Juniper Networks Annual Report 2005

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Juniper Networks Annual Report 2005 JUNIPER NETWORKS, INC. 1194 N. Mathilda Avenue Sunnyvale, California 94089 www.juniper.net (408) 745-2000 2005 Annual Report Letter to Stockholders Notice of 2006 Annual Meeting of Stockholders and Proxy Statement Report on Form 10-K To Our Valued Stockholders, As we celebrate our 10-year anniversary, we look back to February 6, 1996, when Juniper Networks was founded by one individual with one product idea. Today, the company has grown to over 4,000 employees selling 55 products and solutions to 8,000 customers in 80 countries. We serve 77 of the Fortune 100 enterprise networks and all 25 of the largest wireline service providers around the world. In 2005, Juniper generated over $2 billion in revenue and we ended the year with approximately $2 billion in cash and investments on our balance sheet. During the past 10 years, Juniper has helped shape and drive the networking industry while executing on our mission to revolutionize the economics of global information exchange. We continue to lead this revolution by helping to make information more readily available around the world. We have been successful by being able to: 1. Focus on executing our strategy to be the best provider of traffic processing for the delivery of virtual network services. Our focused strategy enables Juniper to handle the secure and assured requirements of our customers—both service providers and enterprises—and the customers who depend on them. 2. Provide best-in-class products that map to our customers’ critically important networking challenges. Recognized for our industry-leading routing, security and application performance products, Juniper continues to hold the #2 position in the Service Provider Core and Edge Routing markets according to Synergy Research Group, who also named Juniper #2 in the High-End Enterprise Routing category, a market in which we had no presence in 2004. Juniper also led the 2005 Gartner Magic Quadrant in the four security market segments we serve: Firewall, IPSec VPN, SSL VPN and IPS. To meet customers’ evolving needs, Juniper introduced thousands of new software features across several best- in class-platforms in 2005—from the multi-chassis TX Matrix and the E320 Broadband Services Router in our infrastructure portfolio, to our security portfolio’s ISG 2000, SA6000 and Unified Access Control, an industry-leading open standards security architecture that protects customers’ existing network equipment investments. 3. Work openly with partners to broaden our reach and better serve customers’ evolving requirements. Adding to our established partnerships with such industry leaders as Ericsson, Lucent, Siemens and NEC, in 2005 Juniper formed a strategic partnership with leading enterprise service provider Avaya to deliver secure converged communication solutions to enterprise customers worldwide. In addition, we grew the number of our quality channel partners to over 6,000. 4. Stay agile while growing globally. Providing us a competitive edge, Juniper has retained the nimbleness of a small company while adding products, services, people and resources that enable us to respond quickly to customers’ wide-ranging needs around the globe. 5. Deliver continual innovation to meet changing customer requirements and maintain a lead in the marketplace. In 2005, Juniper spent over $300M in R&D for the ramp of new product cycles. Our investments in innovation continued to pay off as Juniper once again grew significantly faster than our competitors, allowing us to further establish our brand and gain market share in a number of key market segments. Moving forward, we will continue to hone our abilities in each of these areas while addressing new and growing market trends in both the service provider and enterprise markets. In the service provider market, for example, there is a wave of next-generation network planning as the migration from multiple standalone legacy networks to a single converged infrastructure accelerates. The large service providers, who are building fiber from the network infrastructure all the way out to the home—in the U.S., Europe and Asia—are experiencing an urgent need to plan for the next generation of capacity, performance and reliability. 2006 will be a year of decisions by carriers worldwide. We believe these decisions will also fuel the continued expansion of wireless and mobility in the areas of DSL and broadband, cellular and WiFi, and we expect to see the continued confirmation that there is only one infrastructure—built around secure IP—that will support these access technologies as last-mile solutions connected to a single network. This presents an exciting opportunity for Juniper. In the enterprise market, requirements are moving closer to those of traditional service providers every day. Banks, governments, retailers and other businesses are demanding the same always- on reliability and simultaneous high performance and security as was once reserved only for the largest service providers. These demands can be met by Juniper’s infrastructure and security technologies exactly as they are being designed for service providers, a consistency that presents another opportunity for us. Application performance—a network requirement to ensure the user experience is protected as business processes move online—is more strategic than ever, and our capabilities in both website and wide area network optimization are big differentiators for Juniper in this marketplace. All customers, whether service providers or enterprises, require carrier-class reliability. The lines are blurring, but this is where our opportunity and our leverage are becoming clearer than ever, because everyone on the planet with an Internet connection traverses the traffic-processing infrastructure. While helping customers succeed, Juniper owes its own continuing success to the incredible daily efforts of our employees, and to the invaluable support of our customers, partners, suppliers and investors. 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 2006 ANNUAL MEETING OF STOCKHOLDERS Time and Date 9:00 a.m., Pacific time, on Thursday, May 18, 2006 Place Juniper Networks, Inc. 1220 North Mathilda Avenue Building 3, Pacific Conference Room Sunnyvale, CA 94089 Items of Business (1) To elect three Class I directors; (2) To approve the Juniper Networks, Inc. 2006 Equity Incentive Plan, including approval of its material terms and performance goals for purposes of Internal Revenue Code Section 162(m); (3) To ratify the appointment of Ernst & Young LLP, an independent registered public accounting firm, as auditors for the fiscal year ending December 31, 2006; and (4) To consider such other business as may properly come before the meeting. Adjournments and Any action on the items of business described above may Postponements be considered 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, 2006. This notice of annual meeting and proxy statement and form of proxy are being distributed on or about April 13, 2006. 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, 2006 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 or plan participants 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, 2006, a copy of the voting instruction form provided by your broker, trustee or nominee, or other similar evidence of ownership. If you do not provide photo identifi- cation 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 or refer to the instructions printed on your proxy or voting instruction form. By Order of the Board of Directors, Mitchell L. Gaynor Vice President, General Counsel and Secretary 2006 ANNUAL MEETING OF STOCKHOLDERS NOTICE OF ANNUAL MEETING AND PROXY STATEMENT TABLE OF CONTENTS QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING .................................................................... 1 Why am I receiving these materials? . .............................................. 1 What information is contained in this proxy statement? ................................... 1 How may I obtain Juniper Networks’ 10-K?............................................ 1 What items of business will be voted on at the annual meeting? ............................. 1 How does the Board recommend that I vote? ........................................... 1 What shares can I vote? .......................................................... 1 What is the difference between holding shares as a shareowner of record and as a beneficial owner? .
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