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Juniper Networks, Inc. Reports Q4 '01 and Year End 2001 Financial Results Q4 '01 Net Revenue $151.0M; Pro forma EPS $0.05 2001 Net Revenue $887.0M; Pro forma EPS $0.50

SUNNYVALE, CA - January 15, 2002 - Juniper Networks, Inc. (Nasdaq: JNPR), a leading provider of next-generation IP infrastructure systems, today reported its fourth quarter results for the period ending December 31, 2001.

Net revenues for the fourth quarter were $151.0 million, compared with $201.7 million for the third quarter, a decrease of 25%. Pro forma net income was $15.9 million or $0.05 per share, compared with pro forma net income of $32.5 million or $0.10 per share in the third quarter of 2001.

Actual net loss for the fourth quarter, which includes amortization of goodwill and other purchased intangibles of $12.5 million, amortization of deferred compensation of $15.2 million and in-process research and development of $4.2 million, was $5.1 million or $0.02 per share, compared with a net loss of $29.7 million or $0.09 per share in the third quarter of 2001.

Net revenues for the year ended December 31, 2001 were $887.0 million, compared with $673.5 million for the year ended December 31, 2000. Pro forma net income for 2001 was $169.9 million or $0.50 per share, compared with $184.0 million or $0.53 per share during 2000. Actual net loss for 2001 was $13.4 million or $0.04 per share, compared with actual net income of $147.9 million or $0.43 per share during 2000.

"With all its challenges, 2001 was also a year of significant accomplishments," said Scott Kriens, Chairman and CEO of Juniper Networks. "We more than doubled our customer base, we expanded our product capabilities globally in multiple markets, and increased our revenues by more than 30% over the prior year."

About Juniper Networks, Inc.

Juniper Networks, Inc. is a leading provider of purpose-built systems that meet the scalability, performance, density, and compatibility requirements of rapidly evolving, optically enabled IP networks. The company's systems provide new IP infrastructure solutions for the world's leading service providers. Juniper Networks service, manufacturing teams, and IP engineers work closely with customers to build and support customer networks. The company is headquartered in Sunnyvale, California. For more information, please visit the Web site at www.juniper.net.

Juniper Networks is registered in the U.S. Patent and Trademark Office and in other countries as a trademark of Juniper Networks, Inc. G10, Internet Processor, Internet Processor II, JUNOS, JUNOScript, M5, M10, M20, M40, and M160 are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks are the property of their respective owners.

Actual results could differ materially from those anticipated in forward-looking statements in this release as a result of certain factors, including those set forth in the risk factors described in the Company's SEC filings, including its recent Form 10Q.

JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

December 31,
2001
December 31,
2000
Assets
Current assets:
  Cash and cash equivalents
$ 606,845
$ 563,005
  Short-term investments 382,797 581,738
  Accounts receivable, net 103,524 176,535
  Prepaid expenses and other current assets 32,882 27,269
    Total current assets 1,126,048 1,348,547
Property and equipment, net 251,811 36,440
Long-term investments 708,232 450,568
Other long-term assets 303,497 267,574
   Total Assets
$ 2,389,588
$ 2,103,129
Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable
$ 40,755
$ 72,347
  Other accrued liabilities 164,622 109,436
  Deferred revenue 36,842 34,625
    Total current liabilities 242,219 216,408
Convertible subordinated notes and other long-term liabilities 1,150,000 1,156,719
Common stock and additional paid-in capital 959,684 735,103
Deferred stock compensation (63,065) (111,813)
Accumulated other comprehensive income 18,418 10,963
Retained earnings 82,332 95,749
   Total Liabilities and Stockholders' Equity
$ 2,389,588
$ 2,103,129


JUNIPER NETWORKS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)
(unaudited)

    Three Months Ended
December 31,
  Year Ended
December 31,
     
  2001   2000 2001   2000
     
 
Net revenues
$ 151,033
 
$ 295,386
$ 887,022
 
$ 673,501
 
Cost of revenues 58,783 101,410 332,903 237,554
     
 
Gross profit 92,250 193,976 554,119 435,947
 
Operating expenses:  
  Research and development 32,565 30,243 155,530 87,833
  Sales and marketing 29,531 36,892 140,407 89,029
  General and administrative 8,462 8,545 37,554 21,176
     
    Total operating expenses 70,558 75,680 333,491 198,038
     
 
Operating income 21,692 118,296 220,628 237,909
 
Interest income, net 3,274 8,127 33,370 36,283
Equity in joint venture (1,515) - (4,076) -
     
 
Income before income taxes 23,451 126,423 249,922 274,192
 
Provision for income taxes 7,504 41,823 79,975 90,156
     
 
Net income
$ 15,947
$ 84,600
$ 169,947
$ 184,036
     
     
 
Basic net income per share
$ 0.05
$ 0.27
$ 0.53
$ 0.60
     
     
Shares used in computing basic
net income per share
323,570 312,423 319,378 304,381
     
     
 
Diluted net income per share
$ 0.05
$ 0.24
$ 0.50
$ 0.53
     
     
Shares used in computing diluted
net income per share
338,841 349,505 340,768 347,858
 
 
The above pro forma amounts have been adjusted to exclude the following:
In-process research and development 4,200 10,000 4,200 10,000
Amortization of goodwill and purchased intangibles 12,520 5,349 49,277 10,920
Amortization of deferred stock compensation 15,171 11,494 74,080 12,900
Write-downs of equity investments - - 53,620 -
Restructuring costs - - 12,340 -
Contract manufacturing charge - - 39,868 -
Charitable contribution - - - 10,000
Income tax effect (10,818) (4,400) (50,021) (7,700)


JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

Three Months Ended
December 31,
Year Ended
December 31,
2001 2000 2001 2000
(unaudited)
Net revenues
$ 151,033
$ 295,386
$ 887,022
$ 673,501
Cost of revenues 58,783 101,410 372,771 237,554
Gross profit 92,250 193,976 514,251 435,947
Operating expenses:
  Research and development 32,565 30,243 155,530 87,833
  Sales and marketing 29,531 36,892 140,407 89,029
  General and administrative 8,462 8,545 37,554 21,176
Goodwill, purchased intangibles, and deferred stock compensation 27,691 16,843 123,357 23,820
  Restructuring costs - - 12,340 -
  In-process research and development 4,200 10,000 4,200 10,000
  Charitable contribution - - - 10,000
    Total operating expenses 102,449 102,523 473,388 241,858
Operating income/(loss) (10,199) 91,453 40,863 194,089
Interest income (expense), net 3,274 8,127 (20,250) 36,283
Equity in joint venture (1,515) - (4,076) -
Income/(loss) before income taxes (8,440) 99,580 16,537 230,372
Provision for income taxes (3,314) 37,423 29,954 82,456
Net income/(loss)
$ (5,126)
$ 62,157
$ (13,417)
$ 147,916
Basic net income/(loss) per share
$ (0.02)
$ 0.20
$ (0.04)
$ 0.49
Shares used in computing basic
net income/(loss) per share
323,570 312,423 319,378 304,381
Diluted net income/(loss) per share
$ (0.02)
$ 0.18
$ (0.04)
$ 0.43
Shares used in computing diluted
net income/(loss) per share
323,570 349,505 319,378 347,858