Spreadsheet: 971ca242-c987-46c2-beb3-3e0e6f04376d
Sheet: GAAP to Non-GAAP Reconciliation

Juniper Networks, Inc.
Reconciliation between GAAP and non-GAAP Financial Measures
(in thousands, except percentages)
(unaudited)
 |  | Three Months Ended March 31,
 |  | 2012 |  | 2011
GAAP Cost of revenues - Product |  | 280629 |  | 265746
Share-based compensation expense | C | -1117 |  | -948
Share-based compensation related payroll tax | C | -12 |  | -271
Amortization of purchased intangible assets | A | -6095 |  | -5198
Acquisition-related and other charges | A,B | — |  | -960
Non-GAAP Cost of revenues - Product
GAAP Cost of revenues - Service |  | 117814 |  | 99981
Share-based compensation expense | C | -5220 |  | -3919
Share-based compensation related payroll tax | C | -34 |  | -835
Non-GAAP Cost of revenues - Service
GAAP Gross margin - Product |  | 491244 |  | 611694
Share-based compensation expense | C | 1117 |  | 948
Share-based compensation related payroll tax | C | 12 |  | 271
Amortization of purchased intangible assets | A | 6095 |  | 5198
Acquisition-related and other charges | A,B | — |  | 960
Non-GAAP Gross margin - Product
GAAP Product gross margin as a % of product revenue |  | 0.636 |  | 0.697
Share-based compensation expense as a % of product revenue | C | 0.002 |  | 0.002
Share-based compensation related payroll tax as a % of product revenue | C | — % |  | —%
Amortization of purchased intangible assets as a % of product revenue | A | 0.008 |  | 0.006
Acquisition-related and other charges as a % of product revenue | A,B | —% |  | 0.001
Non-GAAP Product gross margin as a % of product revenue
GAAP Gross margin - Service |  | 142811 |  | 124191
Share-based compensation expense | C | 5220 |  | 3919
Share-based compensation related payroll tax | C | 34 |  | 835
Non-GAAP Gross margin - Service
GAAP Service gross margin as a % of service revenue |  | 0.548 |  | 0.554
Share-based compensation expense as a % of service revenue | C | 0.02 |  | 0.017
Share-based compensation related payroll tax as a % of service revenue | C | — % |  | 0.004
Non-GAAP Service gross margin as a % of service revenue
GAAP Gross margin |  | 634055 |  | 735885
Share-based compensation expense | C | 6337 |  | 4867
Share-based compensation related payroll tax | C | 46 |  | 1106
Amortization of purchased intangible assets | A | 6095 |  | 5198
Acquisition-related and other charges | A,B | — |  | 960
Non-GAAP Gross margin
GAAP Gross margin as a % of revenue |  | 0.614 |  | 0.668
Share-based compensation expense as a % of revenue | C | 0.006 |  | 0.004
Share-based compensation related payroll tax as a % of revenue | C | —% |  | 0.001
Amortization of purchased intangible assets as a % of revenue | A | 0.006 |  | 0.005
Acquisition-related and other charges as a % of revenue | A,B | — % |  | 0.001
Non-GAAP Gross margin as a % of revenue
GAAP Research and development expense |  | 269602 |  | 261979
Share-based compensation expense | C | -25791 |  | -22330
Share-based compensation related payroll tax | C | -126 |  | -3074
Non-GAAP Research and development expense
GAAP Sales and marketing expense |  | 257719 |  | 246291
Share-based compensation expense | C | -21911 |  | -13226
Share-based compensation related payroll tax | C | -176 |  | -3386
Non-GAAP Sales and marketing expense
GAAP General and administrative expense |  | 54666 |  | 44924
Share-based compensation expense | C | -10968 |  | -8616
Share-based compensation related payroll tax | C | -31 |  | -419
Non-GAAP General and administrative expense
GAAP Operating expense |  | 586346 |  | 558492
Share-based compensation expense | C | -58670 |  | -44172
Share-based compensation related payroll tax | C | -333 |  | -6879
Amortization of purchased intangible assets | A | -1178 |  | -1544
Restructuring and other charges | B | -2039 |  | 347
Acquisition-related and other charges | A,B | -1142 |  | -4101
Non-GAAP Operating expense
GAAP Operating income |  | 47709 |  | 177393
Share-based compensation expense | C | 65007 |  | 49039
Share-based compensation related payroll tax | C | 379 |  | 7985
Amortization of purchased intangible assets | A | 7273 |  | 6742
Restructuring and other charges | B | 2039 |  | -347
Acquisition-related and other charges | A,B | 1142 |  | 5061
Non-GAAP Operating income
GAAP Operating margin |  | 0.046 |  | 0.161
Share-based compensation expense as a % of revenue | C | 0.063 |  | 0.045
Share-based compensation related payroll tax as a % of revenue | C | —% |  | 0.007
Amortization of purchased intangible assets as a % of revenue | A | 0.007 |  | 0.006
Restructuring and other charges as a % of revenue | B | 0.002 |  | —%
Acquisition-related and other charges as a % of revenue | A,B | 0.002 |  | 0.004
Non-GAAP Operating margin
GAAP Other (expense) income, net | E | -24431 |  | -6462
(Gain)/loss on equity investments | B | 14000 |  | -62
Non-GAAP Other (expense) income, net | E
GAAP Income tax provision |  | 7008 |  | 41271
Income tax effect of non-GAAP exclusions | B | 22120 |  | 20658
Non-GAAP Provision for income tax
Non-GAAP Income tax rate |  | 0.258 |  | 0.259
Non-GAAP Income before income taxes and noncontrolling interest* |  | 113118 |  | 239349
*Consists of non-GAAP operating income plus non-GAAP net other income and expense.
GAAP Net income attributable to Juniper Networks |  | 16270 |  | 129750
Share-based compensation expense | C | 65007 |  | 49039
Share-based compensation related payroll tax | C | 379 |  | 7985
Amortization of purchased intangible assets | A | 7273 |  | 6742
Restructuring and other charges | B | 2039 |  | -347
Acquisition-related and other charges | A,B | 1142 |  | 5061
(Gain)/loss on equity investments | B | 14000 |  | -62
Income tax effect of non-GAAP exclusions | B | -22120 |  | -20658
Non-GAAP Net income
Non-GAAP Net income per share:
Basic | D | 0.16 |  | 0.33
Diluted | D | 0.16 |  | 0.32
Shares used in computing non-GAAP net income per share:
Basic | D | 527186 |  | 530789
Diluted | D | 533683 |  | 548825
GAAP Net income attributable to Juniper Networks as a % of revenue |  | 0.016 |  | 0.118
Share-based compensation expense as a % of revenue | C | 0.063 |  | 0.045
Share-based compensation related payroll tax as a % of revenue | C | —% |  | 0.007
Amortization of purchased intangible assets as a % of revenue | A | 0.007 |  | 0.006
Restructuring and other charges as a % of revenue | B | 0.002 |  | —%
Acquisition-related and other charges as a % of revenue | A,B | 0.001 |  | 0.005
(Gain)/loss on equity investments as a % of revenue | B | 0.014 |  | —%
Income tax effect of non-GAAP exclusions as a % of revenue | B | -0.022 |  | -0.02
Non-GAAP Net income as a % of revenue