~~Table~~As of ~~Contents~~March 31, 2013, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. It is not our business practice to enter into off-balance sheet arrangements. However, in the normal course of business, we enter into contracts consisting of guarantees of product and service performance, guarantees related to third-party customer-financing arrangements, customs and duties guarantees, and standby letters of credit for certain lease facilities. See Note 16, Commitments and Contingencies, in Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Report for additional information regarding our guarantees.

Contractual Obligations

As of March 31, 2013, our principle commitments consist of obligations under operating leases, purchase commitments, debt, and other contractual obligations. There have been no significant changes to these obligations during the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013, compared to the contractual obligations disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations, set forth in Part II, Item 7, of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2011~~2012.

Guarantees

We have entered into agreements with customers that contain indemnification provisions relating to potential situations where claims could be alleged that our products infringe the intellectual property rights of a third-party. We also have financial guarantees consisting of guarantees of product and service performance, guarantees related to third-party customer-financing arrangements, customs and duties guarantees, and standby letters of credit for certain lease facilities. As of March 31, 2013 and December 31, 2012, we had $11.7 million and $12.6 million, respectively, in bank guarantees and standby letters of credit related to these financial guarantees.

Liquidity and Capital Resource Requirements

Liquidity and capital resources may be impacted by our operating activities as well as acquisitions and investments in strategic relationships that we have made or we may make in the future. Additionally, if we were to repurchase additional shares of our common stock under ~~the 2012 Stock Repurchase Program,~~our stock repurchase program, our liquidity may be impacted. As of ~~September 30, 2012~~March 31, 2013, ~~55%~~60% of our cash and investment balances were held outside of the U.S., which may be subject to U.S. taxes if repatriated.

In August 2010, we filed a $1.5 billion shelf registration ~~statement~~ with the SEC. In March 2011, we issued ~~$1.0 billion~~notes in ~~principle~~the amount of ~~senior notes~~$1.0 billion under the shelf registration statement. ~~While~~Therefore, while we have no current plans to do so, we may issue up to $500 million in additional securities under the shelf registration statement. The shelf registration ~~statement~~ is intended to give us flexibility to take advantage of financing opportunities as needed or deemed desirable in light of market conditions. Any additional offerings of securities under the shelf registration statement will be made pursuant to a prospectus. ~~However, such financing opportunities may not be available on terms acceptable to us or at all.~~

We have been focused on managing our annual equity usage as a percentage of the common stock outstanding to align with peer group competitive levels and have made changes in recent years to reduce the number of shares underlying the equity awards we grant. For fiscal year ~~2012,~~2013, we intend to target the number of shares underlying equity awards granted on an annual basis at 2.75% or less of our common stock outstanding. Based upon shares underlying our grants to date of options, RSUs, RSAs, and PSAs (counting only the on-target measure of such PSAs), we believe we are on track with respect to this goal for ~~2012.~~2013.

Based on past performance and current expectations, we believe that our existing cash and cash equivalents, short-term, and long-term investments (which includes the proceeds from the issuance of our long-term debt), together with cash generated from operations as well as cash generated from the exercise of ~~employee~~ stock options and purchases under our employee stock purchase plan will be sufficient to fund our operations and anticipated growth for at least the next 12twelve months. We believe our working capital is sufficient to meet our liquidity requirements for capital expenditures, commitments, and other liquidity requirements associated with our existing operations during the same period. However, our future liquidity and capital requirements may vary materially from those now planned depending on many factors, including:

level and mix of our product, sales, and gross profit margins;

our business, product, capital expenditures and R&D plans;

repurchases of our common stock;

incurrence and repayment of debt and related interest obligations;

litigation expenses, settlements, and judgments, or similar items related to resolution of tax audits;

volume price discounts and customer rebates;

accounts receivable levels that we maintain;

acquisitions and/or funding of other businesses, assets, products, or technologies;

changes in our compensation policies;

capital improvements for new and existing facilities;

technological advances;

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our competitors' responses to our products and/or pricing;

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our relationships with ~~supplies,~~suppliers, partners, and customers;

possible future investments in raw material and finished goods inventories;

expenses related to future restructuring plans, if any;

tax expense associated with share-based awards;

issuance of share-based awards and the related payment in cash for withholding taxes in the current year and possibly during future years;

level of exercises of stock options and stock purchases under our equity incentive plans; and

general economic conditions and specific conditions in our industry and markets, including the effects of disruptions in global credit and financial markets, international conflicts, and related uncertainties.

Factors That May Affect Future Results

A description of the risk factors associated with our business is included under “Risk Factors” in Item 1A of Part II of this Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposures to market risk have not changed materially since December 31, ~~2011~~2012. For quantitative and qualitative disclosures about market risk, see Item 7A Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the year ended December 31, ~~2011~~2012.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Attached, as exhibits to this report are certifications of our principal executive officer and principal financial officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This “Controls and Procedures” section includes information concerning the controls and related evaluations referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There were no changes in our internal control over financial reporting that occurred during the ~~third~~first quarter ~~quarter~~ of ~~2012~~2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control

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system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Our controls and procedures are designed to provide reasonable assurance that our control system’s objectives will be met and our CEO and CFO have concluded that our disclosure controls and procedures are effective

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at the reasonable assurance level. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of these controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The information set forth under the “Legal Proceedings” section in Note 16, Commitments and Contingencies, in Notes to Condensed Consolidated Financial Statements in Item 1 of Part I of this ~~Quarterly~~ Report, ~~on Form 10-Q,~~ is incorporated herein by reference.

Item 1A. Risk Factors

Factors That May Affect Future Results

Investments in our securities involve significant risks. The market price of our stock has historically reflected a higher multiple of earnings than many other companies. Accordingly, even small changes in investor expectations for our future growth and earnings, whether as a result of actual or rumored financial or operating results, changes in the mix of the products and services sold, acquisitions, industry changes, or other factors, could trigger, and have triggered in the past, significant fluctuations in the market price of our common stock. Investors in our securities should carefully consider all of the relevant factors disclosed by ~~the Company,~~us, including, but not limited to, the following factors, that could affect our business, operating results and stock price.

Our quarterly results are unpredictable and subject to substantial fluctuations, and, as a result, we may fail to meet the expectations of securities analysts and investors, which could adversely affect the trading price of our common stock.

Our revenues and operating results may vary significantly from quarter-to-quarter due to a number of factors, many of which are outside of our control and any of which may cause our stock price to fluctuate.

The factors that may cause our quarterly results to vary quarter by quarter and be unpredictable include, but are not limited to: limited visibility into customer spending plans, changes in the mix of products and services sold, changes in geographies in which our products and services are sold, changing market and economic conditions, current and potential customer consolidation, competition, customer concentration, long sales and implementation cycles, regional economic and political conditions, and seasonality. For example, we, and many companies in our industry, experience adverse seasonal fluctuations in customer spending, particularly in the first and third quarters. Market trends, competitive pressures, commoditization of products, seasonal rebates, increased component or shipping costs, regulatory impacts and other factors may result in reductions in revenue or pressure on gross margins of certain segments in a given period, which may necessitate adjustments to our operations.

As a result of these factors, as well as other variables affecting our operating results, we believe that quarter-to-quarter comparisons of operating results are not necessarily a good indication of what our future performance will be. It is likely that in some future quarters, our operating results may be below our guidance, our long-term financial model or the expectations of securities analysts or investors, in which case the price of our common stock may decline. Such a decline could occur, and has occurred in the past, even when we have met our publicly stated revenues and/or earnings guidance.

Fluctuating economic conditions make it difficult to predict revenues for a particular period and a shortfall in revenues or increase in costs of production may harm our operating results.

Our revenues and gross margin depend significantly on general economic conditions and the demand for products in the markets in which we compete. Economic weakness, customer financial difficulties, and constrained spending on network expansion and enterprise infrastructure have in the past resulted in, and may in the future result in, decreased revenues and earnings. Such factors could make it difficult to accurately forecast sales and operating results and could negatively affect our

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ability to provide accurate forecasts to our contract manufacturers and manage our contract manufacturer relationships and other expenses. In addition, economic uncertainty concerns over the sovereign debt situation in certain countries in the European Union, as well as continued turmoil in the geopolitical environment in many parts of the world, have, and may continue to, put pressure on global economic conditions, which has led, and could continue to lead, to reduced demand for our products, to delays or reductions in network expansions or infrastructure projects, and/or higher costs of production. Economic weakness may also lead to longer collection cycles for payments due from our customers, an increase in customer bad debt, restructuring initiatives and associated expenses, and impairment of investments. Furthermore, ~~the~~ continued weakness and ~~uncertainty in worldwide credit markets, including~~ the sovereign debt situation in certain countries in the European Union, may adversely impact the ability of our customers to adequately fund their expected capital expenditures, which could lead to delays or cancellations of planned purchases of our products or services. In addition, our operating expenses are largely based on anticipated revenue trends and a high percentage of our expenses is, and will continue to be, fixed in the short and medium term.

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Uncertainty about future economic conditions also makes it difficult to forecast operating results and to make decisions about future investments. Future or continued economic weakness, failure of our customers and markets to recover from such weakness, customer financial difficulties, increases in costs of production, and reductions in spending on network maintenance and expansion could have a material adverse effect on demand for our products and consequently on our business, financial condition, and results of operations.

A limited number of our customers comprise a significant portion of our revenues and ~~any~~there is an ongoing trend toward consolidation in the industry in which our customers and partners operate. Any decrease in revenues from ~~these~~our customers or partners could have an adverse effect on our net revenues and operating results.

A substantial majority of our net revenues depend on sales to a limited number of customers and distribution partners. For example, AT&T and Verizon accounted for greater than ~~15%~~10% of our net revenues induring the first quarter of ~~2012 and 12% of our net revenues in the second quarter of 2012.~~2013. Changes in the business requirements, vendor selection, financial prospects, capital resources, and expenditures, or purchasing behavior (including product mix purchased) of our key customers could significantly decrease sales to such customers or could lead to delays or cancellations of planned purchases of our products or services, which increases the risk of quarterly fluctuations in our revenues and operating results. Any of these factors could adversely affect our business, financial condition, and results of operations.

In addition, in recent years, there has been movement towards consolidation in the telecommunications industry (for example, the acquisitions of Global Crossing by Level 3 Communications and Qwest Communications by CenturyLink and Softbank's proposed purchase of a controlling interest in Sprint Nextel) and that consolidation trend has continued. If our customers or partners are parties to consolidation transactions they may delay, suspend or indefinitely reduce or cancel their purchases of our products or other unforeseen consequences could harm our business, financial condition, and results of operations.

The long sales and implementation cycles for our products, as well as our expectation that some customers will sporadically place large orders with short lead times, may cause our revenues and operating results to vary significantly from quarter-to-quarter.

A customer's decision to purchase certain of our products, particularly new products, involves a significant commitment of its resources and a lengthy evaluation and product qualification process. As a result, the sales cycle may be lengthy. In particular, customers making critical decisions regarding the design and implementation of large network deployments may engage in very lengthy procurement processes that may delay or impact expected future orders. Throughout the sales cycle, we may spend considerable time educating and providing information to prospective customers regarding the use and benefits of our products. Even after making the decision to purchase, customers may deploy our products slowly and deliberately. Timing of deployment can vary widely and depends on the skill set of the customer, the size of the network deployment, the complexity of the customer's network environment, and the degree of hardware and operating system configuration necessary to deploy the products. Customers with large networks usually expand their networks in large increments on a periodic basis. Accordingly, we may receive purchase orders for significant dollar amounts on an irregular basis. These long cycles, as well as our expectation that customers will tend to sporadically place large orders with short lead times, both of which may be exacerbated by the impact of continued global economic weakness, may cause revenues and operating results to vary significantly and unexpectedly from quarter-to-quarter.

We face intense competition that could reduce our revenues and adversely affect our business and financial results.

Competition is intense in the markets that we address. The PSD market has historically been dominated by Cisco, with competition coming from other companies such as Alcatel-Lucent, Brocade, Extreme Networks, Hewlett Packard Company, and Huawei. In the SSD market, we face intense competition from a broader group of companies such as Check Point, Cisco,

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F5 Networks, Palo Alto Networks, and Fortinet. ~~In addition,~~Further, a number of other small public and private companies have products or have announced plans for new products to address the same challenges and markets that our products address.

In addition, actual or speculated consolidation among competitors, or the acquisition of our partners and/or resellers by competitors, can increase the competitive pressures faced by us as customers may delay spending decisions or not purchase our products at all. ~~For example, Ericsson~~In this regard, Oracle acquired ~~Redback~~Acme Packet, Inc. in ~~2007,~~2013 and ~~Brocade~~Cisco acquired ~~Foundry~~Meraki Networks, Inc. in ~~2009.~~2013. A number of our competitors have substantially greater resources and can offer a wider range of products and services for the overall network equipment market than we do. If we are unable to compete successfully against existing and future competitors on the basis of product offerings or price, we could experience a loss in market share and revenues and/or be required to reduce prices, which could reduce our gross margins, and which could materially and adversely affect our business, financial condition, and results of operations.

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We expect our gross margins to vary over time, and the level of product gross margins achieved by us in recent years may not be sustainable.

We expect our product gross margins to vary from quarter-to-quarter, and the gross margins we have achieved in recent years may not be sustainable and may be adversely affected in the future by numerous factors, including customer, product and geographic mix shifts, increased price competition in one or more of the markets in which we compete, increases in material or labor costs, increases in inventory carrying costs, excess product component or obsolescence charges from our contract manufacturers, increased costs due to changes in component pricing or charges incurred due to component holding periods if we do not accurately forecast product demand, warranty related issues, or our introduction of new products or entry into new markets with different pricing and cost structures. For example, in the third quarter of fiscal 2012, our margins ~~were reduced~~declined as a result of an inventory charge resulting from inventory we held in excess of forecasted demand. Failure to sustain or improve our gross margins reduces our profitability and may have a material adverse effect on our business and stock price.

If we receive product orders late in a quarter, we may be unable to recognize revenue for these orders in the same period, which could adversely affect our quarterly revenues.

Generally, our PSD products are not stocked by distributors or resellers due to their cost and complexity and configurations required by our customers, and we generally build such products as orders are received. In recent years, the volume of orders received late in any given fiscal quarter has generally continued to increase but remains unpredictable. If orders for certain products are received late in any quarter, we may not be able to build, ship, and recognize revenue for these orders in the same period, which could adversely affect our ability to meet our expected revenues for such quarter. Additionally, we determine our operating expenses largely on the basis of anticipated revenues and a high percentage of our expenses are fixed in the short and medium term. As a result, a failure or delay in generating or recognizing revenue could cause significant variations in our operating results and operating margin from quarter-to-quarter.

We are dependent on sole source and limited source suppliers for several key components, which makes us susceptible to shortages or price fluctuations in our supply chain, and we may face increased challenges in supply chain management in the future.

During periods of high demand for electronic products, component shortages are possible, and the predictability of the availability of such components may be limited. Any future growth in our business, IT spending and the economy in general is likely to create greater pressures on us and our suppliers to accurately forecast overall component demand and to establish optimal component inventories. If shortages or delays persist, the price of these components may increase, or the components may not be available at all. We may not be able to secure enough components at reasonable prices or of acceptable quality to build new products in a timely manner, and our revenues and gross margins could suffer until other sources can be developed. For example, from time to time, we have experienced component shortages that resulted in delays of product shipments. We currently purchase numerous key components, including ASICs, from single or limited sources. The development of alternate sources for those components is time-consuming, difficult, and costly. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules. Also, long-term supply and maintenance obligations to customers increase the duration for which specific components are required, which may further increase the risk of component shortages or the cost of carrying inventory. In the event of a component shortage or supply interruption from these suppliers, we may not be able to develop alternate or second sources in a timely manner. If we are unable to buy these components in quantities sufficient to meet our requirements on a timely basis, we will not be able to deliver product to our customers, which would seriously affect present and future sales, which would, in turn, adversely affect our business, financial condition, and results of operations.

In addition, the development, licensing, or acquisition of new products in the future may increase the complexity of supply chain management. Failure to effectively manage the supply of key components and products would adversely affect our business.

We rely on value-added and other resellers, as well as distribution partners, to sell our products, and disruptions to, or our failure to effectively develop and manage, our distribution channel and the processes and procedures that support it could adversely affect our ability to generate revenues from the sale of our products.

Our future success is highly dependent upon establishing and maintaining successful relationships with a variety of value-added and other reseller and distribution partners, including our worldwide strategic partners such as Ericsson, IBM, and NSN. The majority of our revenues are derived through value-added resellers and distributors, most of which also sell our competitors’ products, and some of which sell their own products that compete with our products. Our revenues depend in part on the

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performance of these partners. The loss of or reduction in sales to our value-added resellers or distributors could materially reduce our revenues. For example, in 2006, one of our largest resellers, Lucent, was acquired by Alcatel, a competitor of ours. As a result of the merger, Lucent became a competitor, their resale of our products declined, and we ultimately terminated our reseller agreement with Lucent. Our competitors may in some cases be effective in leveraging their market share positions or in providing incentives to current or potential resellers and distributors to favor their products or to prevent or reduce sales of our products. If we fail to develop and maintain relationships with our partners, fail to develop new relationships with value-added resellers and distributors in new markets, or expand the number of distributors and resellers in existing markets, fail to manage, train or motivate existing value-added resellers and distributors effectively, or if these partners are not successful in their sales efforts, sales of our products may decrease, and our business, financial condition, and results of operations would suffer.

In addition, we recognize a portion of our revenues based on a sell-through model using information provided by our distributors. If those distributors provide us with inaccurate or untimely information, the amount or timing of our revenues could be adversely impacted.

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Further, in order to develop and expand our distribution channel, we must continue to offer attractive channel programs to potential partners and scale and improve our processes and procedures that support the channel. As a result, our programs, processes and procedures may become increasingly complex and inherently difficult to manage. We have previously entered into OEM agreements with partners pursuant to which they rebrand and resell our products as part of their product portfolios. These types of relationships are complex and require additional processes and procedures that may be challenging and costly to implement, maintain and manage. Our failure to successfully manage and develop our distribution channel and the programs, processes and procedures that support it could adversely affect our ability to generate revenues from the sale of our products.

Our ability to process orders and ship products in a timely manner is dependent in part on our business systems and performance of the systems and processes of third parties such as our contract manufacturers, suppliers, or other partners, as well as the interfaces between our systems and the systems of such third parties. If our systems, the systems and processes of those third parties, or the interfaces between them experience delays or fail, our business processes and our ability to build and ship products could be impacted, and our financial results could be harmed.

Some of our business processes depend upon our information technology ("IT") systems, the systems, and processes of third parties and on the interfaces of our systems with the systems of third parties. For example, our order entry system feeds information into the systems of our contract manufacturers, which enables them to build and ship our products. If those systems fail or are interrupted, our processes may function at a diminished level or not at all. This could negatively impact our ability to ship products or otherwise operate our business, and our financial results could be harmed. For example, although it did not adversely affect our shipments, an earthquake in late December of 2006 disrupted our communications with China, where a significant part of our manufacturing occurs.

We also rely upon the performance of the systems and processes of our contract manufacturers to build and ship our products. If those systems and processes experience interruption or delay, our ability to build and ship our products in a timely manner may be harmed. For example, as we have expanded our contract manufacturing base to China, we have experienced instances where our contract manufacturer was not able to ship products in the time periods expected by us. If we are not able to ship our products or if product shipments are delayed, our ability to recognize revenue in a timely manner for those products would be affected and our financial results could be harmed.

Telecommunications companies and our other large customers generally require more onerous terms and conditions in our contracts with them. As we seek to sell more products to such customers, we may be required to agree to terms and conditions that could have an adverse effect on our business or ability to recognize revenues.

Telecommunications service provider companies, which comprise a significant portion of our customer base, and other large companies, because of their size, generally have greater purchasing power and, accordingly, have requested and received more favorable terms from others, which often translate into more onerous terms and conditions from us. Recently, France Telecom-Orange and Deutsche Telekom AG have formed a company for the purpose of purchasing products from, and negotiating more favorable contractual terms with, suppliers. As we seek to sell more products to this class of customer, we may be required to agree to such terms and conditions, which may include terms that affect the timing of our ability to recognize revenue and have an adverse effect on our business, financial condition, and results of operations. Consolidation among such large customers can further increase their buying power and ability to require onerous terms.

~~For example, customers in this class~~

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In addition, telecommunications service providers have purchased products from other vendors who promised but failed to deliver certain functionality and/or had products that caused problems or outages in the networks of these customers. As a result, these customers may request additional features from us and require substantial penalties for failure to deliver such features or may require substantial penalties for any network outages that may be caused by our products. These additional requests and penalties, if we are required to agree to them, may require us to defer revenue recognition from such sales, which may negatively affect our business, financial condition, and results of operations.

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manner, and our revenues and gross margins could suffer until other sources can be developed. For example, from time to time, we have experienced component shortages that resulted in delays of product shipments. We currently purchase numerous key components, including ASICs, from single or limited sources. The development of alternate sources for those components is time-consuming, difficult, and costly. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules. Also, long-term supply and maintenance obligations to customers increase the duration for which specific components are required, which may further increase the risk of component shortages or the cost of carrying inventory. In the event of a component shortage or supply interruption from these suppliers, we may not be able to develop alternate or second sources in a timely manner. If we are unable to buy these components in quantities sufficient to meet our requirements on a timely basis, we will not be able to deliver product to our customers, which would seriously affect present and future sales, which would, in turn, adversely affect our business, financial condition, and results of operations.

System security risks, data protection breaches, and cyber-attacks could compromise our proprietary information, disrupt our internal operations and harm public perception of our security products, which could cause our business and reputation to suffer and adversely affect our stock price.

In the ordinary course of business, we store sensitive data, including intellectual property, our proprietary business information and that of our customers, suppliers and business partners on our networks. The secure maintenance of this information is critical to our operations and business strategy. Increasingly, companies, including Juniper Networks, are subject to a wide variety of attacks on their networks on an ongoing basis. Despite our security measures, Juniper Networks' information technology and infrastructure may be vulnerable to penetration or attacks by computer programmers and hackers, or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks, creating system disruptions or slowdowns and exploiting security vulnerabilities of our products, and the information stored on our networks could be accessed, publicly disclosed, lost or stolen, which could subject us to liability to our customers, suppliers, business partners and others, and cause us reputational and financial harm. In addition, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the operation of our networks.

If an actual or perceived breach of network security occurs in our network or in the network of a customer of our security products, regardless of whether the breach is attributable to our products, the market perception of the effectiveness of our products could be harmed. Because the techniques used by computer programmers and hackers, many of whom are highly sophisticated and well-funded, to access or sabotage networks change frequently and generally are not recognized until after they are used, we may be unable to anticipate or immediately detect these techniques. This could impede our sales, manufacturing, distribution or other critical functions. In addition, the economic costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software systems and security vulnerabilities could be significant and may be difficult to anticipate or measure because the damage may differ based on the identity and motive of the programmer or hacker, which are often difficult to identify.

Regulation of the telecommunications industry could harm our operating results and future prospects.

The traditional telecommunications industry is highly regulated, and our business and financial condition could be adversely affected by changes in regulations relating to the Internet telecommunications industry. Currently, there are few laws or regulations that apply directly to access to or commerce on IP networks, but future regulations could include sales taxes on products sold via the Internet and Internet service provider access charges. We could be adversely affected by regulation of IP networks and commerce in any country where we market equipment and services to service or content providers. Regulations governing the range of services and business models that can be offered by service providers or content providers could adversely affect those customers' needs for products designed to enable a wide range of such services or business models. For instance, the U.S. Federal Communications Commission has issued regulations governing aspects of fixed broadband networks and wireless networks; these regulations might impact service provider and content provider business models and as such, providers' needs for Internet telecommunications equipment and services. Also, many jurisdictions are evaluating or implementing regulations relating to cyber security, supply chain integrity, privacy and data protection, any of which can affect the market and requirements for networking and security equipment.

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In addition, environmental regulations relevant to electronic equipment manufacturing or operations may impact our business and financial condition adversely. For instance, the European Union and China have adopted WEEE and ROHS regulations, which require producers of electrical and electronic equipment to assume responsibility for collecting, treating, recycling and disposing of products when they have reached the end of their useful life, as well as REACH regulations, which regulate handling of certain chemical substances that may be used in our products. In addition, some governments have regulations prohibiting government entities from purchasing security products that do not meet specified indigenous certification criteria, even though those criteria may be in conflict with accepted international standards. These regulations are in effect or under consideration in several jurisdictions where we do business.

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The adoption and implementation of such regulations could reduce demand for our products, increase the cost of building and selling our products, result in product inventory write-offs, impact our ability to ship products into affected areas and recognize revenue in a timely manner and require us to spend significant time and expense to comply, and we could face fines and civil or criminal sanctions or claims if we were to violate or become liable under such regulations. Any of these impacts could have a material adverse effect on our business, financial condition, and results of operations.

Governmental regulations affecting the import or export of products or affecting products containing encryption capabilities could negatively affect our revenues.

Certain of our products contain or use encryption technology. The United States and various foreign governments have imposed controls, export license requirements, and restrictions on the import or export, among other things, encryption technology. In addition, from time to time, governmental agencies have proposed additional regulation of encryption technology, such as requiring certification, notifications, review of source code, or the escrow and governmental recovery of private encryption keys. For example, Russia and China recently have implemented new requirements relating to products containing encryption and India has imposed special warranty and other obligations associated with technology deemed critical. Governmental regulation of encryption or IP networking technology and regulation of imports or exports, or our failure to obtain required import or export approval for our products, could harm our international and domestic sales and adversely affect our revenues. In addition, failure to comply with such regulations could result in harm to our reputation, penalties, costs, and restrictions on import or export privileges or adversely affect sales to government agencies or government-funded projects.

If we do not successfully anticipate technological shifts, market needs and opportunities, and develop products and product enhancements that meet those technological shifts, needs and opportunities, or if those products are not made available in a timely manner or do not gain market acceptance, we may not be able to compete effectively and our ability to generate revenues will suffer.

We cannot guarantee that we will be able to anticipate future technological shifts, market needs and opportunities or be able to develop new products or product enhancements to meet such technological shifts, needs or opportunities in a timely manner or at all. For example, the move from traditional network infrastructures towards software defined networks ("SDN") has been receiving considerable attention. In our view, it will take several years to see the full impact of SDN, and we believe the successful products and solutions in this market will combine hardware and software elements together. If we fail to anticipate market requirements or fail to develop and introduce new products or product enhancements to meet those needs in a timely manner, it could cause us to lose customers, and such failure could substantially decrease or delay market acceptance and sales of our present and future products, which would significantly harm our business, financial condition, and results of operations. Even if we are able to anticipate, develop, and commercially introduce new products and enhancements, there can be no assurance that new products or enhancements will achieve widespread market acceptance.

~~For example,~~In addition, as a result of our acquisitions of Altor and Trapeze in 2010, we have been offering a virtualization security product and a WLAN product. ~~Additionally,~~Also, in ~~2011,~~2012, we announced new products, including the smaller version of our ~~new data center product,~~QFabric solutions, the ~~QFabric™ solution, our mobility solutions with our MobileNext~~^TM ~~software~~latest QFX3000-M QFabric System, T4000 Core Routers, PTX Series Packet Transport switches, MX2020 and ~~our Converged Supercore product, which converges the optical~~MX2010 3D Universal Edge Routers and ~~packet layers of the network.~~JunosV App Engine. If these or other new products do not gain market acceptance at a sufficient rate of growth, our ability to meet future financial targets may be adversely affected. In addition, if we fail to achieve market acceptance at a sufficient rate of growth, our ability to meet future financial targets and aspirations may be adversely affected. Finally, if we fail to deliver new or announced products to the market in a timely manner, it could adversely affect the market acceptance of those products and harm our competitive position and our business and financial results.

Our ability to develop, market, and sell products could be harmed if we are unable to retain or hire key personnel.

Our future success depends upon our ability to recruit and retain the services of executive, engineering, sales and marketing, and support personnel. The supply of highly qualified individuals, in particular engineers in very specialized technical areas, or sales people specializing in the service provider and enterprise markets, is limited and competition for such individuals is intense. None of our officers or key employees is bound by an employment agreement for any specific term. The loss of the services of any of our key employees, the inability to attract or retain personnel in the future or delays in hiring required

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personnel, particularly engineers and sales people, and the complexity and time involved in replacing or training new employees, could delay the development and introduction of new products, and negatively impact our ability to market, sell, or support our products.

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Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results.

Our future effective tax rates could be ~~volatile and maybe~~subject to volatility or adversely affected by: earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated earnings in countries where we have higher statutory rates; changes in the valuation of our deferred tax assets and liabilities; expiration of, or lapses in, the R&D tax credit laws applicable to us; transfer pricing adjustments related to certain acquisitions, including the license of acquired intangibles under our intercompany R&D cost sharing arrangement; costs related to intercompany restructuring; tax effects of share-based compensation; ~~costs related to intercompany restructurings;~~ or changes in tax laws, regulations, accounting principles, or interpretations thereof. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service (“IRS”) and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our business, financial condition, and results of operations.

From time to time, we receive preliminary notices of deficiency or notices of proposed adjustments from the IRS claiming that we owe additional taxes, plus interest and possible penalties. For example, we received a preliminary notice of deficiency in 2011 and one in 2009 for prior tax years based on transfer pricing transactions related to the license of acquired intangibles under an intercompany R&D cost sharing arrangement. As a result of the preliminary notices of deficiency received in 2011 and 2009, the incremental tax liability would be approximately $92.0 million and $807.0 million, excluding interest and penalties, respectively. We believe the IRS' position with regard to these matters is inconsistent with applicable tax laws, judicial precedent and existing Treasury regulations, and that our previously reported income tax provisions for the years in question are appropriate. However, there can be no assurance that these matters will be resolved in our favor. Regardless of whether these matters are resolved in our favor, the final resolution of these matters could be expensive and time-consuming to defend and/or settle. While we believe we have provided adequately for these matters, there is a possibility that an adverse outcome of these matters individually or in the aggregate could have a material effect on our results of operations and financial condition.

If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience manufacturing delays, which would harm our business.

We provide demand forecasts to our contract manufacturers and the manufacturers order components and plan capacity based on these forecasts. If we overestimate our requirements, our contract manufacturers may assess charges, or we may have liabilities for excess inventory, each of which could negatively affect our gross margins. For example, in the third quarter of fiscal 2012, our gross margins were reduced as a result of an inventory charge resulting from inventory we held in excess of forecasted demand. Conversely, because lead times for required materials and components vary significantly and depend on factors such as the specific supplier, contract terms, and the demand for each component at a given time, and because our contract manufacturers are third-party manufacturers for numerous other companies, if we underestimate our requirements, as we did in the third quarter of 2010 with respect to certain components, our contract manufacturers may have inadequate time, materials, and/or components required to produce our products, which could increase costs or could delay or interrupt manufacturing of our products and result in delays in shipments and deferral or loss of revenues.

We are dependent on contract manufacturers with whom we do not have long-term supply contracts, and changes to those relationships, expected or unexpected, may result in delays or disruptions that could cause us to lose revenues and damage our customer relationships.

We depend on independent contract manufacturers (each of which is a third-party manufacturer for numerous companies) to manufacture our products. Although we have contracts with our contract manufacturers, these contracts do not require them to manufacture our products on a long-term basis in any specific quantity or at any specific price. In addition, it is time-consuming and costly to qualify and implement additional contract manufacturer relationships. Therefore, if we fail to effectively manage our contract manufacturer relationships, which includes failing to provide accurate forecasts of our requirements, or if one or more of them experiences delays, disruptions, or quality control problems in our manufacturing operations, or if we had to change or add additional contract manufacturers or contract manufacturing sites, our ability to ship products to our customers could be delayed. Also, the addition of manufacturing locations or contract manufacturers would increase the complexity of our supply chain management. Moreover, an increasing portion of our manufacturing is performed in China and other countries and is therefore subject to risks associated with doing business in other countries. In addition, in late 2012, we confirmed that we were reducing the number of our contract manufacturers. As a result, we will be transitioning the work of one manufacturer to two of our other existing manufacturers during 2013. If we do not manage that transition effectively, we could experience delays or quality issues. Each of these factors could adversely affect our business, financial condition and results of operations.

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Upgrades to key internal systems and processes, and problems with the design or implementation of these systems and processes could interfere with, and therefore harm, our business and operations.

We previously initiated a multi-year project to upgrade certain key internal systems and processes, including our company-wide human resources management system, our customer relationship management (“CRM”) system and enterprise resource planning (“ERP”) system. In the first quarter of 2010, we implemented a major upgrade of our CRM system. In 2012 and continuing into 2013, we expect to implement major changes to our ERP system. We have invested, and will continue to invest, significant capital and human resources in the design and implementation of these systems and processes. Any disruptions or delays in the design and implementation of the new systems or processes, particularly any disruptions or delays that impact our operations, could adversely affect our ability to process customer orders, ship products, provide service and support to our customers, bill and track our customers, fulfill contractual obligations, record and transfer information in a timely and accurate manner, file SEC reports in a timely manner, or otherwise run our business. Even if we do not encounter these adverse effects,

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the design and implementation of these new systems and processes may be much more costly than we anticipated. If we are unable to successfully design and implement these new systems and processes as planned, or if the implementation of these systems and processes is more costly than anticipated, our business, financial condition, and results of operations could be negatively impacted.

We are a party to lawsuits, proceedings, and other disputes, which are costly to defend and, if determined adversely to us, could require us to pay damages or prevent us from taking certain actions, any or all of which could harm our business, financial condition, and results of operations.

We, and certain of our current and former officers and current and former members of our Board of Directors, are subject to various lawsuits. We have been served with lawsuits related to employment matters, commercial transactions and patent infringement as well as securities ~~laws, a~~laws. A description of the securities lawsuits can be found in Note 16, Commitments and Contingencies,in Notes to ~~Condensed~~ Consolidated Financial Statements of this ~~Quarterly~~ Report, ~~on Form 10-Q,~~ under the heading “Legal Proceedings.” There can be no assurance that these or any actions that have been or may in the future be brought against us, our officers, and our directors will be resolved favorably or that tentative settlements will become final. Regardless of whether they are resolved, these lawsuits are, and any future lawsuits or threatened legal proceedings to which we, our officers, or our directors may become a party will likely be, expensive and time-consuming to defend, settle, and/or resolve. Legal proceedings, threatened legal proceedings or investigations, regardless of their ultimate outcome, could harm our reputation. Costs of defense, as well as any losses resulting from these claims or settlement of these claims, could significantly increase our expenses and could harm our business, financial condition, and results of operations.

We are a party to litigation and claims regarding intellectual property rights, resolution of which may be time-consuming and expensive, as well as require a significant amount of resources to prosecute, defend, or make our products non-infringing.

Our industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding patent and other intellectual property rights. We expect that infringement claims may increase as the number of products and competitors in our market increases and overlaps occur. Third parties have asserted and may in the future assert claims or initiate litigation related to patent, copyright, trademark, and other intellectual property rights to technologies and related standards that are relevant to our products. The asserted claims and/or initiated litigation may include claims against us or our manufacturers, suppliers, partners, or customers, alleging that our products or services infringe proprietary rights. Regardless of the merit of these claims, they have been and can be time-consuming, result in costly litigation, and may require us to develop non-infringing technologies or enter into license agreements. Furthermore, because of the potential for high awards of damages or injunctive relief that are not necessarily predictable, even arguably unmeritorious claims may be settled for significant amounts of money. If any infringement or other intellectual property claim made against us by any third-party is successful, if we are required to settle litigation for significant amounts of money, or if we fail to develop non-infringing technology or license required proprietary rights on commercially reasonable terms and conditions, our business, financial condition, and results of operations could be materially and adversely affected.

We may face difficulties enforcing our proprietary rights.

We generally rely on a combination of patents, copyrights, trademarks, and trade secret laws and restrictions on disclosure of confidential and proprietary information, to establish and maintain proprietary rights in our technology and products. Although we have been issued numerous patents and other patent applications are currently now pending, there can be no assurance that any of these patents or other proprietary rights will not be challenged, invalidated, infringed or circumvented or that our rights will, in fact, provide competitive advantages to us or protect our technology, either of which could result in costly product

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redesign efforts, discontinuance of certain product offerings and other competitive harm. Furthermore, the laws of some foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States. The outcome of any actions taken in these foreign countries may be different than if such actions were determined under the laws of the United States. Although we are not dependent on any individual patents or group of patents for particular segments of the business for which we compete, if we are unable to protect our proprietary rights in a market, we may find ourselves at a competitive disadvantage to others who need not incur the substantial expense, time, and effort required to create innovative products that have enabled our success.

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Our success depends upon our ability to effectively plan and manage our resources and restructure our business through rapidly fluctuating economic and market conditions.

Our ability to successfully offer our products and services in a rapidly evolving market requires an effective planning, forecasting, and management process to enable us to effectively scale and adjust our business in response to fluctuating market opportunities and conditions.

In periods of market expansion, we have increased investment in our business by, for example, increasing headcount and increasing our investment in R&D, sales and marketing, and other parts of our business.

Conversely, in the third quarter of 2012, to align our cost structure with long-term strategic plans as part of our productivity and efficiency initiatives, we restructured our business, rebalanced our workforce, and reduced our real estate portfolio. Many of our expenses, such as real estate expenses, are fixed costs that cannot be rapidly or easily adjusted ~~because of~~in response to fluctuations in our business or numbers of employees. Moreover, rapid changes in the size of our workforce could adversely affect our ability to develop and deliver products and services as planned or impair our ability to realize our current or future business objectives. Our ability to achieve the anticipated cost savings and other benefits from our restructuring initiatives within the expected time frame is subject to many estimates and assumptions. These estimates and assumptions are subject to significant economic, competitive and other uncertainties, some of which are beyond our control. If these estimates and assumptions are incorrect, if we are unsuccessful at implementing changes, or if other unforeseen events occur, our business and results of operations could be adversely affected.

Our financial condition and results of operations could suffer if there is an additional impairment of goodwill or other intangible assets with indefinite lives.

We are required to test annually and review on an interim basis, our goodwill and intangible assets with indefinite lives, including the goodwill associated with acquisitions, to determine if impairment has occurred. As of March 31, 2013, our goodwill was $4,057.8 million and our intangible assets were $131.2 million. If goodwill or intangible assets are deemed impaired, an impairment loss equal to the amount by which the carrying amount exceeds the fair value of the assets would be recognized. This would result in incremental expenses for that quarter, which would reduce any earnings or increase any loss for the period in which the impairment was determined to have occurred. For example, such impairment could occur if the market value of our common stock falls below certain levels for a sustained period, or if the portions of our business related to companies we have acquired fail to grow at expected rates or decline. In the second quarter of 2006, our impairment evaluation resulted in a reduction of $1,280.0 million to the carrying value of goodwill on our Condensed Consolidated Balance Sheets, primarily due to the decline in our market capitalization that occurred over a period of approximately nine months prior to the impairment review and, to a lesser extent, a decrease in forecasted future cash flows. In the third quarter of 2012, our impairment evaluation resulted in a reduction of $5.4 million to the carrying value of certain purchased intangibles on our Condensed Consolidated Balance Sheets, primarily due to the decline in discounted cash flow projections. In recent years, economic weakness contributed to extreme price and volume fluctuations in global stock markets that reduced the market price of many technology company stocks, including ours. Future declines in our stock price, as well as declines in our level of revenues or gross margins, increase the risk that goodwill and intangible assets may become impaired in future periods. We cannot accurately predict the amount and timing of any impairment of assets. However, any such impairment would have an adverse effect on our results of operations.

We are subject to risks arising from our international operations, which may adversely affect our business, financial condition, and results of operations.

We derive a majority of our revenues from our international operations, and we plan to continue expanding our business in international markets in the future. We conduct significant sales and customer support operations directly and indirectly through our distributors and ~~value-added resellers~~VARs in countries throughout the world and depend on the operations of our contract manufacturers and suppliers that are located outside of the United States. In addition, a portion of our R&D and our general and administrative operations are conducted outside the United States. In some countries, we may experience reduced intellectual property protection.

As a result of our international operations, we are affected by economic, regulatory, social, and political conditions in foreign countries, including the following:

changes in general IT spending,

the imposition of government controls, ~~including~~inclusive of critical infrastructure protection,

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changes or limitations in trade protection laws or other regulatory requirements, which may affect our ability to import or export our products from various countries,

the impact of the following on service provider and government spending ~~patterns affected by~~patterns: political considerations, unfavorable changes in tax treaties or laws, natural disasters, epidemic disease, labor unrest, earnings expatriation restrictions, misappropriation of intellectual property, military actions, acts of terrorism, political and social unrest and difficulties in staffing and managing international operations. Any or all of these factors could have a material adverse impact on our business, financial condition, and results of operations.

Moreover, local laws and customs in many countries differ significantly from those in the United States. In many foreign countries, particularly in those with developing economies, it is common for others to engage in business practices that are prohibited by our internal policies and procedures or United States regulations applicable to us. There can be no assurance that our employees, contractors, channel partners, and agents will not take actions in violation of our policies and procedures, which are designed to ensure compliance with U.S. and foreign laws and policies. Violations of laws or key control policies by our employees, contractors, channel partners, or agents could result in financial reporting problems, fines, penalties, or prohibition on the importation or exportation of our products, and could have a material adverse effect on our business, financial condition and results of operations.

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We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations.

Because a majority of our business is conducted outside the United States, we face exposure to adverse movements in non-U.S. currency exchange rates. These exposures may change over time as business practices evolve and could have a material adverse impact on our financial condition and results of operations.

The majority of our revenues and expenses are transacted in U.S. Dollars. We also have some transactions that are denominated in foreign currencies, primarily the British Pound, Euro, Indian Rupee, and Japanese Yen related to our sales and service operations outside of the United States. An increase in the value of the U.S. Dollar could increase the real cost to our customers of our products in those markets outside the United States in which we sell in U.S. Dollars, and a weakened U.S. Dollar could increase the cost of local operating expenses and procurement of raw materials to the extent we must purchase components in foreign currencies.

Currently, we hedge only those currency exposures associated with certain assets and liabilities denominated in nonfunctional currencies and periodically hedge anticipated foreign currency cash flows. The hedging activities undertaken by us are intended to offset the impact of currency fluctuations on certain nonfunctional currency assets and liabilities. However, such attempts to offset the impact of currency fluctuations are costly and no amount of hedging can be effective against all circumstances, including long-term declines in the value of the U.S. Dollar. If our attempts to hedge against these risks are not successful, or if long-term declines in the value of the U.S. Dollar persist, our financial condition and results of operations could be adversely impacted.

Integration of acquisitions could disrupt our business and harm our financial condition and stock price and may dilute the ownership of our stockholders.

We have made, and may continue to make, acquisitions in order to enhance our business. For example, in ~~February~~ 2012, we acquired Contrail Systems Inc. ("Contrail") and Mykonos, and in 2010 we acquired Altor, Trapeze, SMobile, and Ankeena. Acquisitions involve numerous risks, including problems combining the purchased operations, technologies or products, unanticipated costs, diversion of management's attention from our core businesses, adverse effects on existing business relationships with suppliers and customers, risks associated with entering markets in which we have no or limited prior experience, and potential loss of key employees. There can be no assurance that we will be able to integrate successfully any businesses, products, technologies, or personnel that we might acquire. The integration of businesses that we may acquire is likely to be a complex, time-consuming, and expensive process and we may not realize the anticipated revenues or other benefits associated with our acquisitions if we fail to successfully manage and operate the acquired business. If we fail in any acquisition integration efforts and are unable to efficiently operate as a combined organization utilizing common information and communication systems, operating procedures, financial controls, and human resources practices, our business, financial condition, and results of operations may be adversely affected.

Acquisitions may also require us to issue common stock or assume equity awards that dilute the ownership of our current stockholders, use a substantial portion of our cash resources, assume liabilities, record goodwill and amortizable intangible

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assets that will be subject to impairment testing on a regular basis and potential periodic impairment charges, incur amortization expenses related to certain intangible assets, and incur large and immediate write-offs and restructuring and other related expenses, all of which could harm our financial condition and results of operations.

If we fail to adequately evolve our financial and managerial control and reporting systems and processes, our ability to manage and grow our business will be negatively affected.

Our ability to successfully offer our products and implement our business plan in a rapidly evolving market depends upon an effective planning and management process. We will need to continue to improve our financial and managerial control and our reporting systems and procedures in order to manage our business effectively in the future. If we fail to continue to implement improved systems and processes, our ability to manage our business, financial condition, and results of operations may be negatively affected.

Our ~~financial condition and results of operations could suffer if there is an additional impairment of goodwill or other intangible assets with indefinite lives.~~

We are required to test annually and review on an interim basis, our goodwill and intangible assets with indefinite lives, including the goodwill associated with past acquisitions and any future acquisitions, to determine if impairment has occurred.

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~~As of~~ ~~September 30, 2012, our goodwill was~~ ~~$3,987.1 million~~. If such assets are deemed impaired, an impairment loss equal to the amount by which the carrying amount exceeds the fair value of the assets would be recognized. This would result in incremental expenses for that quarter, which would reduce any earnings or increase any loss for the period in which the impairment was determined to have occurred. For example, such impairment could occur if the market value of our common stock falls below certain levels for a sustained period, or if the portions of our business related to companies we have acquired fail to grow at expected rates or decline. In the second quarter of 2006, our impairment evaluation resulted in a reduction of $1,280.0 million to the carrying value of goodwill on our balance sheet, primarily due to the decline in our market capitalization that occurred over a period of approximately nine months prior to the impairment review and, to a lesser extent, a decrease in forecasted future cash flows. In recent years, economic weakness contributed to extreme price and volume fluctuations in global stock markets that reduced the market price of many technology company stocks, including ours. Future declines in our stock price, as well as declines in our level of revenues or gross margins, increase the risk that goodwill and intangible assets may become impaired in future periods. We cannot accurately predict the amount and timing of any impairment of assets.

~~Our~~ products are highly technical and if they contain undetected errors or malware or do not meet customer quality expectations, our business could be adversely affected, and we may be subject to lawsuits or be required to pay damages in connection with any alleged or actual failure of our products and services.

Our products are highly technical and complex, are critical to the operation of many networks, and, in the case of our security products, provide and monitor network security and may protect valuable information. Our products have contained and may contain one or more undetected errors, defects, malware, or security vulnerabilities. Some errors in our products may only be discovered after a product has been installed and used by end-customers. Any errors, defects, malware or security vulnerabilities discovered in our products after commercial release could result in monetary penalties, loss of revenues or delay in revenue recognition, loss of customers, loss of future business and reputation, penalties, and increased service and warranty cost, any of which could adversely affect our business, financial condition, and results of operations. In addition, in the event an error, defect, malware, or vulnerability is attributable to a component supplied by a third-party vendor, we may not be able to recover from the vendor all of the costs of remediation that we may incur. In addition, we could face claims for product liability, tort, or breach of warranty. Defending a lawsuit, regardless of its merit, is costly and may divert management’s attention. If our business liability insurance coverage is inadequate, or future coverage is unavailable on acceptable terms or at all, our financial condition and results of operations could be harmed. Moreover, if our products fail to satisfy our customers' quality expectations for whatever reason, the perception of and the demand for our products could be adversely affected.

If our products do not interoperate with our customers’ networks, installations will be delayed or cancelled and could harm our business.

Our products are designed to interface with our customers’ existing networks, each of which have different specifications and utilize multiple protocol standards and products from other vendors. Many of our customers’ networks contain multiple generations of products that have been added over time as these networks have grown and evolved. Our products must interoperate with many or all of the products within these networks as well as future products in order to meet our customers’ requirements. If we find errors in the existing software or defects in the hardware used in our customers’ networks, we may need to modify our software or hardware to fix or overcome these errors so that our products will interoperate and scale with the existing software and hardware, which could be costly and could negatively affect our business, financial condition, and results of operations. In addition, if our products do not interoperate with those of our customers’ networks, demand for our products could be adversely affected or orders for our products could be cancelled. This could hurt our operating results, damage our reputation, and seriously harm our business and prospects.

Our products incorporate and rely upon licensed third-party technology, and if licenses of third-party technology do not continue to be available to us or become very expensive, our revenues and ability to develop and introduce new products could be adversely affected.

We integrate licensed third-party technology into certain of our products. From time to time, we may be required to license additional technology from third-parties to develop new products or product enhancements. Third-party licenses may not be available or continue to be available to us on commercially reasonable terms. The failure to comply with the terms of any license, including free open source software, may result in our inability to continue to use such license. Our inability to maintain or re-license any third-party licenses required in our products or our inability to obtain third-party licenses necessary to develop new products and product enhancements, could require us, if possible, to develop substitute technology or obtain substitute technology of lower quality or performance standards or at a greater cost, any of which could delay or prevent product shipment and harm our business, financial condition, and results of operations.

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We sell our products to customers that use those products to build networks and IP infrastructure, and if the demand for network and IP systems does not continue to grow, then our business, financial condition, and results of operations could be adversely affected.

A substantial portion of our business and revenues depends on the growth of secure IP infrastructure and on the deployment of our products by customers that depend on the continued growth of IP services. As a result of changes in the economy capital spending or the building of network capacity in excess of demand, all of which have in the past particularly affected telecommunications service providers, spending on IP infrastructure can vary, which could have a material adverse effect on our business, financial condition, and results of operations. In addition, a number of our existing customers are evaluating the ~~build out~~build-out of their next generation networks. During the decision-making period when the customers are determining the design of those networks and the selection of the equipment they will use in those networks, such customers may greatly reduce or suspend their spending on secure IP infrastructure. Such delays in purchases can make it more difficult to predict revenues from such customers can cause fluctuations in the level of spending by these customers and, even where our products are ultimately selected, can have a material adverse effect on our business, financial condition, and results of operations.

~~While we believe that we currently have adequate~~We are required to evaluate the effectiveness of our internal control over financial reporting, ~~we are exposed~~and any adverse results from such evaluation may adversely affect investor perception, our stock price and cause us to ~~risks from legislation requiring companies to evaluate those internal controls.~~incur additional expense.

Section 404 of the Sarbanes-Oxley Act of 2002 requires our management to report on, and our independent auditors to attest to, the effectiveness of our internal control over financial reporting. We have an ongoing program to perform the system and process evaluation and testing necessary to comply with these requirements. We have and will continue to incur significant expenses and devote management resources to Section 404 compliance on an ongoing basis. In the event that our Chief Executive Officer, Chief Financial Officer, or independent registered public accounting firm determine in the future that, our internal controls over financial reporting are not effective as defined under Section 404, investor perceptions may be adversely affected if our financial statements are not reliable and could cause a decline in the market price of our stock and otherwise negatively affect our liquidity and financial condition.

The investment of our cash balance and our investments in government and corporate debt securities are subject to risks, which may cause losses and affect the liquidity of these investments.

At ~~September 30, 2012~~March 31, 2013, we had $~~2,707.9~~2,043.7 million in cash and cash equivalents and $~~1,340.0~~1,628.3 million in short- and long-term investments. We have invested these amounts primarily in ~~U.S. government~~asset-backed securities, ~~government-sponsored enterprise obligations,~~certificate of deposit, commercial paper, corporate debt securities, foreign government debt securities, ~~corporate notes and bonds, commercial paper, and~~government- sponsored enterprise obligations, money market funds, ~~meeting certain criteria.~~mutual funds, publicly-traded equity securities and U.S. government securities. Certain of these investments are subject to general credit, liquidity, market, and interest rate risks, which may be exacerbated by U.S. sub-prime mortgage defaults that have affected various sectors of the financial markets and caused credit and liquidity issues at many financial institutions. Our future investment income may fall short of expectations due to changes in interest rates or if the decline in fair value of our publicly traded debt or equity investments is judged to be other-than-temporary. These market risks associated with our investment portfolio may have a negative adverse effect on our liquidity, financial condition, and results of operations.

We may be unable to generate the cash flow to service our debt obligations, including the Senior Notes.

In March 2011, we issued senior unsecured notes for an aggregate principle amount of $1.0 billion (see discussion in Note 10, Long-Term Debt and Financing, in the Notes to Condensed Consolidated Financial ~~Statements)~~Statements of this Report). We may not be able to generate sufficient cash flow to enable us to service our indebtedness, including the notes, or to make anticipated capital expenditures. Our ability to pay our expenses and satisfy our debt obligations, refinance our debt obligations and fund planned capital expenditures will depend on our future performance, which will be affected by general economic, financial, competitive, legislative, regulatory and other factors beyond our control. Based upon current levels of operations, we believe cash flow from operations and available cash will be adequate for the foreseeable future to meet our anticipated requirements for working capital, capital expenditures and scheduled payments of principal and interest on our indebtedness, including the senior notes. However, if we are unable to generate sufficient cash flow from operations or to borrow sufficient funds in the future to service our debt, we may be required to sell assets, reduce capital expenditures, refinance all or a portion of our existing debt (including the senior notes) or obtain additional financing. There is no assurance that we will be able to refinance our debt, sell assets or borrow more money on terms acceptable to us, or at all.

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The indenture that governs the senior notes also contains various covenants that limit our ability and the ability of our subsidiaries to, among other things:

incur liens;

incur sale and leaseback transactions; and

consolidate or merge with or into, or sell substantially all of our assets to, another person

As a result of these covenants, we are limited in the manner in which we can conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs. Accordingly, these restrictions may limit our ability to successfully operate our business. A failure to comply with these restrictions could lead to an event of default, which could result in an acceleration of the indebtedness. Our future operating results may not be sufficient to enable compliance with these covenants to remedy any such default. In addition, in the event of an acceleration, we may not have or be able to obtain sufficient funds to make any accelerated payments, including those under the senior notes.

Uninsured losses could harm our operating results.

We self-insure against many business risks and expenses, such as intellectual property litigation and our medical benefit programs, where we believe we can adequately self-insure against the anticipated exposure and risk or where insurance is either not deemed cost-effective or is not available. We also maintain a program of insurance coverage for various types of property, casualty, and other risks. We place our insurance coverage with various carriers in numerous jurisdictions. The types and amounts of insurance that we obtain vary from time to time and from location to location, depending on availability, cost, and our decisions with respect to risk retention. The policies are subject to deductibles, policy limits, and exclusions that result in our retention of a level of risk on a self-insurance basis. Losses not covered by insurance could be substantial and unpredictable and could adversely affect our financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds

There were no unregistered sales of equity securities during the period covered by this ~~report.~~Report.

~~(c) Issuer~~ Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides a summary of stock repurchases during the three months endedMarch 31, 2013 (in millions, except per share amounts):

Period
Total Number
of Shares
Purchased

Average
Price Paid
per Share

Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs ^(*)

Maximum Dollar
Value of Shares
that May Yet Be
Purchased
Under the Plans or
Programs ^(*)
July 1 - July 31, 2012 —
$ —
—
$ 1,068,227,364
August 1 - August 31, 2012 11,090,252
18.03
11,090,252
$ 868,243,528
September 1 - September 30, 2012 2,795,364
17.89
2,795,364
$ 818,244,059
Total 13,885,616
$ 18.00
13,885,616



Period	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid per Share ⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽²⁾	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾
January 1 - January 31, 2013	—	$	—	—	$	568.2
February 1 - February 28, 2013	3.7	$	22.19	3.6	$	488.3
March 1 - March 31, 2013	2.6	$	19.32	2.6	$	438.3
Total	6.3	$	21.01	6.2

^(*)(1)

Amounts include repurchases under our stock repurchase program and repurchases of our common stock for our employees in connection with net issuances of shares to satisfy minimum tax withholding obligations for the vesting of certain stock awards. The amount of shares of common stock repurchased from our employees in connection with net issuances was not significant during the three months endedMarch 31, 2013.

⁽²⁾

Shares were repurchased under ~~the~~our stock repurchase program approved by the Board, ~~in June 2012 (the "2012 Stock Repurchase Program"),~~ which authorized ~~the Company~~us to purchase an aggregate of up to $1.0 billion of ~~the Company's~~our common stock. Future share repurchases under this program will be subject to a review of the circumstances in place at that time and will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. This program may be discontinued at any time. As of ~~September 30, 2012~~March 31, 2013, ~~the 2012 Stock Repurchase Program~~our stock repurchase program had $~~818.2~~438.3 million remaining authorized funds available for future stock repurchases.

6157

Table of Contents

Item 6. Exhibits



Exhibit Number		Description of Document
~~10.1~~		Employment Agreement by and between Juniper Networks, Inc. and Rami Rahim*

~~10.2~~		Consulting Agreement by and between Juniper Networks, Inc. and Stefan Dyckerhoff*

12.1		Computation of Ratio of Earnings to Fixed Charges*

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934*

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934*

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350*

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350*

101		The following materials from Juniper Network Inc.'s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2012,~~March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations (ii) the Condensed Consolidated Statements of Comprehensive Income, ~~(ii)~~(iii) the Condensed Consolidated Balance Sheets, and ~~(iii)~~(iv) the Condensed Consolidated Statements of Cash Flows, and ~~(iv)~~(v) Notes to Condensed Consolidated Financial Statements*

101.INS		XBRL Instance Document*

101.SCH		XBRL Taxonomy Extension Schema Document*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB		XBRL Taxonomy Extension Label Linkbase Document*

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*

*Filed herewith.

6258

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant had duly caused this ~~report~~Report to be signed on its behalf by the undersigned thereunto duly authorized.



	Juniper Networks, Inc.

~~November~~May 8, ~~2012~~2013	By:	/s/ Robyn M. Denholm
		Robyn M. Denholm
		Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

~~November~~May 8, ~~2012~~2013	By:	/s/ ~~Gene Zamiska~~Terrance F. Spidell
		~~Gene Zamiska~~Terrance F. Spidell
		Vice President, Corporate ~~Finance~~Controller (Duly Authorized Officer and Principal Accounting Officer)

6359

Table of Contents

Exhibit Index



Exhibit Number		Description of Document
~~10.1~~		Employment Agreement by and between Juniper Networks, Inc. and Rami Rahim*

~~10.2~~		Consulting Agreement by and between Juniper Networks, Inc. and Stefan Dyckerhoff*

12.1		Computation of Ratio of Earnings to Fixed Charges*

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934*

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934*

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350*

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350*

101		The following materials from Juniper Network Inc.'s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2012,~~March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations (ii) the Condensed Consolidated Statements of Comprehensive Income, ~~(ii)~~(iii) the Condensed Consolidated Balance Sheets, and ~~(iii)~~(iv) the Condensed Consolidated Statements of Cash Flows, and ~~(iv)~~(v) Notes to Condensed Consolidated Financial Statements*

101.INS		XBRL Instance Document*

101.SCH		XBRL Taxonomy Extension Schema Document*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB		XBRL Taxonomy Extension Label Linkbase Document*

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*

*Filed herewith.

6460



Delaware		77-0422528
(State or other jurisdiction of		~~(I.R.S. Employer~~
incorporation or organization)		(I.R.S. Employer Identification No.)

1194 North Mathilda Avenue
Sunnyvale, California		94089
(Address of principal executive offices)		(Zip code)
(408) 745-2000
(Registrant's telephone number, including area code)
_________________________________
(Former name, former address and former fiscal year, if changed since last report)



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)



Table of Contents

PART I - FINANCIAL INFORMATION	3
	Page No.
Item 1. ~~Condensed Consolidated~~ Financial Statements	3

Condensed Consolidated Statements of ~~Comprehensive Income~~Operations Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2013 and March 31, 2012 ~~and 2011~~	3

Condensed Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2013 and March 31, 2012	4

Condensed Consolidated Balance Sheets ~~September 30, 2012~~ March 31, 2013 and December 31, ~~2011~~2012	45

Condensed Consolidated Statements of Cash Flows ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2013 and March 31, 2012 ~~and 2011~~	56

Notes to Condensed Consolidated Financial Statements	67

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3632

Item 3. Quantitative and Qualitative Disclosures About Market Risk	4843

Item 4. Controls and Procedures	4843

PART II - OTHER INFORMATION	49

Item 1. Legal Proceedings	4945

Item 1A. Risk Factors	4945

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	6157

Item 6. Exhibits	6258

SIGNATURES	6359

Exhibit Index	6460



	Three Months Ended March 31,
	2013			2012
Net revenues:
Product	$	781.8		$	771.9
Service	277.4			260.6
Total net revenues	1,059.2			1,032.5
Cost of revenues:
Product	278.2			280.6
Service	110.2			117.8
Total cost of revenues	388.4			398.4
Gross margin	670.8			634.1
Operating expenses:
Research and development	262.2			269.6
Sales and marketing	255.2			257.7
General and administrative	47.8			54.7
Amortization of purchased intangible assets	1.2			1.2
Restructuring charges	7.0			2.0
Acquisition and litigation charges	10.4			1.2
Total operating expenses	583.8			586.4
Operating income	87.0			47.7
Other expense, net	(10.1		)	(24.4		)
Income before income taxes	76.9			23.3
Income tax (benefit) provision	(14.1		)	7.0
Net income	$	91.0		$	16.3

Net income per share:
Basic	$	0.18		$	0.03
Diluted	$	0.18		$	0.03
Shares used in computing net income per share:
Basic	504.7			527.2
Diluted	512.7			533.7



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net revenues:
Product	$	838,179		$	861,935		$	2,414,714		$	2,630,803
Service	280,132			243,861			809,854			697,149
Total net revenues	1,118,311			1,105,796			3,224,568			3,327,952
Cost of revenues:
Product	334,645			286,609			907,863			844,746
Service	109,835			107,583			340,946			313,551
Total cost of revenues	444,480			394,192			1,248,809			1,158,297
Gross margin	673,831			711,604			1,975,759			2,169,655
Operating expenses:
Research and development	288,178			257,096			826,514			776,325
Sales and marketing	261,026			254,933			778,200			747,859
General and administrative	49,442			44,455			152,883			133,639
Amortization of purchased intangible assets	1,148			1,263			3,562			4,139
Restructuring and other charges	31,018			16,813			36,218			15,550
Acquisition-related and other charges	250			18			1,186			6,804
Total operating expenses	631,062			574,578			1,798,563			1,684,316
Operating income	42,769			137,026			177,196			485,339
Other expense, net	(3,956		)	(15,957		)	(25,617		)	(36,107		)
Income before income taxes and noncontrolling interest	38,813			121,069			151,579			449,232
Income tax provision	21,999			37,398			60,776			120,383
Consolidated net income	16,814			83,671			90,803			328,849
Adjust for net (income) loss attributable to noncontrolling interest	—			(8		)	—			124
Net income attributable to Juniper Networks	$	16,814		$	83,663		$	90,803		$	328,973

Net income per share attributable to Juniper Networks common stockholders:
Basic	$	0.03		$	0.16		$	0.17		$	0.62
Diluted	$	0.03		$	0.16		$	0.17		$	0.60
Shares used in computing net income per share:
Basic	521,178			529,286			525,419			530,994
Diluted	524,537			536,583			530,343			544,086

Comprehensive income	$	30,403		$	67,425		$	113,620		$	324,756



~~[X]~~x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~September 30, 2012~~March 31, 2013



~~[ ]~~o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from_________ to_________


	September 30, 2012			December 31, 2011			March 31, 2013			December 31, 2012
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,707,940		$	2,910,420		$	2,043.7		$	2,407.8
Short-term investments	439,278			641,323			613.1			441.5
Accounts receivable, net of allowances	397,082			577,386			532.6			438.4
Deferred tax assets, net	229,374			154,310			151.4			172.6
Prepaid expenses and other current assets	168,625			156,222			199.2			140.4
Total current assets	3,942,299			4,439,661			3,540.0			3,600.7
Property and equipment, net	768,530			598,581			839.0			811.9
Long-term investments	900,769			740,659			1,015.2			988.1
Restricted cash and investments	102,661			78,307			94.4			106.4
Purchased intangible assets, net	118,655			123,114			131.2			128.9
Goodwill	3,987,073			3,928,144			4,057.8			4,057.8
Other long-term assets	140,607			75,354			152.8			138.3
Total assets	$	9,960,594		$	9,983,820		$	9,830.4		$	9,832.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	224,242		$	324,843		$	223.8		$	209.3
Accrued compensation	230,102			223,018			204.5			279.3
Accrued warranty	29,776			28,276			29.4			29.7
Deferred revenue	771,709			712,663			774.7			693.5
Income taxes payable	66,996			12,545
Other accrued liabilities	178,976			165,358			191.3			210.2
Total current liabilities	1,501,801			1,466,703			1,423.7			1,422.0
Long-term debt	999,145			999,034			999.2			999.2
Long-term deferred revenue	221,217			254,364			206.0			229.9
Long-term income taxes payable	116,929			108,471			87.1			112.4
Other long-term liabilities	41,622			65,590			58.0			69.1
Total liabilities	2,880,714			2,894,162			2,774.0			2,832.6
Commitments and contingencies
Juniper Networks stockholders' equity:
Convertible preferred stock, $0.00001 par value; 10,000 shares authorized; none issued and outstanding	—			—
Common stock, $0.00001 par value; 1,000,000 shares authorized; 515,332 shares and 526,409 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively	5			5
Convertible preferred stock, $0.00001 par value; 10.0 shares authorized; none issued and outstanding							—			—
Common stock, $0.00001 par value; 1,000.0 shares authorized; 510.9 shares and 508.4 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively							—			—
Additional paid-in capital	10,042,392			10,079,169			9,923.1			9,905.7
Accumulated other comprehensive income (loss)	5,227			(17,590		)
Accumulated other comprehensive (loss) income							(5.2		)	4.7
Accumulated deficit	(2,968,220		)	(2,972,402		)	(2,862.0		)	(2,911.4		)
Total Juniper Networks stockholders' equity	7,079,404			7,089,182			7,055.9			6,999.0
Noncontrolling interest	476			476			0.5			0.5
Total stockholders' equity	7,079,880			7,089,658			7,056.4			6,999.5
Total liabilities and stockholders' equity	$	9,960,594		$	9,983,820		$	9,830.4		$	9,832.1



	Mykonos			BitGravity		Total
Net tangible assets/(liabilities) acquired	$	(0.2	)	$	0.1	$	(0.1	)
Intangible assets acquired	24.3			12.4		36.7
Goodwill	58.5			0.5		59.0
Total	$	82.6		$	13.0	$	95.6



	2012 Acquisitions
	Weighted Average Estimated Useful Life (In Years)	Amount
Existing technology	5	$	31.7
Trade name and trademarks	7	1.0
In-process research and development ("IPR&D")	—	4.0
Total		$	36.7


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
As of September 30, 2012
As of March 31, 2013
Cash equivalents:
Certificate of deposit									$	0.3	$	—	$	—		$	0.3
Money market funds									749.6		—		—			749.6
U.S. government securities									6.0		—		—			6.0
Total cash equivalents									755.9		—		—			755.9
Restricted investments:
Money market funds									89.5		—		—			89.5
Mutual funds									2.9		0.1		—			3.0
Total restricted investments									92.4		0.1		—			92.5
Fixed income securities:
Asset-backed securities	$	175.4	$	0.4	$	—	$	175.8	234.7		0.2		(0.1		)	234.8
Certificates of deposit	26.9		—		—		26.9		44.7		—		—			44.7
Commercial paper	3.0		—		—		3.0
Corporate debt securities	566.2		3.1		—		569.3		614.0		2.0		(0.3		)	615.7
Foreign government debt securities	10.0		—		—		10.0		15.8		—		—			15.8
Government-sponsored enterprise obligations	251.2		0.3		—		251.5		270.4		0.2		—			270.6
Money market funds	1,430.2		—		—		1,430.2
U.S. government securities	462.7		0.2		—		462.9		430.1		0.2		—			430.3
Total fixed income securities	2,925.6		4.0		—		2,929.6		1,609.7		2.6		(0.4		)	1,611.9
Publicly-traded equity securities	3.0		0.6		—		3.6		2.9		—		(0.3		)	2.6
Total available-for-sale securities	2,928.6		4.6		—		2,933.2		2,460.9		2.7		(0.7		)	2,462.9
Trading securities^(*)	12.6		—		—		12.6
Trading securities in mutual funds^(*)									13.8		—		—			13.8
Total	$	2,941.2	$	4.6	$	—	$	2,945.8	$	2,474.7	$	2.7	$	(0.7	)	$	2,476.7

Reported as:
Cash equivalents	$	1,605.7	$	—	$	—	$	1,605.7	$	755.9	$	—	$	—		$	755.9
Restricted investments									92.4		0.1		—			92.5
Short-term investments	438.2		1.1		—		439.3		613.0		0.4		(0.3		)	613.1
Long-term investments	897.3		3.5		—		900.8		1,013.4		2.2		(0.4		)	1,015.2
Total	$	2,941.2	$	4.6	$	—	$	2,945.8	$	2,474.7	$	2.7	$	(0.7	)	$	2,476.7


^(*)	Balance includes the Company's non-qualified deferred compensation plan assets. ~~For additional information, see Note 12,~~ ~~Employee Benefit Plans, under the section Deferred Compensation Plan.~~



	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of September 30, 2012
Corporate debt securities	$	40.8	$	—	$	—	$	—	$	40.8	$	—
U.S. government securities	51.0		—		—		—		51.0		—
Government-sponsored enterprise obligations	20.0		—		—		—		20.0		—
Asset-backed securities	16.9		—		1.4		—		18.3		—
Total	$	128.7	$	—	$	1.4	$	—	$	130.1	$	—



	As of
	September 30, 2012		December 31, 2011
Restricted cash:
Demand deposits	$	0.9	$	0.6
Total restricted cash	0.9		0.6
Restricted investments:
Corporate debt securities	1.9		1.6
Mutual funds	1.2		1.0
Money market funds	98.7		75.1
Total restricted investments	101.8		77.7
Total restricted cash and investments	$	102.7	$	78.3


	Fair Value Measurements at September 30, 2012 Using:								Fair Value Measurements at March 31, 2013 Using:
	Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Remaining Inputs		Significant Other Unobservable Remaining Inputs				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		(Level 1)		(Level 2)		(Level 3)		Total
Assets measured at fair value:
Available-for-sale debt securities:
Available-for-sale securities:
Asset-backed securities	$	—	$	175.8	$	—	$	175.8	$	—	$	234.8	$	—	$	234.8
Certificate of deposit	—		26.9		—		26.9		—		45.0		—		45.0
Commercial paper	—		3.0		—		3.0
Corporate debt securities ⁽¹⁾	—		571.2		—		571.2
Corporate debt securities									—		615.7		—		615.7
Foreign government debt securities	—		10.0		—		10.0		—		15.8		—		15.8
Government-sponsored enterprise obligations	241.5		10.0		—		251.5		265.6		5.0		—		270.6
Money market funds ⁽²⁾	1,528.9		—		—		1,528.9
Mutual funds ⁽³⁾	1.2		—		—		1.2
Money market funds ⁽¹⁾									839.1		—		—		839.1
Mutual funds ⁽²⁾									3.0		—		—		3.0
Publicly-traded equity securities									2.6		—		—		2.6
U.S. government securities	260.8		202.1		—		462.9		237.2		199.1		—		436.3
Total available-for-sale debt securities	2,032.4		999.0		—		3,031.4
Available-for-sale equity securities:
Publicly-traded equity securities	3.6		—		—		3.6
Total available-for-sale securities	2,036.0		999.0		—		3,035.0		1,347.5		1,115.4		—		2,462.9
Trading securities:
Mutual funds ⁽⁴⁾	12.6		—		—		12.6
Trading securities in mutual funds ⁽³⁾									13.8		—		—		13.8
Derivative assets:
Foreign exchange contracts	—		4.6		—		4.6		—		1.6		—		1.6
Total assets measured at fair value	$	2,048.6	$	1,003.6	$	—	$	3,052.2	$	1,361.3	$	1,117.0	$	—	$	2,478.3

Liabilities measured at fair value:
Derivative liabilities:
Foreign exchange contracts	$	—	$	0.6	$	—	$	0.6	$	—	$	1.1	$	—	$	1.1
Total liabilities measured at fair value	$	—	$	0.6	$	—	$	0.6	$	—	$	1.1	$	—	$	1.1

Total assets measured at fair value, reported as:
Cash equivalents									$	749.6	$	6.3	$	—	$	755.9
Restricted investments									92.5		—		—		92.5
Short-term investments									262.5		350.6		—		613.1
Long-term investments									256.7		758.5		—		1,015.2
Prepaid expenses and other current assets									—		1.6		—		1.6
Total assets measured at fair value									$	1,361.3	$	1,117.0	$	—	$	2,478.3

Total liabilities measured at fair value, reported as:
Other accrued liabilities									$	—	$	1.1	$	—	$	1.1
Total liabilities measured at fair value									$	—	$	1.1	$	—	$	1.1


	As of				As of
	September 30, 2012		December 31, 2011		March 31, 2013		December 31, 2012
Cash flow hedges	$	130.2	$	184.3	$	67.6	$	85.8
Non-designated derivatives	102.8		122.7		114.4		112.8
Total	$	233.0	$	307.0	$	182.0	$	198.6


⁽¹⁾	Balance includes $~~1.9 million~~ ~~of restricted investments measured at fair market value, related to the Company's India Gratuity Trust.~~


⁽²⁾	~~Balance includes~~ ~~$98.7~~89.5 million of restricted investments measured at fair market value, related to the Company's D&O trust and ~~acquisitions related~~acquisition-related escrows.


⁽³⁾⁽²⁾	Balance relates to the restricted investments measured at fair market value of the Company's India Gratuity Trust.


⁽⁴⁾⁽³⁾	Balance relates to investments measured at fair value related to the Company's non-qualified deferred compensation plan assets.


	Fair Value Measurements at September 30, 2012 Using:								Fair Value Measurements at December 31, 2012 Using:
	Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Remaining Inputs		Significant Other Unobservable Remaining Inputs				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		(Level 1)		(Level 2)		(Level 3)		Total
Assets measured at fair value:
Available-for-sale securities:
Asset-backed securities									$	—	$	226.4	$	—	$	226.4
Certificate of deposit									—		42.5		—		42.5
Commercial paper									—		22.4		—		22.4
Corporate debt securities									—		535.6		—		535.6
Foreign government debt securities									—		5.0		—		5.0
Government-sponsored enterprise obligations									254.9		16.1		—		271.0
Money market funds ⁽¹⁾									1,145.2		—		—		1,145.2
Mutual funds ⁽²⁾									1.0		2.0		—		3.0
Publicly-traded equity securities									2.9		—		—		2.9
U.S. government securities									275.9		218.6		—		494.5
Total available-for-sale securities									1,679.9		1,068.6		—		2,748.5
Trading securities in mutual funds ⁽³⁾									12.6		—		—		12.6
Derivative assets:
Foreign exchange contracts									—		3.5		—		3.5
Total assets measured at fair value									$	1,692.5	$	1,072.1	$	—	$	2,764.6
Liabilities measured at fair value:
Derivative liabilities:
Foreign exchange contracts									$	—	$	0.1	$	—	$	0.1
Total liabilities measured at fair value									$	—	$	0.1	$	—	$	0.1

Total assets measured at fair value, reported as:
Cash equivalents	$	1,430.2	$	175.5	$	—	$	1,605.7	$	1,048.7	$	177.2	$	—	$	1,225.9
Restricted investments									103.6		2.0		—		105.6
Short-term investments	212.7		226.6		—		439.3		224.4		217.1		—		441.5
Long-term investments	305.8		595.0		—		900.8		315.8		672.3		—		988.1
Restricted investments	99.9		1.9		—		101.8
Prepaid expenses and other current assets	—		4.6		—		4.6		—		3.5		—		3.5
Total assets measured at fair value	$	2,048.6	$	1,003.6	$	—	$	3,052.2	$	1,692.5	$	1,072.1	$	—	$	2,764.6

Total liabilities measured at fair value, reported as:							��
Other accrued liabilities	$	—	$	0.6	$	—	$	0.6	$	—	$	0.1	$	—	$	0.1
Total liabilities measured at fair value	$	—	$	0.6	$	—	$	0.6	$	—	$	0.1	$	—	$	0.1


⁽¹⁾	Balance includes $~~1.6 million~~ ~~of restricted investments measured at fair market value, related to the Company's India Gratuity Trust.~~


⁽²⁾	~~Balance includes~~ ~~$75.1~~102.6 million of restricted investments measured at fair market value, related to the Company's D&O trust and ~~acquisition related~~acquisition-related escrows.



	PSD		SSD			Total
Balance as of January 1, 2012	$	1,795.6	$	2,132.5		$	3,928.1
Additions due to business combinations	—		59.6			59.6
Accumulated adjustment to goodwill	—		(0.6		)	(0.6		)
Balance as of September 30, 2012	$	1,795.6	$	2,191.5		$	3,987.1



	PSD			SSD		Total
Balance as of December 31, 2012	$	1,866.3		$	2,191.5	$	4,057.8
Reclassifications	(179.0		)	179.0		—
Balance as of March 31, 2013	$	1,687.3		$	2,370.5	$	4,057.8


	Gross		Accumulated Amortization			Impairments and Other Charges			Net		Gross		Accumulated Amortization			Impairments and Other Charges			Net
As of September 30, 2012
As of March 31, 2013
Intangible assets with finite lives:
Technologies and patents	$	538.1	$	(426.4	)	$	(16.1	)	$	95.6	$	564.0	$	(431.7	)	$	(30.5	)	$	101.8
Other	92.5		(69.4		)	—			23.1
Total purchased intangible assets	$	630.6	$	(495.8	)	$	(16.1	)	$	118.7

As of December 31, 2011
Intangible assets with finite lives:
Technologies and patents	$	499.5	$	(404.2	)	$	—		$	95.3
Customer contracts, support agreements, and related relationships											74.3		(60.1		)	(2.2		)	12.0
Other	91.5		(66.5		)	—			25.0		18.8		(18.8		)	—			—
Total intangible assets with finite lives	591.0		(470.7		)	—			120.3		657.1		(510.6		)	(32.7		)	113.8
IPR&D with indefinite lives	2.8		—			—			2.8		17.4		—			—			17.4
Total purchased intangible assets	$	593.8	$	(470.7	)	$	—		$	123.1	$	674.5	$	(510.6	)	$	(32.7	)	$	131.2

As of December 31, 2012
Intangible assets with finite lives:
Technologies and patents											$	554.1	$	(425.0	)	$	(30.5	)	$	98.6
Customer contracts, support agreements, and related relationships											74.3		(59.2		)	(2.2		)	12.9
Other											18.8		(18.8		)	—			—
Total intangible assets with finite lives											647.2		(503.0		)	(32.7		)	111.5
IPR&D with indefinite lives											17.4		—			—			17.4
Total purchased intangible assets											$	664.6	$	(503.0	)	$	(32.7	)	$	128.9


Years Ending December 31,	Amount		Amount
Remainder of 2012	$	7.2
2013	28.6
Remainder of 2013			$	22.9
2014	28.5		30.4
2015	24.9		26.8
2016	12.2		14.2
2017			10.5
Thereafter	17.3		9.0
Total	$	118.7	$	113.8


	As of				As of
	September 30, 2012		December 31, 2011		March 31, 2013		December 31, 2012
Inventories, net
Inventories, net:
Production materials	$	61.4	$	52.4	$	50.1	$	54.6
Finished goods	19.4		16.7		4.0		4.1
Total inventories, net	$	80.8	$	69.1	$	54.1	$	58.7


	As of
	September 30, 2012
Beginning balance	$	28.3
Balance as of December 31, 2012				$	29.7
Provisions made during the period, net	24.3			7.3
Change in estimate	—			(0.3		)
Actual costs incurred during the period	(22.8		)	(7.3		)
Ending balance	$	29.8
Balance as of March 31, 2013				$	29.4



	December 31, 2012		Charges		Cash Payments			Non-cash Settlements and Other			March 31, 2013
Severance	$	10.6	$	4.4	$	(8.2	)	$	(0.1	)	$	6.7
Facilities	5.2		2.6		(1.8		)	(0.2		)	5.8
Contract terminations and other	2.4		0.7		(2.1		)	0.5			1.5
Total	$	18.2	$	7.7	$	(12.1	)	$	0.2		$	14.0



	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, 2012	$	2.1		$	3.0		$	(0.4	)	$	4.7
Other comprehensive loss before reclassifications	(0.2		)	(2.1		)	(5.8		)	(8.1		)
Amount reclassified from accumulated other comprehensive (loss) income	(0.4		)	(1.4		)	—			(1.8		)
Other comprehensive loss⁽³⁾	(0.6		)	(3.5		)	(5.8		)	(9.9		)
Balance as of March 31, 2013	$	1.5		$	(0.5	)	$	(6.2	)	$	(5.2	)


⁽¹⁾	The reclassifications out of accumulated comprehensive income during the three months ended March 31, 2013 for realized gains on available-for-sale securities of $0.4 million are included in other expense, net in the Condensed Consolidated Statements of Operations.


⁽³⁾	Taxes related to each component of other comprehensive loss were not material for the three months ended March 31, 2013 and March 31, 2012.



	Outstanding Options
	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Balance at January 1, 2012	38.6		$	23.98
Options granted	3.1		22.81
Options canceled	(2.1	)	25.61
Options exercised	(2.8	)	10.84
Options expired	(1.1	)	26.97
Balance at September 30, 2012	35.7		$	24.73	3.2	$	17.2

As of September 30, 2012:
Vested or expected-to-vest options	34.6		$	24.58	3.2	$	17.1
Exercisable options	27.4		$	23.59	2.6	$	15.4


	Outstanding RSUs and PSAs							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		Number of Shares		Weighted Average Grant-Date Fair Value per Share		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Balance at January 1, 2012	19.6		$	30.27
Balance as of December 31, 2012								26.8		$	27.76
RSUs granted	7.8		20.83					7.7		20.41
RSUs assumed	0.2		22.47
PSAs granted^(*)	2.2		23.07					2.0		21.36
RSUs vested	(2.2	)	28.10					(3.8	)	28.80
PSAs vested	(1.9	)	18.02					(1.0	)	28.26
RSAs vested								(0.2	)	19.59
RSUs canceled	(1.5	)	28.66					(0.7	)	24.20
PSAs canceled	(0.9	)	32.50					(1.8	)	29.05
Balance at September 30, 2012	23.3		$	27.77	1.4	$	399.0
Balance as of March 31, 2013								29.0		$	25.28	1.7	$	538.4

As of September 30, 2012:
Vested and expected-to-vest RSUs and PSAs	18.8		$	27.56	1.3	$	322.4
As of March 31, 2013:
Vested and expected-to-vest RSUs, RSAs, and PSAs								24.9		$	23.95	1.6	$	461.3



	~~Number of Shares~~
~~Balance at January 1, 2012~~	~~41.1~~
~~Additional shares authorized for issuance~~	~~25.0~~
~~RSUs and PSAs granted~~ ⁽¹⁾	~~(21.0~~	)
~~Options granted~~	~~(3.1~~	)
~~RSUs and PSAs canceled~~⁽¹⁾	~~5.0~~
~~Options canceled~~ ⁽²⁾	~~2.1~~
~~Options expired~~ ⁽²⁾	~~1.1~~
~~Balance at September 30, 2012~~	~~50.2~~