2006 Annual Report Letter to Stockholders

JUNIPER NETWORKS, INC. 1194 N. Mathilda Avenue Sunnyvale, California 94089 www.juniper.net (408) 745-2000 2006 Annual Report Letter to Stockholders Notice of 2007 Annual Meeting of Stockholders and Proxy Statement Report on Form 10-K To Our Valued Stockholders, 2006 was another year of focus and execution for Juniper Networks, as we continued to position the Company for its next stage of evolution. Juniper finished the year with over $2.3 billion in revenue. To put Juniper’s growth into perspective, this represents a revenue base that has nearly doubled over the past three years. As we move into 2007, we see a marketplace that presents the Company with significant opportunity to deliver strategic value to customers, scale our ability to execute, and continue to grow our business. New demands on network infrastructure are rapidly rising, and Juniper remains at the forefront of these trends as the vanguard of innovation and progress. Our accomplishments in 2006 stem from the following strategic areas of focus: 1. Delivering best-in-class solutions that continue to progress with the changes in the marketplace. Standalone products are increasingly giving way to more fully integrated solutions for the enterprise market, and in February 2006, Juniper introduced the SSG platform, coupling the best in security with the best in routing. For the service provider market, we saw traction with the introduction of Ethernet line cards as well as the M120 Multiservice Edge Router, and we launched the MX960 Ethernet Services Router. 2. Leveraging our technology for enterprises and service providers to further capitalize on the synergies across these two markets. Juniper is currently well-positioned in both end-markets, which are expected to have healthy spending levels in 2007. Over the past year, we have continued to strengthen our product offerings for both enterprises and service providers, and our concentrated approach ensures a secure delivery of virtual network services. 3. Increasing traction in the enterprise market with over 20,000 enterprise customers to date, and an annual revenue growth rate in our Service Layer Technology segment of more than 20% during 2006. As we approach our third year selling into the enterprise market, we continue to expand our strategy with the evolution of the business model and leverage our best-in-class technology. Juniper is setting the pace for the integration of security, routing and application acceleration trends evident in the marketplace. We are pleased with our momentum with enterprise customers as we placed second in market share for both high-end enterprise routing and worldwide security, as reported by Infonetics in February, 2007. 4. Maintaining our focus on partner relationships to ensure the Company’s ability to address the changing needs of our customers. Our relationships with partners such as Siemens, Ericsson and Alcatel-Lucent remained strong in 2006 as we continue to leverage our joint capabilities. We have built partnerships with other market leaders including Symantec and Avaya as we are focus on delivering best-in-class, integrated solutions to enterprise customers and we continue to look for ongoing strategic collaborations that add value to our customers. 5. Striving to improve execution as well as the ongoing priority of always strengthening our management team. A top priority at Juniper continues to be recruiting and retaining top notch leaders who will excel in serving customers, increasing market share and strengthening revenues and profitability. We are poised to take advantage of significant opportunities that lie ahead, and our team is intensely focused on execution. In 2006, the growing demand for our innovative products drove revenue over $2.3 billion, up 12% compared to 2005. We ended the year with over $2.5 billion in cash and other investments on our balance sheet, an increase of over 28% from 2005. During 2006, our board of directors approved a share repurchase program of $1 billion and in early 2007 an additional $1 billion was approved. In December 2006, Juniper announced the completion of the independent investigation related to the Company’s historical stock option granting practices. I am pleased to report that in March 2007 we regained compliance with NASDAQ listing standards and our periodic reporting requirements with the SEC, and we have taken the appropriate actions to verify that proper stock option accounting controls are in place moving forward. As we head into 2007, our strategy remains the same – to be the best supplier of traffic processing infrastructure for the delivery of virtual network services. Concentrating on the service provider market, we continue to see growth in IP traffic on service provider networks as a result of peer to peer interaction, broadband usage, video, and the increasing reliance on the IP network as a mission critical business tool in the strategies of our service provider customers, and of their enterprise customers. The quality and type of traffic is continuing to change from generic delivery of information to high demand voice and video where managing traffic characteristics like latency and quality of service become increasingly important and play to the foundation and differentiation of what we can offer. The service providers’ network requirements are becoming clearer and therefore the Juniper solution and the differentiation we provide are becoming more apparent to the marketplace and to our customers. As our enterprise strategy progresses, we remain confident in our ability to help enterprises enhance the performance of their networks, mitigate exposure from risk and gain greater choice through open standards and partnerships so that they can ultimately realize enhanced business performance. Juniper is actively addressing the changing requirements of next generation data centers and is working to accommodate the increasingly mobile employee with enhanced security, scalability, and application performance. In conjunction with these efforts, we will also intensify a broadening of brand awareness in the enterprise market by increasing visibility through more aggressive marketing and sales strategies. As we look across our marketplaces in 2007, we see great opportunity. We have made solid progress in 2006, and we expect continuing evidence of that progress in the years to come. We will continue to invest and to look outward to capture more of the considerable addressable market opportunity, and we will also continue to look inward, to improve our execution, and invest in the talent we have assembled and the technology that we have developed. All of this is possible only with the support of our employees, whose continued commitment and incredible efforts make these results possible, as well as our many partners, our customers, our suppliers, and our long-term stockholders. I would like to thank you all for your continued support and confidence in Juniper Networks. Scott Kriens Chairman and CEO JUNIPER NETWORKS, INC. 1194 North Mathilda Avenue Sunnyvale, California 94089 www.juniper.net (408) 745-2000 NOTICE OF 2007 ANNUAL MEETING OF STOCKHOLDERS Time and Date 9:00 a.m., Pacific time, on Thursday, May 17, 2007 Place Juniper Networks, Inc. 1220 North Mathilda Avenue Building 3, Pacific Conference Room Sunnyvale, CA 94089 Items of Business (1) To elect two Class II directors; (2) To ratify the appointment of Ernst & Young LLP, an independent registered public accounting firm, as auditors for the fiscal year ending December 31, 2007; and (3) To consider such other business as may properly come before the meeting. Adjournments and Postponements Any action on the items of business described above may be consid- ered at the annual meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed. Record Date You are entitled to vote only if you were a Juniper Networks stockholder as of the close of business on March 21, 2007. This notice of annual meeting and proxy statement and form of proxy are being distributed on or about April 18, 2007. Meeting Admission You are entitled to attend the annual meeting only if you were a Juniper Networks stockholder as of the close of business on March 21, 2007 or hold a valid proxy for the annual meeting. You should be prepared to present valid government-issued photo identification for admittance. In addition, if you are a stockholder of record, your ownership will be verified against the list of stockholders of record on the record date prior to being admitted to the meeting. If you are not a stockholder of record but hold shares through a broker or nominee (i.e., in street name), you should provide proof of beneficial ownership as of the record date, such as your most recent account statement prior to March 21, 2007, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above upon request, you may not be admitted to the annual meeting. The annual meeting will begin promptly at 9:00 a.m., Pacific time. Check-in will begin at 8:30 a.m., Pacific time, and you should allow ample time for the check-in procedures. Voting Your vote is very important. Whether or not you plan to attend the annual meeting, we encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. You may submit your proxy or voting instructions for the annual meeting by completing, signing, dating and returning your proxy or voting instruction card in the pre-addressed envelope provided, or, in most cases, by using the telephone or the Internet. For specific instructions on how to vote your shares, please refer to the section entitled Questions and Answers beginning on page 1 of this proxy statement and the instructions on the proxy or voting instruction card.

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