Other Financial Information

Inventory

Total inventory consisted of the following (in millions):



	As of
	June 30, 2017		December 31, 2016
Production and service materials	$	79.2	$	75.6
Finished goods	17.4		19.9
Inventory	$	96.6	$	95.5

Reported as:
Prepaid expenses and other current assets	$	87.6	$	91.4
Other long-term assets	9.0		4.1
Total	$	96.6	$	95.5

Note Receivable

In October 2014, the Company completed the sale of its Junos Pulse product portfolio. The Company received total consideration of $230.7 million, of which $105.7 million was in cash, net of a $19.3 million working capital adjustment, and $125.0 million was in the form of a non-contingent interest-bearing promissory note due to the Company on April 1, 2016.

In October 2015, the Company and the issuer of the Pulse Note mutually agreed to amend the original terms of the Pulse Note to, among other things:


•	extend the maturity date from April 1, 2016 to December 31, 2018;


•	provide that interest due on the Pulse Note through December 31, 2015 shall be paid in kind by increasing the outstanding principal amount of the note and increase the interest rate on the Pulse Note; and


•	require a minimum payment of $75.0 million on or prior to April 1, 2017, less any principal amount previously pre-paid to the Company.

In May 2017, the Company received payment of $75.0 million and the outstanding interest due. The Company and the issuer of the Pulse Note further mutually agreed to amend the terms of the Pulse Note to, among other things:


•	extend the maturity date of the remaining outstanding amount of approximately $58.0 million from December 31, 2018 to September 30, 2022;


•	provide that interest due after April 1, 2017 can be paid in kind by increasing the outstanding principal amount of the note or paid in cash;


•	require the promissory note to be subordinated to other debt raised by the issuer; and


•	entitle the Company to additional financial considerations if the issuer of the note and its affiliates meet certain conditions.

The Company considers notes receivable to be impaired when, based on current information and events, it is probable that the Company will not be able to collect the scheduled payments of principal or interest when due. No impairment charge was required to the Pulse Note as of June 30, 2017. The outstanding balance of the Pulse Note, along with the accumulated interest paid in kind, of $58.5 million as of June 30, 2017 is classified as a long-term asset based on expected collection beyond twelve months from the Condensed Consolidated Balance Sheet date.

During the three and six months ended June 30, 2017, the interest income on the Pulse Note was $2.2 million and $4.9 million, respectively. During the three and six months ended and June 30, 2016, the related amount of interest income recognized was $2.7 million and $5.3 million, respectively.

Warranties

Changes during the six months ended June 30, 2017 in the Company’s warranty reserve as reported within other accrued liabilities in the Condensed Consolidated Balance Sheets were as follows (in millions):



Balance as of December 31, 2016	$	41.3
Provisions made during the period	20.7
Actual costs incurred during the period	(27.5		)
Balance as of June 30, 2017	$	34.5

Deferred Revenue

Details of the Company's deferred revenue, as reported in the Condensed Consolidated Balance Sheets, were as follows (in millions):



	As of
	June 30, 2017			December 31, 2016
Deferred product revenue:
Undelivered product commitments and other product deferrals	$	265.5		$	302.4
Distributor inventory and other sell-through items	76.1			74.2
Deferred gross product revenue	341.6			376.6
Deferred cost of product revenue	(44.3		)	(53.7		)
Deferred product revenue, net	297.3			322.9
Deferred service revenue	1,203.7			1,158.2
Total	$	1,501.0		$	1,481.1
Reported as:
Current	$	998.0		$	1,032.0
Long-term	503.0			449.1
Total	$	1,501.0		$	1,481.1

Other Expense, Net

Other expense, net, consisted of the following (in millions):



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Interest income	$	12.0		$	8.5		$	22.4		$	16.4
Interest expense	(25.0		)	(25.0		)	(50.3		)	(47.5		)
Gain (loss) on investments, net	0.8			3.6			2.0			(1.8		)
Other	(0.8		)	1.3			(2.8		)	(0.9		)
Other expense, net	$	(13.0	)	$	(11.6	)	$	(28.7	)	$	(33.8	)