RSUs, RSAs, and PSAs | 197.3 | 209.7 | 196.8 | ||||||||
ESPP | 13.4 | 15.4 | 16.3 | ||||||||
Total | $ | 217.3 | $ | 240.0 | $ | 244.6 | |||||
Unrecognized Compensation Cost | Weighted Average Period (In Years) | ||||
Stock options | $ | 2.1 | 0.6 | ||
RSUs, RSAs, and PSAs | $ | 211.2 | 1.7 | ||
|
|||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Routing | $ | 2,359.2 | $ | 2,223.9 | $ | 2,318.0 | |||||
Switching | 768.3 | 721.2 | 638.0 | ||||||||
Security | 435.6 | 463.6 | 563.9 | ||||||||
Total product | 3,563.1 | 3,408.7 | 3,519.9 | ||||||||
Total service | 1,294.7 | 1,218.4 | 1,149.2 | ||||||||
Total | $ | 4,857.8 | $ | 4,627.1 | $ | 4,669.1 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Americas: | |||||||||||
United States | $ | 2,568.6 | $ | 2,410.6 | $ | 2,381.5 | |||||
Other | 223.6 | 219.7 | 232.0 | ||||||||
Total Americas | 2,792.2 | 2,630.3 | 2,613.5 | ||||||||
Europe, Middle East, and Africa | 1,320.3 | 1,263.3 | 1,256.9 | ||||||||
Asia Pacific | 745.3 | 733.5 | 798.7 | ||||||||
Total | $ | 4,857.8 | $ | 4,627.1 | $ | 4,669.1 | |||||
As of December 31, | |||||||
2015 | 2014 | ||||||
United States | $ | 925.5 | $ | 871.7 | |||
International | 129.4 | 95.0 | |||||
Property and equipment, net and purchased intangible assets, net | $ | 1,054.9 | $ | 966.7 | |||
|
|||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Domestic | $ | 456.3 | $ | (509.7 | ) | $ | 248.7 | ||||
Foreign | 395.9 | 423.4 | 276.8 | ||||||||
Total pretax (loss) income | $ | 852.2 | $ | (86.3 | ) | $ | 525.5 | ||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Current provision (benefit): | |||||||||||
Federal | $ | 181.4 | $ | 180.1 | $ | (12.9 | ) | ||||
States | 15.9 | 15.2 | (5.0 | ) | |||||||
Foreign | 43.3 | 33.7 | 32.5 | ||||||||
Total current provision (benefit) | 240.6 | 229.0 | 14.6 | ||||||||
Deferred provision (benefit): | |||||||||||
Federal | (16.7 | ) | 17.3 | 51.2 | |||||||
States | (0.4 | ) | 1.2 | (2.7 | ) | ||||||
Foreign | (5.0 | ) | 0.5 | 22.6 | |||||||
Total deferred provision (benefit) | (22.1 | ) | 19.0 | 71.1 | |||||||
Income tax benefits attributable to employee stock plan activity | — | — | — | ||||||||
Total provision (benefit) for income taxes | $ | 218.5 | $ | 248.0 | $ | 85.7 | |||||
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Expected (benefit) provision at 35% rate | $ | 298.3 | $ | (30.2 | ) | $ | 184.0 | ||||
State taxes (benefit), net of federal benefit | 8.9 | 9.5 | (3.6 | ) | |||||||
Foreign income at different tax rates | (68.9 | ) | (90.2 | ) | (37.7 | ) | |||||
R&D tax credits | (12.7 | ) | (17.1 | ) | (32.5 | ) | |||||
Share-based compensation | 13.2 | 25.3 | 25.6 | ||||||||
Non-deductible goodwill impairment | — | 297.5 | — | ||||||||
Gain on sale of Junos Pulse | — | 75.6 | — | ||||||||
Release of valuation allowance | — | (22.8 | ) | — | |||||||
Settlement with tax authorities | — | — | (28.3 | ) | |||||||
Domestic production activities | (15.1 | ) | (6.8 | ) | (26.3 | ) | |||||
Non-deductible compensation | 3.7 | 3.2 | 1.5 | ||||||||
Cost sharing adjustment | (13.2 | ) | — | — | |||||||
Other | 4.3 | 4.0 | 3.0 | ||||||||
Total provision for income taxes | $ | 218.5 | $ | 248.0 | $ | 85.7 | |||||
As of December 31, | |||||||
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Net operating loss carry-forwards | $ | 1.0 | $ | 1.3 | |||
Foreign tax credit carry-forwards | 75.4 | 69.7 | |||||
Research and other credit carry-forwards | 128.7 | 122.5 | |||||
Deferred revenue | 109.3 | 104.9 | |||||
Stock-based compensation | 49.1 | 55.8 | |||||
Cost sharing adjustment | 70.1 | — | |||||
Reserves and accruals not currently deductible | 173.9 | 129.8 | |||||
Other | 19.2 | 19.8 | |||||
Total deferred tax assets | 626.7 | 503.8 | |||||
Valuation allowance | (146.2 | ) | (144.5 | ) | |||
Deferred tax assets, net of valuation allowance | 480.5 | 359.3 | |||||
Deferred tax liabilities: | |||||||
Property and equipment basis differences | (44.1 | ) | (35.6 | ) | |||
Purchased intangibles | (3.1 | ) | (16.7 | ) | |||
Unremitted foreign earnings | (365.4 | ) | (260.6 | ) | |||
Deferred compensation and other | (12.0 | ) | (5.1 | ) | |||
Other | — | — | |||||
Total deferred tax liabilities | (424.6 | ) | (318.0 | ) | |||
Net deferred tax assets(1) | $ | 55.9 | $ | 41.3 | |||
(1) | During the year ended December 31, 2015, the Company early adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the Consolidated Balance Sheets. Certain amounts in the prior-year Consolidated Financial Statements were retrospectively adjusted to conform to the current-year presentation. |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Balance at beginning of year | $ | 199.2 | $ | 137.6 | $ | 136.1 | |||||
Tax positions related to current year: | |||||||||||
Additions | 18.1 | 62.5 | 15.8 | ||||||||
Tax positions related to prior years: | |||||||||||
Additions | 5.3 | 0.6 | 22.6 | ||||||||
Reductions | (2.9 | ) | — | (2.2 | ) | ||||||
Settlements | — | — | (31.1 | ) | |||||||
Lapses in statutes of limitations | (3.6 | ) | (1.5 | ) | (3.6 | ) | |||||
Balance at end of year | $ | 216.1 | $ | 199.2 | $ | 137.6 | |||||
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Years Ending December 31, | Amount | ||
2016 | $ | 35.7 | |
2017 | 25.6 | ||
2018 | 18.6 | ||
2019 | 10.3 | ||
2020 | 7.8 | ||
Thereafter | 15.7 | ||
Total | $ | 113.7 | |
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Year Ended December 31, 2015 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Net revenues: | ||||||||||||||||
Product | $ | 764.1 | $ | 899.7 | $ | 925.4 | $ | 973.9 | ||||||||
Service | 303.3 | 322.5 | 323.2 | 345.7 | ||||||||||||
Total net revenues | 1,067.4 | 1,222.2 | 1,248.6 | 1,319.6 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Product | 288.8 | 311.7 | 322.6 | 346.5 | ||||||||||||
Service | 121.3 | 129.0 | 128.6 | 130.7 | ||||||||||||
Total cost of revenues | 410.1 | 440.7 | 451.2 | 477.2 | ||||||||||||
Gross margin | 657.3 | 781.5 | 797.4 | 842.4 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 248.7 | 251.6 | 247.0 | 247.2 | ||||||||||||
Sales and marketing | 220.2 | 232.4 | 235.3 | 255.9 | ||||||||||||
General and administrative | 55.2 | 56.3 | 57.1 | 60.3 | ||||||||||||
Restructuring and other charges (benefit) | 1.4 | (1.9 | ) | — | (0.1 | ) | ||||||||||
Total operating expenses | 525.5 | 538.4 | 539.4 | 563.3 | ||||||||||||
Operating income | 131.8 | 243.1 | 258.0 | 279.1 | ||||||||||||
Other expense, net(1)(3) | (15.8 | ) | (17.1 | ) | (8.4 | ) | (18.5 | ) | ||||||||
Income before income taxes | 116.0 | 226.0 | 249.6 | 260.6 | ||||||||||||
Income tax provision(2) | 35.8 | 68.0 | 51.9 | 62.8 | ||||||||||||
Net income | $ | 80.2 | $ | 158.0 | $ | 197.7 | $ | 197.8 | ||||||||
Net income per share:(4) | ||||||||||||||||
Basic | $ | 0.20 | $ | 0.41 | $ | 0.52 | $ | 0.52 | ||||||||
Diluted | $ | 0.19 | $ | 0.40 | $ | 0.51 | $ | 0.51 | ||||||||
Cash dividends declared per common stock(5) | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||||
(1) | During the first quarter of 2015, the Company issued $300.0 million aggregate principal amount of 3.30% senior notes due 2020 and $300.0 million aggregate principal amount of 4.35% senior notes due 2025. As a result, the Company recorded interest expense of $19.1 million, related to long-term debt issued in 2015 in other expense, net during the year ended December 31, 2015. |
(2) | Includes approximately $13.2 million net benefit of cumulative adjustment related to the change in treatment of share-based compensation as a result of the U.S. Tax Court decision in Altera Corporation et al., or Altera, v. Commissioner. See Note 14, Income Taxes, in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Report for further information. |
(3) | During the fourth quarter of 2015, the Company recorded a gain on privately held investments of $7.3 million in other expense, net. |
(4) | Net income per share is computed independently. Therefore, the sum of the quarterly net income per share may not equal the total computed for the year or any cumulative interim period. |
(5) | On January 27, 2015, April 23, 2015, July 23, 2015 and on October 22, 2015, the company declared a quarterly cash dividend of $0.10 per share of common stock to stockholders on record as of the close of business March 3, 2015, June 2, 2015, September 1, 2015, and December 1, 2015, respectively. |
Year Ended December 31, 2014 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Net revenues: | ||||||||||||||||
Product | $ | 876.0 | $ | 929.2 | $ | 809.5 | $ | 794.0 | ||||||||
Service | 294.1 | 300.3 | 316.4 | 307.6 | ||||||||||||
Total net revenues | 1,170.1 | 1,229.5 | 1,125.9 | 1,101.6 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Product | 326.6 | 359.3 | 290.0 | 310.9 | ||||||||||||
Service | 123.4 | 122.0 | 121.1 | 115.6 | ||||||||||||
Total cost of revenues (1) | 450.0 | 481.3 | 411.1 | 426.5 | ||||||||||||
Gross margin | 720.1 | 748.2 | 714.8 | 675.1 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 264.0 | 255.5 | 253.2 | 233.5 | ||||||||||||
Sales and marketing | 273.4 | 258.0 | 249.2 | 243.0 | ||||||||||||
General and administrative | 74.9 | 60.6 | 55.0 | 40.6 | ||||||||||||
Restructuring and other charges (benefits)(1) | 114.0 | 58.2 | (15.0 | ) | 9.8 | |||||||||||
Impairment of goodwill(2) | — | — | — | 850.0 | ||||||||||||
Total operating expenses | 726.3 | 632.3 | 542.4 | 1,376.9 | ||||||||||||
Operating (loss) income | (6.2 | ) | 115.9 | 172.4 | (701.8 | ) | ||||||||||
Other income (expense), net(3) | 154.2 | 178.6 | (6.8 | ) | 7.4 | |||||||||||
Income (loss) before income taxes | 148.0 | 294.5 | 165.6 | (694.4 | ) | |||||||||||
Income tax provision | 37.4 | 73.4 | 62.0 | 75.2 | ||||||||||||
Net income (loss) | $ | 110.6 | $ | 221.1 | $ | 103.6 | $ | (769.6 | ) | |||||||
Net income (loss) per share:(4) | ||||||||||||||||
Basic | $ | 0.23 | $ | 0.47 | $ | 0.23 | $ | (1.81 | ) | |||||||
Diluted | $ | 0.22 | $ | 0.46 | $ | 0.23 | $ | (1.81 | ) | |||||||
Cash dividends declared per common stock(5) | $ | — | $ | — | $ | 0.10 | $ | 0.10 | ||||||||
(1) | In the first quarter of 2014, the company initiated a 2014 Restructuring Plan, which consisted of $84.7 million asset write-downs, $28.0 million of severance costs, and $0.8 million of contract terminations that were recorded in restructuring and other charges. In addition, the Company recorded inventory write-downs related to the acceleration of the end-of-service life of certain products totaling $8.4 million to cost of revenues. In the second quarter, the Company recorded $9.9 million of severance costs, $37.6 million of facility consolidation and closures, $8.9 million of asset write-downs, and $1.5 million of contract terminations that were recorded to restructuring and other charges. The Company also recorded inventory write-downs of $11.5 million and a charge related to products with contract manufacturers of $2.3 million for acceleration of the end-of-life service of certain products to cost of revenues. In the third quarter, the Company recorded $7.1 million of severance costs, a benefit of $25.0 million of facility consolidation and closures as a result of a lease assignment, and $2.9 million of asset write-downs, that were recorded to restructuring and other (credit) charges. In the fourth quarter, the Company recorded $6.9 million in severance costs, $1.6 million of facility consolidation and closures, and $20.6 million in asset impairment and write-downs. |
(2) | During the fourth quarter of 2014, the Company recorded an $850.0 million goodwill impairment charge related to its Security reporting unit. |
(3) | In the first quarter of 2014, the Company recorded a gain of $163.0 million related to the sale of investments which were converted from privately-held investments to publicly-traded equity upon initial public offering. In the second quarter, the Company entered into a settlement agreement with Palo Alto Networks, which resulted in a realized gain on legal settlement of $195.3 million, net of legal fees. All such Palo Alto Networks securities were sold in the third quarter, and the Company recorded an additional $0.8 million gain. In the fourth quarter, the Company recorded a gain of $19.6 million on the sale of Junos Pulse. |
(4) | Net income (loss) per share is computed independently. Therefore, the sum of the quarterly net income per share may not equal the total computed for the year or any cumulative interim period. |
(5) | On July 22, 2014 and October 23, 2014 the company declared a quarterly cash dividend of $0.10 per share of common stock to stockholders on record as of the close of business September 2, 2014 and December 2, 2014, respectively. |
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