Operating Segments and Geographic Information

12 Months Ended

Jun. 28, 2014

Operating Segments and Geographic Information

Operating Segments and Geographic Information

Note 18. Operating Segments and Geographic Information

        The Company evaluates its reportable segments in accordance with the authoritative guidance on segment reporting. The Company's Chief Executive Officer, Thomas H. Waechter, is the Company's Chief Operating Decision Maker ("CODM") pursuant to the guidance. The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue and operating results.

        The Company is a leading provider of network and service enablement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers ("NEMs"), and enterprises. JDSU's diverse technology portfolio also fights counterfeiting and enables commercial lasers for a range of manufacturing applications.

        The Company's reportable segments are:

• (i)

  Network and Service Enablement Business Segment:

  • NSE network and service enablement solutions provide end-to-end visibility and intelligence necessary for consistent, high-quality network, service, and application performance. These solutions speed time-to-revenue by accelerating the deployment of new products and services, lower operating expenses and improve network performance and reliability. Included in the product portfolio are test tools, platforms, microprobes, software, and services for wireless and fixed networks.

  (ii)

  Communications and Commercial Optical Products Business Segment:

  • CCOP provides components, modules, subsystems, and solutions used by communications equipment providers for telecommunications and enterprise data communications. These products enable the transmission of video, audio, and text data over high-capacity, fiber-optic cables. The product portfolio includes transmitters, receivers, amplifiers, reconfigurable optical add/drop multiplexers ("ROADMs"), optical transceivers, multiplexers and demultiplexers, switches, optical-performance monitors and couplers, splitters and circulators.

    CCOP also provides a broad laser portfolio that addresses the needs of original equipment manufacturers ("OEM") clients for applications such as micromachining, materials processing, bioinstrumentation, consumer electronics, graphics, medical/dental, and optical pumping. JDSU products include diode, direct-diode, diode-pumped solid-state, fiber and gas lasers.

  (iii)

  Optical Security and Performance Products Business Segment:

• • OSP provides innovative optical security solutions, with a strategic focus on serving the anti-counterfeiting market through advanced security pigments, thread substrates and printed features for the currency, pharmaceutical and consumer electronic segments. OSP also provides thin-film coating solutions for 3D and gesture recognition applications.

        The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. The Company evaluates segment performance based on operating income (loss), excluding certain infrequent or unusual items.

        The amounts shown as Corporate consist of certain unallocated corporate-level operating expenses. In addition, the Company does not allocate stock-based compensation, acquisition-related charges and amortization of intangibles, restructuring and related charges, non-operating income and expenses, or other non-recurring charges to its segments as highlighted in the table below.

        Information on reportable segments is as follows (in millions):

	Years Ended
	June 28, 2014			June 29, 2013			June 30, 2012
Net revenue:
Network and Service Enablement	$	748.3		$	728.9		$	755.4
Communications and Commercial Optical Products		794.1			742.2			701.6
Optical Security and Performance Products		200.8			205.8			206.0
Deferred revenue related to purchase accounting adjustment		—			—			(0.6	)
Net revenue	$	1,743.2		$	1,676.9		$	1,662.4
Operating income (loss):
Network and Service Enablement	$	80.3		$	83.1		$	98.3
Communications and Commercial Optical Products		93.5			82.4			72.0
Optical Security and Performance Products		72.0			73.2			72.5
Corporate		(95.0	)		(92.9	)		(88.9	)
Total segment operating income		150.8			145.8			153.9
Unallocated amounts:
Stock-based compensation		(64.1	)		(56.4	)		(48.6	)
Amortization of intangibles		(59.0	)		(76.0	)		(80.3	)
Loss on disposal of long-lived assets		(2.0	)		(3.6	)		(1.2	)
Restructuring and related charges		(23.8	)		(19.0	)		(12.4	)
Other charges related to non-recurring activities(1)		(3.6	)		(15.7	)		(11.0	)
Interest and other income (expense), net		0.5			(4.1	)		12.8
Interest expense		(29.7	)		(17.9	)		(27.3	)
Income (loss) from continuing operations before income taxes	$	(30.9	)	$	(46.9	)	$	(14.1	)

(1)

During the third quarter of fiscal 2013, the Company incurred $11.3 million of inventory related charges, included in Cost of sales, primarily related to a write-off of inventory no longer being sold due to a strategic plan to exit NSE's legacy low-speed wireline product line approved in the third quarter of fiscal 2013.

        The table below discloses the percentage of the Company's total net revenue attributable to each of our three reportable segments. In addition, it discloses the percentage of the Company's total net revenue attributable to our Optical Communications ("OpComms") products within the CCOP segment, which accounted for more than 10% of our consolidated net revenue in each of the last three fiscal years, and Laser products, which represents the remainder of the CCOP segment:

	Years Ended
	June 28, 2014			June 29, 2013			June 30, 2012
Network and Service Enablement		42.9	%		43.4	%		45.4	%
Communications and Commercial Optical Products:
Optical Communications		38.5			37.3			35.3
Laser		7.1			7.0			6.9
Communications and Commercial Optical Products		45.6			44.3			42.2
Optical Security and Performance Products		11.5			12.3			12.4

        The Company operates primarily in three geographic regions: Americas, Europe, Middle East and Africa ("EMEA") and Asia-Pacific. The following table presents net revenue and identifiable assets by geographic regions (in millions):

	Years Ended
	June 28, 2014				June 29, 2013				June 30, 2012
Net revenue:
Americas	$	826.0	47.4	%	$	822.5	49.1	%	$	833.2	50.1	%
Asia-Pacific		505.4	29.0			473.2	28.2			428.5	25.8
EMEA		411.8	23.6			381.2	22.7			400.7	24.1
Total net revenue	$	1,743.2	100.0	%	$	1,676.9	100.0	%	$	1,662.4	100.0	%

        Net revenue was assigned to geographic regions based on the customers' shipment locations. Net revenue for Americas included net revenue from United States of $626.7 million, $630.8 million and $673.6 million, for the fiscal years ended June 28, 2014, June 29, 2013 and June 30, 2012, respectively, based on customers' shipment location.

        During fiscal 2014, 2013 and 2012, no customer accounted for more than 10% of net revenue.

        Long-lived assets, namely net property, plant and equipment were identified based on the operations in the corresponding geographic areas (in millions).

	Years Ended
	June 28, 2014		June 29, 2013
United States	$	144.6	$	110.4
Other Americas		15.6		13.4
China		72.6		74.8
Thailand		29.8		23.2
Other Asia-Pacific		9.2		9.6
EMEA		17.0		15.7
Total long-lived assets	$	288.8	$	247.0