Other Financial Information

Inventories, net

The Company's inventories are stated at the lower of standard cost or market, which approximates actual cost. Inventories, net are reported within prepaid expenses and other current assets on the consolidated balance sheet and consist of the following (in millions):



	As of December 31,
	2011		2010
Inventories, net
Production materials	$	52.4	$	5.8
Finished goods	16.7		15.8
Total inventories, net	$	69.1	$	21.6

Property and Equipment

Property and equipment consist of the following (in millions):



	As of December 31,
	2011			2010
Computers and equipment	$	604.6		$	514.3
Software	110.2			101.6
Leasehold improvements	204.1			179.0
Furniture and fixtures	27.4			24.9
Building and building improvements	6.2			—
Land and land improvements	208.2			203.7
Construction-in-process	99.7			41.9
Property and equipment, gross	1,260.4			1,065.4
Accumulated depreciation	(661.8		)	(571.5		)
Property and equipment, net	$	598.6		$	493.9

Depreciation expense was $142.2 million, $146.8 million, and $133.0 million in 2011, 2010, and 2009, respectively. In 2011, the Company recorded a $13.5 million asset impairment charge in restructuring and other charges on the consolidated statement of operations related to an abandoned in-process internal use software project.

Deferred Revenue

Details of the Company's deferred revenue were as follows (in millions):



	As of December 31,
	2011			2010
Deferred product revenue:
Undelivered product commitments and other product deferrals	$	288.1		$	294.1
Distributor inventory and other sell-through items	134.0			143.4
Deferred gross product revenue	422.1			437.5
Deferred cost of product revenue	(136.9		)	(148.8		)
Deferred product revenue, net	285.2			288.7
Deferred service revenue	681.8			595.7
Total	$	967.0		$	884.4
Reported as:
Current	$	712.6		$	660.2
Long-term	254.4			224.2
Total deferred revenue	$	967.0		$	884.4

Deferred product revenue primarily represents unrecognized revenue related to shipments to distributors that have not sold through to end-users, undelivered product commitments, and other shipments that have not met all revenue recognition criteria. Deferred product revenue is recorded net of the related costs of product revenue. Deferred service revenue represents customer payments made in advance for services, which include technical support, hardware and software maintenance, professional services, and training.

Warranties

The Company accrues for warranty costs as part of its cost of sales based on associated material costs, labor costs for customer support, and overhead at the time revenue is recognized. This provision is reported as accrued warranty within other current liabilities on the consolidated balance sheets. Changes in the Company’s warranty reserve were as follows (in millions):



	As of December 31,
	2011			2010
Beginning balance	$	35.9		$	38.2
Provisions made during the period, net	52.5			49.9
Change in estimate	(12.6		)	(3.0		)
Actual costs incurred during the period	(47.5		)	(49.2		)
Ending balance	$	28.3		$	35.9

Restructuring Liabilities

In the third quarter of 2011, the Company implemented a restructuring plan (the "2011 Restructuring Plan") in an effort to better align its business operations with the current market and macroeconomic conditions. The 2011 Restructuring Plan primarily consisted of certain workforce reductions, and to a lesser extent, contract terminations.

During 2009, the Company implemented a restructuring plan (the "2009 Restructuring Plan") in an effort to better align its business operations with the market and macroeconomic conditions. The 2009 Restructuring Plan included restructuring of certain business functions that resulted in reductions of workforce and facilities. The Company recorded the majority of the restructuring charges associated with this plan during the years ended 2010 and 2009.

The Company recorded net restructuring charges of $17.1 million in the year ended December 31, 2011, primarily due to the implementation of its 2011 Restructuring Plan, and recorded $10.8 million and $19.5 million in restructuring charges during the years ended December 31, 2010, and 2009, respectively, associated with the 2009 Restructuring Plan. As of December 31, 2011, remaining restructuring liability under the 2011 Restructuring Plan was related to severance costs to be paid out in the first half of 2012, as well as facilities related charges under the 2009 Restructuring Plan, which is expected to be completed through February 2015.

Restructuring charges were based on the Company's restructuring plans that were committed by management. Any changes in the estimates of executing the approved plans will be reflected in the Company's results of operations. The following tables provide a summary of changes in the Company’s restructuring liability, which is reported in current and long-term liabilities on its consolidated balance sheets, for 2011 and 2010 (in millions):



	Remaining Liability as of December 31, 2010		Charges		Cash payments			Non-cash Settlements and Other Adjustments			Remaining Liability as of December 31, 2011
Facilities	$	7.7	$	0.2	$	(5.3	)	$	(1.6	)	$	1.0
Severance, contractual commitments, and other charges	0.2		16.9		(13.3		)	(0.7		)	3.1
Total	$	7.9	$	17.1	$	(18.6	)	$	(2.3	)	$	4.1



	Remaining Liability as of December 31, 2009		Charges		Cash payments			Non-cash Settlements and Other Adjustments			Remaining Liability as of December 31, 2010
Facilities	$	4.9	$	6.9	$	(2.5	)	$	(1.6	)	$	7.7
Severance, contractual commitments, and other charges	4.5		3.9		(5.5		)	(2.7		)	0.2
Total	$	9.4	$	10.8	$	(8.0	)	$	(4.3	)	$	7.9

Other Expense and Income, Net

Other expense and income, net consists of the following (in millions):



	Years Ended December 31,
	2011			2010			2009
Interest income	$	9.7		$	10.5		$	11.8
Interest expense	(49.5		)	(8.7		)	(6.0		)
Other income and expense, net	(7.0		)	8.8			(4.6		)
Other (expense) income, net	$	(46.8	)	$	10.6		$	1.4

Interest income primarily includes interest earned on the Company’s cash, cash equivalents, and investments. Interest expense primarily includes interest expense from long-term debt and customer financing arrangements. Other income and expense typically consists of investment and foreign exchange gains and losses and other non-operational income and expense items.

In 2011, the Company recognized $37.7 million in interest expense in connection with its long-term debt issued in March 2011. In 2011, other income and expense, net, included certain legal expenses unrelated to current or recent operations of approximately $7.0 million. In 2010, the Company recognized a total gain of $8.7 million, primarily due to acquisitions of its privately-held equity investments in Ankeena and Altor. During 2009, the Company recognized an impairment loss of $5.6 million on its equity investments for changes in fair value that the Company believed were other-than-temporary.