10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 29, 2012

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                          to                         

Commission File Number 0-22874

JDS UNIPHASE CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	94-2579683
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

430 North McCarthy Boulevard, Milpitas, California 95035

(Address of principal executive offices including Zip code)

(408) 546-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xNo o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of January 26, 2013, the Registrant had 235,145,384 shares of common stock outstanding, including 3,681,302 exchangeable shares of JDS Uniphase Canada Ltd. The par value of each share of common stock is $0.001. Each exchangeable share is exchangeable at any time into common stock on a one-for-one basis, entitles a holder to dividend and other rights economically equivalent to those of the common stock, and through a voting trust, votes at meetings of stockholders of the Registrant.

TABLE OF CONTENTS

			Page
PART I-	FINANCIAL INFORMATION
	Item 1.	Financial Statements	1
		Consolidated Statements of Operations for the Three and Six Months Ended December 29, 2012 and December 31, 2011	1
		Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended December 29, 2012 and December 31, 2011	2
		Consolidated Balance Sheets as of December 29, 2012 and June 30, 2012	3
		Consolidated Statements of Cash Flows for the Six Months Ended December 29, 2012 and December 31, 2011	4
		Notes to Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
	Item 3.	Quantitative and Qualitative Disclosure About Market Risks	41
	Item 4.	Controls and Procedures	43
PART II-	OTHER INFORMATION		43
	Item 1.	Legal Proceedings	43
	Item 1A.	Risk Factors	43
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
	Item 3.	Defaults upon Senior Securities	43
	Item 4.	Mine Safety Disclosures	43
	Item 5.	Other Information	43
	Item 6.	Exhibits	44
SIGNATURES			45

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

JDS UNIPHASE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Net revenue	$	429.4		$	409.3		$	850.3		$	825.1
Cost of sales	225.8			219.4			457.0			439.3
Amortization of acquired technologies	14.6			15.4			31.7			29.7
Gross profit	189.0			174.5			361.6			356.1
Operating expenses:
Research and development	63.5			58.9			125.1			118.2
Selling, general and administrative	105.4			105.3			210.1			215.6
Amortization of other intangibles	2.2			5.4			5.7			10.5
Restructuring and related charges	3.0			4.0			5.7			5.5
Total operating expenses	174.1			173.6			346.6			349.8
Income from operations	14.9			0.9			15.0			6.3
Interest and other income (expense), net	(2.4		)	1.0			(2.8		)	2.0
Interest expense	(5.1		)	(6.6		)	(11.2		)	(13.2		)
Income (loss) from continuing operations before income taxes	7.4			(4.7		)	1.0			(4.9		)
Provision for income taxes	4.1			3.0			7.5			6.4
Income (loss) from continuing operations, net of tax	3.3			(7.7		)	(6.5		)	(11.3		)
Income (loss) from discontinued operations, net of tax	0.8			(2.5		)	(1.0		)	(4.7		)
Net income (loss)	$	4.1		$	(10.2	)	$	(7.5	)	$	(16.0	)
Basic net income (loss) per share from:
Continuing operations, net of tax	$	0.02		$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—			(0.01		)	—			(0.02		)
Net income (loss)	$	0.02		$	(0.04	)	$	(0.03	)	$	(0.07	)
Diluted net income (loss) per share from:
Continuing operations, net of tax	$	0.02		$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—			(0.01		)	—			(0.02		)
Net income (loss)	$	0.02		$	(0.04	)	$	(0.03	)	$	(0.07	)
Shares used in per share calculation:
Basic	234.4			229.4			233.6			228.9
Diluted	237.1			229.4			233.6			228.9

See accompanying notes to consolidated financial statements.

1

JDS UNIPHASE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(unaudited)

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Net income (loss)	$	4.1		$	(10.2	)	$	(7.5	)	$	(16.0	)
Other comprehensive income (loss):
Unrealized gains and losses on investments, net of tax:
Unrealized holding (losses) gains arising during period	(0.1		)	—			0.3			(0.3		)
Less: reclassification adjustments included in net income (loss)	—			—			(0.1		)	(1.3		)
Net change in cumulative translation adjustment	3.1			(0.7		)	6.4			(6.3		)
Net change in defined benefit obligation, net of tax	—			(0.4		)	—			(0.4		)
Net change in other comprehensive income (loss)	3.0			(1.1		)	6.6			(8.3		)
Comprehensive income (loss)	$	7.1		$	(11.3	)	$	(0.9	)	$	(24.3	)

See accompanying notes to consolidated financial statements.

2

JDS UNIPHASE CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share and par value data)

(unaudited)

	December 29,			June 30,
	2012			2012
ASSETS
Current assets:
Cash and cash equivalents	$	305.5		$	401.1
Short-term investments	403.8			320.5
Restricted cash	30.9			31.1
Accounts receivable, net (Note 6)	278.8			305.8
Inventories, net	179.3			174.5
Prepayments and other current assets	78.4			77.2
Total current assets	1,276.7			1,310.2
Property, plant and equipment, net	250.3			252.9
Goodwill	75.3			68.7
Intangibles, net	139.9			178.8
Other non-current assets	70.7			58.9
Total assets	$	1,812.9		$	1,869.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	116.1		$	117.6
Accrued payroll and related expenses	80.2			68.6
Income taxes payable	22.9			20.7
Deferred revenue	59.9			81.2
Accrued expenses	37.4			35.3
Short-term debt	205.6			292.8
Other current liabilities	33.1			37.9
Total current liabilities	555.2			654.1
Other non-current liabilities	192.5			176.6
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred Stock, $0.001 par value; 1 million shares authorized; 1 share at December 29, 2012 and June 30, 2012, issued and outstanding	—			—
Common Stock, $0.001 par value; 1 billion shares authorized; 234 million shares at December 29, 2012 and 232 million shares at June 30, 2012, issued and outstanding	0.2			0.2
Additional paid-in capital	69,723.0			69,695.7
Accumulated deficit	(68,672.1		)	(68,664.6		)
Accumulated other comprehensive income	14.1			7.5
Total stockholders’ equity	1,065.2			1,038.8
Total liabilities and stockholders’ equity	$	1,812.9		$	1,869.5

See accompanying notes to consolidated financial statements.

3

JDS UNIPHASE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

	Six Months Ended
	December 29,			December 31,
	2012			2011
OPERATING ACTIVITIES:
Net loss	$	(7.5	)	$	(16.0	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense	33.9			34.7
Amortization of acquired technologies and other intangibles	37.6			43.8
Stock-based compensation	26.3			24.1
Amortization of debt issuance costs and accretion of debt discount	8.3			10.3
Amortization of discount and premium on investments, net	1.9			1.9
Other	1.3			—
Changes in operating assets and liabilities, net of impact of acquisition of business:
Accounts receivable	29.4			38.8
Inventories	(4.7		)	(19.6		)
Other current and non-current assets	(13.8		)	(6.7		)
Accounts payable	3.6			(21.8		)
Income taxes payable	2.6			(0.8		)
Deferred revenue, current and non-current	(12.5		)	(9.6		)
Accrued payroll and related expenses	1.1			(13.0		)
Accrued expenses and other current and non-current liabilities	(5.0		)	2.5
Net cash provided by operating activities	102.5			68.6
INVESTING ACTIVITIES:
Purchases of available-for-sale investments	(292.5		)	(211.2		)
Maturities and sales of investments	208.9			201.5
Changes in restricted cash	0.5			1.8
Acquisition of business, net of cash acquired	(11.1		)	(3.7		)
Acquisition of property and equipment	(33.3		)	(40.8		)
Proceeds from the sale of a business and assets, net of selling costs	11.7			2.1
Net cash used in investing activities	(115.8		)	(50.3		)
FINANCING ACTIVITIES:
Redemption of convertible debt	(96.5		)	—
Proceeds from financing obligations	—			6.9
Payment of financing obligations	(0.4		)	(7.6		)
Proceeds from exercise of employee stock options and employee stock purchase plan	11.5			7.0
Net cash (used in) provided by financing activities	(85.4		)	6.3
Effect of exchange rate changes on cash and cash equivalents	3.1			(4.8		)
(Decrease) increase in cash and cash equivalents	(95.6		)	19.8
Cash and cash equivalents at beginning of period	401.1			395.4
Cash and cash equivalents at end of period	$	305.5		$	415.2

See accompanying notes to consolidated financial statements.

4

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The financial information for JDS Uniphase Corporation (“JDSU,” also referred to as “the Company”) as of December 29, 2012 and for the three and six months ended December 29, 2012 and December 31, 2011 is unaudited, and includes all normal and recurring adjustments that Company management (“Management”) considers necessary for a fair statement of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 14, 2012.

The balance sheet as of June 30, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results for the three and six months ended December 29, 2012 and December 31, 2011 may not be indicative of results for the year ending June 29, 2013 or any future periods.

Fiscal Years

The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2013 is a 52-week year ending on June 29, 2013. The Company’s fiscal 2012 was a 52-week year and ended on June 30, 2012.

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.

Out-of-Period Adjustments

During the three months ended September 29, 2012, the Company recorded out-of-period adjustments primarily related to the cost of sales in fiscal year 2011. The impact of the corrections reduced the net loss by $1.9 million for the three months ended September 29, 2012. Management and the Audit Committee have concluded these errors, both individually and in aggregate, were not material to any prior year financial statements and the impact of correcting these errors in the current year is not expected to be material to the full year fiscal 2013 financial statements, accordingly the Company recorded the correction of these errors in the first quarter of fiscal 2013.

Discontinued Operations

On October 12, 2012, the Company closed the sale of its hologram business (“Hologram Business”) to OpSec Security Inc. for $11.5 million in cash. The Consolidated Statements of Operations have been recast to present the Hologram Business as discontinued operations as described in “Note 18. Discontinued Operations.” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of net revenue and expenses and the disclosure of commitments and contingencies during the reporting periods. The Company bases estimates on historical experience and on various assumptions about the future believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information.

Note 2. Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. This guidance will be effective for the Company beginning in the first quarter of fiscal 2014. The adoption of this guidance may expand existing disclosure requirements, which the Company is currently evaluating.

5

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3. Earnings Per Share

The following table sets forth the computation of basic and diluted net loss per share (in millions, except per share data):

	Three Months Ended					Six Months Ended
	December 29, 2012		December 31,  2011			December 29,  2012			December 31, 2011
Numerator:
Income (loss) from continuing operations, net of tax	$	3.3	$	(7.7	)	$	(6.5	)	$	(11.3	)
Income (loss) from discontinued operations, net of tax	0.8		(2.5		)	(1.0		)	(4.7		)
Net income (loss)	$	4.1	$	(10.2	)	$	(7.5	)	$	(16.0	)
Denominator:
Weighted-average number of common shares outstanding
Basic	234.4		229.4			233.6			228.9
Effect of dilutive securities from stock-based benefit plans	2.7		—			—			—
Diluted	237.1		229.4			233.6			228.9
Basic net income (loss) per share from:
Continuing operations, net of tax	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—		(0.01		)	—			(0.02		)
Net income (loss)	$	0.02	$	(0.04	)	$	(0.03	)	$	(0.07	)
Diluted net income (loss) per share from:
Continuing operations, net of tax	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—		(0.01		)	—			(0.02		)
Net income (loss)	$	0.02	$	(0.04	)	$	(0.03	)	$	(0.07	)

As the Company incurred net losses for the six months ended December 29, 2012 and for the three and six months ended December 31, 2011, potential dilutive securities from stock options, employee stock purchase plan (“ESPP”) and Full Value Awards (restricted shares and stock units) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive.

The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive (in millions):

	Three Months Ended		Six Months Ended
	December 29, 2012	December 31, 2011	December 29, 2012	December 31, 2011
Stock options and ESPP	3.9	10.4	8.2	10.7
Restricted shares and stock units	3.3	8.2	9.2	7.8
Total potentially dilutive securities	7.2	18.6	17.4	18.5

The Company’s 1% Senior Convertible Notes are not included in the table above. The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $30.30 per share is payable in shares of the Company’s common stock or cash. See “Note 10. Debts and Letters of Credit” for more details.

Note 4. Accumulated Other Comprehensive Income

The Company’s accumulated other comprehensive income consists of the accumulated net unrealized gains and losses on available-for-sale investments, foreign currency translation adjustments and defined benefit obligation.

6

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At December 29, 2012 and June 30, 2012, balances for the components of accumulated other comprehensive income were as follows (in millions):

	December 29,  2012			June 30,  2012
Unrealized losses on available-for-sale investments, net of tax	$	(2.6	)	$	(2.8	)
Foreign currency translation adjustments	17.0			10.6
Defined benefit obligation, net of tax	(0.3		)	(0.3		)
Accumulated other comprehensive income	$	14.1		$	7.5

Note 5. Mergers and Acquisitions

GenComm Co., Ltd. (“GenComm”)

On August 17, 2012 (“Closing Date”), the Company completed the acquisition of Seoul, South Korea-based GenComm, a provider of test and measurement solutions for troubleshooting, installation and maintenance of wireless base stations and repeaters, based in Seoul, South Korea. The Company acquired tangible and intangible assets and assumed liabilities of GenComm for a total purchase price of approximately $15.2 million in cash, including holdback payments of approximately $3.8 million, which are reserved for potential breaches of representations and warranties. The holdback payments, minus any deductions for actual or pending claims, will be released more than one year after the Closing Date. After the Closing Date, GenComm was integrated in the Company’s Communications Test and Measurement segment (“CommTest”).

The Company accounted for the transaction in accordance with the authoritative guidance on business combinations; therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date.

The purchase price was allocated as follows (in millions):

Net tangible assets acquired	$	5.9
Intangible assets acquired:
Developed technology	3.2
Customer relationships	0.2
Backlog	0.2
Goodwill	5.7
Total purchase price	$	15.2

The following table summarizes the components of the tangible assets acquired at fair value (in millions):

Cash	$	1.9
Accounts receivable	2.3
Inventories	2.4
Property and equipment	2.9
Tax liabilities, net	(1.7		)
Employee related liabilities	(1.5		)
Other assets and liabilities, net	(0.4		)
Net tangible assets acquired	$	5.9

Acquired intangible assets are classified as Level 3 assets for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of acquired developed technology, customer relationships and order backlog was determined based on an income approach using the discounted cash flow method. The acquired developed technology and customer relationship intangible assets are being amortized over their estimated useful lives of four years. Backlog has been fully amortized as of September 29, 2012.

7

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The goodwill arising from this acquisition is primarily attributed to sales of future products and services and the assembled workforce of GenComm. Goodwill is not being amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative guidance. Goodwill has been assigned to the CommTest segment and is not deductible for tax purposes.

GenComm’s results of operations have been included in the Company’s consolidated financial statements subsequent to the Closing Date. Pro forma results of operations have not been presented because the effect of the acquisition was not material to prior period financial statements.

Dyaptive Systems Inc. (“Dyaptive”)

In January 2012, the Company completed the acquisition of Dyaptive based in Vancouver, Canada. The Company acquired tangible and intangible assets and assumed liabilities of Dyaptive for a total purchase price of CAD 14.9 million (approximately USD 14.8 million) in cash, including a holdback payment of CAD 2.0 million (approximately USD 2.0 million). The holdback payment of CAD 2.0 million (approximately USD 2.0 million) was made during the three months ended December 29, 2012.

Dyaptive is a provider of wireless laboratory test tools for base station and network load simulators. The Company acquired Dyaptive to strengthen its laboratory product portfolio and to offer field service and production test tools that complement its current products. After the Closing Date, Dyaptive was integrated in the Company’s CommTest segment.

The Company accounted for the transaction in accordance with the authoritative guidance on business combinations; therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date.

The purchase price was allocated as follows (in millions, in USD):

Net tangible assets acquired	$	3.4
Intangible assets acquired:
Developed technology	6.2
Customer relationships	2.3
Others	0.9
Goodwill	2.0
Total purchase price	$	14.8

The following table summarizes the components of the tangible assets acquired and liabilities assumed at fair value (in millions):

Cash	$	4.0
Accounts receivable	0.9
Inventories	0.8
Property and equipment	0.5
Accounts payable	(0.2		)
Deferred revenue	(0.3		)
Employee related liabilities	(2.3		)
Net tangible assets acquired	$	3.4

Acquired intangible assets are classified as Level 3 assets for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of acquired developed technology and customer relationships was determined based on an income approach using the discounted cash flow method. The acquired developed technology and customer relationship intangible assets are being amortized over their estimated useful lives of four years.

The goodwill arising from this acquisition is primarily attributed to sales of future products and services and the assembled workforce of Dyaptive. Goodwill is not being amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative guidance. Goodwill has been assigned to the CommTest segment and is not deductible for tax purposes.

8

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Dyaptive’s results of operations have been included in the Company’s consolidated financial statements subsequent to the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material to prior period financial statements.

Note 6. Balance Sheet and Other Details

Accounts Receivable Reserves and Allowances

The activities and balances for allowance for doubtful accounts and allowance for sales returns were as follows (in millions):

	June 30, 2012		Charged to Costs and Expenses		Deduction (1)			December 29, 2012
Allowance for doubtful accounts	$	2.2	$	0.4	$	(0.6	)	$	2.0
Allowance for sales returns	0.4		—		(0.3		)	0.1
Total accounts receivable reserves	$	2.6	$	0.4	$	(0.9	)	$	2.1

(1) Write-off of uncollectible accounts, net of recoveries.

Inventories, Net

Inventories, net are stated at the lower of cost or market, and include material, labor, and manufacturing overhead costs. The components of inventories, net were as follows (in millions):

	December 29,  2012		June 30,  2012
Finished goods	$	95.8	$	89.5
Work in process	37.4		37.3
Raw materials and purchased parts	46.1		47.7
Total inventories, net	$	179.3	$	174.5

Property, Plant and Equipment, Net

The components of property, plant and equipment, net were as follows (in millions):

	December 29, 2012			June 30, 2012
Land	$	15.5		$	14.1
Buildings and improvements	38.7			35.8
Machinery and equipment	444.0			421.3
Furniture, fixtures, software and office equipment	171.1			166.1
Leasehold improvements	93.0			95.3
Construction-in-progress	18.8			33.0
	781.1			765.6
Less: Accumulated depreciation	(530.8		)	(512.7		)
Property, plant and equipment, net	$	250.3		$	252.9

During the first quarter of fiscal 2013, the Company completed a capital investment project in machinery and equipment to increase anti-counterfeiting production capabilities in Beijing, China that was included in Construction-in-progress as of June 30, 2012. The Company began depreciating the asset over its useful life of 20 years during the first quarter of fiscal 2013.

At December 29, 2012 and June 30, 2012, property, plant and equipment, net included $20.7 million and $21.4 million, respectively, in land and buildings related to the Santa Rosa and Eningen Transactions (as defined in “Note 16. Commitments and Contingencies” below) accounted for under the financing method. See “Note 16. Commitments and Contingencies” for more detail.

9

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the three months ended December 29, 2012 and December 31, 2011, the Company recorded $16.9 million and $17.1 million of depreciation expense, respectively. During the six months ended December 29, 2012 and December 31, 2011, the Company recorded $33.8 million and $34.2 million of depreciation expense, respectively.

Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows (in millions):

	December 29, 2012		June 30, 2012
Prepayments	$	31.1	$	30.9
Advances to contract manufacturers	16.4		18.4
Deferred income tax	2.4		2.3
Refundable income taxes	2.8		4.7
Other receivables	18.5		13.0
Other current assets	7.2		7.9
Total prepayments and other current assets	$	78.4	$	77.2

Other Current Liabilities

The components of other current liabilities were as follows (in millions):

	December 29,  2012		June 30,  2012
Deferred compensation plan	$	4.9	$	4.6
Warranty accrual	6.8		8.1
VAT liabilities	5.5		2.7
Restructuring accrual	5.6		8.6
Deferred taxes	3.5		3.1
Other	6.8		10.8
Total other current liabilities	$	33.1	$	37.9

Other Non-Current Liabilities

The components of other non-current liabilities were as follows (in millions):

	December 29, 2012		June 30, 2012
Pension accrual and post-employment benefits	$	89.8	$	85.2
Deferred taxes	4.0		4.7
Restructuring accrual	3.5		4.0
Financing obligation	35.0		35.4
Non-current income taxes payable	10.8		9.3
Asset retirement obligations	8.5		9.2
Long-term deferred revenue	25.3		16.1
Other	15.6		12.7
Total other non-current liabilities	$	192.5	$	176.6

10

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7. Investments and Fair Value Measurements

The Company’s investments in marketable debt and equity securities were primarily classified as available-for-sale investments.

At December 29, 2012, the Company’s available-for-sale securities were as follows (in millions):

	Amortized		Gross		Gross
	Cost / Carrying		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Debt securities:
U.S. treasuries	$	71.9	$	—	$	—		$	71.9
Agencies
U.S.	53.4		0.1		—			53.5
Foreign	4.0		0.1		—			4.1
Municipal bonds and sovereign debt instruments	6.6		—		—			6.6
Asset-backed securities	40.2		0.3		(0.4		)	40.1
Corporate securities
U.S.	213.8		1.4		(0.1		)	215.1
Foreign	33.4		2.2		—			35.6
Total available-for-sale securities	$	423.3	$	4.1	$	(0.5	)	$	426.9

The Company generally classifies debt securities as cash equivalents, short-term investments, or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are classified as current assets. As of December 29, 2012, of the total estimated fair value, $26.6 million was classified as cash equivalents, $398.9 million was classified as short-term investments, and $1.4 million was classified as other non-current assets.

In addition to the amounts presented above, at December 29, 2012, the Company’s short-term investments classified as trading securities, related to the deferred compensation plan, were $4.9 million, of which $1.5 million were invested in debt securities, $0.4 million were invested in money market instruments and funds and $3.0 million were invested in equity securities. Trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

During the three and six months ended December 29, 2012 and December 31, 2011, the Company recorded no other-than-temporary impairment charge in each respective period.

At December 29, 2012, the Company’s total gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument were as follows (in millions):

	Less than 12 Months		Greater than 12 Months		Total
Asset-backed securities	$	—	$	0.4	$	0.4
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.4	$	0.5

11

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At December 29, 2012, contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows (in millions):

	Amortized
	Cost / Carrying		Estimated
	Cost		Fair Value
Amounts maturing in less than 1 year	$	241.3	$	244.4
Amounts maturing in 1 - 5 years	180.6		181.1
Amounts maturing in more than 5 years	1.4		1.4
Total debt securities	$	423.3	$	426.9

At June 30, 2012, the Company’s available-for-sale securities were as follows (in millions):

	Amortized		Gross		Gross
	Cost / Carrying		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Debt securities:
U.S. treasuries	$	52.0	$	—	$	—		$	52.0
Agencies
U.S.	65.1		0.2		—			65.3
Foreign	3.3		—		—			3.3
Municipal bonds and sovereign debt instruments	11.4		—		—			11.4
Asset-backed securities	21.9		0.2		(0.4		)	21.7
Corporate securities	183.6		1.3		(0.1		)	184.8
Total available-for-sale securities	$	337.3	$	1.7	$	(0.5	)	$	338.5

The Company generally classifies debt securities as cash equivalents, short-term investments, or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are classified as current assets. As of June 30, 2012, of the total estimated fair value, $21.3 million was classified as cash equivalents, $315.9 million was classified as short-term investments, and $1.3 million was classified as other non-current assets.

In addition to the amounts presented above, at June 30, 2012, the Company’s short-term investments classified as trading securities, related to the deferred compensation plan, were $4.6 million, of which $0.9 million were invested in debt securities, $0.5 million were invested in money market instruments and funds and $3.2 million were invested in equity securities. Trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in interest and other income (expense), net.

At June 30, 2012, the Company’s gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument were as follows (in millions):

	Less than		Greater than
	12 Months		12 Months		Total
Asset-backed securities	$	—	$	0.4	$	0.4
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.4	$	0.5

12

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fair Value Measurements

Assets measured at fair value at December 29, 2012 are summarized below (in millions):

			Fair value measurement as of December 29, 2012
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Debt available-for-sale securities
U.S. treasuries	$	71.9	$	71.9	$	—
Agencies
U.S.	53.5		—		53.5
Foreign	4.1		—		4.1
Municipal bonds and sovereign debt instruments	6.6		—		6.6
Asset-backed securities	40.1		—		40.1
Corporate securities
U.S.	215.1				215.1
Foreign	35.6				35.6
Total debt available-for-sale securities	426.9		71.9		355.0
Money market funds	220.9		220.9		—
Trading securities	4.9		4.9		—
Total assets (1)	$	652.7	$	297.7	$	355.0

(1)$210.1 million in cash and cash equivalents, $403.8 million in short-term investments, $30.9 million in restricted cash, and $7.9 million in other non-current assets on the Company’s consolidated balance sheet.

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions about the factors that market participants would use in valuing the asset or liability.

The Company’s cash and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy based on quoted prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

·Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 1 assets of the Company include money market funds and U.S. Treasury securities as they are traded in active markets with sufficient volume and frequency of transactions.

·Level 2 includes financial instruments for which the valuations are based on quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets. Level 2 instruments of the Company generally include certain U.S. and foreign government and agency securities, commercial paper, corporate and municipal bonds and notes, asset-backed securities, and foreign currency forward contracts. To estimate their fair value, the Company utilizes pricing models based on market data. The significant inputs for the valuation model usually include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, and industry and economic events.

As of June 30, 2012 and during the three and six months ended December 29, 2012, the Company held no Level 3 investments. Level 3 includes financial instruments for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement.

13

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Foreign Currency Forward Contracts

The Company has foreign subsidiaries that operate and sell the Company’s products in various markets around the world. As a result, the Company is exposed to foreign exchange risks. The Company utilizes foreign exchange forward contracts and other instruments to manage foreign currency risk associated with foreign currency denominated assets and liabilities, primarily certain short-term intercompany receivables and payables and to reduce the volatility of earnings and cash flows related to foreign-currency transactions.

The forward contracts, most with a term of less than 120 days, were transacted near month end; therefore, the fair value of the contracts as of both December 29, 2012 and June 30, 2012, is not significant. The change in the fair value of these foreign currency forward contracts is recorded as income or loss in the Company’s Consolidated Statements of Operations as a component of Interest and other income (expense), net.

Note 8. Goodwill

The Company’s goodwill balance as of December 29, 2012 was $75.3 million, which consisted of $67.0 million of goodwill in the CommTest segment and $8.3 million of goodwill in the Optical Security and Performance Products (“OSP”) segment. The Company’s goodwill balance as of June 30, 2012 was $68.7 million, which consisted of $60.4 million of goodwill in the CommTest segment and $8.3 million of goodwill in the Advanced Optical Technologies (“AOT”) segment (see below). The goodwill balance is adjusted quarterly to record the effect of currency translation adjustments.

During the first quarter of fiscal 2013, the reporting structure of the AOT reportable segment was reorganized and its previous reporting units, which consisted of the Custom Optics Product Group (“COPG”), Flex Products Group (“Flex”) and Authentication Solutions Group (“ASG”) (excluding the Hologram Business), were merged into the new OSP reportable segment, having one single reporting unit, replacing the AOT segment. As the entire $8.3 million balance of AOT’s goodwill at June 30, 2012was attributable to the Flex reporting unit, the Company reclassified AOT’s goodwill to the OSP segment. The Company closed the sale of the Hologram Business, a component of the ASG reporting unit, during the second quarter of fiscal 2013. As there was zero goodwill attributable to the ASG reporting unit as of June 30, 2012, the sale does not impact goodwill. Refer to “Note 17. Operating Segments” and “Note 18. Discontinued Operations” for further information.

The Company reviews goodwill for impairment during the fourth quarter of each fiscal year or more frequently if events or circumstances indicate that an impairment loss may have occurred. In the fourth quarter of fiscal 2012, the Company completed the annual impairment test of goodwill, which indicated there was no goodwill impairment. There were no events or changes in circumstances which triggered an impairment review during the three and six months ended December 29, 2012 and December 31, 2011.

Note 9. Acquired Developed Technology and Other Intangibles

The following tables present details of the Company’s acquired developed technology and other intangibles (in millions):

	Gross
	Carrying		Accumulated
As of December 29, 2012	Amount		Amortization			Net
Acquired developed technology	$	543.5	$	(434.9	)	$	108.6
Other	230.1		(198.8		)	31.3
Total intangibles	$	773.6	$	(633.7	)	$	139.9

	Gross
	Carrying		Accumulated
As of June 30, 2012	Amount		Amortization			Net
Acquired developed technology	$	534.8	$	(398.6	)	$	136.2
Other	279.3		(236.7		)	42.6
Total intangibles	$	814.1	$	(635.3	)	$	178.8

14

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the three and six months ended December 29, 2012, the Company recorded $16.8 million and $37.4 million, respectively, of amortization expense relating to acquired technology and other intangibles. During the three months ended September 29, 2012, the Company approved a plan to terminate the concentrated photovoltaic (“CPV”) product line within its Communications and Commercial Optical Products (“CCOP”) segment and accordingly recorded $2.6 million of accelerated amortization. Refer to “Note 11. Restructuring and Related Charges” for more details.

During the three and six months ended December 31, 2011, the Company recorded $20.8 million and $40.2 million, respectively, of amortization expense relating to acquired technology and other intangibles.

Based on the carrying amount of acquired technology and other intangibles as of December 29, 2012, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):

Fiscal Years
Remainder of 2013	$	33.3
2014	41.8
2015	33.9
2016	12.9
2017	9.6
Thereafter	8.4
Total amortization	$	139.9

The acquired developed technology and other intangibles balance are adjusted quarterly to record the effect of currency translation adjustments.

Note 10. Debts and Letters of Credit

The Company had short-term debt of $205.6 million and $292.8 million as of December 29, 2012 and June 30, 2012, respectively. The Company was in compliance with all debt covenants as of December 29, 2012.

1% Senior Convertible Notes

On June 5, 2006, the Company completed an offering of $425.0 million aggregate principal amount of 1% Senior Convertible Notes due 2026. Proceeds from the notes amounted to $415.9 million after issuance costs. The notes bear interest at a rate of 1.0% per year and are convertible into a combination of cash and shares of the Company’s common stock at a conversion price of $30.30 per share. Interest on the notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2006. The notes mature on May 15, 2026.

The holders of the notes may require the Company to purchase all or a portion of the notes on each of May 15, 2013, May 15, 2016 and May 15, 2021 at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. In addition, upon certain fundamental changes, holders may require the Company to purchase for cash the notes at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The Company may not redeem the notes before May 20, 2013. On or after that date, the Company may redeem all or part of the notes for cash at 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Upon adoption of authoritative guidance which applies to the 1% Senior Convertible Notes, the Company calculated the carrying value of the liability component at issuance as the present value of its cash flows using a discount rate of 8.1%, based on the 7-year swap rate plus credit spread as of the issuance date. The credit spread for JDSU is based on the historical average “yield to worst” rate for BB-rated issuers. The carrying value of the liability component was determined to be $266.5 million. The equity component, or debt discount, of the notes was determined to be $158.5 million. The debt discount is being accreted using the effective interest rate of 8.1% over the period from issuance date through May 15, 2013 as a non-cash charge to interest expense. As of December 29, 2012, the expected remaining term of the 1% Senior Convertible Notes is less than one year and accordingly is classified as short-term debt.

The $9.1 million of costs incurred in connection with the issuance of the notes were capitalized and bifurcated into debt issuance cost of $5.7 million and equity issuance cost of $3.4 million. The debt issuance cost is being amortized to interest expense using the effective interest method from issuance date through May 15, 2013.

15

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In the first and second quarter of fiscal 2013, the Company repurchased $50.0 million and $50.0 million aggregate principal amount of the notes for $49.8 million and $49.9 million in cash, respectively. In connection with the two repurchases, losses of $2.1 million and $1.3 million were recognized in accordance with the authoritative guidance in Interest and other income (expense), net during the first and second quarter of fiscal 2013, respectively. After giving effect to the repurchases, the total carrying amount of 1% Senior Convertible Notes outstanding as of December 29, 2012 was $205.6 million.

As of December 29, 2012, the unamortized portion of the debt issuance cost related to the notes was $0.2 million and was included in Other current assets on the Consolidated Balance Sheets.

The following table presents the carrying amounts of the liability and equity components (in millions):

	December 29,			June 30,
	2012			2012
Carrying amount of equity component	$	156.8		$	158.3
Principal amount of 1% Senior Convertible Notes	$	211.0		$	311.0
Unamortized discount of liability component	(5.4		)	(18.2		)
Carrying amount of liability component	$	205.6		$	292.8

Based on quoted market prices, as of December 29, 2012 and June 30, 2012, the fair market value of the 1% Senior Convertible Notes was approximately $210.5 million and $307.3 million, respectively. Changes in fair market value reflect the change in the market price of the notes. The 1% Senior Convertible Notes are classified within Level 2 as they are not actively traded in markets; and the bond parity derivatives related to the convertible notes are classified within Level 1 since the quoted market price for identical instrument are available in active markets. The fair value of the bond parity derivatives is approximately zero as of December 29, 2012 and June 30, 2012.

The following table presents the effective interest rate and the interest expense for the contractual interest and the accretion of debt discount (in millions, except for the effective interest rate):

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Effective interest rate	8.1		%	8.1		%	8.1		%	8.1		%
Interest expense-contractual interest	$	0.5		$	0.8		$	1.2		$	1.6
Accretion of debt discount	3.6			5.0			7.8			9.9

The increase of the debt related to the interest accretion is treated as a non-cash transaction and the repayment of the carrying amount of the debt is classified as financing activity.

Revolving Credit Facility

On January 20, 2012, the Company entered into an agreement (the “Credit Agreement”) for a five-year $250.0 million revolving credit facility that matures in January 2017. At the election of the Company, the principal amount available under the Credit Agreement may be increased by up to an additional $100 million, which amount may be allocated as either an increase to the revolving loan commitments or as an add-on term loan, in each case subject to the conditions provided in the Credit Agreement. None of the lenders are currently obligated to provide such additional commitments or term loans. Borrowings under the credit facility bear an annual interest rate, at the Company’s option, equal to either (i) the Alternate Base Rate (as defined in the Credit Agreement) plus the applicable margin for base rate loans, which ranges between 0.75% and 2.00%, based on the Company’s leverage ratio or (ii) the Adjusted LIBO Rate (as defined in the Credit Agreement) plus the applicable margin for Eurocurrency loans, which ranges between 1.75% and 3.00%, based on the Company’s leverage ratio. The Company is required to pay a commitment fee on the unutilized portion of the facility of between 0.25% and 0.50%, based on the Company’s leverage ratio.

Obligations under the Credit Agreement are guaranteed by certain wholly owned domestic subsidiaries of the Company (“the Guarantors”). The Company’s obligations under the Credit Agreement have been collateralized by a pledge of substantially all assets of the Company and the Guarantors (subject to certain exclusions), full pledges of equity interests in certain domestic subsidiaries and partial pledges of equity interests in certain foreign subsidiaries. The Company has also agreed to maintain at least $200 million of cash and permitted investments in accounts which are subject to a control agreement.

16

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Credit Agreement contains certain affirmative and negative covenants applicable to the Company and its subsidiaries, which include, among other things, restrictions on their ability to (1) incur additional indebtedness, (ii) make certain investments, (iii) acquire other entities, (iv) dispose of assets, (v) incur liens and (vi) make certain payments including those related to dividends or repurchase of equity. The Credit Agreement also contains financial maintenance covenants, including a maximum senior secured leverage ratio, a maximum total leverage ratio, a minimum interest coverage ratio and the requirement to maintain minimum liquidity.

The $1.9 million of costs incurred in connection with the issuance of the revolving credit facility were capitalized and are being amortized to interest expense on a straight-line basis over five years based on the contractual term of the revolving credit facility. As of December 29, 2012, the unamortized portion of debt issuance cost related to the revolving credit facility was $1.5 million, and was included in Other current assets and Other non-current assets on the Consolidated Balance Sheets.

During the quarter ended December 29, 2012, there was no drawdown under the facility and the outstanding balance at quarter end was zero.

Outstanding Letters of Credit

As of December 29, 2012, the Company had 15 standby letters of credit totaling $34.5 million.

Note 11. Restructuring and Related Charges

The Company continues to seek to reduce costs through targeted restructuring events intended to consolidate its operations and rationalize the manufacturing of its products based on core competencies and cost efficiencies, together with the need to align its businesses with market conditions. As of December 29, 2012, the Company’s total restructuring accrual was $9.1 million. During the three and six months ended December 29, 2012, the Company incurred restructuring expenses of $3.0 million and $5.7 million, respectively. During the three and six months ended December 31, 2011, the Company incurred restructuring expenses of $4.0 million and $5.5 million, respectively. The Company’s restructuring charges can include severance and benefit costs to eliminate a specified number of positions, facilities and equipment costs to vacate facilities and consolidate operations, and lease termination costs. The timing of associated cash payments depend upon the type of restructuring charge and can extend over multiple periods.

17

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Summary of Restructuring Plans

The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the six months ended December 29, 2012 were as follows (in millions):

			Six Months  Ended					Non-cash				Three  Months  Ended
	Balance		December 29,					Settlements		Balance		December 29,
	June 30,		2012		Cash			and Other		December 29,		2012
	2012		Charges		Settlements			Adjustments		2012		Charges
CommTest Wireless Business Restructuring Plan	$	—	$	1.8	$	(1.0	)	$	—	$	0.8	$	1.8
CCOP CPV Plan	—		0.6		(0.4		)	—		0.2		—
CommTest Operation and Repair Outsourcing Restructuring Plan
Workforce Reduction	$	3.9	$	1.5	$	(3.8	)	$	—	$	1.6	$	0.6
Facilities and Equipment	—		0.7		(0.7		)	—		—		0.2
Lease Costs	—		0.5		(0.3		)	—		0.2		—
Total CommTest Operation and Repair Outsourcing Restructuring Plan	$	3.9	$	2.7	$	(4.8	)	$	—	$	1.8	$	0.8
OSP Business Consolidation Plan	0.8		—		(0.6		)	—		0.2		—
CommTest Manufacturing Support Consolidation Plan (Workforce Reduction)	2.5		0.5		(2.0		)	—		1.0		0.4
CommTest Germantown Tower Restructuring Plan (Lease Costs)	0.5		—		—			—		0.5		—
CommTest Market Rebalancing Restructuring Plan (Lease Costs)	0.9		—		(0.2		)	—		0.7		—
CommTest US Manufacturing Outsourcing Restructuring Plan (Lease Costs)	1.1		—		(0.2		)	—		0.9		—
CommTest Germany Restructuring Plan (Workforce Reduction)	2.4		0.1		(0.3		)	0.2		2.4		—
Other plans
Workforce Reduction	$	0.4	$	—	$	(0.3	)	$	—	$	0.1	$	—
Lease Costs	0.1		—		—			0.4		0.5		—
Total other plans	$	0.5	$	—	$	(0.3	)	$	0.4	$	0.6	$	—
Total	$	12.6	$	5.7	$	(9.8	)	$	0.6	$	9.1	$	3.0
Ottawa Lease Exit Costs	$	4.6	$	0.2	$	(0.6	)	$	0.1	$	4.3	$	0.1

As of December 29, 2012 and June 30, 2012, the Company included the long-term portion of the restructuring liability of $3.5 million and $4.0 million, respectively, as the restructuring accrual component under Other non-current liabilities, and the short-term portion as the restructuring accrual component under Other current liabilities in the Consolidated Balance Sheets.

The Company had also previously recorded lease exit charges, net of assumed sub-lease income in prior fiscal years related to its Ottawa facility that was included in selling, general and administrative expenses. The fair value of the remaining contractual obligations, net of sublease income, is $4.3 million and $4.6 million as of December 29, 2012 and June 30, 2012 respectively. The Company included the long-term portion of the contract obligations of $3.3 million and $3.7 million in other non-current liabilities as of each period end, and the short-term portion in other current liabilities in the Consolidated Balance Sheets. The payments related to these lease costs are expected to be paid by the end of the third quarter of fiscal 2018.

CommTest Wireless Business Restructuring Plan

During the second quarter of fiscal 2013, Management approved a plan to align the Company’s investment strategy in CommTest segment with customer spending priorities in high growth product lines such as wireless network assurance and eliminate positions in research and development, sales and operations organization that supported low growth product lines. As a result, a restructuring charge of $1.8 million was recorded for severance and employee benefits for 43 employees primarily in research and development and selling, general and administrative functions. As of December 29, 2012, 38 employees have been terminated. The employees being affected are located in North America and Asia. Payments related to remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2013.

18

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

CCOP CPV Plan

During the first quarter of fiscal 2013, Management approved a plan to terminate the CPV product line within the CCOP segment based on limited opportunities for market growth. This action will occur over the next several quarters and affects 10 employees in manufacturing, research and development and selling, general and administrative functions. The employees being affected are located in North America, Europe and Asia. As of December 29, 2012, 9 employees have been terminated. Payments related to remaining severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2013.

CommTest Operation and Repair Outsourcing Restructuring Plan

During the fourth quarter of fiscal 2012, Management approved a plan which focuses on three areas in the CommTest segment: (1) moving the repair organization to a repair outsourcing partner; (2) reorganizing the R&D global team because of portfolio prioritization primarily in the Customer Experience Management (“CEM”) business to consolidate key platforms from several sites to a single site, and (3) reorganizing Global Sales to focus on strategic software growth, wireless growth, and to ensure sales account resources on the most critical global growth accounts. This action will occur over the next several quarters and affected 133 employees in manufacturing, research and development and selling, general and administrative functions. The employees being affected are located in America, Europe and Asia. As of December 29, 2012, 107 of these employees have been terminated. During the three months ended December 29, 2012, the Company adjusted the accrual for $0.6 million of additional severance and employee benefits arising from 22 employees added to the original plan. Payments related to the severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2014.

During the fourth quarter of fiscal 2012, Management approved a plan to exit workspaces in Techpoint, Singapore and Atlanta, Georgia, primarily used by the CommTest segment. During the six months ended December 29, 2012, the Company exited both the workspaces. The fair value of the remaining contractual obligations, net of sublease income as of December 29, 2012, was $0.2 million. Payments related to the lease costs are expected to be paid by the end of the fourth quarter of fiscal 2013 and second quarter of fiscal 2014 for the leased sites in Techpoint, Singapore and Atlanta, Georgia, respectively.

OSP Business Consolidation Plan

During the fourth quarter of fiscal 2012, Management approved a plan to consolidate and re-align the various business units primarily within its OSP segment to improve synergies. This action will occur over the next several quarters and affected 16 employees primarily in manufacturing, research and development and selling, general and administrative functions. The employees being affected are located in the United States and Europe. As of December 29, 2012, 11 of these employees have been terminated. Payments related to the severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2013.

CommTest Manufacturing Support Consolidation Plan

During the third quarter of fiscal 2012, Management approved a plan to continue to consolidate its manufacturing support operations in the CommTest segment by reducing the number of contract manufacturer locations worldwide and moving most of them to lower cost regions such as Mexico and China. This action will occur over the next several quarters and affected 80 employees in manufacturing and selling, general and administrative functions. The employees being affected are located in North America, Europe and Asia. As of December 29, 2012, 53 employees have been terminated. During the three months ended December 29, 2012, the Company adjusted the accrual for $0.4 million due to additional severance and employee benefits arising from 5 employees added to the original plan. Payments related to the severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2013.

CommTest Germantown Restructuring Plan

During the second quarter of fiscal 2012, Management approved a plan to consolidate workspace in Germantown, Maryland, primarily used by the CommTest segment. As of December 31, 2011, the Company exited the workspace in Germantown under the plan. The fair value of the remaining contractual obligations, net of sublease income as of December 29, 2012 was $0.5 million. Payments related to the lease costs are expected to be paid by the end of the second quarter of fiscal 2019.

CommTest Market Rebalancing Restructuring Plan

During the third quarter of fiscal 2011, Management approved a plan for the CommTest segment to focus on higher growth products and services in lower cost markets with higher growth potential. This resulted in termination of employment, exit of three facilities and manufacturing transfer costs. As of June 30, 2012, all employees had been terminated. The fair value of the remaining

19

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

contractual obligations with respect to the facilities exited, net of sublease income as of December 29, 2012 was $0.7 million. Payments related to the lease costs are expected to be paid by the end of the second quarter of fiscal 2016.

CommTest US Manufacturing Outsourcing Restructuring Plan

During fiscal 2010, the Company exited facilities in Maryland and Indiana as part of its restructuring plan in the CommTest segment to reduce and/or consolidate manufacturing locations. The fair value of the remaining contractual obligations, net of sublease income, as of December 29, 2012 was $0.9 million. Payments related to the lease costs are expected to be paid by the end of the second quarter of fiscal 2015 for its facilities in Indiana. Payments related the lease costs for its facilities in the state of Maryland were paid out as of December 31, 2011.

CommTest Germany Restructuring Plan

During the fourth quarter of fiscal 2009, the Company implemented a restructuring plan for its site in Germany in its CommTest segment to significantly change the overall cost structure and complexity of the site, and to align the cost of the site more with market demand. 77 employees in manufacturing, research and development and selling, general and administrative functions were affected by the plan. As of December 29, 2012, 74 employees have been terminated. Payments related to the severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2016.

Other plans

Other plans account for a minor portion of the total restructuring accrual, with minimal or no revisions recorded.

Note 12. Income Tax

The Company recorded an income tax expense of $4.1 million and $7.5 million for the three and six months endedDecember 29, 2012, respectively. The Company recorded an income tax expense of $3.0 million and $6.4 million for the three and six months ended December 31, 2011, respectively.

The income tax expense recorded for the three and six months ended December 29, 2012 and December 31, 2011, respectively, primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income for the year in those locations.

The income tax expense recorded differs from the expected tax expense or benefit that would be calculated by applying the federal statutory rate to the Company’s income or loss before income taxes primarily due to the increases in valuation allowance for deferred tax assets attributable to the Company’s domestic and foreign losses from continuing operations.

As of December 29, 2012 and June 30, 2012, the Company’s unrecognized tax benefits totaled $62.6 million and $61.3 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $24.5 million accrued for the payment of interest and penalties at December 29, 2012.

Note 13. Stock-Based Compensation

Overview

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and six months ended December 29, 2012 and December 31, 2011 was as follows (in millions):

	Three Months Ended				Six Months Ended
	December 29,		December 31,		December 29,		December 31,
	2012		2011		2012		2011
Cost of sales	$	2.1	$	1.5	$	4.3	$	3.3
Research and development	3.4		3.1		6.3		5.7
Selling, general and administrative	8.1		7.7		15.6		14.8
	$	13.6	$	12.3	$	26.2	$	23.8

Approximately $2.3 million of stock-based compensation was capitalized in inventory at December 29, 2012.

20

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Stock Options

The Company issues stock options that generally become exercisable over a three-year or four-year period and, if not exercised, expire from five to ten years after the date of grant. The Company granted no stock options in the first two quarters of fiscal 2013 or fiscal 2012.

As of December 29, 2012, $3.3 million of unrecognized stock-based compensation cost related to stock options remains to be amortized. That cost is expected to be recognized over an estimated amortization period of 1.2 years.

Employee Stock Purchase Plan

The Company’s ESPP provides eligible employees an opportunity to acquire an ownership interest in the Company at a discounted purchase price with a 6-month look-back period. The fair value of ESPP is estimated on the date of offering using a Black-Scholes-Metron valuation model.

As of December 29, 2012, $0.2 million of unrecognized stock-based compensation cost related to the ESPP remains to be amortized. That cost is expected to be recognized through the third quarter of fiscal 2013.

Full Value Awards

“Full Value Awards” refer to Restricted Stock Units (“RSUs”) and Performance Units that are granted with the exercise price equal to zero and are converted to shares immediately upon vesting. These Full Value Awards are performance-based, time-based, or a combination of both and expected to vest over one year to four years. The fair value of the time-based Full Value Awards is based on the closing market price of the Company’s common stock on the date of award.

For the six months ended December 29, 2012 and December 31, 2011, the Company granted 5.5 million and 4.4 million RSUs, of which 0.7.million and 0.5 million, respectively, are performance-based RSUs with market conditions (“MSUs”). These MSUs shares represent the target amount of grants, and the actual number of shares awarded upon vesting of the MSUs may be higher or lower depending upon the achievement of the relevant market conditions. The majority of MSUs vest in equal annual installments over three years based on the attainment of certain total shareholder return performance measures and the employee’s continued service through the vest date. The aggregate grant-date fair value of MSUs granted during the first six months of fiscal 2013 and fiscal 2012 was estimated to be $9.8 million and $9.3 million, respectively, and was calculated using a Monte Carlo simulation. The remaining 4.8 million and 3.9 million shares for the six months ended December 29, 2012 and December 31, 2011 are mainly time-based RSUs. The majority of these time-based RSUs vest over three years, with 33% vesting after one year and quarterly over the remaining two years.

As of December 29, 2012, $87.0 million of unrecognized stock-based compensation cost related to Full Value Awards remains to be amortized. That cost is expected to be recognized over an estimated amortization period of 2.3 years.

Valuation Assumptions

The Company estimates the fair value of the MSUs on the date of grant using a Monte Carlo simulation with the following assumptions:

	Six Months Ended
	December 29,		December 31,
	2012		2011
Volatility of common stock	57.7	%	68.7	%
Average volatility of peer companies	58.3	%	68.4	%
Average correlation coefficient of peer companies	0.3214		0.3383
Risk-free interest rate	0.4	%	0.7	%

Note 14. Employee Defined Benefit Plans

The Company sponsors qualified and non-qualified pension plans for certain past and present employees in the U.K. and Germany. The Company is also responsible for the non-pension post-retirement benefit obligation of a previously acquired subsidiary.

21

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Most of the plans have been closed to new participants and no additional service costs are being accrued, except for the plans assumed during fiscal 2010 and the first quarter of fiscal 2013 in connection with acquisitions. Benefits are generally based upon years of service and compensation or stated amounts for each year of service.

On November 30, 2012, the Company terminated the defined benefit pension plan in South Korea and settled the vested benefit obligation of $1.3 million by subsequently funding a defined contribution retirement plan. The Company accounted for the termination of Korean pension plan as a combination of curtailment and settlement pursuant to the authoritative guidance, and recorded a gain of $0.2 million in its Consolidated Statements of Operations.

As of December 29, 2012, the U.K. plan was partially funded while the other plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. During the six months ended December 29, 2012, the Company contributed $0.7 million to the U.K. plan. The funded plan assets consist primarily of managed investments.

The following table presents the components of the net periodic cost for the pension plans (in millions):

Pension Benefits

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Service cost	$	0.1		$	0.1		$	0.2		$	0.2
Interest cost	1.1			1.3			2.2			2.7
Expected return on plan assets	(0.3		)	(0.3		)	(0.6		)	(0.7		)
Recognized net actuarial (gains)/losses				(0.1		)	—			(0.2		)
Curtailment/Settlement (gains)/losses	(0.2		)				(0.2		)
Net periodic benefit cost	$	0.7		$	1.0		$	1.6		$	2.0

Both the calculation of the projected benefit obligation and net periodic cost are based upon actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, pension increases and other factors. At a minimum, the Company evaluates these assumptions annually and makes changes as necessary.

The Company expects to incur cash outlays of approximately $6.4 million related to its defined benefit pension plans during fiscal 2013 to make current benefit payments and fund future obligations. As of December 29, 2012, approximately $3.5 million had been incurred. These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at June 30, 2012.

Note 15. Related Party Transactions

KLA-Tencor Corporation (“KLA-Tencor”)

During a portion of the first quarter of fiscal 2013, one member of the Board of Directors of JDSU was also a member of the Board of Directors of KLA-Tencor, a publicly held company which provides process control and yield management solutions for semiconductor manufacturing. KLA-Tencor is a customer of the Company. As of August 16, 2012, the member resigned from the Board of Directors of JDSU and KLA-Tencor was no longer a related party.

22

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Transactions and balances with the Company’s related parties were as follows (in millions):

	Three Months Ended				Six Months Ended
	December 29,		December 31,		December 29,		December 31,			December 29,		June 30,
	2012		2011		2012		2011			2012		2012
Sales:									Receivables:
*KLA-Tencor	$	—	$	1.8	$	—	$	3.9	*KLA-Tencor	$	—	$	0.9

* There were no material transactions between the Company and KLA-Tencor during the period when KLA-Tencor was a related party of the Company in fiscal 2013.

Note 16. Commitments and Contingencies

Tax Matters

The Company has been subject to Texas franchise tax audits related to allocated taxable surplus capital for Texas report years 2002 through 2007. While the Company believes that it is reasonably possible this audit may result in additional tax liabilities, based on currently available information, the Company believes the ultimate outcome of this audit will not have a material adverse effect on the Company’s financial position, cash flows or overall trends in results of operations. There is the possibility of a material adverse effect on the Company’s financial position, cash flows or overall trends in results of operations for the period in which this matter is ultimately resolved, if it is resolved unfavorably, or in the period in which an unfavorable outcome becomes probable. The range of the potential total tax liability related to these matters is estimated to be from $0 million to $34.2 million, plus interest and penalties.

Legal Proceedings

During the first quarter of fiscal 2012, the Company received an unfavorable arbitrator’s decision in a legal dispute unrelated to current or future quarters. The arbitrator’s decision was related to, and contrary to the result of, an action which commenced in 2006 in the Western District of Pennsylvania in which the Company was a nominal plaintiff. The Pennsylvania matter was resolved in the Company’s favor in 2009 and was subsequently affirmed by a Federal Appeals Court in January 2011. The Company accrued $7.4 million during the first quarter of fiscal 2012, which included the arbitration award plus interest, in accordance with authoritative guidance on contingencies and recorded an additional $0.2 million towards interest during the second quarter of fiscal 2012. On March 5, 2012 the Pennsylvania District Court denied JDSU’s request to vacate the arbitration award, and the parties subsequently reached a settlement agreement on March 22, 2012 pursuant to which the Company paid $7.9 million on April 2, 2012 in full and final settlement of the matter. The related charge is included as a component of selling, general and administrative expense during the three and six months ended December 31, 2011 in the Company’s Consolidated Statements of Operations.

The Company is subject to a variety of claims and suits that arise from time to time in the ordinary course of our business. While Management currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and Management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable.

Guarantees

In accordance with authoritative guidance which requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities, are required.

The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary indemnifications to purchasers of the Company’s businesses or assets; (ii) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises; and (iii) certain agreements with the Company’s officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship.

23

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on its balance sheet as of December 29, 2012 and June 30, 2012.

Product Warranties

In general, the Company offers a three-month to one-year warranty for most of its products. The Company provides reserves for the estimated costs of product warranties at the time revenue is recognized. The Company estimates the costs of its warranty obligations based on its historical experience of known product failure rates, use of materials to repair or replace defective products and service delivery costs incurred in correcting product failures. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise with specific products. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

The following table presents the changes in the Company’s warranty reserve (in millions):

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Balance as of beginning of period	$	7.6		$	7.6		$	8.1		$	7.9
Provision for warranty	1.0			2.2			2.9			4.8
Utilization of reserve	(0.1		)	(0.2		)	(1.4		)	(4.6		)
Adjustments related to pre-existing
warranties (including changes in estimates)	(1.7		)	(2.1		)	(2.8		)	(0.6		)
Balance as of end of period	$	6.8		$	7.5		$	6.8		$	7.5

Financing Obligations — Eningen, Santa Rosa and Payment Plan Agreement for Software Licenses

Eningen

On December 16, 2011, the Company executed and closed the sale and leaseback transaction of certain buildings and land in Eningen, Germany (the “Eningen Transactions”). The Company sold approximately 394,217 square feet of land, nine buildings with approximately 386,132 rentable square feet, and parking areas. The Company leased back approximately 158,154 rentable square feet comprised of two buildings and a portion of a basement of another building (the “Leased Premises”). The lease term is 10 years with the right to cancel a certain portion of the lease after 5 years. The gross cash proceeds received from the transaction were approximately €7.1 million.

Concurrent with the sale and lease back, the Company has provided collateral in case of a default by the Company relative to future lease payments for the Leased Premises. Due to this continuing involvement, the related portion of the cash proceeds and transaction costs, associated with the Leased Premises and other buildings which the Company continues to occupy, was recorded under the financing method in accordance with the authoritative guidance on leases and sales of real estate. Accordingly, the carrying value of these buildings and associated land will remain on the Company’s books and the buildings will continue to be depreciated over their remaining useful lives. The portion of the proceeds received have been recorded as a financing obligation, a portion of the lease payments are recorded as a decrease to the financing obligation and a portion is recognized as interest expense. Imputed rental income from the buildings sold but not leased back and currently being occupied is recorded as a reduction in the financing obligation.

As of December 29, 2012, of the total financing obligation related to the Eningen Transactions, $0.1 million was included in Other current liabilities, and $5.1 million was included in Other non-current liabilities. As of June 30, 2012, of the total financing obligation related to the Eningen Transactions $0.1 million was included in Other current liabilities, and $4.9 million was included in Other non-current liabilities.

Santa Rosa

On August 21, 2007, the Company entered into a sale and lease back of certain buildings and land in Santa Rosa, California (the “Santa Rosa Transactions”). The Company sold approximately 45 acres of land, 13 buildings with approximately 492,000 rentable square feet, a building pad, and parking areas. The Company leased back 7 buildings with approximately 286,000 rentable square feet.

24

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The net cash proceeds received from the transaction were $32.2 million. The lease terms range from a five year lease with a one year renewal option to a ten year lease with two five year renewal options.

The Company has an ongoing obligation to remediate environmental matters, impacting the entire site, as required by the North Coast Regional Water Quality Control Board which existed at the time of sale. Concurrent with the sale and lease back, the Company has issued an irrevocable letter of credit for $3.8 million as security for the remediation of the environmental matter that remains in effect until the issuance of a notice of no further action letter from the North Coast Regional Water Quality Control Board. In addition, the lease agreement for one building included an option to purchase at fair market value, at the end of the lease term. Due to these various forms of continuing involvement the transaction was recorded under the financing method in accordance with the authoritative guidance on leases and sales of real estate.

Accordingly, the value of the buildings and land will remain on the Company’s books and the buildings will continue to be depreciated over their remaining useful lives. The proceeds received have been recorded as a financing obligation, a portion of the lease payments are recorded as a decrease to the financing obligation and a portion is recognized as interest expense. Imputed rental income from the buildings sold but not leased back is recorded as a reduction in the financing obligation.

As of December 29, 2012, $1.0 million was included in Other current liabilities, and $28.0 million was included in Other non-current liabilities. As of June 30, 2012, $0.9 million was included in Other current liabilities, and $28.5 million was included in Other non-current liabilities.

The lease payments due under the agreements reset to fair market rental rates upon the Company’s execution of the renewal options.

Payment Plan Agreement for Software Licenses

During fiscal 2011 the Company capitalized approximately $7.1 million of cost incurred for the purchase of perpetual software licenses in accordance with the authoritative accounting guidance. The Company entered into a four-year payment plan agreement (“PPA”) with the supplier towards software licenses and technical support. Under this PPA, payments are made on an annual basis starting the first quarter of fiscal 2012. The principal portion of the payment is accounted for as a financing activity and the remaining interest portion is accounted for as an operating activity in the statement of cash flows.

During the three and six months ended December 29, 2012, the Company recorded amortization expense of $0.3 million and $0.7 million in each period, respectively. During the three and six months ended December 31, 2011, the Company recorded amortization expense of $0.3 million and $0.7 million in each period, respectively.

Future Minimum Financing Payments — Eningen, Santa Rosa and Payment Plan Agreement for Software Licenses

As of December 29, 2012, future minimum financing payments of the perpetual software licenses and financing obligations are as follows (in millions):

Fiscal Years
Remainder of 2012	$	3.8
2013	5.6
2014	3.7
2015	3.5
2016	3.5
Thereafter	37.3
Total	$	57.4

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.

25

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Effective July 1, 2012, the reporting structure of the previous AOT business segment was reorganized and its previous reporting units, which consisted of COPG, Flex and ASG (excluding the Hologram Business), were merged into the new OSP business segment, having one single reporting unit, replacing the AOT business segment.The Hologram Business was previously presented within the AOT business segment; however, because it is presented as discontinued operations for financial reporting purposes as of September 29, 2012, it has been excluded from the segment results below.

The Company’s reportable segments are:

(i) Communications Test and Measurement Business Segment:

CommTest 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:

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, 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 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 Company’s Current Report on Form 8-K dated December 14, 2012. 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, or non-operating income and expenses to its segments as highlighted in the table below.

26

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Net revenue:
Communications Test and Measurement	$	195.4		$	196.2		$	364.9		$	381.4
Communications and Commercial Optical Products	185.8			163.2			380.7			343.5
Optical Security and Performance Product	48.2			50.2			104.7			100.8
Deferred revenue related to purchase accounting adjustment	—			(0.3		)	—			(0.6		)
Net revenue	$	429.4		$	409.3		$	850.3		$	825.1
Operating income (loss):
Communications Test and Measurement	$	35.3		$	28.0		$	52.1		$	52.1
Communications and Commercial Optical Products	21.2			16.6			45.0			42.2
Optical Security and Performance Product	16.2			16.8			37.4			34.5
Corporate	(23.7		)	(21.4		)	(46.8		)	(42.4		)
Total segment operating income	49.0			40.0			87.7			86.4
Unallocated amounts:
Stock-based compensation	(13.6		)	(12.3		)	(26.2		)	(23.8		)
Acquisition-related charges and amortization of intangibles	(17.3		)	(21.1		)	(38.7		)	(40.8		)
Loss on disposal of long-lived assets	(0.1		)	(0.2		)	(1.4		)	(0.7		)
Restructuring and related charges	(3.0		)	(4.0		)	(5.7		)	(5.5		)
Realignment and other charges	(0.1		)	(1.5		)	(0.7		)	(9.3		)
Interest and other income	(2.4		)	1.0			(2.8		)	2.0
Interest expense	(5.1		)	(6.6		)	(11.2		)	(13.2		)
Income (loss) from continuing operations before income taxes	$	7.4		$	(4.7	)	$	1.0		$	(4.9	)

Note 18. Discontinued Operations

On September 18, 2012, the Company entered into a definitive agreement to sell the Hologram Business within the previous AOT reportable segment to OpSec Security Inc. in cash, subject to adjustment based on close date net working capital condition. On October 12, 2012, the transaction closed and the Company received gross proceeds of $11.5 million from the sale.

In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of the Hologram Business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Net revenue of the Hologram Business for the three and six months ended December 29, 2012 was $0.3 million and $5.2 million, respectively. Net revenue of the Hologram Business for the three and six months ended December 31, 2011 was $3.5 million and $8.5 million, respectively. Net income (loss) for the three and six months ended December 29, 2012 was net income of $0.8 million and net loss $1.0 million, respectively. Net loss for the three and six months ended December 31, 2011 was $2.5 million and $4.7 million, respectively. There was no tax effect associated with the discontinued operation for any periods presented.

The Company recorded a gain of $0.6 million in connection with the sale of the Hologram Business, calculated as follows (in millions):

Gross Proceeds	$	11.5
Less: carrying value of net assets	(10.6		)
Less: selling costs	(0.3		)
Gain	$	0.6

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JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The carrying value of the net assets sold as of October 12, 2012 are as follows (in millions):

	October 12,
	2012
Accounts receivable, net	$	2.7
Inventories, net	4.4
Property, plant and equipment, net	0.8
Intangibles, net	5.8
Accounts payable and accrued expenses	(1.5		)
Other current and non-current liabilities	(1.6		)
Total net assets held for sale	$	10.6

The gain was recorded in the Consolidated Statements of Operations as a component of Net income (loss) from discontinued operations, net of tax.

Note 19. Rescission Offer

During the first quarter of fiscal 2013, the Company discovered it inadvertently failed to register the offer and issuance of shares under its ESPP with the SEC for the last three years. As a result, certain purchasers of securities under the ESPP may have the right to rescind their purchases for an amount equal to the purchase price paid for the securities, plus interest from the date of purchase, limited to the unregistered shares purchased in the last twelve months and still held by the original purchasers, which is the applicable federal statute of limitations. These shares have always been treated as issued and outstanding for financial reporting purposes.

As of December 29, 2012, there were approximately 501,000 shares issued under the ESPP in the past twelve months and held by the original purchasers of such shares which may be subject to the recessionary rights, because the redemption features are not within the Company’s control. Of these, approximately 218,400 shares were originally purchased for $12.06 per share and the remaining shares were originally purchased for $9.35 per share. If holders of all of these shares had rescinded their purchases, the Company would be required to make aggregate payments of up to approximately $5.7 million, which includes estimated statutory interest. However, the actual impact to the Company’s cash position may be lower depending on the number of holders who accept the rescission offer and tender their shares. These shares were not reclassified out of permanent stockholder’s equity due to its immateriality. The Company also may be subject to civil and other penalties by regulatory authorities as a result of the failure to register these shares. The Company does not believe that the failure to register the shares or the planned rescission offer will have a material impact on its consolidated financial statements.

On January 29, 2013, the SEC declared effective the Company’s registration statement on Form S-3 for the ESPP shares eligible for the rescission offer, and the Company will make a rescission offer to eligible plan participants who purchased shares in the past twelve months.

Note 20. Subsequent Events

Repurchase of 1% Senior Convertible Notes

On January 2, 2013, the Company repurchased an additional $50.0 million aggregate principal amount of its 1% Senior Convertible Notes for $50.0 million in cash.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Statements contained in this Quarterly Report on Form 10-Q which are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. A forward-looking statement may contain words such as “anticipates,” “believes,” “can,” “can impact,” “could,” “continue,” “estimates,” “expects,” “intends,” “may,” “ongoing,” “plans,” “potential,” “projects,” “should,” “will,” “will continue to be,” “would,” or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements include statements such as:

· our expectations regarding demand for our products, including continued trends in end-user behavior and technological advancements that may drive such demand;

· our belief that the Company is well positioned to benefit from certain industry trends and advancements, and our expectations of the role we will play in those advancements;

· our plans for growth and innovation opportunities;

· our plans to continue to operate as a Company comprised of a portfolio of businesses with a focus on optical and broadband innovation;

· financial projections and expectations, including profitability of certain business units, plans to reduce costs and improve efficiencies, the effects of seasonality on certain business units, continued reliance on key customers for a significant portion of our revenue, future sources of revenue, competition and pricing pressures, the future impact of certain accounting pronouncements and our estimation of the potential impact and materiality of litigation;

· our plans for continued development, use and protection of our intellectual property;

· our strategies for achieving our current business objectives, including related risks and uncertainties;

· our plans or expectations relating to investments, acquisitions, partnerships and other strategic opportunities;

· our strategies for reducing our dependence on sole suppliers or otherwise mitigating the risk of supply chain interruptions;

· our research and development plans; and

· our expectations related to our products, including costs associated with the development of new products, product yields, quality and other issues.

Management cautions that forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected in such forward-looking statements. These forward-looking statements are only predictions and are subject to risks and uncertainties including those set forth in Part II, Item 1A “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in other documents we file with the Securities and Exchange Commission. Moreover, neither we assume nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Forward-looking statements are made only as of the date of this Report and subsequent facts or circumstances may contradict, obviate, undermine or otherwise fail to support or substantiate such statements. We are under no duty to update any of the forward-looking statements after the date of this Form 10-Q to conform such statements to actual results or to changes in our expectations.

In addition, Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Annual Report on Form 10-K (except for Items 1, 1A, 6, 7, and 8) for the fiscal year ended June 30, 2012, and our Current Report on Form 8-K dated December 14, 2012.

OUR INDUSTRIES AND QUARTERLY DEVELOPMENTS

JDSU provides communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers. Our diverse technology portfolio also fights counterfeiting and enables commercial lasers for a range of applications.

To serve its markets, JDSU operates the following business segments:

·      Communications Test and Measurement (“CommTest”)

·      Communications and Commercial Optical Products (“CCOP”)

·      Optical Security and Performance Products (“OSP”)

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Communications Test and Measurement

CommTest provides an integrated portfolio of advanced field test and lab instruments, customer experience management (“CEM”) tools, and service-assurance solutions supported by monitoring software and optimization applications. This portfolio helps network operators and service providers effectively manage the continued growth of network traffic, devices and applications.

As a result of this continued and rapid growth, operators and providers are looking for new ways to drive business agility and generate revenue with innovative services, while continuing to focus on reducing operating costs and improving performance. To this end, CommTest is focused on providing world-class network and service enablement solutions, focusing investments on software and solutions offerings in high-growth markets while leveraging its instruments portfolio. These strategic investments are being placed globally to meet end-customer demand.

CommTest solutions address lab and production environments, field deployment, and service assurance for Ethernet and IP services over cable, wireless, and fixed/telecom networks. CommTest also provides protocol test solutions for the development and field deployment of storage and storage-network technologies. CommTest’s test instrument portfolio is one of the largest in the industry, with hundreds of thousands of units in active use by major network equipment manufacturers (“NEMs”), operators and services providers worldwide. CommTest is leveraging this installed base and knowledge of network management methods and procedures to develop advanced CEM and service-assurance solutions. Our CEM products let carriers remotely monitor performance and quality of service throughout the entire network. Remote monitoring decreases operating expenses, while early detection increases uptime, preserves revenue, and lets operators better monetize their networks. Service-assurance solutions address the entire scope of network monitoring from xDSL and Ethernet to mobile wireless, providing end-to-end visibility into customers’ quality of experience through continuous monitoring and correlation of service and network performance.

CommTest customers include fixed and wireless services providers, NEMs, government organizations and large corporate customers. These include major telecom, mobility and cable operators such as AT&T, Bell Canada, Bharti Airtel Limited, British Telecom, China Mobile, China Telecom, Chunghwa Telecom, Comcast, CSL, Deutsche Telecom, France Telecom, Telefónica, Telmex, TimeWarner Cable and Verizon. CommTest customers also include many of the NEMs served by our CCOP segment, including Alcatel-Lucent, Ciena, Cisco Systems, Fujitsu and Huawei. JDSU test and measurement customers also include chip and infrastructure vendors, storage-device manufacturers, storage-network and switch vendors, and deployed private enterprise customers. Storage-segment customers include Brocade, Cisco Systems and EMC.

Communications and Commercial Optical Products

CCOP is a leading provider of optical communications and commercial laser products and technologies and commercial laser components.

Serving telecommunications and enterprise data communications markets, CCOP products include components, modules, subsystems, and solutions for access (local), metro (intracity), long-haul (city-to-city and worldwide), and submarine (undersea) networks, as well as storage access networks (“SANs”), local area networks (“LANs”), and Ethernet wide-area networks (“WANs”). These products enable the transmission and transport of video, audio, and text data over high-capacity fiber-optic cables. CCOP maintains market-leading positions in the fastest-growing optical communications segments, including ROADMs and tunable XFPs and SFPs. CCOP’s growing portfolio of pluggable transceivers supports LAN/SAN needs and the cloud for customers building proprietary data center networks.

Gesture-recognition systems use both CCOP laser diodes and optical filters from the Company’s OSP business segment. These systems simplify the way people interact with technology by enabling the use of natural body gestures, like the wave of a hand, instead of using a device like a mouse or remote control. Emerging markets for gesture recognition include gaming, home entertainment and personal computing.

OEMs use CCOP lasers—fiber, diode, direct-diode, diode-pumped solid-state (“DPSS”), and gas—that offer low- to high-power output with ultraviolet (“UV”), visible, and IR wavelengths. This broad product portfolio addresses the needs of laser clients in applications such as micromachining, materials processing, bio-instrumentation, consumer electronics, graphics, and medical/dental. Core laser technologies include continuous-wave, q-switched, and mode-locked lasers addressing application needs from continuous-wave to megahertz repetition rates.

During the first quarter of fiscal 2013, CCOP terminated the CPV product line due to limited market opportunities.

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CCOP’s optical communications products customers include Adva, Alcatel-Lucent, Ciena, Cisco Systems, Ericsson, Fujitsu, Huawei, Infinera, Nokia Siemens Networks, and Tellabs. CCOP’s lasers customers include Amada, ASML, Beckman Coulter, Becton Dickinson, Disco, Electro Scientific Industries, and KLA-Tencor.

Optical Security and Performance Products

OSP designs, manufactures, and sells products targeting anti-counterfeiting, consumer electronics, government, healthcare, and other markets.

OSP’s security offerings for the currency market include Optically Variable Pigment (“OVP®”), Optically Variable Magnetic Pigment (“OVMP®”), and banknote thread substrates. OVP® enables a color-shifting effect used by banknote issuers and security printers worldwide for anti-counterfeiting applications on currency and other high-value documents and products. OVP® protects the currencies of more than 100 countries today. OSP also develops and delivers overt and covert anti-counterfeiting products targeting the pharmaceuticals and consumer-electronics markets.

Leveraging its expertise in spectral management and its unique high-precision coating capabilities, OSP improves the performance of a range of products in the consumer-electronics market. For example, gesture-recognition devices designed for the gaming market use OSP bandpass filters. OSP also manufactures components for phase and polarization control that enhance contrast in home-theater projection systems. OSP also provides glasses and color filter wheels for 3D cinema applications.

OSP value-added solutions meet the stringent requirements of commercial and government customers in aerospace and defense. In the aerospace industry, JDSU precision optical filters are a critical component in satellite and spacecraft power- and temperature-control systems. OSP also supplies anti-reflection coatings, beamsplitters, optical filters, laser optics, solar reflectors, and mirrors for a variety of defense and security applications including guidance systems, high-energy laser systems, battlefield eye protection, infrared night-vision systems, and secure optical communications.

OSP serves customers such as 3M, Barco, Kingston, Lockheed Martin, Northrup Grumman, Pan Pacific, Seiko Epson, and SICPA.

During the second quarter of fiscal 2013, JDSU completed the sale of the Hologram Business, which primarily addressed the transaction card market. JDSU has presented its current and historical Consolidated Statements of Operations and segment financials to reflect the sale of this business. The historical results of this business are reflected as discontinued operations in accordance with the authoritative guidance under US GAAP and are not included in quarterly JDSU results from continuing operations for all periods presented.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See “Note 2. Recently Issued Accounting Pronouncements” regarding the effect of certain recent accounting pronouncements on our consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

For a description of the critical accounting policies that affect our more significant judgments and estimates used in the preparation of our consolidated financial statements, refer to Item 7 on Management Discussion and Analysis in our Current Report on Form 8-K filed with the SEC on December 14, 2012.

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RESULTS OF OPERATIONS

The results of operations for the current period are not necessarily indicative of results to be expected for future periods. The following table summarizes selected Consolidated Statements of Operations items (in millions, except for percentages):

	Three Months Ended											Six Months Ended
	December 29,			December 31,						Percentage		December 29,			December 31,						Percentage
	2012			2011			Change			Change		2012			2011			Change			Change
Segment net revenue:
CommTest	$	195.4		$	195.9		$	(0.5	)			$	364.9		$	380.8		$	(15.9	)
CCOP	185.8			163.2			22.6					380.7			343.5			37.2
OSP	48.2			50.2			(2.0		)			104.7			100.8			3.9
Net revenue	$	429.4		$	409.3		$	20.1		4.9	%	$	850.3		$	825.1		$	25.2		3.1	%
Gross profit	$	189.0		$	174.5		$	14.5		8.3	%	$	361.6		$	356.1		$	5.5		1.5	%
Gross margins	44.0		%	42.6		%						42.5		%	43.2		%
Research and development	63.5			58.9			4.6			7.8	%	125.1			118.2			6.9			5.8	%
Percentage of net revenue	14.8		%	14.4		%						14.7		%	14.3		%
Selling, general and administrative	105.4			105.3			0.1			0.1	%	210.1			215.6			(5.5		)	(2.6	)%
Percentage of net revenue	24.5		%	25.7		%						24.7		%	26.1		%
Amortization of acquired technologies	14.6			15.4			(0.8		)	(5.2	)%	31.7			29.7			2.0			6.7	%
Percentage of net revenue	3.4		%	3.8		%						3.7		%	3.6		%
Amortization of other intangibles	2.2			5.4			(3.2		)	(59.3	)%	5.7			10.5			(4.8		)	(45.7	)%
Percentage of net revenue	0.5		%	1.3		%						0.7		%	1.3		%
Restructuring and related charges	3.0			4.0			(1.0		)	(25.0	)%	5.7			5.5			0.2			3.6	%
Percentage of net revenue	0.7		%	1.0		%						0.7		%	0.7		%
Income (loss) from discontinued operations, net of tax	0.8			(2.5		)	3.3			(132.0	)%	(1.0		)	(4.7		)	3.7			(78.7	)%
Percentage of net revenue	0.2		%	0.6		%						0.1		%	0.6		%

Net Revenue

Net revenue during the three months ended December 29, 2012 increased $20.1 million, or 4.9%, to $429.4 million from $409.3 million during the same period a year ago, primarily due to (i) the fact that the prior period reflected a reduction in CCOP net revenue of approximately $15 million due to the regional flooding in Thailand which temporarily suspended operations at one of our primary contract manufacturers, Fabrinet, and (ii) an incremental increase in volume and demand in our CCOP segment in the current period. Net revenue during the six months ended December 29, 2012 increased $25.2 million, or 3.1%, to $850.3 million from $825.1 million during the same period a year ago, primarily due to the aforementioned factors and, to a lesser degree, higher net revenue in our OSP segment, partially offset by a decline in CommTest net revenue.

CommTest net revenue decreased by $0.5 million, or 0.3%, and $15.9 million, or 4.2%, during the three and six months ended December 29, 2012, respectively. During the three months ended December 29, 2012, net revenue decreased slightly primarily due to the wind-down of lower margin product lines which was partially offset by growth in our mobility and broadband and networking product lines and net revenue from the acquisition of Dyaptive. During the six months ended December 29, 2012 net revenue decreased in our instruments product portfolio, particularly in our cable and access product lines, primarily due to procurement delays at key customers and uncertainty in the macro-economic environment that reduced service providers’ spending, particularly in Europe and North America. This decrease was partially offset by growth in our mobility and broadband and networking product lines and net revenue from the acquisition of Dyaptive.

CCOP net revenue increased by $22.6 million, or 13.8%, and $37.2 million, or 10.8%, during the three and six months ended December 29, 2012, respectively, compared to the same periods a year ago, primarily due to the adverse impact of the regional flooding in Thailand referenced above in the prior periods coupled with higher current period revenues due to the ramp up of new

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products in our Modulator, Pluggables and Tunables product lines compared to the same periods a year ago. These increases were partially offset by a decline in net revenue of our ROADMs product line due to softness in industry demand and the timing of key customer programs.

OSP net revenue decreased by $2.0 million, or 4.0%, and increased by $3.9 million, or 3.9%, during the three and six months ended December 29, 2012, respectively. The decrease in net revenue during the three months ended December 29, 2012, was primarily due to declines in aerospace and defense product lines arising from reductions in government spending, partially offset by an increase in demand in consumer and industrial product lines. The increase in net revenue during the six months ended December 29, 2012 was primarily due to higher demand in currency products, partially offset by declines in aerospace and defense products.

Going forward, we expect to continue to encounter a number of industry and market risks and uncertainties that may limit our visibility, and consequently, our ability to predict future revenue, profitability and general financial performance, and that could create quarter over quarter variability in our financial measures. For example, continued economic issues in Europe have led to uncertainty of demand in our CommTest and optical communications product portfolios and we cannot predict when or to what extent this uncertainty will be resolved. Our revenues, profitability, and general financial performance may also be affected by: (a) strong pricing pressures, particularly within our optical communications markets, due to, among other things, a highly concentrated customer base, increasing competition, particularly from Asia-based competitors, and a general commoditization trend for certain products; (b) high product mix variability, particularly in our CCOP and CommTest markets, which affects revenue and gross profit; (c) continuing service provider seasonality, which causes demand, revenue and profitability volatility at each level of the communications industry; (d) the current trend of communication industry consolidations, which is expected to continue, that directly affects our CCOP and CommTest customer bases and adds additional risk and uncertainty to our financial and business predictability; and (e) activities related to our program of contract manufacturing transitions in our CommTest segment that present additional supply chain and product delivery disruption risks, yield and quality concerns and risk of increased cost. These risks limit our ability to predict longer-term revenue, profitability and general financial performance.

We operate primarily in three geographic regions: Americas, EMEA and Asia-Pacific. The following table presents net revenue by geographic regions (in millions):

	Three Months Ended								Six Months Ended
	December 29,				December 31,				December 29,				December 31,
	2012				2011				2012				2011
Net revenue:
Americas	$	214.1	49.9	%	$	206.3	50.4	%	$	423.9	49.9	%	$	414.0	50.2	%
EMEA	102.3		23.8		100.0		24.4		199.3		23.4		200.9		24.3
Asia-Pacific	113.0		26.3		103.0		25.2		227.1		26.7		210.2		25.5
Total net revenue	$	429.4	100.0	%	$	409.3	100.0	%	$	850.3	100.0	%	$	825.1	100.0	%

Net revenue is assigned to geographic regions based on customer shipment locations. Net revenue from customers in the Americas during the three months ended December 29, 2012 and December 31, 2011 included net revenue from the United States of $161.0 million and $159.3 million, respectively. Net revenue from customers in the Americas during the six months ended December 29, 2012 and December 31, 2011 included net revenue from the United States of $324.9 million and $328.8 million, respectively.

Net revenue from customers outside the Americas during the three months ended December 29, 2012 and December 31, 2011 represented 50.1% and 49.6% of net revenue, respectively. Net revenue from customers outside the Americas during the six months ended December 29, 2012 and December 31, 2011, represented 50.1% and 49.8% of net revenue, respectively.We expect revenue from customers outside of North America to continue to be an important part of our overall net revenue and an increasing focus for net revenue growth opportunities.

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Gross Margin

Gross margin during the three months ended December 29, 2012 increased 1.4 percentage points to 44.0% from 42.6% compared to the same period a year ago. The increase in gross margin was primarily due to savings obtained through (i) targeted restructuring activities to consolidate and rationalize business functions to achieve cost efficiencies in our CommTest segment, and (ii) savings associated with our CommTest segment’s recent outsourcing of its repair operations, and its ongoing efforts to outsource manufacturing and reduce the number of its contract manufacturing partners. Additionally, product mix within our CommTest segment improved as net revenue generated from higher margin products, particularly from our mobility and broadband and networking product lines, increased compared to the same period a year ago. This was partially offset as our CCOP segment, which yields lower gross margin generally than our other two segments, generated $22.6 million more in net revenue and represented a higher percentage of consolidated net revenue in the current period compared to the same period a year ago.

Gross margin during the six months ended December 29, 2012 decreased 0.7 percentage points to 42.5% from 43.2% compared to the same period a year ago primarily due to (i) CCOP’s higher percentage of consolidated net revenue in the current period, which yields lower gross margin as referenced above and (ii) a $0.8 million charge related to the write-off of inventory and a $2.6 million charge for accelerated amortization of acquired technologies related to the plan to terminate the CPV product line within CCOP. This was partially offset by (i) the cost efficiencies and savings referenced above, (ii) improved product mix and (iii) a favorable $1.9 million out-of-period adjustment recorded during the three months ended September 29, 2012, all within our CommTest segment.

As discussed in more detail under “Net Revenue” above, we sell products in certain markets that are consolidating, undergoing product, architectural and business model transitions, have high customer concentrations, are highly competitive (increasingly due to Asia-Pacific-based competition), are price sensitive and are affected by customer seasonal and mix variant buying patterns. We expect these factors to continue to result in variability of our gross margin.

Research and Development (“R&D”)

R&D expense during the three months ended December 29, 2012 increased $4.6 million, or 7.8%, to $63.5 million from $58.9 million compared to the same period a year ago. As a percentage of revenue, R&D expense increased to 14.8% compared to 14.4% in the same period a year ago, as our R&D investment increases were proportionately higher than the 4.9% period-to-period increase in revenue.

R&D expense during the six months ended December 29, 2012 increased $6.9 million, or 5.8%, to $125.1 million from $118.2 million compared to the same period a year ago. As a percentage of revenue, R&D expense increased to 14.7% compared to 14.3% in the same period a year ago, as our R&D investment increases were proportionately higher than the period-to-period increase in revenue.

For both the three and six months ended December 29, 2012, the dollar and percentage increases in R&D expense were primarily driven by higher variable incentive pay as a result of improved operating performance, increased investments in new network enablement product platforms for the next generations of communication networks and incremental on-going operating expenses from the acquisitions of Dyaptive and GenComm during the three months ended March 31, 2012 and September 29, 2012, respectively. The increase was partially offset by reductions in R&D expense primarily related to the exit from certain sites in connection with restructuring activities in our CommTest segment.

We believe that continuing our investments in R&D is critical to attaining our strategic objectives, and plan to continue to invest in R&D and new products that will further differentiate us in the marketplace.

Selling, General and Administrative (“SG&A”)

SG&A expense during the three months ended December 29, 2012 increased $0.1 million, or 0.1%, to $105.4 million from $105.3 million compared to the same period a year ago. As a percentage of revenue, SG&A expense decreased to 24.5% compared to 25.7% in the same period a year ago as revenue increased by 4.9%. The dollar change remained relatively flat for the current period, as higher variable incentive pay as a result of improved operating performance and incremental ongoing operating expenses from our Dyaptive and GenComm acquisitions were offset by ongoing expense reduction efforts and by a one-time benefit from a litigation settlement related to an insurance claim during the three months ended December 29, 2012.

SG&A expense during the six months ended December 29, 2012 decreased $5.5 million, or 2.6%, to $210.1 million from $215.6 million compared to the same period a year ago. As a percentage of revenue, SG&A expense decreased to 24.7% compared to 26.1% in the same period a year ago due to the dollar decrease and to a 3.1% increase in revenue. The dollar decrease in SG&A expense was primarily due to reductions in legal expenses, including charges of $7.6 million recorded during the six months ended December 31, 2011 related to a litigation settlement, and due to reductions in various SG&A costs such as travel and acquisition-related activities. The decrease was

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partially offset by an increase in variable incentive pay as a result of improved operating performance.

We intend to continue to focus on reducing our SG&A expenses as a percentage of revenue. However, we have in the recent past experienced, and may continue to experience in the future, certain non-core expenses, such as mergers and acquisitions-relatedexpenses and litigation expenses which could increase our SG&A expenses and potentially impact our profitability expectations in any particular quarter.

Restructuring and Related Charges

We continue to seek to reduce costs through targeted restructuring efforts intended to consolidate and rationalize business functions and related locations based on core competencies and cost efficiencies, to align the business in response to market conditions. We estimate annualized cost savings of approximately $23.1 million excluding any one-time charge as a result of the restructuring activities initiated in the past year. See “Note 11. Restructuring and Related Charges” for more detail.

During the three and six months ended December 29, 2012, we incurred restructuring and related charges of $3.0 million and $5.7 million, respectively. During the three and six months ended December 31, 2011, we incurred restructuring and related charges of $4.0 million and $5.5 million, respectively.

During the second quarter of fiscal 2013, we incurred restructuring and related charges of $3.0 million. The charges are a combination of new and previously announced restructuring plans and are primarily the result of the following:

·During the second quarter of fiscal 2013, our Company’s management (“Management”) approved a plan to align our investment strategy in CommTest with customer spending priorities in high growth product lines such as wireless network assurance and eliminate positions in research and development, sales and operations organization that supported low growth product lines. As a result, a restructuring charge of $1.8 million was recorded for severance and employee benefits for 43 employees primarily in research and development and selling, general and administrative functions. As of December 29, 2012, 38 employees have been terminated. The employees being affected are located in North America and Asia. Payments related to remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2013.

·We also incurred restructuring and related charges from previously announced restructuring plans in the second quarter of fiscal 2013 related to the following: (i) $0.6 million of additional severance and employee benefits arising primarily to adjust the accrual for the CommTest Operation and Repair Outsourcing Restructuring Plan announced in the fourth quarter of fiscal 2012 (ii) $0.4 million of additional severance and employee benefits arising primarily to adjust the accrual for the CommTest Manufacturing Support Consolidation Plan announced in the third quarter of fiscal 2012.

During the second quarter of fiscal 2012, we incurred restructuring and related charges of $4.0 million. The charges are a combination of new and previously announced restructuring plans and are primarily the result of the following:

·We had approved a plan to re-organize the CEM business of CommTest to improve business efficiencies with greater focus on the mobility and video software test business, as well as the CommTest global operations to move to a full outsourcing model with initiative to lower costs. As a result, a restructuring charge of $1.8 million was recorded for severance and employee benefits for approximately 57 employees in manufacturing, research and development and selling, general and administrative functions. As of December 29, 2012, all employees have been terminated. The employees being affected were located in North America, Europe and Asia. Payments related to remaining severance and benefits accrual expected to be paid by the end of third quarter of fiscal 2013.

·We partially exited the workspace facility in Germantown, Maryland, primarily used by CommTest in the second quarter of fiscal 2012. We had accrued $0.6 million exit costs in accordance with authoritative guidance related to lease and contract terminations. Payments related to lease costs are expected to be paid by the end of second quarter of fiscal 2019.

·In the second quarter of fiscal 2012, we exited all the facilities under the CommTest Market Rebalancing Restructuring Plan approved by the Management in the third quarter of fiscal 2011. We had accrued $0.9 million exit costs in accordance with authoritative guidance related to lease and contract terminations. Payments related to lease costs are expected to be paid by the end of second quarter of fiscal 2016.

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During the six months ended December 29, 2012, we recorded $5.7 million in restructuring and related charges. The charges are a combination of new and previously announced restructuring plans and are primarily the result of the following:

·$2.4 million for severance and benefits for the CommTest Wireless Business Plan announced in the current quarter and the CCOP CPV plan announced during the first quarter of fiscal 2013 and $2.1 million of additional severance and employee benefits arising primarily to adjust the accrual for the CommTest Operation and Repair Outsourcing Restructuring and the CommTest Manufacturing Support Consolidation plans announced in the fourth and third quarters of fiscal 2012, respectively.

·$0.7 million for transfer costs and lease construction costs in CommTest which was the result of the repair outsourcing initiative announced by Management during the fourth quarter of fiscal 2012.

·$0.5 million for the exit of two leased sites in CommTest for the plan announced during the fourth quarter of fiscal 2012.

During the six months ended December 31, 2011, we recorded $5.5 million in restructuring and related charges. The charges are a combination of new and previously announced restructuring plans and are primarily the result of the following:

·$2.5 million consisting of $3.4 million severance and benefits primarily for the CommTest Solutions Business Restructuring Plan announced in the second quarter of fiscal 2012, CCOP segment restructuring plan announced in the first quarter of fiscal 2012, and continued implementation of the CommTest Germany Restructuring Plan, offset by a benefit of $0.9 million arising primarily to adjust the accrual for restructuring plans announced in the third and fourth quarters of fiscal 2011 in the CommTest segment that did not materialize due to Management’s decision to re-locate employees and realize co-location efficiencies.

·$1.4 million for manufacturing transfer costs in the CommTest and OSP segment which were the result of the transfer of certain production processes into existing sites in the U.S. or to contract manufacturers.

·$1.7 million lease exit costs from exiting three of the facilities under the CommTest Market Rebalancing Plan announced in the third quarter of fiscal 2011 and the CommTest workspace in Germantown, Maryland.

Our restructuring and other lease exit cost obligations are net of sublease income or lease settlement estimates of approximately $3.8 million. Our ability to generate sublease income, as well as our ability to terminate lease obligations and recognize the anticipated related savings, is highly dependent upon the economic conditions, particularly commercial real estate market conditions in certain geographies, at the time we negotiate the lease termination and sublease arrangements with third parties as well as the performances by such third parties of their respective obligations. While the amount we have accrued represents the best estimate of the remaining obligations we expect to incur in connection with these plans, estimates are subject to change. Routine adjustments are required and may be required in the future as conditions and facts change through the implementation period. If adverse macroeconomic conditions continue, particularly as they pertain to the commercial real estate market, or if, for any reason, tenants under subleases fail to perform their obligations, we may be required to reduce estimated future sublease income and adjust the estimated amounts of future settlement agreements, and accordingly, increase estimated costs to exit certain facilities. Amounts related to the lease expense, net of anticipated sublease proceeds, will be paid over the respective lease terms through fiscal 2019.

Interest and Other Income (Expense), Net

During the three months ended December 29, 2012, interest and other income (expense), net decreased $3.4 million to an expense of $2.4 million from income of $1.0 million during the same period a year ago primarily due to loss realized, in accordance with the authoritative guidance, in connection with repurchase of $50.0 million aggregate principal amount of our 1% Senior Convertible Notes at prices below par in the current period.

During the six months ended December 29, 2012, interest and other income (expense), net decreased $4.8 million to an expense of $2.8 million from income of $2.0 million during the same period a year ago primarily due to losses realized, in accordance with the authoritative guidance, in connection with repurchases of $100.0 million aggregate principal amount of our 1% Senior Convertible Notes at prices below par in the current period.

Interest Expense

During the three months ended December 29, 2012, interest expense decreased $1.5 million to $5.1 million from $6.6 million during the same period a year ago. During the six months ended December 29, 2012, interest expense decreased $2.0 million to $11.2

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million from $13.2 million during the same period a year ago. The decreases in interest expense for both the three and six month periods were primarily due to repurchases of $114.0 million of the aggregate principal amount of our 1% Senior Convertible Notes subsequent to the three months ended December 31, 2011.

Provision for Income Tax

We recorded an income tax expense of $4.1 million and $7.5 million for the three and six months endedDecember 29, 2012, respectively, and an income tax expense of $3.0 million and $6.4 million for the three and six months ended December 31, 2011,respectively, in all cases primarily relating to income tax in certain foreign and state jurisdictions based on our forecasted pre-tax income for the year in those locations.

The income tax expense recorded differs from the expected tax expense or benefit that would be calculated by applying the federal statutory rate to our income or loss before income taxes primarily due to the increases in valuation allowance for deferred tax assets attributable to our domestic and foreign losses from continuing operations.

As of December 29, 2012 and June 30, 2012, our unrecognized tax benefits totaled $62.6 million and $61.3 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. We had $24.5 million accrued for the payment of interest and penalties at December 29, 2012.

Discontinued Operations

On September 18, 2012, we entered into a definitive agreement to sell the Hologram Business within the previous AOT reportable segment to OpSec Security Inc. for $11.5 million in cash, subject to an earn-out clause. Based on an assessment to be performed following the one-year period subsequent to the closing date (the “earn-out period”), the buyer may be required to pay up to a maximum additional amount of $4.0 million contingent on the Hologram Business exceeding a pre-determined revenue target during the earn-out period. No amount related to the earn-out clause will be recognized unless it is realized or realizable, in accordance with authoritative guidance. If any amount related to the earn-out clause meets the recognition criteria it will be included as a component of discontinued operations in the Consolidated Statements of Operations. On October 12, 2012, the transaction closed and we received gross proceeds of $11.5 million from the sale. We recorded a gain of $0.6 million in connection with the sale during the three and six months ended December 29, 2012.

Net revenue of the Hologram Business for the three and six months ended December 29, 2012 was $0.3 million and $5.2 million, respectively. Net revenue of the Hologram Business for the three and six months ended December 31, 2011 was $3.5 million and $8.5 million, respectively. Net income (loss) for the three and six months ended December 29, 2012 was net income of $0.8 million and net loss $1.0 million, respectively. Net loss for the three and six months ended December 31, 2011 was $2.5 million and $4.7 million, respectively. There was no tax effect associated with the discontinued operation for any periods presented.

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Operating Segment Information (in millions)

	Three Months Ended											Six Months Ended
	December 29,			December 31,						Percentage		December 29,			December 31,						Percentage
	2012			2011			Change			Change		2012			2011			Change			Change
CommTest
Net revenue	$	195.4		$	195.9		$	(0.5	)	(0.3	)%	$	364.9		$	380.8		$	(15.9	)	(4.2	)%
Operating income	35.3			28.0			7.3			26.1	%	52.1			52.1			—			—	%
Operating margin	18.1		%	14.3		%						14.3		%	13.7		%
CCOP
Net revenue	185.8			163.2			22.6			13.8	%	380.7			343.5			37.2			10.8	%
Operating income	21.2			16.6			4.6			27.7	%	45.0			42.2			2.8			6.6	%
Operating margin	11.4		%	10.2		%						11.8		%	12.3		%
OSP
Net revenue	48.2			50.2			(2.0		)	(4.0	)%	104.7			100.8			3.9			3.9	%
Operating income	16.2			16.8			(0.6		)	(3.6	)%	37.4			34.5			2.9			8.4	%
Operating margin	33.6		%	33.5		%						35.7		%	34.2		%

CommTest

CommTest operating margin during the three months ended December 29, 2012 increased 3.8 percentage points to 18.1% from 14.3% compared to the same period a year ago. The increase was primarily due to gross margin improvements gained through (i) targeted restructuring activities to consolidate and rationalize business functions to achieve cost efficiencies, (ii) savings associated with CommTest’s recent outsourcing of its repair operations, and its ongoing efforts to outsource manufacturing and reduce the number of its contract manufacturing partners, (iii) improved product mix, and (iv) and reductions in various other SG&A expenses compared to the same period a year ago. This was partially offset by (i) an increase in R&D expense primarily related to an increase in variable incentive pay and increased investment in new product platforms and (ii) a slight decrease in net revenue.

CommTest operating margin during the six months ended December 29, 2012 increased 0.6 percentage points to 14.3% from 13.7% compared to the same period a year ago. The increase was primarily due to (i) the cost efficiencies and savings referenced above, (ii) a favorable $1.9 million out-of-period adjustment recorded during the three months ended September 29, 2012 and (iii) various reductions in SG&A expense, such as reduced information technology expenses due to the completion of infrastructure projects in fiscal 2012, reduced sales commissions as a result of decreased net revenue and reductions in travel expense. This was partially offset by (i) an increase in R&D expense primarily related to an increase in variable incentive pay and increased investment in new product platforms and (ii) a 4.2% reduction in net revenue in the current period.

CCOP

CCOP operating margin during the three months ended December 29, 2012 increased 1.2 percentage points to 11.4% from 10.2% compared to the same period a year ago due primarily to a $22.6 million increase in net revenue as noted above, partially offset by increased R&D expense driven by higher headcount with higher variable incentive pay.

CCOP operating margin during the six months ended December 29, 2012 decreased 0.5 percentage points to 11.8% from 12.3% compared to the same period a year ago. The decrease was primarily due to a less favorable product mix within our optical communications product line in addition to an increase in R&D expense, driven by higher headcount with higher variable incentive pay. This decrease was partially offset by a substantial increase in net revenue as noted above.

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OSP

OSP operating margin during the three months ended December 29, 2012 increased 0.1 percentage points to 33.6% from 33.5% compared to the same period a year ago. The increase was driven by a reduction in SG&A expense which included a one-time benefit from a litigation settlement related to an insurance claim that occurred during the three months ended December 29, 2012. This increase was offset by a decline in gross margin as a result of unfavorable manufacturing variances and under-utilization of factory overhead in addition to an increase in variable incentive pay due to improved operating performance.

OSP operating margin during the six months ended December 29, 2012 increased 1.5 percentage points to 35.7% from 34.2% compared to the same period a year ago. The increase was driven by a reduction in SG&A expense which included a one-time benefit from a litigation settlement related to an insurance claim that occurred during the three months ended December 29, 2012 coupled with an increase in net revenue due to higher demand in currency products which was partially offset by declines in aerospace and defense products.

Liquidity and Capital Resources

Our cash investments are made in accordance with an investment policy approved by the Audit Committee of our Board of Directors. In general, our investment policy requires that securities purchased be rated A-1/P-1, A/A2 or better. In November, 2012, the policy was amended to allow an allocation to securities rated A-2/P-2, BBB/Baa2 or better, with such allocation not to exceed 10% of any investment portfolio. Securities that are downgraded subsequent to purchase are evaluated and may be sold or held at Management’s discretion. No security may have an effective maturity that exceeds 37 months, and the average duration of our holdings may not exceed 18 months. At any time, no more than 5% of the investment portfolio may be concentrated in a single issuer other than the U.S. or sovereign governments or agencies. Our investments in debt securities and marketable equity securities are primarily classified as available-for-sale investments or trading assets and are recorded at fair value. The cost of securities sold is based on the specific identification method. Unrealized gains and losses on available-for-sale investments are reported as a separate component of stockholders’ equity. We did not hold any investments in auction rate securities, mortgage backed securities, collateralized debt obligations, or variable rate demand notes at December 29, 2012 and virtually all debt securities held were of investment grade (at least BBB-/Baa3). As of December 29, 2012, approximately 83.9% of our cash and cash equivalents, short-term investments, and restricted cash were held in the U.S.

As of December 29, 2012, the majority of our cash investments have maturities of 90 days or less and are of high credit quality. Although we intend to hold these investments to maturity, in the event that we are required to sell any of these securities under adverse market conditions, losses could be recognized on such sales. During the six months ended December 29, 2012, we have not realized material investment losses but can provide no assurance that the value or the liquidity of our other investments will not be impacted by adverse conditions in the financial markets. In addition, we maintain cash balances in operating accounts that are with third party financial institutions. These balances in the U.S. may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. While we monitor the cash balances in our operating accounts and adjust the cash balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail.

As of December 29, 2012, we had a combined balance of cash and cash equivalents, short-term investments and restricted cash of $740.2 million, a decrease of $12.5 million from June 30, 2012. Cash and cash equivalents decreased by $95.6 million in the six months ended December 29, 2012, primarily due to $85.4 million used for financing activities, net cash outflows of $83.6 million used for the purchase of available-for-sale investments and $33.3 million used for the purchases of property, plant and equipment, offset by cash generated by operating activities of $102.5 million.

During the six months ended December 29, 2012, cash provided by operating activities was $102.5 million, resulting from our net income adjusted for non-cash items such as depreciation, amortization and stock-based compensation of $101.8 million and changes in operating assets and liabilities that generated $0.7 million related primarily to a decrease in accounts receivable of $29.4 million driven by our collection efforts and an increase in accounts payable of $3.6 million, offset by an increase in other current and non-current assets of $13.8 million, a decrease in deferred revenue of $12.5 million and a decrease in accrued expenses and other current and non-current liabilities of $5.0 million.

During the six months ended December 31, 2011, cash provided by operating activities was $68.6 million, resulting from our net income adjusted for non-cash items such as depreciation, amortization and stock-based compensation of $98.8 million, and changes in operating assets and liabilities that used $30.2 million related primarily to a decrease in accounts payable of $21.8 million, an increase in inventories of $19.6 million, a decrease in accrued payroll and related expenses of $13.0 million, a decrease in deferred revenue of $9.6 million, and an increase in other current and non-current assets of $6.7 million, offset by a decrease in accounts receivable of $38.8 million primarily driven by seasonality of our collection activities.

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During the six months ended December 29, 2012 cash used for investing activities was $115.8 million, primarily related to net cash outflows used for the purchase of available-for-sale investments of $83.6 million, cash used for the purchase of property, plant and equipment of $33.3 million and cash used for the acquisition of business of $11.1 million, offset by net proceeds from sale of the Hologram Business of $11.2 million. Since we continue to invest in new technology, laboratory equipment, and manufacturing capacity to support revenue growth opportunities, investments were made during the six months ended December 29, 2012 to increase manufacturing capacity in Asia and the U.S., to set up and improve facilities, and to upgrade information technology systems.

During the six months ended December 31, 2011 cash used for investing activities was $50.3 million, primarily related to cash used for the purchase of property, plant and equipment of $40.8 million, net cash outflows used for the purchase of available-for-sale investments of $9.7 million, and cash used for the acquisition of QuantaSol of $3.7 million, offset by proceeds from the sale of assets of $2.1 million primarily from the Eningen transaction.

During the six months ended December 29, 2012, cash used for financing activities was $85.4 million, primarily related to the repurchase of our 1% Senior Convertible Notes in the amount of $96.5 million, offset by proceeds from the exercise of stock options and the issuance of common stock under our employee stock purchase plan of $11.5 million.

During the six months ended December 31, 2011, cash provided by financing activities was $6.3 million, related to proceeds from the exercise of stock options and the issuance of common stock under our employee stock purchase plan of $7.0 million and proceeds from financing obligation of $6.9 million related to the Eningen transaction, offset by payments made on financing obligations of $7.6 million.

We believe that our existing cash balances, investments and availability under our revolving credit facility will be sufficient to meet our liquidity and capital spending requirements, including the repayment of the principal balance of $211.0 million outstanding under the 1% Senior Convertible Notes, which is expected to be paid no later than May 2013 based on the put and call provisions of the 1% Senior Convertible Notes. However, there are a number of factors that could positively or negatively impact our liquidity position, including:

·global economic conditions which affect demand for our products and services and impact the financial stability of our suppliers and customers;

·changes in accounts receivable, inventory or other operating assets and liabilities which affect our working capital;

·increase in capital expenditure to support the revenue growth opportunity of our business;

·the tendency of customers to delay payments or to negotiate favorable payment term to manage their own liquidity positions;

·timing of payments to our suppliers;

·factoring or sale of accounts receivable;

·volatility in fixed income, credit, and foreign exchange markets which impact the liquidity and valuation of our investment portfolios;

·possible investments or acquisitions of complementary businesses, products or technologies;

·issuance or repurchase of debt or equity securities;

·potential funding of pension liabilities either voluntarily or as required by law or regulation, and

·compliance with covenants and other terms and conditions related to our financing arrangements.

Contractual Obligations

During the second quarter of fiscal 2013, there were no material changes to the contractual obligations previously disclosed in our Current Report on Form 8-K for dated December 14, 2012, except for those occurring in the ordinary course of our business.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, other than the guarantees discussed in “Note 16. Commitments and Contingencies.”

Employee Stock-based Benefit Plans

Our stock-based benefit plans are a broad-based, long-term retention program that is intended to attract and retain employees and align stockholder and employee interests. See “Note 13. Stock-Based Compensation” for more detail.

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Pension and Other Post-retirement Benefits

We sponsor pension plans for certain past and present employees in the U.K. and Germany. On November 30, 2012, we terminated the defined benefit pension plan in South Korea. JDSU also is responsible for the non-pension post-retirement benefit obligation of a previously acquired subsidiary. Most of these plans have been closed to new participants and no additional service costs are being accrued, except for the plans assumed in connection with acquisitions during fiscal 2010 and the first quarter of fiscal 2013. The U.K. plan is partially funded; and the German plans, which were established as “pay-as-you-go” plans, are unfunded. The authoritative guidance requires the recognition of the funded status of the pension plans and non-pension post-retirement benefit plans (retirement-related benefit plans) as an asset or a liability in the Consolidated Balance Sheet. The authoritative guidance also requires the recognition of changes in that funded status in the year in which they occur through the gains and (losses) not affecting retained earnings, net of tax, and the recognition of previously unrecognized gains/(losses), prior service costs/(credits) and transition assets as a component of Accumulated gains and (losses) not affecting retained earnings. The funded status of a retirement plan is the difference between the projected benefit obligation and the fair value of its plan assets. The projected benefit obligation is the actuarial present value of all benefits attributed by the plan’s benefit formula to employee service. At December 29, 2012, our pension plans were under funded by $93.3 million since the projected benefit obligation exceeded the fair value of its plan assets. Similarly, we had a liability of $1.1 million related to our non-pension post-retirement benefit plan. Pension plan assets are professionally managed and we monitor the performance of our investment managers. As of December 29, 2012, the value of plan assets had increased approximately 6.2% since June 30, 2012, our most recent fiscal year end.

A key actuarial assumption is the discount rate. Changes in the discount rate impact the interest cost component of the net periodic benefit cost calculation and, due to the fact that the projected benefit obligation (“PBO”) is calculated on a net present value basis, changes in the discount rate will also impact the current PBO. Decreases in the discount rate will generally increase pre-tax cost, recognized expense and the PBO. Increases in the discount rate tend to have the opposite effect. We estimate a 50 basis point decrease or increase in the discount rate would cause a corresponding increase or decrease, respectively, in the PBO of approximately $7.0 million based upon June 30, 2012 data.

In estimating the expected return on plan assets, we consider historical returns on plan assets, adjusted for forward-looking considerations, inflation assumptions and the impact of active management of the plan’s invested assets. While it is not possible to accurately predict future rate movements, we believe our current assumptions are appropriate. Please refer to “Note 14. Employee Defined Benefit Plans” for further discussion.

Item 3. Quantitative and Qualitative Disclosure About Market Risks

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Derivatives and other financial instruments are used to mitigate exposures subject to market risk. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

Foreign Exchange Risk

We utilize foreign exchange forward contracts and other instruments, including option contracts, to hedge foreign currency risk associated with foreign currency denominated assets and liabilities, primarily certain short-term intercompany receivables and payables. Our foreign exchange forward contracts and other instruments are accounted for as derivatives whereby the fair value of the contracts are reflected as other current assets or other current liabilities and the associated gains and losses are reflected in Interest and other income (loss) in the Consolidated Statements of Operations. Our hedging programs reduce, but do not eliminate, the impact of currency exchange rate movements. The gains and losses on those derivatives are expected to be offset by re-measurement gains and losses on the foreign currency denominated assets and liabilities.

Forward contracts, most with a term of less than 120 days, were transacted near month end and therefore, the fair value of the contracts is approximately zero. The change in the fair value of these foreign currencyforward contracts is recorded as income or loss in the Company’s Consolidated Statements of Operations as a component of Interest and other income (expense), net.

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The following table provides information about our foreign currency forward contracts outstanding as of December 29, 2012.

	Contract		Contract
	Amount		Amount
(in millions)	(Local Currency)		(USD)
Canadian Dollar (contracts to buy CAD / sell USD)	CAD	47.5	$	47.7
Chinese Renminbi (contracts to buy CNY / sell USD)	CNY	238.7	37.9
British Pound (contracts to buy GBP / sell USD)	GBP	0.5	0.8
Euro (contracts to buy EUR / sell USD)	EUR	3.8	5.0
Singapore Dollar (contracts to sell SGD / buy USD)	SGD	32.3	26.4
Mexican Peso (contracts to buy MXN / sell USD)	MXN	96.2	7.3
Australian Dollar (contracts to sell AUD / buy USD)	AUD	9.7	9.9
Brazilian Real (contracts to sell BRL / buy USD)	BRL	2.2	1.1
Japanese Yen (contracts to sell JPY / buy USD)	JPY	141.7	1.7
Total USD notional amount of outstanding foreign exchange contracts			$	137.8

The counterparties to these hedging transactions are creditworthy multinational financial institutions. We actively manage these counterparty exposures by seeking to diversify our hedge positions across multiple counterparties to avoid concentration of risk and by minimizing exposures to less creditworthy counterparties. Nevertheless, under current market conditions, failure of one or more of these financial institutions could result in incurred losses.

Notwithstanding our efforts to mitigate some foreign exchange risks, we do not hedge all of our foreign currency exposures, and there can be no assurances that our mitigating activities related to the exposures that we do hedge will adequately protect us against the risks associated with foreign currency fluctuations.

Investments

We maintain an investment portfolio in a variety of financial instruments, including, but not limited to, U.S. government and agency bonds, corporate obligations, money market funds, asset-backed securities, and other investment-grade securities. The majority of these investments pay a fixed rate of interest. The securities in the investment portfolio are subject to market price risk due to changes in interest rates, perceived issuer creditworthiness, marketability, and other factors. These investments are generally classified as available-for-sale and, consequently, are recorded on our Consolidated Balance Sheets at fair value with unrealized gains or losses reported as a separate component of Stockholders’ equity. We did not hold any investments in auction rate securities, mortgage backed securities, collateralized demand obligations, or variable rate demand notes at December 29, 2012.

Investments in both fixed-rate and floating-rate interest earning instruments carry a degree of interest rate risk. The fair market values of our fixed-rate securities decline if interest rates rise, while floating-rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may be less than expectations because of changes in interest rates or we may suffer losses in principal if forced to sell securities that have experienced a decline in market value because of changes in interest rates.

Debt

The fair market value of the 1% Senior Convertible Notes is subject to interest rate and market price risk due to the convertible feature of the notes and other factors. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. The fair market value of the notes may also increase as the market price of JDSU stock rises and decrease as the market price of the stock falls. Interest rate and market value changes affect the fair market value of the notes but do not impact our financial position, cash flows or results of operations. Based on quoted market prices, as of December 29, 2012 and June 30, 2012, the fair market value of the 1% Senior Convertible Notes was $210.5 million and $307.3 million, respectively. For additional information, see “Note 10. Debt and Letters of Credit.”

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Item 4. Controls and Procedures

Disclosure Controls and Procedures: The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

Internal Control Over Financial Reporting: There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to a variety of claims and suits that arise from time to time in the ordinary course of our business. While Management currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and Management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our Current Report on Form 8-K dated December 14, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the second quarter of fiscal 2013, the Company repurchased $50 million aggregate principal amount of its 1% Senior Convertible Notes for $49.9 million in cash.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits

The following documents are filed as Exhibits to this report:

		Incorporated by Reference			Filed
Exhibit No.	Exhibit Description	Form	Exhibit	Filing Date	Herewith
3.1	Amendment to Certificate of Incorporation				X
10.10	Amended and Restated 2003 Equity Incentive Plan				X
31.1	Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
31.2	Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
101.INS	XBRL Instance				X
101.SCH	XBRL Taxonomy Extension Schema				X
101.CAL	XBRL Taxonomy Extension Calculation				X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	XBRL Taxonomy Extension Calculation				X
101.PRE	XBRL Taxonomy Extension Presentation				X

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JDS Uniphase Corporation

(Registrant)

/s/ REX S. JACKSON

By: Rex S. Jackson

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial and
Accounting Officer)

Date: February 6, 2013

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EX-3.1

Exhibit 3.1

CERTIFICATE OF AMENDMENT TO

SECOND RESTATED

CERTIFICATE OF INCORPORATION

OF

JDS UNIPHASE CORPORATION

a Delaware Corporation

Pursuant to § 242 of the General Corporation Law

of the State of Delaware

It is hereby certified that the following amendment to the Second Restated Certificate of Incorporation of the corporation has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware:

Section 5.1 of Article 5 of the Second Restated Certificate of Incorporation is hereby amended to read in its entirety as follows:

“5.1        Election of Directors.  Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.  At each annual meeting of stockholders, directors of the Corporation shall be elected to hold office until the expiration of the term for which they are elected, and until their successors have been duly elected and qualified; except that if any such election shall not be so held, such election shall take place at a stockholders’ meeting called and held in accordance with the Delaware General Corporation Law.  Commencing with the 2013 annual meeting of stockholders, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting and until their respective successors have been duly elected and qualified.  Directors elected at the 2010 annual meeting of stockholders shall hold office until the 2013 annual meeting of stockholders, directors elected at the 2011 annual meeting of stockholders shall hold office until the 2014 annual meeting of stockholders, and directors elected at the 2012 annual meeting of stockholders shall hold office until the 2015 annual meeting of stockholders.”

IN WITNESS WHEREOF, this Certificate is hereby executed by the undersigned on   November 20, 2012.

JDS Uniphase Corporation
By:	/s/ Andrew R. Pollack
	Andrew R. Pollack
	Senior Vice President, General Counsel and Corporate Secretary

EX-10.10

Exhibit 10.10

JDS UNIPHASE CORPORATION

AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN

(As Amended on November 14, 2012)

1.Purpose of the Plan.  The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company by offering them an opportunity to participate in the Company’s future performance.

2.Definitions.  As used herein, the following definitions shall apply:

(a)“Administrator” means the Board or any of the Committees appointed to administer the Plan.

(b)“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

(c)“Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein.

(d)“Assumed” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company or (ii) the contractual obligations represented by the Award are expressly assumed (and not simply by operation of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number and type of securities of the successor entity or its Parent subject to the Award and the exercise or purchase price thereof which preserves the compensation element of the Award existing at the time of the Corporate Transaction as determined in accordance with the instruments evidencing the agreement to assume the Award.

(e)“Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock Unit, Performance Unit, Performance Share, or other right or benefit under the Plan.

(f)“Award Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any amendments thereto.

(g)“Board” means the Board of Directors of the Company.

(h)“Cause” means, with respect to the termination by the Company or a Related Entity of the Grantee’s Continuous Active Service, that such termination is for “Cause” as such term is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee’s:  (i) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct, material violation of any applicable Company or Related Entity policy, or material breach of any agreement with the Company or a Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person.

(i)“Change in Control” means a change in ownership or control of the Company effected through either of the following transactions:

(i)the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such stockholders accept, or

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(ii)a change in the composition of the Board over a period of thirty-six (36) months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors.

(j)“Code” means the Internal Revenue Code of 1986, as amended.

(k)“Committee” means any committee composed of members of the Board appointed by the Board to administer the Plan.

(l)“Common Stock” means the common stock of the Company.

(m)“Company” means JDS Uniphase Corporation, a Delaware corporation.

(n)“Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity.

(o)“Continuing Directors” means members of the Board who either (i) have been Board members continuously for a period of at least thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.

(p)“Continuous Active Service” means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director or Consultant is not interrupted or terminated.  In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or Consultant, Continuous Active Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an Employee, Director or Consultant can be effective under Applicable Laws.  Continuous Active Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement).  An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.  For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds ninety (90) days, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of such ninety (90) day period.

(q)“Corporate Transaction” means any of the following transactions:

(i)a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;

(ii)the sale, transfer or other disposition of all or substantially all of the assets of the Company;

(iii)the complete liquidation or dissolution of the Company;

(iv)any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but in which securities possessing more than forty percent (40%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction; or

(v)acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction.

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(r)“Covered Employee” means an Employee who is a “covered employee” under Section 162(m)(3) of the Code.

(s)“Director” means a member of the Board or the board of directors of any Related Entity.

(t)“Disability” means as defined under the long-term disability policy of the Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee is covered by such policy.  If the Company or the Related Entity to which the Grantee provides service does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days.  A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.

(u)“Dividend Equivalent Right” means a right entitling the Grantee to compensation measured by dividends paid with respect to Common Stock.

(v)“Employee” means any person, including an Officer or Director, who is in the employ of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance.  The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.

(w)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(x)“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i)If the Common Stock is listed on any established stock exchange or a national market system, including without limitation The Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii)If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, but selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(iii)In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good faith.

(y)“Full Value Award” means the grant of Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares under the Plan with a per share or unit purchase price lower than 100% of Fair Market Value on the date of grant.

(z)“Grantee” means an Employee, Director or Consultant who receives an Award under the Plan.

(aa)“Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee’s household (other than a tenant or employee), a trust in which these persons (or the Grantee) have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Grantee) control the management of assets, and any other entity in which these persons (or the Grantee) own more than fifty percent (50%) of the voting interests.

(bb)“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code

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(cc)“Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(dd)“Officer” means a person who is an officer of the Company or a Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(ee)“Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan.

(ff)“Parent” means a “parent corporation”, whether now or hereafter existing, as defined in Section 424(e) of the Code.

(gg)“Performance-Based Compensation” means compensation qualifying as “performance-based compensation” under Section 162(m) of the Code.

(hh)“Performance Shares” means Shares or an Award denominated in Shares which may be earned in whole or in part upon attainment of performance criteria established by the Administrator.

(ii)“Performance Units” means an Award which may be earned in whole or in part based upon attainment of performance criteria established by the Administrator and which may be settled for cash, Shares or other securities or a combination of cash, Shares or other securities as established by the Administrator.

(jj)“Plan” means this 2003 Equity Incentive Plan.

(kk)“Related Entity” means any Parent or Subsidiary of the Company and any business, corporation, partnership, limited liability company or other entity in which the Company or a Parent or a Subsidiary of the Company holds a substantial ownership interest, directly or indirectly.

(ll)“Replaced” means that pursuant to a Corporate Transaction the Award is replaced with a comparable stock award or a cash incentive program of the Company, the successor entity (if applicable) or Parent of either of them which preserves the compensation element of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same (or a more favorable) vesting schedule applicable to such Award.  The determination of Award comparability shall be made by the Administrator and its determination shall be final, binding and conclusive.

(mm)“Restricted Stock” means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator.

(nn)“Restricted Stock Unit” means a grant of a right to receive in cash or stock, as established by the Administrator, the market value of one Share.

(oo)“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.

(pp)“SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured by appreciation in the value of Common Stock.

(qq)“Share” means a share of the Common Stock.

(rr)“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.

3.Stock Subject to the Plan.

(a)Subject to the provisions of Section 10 below, the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Stock Options) is 64,200,000 Shares.  The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired Common Stock.

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(b)Any Shares that are not subject to Full Value Awards will be counted against the numerical limits of this Section 3 as one Share for every Share subject thereto.  Any Shares subject to Full Value Awards will be counted against the numerical limits of this Section 3 as 1.5 Shares for every one Share subject thereto.  To the extent that a Share that was subject to an Award that counted as 1.5 Shares against the Plan reserve pursuant to the preceding sentence is recycled back into the Plan under the next paragraph of this Section 3, the Plan will be credited with 1.5 Shares.

(c)Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan.  Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at the lower of their original purchase price or their Fair Market Value at the time of repurchase, such Shares shall become available for future grant under the Plan.  With respect to SARs, the gross number of Shares subject to a SAR will cease to be available under the Plan (whether or not the SAR is net settled for a lesser number of Shares).

4.Administration of the Plan.

(a)Plan Administrator.

(i)Administration with Respect to Directors and Officers.  With respect to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3.  Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.

(ii)Administration With Respect to Consultants and Other Employees.  With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws.  Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.  The Board may authorize one or more Officers to grant such Awards and may limit such authority as the Board determines from time to time.

(iii)Administration With Respect to Covered Employees.  Notwithstanding the foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation.  In the case of such Awards granted to Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee.

(iv)Administration Errors.  In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.

(b)Powers of the Administrator.  Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:

(i)to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

(ii)to determine whether and to what extent Awards are granted hereunder;

(iii)to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder;

(iv)to approve forms of Award Agreements for use under the Plan;

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(v)to determine the terms and conditions of any Award granted hereunder;

(vi)to amend the terms of any outstanding Award granted under the Plan, provided that (A) any amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent, (B) the reduction of the exercise price of any Option or SAR awarded under the Plan shall be subject to stockholder approval and (C) canceling or “buying-out” an Option or SAR at a time when its exercise price exceeds the Fair Market Value of the underlying Shares, in exchange for cash, another Option, SAR, Restricted Stock, Restricted Stock Unit, or other Award shall be subject to stockholder approval, unless the cancellation and exchange occurs in connection with a Corporate Transaction;

(vii)to construe and interpret the terms of the Plan and Awards, including without limitation, any notice of award or Award Agreement, granted pursuant to the Plan;

(viii)to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non-U.S. jurisdictions and to afford Grantees favorable treatment under such rules or laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan; and

(ix)to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

(c)Indemnification.  In addition to such other rights of indemnification as they may have as members of the Board or as Officers or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within thirty (30) days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to handle and defend the same.

5.Eligibility.  Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.  Incentive Stock Options may be granted only to Employees of the Company or a Parent or a Subsidiary of the Company.  An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards.  Awards may be granted to such Employees, Directors or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time.

6.Terms and Conditions of Awards.

(a)Type of Awards.  The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) cash or (iii) an Option, a SAR, or similar right with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions.  Such awards include, without limitation, Options, SARs, Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights, Performance Units or Performance Shares, and an Award may consist of one such security or benefit, or two (2) or more of them in any combination or alternative.

(b)Designation of Award.  Each Award shall be designated in the Award Agreement.  In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option.  However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated as Non-Qualified Stock Options.  For this

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purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the grant date of the relevant Option.

(c)Conditions of Award.  Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria.  The performance criteria established by the Administrator may be based on any one of, or combination of, the following: (i) increase in share price, (ii) earnings per share, (iii) total stockholder return, (iv) operating margin, (v) gross margin, (vi) return on equity, (vii) return on assets, (viii) return on investment, (ix) operating income, (x) net operating income, (xi) pre-tax profit, (xii) cash flow, (xiii) revenue, (xiv) expenses, (xv) earnings before interest, taxes and depreciation, (xvi) economic value added, (xvii) market share, (xviii) personal management objectives, and (xix) other measures of performance selected by the Administrator.  Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement.

(d)Acquisitions and Other Transactions.  The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction.

(e)Deferral of Award Payment.  The Administrator may establish one or more programs under the Plan to permit selected Grantees the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award.  The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program.

(f)Separate Programs.  The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time.

(g)Individual Limitations on Awards.  The maximum number of Shares with respect to which Awards may be granted to any Grantee in any fiscal year of the Company shall be one million (1,000,000) Shares.  In connection with a Grantee’s (i) commencement of Continuous Active Service or (ii) first promotion in any fiscal year of the Company, a Grantee may be granted Awards for up to an additional one million (1,000,000) Shares which shall not count against the limit set forth in the preceding sentence.  The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10, below.  To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if any Awards are canceled, the canceled Awards shall continue to count against the maximum number of Shares with respect to which Awards may be granted to the Grantee.  For this purpose, the repricing of an Option (or in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced to reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR.  If the vesting or receipt of Shares under the Award is deferred to a later date, any amount (whether denominated in Shares or cash) paid in addition to the original number of Shares subject to the Award will not be treated as an increase in the number of Shares subject to the Award if the additional amount is based either on a reasonable rate of interest or on one or more predetermined actual investments such that the amount payable by the Company at the later date will be based on the actual rate of return of a specific investment (including any decrease as well as any increase in the value of an investment).

(h)Early Exercise.  The Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award.  Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate.

(i)Term of Award.  The term of each Award shall be the term stated in the Award Agreement, provided, however, that the term of an Award shall be no more than eight (8) years from the date of grant thereof.  However, in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the

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Company, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement.

(j)Transferability of Awards.  Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee.  Other Awards shall be transferable by will and by the laws of descent and distribution, and during the lifetime of the Grantee, by gift or pursuant to a domestic relations order to members of the Grantee’s Immediate Family to the extent and in the manner determined by the Administrator.  Notwithstanding the foregoing, the Grantee may designate a beneficiary of the Grantee’s Award in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator.

(k)Time of Granting Awards.  The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such later date as is determined by the Administrator.

7.Award Exercise or Purchase Price, Consideration and Taxes.

(a)Exercise or Purchase Price.  The exercise or purchase price, if any, for an Award shall be as follows:

(i)In the case of an Incentive Stock Option:

(A)granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

(B)granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(ii)In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(iii)In the case of a SAR, the base amount on which the stock appreciation is calculated shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(iv)In the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(v)In the case of other Awards, such price as is determined by the Administrator.

(vi)Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d) above, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award.

(b)Consideration.  Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant).  In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following, provided that the portion of the consideration equal to the par value of the Shares must be paid in cash or other legal consideration permitted by the Delaware General Corporation Law:

(i)cash;

(ii)check;

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(iii)surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require (including withholding of Shares otherwise deliverable upon exercise of the Award) which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised, provided, however, that Shares acquired under the Plan or any other equity compensation plan or agreement of the Company must have been held by the Grantee for a period of more than six (6) months;

(iv)with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or

(v)any combination of the foregoing methods of payment.

(c)Taxes.  No Shares shall be delivered under the Plan to any Grantee or other person until such Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of any non-U.S., federal, state, or local income and employment tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares or the disqualifying disposition of Shares received on exercise of an Incentive Stock Option.  Upon exercise of an Award the Company shall withhold or collect from Grantee an amount sufficient to satisfy such tax obligations.

8.Exercise of Award.

(a)Procedure for Exercise; Rights as a Stockholder.

(i)Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement.

(ii)An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in Section 7(b)(iv).

(b)Exercise of Award Following Termination of Continuous Active Service.

(i)An Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following the termination of a Grantee’s Continuous Active Service only to the extent provided in the Award Agreement.

(ii)Where the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee’s Continuous Active Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first.

(iii)Any Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of a Grantee’s Continuous Active Service shall convert automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the Award Agreement.

9.Conditions Upon Issuance of Shares.

(a)Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(b)As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.

9

10.Adjustments Upon Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Awards may be granted to any Grantee in any fiscal year of the Company, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, or (iii) as the Administrator may determine in its discretion, any other transaction with respect to Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator and the Administrator’s determination shall be final, binding and conclusive.  Except as the Administrator determines, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award.

11.Corporate Transactions.

(a)Termination of Award to Extent Not Assumed in Corporate Transaction.  Effective upon the consummation of a Corporate Transaction, all outstanding Awards under the Plan shall terminate.  However, all such Awards shall not terminate to the extent they are Assumed in connection with the Corporate Transaction.

(b)Acceleration of Award Upon Corporate Transaction.  Except as provided otherwise in an individual Award Agreement, in the event of a Corporate Transaction, for the portion of each Award that is neither Assumed nor Replaced, such portion of the Award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) for all of the Shares at the time represented by such portion of the Award, immediately prior to the specified effective date of such Corporate Transaction.

(c)Effect of Acceleration on Incentive Stock Options.  Any Incentive Stock Option accelerated under this Section 11 in connection with a Corporate Transaction shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.  To the extent such dollar limitation is exceeded, the excess Options shall be treated as Non-Qualified Stock Options.

12.Effective Date and Term of Plan.  The Plan originally became effective upon its approval by the stockholders of the Company.  The Plan, as amended and restated, shall become effective upon its approval by the stockholders of the Company.  It shall continue in effect for a term of ten (10) years from the date of such approval unless sooner terminated.  Subject to Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

13.Amendment, Suspension or Termination of the Plan.

(a)The Board may at any time amend, suspend or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s stockholders to the extent such approval is required by Applicable Laws, or if such amendment would change any of the provisions of Section 4(b)(vi) or this Section 13(a). Notwithstanding any other provision of the Plan to the contrary, the Board may, in its sole and absolute discretion and without the consent of any participant, amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the Plan, including, but not limited to, Section 409A of the Code.

(b)No Award may be granted during any suspension of the Plan or after termination of the Plan.

(c)No suspension or termination of the Plan (including termination of the Plan under Section 12, above) shall adversely affect any rights under Awards already granted to a Grantee.

14.Reservation of Shares.

(a)The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

10

(b)The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

15.No Effect on Terms of Employment/Consulting Relationship.  The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Active Service, nor shall it interfere in any way with his or her right or the right of the Company or any Related Entity to terminate the Grantee’s Continuous Active Service at any time, with or without Cause, and with or without notice.  The ability of the Company or any Related Entity to terminate the employment of a Grantee who is employed at will is in no way affected by its determination that the Grantee’s Continuous Active Service has been terminated for Cause for the purposes of this Plan.

16.No Effect on Retirement and Other Benefit Plans.  Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation.  The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

17.Unfunded Obligation.  Grantees shall have the status of general unsecured creditors of the Company.  Any amounts payable to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended.  Neither the Company nor any Related Entity shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations.  The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder.  Any investments or the creation or maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity.  The Grantees shall have no claim against the Company or any Related Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.

11

EX-31.1

Exhibit 31.1

JDS UNIPHASE CORPORATION

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas H. Waechter, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of JDS Uniphase Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 6, 2013

/s/ THOMAS H. WAECHTER

Thomas H. Waechter
Chief Executive Officer
(Principal Executive Officer)

1

EX-31.2

Exhibit 31.2

JDS UNIPHASE CORPORATION

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Rex S. Jackson, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of JDS Uniphase Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 6, 2013

/s/ REX S. JACKSON

Rex S. Jackson
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

1

EX-32.1

Exhibit 32.1

JDS UNIPHASE CORPORATION

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of JDS Uniphase Corporation (the “Company”) on Form 10-Q for the quarter ended December 29, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Thomas Waechter, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Dated: February 6, 2013

/s/ THOMAS H. WAECHTER

Thomas H. Waechter

Chief Executive Officer

(Principal Executive Officer)

1

EX-32.2

Exhibit 32.2

JDS UNIPHASE CORPORATION

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of JDS Uniphase Corporation (the “Company”) on Form 10-Q for the quarter ended December 29, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Rex S. Jackson, Executive Vice President and Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Dated: February 6, 2013

/s/ REX S. JACKSON

Rex S. Jackson

Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

1

XML

Commitments and Contingencies (Tables)

6 Months Ended

Dec. 29, 2012

Commitments and Contingencies

Schedule of changes in the entity's warranty reserve

The following table presents the changes in the Company’s warranty reserve (in millions):

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Balance as of beginning of period	$	7.6		$	7.6		$	8.1		$	7.9
Provision for warranty	1.0			2.2			2.9			4.8
Utilization of reserve	(0.1		)	(0.2		)	(1.4		)	(4.6		)
Adjustments related to pre-existing
warranties (including changes in estimates)	(1.7		)	(2.1		)	(2.8		)	(0.6		)
Balance as of end of period	$	6.8		$	7.5		$	6.8		$	7.5

Schedule of future minimum financing payments for perpetual software licenses and financing obligations

As of December 29, 2012, future minimum financing payments of the perpetual software licenses and financing obligations are as follows (in millions):

Fiscal Years
Remainder of 2012	$	3.8
2013	5.6
2014	3.7
2015	3.5
2016	3.5
Thereafter	37.3
Total	$	57.4

XML

Restructuring and Related Charges (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended			3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended				6 Months Ended					3 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended			3 Months Ended	6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011	Jun. 30, 2012	Dec. 29, 2012 CommTest Wireless Business Restructuring Plan	Dec. 29, 2012 CommTest Wireless Business Restructuring Plan employee	Dec. 29, 2012 CCOP CPV Plan employee	Dec. 29, 2012 CommTest Operation and Repair Outsourcing Restructuring Plan employee	Dec. 29, 2012 CommTest Operation and Repair Outsourcing Restructuring Plan employee	Dec. 29, 2012 OSP Business Consolidation Plan employee	Dec. 29, 2012 CommTest Manufacturing Support Consolidation Plan employee	Dec. 29, 2012 CommTest Manufacturing Support Consolidation Plan employee	Dec. 29, 2012 CommTest Manufacturing Support Consolidation Plan Communications Test and Measurement employee	Dec. 29, 2012 CommTest Germantown Restructuring Plan	Jun. 30, 2012 CommTest Germantown Restructuring Plan	Dec. 29, 2012 CommTest Market Rebalancing Restructuring Plan	Dec. 29, 2012 CommTest US Manufacturing Outsourcing Restructuring Plan	Dec. 29, 2012 CommTest Germany Restructuring Plan	Dec. 29, 2012 Other plans	Dec. 29, 2012 Maryland and Indiana in the United States CommTest US Manufacturing Outsourcing Restructuring Plan Communications Test and Measurement	Jun. 27, 2009 Germany CommTest Germany Restructuring Plan Communications Test and Measurement employee	Dec. 29, 2012 Germany CommTest Germany Restructuring Plan Communications Test and Measurement employee	Dec. 29, 2012 Workforce reduction CommTest Operation and Repair Outsourcing Restructuring Plan	Dec. 29, 2012 Workforce reduction CommTest Operation and Repair Outsourcing Restructuring Plan	Dec. 29, 2012 Workforce reduction Other plans	Dec. 29, 2012 Facilities and Equipment CommTest Operation and Repair Outsourcing Restructuring Plan	Dec. 29, 2012 Facilities and Equipment CommTest Operation and Repair Outsourcing Restructuring Plan	Dec. 29, 2012 Lease Costs CommTest Operation and Repair Outsourcing Restructuring Plan	Dec. 29, 2012 Lease Costs Other plans	Dec. 29, 2012 Ottawa Lease Exit Costs	Dec. 29, 2012 Ottawa Lease Exit Costs
Restructuring and Related Charges
Number of employees expected to be reduced							43	10	22	133	16	5		80								77
Number of positions eliminated as of the balance sheet date							38	9		107	11		53
Additional severance and employee benefits									$ 0.6			$ 0.4
Number of positions eliminated as of the balance sheet date																							74
Contractual obligations under the operating lease, net of sublease income, fair value	4.3		4.3		4.6				0.2	0.2					0.5		0.7				0.9
Summary of various restructuring plans
Accrual balance at the beginning of the period			12.6							3.9	0.8		2.5		0.5	0.5	0.9	1.1	2.4	0.5					3.9	0.4				0.1		4.6
Restructuring and related charges	3.0	4.0	5.7	5.5		1.8	1.8	0.6	0.8	2.7		0.4	0.5						0.1					0.6	1.5		0.2	0.7	0.5		0.1	0.2
Cash Settlements			(9.8)				(1.0)	(0.4)		(4.8)	(0.6)		(2.0)				(0.2)	(0.2)	(0.3)	(0.3)					(3.8)	(0.3)		(0.7)	(0.3)			(0.6)
Non-cash settlements and other adjustments			0.6																0.2	0.4										0.4		0.1
Accrual balance at the end of the period	$ 9.1		$ 9.1			$ 0.8	$ 0.8	$ 0.2	$ 1.8	$ 1.8	$ 0.2	$ 1.0	$ 1.0		$ 0.5	$ 0.5	$ 0.7	$ 0.9	$ 2.4	$ 0.6				$ 1.6	$ 1.6	$ 0.1			$ 0.2	$ 0.5	$ 4.3	$ 4.3

XML

Investments and Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Dec. 29, 2012	Jun. 30, 2012
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	$ 423.3	$ 337.3
Gross Unrealized Gains	4.1	1.7
Gross Unrealized Losses	(0.5)	(0.5)
Available for Sale Investments at Fair Value	426.9	338.5
Gross unrealized losses on available-for-sale securities
Term of maturities of securities classified as current assets included in short-term investments	12 months	12 months
Gross unrealized losses, Less than 12 Months	0.1	0.1
Gross unrealized losses, Greater than 12 Months	0.4	0.4
Total gross unrealized losses	0.5	0.5
Cash and cash equivalents
Available-For-Sale Investments
Available for Sale Investments at Fair Value	26.6	21.3
Short-term investments
Available-For-Sale Investments
Available for Sale Investments at Fair Value	398.9	315.9
Other non-current assets
Available-For-Sale Investments
Available for Sale Investments at Fair Value	1.4	1.3
Debt securities
Contractual maturities of debt securities classified as available-for-sale securities, Amortized cost
Amortized cost of amounts maturing in less than 1 year	241.3
Amortized cost of amounts maturing in 1-5 years	180.6
Amortized cost of amounts maturing more than 5 years	1.4
Total amortized cost of debt securities	423.3
Contractual maturities of the debt securities classified as available-for-sale securities, Estimated fair value
Estimated fair value amounts maturing in less than 1 year	244.4
Estimated fair value amounts maturing in 1 -5 years	181.1
Estimated fair value amounts maturing in more than 5 years	1.4
Total estimated fair value of debt securities	426.9
Asset-backed securities
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	40.2	21.9
Gross Unrealized Gains	0.3	0.2
Gross Unrealized Losses	(0.4)	(0.4)
Available for Sale Investments at Fair Value	40.1	21.7
Gross unrealized losses on available-for-sale securities
Gross unrealized losses, Greater than 12 Months	0.4	0.4
Total gross unrealized losses	0.4	0.4
U.S. treasuries
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	71.9	52.0
Available for Sale Investments at Fair Value	71.9	52.0
U.S. Agencies
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	53.4	65.1
Gross Unrealized Gains	0.1	0.2
Available for Sale Investments at Fair Value	53.5	65.3
Foreign Agencies
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	4.0	3.3
Gross Unrealized Gains	0.1
Available for Sale Investments at Fair Value	4.1	3.3
Municipal bonds and sovereign debt instruments
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	6.6	11.4
Available for Sale Investments at Fair Value	6.6	11.4
Corporate securities
Available-For-Sale Investments
Amortized Cost/ Carrying Cost		183.6
Gross Unrealized Gains		1.3
Gross Unrealized Losses		(0.1)
Available for Sale Investments at Fair Value		184.8
Gross unrealized losses on available-for-sale securities
Gross unrealized losses, Less than 12 Months	0.1	0.1
Total gross unrealized losses	0.1	0.1
U.S.
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	213.8
Gross Unrealized Gains	1.4
Gross Unrealized Losses	(0.1)
Available for Sale Investments at Fair Value	215.1
Foreign
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	33.4
Gross Unrealized Gains	2.2
Available for Sale Investments at Fair Value	$ 35.6

XML

Restructuring and Related Charges (Details 2) (USD $) In Millions, unless otherwise specified	Dec. 29, 2012	Jun. 30, 2012
Restructuring accrual
Non-current	$ 3.5	$ 4.0
Other lease exit costs
Current	$ 3.3	$ 3.7

XML

Balance Sheet and Other Details (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 29, 2012	Jun. 30, 2012
Activities and balances for allowance for doubtful accounts and for sales returns
Balance at Beginning of Period	$ 2.6
Charged to Costs and Expenses	0.4
Deduction	(0.9)
Balance at End of Period	2.1
Inventories
Finished goods	95.8	89.5
Work in process	37.4	37.3
Raw materials and purchased parts	46.1	47.7
Total inventories, net	179.3	174.5
Allowance for doubtful accounts
Activities and balances for allowance for doubtful accounts and for sales returns
Balance at Beginning of Period	2.2
Charged to Costs and Expenses	0.4
Deduction	(0.6)
Balance at End of Period	2.0
Allowance for sales returns
Activities and balances for allowance for doubtful accounts and for sales returns
Balance at Beginning of Period	0.4
Deduction	(0.3)
Balance at End of Period	$ 0.1

XML

Acquired Developed Technology and Other Intangibles (Tables)

6 Months Ended

Dec. 29, 2012

Acquired Developed Technology and Other Intangibles

Schedule of acquired developed technology and other intangibles

The following tables present details of the Company’s acquired developed technology and other intangibles (in millions):

	Gross
	Carrying		Accumulated
As of December 29, 2012	Amount		Amortization			Net
Acquired developed technology	$	543.5	$	(434.9	)	$	108.6
Other	230.1		(198.8		)	31.3
Total intangibles	$	773.6	$	(633.7	)	$	139.9

	Gross
	Carrying		Accumulated
As of June 30, 2012	Amount		Amortization			Net
Acquired developed technology	$	534.8	$	(398.6	)	$	136.2
Other	279.3		(236.7		)	42.6
Total intangibles	$	814.1	$	(635.3	)	$	178.8

Schedule of estimated future amortization

Based on the carrying amount of acquired technology and other intangibles as of December 29, 2012, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):

Fiscal Years
Remainder of 2013	$	33.3
2014	41.8
2015	33.9
2016	12.9
2017	9.6
Thereafter	8.4
Total amortization	$	139.9

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Income Tax (Details 2) (USD $) In Millions, unless otherwise specified	Dec. 29, 2012	Jun. 30, 2012
Income Tax
Unrecognized tax benefits	$ 62.6	$ 61.3
Accrued interest and penalties related to unrecognized tax benefits	$ 24.5

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Rescission Offer

6 Months Ended

Dec. 29, 2012

Rescission Offer

Rescission Offer

Note 19. Rescission Offer

During the first quarter of fiscal 2013, the Company discovered it inadvertently failed to register the offer and issuance of shares under its ESPP with the SEC for the last three years. As a result, certain purchasers of securities under the ESPP may have the right to rescind their purchases for an amount equal to the purchase price paid for the securities, plus interest from the date of purchase, limited to the unregistered shares purchased in the last twelve months and still held by the original purchasers, which is the applicable federal statute of limitations. These shares have always been treated as issued and outstanding for financial reporting purposes.

As of December 29, 2012, there were approximately 501,000 shares issued under the ESPP in the past twelve months and held by the original purchasers of such shares which may be subject to the recessionary rights, because the redemption features are not within the Company’s control. Of these, approximately 218,400 shares were originally purchased for $12.06 per share and the remaining shares were originally purchased for $9.35 per share. If holders of all of these shares had rescinded their purchases, the Company would be required to make aggregate payments of up to approximately $5.7 million, which includes estimated statutory interest. However, the actual impact to the Company’s cash position may be lower depending on the number of holders who accept the rescission offer and tender their shares. These shares were not reclassified out of permanent stockholder’s equity due to its immateriality. The Company also may be subject to civil and other penalties by regulatory authorities as a result of the failure to register these shares. The Company does not believe that the failure to register the shares or the planned rescission offer will have a material impact on its consolidated financial statements.

On January 29, 2013, the SEC declared effective the Company’s registration statement on Form S-3 for the ESPP shares eligible for the rescission offer, and the Company will make a rescission offer to eligible plan participants who purchased shares in the past twelve months.

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Investments and Fair Value Measurements (Details 3) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Dec. 29, 2012	Jun. 30, 2012
Maximum
Foreign Currency Forward Contracts
Foreign currency forward contracts, expiration period	120 days	120 days
Recurring basis | Cash and cash equivalents
Fair Value Measurements
Total assets	210.1
Recurring basis | Short-term investments
Fair Value Measurements
Total assets	403.8
Recurring basis | Restricted cash
Fair Value Measurements
Total assets	30.9
Recurring basis | Other non-current assets
Fair Value Measurements
Total assets	7.9
Recurring basis | Total fair value
Fair Value Measurements
Total debt available-for-sale securities	426.9
Money market instruments and funds	220.9
Trading securities	4.9
Total assets	652.7
Recurring basis | Total fair value | U.S. treasuries
Fair Value Measurements
Total debt available-for-sale securities	71.9
Recurring basis | Total fair value | U.S. Agencies
Fair Value Measurements
Total debt available-for-sale securities	53.5
Recurring basis | Total fair value | Foreign Agencies
Fair Value Measurements
Total debt available-for-sale securities	4.1
Recurring basis | Total fair value | Municipal bonds and sovereign debt instruments
Fair Value Measurements
Total debt available-for-sale securities	6.6
Recurring basis | Total fair value | Asset-backed securities
Fair Value Measurements
Total debt available-for-sale securities	40.1
Recurring basis | Total fair value | U.S. Corporate Securities
Fair Value Measurements
Money market instruments and funds	215.1
Recurring basis | Total fair value | Foreign Corporate Securities
Fair Value Measurements
Money market instruments and funds	35.6
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Total debt available-for-sale securities	71.9
Money market instruments and funds	220.9
Trading securities	4.9
Total assets	297.7
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. treasuries
Fair Value Measurements
Total debt available-for-sale securities	71.9
Recurring basis | Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Total debt available-for-sale securities	355.0
Total assets	355.0
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. Agencies
Fair Value Measurements
Total debt available-for-sale securities	53.5
Recurring basis | Significant Other Observable Inputs (Level 2) | Foreign Agencies
Fair Value Measurements
Total debt available-for-sale securities	4.1
Recurring basis | Significant Other Observable Inputs (Level 2) | Municipal bonds and sovereign debt instruments
Fair Value Measurements
Total debt available-for-sale securities	6.6
Recurring basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities
Fair Value Measurements
Total debt available-for-sale securities	40.1
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. Corporate Securities
Fair Value Measurements
Total debt available-for-sale securities	215.1
Recurring basis | Significant Other Observable Inputs (Level 2) | Foreign Corporate Securities
Fair Value Measurements
Total debt available-for-sale securities	35.6

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Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended	12 Months Ended
	Oct. 12, 2012	Sep. 29, 2012	Jun. 29, 2013	Jun. 30, 2012
Fiscal Years
Number of weeks in fiscal year			364 days	364 days
Gross cash proceeds received from sale of business	$ 11.5
Out of Period Adjustments
Reduction in net loss due to out of period adjustments		$ (1.9)
Minimum
Fiscal Years
Number of weeks in fiscal year			364 days
Maximum
Fiscal Years
Number of weeks in fiscal year			371 days

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Employee Defined Benefit Plans (Tables)

6 Months Ended

Dec. 29, 2012

Employee Defined Benefit Plans

Schedule of net periodic cost for the pension plans

The following table presents the components of the net periodic cost for the pension plans (in millions):

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Service cost	$	0.1		$	0.1		$	0.2		$	0.2
Interest cost	1.1			1.3			2.2			2.7
Expected return on plan assets	(0.3		)	(0.3		)	(0.6		)	(0.7		)
Recognized net actuarial (gains)/losses				(0.1		)	—			(0.2		)
Curtailment/Settlement (gains)/losses	(0.2		)				(0.2		)
Net periodic benefit cost	$	0.7		$	1.0		$	1.6		$	2.0

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Acquired Developed Technology and Other Intangibles (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended			3 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011	Jun. 30, 2012	Sep. 29, 2012 CCOP CPV Plan	Dec. 29, 2012 Acquired developed technology	Jun. 30, 2012 Acquired developed technology	Dec. 29, 2012 Other	Jun. 30, 2012 Other
Details of acquired intangible assets and other intangibles
Gross carrying amount of intangibles	$ 773.6		$ 773.6		$ 814.1		$ 543.5	$ 534.8	$ 230.1	$ 279.3
Accumulated amortization on finite-lived assets	(633.7)		(633.7)		(635.3)		(434.9)	(398.6)	(198.8)	(236.7)
Net carrying amount of intangibles	139.9		139.9		178.8		108.6	136.2	31.3	42.6
Amortization related to acquired developed technology and other intangibles
Amortization Expenses	16.8	20.8	37.4	40.2		2.6
Estimated future amortization expense
Remainder of 2013	33.3		33.3
2014	41.8		41.8
2015	33.9		33.9
2016	12.9		12.9
2017	9.6		9.6
Thereafter	8.4		8.4
Net carrying amount of intangibles	$ 139.9		$ 139.9		$ 178.8		$ 108.6	$ 136.2	$ 31.3	$ 42.6

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Subsequent Events (Details) (1% senior convertible notes, USD $) In Millions, unless otherwise specified	3 Months Ended				0 Months Ended
	Dec. 29, 2012	Sep. 29, 2012	Dec. 31, 2011	Jun. 05, 2006	Jan. 02, 2013 Subsequent event
Subsequent Events
Principal amount of debt repurchased	$ 50.0	$ 50.0			$ 50.0
Interest rate on Senior convertible notes (as a percent)	1.00%		1.00%	1.00%	1.00%
Cash paid for repurchase of debt	$ 49.9	$ 49.8			$ 50.0

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Related Party Transactions (Details) (KLA-Tencor Corporation ("KLA-Tencor"), USD $) In Millions, unless otherwise specified	0 Months Ended	1 Months Ended	3 Months Ended	6 Months Ended
	Dec. 29, 2012 item	Aug. 15, 2012 item	Dec. 31, 2011	Dec. 31, 2011	Jun. 30, 2012
KLA-Tencor Corporation ("KLA-Tencor")
Transactions with Related Party
Sales:			$ 1.8	$ 3.9
Accounts Receivable:					$ 0.9
Board of Directors in Common
Number of the Company's board members that are also on the Board of related party entity	0	1

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Balance Sheet and Other Details (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended													3 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011	Jun. 30, 2012	Dec. 29, 2012 Santa Rosa and Eningen site sale and leaseback transaction	Jun. 30, 2012 Santa Rosa and Eningen site sale and leaseback transaction	Dec. 29, 2012 Santa Rosa Sale Leaseback Transaction	Jun. 30, 2012 Santa Rosa Sale Leaseback Transaction	Dec. 29, 2012 Land	Jun. 30, 2012 Land	Dec. 29, 2012 Building and improvements	Jun. 30, 2012 Building and improvements	Dec. 29, 2012 Machinery and equipment	Jun. 30, 2012 Machinery and equipment	Sep. 29, 2012 Capital investment project in Beijing, China	Dec. 29, 2012 Furniture, fixtures, software and office equipment.	Jun. 30, 2012 Furniture, fixtures, software and office equipment.	Dec. 29, 2012 Leasehold improvements	Jun. 30, 2012 Leasehold improvements	Dec. 29, 2012 Construction in progress	Jun. 30, 2012 Construction in progress
Property, Plant and Equipment
Property, plant and equipment, gross	$ 781.1		$ 781.1		$ 765.6					$ 15.5	$ 14.1	$ 38.7	$ 35.8	$ 444.0	$ 421.3		$ 171.1	$ 166.1	$ 93.0	$ 95.3	$ 18.8	$ 33.0
Less: Accumulated depreciation	(530.8)		(530.8)		(512.7)
Property, plant and equipment, net	250.3		250.3		252.9
Economic useful life																20 years
Property, plant and equipment, net						20.7	21.4
Depreciation expense	16.9	17.1	33.8	34.2
Other Non-Current Liabilities
Pension accrual and post-employment benefits	89.8		89.8		85.2
Deferred taxes	4.0		4.0		4.7
Restructuring accrual	3.5		3.5		4.0
Financing obligation	35.0		35.0		35.4			28.0	28.5
Non-current income taxes payable	10.8		10.8		9.3
Asset retirement obligations	8.5		8.5		9.2
Long-term deferred revenue	25.3		25.3		16.1
Other	15.6		15.6		12.7
Total other non-current liabilities	192.5		192.5		176.6
Prepayments and Other Current Assets
Prepayments	31.1		31.1		30.9
Advances to contract manufacturers	16.4		16.4		18.4
Deferred income tax	2.4		2.4		2.3
Refundable income taxes	2.8		2.8		4.7
Other receivables	18.5		18.5		13.0
Other current assets	7.2		7.2		7.9
Total prepayments and other current assets	78.4		78.4		77.2
Other Current Liabilities
Deferred compensation plan	4.9		4.9		4.6
Warranty accrual	6.8		6.8		8.1
VAT liabilities	5.5		5.5		2.7
Restructuring accrual	5.6		5.6		8.6
Deferred taxes	3.5		3.5		3.1
Other	6.8		6.8		10.8
Total other current liabilities	$ 33.1		$ 33.1		$ 37.9

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Earnings Per Share

6 Months Ended

Dec. 29, 2012

Earnings Per Share

Earnings Per Share

Note 3. Earnings Per Share

The following table sets forth the computation of basic and diluted net loss per share (in millions, except per share data):

	Three Months Ended					Six Months Ended
	December 29, 2012		December 31,  2011			December 29,  2012			December 31, 2011
Numerator:
Income (loss) from continuing operations, net of tax	$	3.3	$	(7.7	)	$	(6.5	)	$	(11.3	)
Income (loss) from discontinued operations, net of tax	0.8		(2.5		)	(1.0		)	(4.7		)
Net income (loss)	$	4.1	$	(10.2	)	$	(7.5	)	$	(16.0	)
Denominator:
Weighted-average number of common shares outstanding
Basic	234.4		229.4			233.6			228.9
Effect of dilutive securities from stock-based benefit plans	2.7		—			—			—
Diluted	237.1		229.4			233.6			228.9
Basic net income (loss) per share from:
Continuing operations, net of tax	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—		(0.01		)	—			(0.02		)
Net income (loss)	$	0.02	$	(0.04	)	$	(0.03	)	$	(0.07	)
Diluted net income (loss) per share from:
Continuing operations, net of tax	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—		(0.01		)	—			(0.02		)
Net income (loss)	$	0.02	$	(0.04	)	$	(0.03	)	$	(0.07	)

As the Company incurred net losses for the six months ended December 29, 2012 and for the three and six months ended December 31, 2011, potential dilutive securities from stock options, employee stock purchase plan (“ESPP”) and Full Value Awards (restricted shares and stock units) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive.

The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive (in millions):

	Three Months Ended		Six Months Ended
	December 29, 2012	December 31, 2011	December 29, 2012	December 31, 2011
Stock options and ESPP	3.9	10.4	8.2	10.7
Restricted shares and stock units	3.3	8.2	9.2	7.8
Total potentially dilutive securities	7.2	18.6	17.4	18.5

The Company’s 1% Senior Convertible Notes are not included in the table above. The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $30.30 per share is payable in shares of the Company’s common stock or cash. See “Note 10. Debts and Letters of Credit” for more details.

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		0 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012 Minimum	Dec. 29, 2012 Maximum	Apr. 02, 2012 Pennsylvania legal matter	Dec. 31, 2011 Pennsylvania legal matter	Oct. 01, 2011 Pennsylvania legal matter
Changes in warranty reserve
Balance as of beginning of period	$ 7.6	$ 7.6	$ 8.1	$ 7.9
Provision for warranty	1.0	2.2	2.9	4.8
Utilization of reserve	(0.1)	(0.2)	(1.4)	(4.6)
Adjustments related to pre-existing warranties (including changes in estimates)	(1.7)	(2.1)	(2.8)	(0.6)
Balance as of end of period	6.8	7.5	6.8	7.5
Tax Matters
Range of estimated potential tax liability					0	34.2
Product Warranties
Warranty Term for most products					3 months	1 year
Legal Proceedings
Accrued legal obligations									7.4
Accrued interest								0.2
Settlement value							$ 7.9

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Earnings Per Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended					3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012 1% senior convertible notes	Dec. 31, 2011 1% senior convertible notes	Jun. 05, 2006 1% senior convertible notes	Dec. 29, 2012 Stock options and ESPP	Dec. 31, 2011 Stock options and ESPP	Dec. 29, 2012 Stock options and ESPP	Dec. 31, 2011 Stock options and ESPP	Dec. 29, 2012 Restricted shares and stock units	Dec. 31, 2011 Restricted shares and stock units	Dec. 29, 2012 Restricted shares and stock units	Dec. 31, 2011 Restricted shares and stock units
Numerator:
Income (loss) from continuing operations, net of tax	$ 3.3	$ (7.7)	$ (6.5)	$ (11.3)
Income (loss) from discontinued operations, net of tax	0.8	(2.5)	(1.0)	(4.7)
Net income (loss)	$ 4.1	$ (10.2)	$ (7.5)	$ (16.0)
Denominator:
Weighted-average number of common shares outstanding-Basic	234.4	229.4	233.6	228.9
Effect of dilutive securities from stock-based benefit plans (in shares)	2.7
Weighted-average number of common shares outstanding-Diluted	237.1	229.4	233.6	228.9
Basic net income (loss) per share from:
Continuing operations, net of tax (in dollars per share)	$ 0.02	$ (0.03)	$ (0.03)	$ (0.05)
Discontinued operations, net of tax (in dollars per share)		$ (0.01)		$ (0.02)
Net income (loss) (in dollars per share)	$ 0.02	$ (0.04)	$ (0.03)	$ (0.07)
Diluted net income (loss) per share from:
Continuing operations, net of tax (in dollars per share)	$ 0.02	$ (0.03)	$ (0.03)	$ (0.05)
Discontinued operations, net of tax (in dollars per share)		$ (0.01)		$ (0.02)
Net income (loss) (in dollars per share)	$ 0.02	$ (0.04)	$ (0.03)	$ (0.07)
Anti-dilutive securities excluded from computation of earnings per share
Total potentially dilutive securities (in shares)	7.2	18.6	17.4	18.5				3.9	10.4	8.2	10.7	3.3	8.2	9.2	7.8
Convertible notes
Interest rate on Senior convertible notes (as a percent)					1.00%	1.00%	1.00%
Conversion price of debt (in dollars per share)					$ 30.30

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Dec. 29, 2012

Accumulated Other Comprehensive Income

Schedule of components of accumulated other comprehensive income

At December 29, 2012 and June 30, 2012, balances for the components of accumulated other comprehensive income were as follows (in millions):

	December 29,  2012			June 30,  2012
Unrealized losses on available-for-sale investments, net of tax	$	(2.6	)	$	(2.8	)
Foreign currency translation adjustments	17.0			10.6
Defined benefit obligation, net of tax	(0.3		)	(0.3		)
Accumulated other comprehensive income	$	14.1		$	7.5

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Earnings Per Share (Tables)

6 Months Ended

Dec. 29, 2012

Earnings Per Share

Schedule of computation of basic and diluted net loss per share

The following table sets forth the computation of basic and diluted net loss per share (in millions, except per share data):

	Three Months Ended					Six Months Ended
	December 29, 2012		December 31,  2011			December 29,  2012			December 31, 2011
Numerator:
Income (loss) from continuing operations, net of tax	$	3.3	$	(7.7	)	$	(6.5	)	$	(11.3	)
Income (loss) from discontinued operations, net of tax	0.8		(2.5		)	(1.0		)	(4.7		)
Net income (loss)	$	4.1	$	(10.2	)	$	(7.5	)	$	(16.0	)
Denominator:
Weighted-average number of common shares outstanding
Basic	234.4		229.4			233.6			228.9
Effect of dilutive securities from stock-based benefit plans	2.7		—			—			—
Diluted	237.1		229.4			233.6			228.9
Basic net income (loss) per share from:
Continuing operations, net of tax	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—		(0.01		)	—			(0.02		)
Net income (loss)	$	0.02	$	(0.04	)	$	(0.03	)	$	(0.07	)
Diluted net income (loss) per share from:
Continuing operations, net of tax	$	0.02	$	(0.03	)	$	(0.03	)	$	(0.05	)
Discontinued operations, net of tax	—		(0.01		)	—			(0.02		)
Net income (loss)	$	0.02	$	(0.04	)	$	(0.03	)	$	(0.07	)

Schedule of weighted average potentially dilutive securities excluded from the computation because their effect would have been anti-dilutive

The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive (in millions):

	Three Months Ended		Six Months Ended
	December 29, 2012	December 31, 2011	December 29, 2012	December 31, 2011
Stock options and ESPP	3.9	10.4	8.2	10.7
Restricted shares and stock units	3.3	8.2	9.2	7.8
Total potentially dilutive securities	7.2	18.6	17.4	18.5

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Income Tax (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011
Components of the Company's income tax expense (benefit)
Total income tax expense	$ 4.1	$ 3.0	$ 7.5	$ 6.4

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Accumulated Other Comprehensive Income (Details) (USD $) In Millions, unless otherwise specified	Dec. 29, 2012	Jun. 30, 2012
Components of accumulated other comprehensive income
Unrealized losses on available-for-sale investments, net of tax	$ (2.6)	$ (2.8)
Foreign currency translation adjustments	17.0	10.6
Defined benefit obligation, net of tax	(0.3)	(0.3)
Accumulated other comprehensive income	$ 14.1	$ 7.5

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Mergers and Acquisitions (Tables)

6 Months Ended

Dec. 29, 2012

Gen Comm Co., Ltd ("GenComm")

Acquisitions

Schedule of purchase price allocation to acquired assets

The purchase price was allocated as follows (in millions):

Net tangible assets acquired	$	5.9
Intangible assets acquired:
Developed technology	3.2
Customer relationships	0.2
Backlog	0.2
Goodwill	5.7
Total purchase price	$	15.2

Schedule of fair value of tangible assets acquired and liabilities assumed

The following table summarizes the components of the tangible assets acquired at fair value (in millions):

Cash	$	1.9
Accounts receivable	2.3
Inventories	2.4
Property and equipment	2.9
Tax liabilities, net	(1.7		)
Employee related liabilities	(1.5		)
Other assets and liabilities, net	(0.4		)
Net tangible assets acquired	$	5.9

Dyaptive Systems Inc

Acquisitions

Schedule of purchase price allocation to acquired assets

The purchase price was allocated as follows (in millions, in USD):

Net tangible assets acquired	$	3.4
Intangible assets acquired:
Developed technology	6.2
Customer relationships	2.3
Others	0.9
Goodwill	2.0
Total purchase price	$	14.8

Schedule of fair value of tangible assets acquired and liabilities assumed

The following table summarizes the components of the tangible assets acquired and liabilities assumed at fair value (in millions):

Cash	$	4.0
Accounts receivable	0.9
Inventories	0.8
Property and equipment	0.5
Accounts payable	(0.2		)
Deferred revenue	(0.3		)
Employee related liabilities	(2.3		)
Net tangible assets acquired	$	3.4

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Balance Sheet and Other Details (Tables)

6 Months Ended

Dec. 29, 2012

Balance Sheet and Other Details

Schedule of components of accounts receivable reserves and allowances

The activities and balances for allowance for doubtful accounts and allowance for sales returns were as follows (in millions):

	June 30, 2012		Charged to Costs and Expenses		Deduction (1)			December 29, 2012
Allowance for doubtful accounts	$	2.2	$	0.4	$	(0.6	)	$	2.0
Allowance for sales returns	0.4		—		(0.3		)	0.1
Total accounts receivable reserves	$	2.6	$	0.4	$	(0.9	)	$	2.1

(1) Write-off of uncollectible accounts, net of recoveries.

Schedule of components of inventories

Inventories, net are stated at the lower of cost or market, and include material, labor, and manufacturing overhead costs. The components of inventories, net were as follows (in millions):

	December 29,  2012		June 30,  2012
Finished goods	$	95.8	$	89.5
Work in process	37.4		37.3
Raw materials and purchased parts	46.1		47.7
Total inventories, net	$	179.3	$	174.5

Schedule of components of property, plant and equipment

The components of property, plant and equipment, net were as follows (in millions):

	December 29, 2012			June 30, 2012
Land	$	15.5		$	14.1
Buildings and improvements	38.7			35.8
Machinery and equipment	444.0			421.3
Furniture, fixtures, software and office equipment	171.1			166.1
Leasehold improvements	93.0			95.3
Construction-in-progress	18.8			33.0
	781.1			765.6
Less: Accumulated depreciation	(530.8		)	(512.7		)
Property, plant and equipment, net	$	250.3		$	252.9

Schedule of components of prepayments and other current assets

The components of prepayments and other current assets were as follows (in millions):

	December 29, 2012		June 30, 2012
Prepayments	$	31.1	$	30.9
Advances to contract manufacturers	16.4		18.4
Deferred income tax	2.4		2.3
Refundable income taxes	2.8		4.7
Other receivables	18.5		13.0
Other current assets	7.2		7.9
Total prepayments and other current assets	$	78.4	$	77.2

Schedule of components of other current liabilities

The components of other current liabilities were as follows (in millions):

	December 29,  2012		June 30,  2012
Deferred compensation plan	$	4.9	$	4.6
Warranty accrual	6.8		8.1
VAT liabilities	5.5		2.7
Restructuring accrual	5.6		8.6
Deferred taxes	3.5		3.1
Other	6.8		10.8
Total other current liabilities	$	33.1	$	37.9

Schedule of components of other non-current liabilities

The components of other non-current liabilities were as follows (in millions):

	December 29, 2012		June 30, 2012
Pension accrual and post-employment benefits	$	89.8	$	85.2
Deferred taxes	4.0		4.7
Restructuring accrual	3.5		4.0
Financing obligation	35.0		35.4
Non-current income taxes payable	10.8		9.3
Asset retirement obligations	8.5		9.2
Long-term deferred revenue	25.3		16.1
Other	15.6		12.7
Total other non-current liabilities	$	192.5	$	176.6

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Recently Issued Accounting Pronouncements

6 Months Ended

Dec. 29, 2012

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Note 2. Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. This guidance will be effective for the Company beginning in the first quarter of fiscal 2014. The adoption of this guidance may expand existing disclosure requirements, which the Company is currently evaluating.

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Investments and Fair Value Measurements (Tables)

6 Months Ended

Dec. 29, 2012

Investments and Fair Value Measurements

Schedule of available for sale securities

At December 29, 2012, the Company’s available-for-sale securities were as follows (in millions):

	Amortized		Gross		Gross
	Cost / Carrying		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Debt securities:
U.S. treasuries	$	71.9	$	—	$	—		$	71.9
Agencies
U.S.	53.4		0.1		—			53.5
Foreign	4.0		0.1		—			4.1
Municipal bonds and sovereign debt instruments	6.6		—		—			6.6
Asset-backed securities	40.2		0.3		(0.4		)	40.1
Corporate securities
U.S.	213.8		1.4		(0.1		)	215.1
Foreign	33.4		2.2		—			35.6
Total available-for-sale securities	$	423.3	$	4.1	$	(0.5	)	$	426.9

At June 30, 2012, the Company’s available-for-sale securities were as follows (in millions):

	Amortized		Gross		Gross
	Cost / Carrying		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Debt securities:
U.S. treasuries	$	52.0	$	—	$	—		$	52.0
Agencies
U.S.	65.1		0.2		—			65.3
Foreign	3.3		—		—			3.3
Municipal bonds and sovereign debt instruments	11.4		—		—			11.4
Asset-backed securities	21.9		0.2		(0.4		)	21.7
Corporate securities	183.6		1.3		(0.1		)	184.8
Total available-for-sale securities	$	337.3	$	1.7	$	(0.5	)	$	338.5

Schedule of gross unrealized losses on available for sale securities

At December 29, 2012, the Company’s total gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument were as follows (in millions):

	Less than 12 Months		Greater than 12 Months		Total
Asset-backed securities	$	—	$	0.4	$	0.4
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.4	$	0.5

At June 30, 2012, the Company’s gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument were as follows (in millions):

	Less than		Greater than
	12 Months		12 Months		Total
Asset-backed securities	$	—	$	0.4	$	0.4
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.4	$	0.5

Schedule of contractual maturities of available-for-sale securities

At December 29, 2012, contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows (in millions):

	Amortized
	Cost / Carrying		Estimated
	Cost		Fair Value
Amounts maturing in less than 1 year	$	241.3	$	244.4
Amounts maturing in 1 - 5 years	180.6		181.1
Amounts maturing in more than 5 years	1.4		1.4
Total debt securities	$	423.3	$	426.9

Schedule of assets measured at fair value

Assets measured at fair value at December 29, 2012 are summarized below (in millions):

			Fair value measurement as of December 29, 2012
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Debt available-for-sale securities
U.S. treasuries	$	71.9	$	71.9	$	—
Agencies
U.S.	53.5		—		53.5
Foreign	4.1		—		4.1
Municipal bonds and sovereign debt instruments	6.6		—		6.6
Asset-backed securities	40.1		—		40.1
Corporate securities
U.S.	215.1				215.1
Foreign	35.6				35.6
Total debt available-for-sale securities	426.9		71.9		355.0
Money market funds	220.9		220.9		—
Trading securities	4.9		4.9		—
Total assets (1)	$	652.7	$	297.7	$	355.0

(1) $210.1 million in cash and cash equivalents, $403.8 million in short-term investments, $30.9 million in restricted cash, and $7.9 million in other non-current assets on the Company’s consolidated balance sheet.

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Operating Segments (Tables)

6 Months Ended

Dec. 29, 2012

Operating Segments

Schedule of information on reportable segments

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

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Net revenue:
Communications Test and Measurement	$	195.4		$	196.2		$	364.9		$	381.4
Communications and Commercial Optical Products	185.8			163.2			380.7			343.5
Optical Security and Performance Product	48.2			50.2			104.7			100.8
Deferred revenue related to purchase accounting adjustment	—			(0.3		)	—			(0.6		)
Net revenue	$	429.4		$	409.3		$	850.3		$	825.1
Operating income (loss):
Communications Test and Measurement	$	35.3		$	28.0		$	52.1		$	52.1
Communications and Commercial Optical Products	21.2			16.6			45.0			42.2
Optical Security and Performance Product	16.2			16.8			37.4			34.5
Corporate	(23.7		)	(21.4		)	(46.8		)	(42.4		)
Total segment operating income	49.0			40.0			87.7			86.4
Unallocated amounts:
Stock-based compensation	(13.6		)	(12.3		)	(26.2		)	(23.8		)
Acquisition-related charges and amortization of intangibles	(17.3		)	(21.1		)	(38.7		)	(40.8		)
Loss on disposal of long-lived assets	(0.1		)	(0.2		)	(1.4		)	(0.7		)
Restructuring and related charges	(3.0		)	(4.0		)	(5.7		)	(5.5		)
Realignment and other charges	(0.1		)	(1.5		)	(0.7		)	(9.3		)
Interest and other income	(2.4		)	1.0			(2.8		)	2.0
Interest expense	(5.1		)	(6.6		)	(11.2		)	(13.2		)
Income (loss) from continuing operations before income taxes	$	7.4		$	(4.7	)	$	1.0		$	(4.9	)

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Debts and Letters of Credit (Details) (USD $) In Millions, except Per Share data, unless otherwise specified			0 Months Ended	6 Months Ended						6 Months Ended			0 Months Ended	3 Months Ended			6 Months Ended				6 Months Ended
	Dec. 29, 2012 letter	Jun. 30, 2012	Jan. 20, 2012 Revolving Credit Facility	Dec. 29, 2012 Revolving Credit Facility	Dec. 29, 2012 Revolving Credit Facility Alternate base rate	Dec. 29, 2012 Revolving Credit Facility Adjusted LIBOR rate	Dec. 29, 2012 Maximum Revolving Credit Facility	Dec. 29, 2012 Maximum Revolving Credit Facility Alternate base rate	Dec. 29, 2012 Maximum Revolving Credit Facility Adjusted LIBOR rate	Dec. 29, 2012 Minimum Revolving Credit Facility	Dec. 29, 2012 Minimum Revolving Credit Facility Alternate base rate	Dec. 29, 2012 Minimum Revolving Credit Facility Adjusted LIBOR rate	Jun. 30, 2006 1% senior convertible notes	Dec. 29, 2012 1% senior convertible notes	Sep. 29, 2012 1% senior convertible notes	Dec. 31, 2011 1% senior convertible notes	Dec. 29, 2012 1% senior convertible notes item	Dec. 31, 2011 1% senior convertible notes	Jun. 30, 2012 1% senior convertible notes	Jun. 05, 2006 1% senior convertible notes	Dec. 29, 2012 1% senior convertible notes Maximum
Debt details
Convertible Debt														$ 205.6			$ 205.6		$ 292.8
Short-term debt	205.6	292.8
Interest rate on Senior convertible notes (as a percent)														1.00%		1.00%	1.00%	1.00%		1.00%
Aggregate principal amount of convertible debt																				425.0
Proceeds from issuance of convertible notes after issuance costs																				415.9
Conversion price of convertible debt (in dollars per share)														$ 30.30			$ 30.30
Percentage of principal amount that the holder of the note may require the entity to repurchase the debt instrument on May 15, 2013, 2016, and 2021														100.00%			100.00%
Percentage of principal amount that the holder of the note may require the entity to repurchase due to certain fundamental changes undergone by the entity																	100.00%
Percentage of principal amount at which the entity may redeem some or all of the notes on or after May 20, 2013																	100.00%
Discount rate used to calculate the carrying value of the liability component of the convertible debt (as a percent)																				8.10%
Variable rate basis on which discount rate is based					Base rate	LIBOR							7-year swap
Carrying value of the liability component of convertible debt																				266.5
Carrying value of the equity component of convertible debt																				158.5
Remaining term of convertible notes																					1 year
Deferred finance costs				1.9																9.1
Liability component, debt issuance cost																				5.7
Equity component, debt issuance cost																				3.4
Principal amount of debt repurchased														50.0	50.0
Cash paid for repurchase of debt														49.9	49.8
Debt instruments repurchased																	2
Losses on repurchase of Convertible Notes														1.3	2.1
Carrying amounts of the liability and equity components:
Carrying amount of equity component, net of equity issuance cost														156.8			156.8		158.3
Principal amount of 1% senior convertible note														211.0			211.0		311.0
Unamortized discount of liability component														(5.4)			(5.4)		(18.2)
Fair market value of convertible debt														210.5			210.5		307.3
Fair value of the bond parity derivatives														0			0		0
Effective interest rate and interest expense for the contractual interest and the accretion of debt discount:
Effective interest rate (as a percent)														8.10%		8.10%	8.10%	8.10%
Interest expense-contractual interest														0.5		0.8	1.2	1.6
Accretion of debt discount														3.6		5.0	7.8	9.9
Credit facility term			5 years
Maximum borrowing capacity under the credit agreement			250.0
Potential additional borrowings allocated as either an increase to the revolving loan commitments or as an add-on term loan				100
Percentage points added to the reference rate								2.00%	3.00%		0.75%	1.75%
Commitment fee on the unused portion of the credit facility (as a percent)							0.50%			0.25%
Minimum cash and permitted investments agreed to be maintained under the terms of revolving credit facility				200
Period of amortization of debt issuance costs capitalized				5 years
Outstanding balance				0
Unamortized portion of debt issuance cost				1.5										0.2			0.2
Outstanding Letters of Credit
Number of standby letters of credit	15
Letters of credit outstanding	$ 34.5

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF OPERATIONS
Net revenue	$ 429.4	$ 409.3	$ 850.3	$ 825.1
Cost of sales	225.8	219.4	457.0	439.3
Amortization of acquired technologies	14.6	15.4	31.7	29.7
Gross profit	189.0	174.5	361.6	356.1
Operating expenses:
Research and development	63.5	58.9	125.1	118.2
Selling, general and administrative	105.4	105.3	210.1	215.6
Amortization of other intangibles	2.2	5.4	5.7	10.5
Restructuring and related charges	3.0	4.0	5.7	5.5
Total operating expenses	174.1	173.6	346.6	349.8
Income from operations	14.9	0.9	15.0	6.3
Interest and other income (expense), net	(2.4)	1.0	(2.8)	2.0
Interest expense	(5.1)	(6.6)	(11.2)	(13.2)
Income (loss) from continuing operations before income taxes	7.4	(4.7)	1.0	(4.9)
Provision for income taxes	4.1	3.0	7.5	6.4
Income (loss) from continuing operations, net of tax	3.3	(7.7)	(6.5)	(11.3)
Income (loss) from discontinued operations, net of tax	0.8	(2.5)	(1.0)	(4.7)
Net income (loss)	$ 4.1	$ (10.2)	$ (7.5)	$ (16.0)
Basic net income (loss) per share from:
Continuing operations, net of tax (in dollars per share)	$ 0.02	$ (0.03)	$ (0.03)	$ (0.05)
Discontinued operations, net of tax (in dollars per share)		$ (0.01)		$ (0.02)
Net income (loss) (in dollars per share)	$ 0.02	$ (0.04)	$ (0.03)	$ (0.07)
Diluted net income (loss) per share from:
Continuing operations, net of tax (in dollars per share)	$ 0.02	$ (0.03)	$ (0.03)	$ (0.05)
Discontinued operations, net of tax (in dollars per share)		$ (0.01)		$ (0.02)
Net income (loss) (in dollars per share)	$ 0.02	$ (0.04)	$ (0.03)	$ (0.07)
Shares used in per share calculation:
Basic (in shares)	234.4	229.4	233.6	228.9
Diluted (in shares)	237.1	229.4	233.6	228.9

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Mergers and Acquisitions (Details) In Millions, unless otherwise specified		1 Months Ended		1 Months Ended							3 Months Ended		3 Months Ended
	Aug. 17, 2012 Gen Comm Co., Ltd ("GenComm") USD ($)	Aug. 31, 2012 Gen Comm Co., Ltd ("GenComm") Developed technology	Aug. 17, 2012 Gen Comm Co., Ltd ("GenComm") Developed technology USD ($)	Aug. 31, 2012 Gen Comm Co., Ltd ("GenComm") Customer relationships	Aug. 17, 2012 Gen Comm Co., Ltd ("GenComm") Customer relationships USD ($)	Aug. 17, 2012 Gen Comm Co., Ltd ("GenComm") Backlog USD ($)	Dec. 29, 2012 Dyaptive Systems Inc USD ($)	Dec. 29, 2012 Dyaptive Systems Inc CAD	Jan. 31, 2012 Dyaptive Systems Inc USD ($)	Jan. 31, 2012 Dyaptive Systems Inc CAD	Dec. 29, 2012 Dyaptive Systems Inc Developed technology	Jan. 31, 2012 Dyaptive Systems Inc Developed technology USD ($)	Dec. 29, 2012 Dyaptive Systems Inc Customer relationships	Jan. 31, 2012 Dyaptive Systems Inc Customer relationships USD ($)	Jan. 31, 2012 Dyaptive Systems Inc Other USD ($)
Acquisitions
Purchase consideration paid in cash	$ 15.2								$ 14.8	14.9
Working capital adjustment and holdback payment	3.8						2.0	2.0
Purchase price allocation to assets acquired
Net tangible assets acquired	5.9								3.4
Acquired finite-lived intangible assets			3.2		0.2	0.2						6.2		2.3	0.9
Goodwill	5.7								2.0
Total purchase price	15.2								14.8
Estimated useful lives of acquired intangible assets
Estimated useful lives of acquired developed technology and customer relationship intangible assets		4 years		4 years							4 years		4 years
Fair value of acquired tangible assets
Cash	1.9								4.0
Accounts receivable	2.3								0.9
Inventories	2.4								0.8
Property and equipment	2.9								0.5
Tax liabilities, net	(1.7)
Accounts payable									(0.2)
Deferred revenue									(0.3)
Employee related liabilities	(1.5)								(2.3)
Other assets and liabilities, net	(0.4)
Net tangible assets acquired	$ 5.9								$ 3.4

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011
OPERATING ACTIVITIES:
Net loss	$ (7.5)	$ (16.0)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense	33.9	34.7
Amortization of acquired technologies and other intangibles	37.6	43.8
Stock-based compensation	26.3	24.1
Amortization of debt issuance costs and accretion of debt discount	8.3	10.3
Amortization of discount and premium on investments, net	1.9	1.9
Other	1.3
Changes in operating assets and liabilities, net of impact of acquisition of business:
Accounts receivable	29.4	38.8
Inventories	(4.7)	(19.6)
Other current and non-current assets	(13.8)	(6.7)
Accounts payable	3.6	(21.8)
Income taxes payable	2.6	(0.8)
Deferred revenue, current and non-current	(12.5)	(9.6)
Accrued payroll and related expenses	1.1	(13.0)
Accrued expenses and other current and non-current liabilities	(5.0)	2.5
Net cash provided by operating activities	102.5	68.6
INVESTING ACTIVITIES:
Purchases of available-for-sale investments	(292.5)	(211.2)
Maturities and sales of investments	208.9	201.5
Changes in restricted cash	0.5	1.8
Acquisition of business, net of cash acquired	(11.1)	(3.7)
Acquisition of property and equipment	(33.3)	(40.8)
Proceeds from the sale of a business and assets, net of selling costs	11.7	2.1
Net cash used in investing activities	(115.8)	(50.3)
FINANCING ACTIVITIES:
Redemption of convertible debt	(96.5)
Proceeds from financing obligations		6.9
Payment of financing obligations	(0.4)	(7.6)
Proceeds from exercise of employee stock options and employee stock purchase plan	11.5	7.0
Net cash (used in) provided by financing activities	(85.4)	6.3
Effect of exchange rate changes on cash and cash equivalents	3.1	(4.8)
(Decrease) increase in cash and cash equivalents	(95.6)	19.8
Cash and cash equivalents at beginning of period	401.1	395.4
Cash and cash equivalents at end of period	$ 305.5	$ 415.2

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Stock-Based Compensation (Details 2) (Restricted Stock Units with Market Conditions (MSU))	6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011
Restricted Stock Units with Market Conditions (MSU)
Valuation Assumptions
Volatility of common stock (as a percent)	57.70%	68.70%
Average volatility of peer companies (as a percent)	58.30%	68.40%
Average correlation coefficient of peer companies	0.3214	0.3383
Risk-free interest rate (as a percent)	0.40%	0.70%

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Restructuring and Related Charges (Tables)

6 Months Ended

Dec. 29, 2012

Restructuring and Related Charges

Schedule of various restructuring plans

The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the six months ended December 29, 2012 were as follows (in millions):

			Six Months  Ended					Non-cash				Three  Months  Ended
	Balance		December 29,					Settlements		Balance		December 29,
	June 30,		2012		Cash			and Other		December 29,		2012
	2012		Charges		Settlements			Adjustments		2012		Charges
CommTest Wireless Business Restructuring Plan	$	—	$	1.8	$	(1.0	)	$	—	$	0.8	$	1.8
CCOP CPV Plan	—		0.6		(0.4		)	—		0.2		—
CommTest Operation and Repair Outsourcing Restructuring Plan
Workforce Reduction	$	3.9	$	1.5	$	(3.8	)	$	—	$	1.6	$	0.6
Facilities and Equipment	—		0.7		(0.7		)	—		—		0.2
Lease Costs	—		0.5		(0.3		)	—		0.2		—
Total CommTest Operation and Repair Outsourcing Restructuring Plan	$	3.9	$	2.7	$	(4.8	)	$	—	$	1.8	$	0.8
OSP Business Consolidation Plan	0.8		—		(0.6		)	—		0.2		—
CommTest Manufacturing Support Consolidation Plan (Workforce Reduction)	2.5		0.5		(2.0		)	—		1.0		0.4
CommTest Germantown Tower Restructuring Plan (Lease Costs)	0.5		—		—			—		0.5		—
CommTest Market Rebalancing Restructuring Plan (Lease Costs)	0.9		—		(0.2		)	—		0.7		—
CommTest US Manufacturing Outsourcing Restructuring Plan (Lease Costs)	1.1		—		(0.2		)	—		0.9		—
CommTest Germany Restructuring Plan (Workforce Reduction)	2.4		0.1		(0.3		)	0.2		2.4		—
Other plans
Workforce Reduction	$	0.4	$	—	$	(0.3	)	$	—	$	0.1	$	—
Lease Costs	0.1		—		—			0.4		0.5		—
Total other plans	$	0.5	$	—	$	(0.3	)	$	0.4	$	0.6	$	—
Total	$	12.6	$	5.7	$	(9.8	)	$	0.6	$	9.1	$	3.0
Ottawa Lease Exit Costs	$	4.6	$	0.2	$	(0.6	)	$	0.1	$	4.3	$	0.1

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Discontinued Operations (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended		6 Months Ended
	Oct. 12, 2012	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011
Discontinued Operations
Gross proceeds from sale of business	$ 11.5
Hologram Business
Discontinued Operations
Gain on sale of business				0.6
Gross proceeds from sale of business	11.5
Net Revenue		0.3	3.5	5.2	8.5
Net income (loss) from discontinued operations		0.8	(2.5)	(1.0)	(4.7)
Less: selling costs				(0.3)
Net assets associated with Discontinued Operations
Accounts receivable, net	2.7
Inventories, net	4.4
Property, plant and equipment, net	0.8
Intangibles, net	5.8
Accounts payable and accrued expenses	(1.5)
Other current and non-current liabilities	(1.6)
Total net assets held for sale of discontinued operations	$ 10.6

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Commitments and Contingencies

6 Months Ended

Dec. 29, 2012

Commitments and Contingencies

Commitments and Contingencies

Note 16. Commitments and Contingencies

Tax Matters

The Company has been subject to Texas franchise tax audits related to allocated taxable surplus capital for Texas report years 2002 through 2007. While the Company believes that it is reasonably possible this audit may result in additional tax liabilities, based on currently available information, the Company believes the ultimate outcome of this audit will not have a material adverse effect on the Company’s financial position, cash flows or overall trends in results of operations. There is the possibility of a material adverse effect on the Company’s financial position, cash flows or overall trends in results of operations for the period in which this matter is ultimately resolved, if it is resolved unfavorably, or in the period in which an unfavorable outcome becomes probable. The range of the potential total tax liability related to these matters is estimated to be from $0 million to $34.2 million, plus interest and penalties.

Legal Proceedings

During the first quarter of fiscal 2012, the Company received an unfavorable arbitrator’s decision in a legal dispute unrelated to current or future quarters. The arbitrator’s decision was related to, and contrary to the result of, an action which commenced in 2006 in the Western District of Pennsylvania in which the Company was a nominal plaintiff. The Pennsylvania matter was resolved in the Company’s favor in 2009 and was subsequently affirmed by a Federal Appeals Court in January 2011. The Company accrued $7.4 million during the first quarter of fiscal 2012, which included the arbitration award plus interest, in accordance with authoritative guidance on contingencies and recorded an additional $0.2 million towards interest during the second quarter of fiscal 2012. On March 5, 2012 the Pennsylvania District Court denied JDSU’s request to vacate the arbitration award, and the parties subsequently reached a settlement agreement on March 22, 2012 pursuant to which the Company paid $7.9 million on April 2, 2012 in full and final settlement of the matter. The related charge is included as a component of selling, general and administrative expense during the three and six months ended December 31, 2011 in the Company’s Consolidated Statements of Operations.

The Company is subject to a variety of claims and suits that arise from time to time in the ordinary course of our business. While Management currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and Management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable.

Guarantees

In accordance with authoritative guidance which requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities, are required.

The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary indemnifications to purchasers of the Company’s businesses or assets; (ii) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises; and (iii) certain agreements with the Company’s officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship.

The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on its balance sheet as of December 29, 2012 and June 30, 2012.

Product Warranties

In general, the Company offers a three-month to one-year warranty for most of its products. The Company provides reserves for the estimated costs of product warranties at the time revenue is recognized. The Company estimates the costs of its warranty obligations based on its historical experience of known product failure rates, use of materials to repair or replace defective products and service delivery costs incurred in correcting product failures. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise with specific products. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

The following table presents the changes in the Company’s warranty reserve (in millions):

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Balance as of beginning of period	$	7.6		$	7.6		$	8.1		$	7.9
Provision for warranty	1.0			2.2			2.9			4.8
Utilization of reserve	(0.1		)	(0.2		)	(1.4		)	(4.6		)
Adjustments related to pre-existing
warranties (including changes in estimates)	(1.7		)	(2.1		)	(2.8		)	(0.6		)
Balance as of end of period	$	6.8		$	7.5		$	6.8		$	7.5

Financing Obligations — Eningen, Santa Rosa and Payment Plan Agreement for Software Licenses

Eningen

On December 16, 2011, the Company executed and closed the sale and leaseback transaction of certain buildings and land in Eningen, Germany (the “Eningen Transactions”). The Company sold approximately 394,217 square feet of land, nine buildings with approximately 386,132 rentable square feet, and parking areas. The Company leased back approximately 158,154 rentable square feet comprised of two buildings and a portion of a basement of another building (the “Leased Premises”). The lease term is 10 years with the right to cancel a certain portion of the lease after 5 years. The gross cash proceeds received from the transaction were approximately €7.1 million.

Concurrent with the sale and lease back, the Company has provided collateral in case of a default by the Company relative to future lease payments for the Leased Premises. Due to this continuing involvement, the related portion of the cash proceeds and transaction costs, associated with the Leased Premises and other buildings which the Company continues to occupy, was recorded under the financing method in accordance with the authoritative guidance on leases and sales of real estate. Accordingly, the carrying value of these buildings and associated land will remain on the Company’s books and the buildings will continue to be depreciated over their remaining useful lives. The portion of the proceeds received have been recorded as a financing obligation, a portion of the lease payments are recorded as a decrease to the financing obligation and a portion is recognized as interest expense. Imputed rental income from the buildings sold but not leased back and currently being occupied is recorded as a reduction in the financing obligation.

As of December 29, 2012, of the total financing obligation related to the Eningen Transactions, $0.1 million was included in Other current liabilities, and $5.1 million was included in Other non-current liabilities. As of June 30, 2012, of the total financing obligation related to the Eningen Transactions $0.1 million was included in Other current liabilities, and $4.9 million was included in Other non-current liabilities.

Santa Rosa

On August 21, 2007, the Company entered into a sale and lease back of certain buildings and land in Santa Rosa, California (the “Santa Rosa Transactions”). The Company sold approximately 45 acres of land, 13 buildings with approximately 492,000 rentable square feet, a building pad, and parking areas. The Company leased back 7 buildings with approximately 286,000 rentable square feet. The net cash proceeds received from the transaction were $32.2 million. The lease terms range from a five year lease with a one year renewal option to a ten year lease with two five year renewal options.

The Company has an ongoing obligation to remediate environmental matters, impacting the entire site, as required by the North Coast Regional Water Quality Control Board which existed at the time of sale. Concurrent with the sale and lease back, the Company has issued an irrevocable letter of credit for $3.8 million as security for the remediation of the environmental matter that remains in effect until the issuance of a notice of no further action letter from the North Coast Regional Water Quality Control Board. In addition, the lease agreement for one building included an option to purchase at fair market value, at the end of the lease term. Due to these various forms of continuing involvement the transaction was recorded under the financing method in accordance with the authoritative guidance on leases and sales of real estate.

Accordingly, the value of the buildings and land will remain on the Company’s books and the buildings will continue to be depreciated over their remaining useful lives. The proceeds received have been recorded as a financing obligation, a portion of the lease payments are recorded as a decrease to the financing obligation and a portion is recognized as interest expense. Imputed rental income from the buildings sold but not leased back is recorded as a reduction in the financing obligation.

As of December 29, 2012, $1.0 million was included in Other current liabilities, and $28.0 million was included in Other non-current liabilities. As of June 30, 2012, $0.9 million was included in Other current liabilities, and $28.5 million was included in Other non-current liabilities.

The lease payments due under the agreements reset to fair market rental rates upon the Company’s execution of the renewal options.

Payment Plan Agreement for Software Licenses

During fiscal 2011 the Company capitalized approximately $7.1 million of cost incurred for the purchase of perpetual software licenses in accordance with the authoritative accounting guidance. The Company entered into a four-year payment plan agreement (“PPA”) with the supplier towards software licenses and technical support. Under this PPA, payments are made on an annual basis starting the first quarter of fiscal 2012. The principal portion of the payment is accounted for as a financing activity and the remaining interest portion is accounted for as an operating activity in the statement of cash flows.

During the three and six months ended December 29, 2012, the Company recorded amortization expense of $0.3 million and $0.7 million in each period, respectively. During the three and six months ended December 31, 2011, the Company recorded amortization expense of $0.3 million and $0.7 million in each period, respectively.

Future Minimum Financing Payments — Eningen, Santa Rosa and Payment Plan Agreement for Software Licenses

As of December 29, 2012, future minimum financing payments of the perpetual software licenses and financing obligations are as follows (in millions):

Fiscal Years
Remainder of 2012	$	3.8
2013	5.6
2014	3.7
2015	3.5
2016	3.5
Thereafter	37.3
Total	$	57.4

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Stock-Based Compensation (Tables)

6 Months Ended

Dec. 29, 2012

Stock-Based Compensation

Schedule of allocation of stock based compensation cost

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and six months ended December 29, 2012 and December 31, 2011 was as follows (in millions):

	Three Months Ended				Six Months Ended
	December 29,		December 31,		December 29,		December 31,
	2012		2011		2012		2011
Cost of sales	$	2.1	$	1.5	$	4.3	$	3.3
Research and development	3.4		3.1		6.3		5.7
Selling, general and administrative	8.1		7.7		15.6		14.8
	$	13.6	$	12.3	$	26.2	$	23.8

Schedule of valuation assumptions for MSU using Monte Carlo simulation

The Company estimates the fair value of the MSUs on the date of grant using a Monte Carlo simulation with the following assumptions:

	Six Months Ended
	December 29,		December 31,
	2012		2011
Volatility of common stock	57.7	%	68.7	%
Average volatility of peer companies	58.3	%	68.4	%
Average correlation coefficient of peer companies	0.3214		0.3383
Risk-free interest rate	0.4	%	0.7	%

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Discontinued Operations

6 Months Ended

Dec. 29, 2012

Discontinued Operations

Discontinued Operations

Note 18. Discontinued Operations

On September 18, 2012, the Company entered into a definitive agreement to sell the Hologram Business within the previous AOT reportable segment to OpSec Security Inc. in cash, subject to adjustment based on close date net working capital condition. On October 12, 2012, the transaction closed and the Company received gross proceeds of $11.5 million from the sale.

In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of the Hologram Business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Net revenue of the Hologram Business for the three and six months ended December 29, 2012 was $0.3 million and $5.2 million, respectively. Net revenue of the Hologram Business for the three and six months ended December 31, 2011 was $3.5 million and $8.5 million, respectively. Net income (loss) for the three and six months ended December 29, 2012 was net income of $0.8 million and net loss $1.0 million, respectively. Net loss for the three and six months ended December 31, 2011 was $2.5 million and $4.7 million, respectively. There was no tax effect associated with the discontinued operation for any periods presented.

The Company recorded a gain of $0.6 million in connection with the sale of the Hologram Business, calculated as follows (in millions):

Gross Proceeds	$	11.5
Less: carrying value of net assets	(10.6		)
Less: selling costs	(0.3		)
Gain	$	0.6

The carrying value of the net assets sold as of October 12, 2012 are as follows (in millions):

	October 12,
	2012
Accounts receivable, net	$	2.7
Inventories, net	4.4
Property, plant and equipment, net	0.8
Intangibles, net	5.8
Accounts payable and accrued expenses	(1.5		)
Other current and non-current liabilities	(1.6		)
Total net assets held for sale	$	10.6

The gain was recorded in the Consolidated Statements of Operations as a component of Net income (loss) from discontinued operations, net of tax.

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Basis of Presentation

6 Months Ended

Dec. 29, 2012

Basis of Presentation

Basis of Presentation

Note 1. Basis of Presentation

The financial information for JDS Uniphase Corporation (“JDSU,” also referred to as “the Company”) as of December 29, 2012 and for the three and six months ended December 29, 2012 and December 31, 2011 is unaudited, and includes all normal and recurring adjustments that Company management (“Management”) considers necessary for a fair statement of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 14, 2012.

The balance sheet as of June 30, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results for the three and six months ended December 29, 2012 and December 31, 2011 may not be indicative of results for the year ending June 29, 2013 or any future periods.

Fiscal Years

The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2013 is a 52-week year ending on June 29, 2013. The Company’s fiscal 2012 was a 52-week year and ended on June 30, 2012.

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.

Out-of-Period Adjustments

During the three months ended September 29, 2012, the Company recorded out-of-period adjustments primarily related to the cost of sales in fiscal year 2011. The impact of the corrections reduced the net loss by $1.9 million for the three months ended September 29, 2012. Management and the Audit Committee have concluded these errors, both individually and in aggregate, were not material to any prior year financial statements and the impact of correcting these errors in the current year is not expected to be material to the full year fiscal 2013 financial statements, accordingly the Company recorded the correction of these errors in the first quarter of fiscal 2013.

Discontinued Operations

On October 12, 2012, the Company closed the sale of its hologram business (“Hologram Business”) to OpSec Security Inc. for $11.5 million in cash. The Consolidated Statements of Operations have been recast to present the Hologram Business as discontinued operations as described in “Note 18. Discontinued Operations.” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of net revenue and expenses and the disclosure of commitments and contingencies during the reporting periods. The Company bases estimates on historical experience and on various assumptions about the future believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 4.1	$ (10.2)	$ (7.5)	$ (16.0)
Unrealized gains and losses on investments, net of tax:
Unrealized holding (losses) gains arising during period	(0.1)		0.3	(0.3)
Less: reclassification adjustments included in net income (loss)			(0.1)	(1.3)
Net change in cumulative translation adjustment	3.1	(0.7)	6.4	(6.3)
Net change in defined benefit obligation, net of tax		(0.4)		(0.4)
Net change in other comprehensive income (loss)	3.0	(1.1)	6.6	(8.3)
Comprehensive income (loss)	$ 7.1	$ (11.3)	$ (0.9)	$ (24.3)

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Restructuring and Related Charges

6 Months Ended

Dec. 29, 2012

Restructuring and Related Charges

Restructuring and Related Charges

Note 11. Restructuring and Related Charges

The Company continues to seek to reduce costs through targeted restructuring events intended to consolidate its operations and rationalize the manufacturing of its products based on core competencies and cost efficiencies, together with the need to align its businesses with market conditions. As of December 29, 2012, the Company’s total restructuring accrual was $9.1 million. During the three and six months ended December 29, 2012, the Company incurred restructuring expenses of $3.0 million and $5.7 million, respectively. During the three and six months ended December 31, 2011, the Company incurred restructuring expenses of $4.0 million and $5.5 million, respectively. The Company’s restructuring charges can include severance and benefit costs to eliminate a specified number of positions, facilities and equipment costs to vacate facilities and consolidate operations, and lease termination costs. The timing of associated cash payments depend upon the type of restructuring charge and can extend over multiple periods.

Summary of Restructuring Plans

The adjustments to the accrued restructuring expenses related to all of the Company’s restructuring plans described below for the six months ended December 29, 2012 were as follows (in millions):

			Six Months  Ended					Non-cash				Three  Months  Ended
	Balance		December 29,					Settlements		Balance		December 29,
	June 30,		2012		Cash			and Other		December 29,		2012
	2012		Charges		Settlements			Adjustments		2012		Charges
CommTest Wireless Business Restructuring Plan	$	—	$	1.8	$	(1.0	)	$	—	$	0.8	$	1.8
CCOP CPV Plan	—		0.6		(0.4		)	—		0.2		—
CommTest Operation and Repair Outsourcing Restructuring Plan
Workforce Reduction	$	3.9	$	1.5	$	(3.8	)	$	—	$	1.6	$	0.6
Facilities and Equipment	—		0.7		(0.7		)	—		—		0.2
Lease Costs	—		0.5		(0.3		)	—		0.2		—
Total CommTest Operation and Repair Outsourcing Restructuring Plan	$	3.9	$	2.7	$	(4.8	)	$	—	$	1.8	$	0.8
OSP Business Consolidation Plan	0.8		—		(0.6		)	—		0.2		—
CommTest Manufacturing Support Consolidation Plan (Workforce Reduction)	2.5		0.5		(2.0		)	—		1.0		0.4
CommTest Germantown Tower Restructuring Plan (Lease Costs)	0.5		—		—			—		0.5		—
CommTest Market Rebalancing Restructuring Plan (Lease Costs)	0.9		—		(0.2		)	—		0.7		—
CommTest US Manufacturing Outsourcing Restructuring Plan (Lease Costs)	1.1		—		(0.2		)	—		0.9		—
CommTest Germany Restructuring Plan (Workforce Reduction)	2.4		0.1		(0.3		)	0.2		2.4		—
Other plans
Workforce Reduction	$	0.4	$	—	$	(0.3	)	$	—	$	0.1	$	—
Lease Costs	0.1		—		—			0.4		0.5		—
Total other plans	$	0.5	$	—	$	(0.3	)	$	0.4	$	0.6	$	—
Total	$	12.6	$	5.7	$	(9.8	)	$	0.6	$	9.1	$	3.0
Ottawa Lease Exit Costs	$	4.6	$	0.2	$	(0.6	)	$	0.1	$	4.3	$	0.1

As of December 29, 2012 and June 30, 2012, the Company included the long-term portion of the restructuring liability of $3.5 million and $4.0 million, respectively, as the restructuring accrual component under Other non-current liabilities, and the short-term portion as the restructuring accrual component under Other current liabilities in the Consolidated Balance Sheets.

The Company had also previously recorded lease exit charges, net of assumed sub-lease income in prior fiscal years related to its Ottawa facility that was included in selling, general and administrative expenses. The fair value of the remaining contractual obligations, net of sublease income, is $4.3 million and $4.6 million as of December 29, 2012 and June 30, 2012 respectively. The Company included the long-term portion of the contract obligations of $3.3 million and $3.7 million in other non-current liabilities as of each period end, and the short-term portion in other current liabilities in the Consolidated Balance Sheets. The payments related to these lease costs are expected to be paid by the end of the third quarter of fiscal 2018.

CommTest Wireless Business Restructuring Plan

During the second quarter of fiscal 2013, Management approved a plan to align the Company’s investment strategy in CommTest segment with customer spending priorities in high growth product lines such as wireless network assurance and eliminate positions in research and development, sales and operations organization that supported low growth product lines. As a result, a restructuring charge of $1.8 million was recorded for severance and employee benefits for 43 employees primarily in research and development and selling, general and administrative functions. As of December 29, 2012, 38 employees have been terminated. The employees being affected are located in North America and Asia. Payments related to remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2013.

CCOP CPV Plan

During the first quarter of fiscal 2013, Management approved a plan to terminate the CPV product line within the CCOP segment based on limited opportunities for market growth. This action will occur over the next several quarters and affects 10 employees in manufacturing, research and development and selling, general and administrative functions. The employees being affected are located in North America, Europe and Asia. As of December 29, 2012, 9 employees have been terminated. Payments related to remaining severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2013.

CommTest Operation and Repair Outsourcing Restructuring Plan

During the fourth quarter of fiscal 2012, Management approved a plan which focuses on three areas in the CommTest segment: (1) moving the repair organization to a repair outsourcing partner; (2) reorganizing the R&D global team because of portfolio prioritization primarily in the Customer Experience Management (“CEM”) business to consolidate key platforms from several sites to a single site, and (3) reorganizing Global Sales to focus on strategic software growth, wireless growth, and to ensure sales account resources on the most critical global growth accounts. This action will occur over the next several quarters and affected 133 employees in manufacturing, research and development and selling, general and administrative functions. The employees being affected are located in America, Europe and Asia. As of December 29, 2012, 107 of these employees have been terminated. During the three months ended December 29, 2012, the Company adjusted the accrual for $0.6 million of additional severance and employee benefits arising from 22 employees added to the original plan. Payments related to the severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2014.

During the fourth quarter of fiscal 2012, Management approved a plan to exit workspaces in Techpoint, Singapore and Atlanta, Georgia, primarily used by the CommTest segment. During the six months ended December 29, 2012, the Company exited both the workspaces. The fair value of the remaining contractual obligations, net of sublease income as of December 29, 2012, was $0.2 million. Payments related to the lease costs are expected to be paid by the end of the fourth quarter of fiscal 2013 and second quarter of fiscal 2014 for the leased sites in Techpoint, Singapore and Atlanta, Georgia, respectively.

OSP Business Consolidation Plan

During the fourth quarter of fiscal 2012, Management approved a plan to consolidate and re-align the various business units primarily within its OSP segment to improve synergies. This action will occur over the next several quarters and affected 16 employees primarily in manufacturing, research and development and selling, general and administrative functions. The employees being affected are located in the United States and Europe. As of December 29, 2012, 11 of these employees have been terminated. Payments related to the severance and benefits accrual are expected to be paid by the end of the third quarter of fiscal 2013.

CommTest Manufacturing Support Consolidation Plan

During the third quarter of fiscal 2012, Management approved a plan to continue to consolidate its manufacturing support operations in the CommTest segment by reducing the number of contract manufacturer locations worldwide and moving most of them to lower cost regions such as Mexico and China. This action will occur over the next several quarters and affected 80 employees in manufacturing and selling, general and administrative functions. The employees being affected are located in North America, Europe and Asia. As of December 29, 2012, 53 employees have been terminated. During the three months ended December 29, 2012, the Company adjusted the accrual for $0.4 million due to additional severance and employee benefits arising from 5 employees added to the original plan. Payments related to the severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2013.

CommTest Germantown Restructuring Plan

During the second quarter of fiscal 2012, Management approved a plan to consolidate workspace in Germantown, Maryland, primarily used by the CommTest segment. As of December 31, 2011, the Company exited the workspace in Germantown under the plan. The fair value of the remaining contractual obligations, net of sublease income as of December 29, 2012 was $0.5 million. Payments related to the lease costs are expected to be paid by the end of the second quarter of fiscal 2019.

CommTest Market Rebalancing Restructuring Plan

During the third quarter of fiscal 2011, Management approved a plan for the CommTest segment to focus on higher growth products and services in lower cost markets with higher growth potential. This resulted in termination of employment, exit of three facilities and manufacturing transfer costs. As of June 30, 2012, all employees had been terminated. The fair value of the remaining contractual obligations with respect to the facilities exited, net of sublease income as of December 29, 2012 was $0.7 million. Payments related to the lease costs are expected to be paid by the end of the second quarter of fiscal 2016.

CommTest US Manufacturing Outsourcing Restructuring Plan

During fiscal 2010, the Company exited facilities in Maryland and Indiana as part of its restructuring plan in the CommTest segment to reduce and/or consolidate manufacturing locations. The fair value of the remaining contractual obligations, net of sublease income, as of December 29, 2012 was $0.9 million. Payments related to the lease costs are expected to be paid by the end of the second quarter of fiscal 2015 for its facilities in Indiana. Payments related the lease costs for its facilities in the state of Maryland were paid out as of December 31, 2011.

CommTest Germany Restructuring Plan

During the fourth quarter of fiscal 2009, the Company implemented a restructuring plan for its site in Germany in its CommTest segment to significantly change the overall cost structure and complexity of the site, and to align the cost of the site more with market demand. 77 employees in manufacturing, research and development and selling, general and administrative functions were affected by the plan. As of December 29, 2012, 74 employees have been terminated. Payments related to the severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2016.

Other plans

Other plans account for a minor portion of the total restructuring accrual, with minimal or no revisions recorded.

XML

Document and Entity Information	6 Months Ended
	Dec. 29, 2012	Jan. 26, 2013
Document and Entity Information
Entity Registrant Name	JDS UNIPHASE CORP /CA/
Entity Central Index Key	0000912093
Document Type	10-Q
Document Period End Date	Dec. 29, 2012
Amendment Flag	false
Current Fiscal Year End Date	--06-29
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		235,145,384
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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Income Tax

6 Months Ended

Dec. 29, 2012

Income Tax

Income Tax

Note 12. Income Tax

The Company recorded an income tax expense of $4.1 million and $7.5 million for the three and six months ended December 29, 2012, respectively. The Company recorded an income tax expense of $3.0 million and $6.4 million for the three and six months ended December 31, 2011, respectively.

The income tax expense recorded for the three and six months ended December 29, 2012 and December 31, 2011, respectively, primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income for the year in those locations.

The income tax expense recorded differs from the expected tax expense or benefit that would be calculated by applying the federal statutory rate to the Company’s income or loss before income taxes primarily due to the increases in valuation allowance for deferred tax assets attributable to the Company’s domestic and foreign losses from continuing operations.

As of December 29, 2012 and June 30, 2012, the Company’s unrecognized tax benefits totaled $62.6 million and $61.3 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $24.5 million accrued for the payment of interest and penalties at December 29, 2012.

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CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Dec. 29, 2012	Jun. 30, 2012
Current assets:
Cash and cash equivalents	$ 305.5	$ 401.1
Short-term investments	403.8	320.5
Restricted cash	30.9	31.1
Accounts receivable, net (Note 6)	278.8	305.8
Inventories, net	179.3	174.5
Prepayments and other current assets	78.4	77.2
Total current assets	1,276.7	1,310.2
Property, plant and equipment, net	250.3	252.9
Goodwill	75.3	68.7
Intangibles, net	139.9	178.8
Other non-current assets	70.7	58.9
Total assets	1,812.9	1,869.5
Current liabilities:
Accounts payable	116.1	117.6
Accrued payroll and related expenses	80.2	68.6
Income taxes payable	22.9	20.7
Deferred revenue	59.9	81.2
Accrued expenses	37.4	35.3
Short-term debt	205.6	292.8
Other current liabilities	33.1	37.9
Total current liabilities	555.2	654.1
Other non-current liabilities	192.5	176.6
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred Stock, $0.001 par value; 1 million shares authorized; 1 share at December 29, 2012 and June 30, 2012, issued and outstanding
Common Stock, $0.001 par value; 1 billion shares authorized; 234 million shares at December 29, 2012 and 232 million shares at June 30, 2012, issued and outstanding	0.2	0.2
Additional paid-in capital	69,723.0	69,695.7
Accumulated deficit	(68,672.1)	(68,664.6)
Accumulated other comprehensive income	14.1	7.5
Total stockholders' equity	1,065.2	1,038.8
Total liabilities and stockholders' equity	$ 1,812.9	$ 1,869.5

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Balance Sheet and Other Details

6 Months Ended

Dec. 29, 2012

Balance Sheet and Other Details

Balance Sheet and Other Details

Note 6. Balance Sheet and Other Details

Accounts Receivable Reserves and Allowances

The activities and balances for allowance for doubtful accounts and allowance for sales returns were as follows (in millions):

	June 30, 2012		Charged to Costs and Expenses		Deduction (1)			December 29, 2012
Allowance for doubtful accounts	$	2.2	$	0.4	$	(0.6	)	$	2.0
Allowance for sales returns	0.4		—		(0.3		)	0.1
Total accounts receivable reserves	$	2.6	$	0.4	$	(0.9	)	$	2.1

(1) Write-off of uncollectible accounts, net of recoveries.

Inventories, Net

Inventories, net are stated at the lower of cost or market, and include material, labor, and manufacturing overhead costs. The components of inventories, net were as follows (in millions):

	December 29,  2012		June 30,  2012
Finished goods	$	95.8	$	89.5
Work in process	37.4		37.3
Raw materials and purchased parts	46.1		47.7
Total inventories, net	$	179.3	$	174.5

Property, Plant and Equipment, Net

The components of property, plant and equipment, net were as follows (in millions):

	December 29, 2012			June 30, 2012
Land	$	15.5		$	14.1
Buildings and improvements	38.7			35.8
Machinery and equipment	444.0			421.3
Furniture, fixtures, software and office equipment	171.1			166.1
Leasehold improvements	93.0			95.3
Construction-in-progress	18.8			33.0
	781.1			765.6
Less: Accumulated depreciation	(530.8		)	(512.7		)
Property, plant and equipment, net	$	250.3		$	252.9

During the first quarter of fiscal 2013, the Company completed a capital investment project in machinery and equipment to increase anti-counterfeiting production capabilities in Beijing, China that was included in Construction-in-progress as of June 30, 2012. The Company began depreciating the asset over its useful life of 20 years during the first quarter of fiscal 2013.

At December 29, 2012 and June 30, 2012, property, plant and equipment, net included $20.7 million and $21.4 million, respectively, in land and buildings related to the Santa Rosa and Eningen Transactions (as defined in “Note 16. Commitments and Contingencies” below) accounted for under the financing method. See “Note 16. Commitments and Contingencies” for more detail.

During the three months ended December 29, 2012 and December 31, 2011, the Company recorded $16.9 million and $17.1 million of depreciation expense, respectively. During the six months ended December 29, 2012 and December 31, 2011, the Company recorded $33.8 million and $34.2 million of depreciation expense, respectively.

Prepayments and Other Current Assets

The components of prepayments and other current assets were as follows (in millions):

	December 29, 2012		June 30, 2012
Prepayments	$	31.1	$	30.9
Advances to contract manufacturers	16.4		18.4
Deferred income tax	2.4		2.3
Refundable income taxes	2.8		4.7
Other receivables	18.5		13.0
Other current assets	7.2		7.9
Total prepayments and other current assets	$	78.4	$	77.2

Other Current Liabilities

The components of other current liabilities were as follows (in millions):

	December 29,  2012		June 30,  2012
Deferred compensation plan	$	4.9	$	4.6
Warranty accrual	6.8		8.1
VAT liabilities	5.5		2.7
Restructuring accrual	5.6		8.6
Deferred taxes	3.5		3.1
Other	6.8		10.8
Total other current liabilities	$	33.1	$	37.9

Other Non-Current Liabilities

The components of other non-current liabilities were as follows (in millions):

	December 29, 2012		June 30, 2012
Pension accrual and post-employment benefits	$	89.8	$	85.2
Deferred taxes	4.0		4.7
Restructuring accrual	3.5		4.0
Financing obligation	35.0		35.4
Non-current income taxes payable	10.8		9.3
Asset retirement obligations	8.5		9.2
Long-term deferred revenue	25.3		16.1
Other	15.6		12.7
Total other non-current liabilities	$	192.5	$	176.6

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Mergers and Acquisitions

6 Months Ended

Dec. 29, 2012

Mergers and Acquisitions

Mergers and Acquisitions

Note 5. Mergers and Acquisitions

GenComm Co., Ltd. (“GenComm”)

On August 17, 2012 (“Closing Date”), the Company completed the acquisition of Seoul, South Korea-based GenComm, a provider of test and measurement solutions for troubleshooting, installation and maintenance of wireless base stations and repeaters, based in Seoul, South Korea. The Company acquired tangible and intangible assets and assumed liabilities of GenComm for a total purchase price of approximately $15.2 million in cash, including holdback payments of approximately $3.8 million, which are reserved for potential breaches of representations and warranties. The holdback payments, minus any deductions for actual or pending claims, will be released more than one year after the Closing Date. After the Closing Date, GenComm was integrated in the Company’s Communications Test and Measurement segment (“CommTest”).

The Company accounted for the transaction in accordance with the authoritative guidance on business combinations; therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date.

The purchase price was allocated as follows (in millions):

Net tangible assets acquired	$	5.9
Intangible assets acquired:
Developed technology	3.2
Customer relationships	0.2
Backlog	0.2
Goodwill	5.7
Total purchase price	$	15.2

The following table summarizes the components of the tangible assets acquired at fair value (in millions):

Cash	$	1.9
Accounts receivable	2.3
Inventories	2.4
Property and equipment	2.9
Tax liabilities, net	(1.7		)
Employee related liabilities	(1.5		)
Other assets and liabilities, net	(0.4		)
Net tangible assets acquired	$	5.9

Acquired intangible assets are classified as Level 3 assets for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of acquired developed technology, customer relationships and order backlog was determined based on an income approach using the discounted cash flow method. The acquired developed technology and customer relationship intangible assets are being amortized over their estimated useful lives of four years. Backlog has been fully amortized as of September 29, 2012.

The goodwill arising from this acquisition is primarily attributed to sales of future products and services and the assembled workforce of GenComm. Goodwill is not being amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative guidance. Goodwill has been assigned to the CommTest segment and is not deductible for tax purposes.

GenComm’s results of operations have been included in the Company’s consolidated financial statements subsequent to the Closing Date. Pro forma results of operations have not been presented because the effect of the acquisition was not material to prior period financial statements.

Dyaptive Systems Inc. (“Dyaptive”)

In January 2012, the Company completed the acquisition of Dyaptive based in Vancouver, Canada. The Company acquired tangible and intangible assets and assumed liabilities of Dyaptive for a total purchase price of CAD 14.9 million (approximately USD 14.8 million) in cash, including a holdback payment of CAD 2.0 million (approximately USD 2.0 million). The holdback payment of CAD 2.0 million (approximately USD 2.0 million) was made during the three months ended December 29, 2012.

Dyaptive is a provider of wireless laboratory test tools for base station and network load simulators. The Company acquired Dyaptive to strengthen its laboratory product portfolio and to offer field service and production test tools that complement its current products. After the Closing Date, Dyaptive was integrated in the Company’s CommTest segment.

The Company accounted for the transaction in accordance with the authoritative guidance on business combinations; therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date.

The purchase price was allocated as follows (in millions, in USD):

Net tangible assets acquired	$	3.4
Intangible assets acquired:
Developed technology	6.2
Customer relationships	2.3
Others	0.9
Goodwill	2.0
Total purchase price	$	14.8

The following table summarizes the components of the tangible assets acquired and liabilities assumed at fair value (in millions):

Cash	$	4.0
Accounts receivable	0.9
Inventories	0.8
Property and equipment	0.5
Accounts payable	(0.2		)
Deferred revenue	(0.3		)
Employee related liabilities	(2.3		)
Net tangible assets acquired	$	3.4

Acquired intangible assets are classified as Level 3 assets for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of acquired developed technology and customer relationships was determined based on an income approach using the discounted cash flow method. The acquired developed technology and customer relationship intangible assets are being amortized over their estimated useful lives of four years.

The goodwill arising from this acquisition is primarily attributed to sales of future products and services and the assembled workforce of Dyaptive. Goodwill is not being amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative guidance. Goodwill has been assigned to the CommTest segment and is not deductible for tax purposes.

Dyaptive’s results of operations have been included in the Company’s consolidated financial statements subsequent to the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material to prior period financial statements.

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Operating Segments

6 Months Ended

Dec. 29, 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, enterprises and network equipment manufacturers (“NEMs”). JDSU’s diverse technology portfolio also fights counterfeiting and enables commercial lasers for a range of manufacturing applications.

Effective July 1, 2012, the reporting structure of the previous AOT business segment was reorganized and its previous reporting units, which consisted of COPG, Flex and ASG (excluding the Hologram Business), were merged into the new OSP business segment, having one single reporting unit, replacing the AOT business segment. The Hologram Business was previously presented within the AOT business segment; however, because it is presented as discontinued operations for financial reporting purposes as of September 29, 2012, it has been excluded from the segment results below.

The Company’s reportable segments are:

(i) Communications Test and Measurement Business Segment:

CommTest 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:

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, 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 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 Company’s Current Report on Form 8-K dated December 14, 2012. 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, 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						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Net revenue:
Communications Test and Measurement	$	195.4		$	196.2		$	364.9		$	381.4
Communications and Commercial Optical Products	185.8			163.2			380.7			343.5
Optical Security and Performance Product	48.2			50.2			104.7			100.8
Deferred revenue related to purchase accounting adjustment	—			(0.3		)	—			(0.6		)
Net revenue	$	429.4		$	409.3		$	850.3		$	825.1
Operating income (loss):
Communications Test and Measurement	$	35.3		$	28.0		$	52.1		$	52.1
Communications and Commercial Optical Products	21.2			16.6			45.0			42.2
Optical Security and Performance Product	16.2			16.8			37.4			34.5
Corporate	(23.7		)	(21.4		)	(46.8		)	(42.4		)
Total segment operating income	49.0			40.0			87.7			86.4
Unallocated amounts:
Stock-based compensation	(13.6		)	(12.3		)	(26.2		)	(23.8		)
Acquisition-related charges and amortization of intangibles	(17.3		)	(21.1		)	(38.7		)	(40.8		)
Loss on disposal of long-lived assets	(0.1		)	(0.2		)	(1.4		)	(0.7		)
Restructuring and related charges	(3.0		)	(4.0		)	(5.7		)	(5.5		)
Realignment and other charges	(0.1		)	(1.5		)	(0.7		)	(9.3		)
Interest and other income	(2.4		)	1.0			(2.8		)	2.0
Interest expense	(5.1		)	(6.6		)	(11.2		)	(13.2		)
Income (loss) from continuing operations before income taxes	$	7.4		$	(4.7	)	$	1.0		$	(4.9	)

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Stock-Based Compensation

6 Months Ended

Dec. 29, 2012

Stock-Based Compensation

Stock-Based Compensation

Note 13. Stock-Based Compensation

Overview

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and six months ended December 29, 2012 and December 31, 2011 was as follows (in millions):

	Three Months Ended				Six Months Ended
	December 29,		December 31,		December 29,		December 31,
	2012		2011		2012		2011
Cost of sales	$	2.1	$	1.5	$	4.3	$	3.3
Research and development	3.4		3.1		6.3		5.7
Selling, general and administrative	8.1		7.7		15.6		14.8
	$	13.6	$	12.3	$	26.2	$	23.8

Approximately $2.3 million of stock-based compensation was capitalized in inventory at December 29, 2012.

Stock Options

The Company issues stock options that generally become exercisable over a three-year or four-year period and, if not exercised, expire from five to ten years after the date of grant. The Company granted no stock options in the first two quarters of fiscal 2013 or fiscal 2012.

As of December 29, 2012, $3.3 million of unrecognized stock-based compensation cost related to stock options remains to be amortized. That cost is expected to be recognized over an estimated amortization period of 1.2 years.

Employee Stock Purchase Plan

The Company’s ESPP provides eligible employees an opportunity to acquire an ownership interest in the Company at a discounted purchase price with a 6-month look-back period. The fair value of ESPP is estimated on the date of offering using a Black-Scholes-Metron valuation model.

As of December 29, 2012, $0.2 million of unrecognized stock-based compensation cost related to the ESPP remains to be amortized. That cost is expected to be recognized through the third quarter of fiscal 2013.

Full Value Awards

“Full Value Awards” refer to Restricted Stock Units (“RSUs”) and Performance Units that are granted with the exercise price equal to zero and are converted to shares immediately upon vesting. These Full Value Awards are performance-based, time-based, or a combination of both and expected to vest over one year to four years. The fair value of the time-based Full Value Awards is based on the closing market price of the Company’s common stock on the date of award.

For the six months ended December 29, 2012 and December 31, 2011, the Company granted 5.5 million and 4.4 million RSUs, of which 0.7.million and 0.5 million, respectively, are performance-based RSUs with market conditions (“MSUs”). These MSUs shares represent the target amount of grants, and the actual number of shares awarded upon vesting of the MSUs may be higher or lower depending upon the achievement of the relevant market conditions. The majority of MSUs vest in equal annual installments over three years based on the attainment of certain total shareholder return performance measures and the employee’s continued service through the vest date. The aggregate grant-date fair value of MSUs granted during the first six months of fiscal 2013 and fiscal 2012 was estimated to be $9.8 million and $9.3 million, respectively, and was calculated using a Monte Carlo simulation. The remaining 4.8 million and 3.9 million shares for the six months ended December 29, 2012 and December 31, 2011 are mainly time-based RSUs. The majority of these time-based RSUs vest over three years, with 33% vesting after one year and quarterly over the remaining two years.

As of December 29, 2012, $87.0 million of unrecognized stock-based compensation cost related to Full Value Awards remains to be amortized. That cost is expected to be recognized over an estimated amortization period of 2.3 years.

Valuation Assumptions

The Company estimates the fair value of the MSUs on the date of grant using a Monte Carlo simulation with the following assumptions:

	Six Months Ended
	December 29,		December 31,
	2012		2011
Volatility of common stock	57.7	%	68.7	%
Average volatility of peer companies	58.3	%	68.4	%
Average correlation coefficient of peer companies	0.3214		0.3383
Risk-free interest rate	0.4	%	0.7	%

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Acquired Developed Technology and Other Intangibles

6 Months Ended

Dec. 29, 2012

Acquired Developed Technology and Other Intangibles

Acquired Developed Technology and Other Intangibles

Note 9. Acquired Developed Technology and Other Intangibles

The following tables present details of the Company’s acquired developed technology and other intangibles (in millions):

	Gross
	Carrying		Accumulated
As of December 29, 2012	Amount		Amortization			Net
Acquired developed technology	$	543.5	$	(434.9	)	$	108.6
Other	230.1		(198.8		)	31.3
Total intangibles	$	773.6	$	(633.7	)	$	139.9

	Gross
	Carrying		Accumulated
As of June 30, 2012	Amount		Amortization			Net
Acquired developed technology	$	534.8	$	(398.6	)	$	136.2
Other	279.3		(236.7		)	42.6
Total intangibles	$	814.1	$	(635.3	)	$	178.8

During the three and six months ended December 29, 2012, the Company recorded $16.8 million and $37.4 million, respectively, of amortization expense relating to acquired technology and other intangibles. During the three months ended September 29, 2012, the Company approved a plan to terminate the concentrated photovoltaic (“CPV”) product line within its Communications and Commercial Optical Products (“CCOP”) segment and accordingly recorded $2.6 million of accelerated amortization. Refer to “Note 11. Restructuring and Related Charges” for more details.

During the three and six months ended December 31, 2011, the Company recorded $20.8 million and $40.2 million, respectively, of amortization expense relating to acquired technology and other intangibles.

Based on the carrying amount of acquired technology and other intangibles as of December 29, 2012, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):

Fiscal Years
Remainder of 2013	$	33.3
2014	41.8
2015	33.9
2016	12.9
2017	9.6
Thereafter	8.4
Total amortization	$	139.9

The acquired developed technology and other intangibles balance are adjusted quarterly to record the effect of currency translation adjustments.

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Employee Defined Benefit Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011
Pension Benefit Plans
Components of the net periodic cost for the pension and benefits plans
Service cost	$ 0.1	$ 0.1	$ 0.2	$ 0.2
Interest cost	1.1	1.3	2.2	2.7
Expected return on plan assets	(0.3)	(0.3)	(0.6)	(0.7)
Recognized net actuarial (gains)/losses		(0.1)		(0.2)
Curtailment/Settlement (gains)/losses	(0.2)		(0.2)
Net periodic benefit cost	0.7	1.0	1.6	2.0
Defined benefit plan contribution during fiscal year			6.4
Change in plan assets:
Contribution incurred			3.5
Vested benefit obligation	1.3		1.3
UK pension plan
Change in plan assets:
Employer contributions			$ 0.7

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Investments and Fair Value Measurements

6 Months Ended

Dec. 29, 2012

Investments and Fair Value Measurements

Investments and Fair Value Measurements

Note 7. Investments and Fair Value Measurements

The Company’s investments in marketable debt and equity securities were primarily classified as available-for-sale investments.

At December 29, 2012, the Company’s available-for-sale securities were as follows (in millions):

	Amortized		Gross		Gross
	Cost / Carrying		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Debt securities:
U.S. treasuries	$	71.9	$	—	$	—		$	71.9
Agencies
U.S.	53.4		0.1		—			53.5
Foreign	4.0		0.1		—			4.1
Municipal bonds and sovereign debt instruments	6.6		—		—			6.6
Asset-backed securities	40.2		0.3		(0.4		)	40.1
Corporate securities
U.S.	213.8		1.4		(0.1		)	215.1
Foreign	33.4		2.2		—			35.6
Total available-for-sale securities	$	423.3	$	4.1	$	(0.5	)	$	426.9

The Company generally classifies debt securities as cash equivalents, short-term investments, or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are classified as current assets. As of December 29, 2012, of the total estimated fair value, $26.6 million was classified as cash equivalents, $398.9 million was classified as short-term investments, and $1.4 million was classified as other non-current assets.

In addition to the amounts presented above, at December 29, 2012, the Company’s short-term investments classified as trading securities, related to the deferred compensation plan, were $4.9 million, of which $1.5 million were invested in debt securities, $0.4 million were invested in money market instruments and funds and $3.0 million were invested in equity securities. Trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

During the three and six months ended December 29, 2012 and December 31, 2011, the Company recorded no other-than-temporary impairment charge in each respective period.

At December 29, 2012, the Company’s total gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument were as follows (in millions):

	Less than 12 Months		Greater than 12 Months		Total
Asset-backed securities	$	—	$	0.4	$	0.4
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.4	$	0.5

At December 29, 2012, contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows (in millions):

	Amortized
	Cost / Carrying		Estimated
	Cost		Fair Value
Amounts maturing in less than 1 year	$	241.3	$	244.4
Amounts maturing in 1 - 5 years	180.6		181.1
Amounts maturing in more than 5 years	1.4		1.4
Total debt securities	$	423.3	$	426.9

At June 30, 2012, the Company’s available-for-sale securities were as follows (in millions):

	Amortized		Gross		Gross
	Cost / Carrying		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Debt securities:
U.S. treasuries	$	52.0	$	—	$	—		$	52.0
Agencies
U.S.	65.1		0.2		—			65.3
Foreign	3.3		—		—			3.3
Municipal bonds and sovereign debt instruments	11.4		—		—			11.4
Asset-backed securities	21.9		0.2		(0.4		)	21.7
Corporate securities	183.6		1.3		(0.1		)	184.8
Total available-for-sale securities	$	337.3	$	1.7	$	(0.5	)	$	338.5

The Company generally classifies debt securities as cash equivalents, short-term investments, or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are classified as current assets. As of June 30, 2012, of the total estimated fair value, $21.3 million was classified as cash equivalents, $315.9 million was classified as short-term investments, and $1.3 million was classified as other non-current assets.

In addition to the amounts presented above, at June 30, 2012, the Company’s short-term investments classified as trading securities, related to the deferred compensation plan, were $4.6 million, of which $0.9 million were invested in debt securities, $0.5 million were invested in money market instruments and funds and $3.2 million were invested in equity securities. Trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in interest and other income (expense), net.

At June 30, 2012, the Company’s gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument were as follows (in millions):

	Less than		Greater than
	12 Months		12 Months		Total
Asset-backed securities	$	—	$	0.4	$	0.4
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.4	$	0.5

Fair Value Measurements

Assets measured at fair value at December 29, 2012 are summarized below (in millions):

			Fair value measurement as of December 29, 2012
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Debt available-for-sale securities
U.S. treasuries	$	71.9	$	71.9	$	—
Agencies
U.S.	53.5		—		53.5
Foreign	4.1		—		4.1
Municipal bonds and sovereign debt instruments	6.6		—		6.6
Asset-backed securities	40.1		—		40.1
Corporate securities
U.S.	215.1				215.1
Foreign	35.6				35.6
Total debt available-for-sale securities	426.9		71.9		355.0
Money market funds	220.9		220.9		—
Trading securities	4.9		4.9		—
Total assets (1)	$	652.7	$	297.7	$	355.0

(1)         $210.1 million in cash and cash equivalents, $403.8 million in short-term investments, $30.9 million in restricted cash, and $7.9 million in other non-current assets on the Company’s consolidated balance sheet.

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions about the factors that market participants would use in valuing the asset or liability.

The Company’s cash and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy based on quoted prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

·                  Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 1 assets of the Company include money market funds and U.S. Treasury securities as they are traded in active markets with sufficient volume and frequency of transactions.

·                 Level 2 includes financial instruments for which the valuations are based on quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets. Level 2 instruments of the Company generally include certain U.S. and foreign government and agency securities, commercial paper, corporate and municipal bonds and notes, asset-backed securities, and foreign currency forward contracts. To estimate their fair value, the Company utilizes pricing models based on market data. The significant inputs for the valuation model usually include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, and industry and economic events.

As of June 30, 2012 and during the three and six months ended December 29, 2012, the Company held no Level 3 investments. Level 3 includes financial instruments for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement.

Foreign Currency Forward Contracts

The Company has foreign subsidiaries that operate and sell the Company’s products in various markets around the world. As a result, the Company is exposed to foreign exchange risks. The Company utilizes foreign exchange forward contracts and other instruments to manage foreign currency risk associated with foreign currency denominated assets and liabilities, primarily certain short-term intercompany receivables and payables and to reduce the volatility of earnings and cash flows related to foreign-currency transactions.

The forward contracts, most with a term of less than 120 days, were transacted near month end; therefore, the fair value of the contracts as of both December 29, 2012 and June 30, 2012, is not significant. The change in the fair value of these foreign currency forward contracts is recorded as income or loss in the Company’s Consolidated Statements of Operations as a component of Interest and other income (expense), net.

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Goodwill

6 Months Ended

Dec. 29, 2012

Goodwill

Goodwill

Note 8. Goodwill

The Company’s goodwill balance as of December 29, 2012 was $75.3 million, which consisted of $67.0 million of goodwill in the CommTest segment and $8.3 million of goodwill in the Optical Security and Performance Products (“OSP”) segment. The Company’s goodwill balance as of June 30, 2012 was $68.7 million, which consisted of $60.4 million of goodwill in the CommTest segment and $8.3 million of goodwill in the Advanced Optical Technologies (“AOT”) segment (see below). The goodwill balance is adjusted quarterly to record the effect of currency translation adjustments.

During the first quarter of fiscal 2013, the reporting structure of the AOT reportable segment was reorganized and its previous reporting units, which consisted of the Custom Optics Product Group (“COPG”), Flex Products Group (“Flex”) and Authentication Solutions Group (“ASG”) (excluding the Hologram Business), were merged into the new OSP reportable segment, having one single reporting unit, replacing the AOT segment. As the entire $8.3 million balance of AOT’s goodwill at June 30, 2012 was attributable to the Flex reporting unit, the Company reclassified AOT’s goodwill to the OSP segment. The Company closed the sale of the Hologram Business, a component of the ASG reporting unit, during the second quarter of fiscal 2013. As there was zero goodwill attributable to the ASG reporting unit as of June 30, 2012, the sale does not impact goodwill. Refer to “Note 17. Operating Segments” and “Note 18. Discontinued Operations” for further information.

The Company reviews goodwill for impairment during the fourth quarter of each fiscal year or more frequently if events or circumstances indicate that an impairment loss may have occurred. In the fourth quarter of fiscal 2012, the Company completed the annual impairment test of goodwill, which indicated there was no goodwill impairment. There were no events or changes in circumstances which triggered an impairment review during the three and six months ended December 29, 2012 and December 31, 2011.

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Debts and Letters of Credit

6 Months Ended

Dec. 29, 2012

Debts and Letters of Credit

Debts and Letters of Credit

Note 10. Debts and Letters of Credit

The Company had short-term debt of $205.6 million and $292.8 million as of December 29, 2012 and June 30, 2012, respectively. The Company was in compliance with all debt covenants as of December 29, 2012.

1% Senior Convertible Notes

On June 5, 2006, the Company completed an offering of $425.0 million aggregate principal amount of 1% Senior Convertible Notes due 2026. Proceeds from the notes amounted to $415.9 million after issuance costs. The notes bear interest at a rate of 1.0% per year and are convertible into a combination of cash and shares of the Company’s common stock at a conversion price of $30.30 per share. Interest on the notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2006. The notes mature on May 15, 2026.

The holders of the notes may require the Company to purchase all or a portion of the notes on each of May 15, 2013, May 15, 2016 and May 15, 2021 at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. In addition, upon certain fundamental changes, holders may require the Company to purchase for cash the notes at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The Company may not redeem the notes before May 20, 2013. On or after that date, the Company may redeem all or part of the notes for cash at 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Upon adoption of authoritative guidance which applies to the 1% Senior Convertible Notes, the Company calculated the carrying value of the liability component at issuance as the present value of its cash flows using a discount rate of 8.1%, based on the 7-year swap rate plus credit spread as of the issuance date. The credit spread for JDSU is based on the historical average “yield to worst” rate for BB-rated issuers. The carrying value of the liability component was determined to be $266.5 million. The equity component, or debt discount, of the notes was determined to be $158.5 million. The debt discount is being accreted using the effective interest rate of 8.1% over the period from issuance date through May 15, 2013 as a non-cash charge to interest expense. As of December 29, 2012, the expected remaining term of the 1% Senior Convertible Notes is less than one year and accordingly is classified as short-term debt.

The $9.1 million of costs incurred in connection with the issuance of the notes were capitalized and bifurcated into debt issuance cost of $5.7 million and equity issuance cost of $3.4 million. The debt issuance cost is being amortized to interest expense using the effective interest method from issuance date through May 15, 2013.

In the first and second quarter of fiscal 2013, the Company repurchased $50.0 million and $50.0 million aggregate principal amount of the notes for $49.8 million and $49.9 million in cash, respectively. In connection with the two repurchases, losses of $2.1 million and $1.3 million were recognized in accordance with the authoritative guidance in Interest and other income (expense), net during the first and second quarter of fiscal 2013, respectively. After giving effect to the repurchases, the total carrying amount of 1% Senior Convertible Notes outstanding as of December 29, 2012 was $205.6 million.

As of December 29, 2012, the unamortized portion of the debt issuance cost related to the notes was $0.2 million and was included in Other current assets on the Consolidated Balance Sheets.

The following table presents the carrying amounts of the liability and equity components (in millions):

	December 29,			June 30,
	2012			2012
Carrying amount of equity component	$	156.8		$	158.3
Principal amount of 1% Senior Convertible Notes	$	211.0		$	311.0
Unamortized discount of liability component	(5.4		)	(18.2		)
Carrying amount of liability component	$	205.6		$	292.8

Based on quoted market prices, as of December 29, 2012 and June 30, 2012, the fair market value of the 1% Senior Convertible Notes was approximately $210.5 million and $307.3 million, respectively. Changes in fair market value reflect the change in the market price of the notes. The 1% Senior Convertible Notes are classified within Level 2 as they are not actively traded in markets; and the bond parity derivatives related to the convertible notes are classified within Level 1 since the quoted market price for identical instrument are available in active markets. The fair value of the bond parity derivatives is approximately zero as of December 29, 2012 and June 30, 2012.

The following table presents the effective interest rate and the interest expense for the contractual interest and the accretion of debt discount (in millions, except for the effective interest rate):

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Effective interest rate	8.1		%	8.1		%	8.1		%	8.1		%
Interest expense-contractual interest	$	0.5		$	0.8		$	1.2		$	1.6
Accretion of debt discount	3.6			5.0			7.8			9.9

The increase of the debt related to the interest accretion is treated as a non-cash transaction and the repayment of the carrying amount of the debt is classified as financing activity.

Revolving Credit Facility

On January 20, 2012, the Company entered into an agreement (the “Credit Agreement”) for a five-year $250.0 million revolving credit facility that matures in January 2017. At the Company’s option, the principal amount available under the facility may be increased by up to an additional $100.0 million. At the election of the Company, the principal amount available under the Credit Agreement may be increased by up to an additional $100 million, which amount may be allocated as either an increase to the revolving loan commitments or as an add-on term loan, in each case subject to the conditions provided in the Credit Agreement. None of the lenders are currently obligated to provide such additional commitments or term loans. Borrowings under the credit facility bear an annual interest rate, at the Company’s option, equal to either (i) the Alternate Base Rate (as defined in the Credit Agreement) plus the applicable margin for base rate loans, which ranges between 0.75% and 2.00%, based on the Company’s leverage ratio or (ii) the Adjusted LIBO Rate (as defined in the Credit Agreement) plus the applicable margin for Eurocurrency loans, which ranges between 1.75% and 3.00%, based on the Company’s leverage ratio. The Company is required to pay a commitment fee on the unutilized portion of the facility of between 0.25% and 0.50%, based on the Company’s leverage ratio.

Obligations under the Credit Agreement are guaranteed by certain wholly owned domestic subsidiaries of the Company (“the Guarantors”). The Company’s obligations under the Credit Agreement have been collateralized by a pledge of substantially all assets of the Company and the Guarantors (subject to certain exclusions), full pledges of equity interests in certain domestic subsidiaries and partial pledges of equity interests in certain foreign subsidiaries. The Company has also agreed to maintain at least $200 million of cash and permitted investments in accounts which are subject to a control agreement.

The Credit Agreement contains certain affirmative and negative covenants applicable to the Company and its subsidiaries, which include, among other things, restrictions on their ability to (1) incur additional indebtedness, (ii) make certain investments, (iii) acquire other entities, (iv) dispose of assets, (v) incur liens and (vi) make certain payments including those related to dividends or repurchase of equity. The Credit Agreement also contains financial maintenance covenants, including a maximum senior secured leverage ratio, a maximum total leverage ratio, a minimum interest coverage ratio and the requirement to maintain minimum liquidity.

The $1.9 million of costs incurred in connection with the issuance of the revolving credit facility were capitalized and are being amortized to interest expense on a straight-line basis over five years based on the contractual term of the revolving credit facility. As of December 29, 2012, the unamortized portion of debt issuance cost related to the revolving credit facility was $1.5 million, and was included in Other current assets and Other non-current assets on the Consolidated Balance Sheets.

During the quarter ended December 29, 2012, there was no drawdown under the facility and the outstanding balance at quarter end was zero.

Outstanding Letters of Credit

As of December 29, 2012, the Company had 15 standby letters of credit totaling $34.5 million.

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Operating Segments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Dec. 29, 2012	Sep. 29, 2012 item	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011
Net revenue:
Total net revenue	$ 429.4		$ 409.3	$ 850.3	$ 825.1
Unallocated amounts:
Stock-based compensation	(13.6)		(12.3)	(26.2)	(23.8)
Acquisition-related charges and amortization of intangibles	(17.3)		(21.1)	(38.7)	(40.8)
Loss on disposal of long-lived assets	(0.1)		(0.2)	(1.4)	(0.7)
Restructuring and related charges	(3.0)		(4.0)	(5.7)	(5.5)
Realignment and other charges	(0.1)		(1.5)	(0.7)	(9.3)
Interest and other income	(2.4)		1.0	(2.8)	2.0
Interest expense	(5.1)		(6.6)	(11.2)	(13.2)
Income (loss) from continuing operations before income taxes	7.4		(4.7)	1.0	(4.9)
Communications Test and Measurement
Net revenue:
Net Revenue	195.4		196.2	364.9	381.4
Operating income (loss):
Total operating income	35.3		28.0	52.1	52.1
Communications and Commercial Optical Products
Net revenue:
Net Revenue	185.8		163.2	380.7	343.5
Operating income (loss):
Total operating income	21.2		16.6	45.0	42.2
Corporate
Operating income (loss):
Total operating income	(23.7)		(21.4)	(46.8)	(42.4)
Optical Security and Performance Products
Information on reportable segments
Number of reporting units		1
Net revenue:
Net Revenue	48.2		50.2	104.7	100.8
Operating income (loss):
Total operating income	16.2		16.8	37.4	34.5
Operating Segments
Operating income (loss):
Total operating income	49.0		40.0	87.7	86.4
Purchase price adjustments to reconcile segment revenue to net revenue
Net revenue:
Deferred Revenue Related to Purchase Accounting Adjustment			$ 0.3		$ 0.6

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Rescission Offer (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended
	Jan. 29, 2013	Dec. 29, 2012
Rescission Offer
Shares issued under the ESPP in the past twelve months that may be subject to rescissionary rights		501,000
Shares subject to rescissionary rights purchased at $12.06 per share		218,400
Original price one of shares subject to rescissionary rights.		$ 12.06
Original price two of shares subject to rescissionary rights.		$ 9.35
Maximum potential aggregate payments including statutory interest, if holders rescinded their purchases (in dollars)		$ 5.7
Maximum previous period that unregistered shares were issued which are applicable to the rescission offer	P12M

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Commitments and Contingencies (Details 2) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended		1 Months Ended				1 Months Ended
	Dec. 29, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 29, 2012 USD ($)	Dec. 31, 2011 USD ($)	Jul. 02, 2011 USD ($)	Jun. 30, 2012 USD ($)	Dec. 31, 2011 Eningen EUR (€)	Dec. 29, 2012 Eningen USD ($)	Jun. 30, 2012 Eningen USD ($)	Dec. 16, 2011 Eningen item sqft	Aug. 31, 2007 Santa Rosa Sale Leaseback Transaction USD ($)	Dec. 29, 2012 Santa Rosa Sale Leaseback Transaction USD ($) item	Jun. 30, 2012 Santa Rosa Sale Leaseback Transaction USD ($)	Aug. 21, 2007 Santa Rosa Sale Leaseback Transaction acre sqft item
Financing Obligations
Area of land sold (in acres)														45
Area of land sold (in square feet)										394,217
Number of buildings sold										9				13
Area of property sold (in square feet)										386,132				492,000
Number of buildings leased back										2				7
Square feet of property leased back										158,154				286,000
Net cash proceeds received from sale and lease back transaction							€ 7.1				$ 32.2
Description of lease terms							The lease term is 10 years with the right to cancel a certain portion of the lease after 5 years				The lease terms range from a five year lease with a one year renewal option to a ten year lease with two five year renewal options
Letter of credit issued as a security	34.5		34.5					0.1				3.8
Financing obligation, current								0.1	0.1			1.0	0.9
Financing obligation, noncurrent	35.0		35.0			35.4		5.1	4.9			28.0	28.5
Number of buildings included in the option to purchase at the end of the lease term												1
Financing Obligations - Payment Plan Agreement for Software Licenses
Purchase of perpetual software licenses					7.1
Time period of payment plan agreement with the supplier					4 years
Amortization expense for software licenses	0.3	0.3	0.7	0.7
Future Minimum Financing Payments Payment Plan Agreement for Software Licenses and Financing Obligations
Remainder of 2012	3.8		3.8
2013	5.6		5.6
2014	3.7		3.7
2015	3.5		3.5
2016	3.5		3.5
Thereafter	37.3		37.3
Total	$ 57.4		$ 57.4

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Debts and Letters of Credit (Tables)

6 Months Ended

Dec. 29, 2012

Debts and Letters of Credit

Schedule of liability and equity components of convertible debt

The following table presents the carrying amounts of the liability and equity components (in millions):

	December 29,			June 30,
	2012			2012
Carrying amount of equity component	$	156.8		$	158.3
Principal amount of 1% Senior Convertible Notes	$	211.0		$	311.0
Unamortized discount of liability component	(5.4		)	(18.2		)
Carrying amount of liability component	$	205.6		$	292.8

Summary of effective interest rate and interest expense for the contractual interest and the accretion of debt discount

The following table presents the effective interest rate and the interest expense for the contractual interest and the accretion of debt discount (in millions, except for the effective interest rate):

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Effective interest rate	8.1		%	8.1		%	8.1		%	8.1		%
Interest expense-contractual interest	$	0.5		$	0.8		$	1.2		$	1.6
Accretion of debt discount	3.6			5.0			7.8			9.9

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Goodwill (Details) (USD $) In Millions, unless otherwise specified						3 Months Ended
	Dec. 29, 2012	Jun. 30, 2012	Dec. 29, 2012 Communications Test and Measurement	Jun. 30, 2012 Communications Test and Measurement	Jun. 30, 2012 Advanced Optical Technologies	Sep. 29, 2012 Optical Security and Performance Products item	Dec. 29, 2012 Optical Security and Performance Products
Goodwill
Goodwill	$ 75.3	$ 68.7	$ 67.0	$ 60.4	$ 8.3		$ 8.3
Number of reporting units						1

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Related Party Transactions

6 Months Ended

Dec. 29, 2012

Related Party Transactions

Related Party Transactions

Note 15. Related Party Transactions

KLA-Tencor Corporation (“KLA-Tencor”)

During a portion of the first quarter of fiscal 2013, one member of the Board of Directors of JDSU was also a member of the Board of Directors of KLA-Tencor, a publicly held company which provides process control and yield management solutions for semiconductor manufacturing. KLA-Tencor is a customer of the Company. As of August 16, 2012, the member resigned from the Board of Directors of JDSU and KLA-Tencor was no longer a related party.

Transactions and balances with the Company’s related parties were as follows (in millions):

	Three Months Ended				Six Months Ended
	December 29,		December 31,		December 29,		December 31,			December 29,		June 30,
	2012		2011		2012		2011			2012		2012
Sales:									Receivables:
*KLA-Tencor	$	—	$	1.8	$	—	$	3.9	*KLA-Tencor	$	—	$	0.9

* There were no material transactions between the Company and KLA-Tencor during the period when KLA-Tencor was a related party of the Company in fiscal 2013.

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Subsequent Events

6 Months Ended

Dec. 29, 2012

Subsequent Events

Subsequent Events

Note 20. Subsequent Events

Repurchase of 1% Senior Convertible Notes

On January 2, 2013, the Company repurchased an additional $50.0 million aggregate principal amount of its 1% Senior Convertible Notes for $50.0 million in cash.

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Investments and Fair Value Measurements (Details 2) (Short-term investments, Trading securities, USD $) In Millions, unless otherwise specified	Dec. 29, 2012	Jun. 30, 2012
Trading securities related to deferred compensation plan
Deferred compensation plan assets	$ 4.9	$ 4.6
Debt securities
Trading securities related to deferred compensation plan
Deferred compensation plan assets	1.5	0.9
Money market instruments and funds
Trading securities related to deferred compensation plan
Deferred compensation plan assets	0.4	0.5
Marketable equity investments
Trading securities related to deferred compensation plan
Deferred compensation plan assets	$ 3.0	$ 3.2

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Discontinued Operations (Tables)

6 Months Ended

Dec. 29, 2012

Discontinued Operations

Schedule of calculation of gain in connection with the sale of the business

The Company recorded a gain of $0.6 million in connection with the sale of the Hologram Business, calculated as follows (in millions):

Gross Proceeds	$	11.5
Less: carrying value of net assets	(10.6		)
Less: selling costs	(0.3		)
Gain	$	0.6

Schedule of net assets associated with Discontinued Operations

The carrying value of the net assets sold as of October 12, 2012 are as follows (in millions):

	October 12,
	2012
Accounts receivable, net	$	2.7
Inventories, net	4.4
Property, plant and equipment, net	0.8
Intangibles, net	5.8
Accounts payable and accrued expenses	(1.5		)
Other current and non-current liabilities	(1.6		)
Total net assets held for sale	$	10.6

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 29, 2012	Jun. 30, 2012
CONSOLIDATED BALANCE SHEETS
Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized	1,000,000	1,000,000
Preferred Stock, shares issued	1	1
Preferred Stock, shares outstanding	1	1
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized	1,000,000,000	1,000,000,000
Common Stock, shares issued	234,000,000	232,000,000
Common Stock, shares outstanding	234,000,000	232,000,000

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Accumulated Other Comprehensive Income

6 Months Ended

Dec. 29, 2012

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

Note 4. Accumulated Other Comprehensive Income

The Company’s accumulated other comprehensive income consists of the accumulated net unrealized gains and losses on available-for-sale investments, foreign currency translation adjustments and defined benefit obligation.

At December 29, 2012 and June 30, 2012, balances for the components of accumulated other comprehensive income were as follows (in millions):

	December 29,  2012			June 30,  2012
Unrealized losses on available-for-sale investments, net of tax	$	(2.6	)	$	(2.8	)
Foreign currency translation adjustments	17.0			10.6
Defined benefit obligation, net of tax	(0.3		)	(0.3		)
Accumulated other comprehensive income	$	14.1		$	7.5

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Stock-Based Compensation (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended		6 Months Ended
	Dec. 29, 2012	Dec. 29, 2012	Dec. 31, 2011	Dec. 29, 2012	Dec. 31, 2011
Impact on the Company's results of operations of recording stock-based compensation
Stock-based compensation cost		$ 13.6	$ 12.3	$ 26.2	$ 23.8
Stock-based compensation capitalized to inventory	2.3
Cost of sales
Impact on the Company's results of operations of recording stock-based compensation
Stock-based compensation cost		2.1	1.5	4.3	3.3
Research and development
Impact on the Company's results of operations of recording stock-based compensation
Stock-based compensation cost		3.4	3.1	6.3	5.7
Selling, general and administrative
Impact on the Company's results of operations of recording stock-based compensation
Stock-based compensation cost		8.1	7.7	15.6	14.8
Full Value Awards - Total
Impact on the Company's results of operations of recording stock-based compensation
Unrecognized stock-based compensation	87.0	87.0		87.0
Estimated amortization period				2 years 3 months 18 days
Full Value Awards - Total | Minimum
Impact on the Company's results of operations of recording stock-based compensation
Vesting period				1 year
Full Value Awards - Total | Maximum
Impact on the Company's results of operations of recording stock-based compensation
Vesting period				4 years
Restricted Stock Units with Market Conditions (MSU)
Impact on the Company's results of operations of recording stock-based compensation
Vesting period				3 years
Granted (in shares)				0.7	0.5
Aggregate grant-date fair value				9.8	9.3
Restricted Stock Units with Time-based Conditions
Impact on the Company's results of operations of recording stock-based compensation
Vesting period				3 years
Granted (in shares)				4.8	3.9
Percentage of first tranche vested				33.00%
Initial vesting period				1 year
Subsequent vesting period				2 years
Restricted Stock Units
Impact on the Company's results of operations of recording stock-based compensation
Granted (in shares)				5.5	4.4
Stock Option Plans
Impact on the Company's results of operations of recording stock-based compensation
Unrecognized stock-based compensation	3.3	3.3		3.3
Estimated amortization period				1 year 2 months 12 days
Stock Option Plans | Minimum
Impact on the Company's results of operations of recording stock-based compensation
Vesting period				3 years
Stock awards expiration period				5 years
Stock Option Plans | Maximum
Impact on the Company's results of operations of recording stock-based compensation
Vesting period				4 years
Stock awards expiration period				10 years
1998 Employee Stock Purchase Plan
Impact on the Company's results of operations of recording stock-based compensation
Unrecognized stock-based compensation	$ 0.2	$ 0.2		$ 0.2
Look-back period				6 months

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Basis of Presentation (Policies)	6 Months Ended
	Dec. 29, 2012
Basis of Presentation
Fiscal Years	The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2013 is a 52-week year ending on June 29, 2013. The Company’s fiscal 2012 was a 52-week year and ended on June 30, 2012.
Principles of Consolidation	The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.
Out-of-Period Adjustments	During the three months ended September 29, 2012, the Company recorded out-of-period adjustments primarily related to the cost of sales in fiscal year 2011. The impact of the corrections reduced the net loss by $1.9 million for the three months ended September 29, 2012. Management and the Audit Committee have concluded these errors, both individually and in aggregate, were not material to any prior year financial statements and the impact of correcting these errors in the current year is not expected to be material to the full year fiscal 2013 financial statements, accordingly the Company recorded the correction of these errors in the first quarter of fiscal 2013.
Discontinued Operations	On October 12, 2012, the Company closed the sale of its hologram business (“Hologram Business”) to OpSec Security Inc. for $11.5 million in cash. The Consolidated Statements of Operations have been recast to present the Hologram Business as discontinued operations as described in “Note 18. Discontinued Operations.” Unless noted otherwise, discussion in the Notes to Consolidated Financial Statements pertain to continuing operations.
Use of Estimates	The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of net revenue and expenses and the disclosure of commitments and contingencies during the reporting periods. The Company bases estimates on historical experience and on various assumptions about the future believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more current information.

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Related Party Transactions (Tables)

6 Months Ended

Dec. 29, 2012

Related Party Transactions

Schedule of transactions and balances with related parties

Transactions and balances with the Company’s related parties were as follows (in millions):

	Three Months Ended				Six Months Ended
	December 29,		December 31,		December 29,		December 31,			December 29,		June 30,
	2012		2011		2012		2011			2012		2012
Sales:									Receivables:
*KLA-Tencor	$	—	$	1.8	$	—	$	3.9	*KLA-Tencor	$	—	$	0.9

* There were no material transactions between the Company and KLA-Tencor during the period when KLA-Tencor was a related party of the Company in fiscal 2013.

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Employee Defined Benefit Plans

6 Months Ended

Dec. 29, 2012

Employee Defined Benefit Plans

Employee Defined Benefit Plans

Note 14. Employee Defined Benefit Plans

The Company sponsors qualified and non-qualified pension plans for certain past and present employees in the U.K. and Germany. The Company is also responsible for the non-pension post-retirement benefit obligation of a previously acquired subsidiary. Most of the plans have been closed to new participants and no additional service costs are being accrued, except for the plans assumed during fiscal 2010 and the first quarter of fiscal 2013 in connection with acquisitions. Benefits are generally based upon years of service and compensation or stated amounts for each year of service.

On November 30, 2012, the Company terminated the defined benefit pension plan in South Korea and settled the vested benefit obligation of $1.3 million by subsequently funding a defined contribution retirement plan. The Company accounted for the termination of Korean pension plan as a combination of curtailment and settlement pursuant to the authoritative guidance, and recorded a gain of $0.2 million in its Consolidated Statements of Operations.

As of December 29, 2012, the U.K. plan was partially funded while the other plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. During the six months ended December 29, 2012, the Company contributed $0.7 million to the U.K. plan. The funded plan assets consist primarily of managed investments.

The following table presents the components of the net periodic cost for the pension plans (in millions):

Pension Benefits

	Three Months Ended						Six Months Ended
	December 29,			December 31,			December 29,			December 31,
	2012			2011			2012			2011
Service cost	$	0.1		$	0.1		$	0.2		$	0.2
Interest cost	1.1			1.3			2.2			2.7
Expected return on plan assets	(0.3		)	(0.3		)	(0.6		)	(0.7		)
Recognized net actuarial (gains)/losses				(0.1		)	—			(0.2		)
Curtailment/Settlement (gains)/losses	(0.2		)				(0.2		)
Net periodic benefit cost	$	0.7		$	1.0		$	1.6		$	2.0

Both the calculation of the projected benefit obligation and net periodic cost are based upon actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, pension increases and other factors. At a minimum, the Company evaluates these assumptions annually and makes changes as necessary.

The Company expects to incur cash outlays of approximately $6.4 million related to its defined benefit pension plans during fiscal 2013 to make current benefit payments and fund future obligations. As of December 29, 2012, approximately $3.5 million had been incurred. These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at June 30, 2012.