Operating Segments

9 Months Ended

Mar. 31, 2012

Operating Segments

Operating Segments

Note 17. Operating Segments

The Company evaluates its reportable segments in accordance with the authoritative guidance on segment reporting. The Company’s Chief Executive Officer, Thomas 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 communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers. JDSU technologies also enable broadband and optical innovation in many essential industries such as biomedical and environmental instrumentation, semiconductor processing, aerospace and defense, and brand protection. In addition, our optical coatings are used in visual display and decorative product differentiation applications. The major segments the Company serves are:

(i) Communications Test and Measurement Business Segment:

The CommTest segment supplies instruments, software, and services to enable the design, deployment, and maintenance of communication equipment and networks as well as to ensure the quality of services delivered to the end customer. 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, software, and services for wireless and fixed networks.

(ii) Communications and Commercial Optical Products Business Segment:

The CCOP segment 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, ROADMs, optical transceivers, multiplexers and demultiplexers, switches, optical-performance monitors and couplers, splitters, and circulators.

This segment also provides a broad laser portfolio that addresses the needs of 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. Additionally, the segment’s PV products include CPV cells and receivers for generating energy from sunlight as well as fiber-optic-based systems for delivering and measuring electrical power.

(iii) Advanced Optical Technologies (“AOT”) Business Segment:

The AOT segment provides innovative optical solutions for security and brand-differentiation applications and thin film coatings for a range of public- and private-sector markets. These products enhance and manage the behavior of light by using its reflection, absorption, and transmission properties to achieve specific effects such as high reflectivity, antiglare, and spectral filtering. Specific product applications include natural user interface, 3D effects, computer-driven projectors, intelligent lighting systems, office equipment, security products, and decorative surface treatments. AOT also provides multilayer product-security solutions for a number of markets. These solutions deliver overt, covert, forensic and digital product and document verification for protection against counterfeiting and tampering.

The accounting policies of the reportable segments are the same as those described in the Company’s Annual Report on Form 10-K for the year ended July 2, 2011. 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, restructuring and related charges, or non-operating income and expenses to its segments as highlighted in the table below.

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

	Three Months Ended						Nine Months Ended
	March 31,			April 2,			March 31,			April 2,
	2012			2011			2012			2011
Net revenue:
Communications Test and Measurement	$	177.8		$	189.2		$	559.2		$	603.4
Communications and Commercial Optical Products	173.1			209.4			516.6			568.5
Advanced Optical Technologies	58.3			56.8			167.6			172.0
Deferred revenue related to purchase accounting adjustment	—			(1.4		)	(0.6		)	(11.2		)
Net revenue	$	409.2		$	454.0		$	1,242.8		$	1,332.7
Operating income (loss):
Communications Test and Measurement	$	20.1		$	22.6		$	72.2		$	89.0
Communications and Commercial Optical Products	14.1			39.6			56.3			97.8
Advanced Optical Technologies	19.3			17.9			53.2			57.7
Corporate	(23.6		)	(25.1		)	(66.2		)	(72.0		)
Total segment operating income	29.9			55.0			115.5			172.5
Unallocated amounts:
Stock-based compensation	(13.4		)	(10.9		)	(37.5		)	(29.9		)
Acquisition-related charges and amortization of intangibles	(21.6		)	(23.7		)	(66.0		)	(78.4		)
Loss on disposal of long-lived assets	(0.2		)	(0.2		)	(0.9		)	(0.2		)
Restructuring and related charges	(2.0		)	(7.6		)	(7.5		)	(10.4		)
Realignment and other charges	(0.3		)	—			(9.6		)	(6.6		)
Interest and other income	0.1			—			0.9			1.8
Interest expense	(6.9		)	(6.2		)	(20.1		)	(18.9		)
Gain on sale of investments	0.1			0.1			1.3			3.4
(Loss) income from continuing operations before income taxes	$	(14.3	)	$	6.5		$	(23.9	)	$	33.3