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 March 29, 2014

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 April 26, 2014, the Registrant had 234,708,831 shares of common stock outstanding. The par value of each share of common stock is $0.001.

TABLE OF CONTENTS

			Page
PART I- FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)	3
		Consolidated Statements of Operations for the Three and Nine Months Ended March 29, 2014 and March 30, 2013	3
		Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended March 29, 2014 and March 30, 2013	4
		Consolidated Balance Sheets as of March 29, 2014 and June 29, 2013	5
		Consolidated Statements of Cash Flows for the Nine Months Ended March 29, 2014 and March 30, 2013	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
	Item 3.	Quantitative and Qualitative Disclosure About Market Risks	48
	Item 4.	Controls and Procedures	50
PART II-	OTHER INFORMATION		50
	Item 1.	Legal Proceedings	50
	Item 1A.	Risk Factors	50
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
	Item 3.	Defaults Upon Senior Securities	50
	Item 4.	Mine Safety Disclosures	50
	Item 5.	Other Information	50
	Item 6.	Exhibits	51
SIGNATURE			52

2

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

JDS UNIPHASE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Net revenue	$	418.0		$	405.3		$	1,294.6		$	1,255.6
Cost of sales	222.3			233.0			687.5			690.0
Amortization of acquired technologies	11.0			17.0			32.3			48.7
Gross profit	184.7			155.3			574.8			516.9
Operating expenses:
Research and development	74.1			65.8			216.0			190.9
Selling, general and administrative	113.4			107.3			329.5			317.4
Amortization of other intangibles	5.2			3.1			10.7			8.8
Restructuring and related charges	3.6			0.4			3.8			6.1
Total operating expenses	196.3			176.6			560.0			523.2
(Loss) income from operations	(11.6		)	(21.3		)	14.8			(6.3		)
Interest and other income (expense), net	0.6			(0.9		)	0.4			(3.7		)
Interest expense	(7.7		)	(4.2		)	(21.3		)	(15.4		)
Loss from continuing operations before income taxes	(18.7		)	(26.4		)	(6.1		)	(25.4		)
(Benefit from) provision for income taxes	(17.2		)	1.6			(13.7		)	9.1
(Loss) income from continuing operations, net of tax	(1.5		)	(28.0		)	7.6			(34.5		)
Loss from discontinued operations, net of tax	—			—			—			(1.0		)
Net (loss) income	$	(1.5	)	$	(28.0	)	$	7.6		$	(35.5	)
Basic net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03		$	(0.15	)
Discontinued operations	—			—			—			0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03		$	(0.15	)
Diluted net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03		$	(0.15	)
Discontinued operations	—			—			—			0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03		$	(0.15	)
Shares used in per share calculation:
Basic	234.0			235.9			234.1			234.4
Diluted	234.0			235.9			237.7			234.4

See accompanying notes to consolidated financial statements.

3

JDS UNIPHASE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

 (in millions)

(unaudited)

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,		March 30,
	2014			2013			2014		2013
Net (loss) income	$	(1.5	)	$	(28.0	)	$	7.6	$	(35.5	)
Other comprehensive income (loss):
Net change in available-for-sale investments, net of tax:
Unrealized holding gains arising during the period	0.1			0.1			0.3		0.4
Less: reclassification adjustments included in Net income (loss)	—			(0.3		)	—		(0.4		)
Net change in cumulative translation adjustment, net of tax	(1.3		)	(3.2		)	8.5		3.2
Net change in defined benefit obligation, net of tax:
Amortization of actuarial losses	—			—			0.1		—
Net change in Accumulated other comprehensive income	(1.2		)	(3.4		)	8.9		3.2
Comprehensive (loss) income	$	(2.7	)	$	(31.4	)	$	16.5	$	(32.3	)

See accompanying notes to consolidated financial statements.

4

JDS UNIPHASE CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share and par value data)

(unaudited)

	March 29,			June 29,
	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	314.5		$	281.0
Short-term investments	580.3			205.2
Restricted cash	31.4			29.7
Accounts receivable, net (Note 6)	287.1			273.3
Inventories, net	147.7			145.8
Prepayments and other current assets	85.9			95.3
Total current assets	1,446.9			1,030.3
Property, plant and equipment, net	271.9			247.0
Goodwill	264.6			115.1
Intangibles, net	192.4			149.7
Deferred income taxes	180.0			155.5
Other non-current assets	26.1			17.6
Total assets	$	2,381.9		$	1,715.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	129.9		$	97.7
Accrued payroll and related expenses	63.5			77.0
Income taxes payable	19.2			18.7
Deferred revenue	80.7			71.9
Accrued expenses	28.2			37.1
Other current liabilities	66.1			45.3
Total current liabilities	387.6			347.7
Long-term debt	530.2			—
Other non-current liabilities	202.8			206.2
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred Stock, $0.001 par value; 1 million shares authorized; 1 share at March 29, 2014 and June 29, 2013, issued and outstanding	—			—
Common Stock, $0.001 par value; 1 billion shares authorized; 235 million shares at March 29, 2014 and 237 million shares at June 29, 2013, issued and outstanding	0.2			0.2
Additional paid-in capital	69,943.6			69,760.1
Accumulated deficit	(68,700.0		)	(68,607.6		)
Accumulated other comprehensive income	17.5			8.6
Total stockholders’ equity	1,261.3			1,161.3
Total liabilities and stockholders’ equity	$	2,381.9		$	1,715.2

See accompanying notes to consolidated financial statements.

5

JDS UNIPHASE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

	Nine Months Ended
	March 29,			March 30,
	2014			2013
OPERATING ACTIVITIES:
Net income (loss)	$	7.6		$	(35.5	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense	53.8			50.9
Amortization of acquired technologies and other intangibles	43.0			57.7
Stock-based compensation	48.3			41.6
Amortization of debt issuance costs and accretion of debt discount	16.3			11.3
Amortization of discount and premium on investments, net	3.1			3.3
Other	0.9			1.8
Changes in operating assets and liabilities, net of impact of acquisitions of businesses:
Accounts receivable	1.0			17.2
Inventories	4.8			19.8
Other current and non-current assets	(1.5		)	(6.4		)
Accounts payable	23.2			6.1
Income taxes payable	(0.6		)	0.5
Deferred revenue, current and non-current	9.3			(2.0		)
Deferred taxes, net	(26.9		)	(0.1		)
Accrued payroll and related expenses	(33.0		)	(24.3		)
Accrued expenses and other current and non-current liabilities	(22.9		)	(11.2		)
Net cash provided by operating activities	126.4			130.7
INVESTING ACTIVITIES:
Purchases of available-for-sale investments	(885.1		)	(415.1		)
Maturities of available-for-sale investments	327.7			235.1
Sales of available-for-sale investments	186.8			147.1
Changes in restricted cash	(1.8		)	0.6
Acquisitions of businesses, net of cash acquired	(219.3		)	(83.2		)
Capital expenditures	(68.1		)	(46.7		)
Proceeds from the sales of a business and assets, net of selling costs	8.0			11.7
Net cash used in investing activities	(651.8		)	(150.5		)
FINANCING ACTIVITIES:
Proceeds from issuance of senior convertible debt	650.0			—
Payment of debt issuance costs	(13.5		)	(0.2		)
Repurchase and retirement of common stock	(100.0		)	—
Redemption of senior convertible debt	—			(145.8		)
Payment of financing obligations	(1.3		)	(0.6		)
Proceeds from exercise of employee stock options and employee stock purchase plan	22.0			21.3
Net cash provided by (used in) financing activities	557.2			(125.3		)
Effect of exchange rate changes on cash and cash equivalents	1.7			1.7
Increase (decrease) in cash and cash equivalents	33.5			(143.4		)
Cash and cash equivalents at beginning of period	281.0			401.1
Cash and cash equivalents at end of period	$	314.5		$	257.7

See accompanying notes to consolidated financial statements.

6

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 March 29, 2014 and for the three and nine months ended March 29, 2014 and March 30, 2013 is unaudited, and includes all normal and recurring adjustments 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 Annual Report on Form 10-K/A for the year ended June 29, 2013.

The balance sheet as of June 29, 2013 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 nine months ended March 29, 2014 and March 30, 2013 may not be indicative of results for the year ending June 28, 2014 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 2014 is a 52-week year ending on June 28, 2014. The Company’s fiscal 2013 was a 52-week year ending on June 29, 2013.

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.

Fiscal 2013 Out-of-Period Adjustments

During the nine months ended March 30, 2013, the Company recorded out-of-period adjustments that related to cost of sales and other income in the current and prior fiscal years. The impact of the out-of-period adjustments recorded by the Company resulted in a $2.5 million reduction in net loss during the nine months ended March 30, 2013. 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 fiscal 2013 was not material to the full year fiscal 2013 financial statements.

Discontinued Operations

During the second quarter of fiscal 2013, the Company closed the sale of its hologram business (“Hologram Business”) for $11.5 million in cash. The Consolidated Statements of Operations reflect 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.

7

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2. Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance, which specifies that only disposals, such as a disposal of a major line of business, representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. This guidance is effective for the Company in the first quarter of fiscal 2016. The Company does not anticipate that the adoption of this guidance will have a material impact on its consolidated financial statements, absent any disposition representing a strategic shift in the Company’s operations.

In July 2013, the FASB issued authoritative guidance that requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective for the Company in the first quarter of fiscal 2015. The Company does not anticipate that the adoption of this guidance will have a material impact on its consolidated financial statements.

In March 2013, the FASB issued authoritative guidance that resolves the diversity in practice regarding the release into net income of the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity. This guidance will be effective for the Company beginning in the first quarter of fiscal 2015. The Company does not anticipate that the adoption of this guidance will have a material impact on its consolidated financial statements, absent any material transactions involving de-recognition of subsidiaries or groups of assets within a foreign entity.

Note 3. Earnings Per Share

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

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,		March 30,
	2014			2013			2014		2013
Numerator:
(Loss) income from continuing operations, net of tax	$	(1.5	)	$	(28.0	)	$	7.6	$	(34.5	)
Loss from discontinued operations, net of tax	—			—			—		(1.0		)
Net (loss) income	$	(1.5	)	$	(28.0	)	$	7.6	$	(35.5	)
Denominator:
Weighted-average number of common shares outstanding
Basic	234.0			235.9			234.1		234.4
Effect of dilutive securities from stock-based benefit plans	—			—			3.6		—
Diluted	234.0			235.9			237.7		234.4
Basic net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Discontinued operations	—			—			—		0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Diluted net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Discontinued operations	—			—			—		0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)

8

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

	Three Months Ended		Nine Months Ended
	March 29,	March 30,	March 29,	March 30,
	2014 (1) (2)	2013 (1) (3)	2014 (2)	2013 (1) (3)
Employee stock options and ESPP	4.6	7.1	1.1	7.9
RSUs	10.2	9.5	2.9	9.3
Total potentially dilutive securities	14.8	16.6	4.0	17.2

(1)  As the Company incurred a net loss in the period, potential dilutive securities from employee stock options, employee stock purchase plan (“ESPP”) and Restricted Stock Units (“RSUs”) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive.

(2)  The Company’s 0.625% Senior Convertible Notes due 2033 (the “2033 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 $18.83 per share is payable in cash, shares of the Company’s common stock or a combination of both. Refer to “Note 10. Debts and Letters of Credit” for more details.

(3)  The Company’s 1% Senior Convertible Notes due 2026 (the “2026 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. As of June 29, 2013, no amounts related to the 2026 Notes were outstanding. Refer to “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 obligations.

For the nine months ended March 29, 2014, the changes in accumulated other comprehensive income by component net of tax were as follows (in millions)

	Unrealized
	losses on			Foreign currency		Defined benefit
	available-for-			translation		obligation, net
	sale investments			adjustments		of tax (1)			Total
Beginning balance as of June 29, 2013	$	(3.1	)	$	16.4	$	(4.7	)	$	8.6
Other comprehensive income before reclassification adjustments	0.3			8.5		—			8.8
Amounts reclassified from Accumulated other comprehensive income	—			—		0.1			0.1
Net current-period other comprehensive income	0.3			8.5		0.1			8.9
Ending balance as of March 29, 2014	$	(2.8	)	$	24.9	$	(4.6	)	$	17.5

(1) Amount represents the amortization of actuarial losses and is included as a component of Selling, general and administrative expense (“SG&A”) in the Consolidated Statements of Operations for the nine months ended March 29, 2014. There was no tax impact. Refer to “Note 15. Employee Defined Benefit Plans” for more details on the computation of net periodic cost for pension plans.

9

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5. Mergers and Acquisitions

Network Instruments, LLC (“Network Instruments”)

On January 6, 2014 (“Network Instruments Closing Date”), the Company completed the acquisition of Network Instruments, a privately-held leading developer of enterprise network and application-performance management solutions for global 2000 companies. The Company acquired all outstanding shares of Network Instruments for $208.5 million in cash, subject to final cash and working capital adjustments including holdback payments of approximately $20.0 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 in two tranches: $10.0 million to be paid following the six-month anniversary of the Network Instruments Closing Date and the remaining $10.0 million to be paid following the one-year anniversary of the Network Instruments Closing Date.

The acquisition of Network Instruments further strengthens the Company as a key solutions provider to the enterprise, data center and cloud networking markets. In order to improve application performance, reduce costs and address increasing network complexity, enterprise network administrators are rapidly transforming their IT networks while embracing today’s most critical technology initiatives such as unified communications, cloud, and data center consolidation. Network Instruments helps enterprises simplify the management and optimization of their networks with high-performance solutions that provide actionable intelligence and deep network visibility. The Network Instruments acquisition is being integrated into the Company’s Network and Service Enablement (“NSE”) 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):

Net tangible assets acquired	$	22.1
Intangible assets acquired:
Developed technology	21.7
Customer relationships	38.3
In-process research and development	1.7
Other	0.3
Goodwill	124.4
Total purchase price	$	208.5

The amounts above are considered preliminary and are subject to change once the Company receives additional information it believes is necessary to finalize its determination of the fair value of certain assets acquired under the acquisition.

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

Cash	$	9.0
Accounts receivable	13.8
Inventory	7.3
Property and equipment	1.0
Accounts payable	(1.5		)
Deferred tax liabilities, net	(0.6		)
Other liabilities, net of other assets	(4.4		)
Deferred revenue	(2.5		)
Net tangible assets acquired	$	22.1

10

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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, In-process Research and Development (“IPR&D”) and other intangible assets was determined based on an income approach using the discounted cash flow method. The intangible assets, except IPR&D, are being amortized over their estimated useful lives of five years for the majority of acquired developed technology and customer relationships and one year for trade name. Order backlog will be fully amortized in fiscal 2014.

In accordance with authoritative guidance, the Company recognizes IPR&D at fair value as of the Network Instruments Closing Date. The IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. IPR&D is tested for impairment during the period it is considered an indefinite lived asset.

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

Time-Bandwidth Products AG (“Time-Bandwidth”)

On January 27, 2014 (“Time-Bandwidth Closing Date”), the Company completed the acquisition of Time-Bandwidth, a privately-held provider of high powered and ultrafast lasers for industrial and scientific markets. The Company acquired all outstanding shares of Time-Bandwidth for $15.0 million in cash, subject to a holdback payment of approximately $2.3 million which is reserved for potential breaches of representations and warranties. The holdback payment, minus any deductions for actual or pending claims, will be released following the eighteen-month anniversary of the Time-Bandwidth Closing Date.

Time-Bandwidth provides innovative high powered and ultrafast laser technology that can rapidly and precisely process parts at high volumes during the manufacturing process. Use of ultrafast lasers for micromachining applications is being driven primarily by increasing use of consumer electronics and connected devices globally. Manufacturers are taking advantage of high- power and ultrafast lasers to create quality micro parts for consumer electronics and to process semiconductor chips for consumer devices. Time-Bandwidth’s technology complements the Company’s current laser portfolio, while enabling Time-Bandwidth to leverage the Company’s high volume and low-cost manufacturing model, global sales team and channel relationships. Time-Bandwidth is being integrated into the Company’s Communications and Commercial Optical Products (“CCOP”) 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):

Net tangible assets acquired	$	1.7
Intangible assets acquired:
Developed technology	6.7
Customer relationships	0.3
Goodwill	6.3
Total purchase price	$	15.0

11

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Accounts receivable	$	1.4
Inventories	4.9
Property and equipment	1.3
Accounts payable	(0.6		)
Accrued expenses and other liabilities, net of other assets	(3.6		)
Deferred tax liabilities, net	(1.7		)
Net tangible assets acquired	$	1.7

The amounts above are considered preliminary and are subject to change once the Company receives additional information it believes is necessary to finalize its determination of the fair value of certain assets acquired under the acquisition.

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 relationships are being amortized over their estimated useful lives of eight and three years, respectively.

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

Time-bandwidth’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.

Trendium Inc. (“Trendium”)

On December 10, 2013 (“Trendium Closing Date”), the Company acquired certain technology and other assets from Trendium, a privately-held U.S. company, for a purchase price of $26.1 million in cash including a holdback payment of approximately $2.5 million which is reserved for potential breaches of representations and warranties. The holdback payment, minus any deductions for actual or pending claims, will be released following the one-year anniversary of the Trendium Closing Date.

Trendium provides real-time intelligence software solutions for customer experience assurance (“CEA”), asset optimization and monetization of big data for 4G/Long term evolution (“LTE”) mobile network operators. The addition of Trendium employees and technology enables the Company to introduce a new paradigm of CEA, enabling operators of 4G/LTE networks to achieve a real and relevant improvement in customer satisfaction while maximizing productivity and profitability for dynamic converged 4G/LTE networks and beyond. The purchased assets are included in the Company’s NSE segment.

12

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company finalized the purchase price allocation related to this acquisition during the three months ended March 29, 2014. The purchase price was allocated as follows (in millions):

Tangible assets acquired:
Property, plant and equipment	$	0.2
Intangible assets acquired:
Developed technology	6.1
In-process research and development	5.4
Goodwill	14.4
Total purchase price	$	26.1

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 was determined based on an income approach using the discounted cash flow method and are being amortized over their estimated useful lives of seven years.

In accordance with authoritative guidance, the Company recognized IPR&D at fair value as of the Trendium Closing Date. The IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. IPR&D is tested for impairment during the period it is considered an indefinite lived asset.

The goodwill arising from this acquisition is primarily attributed to product synergies and the assembled workforce of Trendium. Goodwill was assigned to the NSE segment and is deductible for tax purposes. Goodwill is not amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative guidance.

Trendium’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.

Arieso Ltd. (“Arieso”)

On March 7, 2013 (“Arieso Closing Date”), the Company completed the acquisition of Arieso, a privately-held company headquartered in the United Kingdom. Arieso is a provider of location-aware software solutions that enable mobile network operators to boost 2G, 3G and 4G/ LTE network performance and enrich the mobile subscriber experience.

Arieso brings high-caliber mobile software engineering expertise to the Company to address the rapidly growing deployment of small cells and challenges associated with limited spectrum capacity. Utilized by leading wireless network operators and equipment manufacturers, Arieso’s solutions locate, store and analyze data from billions of mobile connection events that translate into rich intelligence, which help enable mobile operators to optimize network performance, improve customer experience and create new revenue-generating services. Arieso was integrated in the Company’s NSE segment.

The Company acquired all outstanding shares of Arieso for approximately $89.7 million in cash, subject to holdback payments of approximately $12.8 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 Arieso Closing Date.

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.

13

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company finalized the purchase price allocation related to this acquisition during the three months ended March 29, 2014. The purchase price was allocated as follows (in millions):

Net tangible assets acquired	$	0.2
Intangible assets acquired:
Developed technology	32.8
Customer relationships	14.5
Order backlog	1.4
Goodwill	40.8
Total purchase price	$	89.7

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

Cash	$	4.1
Accounts receivable	8.4
Property and equipment	0.6
Accounts payable	(0.3		)
Accrued expenses, net of other assets	(1.4		)
Employee related liabilities	(1.4		)
Deferred revenue	(1.7		)
Deferred tax liabilities, net	(8.1		)
Net tangible assets acquired	$	0.2

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 five years. Order backlog was fully amortized in fiscal 2013.

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

In accordance with the authoritative guidance, the Company expensed $1.8 million of acquisition-related costs incurred in fiscal 2013 as SG&A expense in the Company’s Consolidated Statement of Operations.

GenComm Co., Ltd. (“GenComm”)

On August 17, 2012 (“GenComm 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. 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. During the three months ended March 29, 2014, the Company made a holdback payment of $3.3 million dollars. GenComm was integrated in the Company’s NSE 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.

14

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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
Order backlog	0.2
Goodwill	5.7
Total purchase price	$	15.2

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. Order backlog was fully amortized in fiscal 2013.

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

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 29,		Charged to Costs					March 29,
	2013		and Expenses		Deduction (1)			2014
Allowance for doubtful accounts	$	2.1	$	1.0	$	(0.3	)	$	2.8
Allowance for sales returns	0.1		0.3		(0.1		)	0.3
Total accounts receivable reserves	$	2.2	$	1.3	$	(0.4	)	$	3.1

(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):

	March 29,		June 29,
	2014		2013
Finished goods	$	70.2	$	85.7
Work in process	39.9		37.0
Raw materials and purchased parts	37.6		23.1
Inventories, net	$	147.7	$	145.8

15

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Prepayments and Other Current Assets

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

	March 29,		June 29,
	2014		2013
Prepayments	$	30.5	$	36.0
Advances to contract manufacturers	13.7		14.6
Deferred income tax	4.2		3.9
Refundable income taxes	3.0		2.3
Other receivables	25.0		26.1
Assets held for sale	—		2.2
Other current assets	9.5		10.2
Prepayments and other current assets	$	85.9	$	95.3

Property, Plant and Equipment, Net

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

	March 29,			June 29,
	2014			2013
Land	$	20.6		$	14.6
Buildings and improvements	63.7			34.9
Machinery and equipment	482.0			453.8
Furniture, fixtures, software and office equipment	145.4			132.9
Leasehold improvements	76.8			92.7
Construction-in-progress	28.9			14.9
	817.4			743.8
Less: Accumulated depreciation	(545.5		)	(496.8		)
Property, plant and equipment, net	$	271.9		$	247.0

During the second quarter of fiscal 2014, the Company purchased a fabrication facility in California for $14.7 million which the Company previously leased.

As of March 29, 2014 and June 29, 2013, Property, plant and equipment, net included $20.4 million and $21.8 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. Refer to “Note 16. Commitments and Contingencies” for more details.

During the three months ended March 29, 2014 and March 30, 2013, the Company recorded $18.2 million and $17.0 million of depreciation expense, respectively. During the nine months ended March 29, 2014 and March 30, 2013, the Company recorded $53.8 million and $50.8 million of depreciation expense, respectively.

16

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Other Current Liabilities

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

	March 29,		June 29,
	2014		2013
Deferred compensation plan	$	3.8	$	4.2
Warranty	6.0		6.0
VAT liabilities	5.7		5.6
Restructuring	6.4		10.3
Holdback liabilities from acquisitions	32.2		13.1
Other	12.0		6.1
Other current liabilities	$	66.1	$	45.3

Other Non-Current Liabilities

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

	March 29,		June 29,
	2014		2013
Pension and post-employment benefits	$	97.4	$	92.0
Deferred taxes	8.0		11.0
Restructuring	2.6		6.2
Financing obligation	31.7		32.4
Non-current income taxes payable	13.2		13.4
Asset retirement obligations	5.4		8.8
Long-term deferred revenue	26.0		25.8
Other	18.5		16.6
Other non-current liabilities	$	202.8	$	206.2

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.

As of March 29, 2014, 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	$	51.1	$	—	$	—		$	51.1
U.S agencies	72.8		0.1		—			72.9
Municipal bonds and sovereign debt instruments	16.8		—		—			16.8
Asset-backed securities	104.6		0.1		(0.3		)	104.4
Corporate securities	385.5		0.2		(0.1		)	385.6
Total debt available-for-sale securities	$	630.8	$	0.4	$	(0.4	)	$	630.8

17

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 March 29, 2014, of the total estimated fair value, $53.5 million was classified as cash equivalents, $576.5 million was classified as short-term investments and $0.8 million was classified as other non-current assets.

In addition to the amounts presented above, as of March 29, 2014, the Company’s short-term investments classified as trading securities related to the deferred compensation plan were $3.8 million, of which $0.7 million was invested in debt securities, $0.4 million was invested in money market instruments and funds and $2.7 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

During the three and nine months ended March 29, 2014 and March 30, 2013, the Company recorded no other-than-temporary impairment charges in each respective period.

As of March 29, 2014, 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		Greater than
	12 Months		12 Months		Total
Asset-backed securities	$	—	$	0.3	$	0.3
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.3	$	0.4

As of March 29, 2014, 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	$	401.8	$	401.9
Amounts maturing in 1 - 5 years	228.0		228.1
Amounts maturing in more than 5 years	1.0		0.8
Total debt available-for-sale securities	$	630.8	$	630.8

As of June 29, 2013, 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	$	12.0	$	—	$	—		$	12.0
U.S. agencies	52.4		—		—			52.4
Municipal bonds and sovereign debt instruments	12.7		—		—			12.7
Asset-backed securities	15.5		—		(0.3		)	15.2
Corporate securities	135.1		0.7		(0.1		)	135.7
Total debt available-for-sale securities	$	227.7	$	0.7	$	(0.4	)	$	228.0

As of June 29, 2013, of the total estimated fair value, $26.2 million was classified as cash equivalents, $201.0 million was classified as short-term investments and $0.8 million was classified as other non-current assets.

In addition to the amounts presented above, as of June 29, 2013, the Company’s short-term investments classified as trading securities related to the deferred compensation plan were $4.2 million, of which $0.8 million was invested in debt securities, $0.3 million was invested in money market instruments and funds and $3.1 million were invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

18

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of June 29, 2013, 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	$	—	$	0.3	$	0.3
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.3	$	0.4

Fair Value Measurements

Assets measured at fair value as of March 29, 2014 are summarized below (in millions):

			Fair value measurement as of March 29, 2014
			Quoted Prices in		Significant
			Active Markets		Other
			for Identical		Observable
			Assets		Inputs
	Total		(Level 1)		(Level 2)
Assets:
Debt available-for-sale securities
U.S. treasuries	$	51.1	$	51.1	$	—
U.S. agencies	72.9		—		72.9
Municipal bonds and sovereign debt instruments	16.8		—		16.8
Asset-backed securities	104.4		—		104.4
Corporate securities	385.6				385.6
Total debt available-for-sale securities	630.8		51.1		579.7
Money market funds	186.2		186.2		—
Trading securities	3.8		3.8		—
Total assets (1)	$	820.8	$	241.1	$	579.7

(1)  $205.0 million in cash and cash equivalents, $580.3 million in short-term investments, $30.9 million in restricted cash, and $4.6 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.

19

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

·Level 2 includes financial instruments for which the valuations are based on quoted prices for similar assets or liabilities, 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 or liabilities. 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 29, 2013 and during the three and nine months ended March 29, 2014, 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 monetary 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 quarter end; therefore, the fair value of the contracts as of both March 29, 2014 and June 29, 2013 is not significant. The change in the fair value of these foreign currency forward contracts is recorded as gain or loss in the Company’s Consolidated Statements of Operations as a component of Interest and other income (expense), net.

Note 8. Goodwill

The following table presents the changes in goodwill allocated to the reportable segments (in millions):

	Network and		Communications		Optical Security
	Service		and Commercial		and Performance
	Enablement (1)		Optical Products		Products		Total
Balance as of June 29, 2013	$	106.8	$	—	$	8.3	$	115.1
Goodwill from Trendium acquisition (2)	14.4		—		—		14.4
Goodwill from Network Instruments acquistion (2)	124.4		—		—		124.4
Goodwill from Time Bandwidth Products acquisition (2)	—		6.3		—		6.3
Currency translation and other adjustments	4.2		0.2		—		4.4
Balance as of March 29, 2014	$	249.8	$	6.5	$	8.3	$	264.6

(1)In the first quarter of fiscal 2014, the Company changed the name of the Communications Test and Measurement segment to NSE. Refer to “Note 17. Operating Segments” for more details.

(2)Refer to “Note 5. Mergers and Acquisitions” for more details.

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 2013, 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 nine months ended March 29, 2014 and March 30, 2013.

20

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 9. Acquired Developed Technology and Other Intangibles

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

	Gross
	Carrying		Accumulated
As of March 29, 2014	Amount		Amortization			Net
Acquired developed technology	$	563.6	$	(447.9	)	$	115.7
Customer relationships	204.4		(137.3		)	67.1
Other	45.3		(42.8		)	2.5
Total intangibles subject to amortization	813.3		(628.0		)	185.3
In-process research and development intangibles	7.1		—			7.1
Total intangibles	$	820.4	$	(628.0	)	$	192.4

	Gross
	Carrying		Accumulated
As of June 29, 2013	Amount		Amortization			Net
Acquired developed technology	$	546.8	$	(437.4	)	$	109.4
Customer relationships	168.5		(131.5		)	37.0
Other	50.3		(47.0		)	3.3
Total intangibles	$	765.6	$	(615.9	)	$	149.7

During the three and nine months ended March 29, 2014, the Company recorded $16.2 million and $43.0 million, respectively, of amortization expense relating to acquired developed technology and other intangibles, including customer relationships.

During the three and nine months ended March 30, 2013, the Company recorded $20.1 million and $57.5 million, respectively, of amortization expense relating to acquired developed technology and other intangibles, including customer relationships.

During the three months ended September 29, 2012, the Company approved a plan to exit the concentrated photovoltaic (“CPV”) product line within its CCOP segment and accordingly recorded $2.6 million of accelerated amortization.

During the three months ended March 30, 2013, the Company approved a strategic plan to exit the low-speed wireline product line within the NSE segment. As a result, during the third quarter of fiscal 2013, the Company incurred a $2.2 million charge for accelerated amortization of related intangibles, of which $1.8 million and $0.4 million is included in Amortization of acquired technologies and in Amortization of other intangibles in the Consolidated Statement of Operations, respectively.

Based on the carrying amount of acquired developed technology and other intangibles as of March 29, 2014, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):

Fiscal Years
Remainder of 2014	$	16.0
2015	59.1
2016	38.4
2017	35.2
2018	22.4
Thereafter	14.2
Total amortization	$	185.3

21

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

As of March 29, 2014, the Company’s Long-term debt of $530.2 million on the Consolidated Balance Sheets represents the carrying amount of the liability component of the 0.625% Senior Convertible Notes as discussed below. The Company held no short-term debt as of March 29, 2014. The Company was in compliance with all debt covenants as of March 29, 2014. The Company had no debt as of June 29, 2013.

0.625% Senior Convertible Notes

On August 21, 2013, the Company issued $650.0 million aggregate principal amount of 0.625% Senior Convertible Notes due 2033 (the “2033 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The proceeds from the 2033 Notes amounted to $636.3 million after issuance costs. The 2033 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 0.625% payable in cash semi-annually in arrears on February 15 and August 15 of each year. The 2033 Notes mature on August 15, 2033 unless earlier converted, redeemed or repurchased.

Under certain circumstances and during certain periods, the 2033 Notes may be converted at the option of the holders into cash up to the principal amount, with the remaining amount converted into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock at the Company’s election. The initial conversion price is $18.83 per share, representing a 40.0% premium to the closing sale price of the Company’s common stock on the pricing date, August 15, 2013, which will be subject to customary anti-dilution adjustments. Holders may convert the 2033 Notes at any time on or prior to the close of business on the business day immediately preceding February 15, 2033, and other than during the period from, and including, February 15, 2018 until the close of business on the business day immediately preceding August 20, 2018, in multiples of $1,000 principal amount, under the following circumstances:

·on any date during any calendar quarter beginning after December 31, 2013 (and only during such calendar quarter) if the closing price of the Company’s common stock was more than 130% of the then current conversion price for at least 20 trading days during the 30 consecutive trading-day period ending the last trading day of the previous calendar quarter;

·if the 2033 Notes are called for redemption;

·upon the occurrence of specified corporate events;

·if the Company is party to a specified transaction, a fundamental change or a make-whole fundamental change (each as defined in the indenture of the 2033 Notes), or

·during the five consecutive business-day period immediately following any 10 consecutive trading-day period in which the trading price per $1,000 principal amount of the 2033 Notes for each day of such 10 consecutive trading-day period was less than 98% of the product of the closing sale price of the Company’s common stock and the applicable conversion rate on such date.

During the periods from, and including, February 15, 2018 until the close of business on the business day immediately preceding August 20, 2018 and from, and including, February 15, 2033 until the close of business on the business day immediately preceding the maturity date, holders may convert the 2033 Notes at any time, regardless of the foregoing circumstances.

Holders of the 2033 Notes may require the Company to purchase all or a portion of the 2033 Notes on each of August 15, 2018, August 15, 2023 and August 15, 2028, or upon the occurrence of a fundamental change, in each case, at a price equal to 100% of the principal amount of the 2033 Notes to be purchased, plus accrued and unpaid interest to, but excluding the purchase date. The Company may redeem all or a portion of the 2033 Notes for cash at any time on or after August 20, 2018, at a redemption price equal to 100% of the principal amount of the 2033 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

22

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In accordance with the authoritative accounting guidance, the Company separated the 2033 Notes into liability and equity components. The carrying value of the liability component at issuance was calculated as the present value of its cash flows using a discount rate of 5.4% based on the 5-year swap rate plus credit spread as of the issuance date. The credit spread for the Company is based on the historical average “yield to worst” rate for BB rated issuers. The difference between the 2033 Notes principal and the carrying value of the liability component, representing the value of conversion premium assigned to the equity component, was recorded as a debt discount on the issuance date and is being accreted using the effective interest rate of 5.4% over the period from the issuance date through August 15, 2018 as a non-cash charge to interest expense. The carrying value of the liability component was determined to be $515.6 million, and the equity component, or debt discount, of the 2033 Notes was determined to be $134.4 million. As of March 29, 2014, the expected remaining term of the 2033 Notes is 4.4 years.

In connection with the issuance of the 2033 Notes, the Company incurred $13.7 million of issuance costs, which were bifurcated into the debt issuance costs, attributable to the liability component of $10.9 million and the equity issuance costs, attributable to the equity component of $2.8 million based on their relative values. The debt issuance costs were capitalized and are being amortized to interest expense using the effective interest rate method from issuance date through August 15, 2018. The equity issuance costs were netted against the equity component in additional paid-in capital at the issuance date. As of March 29, 2014, the unamortized portion of the debt issuance costs related to the 2033 Notes was $9.7 million, which was included in Other non-current assets on the Consolidated Balance Sheets.

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

	March 29,
	2014
Carrying amount of equity component	$	134.4
Principal amount of 0.625% Senior Convertible Notes	650.0
Unamortized discount of liability component	(119.8		)
Carrying amount of liability component	$	530.2

Based on quoted market prices as of March 29, 2014, the fair market value of the 2033 Notes was approximately $683.2 million. The 2033 Notes are classified within Level 2 as they are not actively traded in markets.

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			Nine Months Ended
	March 29,			March 29,
	2014			2014
Effective interest rate	5.4		%	5.4		%
Interest expense-contractual interest	$	1.0		$	2.4
Accretion of debt discount	6.0			14.6

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 (the “2026 Notes”). Proceeds from the 2026 Notes amounted to $415.9 million after issuance costs. The notes bore interest at a rate of 1.0% per year and were convertible into a combination of cash and shares of the Company’s common stock at a conversion price of $30.30 per share.

In accordance with the authoritative guidance which applied to the 2026 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 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 was 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.

23

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the three and nine months ended March 30, 2013, the Company recognized the contractual interest expense of $0.4 million and $1.6 million, and accreted debt discount of $2.8 million and $10.6 million, respectively. Between fiscal 2009 and fiscal 2013, the Company repurchased or redeemed the $425.0 million aggregate principal amount of the notes. As of March 29, 2014, no amounts were outstanding.

Revolving Credit Facility

On August 21, 2013, in addition to the close of the 2033 Notes offering, the Company terminated its existing $250.0 million revolving credit facility, which had no amounts outstanding upon termination. The $1.3 million of unamortized debt issuance costs was fully amortized to interest expense upon termination in the first quarter of fiscal 2014.

Outstanding Letters of Credit

As of March 29, 2014, the Company had 14 standby letters of credit totaling $34.7 million.

Note 11. Restructuring and Related Charges

The Company continues to reduce costs through targeted restructuring events intended to consolidate its operations, rationalize the manufacturing of its products and align its businesses in response to market conditions. As of March 29, 2014 and June 29, 2013, the Company’s total restructuring accrual was $9.0 million and $16.5 million, respectively. During the three and nine months ended March 29, 2014, the Company incurred restructuring expenses of $3.6 million and $3.8 million, respectively. During the three and nine months ended March 30, 2013, the Company incurred restructuring expenses of $0.4 million and $6.1 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.

24

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 three and nine months ended March 29, 2014 were as follows (in millions):

			Nine Months Ended						Non-cash					Three Months Ended
	Balance		March 29,						Settlements			Balance		March 29,
	June 29,		2014			Cash			and Other			March 29,		2014
	2013		Charges			Settlements			Adjustments			2014		Charges
Fiscal 2014 Plans
NSE Product Strategy Restructuring Plan (Workforce Reduction)	$	—	$	3.3		$	(1.9	)	$	—		$	1.4	$	3.3
Central Finance and IT Restructuring Plan (Workforce Reduction)	—		1.5			(1.1		)	—			0.4		(0.1		)
Fiscal 2013 Plans
OSP Operational Realignment Plan (Workforce Reduction)	3.7		(0.7		)	(1.8		)	—			1.2		0.1
NSE Lease Restructuring Plan	5.0		(0.8		)	(1.8		)	0.2			2.6		0.7
CCOP Outsourcing Plan (Workforce Reduction)	0.7		—			(0.2		)	—			0.5		—
NSE Wireless Business Restructuring Plan (Workforce Reduction)	1.0		0.1			(0.9		)	—			0.2		—
Other plans	0.5		0.6			(1.1		)	—			—		0.1
Fiscal 2012 Plans
NSE Operation and Repair Outsourcing Restructuring Plan:
Workforce Reduction	2.0		(0.3		)	(1.2		)	—			0.5		(0.4		)
Lease Costs	0.1		(0.1		)	—			—			—		(0.1		)
Total NSE Operation and Repair Outsourcing Restructuring Plan	2.1		(0.4		)	(1.2		)	—			0.5		(0.5		)
Other plans	0.6		—			(0.2		)	—			0.4		—
Plans Prior to Fiscal 2012	2.9		0.2			(1.4		)	0.1			1.8		—
Total	$	16.5	$	3.8		$	(11.6	)	$	0.3		$	9.0	$	3.6
Ottawa Lease Exit Costs	$	3.7	$	0.1		$	(1.0	)	$	(0.1	)	$	2.7	$	0.1

As of March 29, 2014 and June 29, 2013, the Company included the long-term portion of the restructuring liability of $2.6 million and $6.2 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 were included in SG&A expenses. As of March 29, 2014 and June 29, 2013 the fair value of the remaining contractual obligations, net of sublease income, was $2.7 million and $3.7 million, respectively. The Company included the long-term portion of the contract obligations of $1.9 million and $2.7 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.

25

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fiscal 2014 Plans

NSE Product Strategy Restructuring Plan

During the third quarter of fiscal 2014, Management approved a plan in the NSE segment to realign its services, support and product resources in response to market conditions in the mobile assurance market and to increase focus on software products and next generation solutions through acquisitions and Research and Development (“R&D”). As a result, a restructuring charge of $3.3 million was recorded for severance and employee benefits for 63 employees primarily in SG&A and manufacturing functions located in North America, Latin America, Asia and Europe. As of March 29, 2014, 34 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the second quarter of fiscal 2015.

Central Finance and Information Technology (“IT”) Restructuring Plan

During the second quarter of fiscal 2014, Management approved a plan to eliminate positions and re-define roles and responsibilities in the Finance and IT organizations to align with the future state of the organizations under new executive management and move positions to lower-cost locations where appropriate. As a result, 25 employees primarily in SG&A functions located in North America, Asia and Europe will be impacted. As of March 29, 2014, 18 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the second quarter of fiscal 2015.

Fiscal 2013 Plans

Optical Security and Performance Products (“OSP”) Operational Realignment Plan

During the fourth quarter of fiscal 2013, Management approved a plan in the OSP segment to realign its operations to focus on priority markets such as Anti-counterfeiting, Consumer and Industrial and Other offerings in government, aerospace and defense. As a result, the OSP segment is ceasing production of certain legacy products such as anti-reflection coatings and front-surface mirrors for display and office automation applications, solar cell covers, and select infrared products that use the Multi-layer Anti-reflection Coater, custom display, and certain box coater production platforms which were at the end of their product lifecycle. The business segment phased out production of these product offerings by the end of the third quarter of fiscal 2014 and de-commissioned and disposed of certain related production equipment. This will result in consolidation of manufacturing operations and office space at the Santa Rosa, California site and reduction of workforce by 79 employees primarily in manufacturing, R&D and SG&A functions located in the United States. Management reduced the number of employees impacted by this plan from 126 to 79, which reduced the total liability for this plan by approximately $0.7 million during the nine months ended March 29, 2014. As of March 29, 2014, 42 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2015.

NSE Lease Restructuring Plan

During the fourth quarter of fiscal 2013, Management approved a plan to consolidate workspace in Germantown, Maryland and Beijing, China, primarily used by the NSE segment. As of June 29, 2013, the Company exited the workspace in Germantown and Beijing under the plan. The fair value of the remaining contractual obligations, net of sublease income as of March 29, 2014 was $2.6 million. A $0.8 million benefit was recorded during the nine months ended March 29, 2014, to adjust the estimated lease liability accrual for the Germantown location. Payments related to the Germantown lease costs are expected to be paid by the end of the second quarter of fiscal 2019. Final payments related to the Beijing lease costs were paid during the first quarter of fiscal 2014.

CCOP Outsourcing Plan

During the third quarter of fiscal 2013, Management approved a plan to transition certain functions related to the CCOP segment to an offshore contract manufacturer as part of its continuous efforts to optimize its supply chain. As a result, 44 employees primarily in manufacturing, R&D and SG&A functions located in the United States were impacted. As of March 29, 2014, 15 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2015.

26

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NSE Wireless Business Restructuring Plan

During the second quarter of fiscal 2013, Management approved a plan to align the Company’s investment strategy in the NSE segment with customer spending priorities in high-growth product lines such as wireless network assurance. As a result, the segment eliminated positions in R&D, sales and operations functions that supported low-growth product lines and 63 employees primarily in manufacturing, R&D and SG&A functions located in North America, Europe and Asia were impacted. As of March 29, 2014, 61 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2014.

Other Plans

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

Fiscal 2012 Plans

NSE Operation and Repair Outsourcing Restructuring Plan

During the fourth quarter of fiscal 2012, Management approved a plan which focuses on three areas in the NSE 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 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 will impact 161 employees in manufacturing, R&D and SG&A functions and resulted in the exit of workspaces in Techpoint Singapore and Atlanta, Georgia. As of September 29, 2012, the Company exited both workspaces. The employees being affected are located in North America, Europe, Latin America and Asia. As of March 29, 2014, 157 of these employees have been terminated. Payments related to the severance and benefits accrual are expected to be paid by the end of the second quarter of fiscal 2015.

Other Plans

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

Plans Prior to Fiscal 2012

The restructuring accrual for plans that commenced prior to fiscal year 2012 was $1.8 million. Of this amount, $1.0 million is related to severance and benefits accrual for the NSE Germany Restructuring Plan which commenced in the fourth quarter of fiscal 2009. Payments related to the severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2016. The remaining balance consists of immaterial lease obligation accruals from various restructuring plans that commenced prior to fiscal 2012.

Note 12. Income Tax

The Company recorded an income tax benefit of $17.2 million and $13.7 million for the three and nine months ended March 29, 2014, respectively. The Company recorded an income tax expense of $1.6 million and $9.1 million for the three and nine months ended March 30, 2013, respectively.

The income tax benefit recorded for the three and nine months ended March 29, 2014, 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 offset by the recognition of $21.7 million of uncertain tax benefits related to deferred tax assets due to the expiration of the statute of limitations in a non-US jurisdiction.  A tax benefit of $5.1 million was recorded for the nine months ended March 29, 2014,  related to the income tax intraperiod tax allocation rules in relation to other comprehensive income. In accordance with authoritative guidance, the year to date benefit may reverse during the year.

27

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The income tax expense recorded for the three and nine months ended March 30, 2013, 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 benefit and 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, due to the income tax benefit recorded in continuing operations under the income tax intraperiod tax allocation rules, and the recognition of the unrecognized tax benefits.

As of March 29, 2014 and June 29, 2013, the Company’s unrecognized tax benefits totaled $58.4 million and $80.7 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $23.6 million accrued for the payment of interest and penalties at March 29, 2014. The unrecognized tax benefits that may be recognized during the next twelve months are approximately $21.4 million.

Note 13. Stockholders’ Equity

Repurchase of Common Stock

During the first quarter of fiscal 2014, the Company repurchased 7.4 million shares of its outstanding common stock at $13.45 per share in privately negotiated transactions. The total purchase price of $100.0 million was reflected as a decrease to common stock based on the stated par value per share with the remainder charged to accumulated deficit. All common shares repurchased under this program have been cancelled and retired.

Note 14. Stock-Based Compensation

Overview

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and nine months ended March 29, 2014 and March 30, 2013 was as follows (in millions):

	Three Months Ended				Nine Months Ended
	March 29,		March 30,		March 29,		March 30,
	2014		2013		2014		2013
Cost of sales	$	2.7	$	2.4	$	7.7	$	6.7
Research and development	4.1		3.7		11.7		10.0
Selling, general and administrative	10.1		9.2		28.9		24.8
	$	16.9	$	15.3	$	48.3	$	41.5

Approximately $1.8 million of stock-based compensation was capitalized in inventory at March 29, 2014.

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 three quarters of fiscal 2014 or fiscal 2013.

As of March 29, 2014, $0.4 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 0.8 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-Merton valuation model.

28

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of March 29, 2014, $0.6 million of unrecognized stock-based compensation cost related to the ESPP remains to be amortized. That cost is expected to be recognized through the first quarter of fiscal 2015.

Full Value Awards

“Full Value Awards” refer to 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.

During the nine months ended March 29, 2014 and March 30, 2013 the Company granted 5.5 million and 6.0 million RSUs, of which 0.6 million and 0.7 million, respectively, are performance-based RSUs with market conditions (“MSUs”). These MSU 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 nine months of fiscal 2014 and fiscal 2013 was estimated to be $9.2 million and $10.7 million, respectively, and was calculated using a Monte Carlo simulation. The remaining 4.9 million and 5.3 million granted during the nine months ended March 29, 2014 and March 30, 2013 are mainly time-based RSUs. The majority of these time-based RSUs vest over three years, with 33% vesting after one year and the balance vesting quarterly over the remaining two years.

As of March 29, 2014, $87.8 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 2.1 years.

Full Value Awards are converted into shares upon vesting.  Shares equivalent in value to the minimum withholding taxes liability on the vested shares are withheld by the Company for the payment of such taxes.  During the nine months ended March 29, 2014 and March 30, 2013 the Company paid $18.3 million and $12.8 million, respectively, and classified the payments as operating cash outflows in the Consolidated Statements of Cash Flows.

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:

	Nine Months Ended
	March 29,		March 30,
	2014		2013
Volatility of common stock	53.9	%	57.5	%
Average volatility of peer companies	58.6	%	58.3	%
Average correlation coefficient of peer companies	0.2920		0.3208
Risk-free interest rate	0.8	%	0.4	%

Note 15. Employee Defined Benefit Plans

The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees primarily in the United Kingdom (“U.K.”), Germany and Switzerland. 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 third quarter of fiscal 2014 in connection with acquisitions. Benefits are generally based upon years of service and compensation or stated amounts for each year of service.

As of March 29, 2014, the U.K. plan and Switzerland plan were 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 nine months ended March 29, 2014, the Company contributed $0.7 million to the U.K. plan. The funded plan assets consist primarily of managed investments.

29

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Pension Benefits

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Service cost	$	0.2		$	0.1		$	0.4		$	0.3
Interest cost	1.2			1.1			3.6			3.3
Expected return on plan assets	(0.4		)	(0.3		)	(1.2		)	(0.9		)
Recognized net actuarial (gains)/losses	—			—			0.1			—
Curtailment/settlement (gains)/losses	—			—			—			(0.2		)
Net periodic benefit cost	$	1.0		$	0.9		$	2.9		$	2.5

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 $5.4 million related to its defined benefit pension plans during fiscal 2014 to make current benefit payments and fund future obligations. As of March 29, 2014, approximately $4.2 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 29, 2013.

Note 16. Commitments and Contingencies

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. If an unfavorable final outcome occurs, it is possible there could be 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 March 29, 2014 and June 29, 2013.

30

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Balance as of beginning of period	$	6.8		$	6.8		$	6.9		$	8.1
Provision for warranty	1.7			1.0			6.3			3.9
Utilization of reserve	(1.2		)	(0.3		)	(4.3		)	(1.7		)
Adjustments related to pre-existing warranties (including changes in estimates)	(0.4		)	(0.7		)	(2.0		)	(3.5		)
Balance as of end of period	$	6.9		$	6.8		$	6.9		$	6.8

Financing Obligations — Eningen and Santa Rosa

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 March 29, 2014, of the total financing obligation related to the Eningen Transactions, $0.1 million was included in Other current liabilities, and $5.3 million was included in Other non-current liabilities. As of June 29, 2013, of the total financing obligation related to the Eningen Transactions, $0.1 million was included in Other current liabilities, and $5.0 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 multiple one-year renewal options to a ten-year lease with two five-year renewal options.

31

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As required by the North Coast Regional Water Quality Control Board, the Company has an ongoing obligation to remediate environmental matters, impacting the entire site 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 March 29, 2014, $1.2 million was included in Other current liabilities, and $26.5 million was included in Other non-current liabilities. As of June 29, 2013, $1.1 million was included in Other current liabilities, and $27.4 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.

Future Minimum Financing Payments — Eningen and Santa Rosa Financing Obligations

As of March 29, 2014, future minimum financing payments of the financing obligations are as follows (in millions):

Fiscal Years
Remainder of 2014	$	0.9
2015	3.8
2016	3.5
2017	3.5
2018	3.6
Thereafter	33.9
Total	$	49.2

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 H. Waechter, is the Company’s Chief Operating Decision Maker (“CODM”) pursuant to the guidance. The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue and operating results.

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

In the first quarter of fiscal 2014, the Company changed the name of the Communication Test and Measurement segment to Network and Service Enablement, or NSE. The name NSE more accurately reflects the value the Company brings to customers and the evolution of the Company’s product portfolio, one that includes communications test instruments as well as microprobes, software and services that  provide the visibility necessary throughout the network to improve service and application performance.

32

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company’s reportable segments are:

(i) Network and Service Enablement:

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

(ii) Communications and Commercial Optical Products:

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

CCOP also provides lasers that address the needs of original equipment manufacturer (“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:

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 gesture-recognition and other applications.

The accounting policies of the reportable segments are the same as those described in the Company’s Annual Report on Form 10-K for the year ended June 29, 2013. The Company evaluates segment performance based on operating income (loss), excluding certain infrequent or unusual items.

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

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

33

JDS UNIPHASE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Net revenue:
Network Service and Enablement	$	172.3		$	174.2		$	539.2		$	539.1
Communications and Commercial Optical Products	194.6			179.2			597.2			559.9
Optical Security and Performance Products	51.1			51.9			158.2			156.6
Net revenue	$	418.0		$	405.3		$	1,294.6		$	1,255.6
Operating income (loss):
Network Service and Enablement	$	9.9		$	13.0		$	51.2		$	65.1
Communications and Commercial Optical Products	22.4			19.2			73.5			64.2
Optical Security and Performance Products	18.2			18.6			57.8			56.0
Corporate	(23.3		)	(23.2		)	(70.7		)	(70.0		)
Total segment operating income	27.2			27.6			111.8			115.3
Unallocated amounts:
Stock-based compensation	(16.9		)	(15.3		)	(48.3		)	(41.5		)
Amortization of intangibles	(16.2		)	(20.1		)	(43.0		)	(57.5		)
Loss on disposal of long-lived assets	(1.0		)	(0.2		)	(0.8		)	(1.6		)
Restructuring and related charges	(3.6		)	(0.4		)	(3.8		)	(6.1		)
Other charges related to non-recurring activities (1)	(1.1		)	(12.9		)	(1.1		)	(14.9		)
Interest and other income (expense), net	0.6			(0.9		)	0.4			(3.7		)
Interest expense	(7.7		)	(4.2		)	(21.3		)	(15.4		)
Loss from continuing operations before income taxes	$	(18.7	)	$	(26.4	)	$	(6.1	)	$	(25.4	)

(1)During the three months ended March 30, 2013, the Company incurred $11.3 million of inventory related charges, included in Cost of sales, primarily related to a write-off of inventory no longer being sold due to a strategic plan to exit NSE’s low-speed wireline product line approved in the third quarter of fiscal 2013.

Note 18. Discontinued Operations

During the second quarter of fiscal 2013, the Company closed the sale of the Hologram Business, previously within the OSP reportable segment, to OpSec Security Inc. and received gross proceeds of $11.5 million in cash.

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 nine months ended March 30, 2013 was $5.2 million. Net loss for the nine months ended March 30, 2013 was $1.0 million. There was no tax effect associated with the discontinued operations for any periods presented.

During fiscal 2013 the Company recorded a gain of $0.6 million as a component of Loss from discontinued operations, net of tax on the Consolidated Statement of Operations 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

34

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

Note 19. Subsequent Events

Conversion of Exchangeable Shares of JDS Uniphase Canada Ltd.

On March 31, 2014 (“the Redemption Date”), the Company exercised its right to redeem the outstanding exchangeable shares of JDS Uniphase Canada Ltd (“Exchangeable Shares”). On the Redemption Date, holders of Exchangeable Shares were entitled to receive one share of the Company’s common stock in exchange for each Exchangeable Share held. As of March 29, 2014, there were 3,157,445 Exchangeable Shares issued and outstanding.

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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 the expected impact of such plans on our financial performance; 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 for the fiscal year ended June 29, 2013.

OUR INDUSTRIES AND QUARTERLY DEVELOPMENTS

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

In the first quarter of fiscal 2014, we changed the name of our Communication Test and Measurement segment to Network and Service Enablement (“NSE”). The name NSE more accurately reflects the value the Company brings to customers and the evolution of the Company’s product portfolio, one that includes communications test instruments as well as microprobes, software and services that provide the necessary visibility throughout the network to improve service and application performance.

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

·      Network and Service Enablement

·      Communications and Commercial Optical Products (“CCOP”)

·      Optical Security and Performance Products (“OSP”)

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Network and Service Enablement

NSE provides an integrated portfolio of network and service enablement solutions that provide end-to-end visibility and intelligence necessary for consistent, high-quality network, service and application performance.

These solutions are made up of test instruments and customer experience assurance management solutions supported by microprobes, 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 network performance. To this end, NSE provides world-class network and service enablement solutions, focusing 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.

JDSU’s network enablement solutions include instruments and software to build, activate, certify, troubleshoot, monitor, and optimize networks that are differentiated through superior efficiency, higher profitability, reliable performance, and greater customer satisfaction. These products include instruments and software that access the network to perform installation and maintenance tasks. Our service enablement solutions collect and analyze complete network data to reveal the true customer experience and opportunities for new revenue streams with enhanced management, control, optimization and differentiation.

NSE solutions address lab and production environments, field deployment and service assurance for wireless and fixed communications networks, including storage networks. NSE’s solutions include one of the largest test instrument portfolios in the industry, with hundreds of thousands of units in active use by major NEMs, operators and services providers worldwide. NSE is leveraging this installed base and knowledge of network management methods and procedures to develop advanced customer experience solutions. These solutions let carriers remotely monitor performance and quality of service and applications performance throughout the entire network. Remote monitoring decreases operating expenses, while early detection increases uptime, preserves revenue, and lets operators better monetize their networks.

NSE customers include wireless and fixed 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, Reliance Communications, Softbank, Telefónica, Telmex, TimeWarner Cable, Verizon and Vodafone. NSE customers also include many of the NEMs served by our CCOP segment, including Alcatel-Lucent, Ciena, Cisco Systems, Fujitsu and Huawei. NSE 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.

On December 10, 2013, we acquired certain technology and other assets from Trendium, a provider of real-time intelligence solutions for customer experience assurance, asset optimization, and monetization of big data for 4G/Long term evolution (“LTE”) mobile network operators.

On January 6, 2014, we acquired Network Instruments, a leading developer of enterprise network and application-performance management solutions for global 2000 companies. Network Instruments extended JDSU’s service enablement solutions to the enterprise, data center and cloud networking markets.

We are currently evaluating the impact of recent strategic acquisitions on the reporting structure of our NSE segment.

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 SANs, LANs and WANs. These products enable the transmission and transport of video, audio and text data over high-capacity fiber-optic cables. CCOP maintains leading positions in the fastest-growing optical communications segments, including ROADMs and tunable XFPs and SFP+s. CCOP’s growing portfolio of pluggable transceivers supports LAN/SAN needs and the cloud for customers building proprietary data center networks.

37

Original equipment manufacturers (“OEMs”) use CCOP lasers—fiber, diode, direct-diode, diode-pumped solid-state, and gas—that offer low- to high-power output with 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. Photonic power products transport energy over optical fiber, enabling electromagnetic- and radio-interference-free power and data transmission for remote sensors such as high-voltage line current monitors.

Gesture recognition systems use both CCOP’s gesture recognition light source and OSP’s gesture recognition optical filters. 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 platforms, home entertainment, mobile devices and personal computing.

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

On January 27, 2014, we acquired Time-Bandwidth Products, a provider of high powered and ultrafast lasers for the industrial and scientific markets. Manufacturers use high-power, ultrafast lasers to create micro parts for consumer electronics and to process semiconductor chips. Use of ultrafast lasers for micromachining applications is being driven primarily by increasing use of consumer electronics and connected devices globally.

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.

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 gaming platforms use OSP optical filters.

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.

During the fourth quarter of fiscal 2013, we made a decision to cease production of certain legacy custom optic products at the end of their lifecycle, including anti-reflection products, solar cell covers, and front-surface mirrors for display and office automation applications as well as certain infrared and box coater solutions. We expect to complete our phase out of these legacy products by the end of the fourth quarter of fiscal 2014.

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

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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

38

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 Fiscal 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”).

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											Nine Months Ended
	March 29,			March 30,						Percentage		March 29,			March 30,						Percentage
	2014			2013			Change			Change		2014			2013			Change			Change
Segment net revenue:
NSE	$	172.3		$	174.2		$	(1.9	)	(1.1	)%	$	539.2		$	539.1		$	0.1		0.0	%
CCOP	194.6			179.2			15.4			8.6		597.2			559.9			37.3			6.7
OSP	51.1			51.9			(0.8		)	(1.5	)	158.2			156.6			1.6			1.0
Net revenue	$	418.0		$	405.3		$	12.7		3.1	%	$	1,294.6		$	1,255.6		$	39.0		3.1	%
Gross profit	$	184.7		$	155.3		$	29.4		18.9	%	$	574.8		$	516.9		$	57.9		11.2	%
Gross margin	44.2		%	38.3		%						44.4		%	41.2		%
Amortization of acquired technologies	11.0			17.0			(6.0		)	(35.3	)%	32.3			48.7			(16.4		)	(33.7	)%
Percentage of net revenue	2.6		%	4.2		%						2.5		%	3.9		%
Research and development	74.1			65.8			8.3			12.6	%	216.0			190.9			25.1			13.1	%
Percentage of net revenue	17.7		%	16.2		%						16.7		%	15.2		%
Selling, general and administrative	113.4			107.3			6.1			5.7	%	329.5			317.4			12.1			3.8	%
Percentage of net revenue	27.1		%	26.5		%						25.5		%	25.3		%
Amortization of other intangibles	5.2			3.1			2.1			67.7	%	10.7			8.8			1.9			21.6	%
Percentage of net revenue	1.2		%	0.8		%						0.8		%	0.7		%
Restructuring and related charges	3.6			0.4			3.2			800.0	%	3.8			6.1			(2.3		)	(37.7	)%
Percentage of net revenue	0.9		%	0.1		%						0.3		%	0.5		%
Loss from discontinued operations, net of tax	—			—			—			—	%	—			(1.0		)	1.0			(100.0	)%
Percentage of net revenue	—		%	—		%						—		%	0.1		%

Net Revenue

Net revenue increased by $12.7 million, or 3.1%, during the three months ended March 29, 2014 compared to the same period a year ago. This increase was primarily due to an increase in our CCOP segment, as discussed below.

39

NSE net revenue decreased by $1.9 million, or 1.1%, during the three months ended March 29, 2014 compared to the same period a year ago. This decrease was driven by $11.0 million of net revenue decreases primarily from our Network Visibility and Control and Services product lines. These decreases were primarily due to the fact that the prior period reflected net revenue from a significant one-time project in our Network Visibility and Control product line, coupled with lower current period demand in our Services product line for hardware services. This was partially offset by $9.1 million of net revenue increases primarily from our Mobility, Cloud and Data Center and Fiber product lines. These increases were primarily due to increased demand from key customers in our Mobility and Fiber product lines and new products in our Cloud and Data Center product line from the acquisition of Network Instruments in the current period.

CCOP net revenue increased by $15.4 million, or 8.6%, during the three months ended March 29, 2014 compared to the same period a year ago. This increase was driven by $31.6 million of net revenue increases primarily from our Gesture Recognition Light Source, Circuit Packs and Pluggable product lines. These increases were primarily due to (i) higher demand for our Gesture Recognition Light Source product line related to our customer’s next generation gaming console, (ii) higher demand from key customers in our Circuit Packs product line and (iii) higher demand for new products from key customers in our Pluggables product line. These increases were partially offset by $16.2 million of net revenue decreases primarily due to lower deployments by customers of our ROADMs product line and lower demand from key customers in our Passive Components product line.

OSP net revenue decreased by $0.8 million, or 1.5%, during the three months ended March 29, 2014 compared to the same period a year ago. This decrease was driven by $6.1 million of net revenue decreases primarily from our Anti-Counterfeiting product line driven by lower cyclical demand for our currency products. This decrease was partially offset by $5.3 million of net revenue increases primarily from our Consumer and Industrial product line driven by last-time buys of products impacted by our plan to exit certain legacy product offerings by the end of the fourth quarter of fiscal 2014 and higher demand for our Gesture Recognition Filters.

Net revenue increased by $39.0 million, or 3.1%, during the nine months ended March 29, 2014 compared to the same period a year ago. This increase was primarily due to an increase in our CCOP segment, as discussed below.

NSE net revenue remained relatively flat during the nine months ended March 29, 2014 compared to the same period a year ago, increasing by $0.1 million. This increase was driven by $29.8 million of net revenue increases primarily from our Media Access and Content and Fiber product lines. These increases were primarily due to higher demand from a key customer of our Media Access and Content product line and increased spending for the deployment of LTE networks by key customers of our Fiber product line. This was partially offset by $29.7 million of net revenue decreases primarily from our Network Visibility and Control and Ethernet product lines. These decreases were primarily due to the fact that the prior period reflected net revenue from a significant one-time project in our Network Visibility and Control product line and reduced current period spending from key customers in our Ethernet product line.

CCOP net revenue increased by $37.3 million, or 6.7%, during the nine months ended March 29, 2014 compared to the same period a year ago. This increase was driven by $102.4 million of net revenue increases primarily from our Gesture Recognition Light Source, Circuit Packs and Pluggable product lines. These increases were primarily due to (i) higher demand for our Gesture Recognition Light Source product line related to our customer’s next generation gaming console, (ii) higher demand from key customers in our Circuit Packs product line and (iii) higher demand for new products from key customers in our Pluggables product line. This was partially offset by $65.1 million of net revenue decreases primarily from our ROADMs, Passive Components and Tunables product lines. These decreases were primarily due to lower deployments by customers of our ROADMs product line and lower demand from key customers in our Passive Components and Tunables product lines.

OSP net revenue increased by $1.6 million, or 1.0%, during the nine months ended March 29, 2014 compared to the same period a year ago. This increase was driven by $11.5 million of net revenue increases primarily from our Consumer and Industrial product line driven by last-time buys of products impacted by our restructuring plan to exit certain legacy product offerings by the end of the fourth quarter of fiscal 2014 and higher demand for our Gesture Recognition Filters. This was partially offset by $9.9 million of net revenue decreases primarily from our Anti-Counterfeiting product line driven by lower cyclical demand in the current period.

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 uncertain demand in our NSE 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 NSE markets, which affects revenue and gross margin; (c) fluctuations in customer buying patterns, which cause demand, revenue and profitability volatility; and (d) the current trend of communication industry consolidation, which is expected to continue, that directly affects our CCOP and NSE customer bases and adds additional risk and uncertainty to our financial and business projections.

40

We operate primarily in three geographic regions: Americas, Europe Middle East and Africa (“EMEA”) and Asia-Pacific. The following table presents net revenue by geographic region (in millions):

	Three Months Ended								Nine Months Ended
	March 29,				March 30,				March 29,				March 30,
Net revenue:	2014				2013				2014				2013
Americas	$	196.5	47.0	%	$	194.1	47.9	%	$	609.5	47.1	%	$	618.0	49.2	%
EMEA	102.3		24.5		95.1		23.5		311.1		24.0		294.4		23.5
Asia-Pacific	119.2		28.5		116.1		28.6		374.0		28.9		343.2		27.3
Total net revenue	$	418.0	100.0	%	$	405.3	100.0	%	$	1,294.6	100.0	%	$	1,255.6	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 March 29, 2014 and March 30, 2013 included net revenue from the United States of $152.0 million and $144.1 million, respectively. Net revenue from customers in the Americas during the nine months ended March 29, 2014 and March 30, 2013 included net revenue from the United States of $454.6 million and $469.0 million, respectively.

Net revenue from customers outside the Americas during the three months ended March 29, 2014 and March 30, 2013 represented 53.0% and 52.1% of net revenue, respectively. Net revenue from customers outside the Americas during the nine months ended March 29, 2014 and March 30, 2013, represented 52.9% and 50.8% 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.

Gross Margin

Gross margin increased 5.9 percentage points during the three months ended March 29, 2014 from 38.3% in the same period a year ago to 44.2% in the current period. The increase was primarily due to (i) the fact that the prior period reflected inventory charges and accelerated amortization of acquired developed technology related to the strategic exit of NSE’s low-speed wireline product line, (ii) improvement in NSE gross margin driven by a reduction in manufacturing variances and improved cost efficiencies realized in the current period through the consolidation of our contract manufacturing partners during the second half of fiscal 2013 and (iii) a reduction in amortization of developed technology in the current period driven by certain significant intangible assets becoming fully amortized in the first quarter of fiscal 2014. This increase was partially offset by a change in segment mix as CCOP net revenue, which generates lower gross margin generally than our other two segments, represented a higher percentage of consolidated net revenue in the current period.

Gross margin increased 3.2 percentage points during the nine months ended March 29, 2014 from 41.2% in the same period a year ago to 44.4% in the current period. The increase was primarily due to (i) a reduction in amortization of developed technology in the current period due to certain significant intangible assets becoming fully amortized in the first quarter of fiscal 2014, (ii) the absence of charges in the current period related to the strategic exit from NSE’s low-speed wireline product line that were reflected in the prior period as referenced above and (iii) improvement in NSE gross margin driven by a reduction in manufacturing variances and improved cost efficiencies realized in the current period through the consolidation of our contract manufacturing partners during the second half of fiscal 2013. This increase was partially offset by a change in segment mix as CCOP net revenue, which generates lower gross margin generally than our other two segments, represented a higher percentage of consolidated net revenue in the current period.

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/or are affected by customer seasonal and mix variant buying patterns. Further, we are continuing significant organic investments in research and development (as discussed under “Research and Development” below) and have made a number of strategic acquisitions to add new products and capabilities to our portfolio, with a goal of driving towards higher gross margin solutions. We expect these factors to continue to result in variability of our gross margin.

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Research and Development (“R&D”)

R&D expense increased by $8.3 million, or 12.6%, during the three months ended March 29, 2014 compared to the same period a year ago. This increase was primarily driven by a $6.8 million increase in labor and benefits expense primarily due to higher headcount and corresponding compensation associated with our ongoing investment in R&D and strategic acquisitions, coupled with a $1.6 million increase in materials spending primarily in our CCOP segment.

R&D expense increased by $25.1 million, or 13.1%, during the nine months ended March 29, 2014 compared to the same period a year ago. This increase was primarily driven by a $20.4 million increase in labor and benefits expense primarily due to higher headcount and corresponding compensation associated with our ongoing investment in R&D and strategic acquisitions. Additionally, R&D offsets from CCOP customer-funded development projects were $2.9 million higher in the same period a year ago, which contributed to the increase in the current period.

We believe that continuing our investments in R&D is critical to attaining our strategic objectives. We plan to continue to invest in R&D and new products that will further differentiate us in the marketplace and expect our investment in dollar terms to increase in future quarters.

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

SG&A expense increased by $6.1 million, or 5.7%, during the three months ended March 29, 2014 compared to the same period a year ago. This increase was primarily driven by a $5.2 million increase in labor and benefits expense primarily due to higher headcount and corresponding compensation related to our strategic acquisitions. This was partially offset by a $1.1 million decrease in acquisition-related costs and a $0.5 million reduction in other SG&A expenses primarily driven by lower external costs due to the insourcing of certain information technology (“IT”) applications in the fourth quarter of fiscal 2013.

SG&A expense increased by $12.1 million, or 3.8%, during the nine months ended March 29, 2014 compared to the same period a year ago. This increase was primarily driven by a $15.8 million increase in labor and benefits expense primarily due to higher headcount and corresponding compensation related to our strategic acquisitions. This was partially offset by a $4.1 million decrease in external costs due to the insourcing of certain IT applications in the fourth quarter of fiscal 2013 and a $1.2 million decrease in acquisition-related costs.

We intend to continue to focus on reducing our SG&A expense 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-related expenses 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 reduce costs through targeted restructuring efforts intended to consolidate our operations, rationalize the manufacturing of our products and align our businesses in response to market conditions. We estimate annualized cost savings of approximately $23.2 million, excluding any one-time charges as a result of the restructuring activities initiated in the past year. Refer to “Note 11. Restructuring and Related Charges” for more detail.

During the three and nine months ended March 29, 2014, we incurred restructuring and related charges of $3.6 million and $3.8 million, respectively. During the three and nine months ended March 30, 2013, we incurred restructuring and related charges of $0.4 million and $6.1 million, respectively.

During the third quarter of fiscal 2014, we incurred restructuring and related charges of $3.6 million. The charges are a combination of new and previously announced restructuring plans and are primarily the result of the following:

·During the third quarter of fiscal 2014, Management approved a plan in the NSE segment to realign its services, support and product resources in response to market conditions in the mobile assurance market and to increase focus on software products and next generation solutions through acquisitions and R&D.As a result, a restructuring charge of $3.3 million was recorded for severance and employee benefits for 63 employees primarily in SG&A and manufacturing functions located in North America, Latin America, Asia and Europe. As of March 29, 2014, 34 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the second quarter of fiscal 2015.

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·We recorded a $0.7 million charge to adjust the lease liability accrual for the Germantown location related to the NSE Lease Restructuring Plan approved in the fourth quarter of fiscal 2013.

·We recorded a $0.4 million benefit to adjust the accrual balance for the NSE Operation and Repair Outsourcing Restructuring Plan approved in the fourth quarter of fiscal 2012.

During the third quarter of fiscal 2013, we incurred restructuring and related charges of $0.4 million. These charges are primarily the result of the following:

·Management approved the CCOP Outsourcing Plan to transition certain functions related to the CCOP segment to an offshore contract manufacturer to align with our continuous efforts to improve supply chain optimization. As a result, a restructuring charge of $0.9 million was recorded for severance and employee benefits for 46 employees primarily in manufacturing, R&D and SG&A functions. As of March 30, 2013, 4 employees have been terminated. The employees being affected are located in the United States. Payments related to remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2015.

·This change was offset by a benefit of $0.5 million for severance and benefits, primarily related to the NSE Operation and Repair Outsourcing Restructuring Plan announced in the fourth quarter of fiscal 2012 and the NSE Manufacturing Support Consolidation Plan announced in the third quarter of fiscal 2012.

During the nine months ended March 29, 2014, we recorded $3.8 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:

·$4.8 million for severance and benefits for the Central Finance and IT Plan announced in the second quarter of fiscal 2014 and for the NSE Product Strategy Restructuring Plan announced in the current quarter. These charges were slightly offset by a benefit of $0.7 million relating to a reduction in the number of employees impacted by the OSP Operational Realignment Plan approved during the fourth quarter of fiscal 2013.

·$0.8 million benefit to adjust the lease liability accrual for the Germantown location related to the NSE Lease Restructuring Plan approved in the fourth quarter of fiscal 2013.

During the nine months ended March 30, 2013, we recorded $6.1 million in restructuring and related charges. The charges are primarily the result of the following:

·$3.2 million for severance and benefits related to the CCOP Outsourcing Plan announced in the current quarter, the NSE Wireless Business Plan announced in the second quarter of fiscal 2013, and the CCOP CPV plan announced during the first quarter of fiscal 2013 and $1.6 million of additional severance and employee benefits arising primarily to adjust the accrual for the NSE Operation and Repair Outsourcing Restructuring and the NSE Manufacturing Support Consolidation plans announced in the fourth and third quarters of fiscal 2012, respectively.

·$0.8 million for transfer costs and lease construction costs in NSE which were 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 NSE for the plan announced during the fourth quarter of fiscal 2012.

Our restructuring and other lease exit cost obligations are net of sublease income or lease settlement estimates of approximately $5.0 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.

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Interest and Other Income (Expense), Net

Interest and other income (expense), net was $0.6 million during the three months ended March 29, 2014 as compared to $(0.9) million during the same period a year ago. This $1.5 million change was primarily due to a currency exchange loss of $2.0 million in the prior period compared to a currency exchange loss of $0.3 million in the current period driven by improved balance sheet hedging, and the fact that the prior period reflected a $0.7 million realized loss in connection with the repurchase of $50.0 million aggregate principal amount of the 1% Senior Convertible Notes due 2026 (the “2026 Notes”) which were fully repurchased and redeemed in fiscal 2013. This was partially offset by a decrease in other income of $0.9 million primarily due to the receipt of a deposit in the prior period.

Interest and other income (expense), net was $0.4 million during the nine months ended March 29, 2014 as compared to $(3.7) million during the same period a year ago. This $4.1 million change was primarily driven by the fact that the prior period reflected a $4.1 million realized loss in connection with the repurchase of $150.0 million aggregate principal amount of the 2026 Notes which were fully repurchased and redeemed in fiscal 2013 and a $0.5 million reduction in other expense primarily due to the absence of commitment fees due under the revolving credit facility which the Company terminated in the first quarter of fiscal 2014. This was partially offset by a decrease in other income of $1.1 million primarily due to the receipt of a deposit in the prior period.

Interest Expense

Interest expense increased by $3.5 million, or 83.3%, during the three months ended March 29, 2014 compared to the same period a year ago. The increase was primarily due to accretion of the debt discount on our 0.625% Senior Convertible Notes due 2033 (“the 2033 Notes”) in the current period as compared to the accretion on our 2026 Notes in the same period a year ago. The increase was primarily driven by the fact that the unamortized debt discount of our 2033 Notes in the current period was significantly higher than that of our 2026 Notes in the prior period. During the three months ended March 29, 2014 and March 30, 2013 we accreted debt discount of $6.0 million and $2.8 million, respectively.

Interest expense increased by $5.9 million, or 38.3%, during the nine months ended March 29, 2014 compared to the same period a year ago. The increase was primarily due to an increase in accretion of the debt discount as referenced above, coupled with a $1.3 million write-off of unamortized issuance costs related to the termination of the revolving credit facility in the first quarter of fiscal 2014. During the nine months ended March 29, 2014 and March 30, 2013, we accreted debt discount of $14.6 million and $10.6 million, respectively.

Provision for Income Tax

We recorded an income tax benefit of $17.2 million and $13.7 million for the three and nine months ended March 29, 2014, respectively. We recorded an income tax expense of $1.6 million and $9.1 million for the three and nine months ended March 30, 2013, respectively.

The income tax benefit recorded for the three and nine months ended March 29, 2014, primarily relates to income tax in certain foreign and state jurisdictions based on our forecasted pre-tax income for the year in those locations offset by the recognition of $21.7 million of uncertain tax benefits related to deferred tax assets due to the expiration of the statute of limitations in a non-US jurisdiction. A tax benefit of $5.1 million was recorded for the nine months ended March 29, 2014, related to the income tax intraperiod tax allocation rules in relation to other comprehensive income. In accordance with authoritative guidance, the year to date benefit may reverse during the year.

The income tax expense recorded for the three and nine months ended March 30, 2013, 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 benefit and 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, the income tax benefit recorded in continuing operations under the income tax intraperiod tax allocation rules, and the recognition of the unrecognized tax benefits.

As of March 29, 2014 and June 29, 2013, our unrecognized tax benefits totaled $58.4 million and $80.7 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. We had $23.6 million accrued for the payment of interest and penalties at March 29, 2014. The unrecognized tax benefits that may be recognized during the next twelve months are approximately $21.4 million.

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Discontinued Operations

During the second quarter of fiscal 2013, we closed the sale of the Hologram Business, previously within the OSP reportable segment, and received gross proceeds of $11.5 million in cash, subject to an earnout clause requiring the buyer to pay up to a maximum additional amount of $4.0 million if the revenue generated by the business exceeds a pre-determined target amount during the one-year period immediately following the closing. In the fourth quarter of fiscal 2014, we submitted an arbitration demand to resolve a dispute regarding the amount we are owed from the buyer under the earnout clause.

Net revenue of the Hologram Business for the nine months ended March 30, 2013 was $5.2 million. Net loss for the nine months ended March 30, 2013 was $1.0 million. There was no tax effect associated with the discontinued operation for any periods presented.

Operating Segment Information (in millions)

	Three Months Ended											Nine Months Ended
	March 29,			March 30,						Percentage		March 29,			March 30,						Percentage
	2014			2013			Change			Change		2014			2013			Change			Change
NSE
Net revenue	$	172.3		$	174.2		$	(1.9	)	(1.1	)%	$	539.2		$	539.1		$	0.1		—	%
Operating income	9.9			13.0			(3.1		)	(23.8	)%	51.2			65.1			(13.9		)	(21.4	)%
Operating margin	5.7		%	7.5		%						9.5		%	12.1		%
CCOP
Net revenue	194.6			179.2			15.4			8.6	%	597.2			559.9			37.3			6.7	%
Operating income	22.4			19.2			3.2			16.7	%	73.5			64.2			9.3			14.5	%
Operating margin	11.5		%	10.7		%						12.3		%	11.5		%
OSP
Net revenue	51.1			51.9			(0.8		)	(1.5	)%	158.2			156.6			1.6			1.0	%
Operating income	18.2			18.6			(0.4		)	(2.2	)%	57.8			56.0			1.8			3.2	%
Operating margin	35.6		%	35.8		%						36.5		%	35.8		%

NSE

NSE operating margin decreased 1.8 percentage points during the three months ended March 29, 2014 from 7.5% in the same period a year ago to 5.7% in the current period. The decrease in operating margin was primarily due to an increase in operating expenses driven by higher headcount primarily related to strategic acquisitions in fiscal 2014 and ongoing R&D investments primarily in our Media Access and Content product line. This was partially offset by an improvement in gross margin driven by a reduction in manufacturing variances and improved cost efficiencies realized in the current period from the consolidation of our contract manufacturing partners during the second half of fiscal 2013.

NSE operating margin decreased 2.6 percentage points during nine months ended March 29, 2014 from 12.1% in the same period a year ago to 9.5% in the current period. The decrease in operating margin was primarily due to an increase in operating expenses driven by higher headcount primarily related to strategic acquisitions in fiscal 2014 and ongoing R&D investments primarily in our Media Access and Content product line. This was partially offset by an improvement in gross margin driven by a reduction in manufacturing variances and improved cost efficiencies realized in the current period from the consolidation of our contract manufacturing partners during the second half of fiscal 2013.

CCOP

CCOP operating margin increased 0.8 percentage points during the three months ended March 29, 2014 from 10.7% in the same period a year ago to 11.5% in the current period. The increase in operating margin was primarily due to an overall increase in CCOP net revenue as referenced above and an improvement in gross margin driven by a favorable product mix and improvements in yields. This was partially offset by an increase in R&D expense primarily due to higher headcount associated with our ongoing R&D investments in the current period.

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CCOP operating margin increased 0.8 percentage points during nine months ended March 29, 2014 from 11.5% in the same period a year ago to 12.3% in the current period. The increase in operating margin was primarily due to improvement in gross margin driven by improvement in yields and an overall increase in CCOP net revenue as referenced above. This was partially offset by an increase in R&D expense primarily due to higher headcount associated with our ongoing R&D investments and higher R&D offsets in the same period a year ago as referenced above.

OSP

OSP operating margin remained relatively flat during the three months ended March 29, 2014, decreasing by 0.2 percentage points. The decrease in operating margin was primarily due to an unfavorable product mix, partially offset by a reduction in SG&A expense driven by lower labor and benefits expenses.

OSP operating margin increased 0.7 percentage points during nine months ended March 29, 2014 from 35.8% in the same period a year ago to 36.5% in the current period. The increase in operating margin was primarily due to improvement in gross margin driven by a reduction in SG&A expense due to lower labor and benefits expenses.

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 5.0% or $5.0 million, whichever is greater, of each of our investment portfolios 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 recorded as other comprehensive income (loss) and 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 March 29, 2014 and virtually all debt securities held were of investment grade (at least BBB-/Baa3). As of March 29, 2014, U.S. entities owned approximately 83.9% of our cash and cash equivalents, short-term investments and restricted cash.

As of March 29, 2014, 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 nine months ended March 29, 2014, we have not realized material investment losses but can provide no assurance that the value or the liquidity of our 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 March 29, 2014, we had a combined balance of cash and cash equivalents, short-term investments and restricted cash of $926.2 million, an increase of $410.3 million from June 29, 2013 primarily due to our issuance of the 2033 Notes and $126.4 million of cash provided by operating activities, partially offset by a $100.0 million share repurchase in the first quarter of fiscal 2014. Cash and cash equivalents increased by $33.5 million in the nine months ended March 29, 2014 due to $557.2 million of cash provided by financing activities and $126.4 million of cash provided by operating activities, partially offset by $651.8 million of cash used in investing activities.

During the nine months ended March 29, 2014, cash provided by operating activities was $126.4 million, resulting from our net income adjusted for non-cash items such as depreciation, amortization and stock-based compensation of $173.7 million, and changes in operating assets and liabilities that used $47.3 million. Changes in operating assets and liabilities related primarily to a decrease in accrued payroll and related expenses of $33.0 million due to timing of salary and variable incentive payments, a decrease in accrued expenses and other current and non-current liabilities of $23.2 million, a decrease in income taxes payable of $22.2 million, partially offset by an increase in accounts payable of $23.2 million due to lower payment activity in the current quarter and increase in deferred revenue current and non-current of $9.4 million.

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During the nine months ended March 30, 2013, cash provided by operating activities was $130.7 million, resulting from our net income adjusted for non-cash items such as depreciation, amortization and stock-based compensation of $131.1 million, and changes in operating assets and liabilities that used $0.4 million. Changes in operating assets and liabilities related primarily to a decrease in accrued payroll and related expenses of $24.3 million due to timing of bonus and salary payments and lower bonus accrual and a decrease in accrued expenses and other current and non-current liabilities of $15.1 million, offset by a decrease in inventory of $19.8 million and an decrease in accounts receivable of $17.2 million driven by our collection efforts.

During the nine months ended March 29, 2014, cash used in investing activities was $651.8 million, primarily due to $885.1 million of purchases of available-for-sale securities largely driven by the investment of proceeds from the 2033 Notes, $219.3 million of cash used for the acquisitions of Trendium, Network Instruments and Time Bandwidth Products, and $68.1 million of purchases of property, plant and equipment. These were partially offset by proceeds from maturities of available-for-sale investments of $327.7 million and sales of available-for-sale investments of $186.8 million in the current period.

During the nine months ended March 30, 2013 cash used for investing activities was $150.5 million, primarily related to cash used for the acquisitions of GenComm and Arieso of $83.2 million, cash used for the purchase of property, plant and equipment of $46.7 million and net cash outflows used for the purchase of available-for-sale investments of $32.9 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 nine months ended March 30, 2013 to increase manufacturing capacity in Asia and the U.S., to set up and improve facilities, and to upgrade information technology systems.

During the nine months ended March 29, 2014, cash provided by financing activities was $557.2 million, primarily related to the $650.0 million proceeds from the 2033 Notes partially offset by the repurchase of 7.4 million shares of our outstanding common stock for $100.0 million in the current period.

During the nine months ended March 30, 2013, cash used for financing activities was $125.3 million, primarily related to the repurchase of our 1% Senior Convertible Notes in the amount of $145.8 million, offset by proceeds from the exercise of stock options and the issuance of common stock under our employee stock purchase plan of $21.3 million.

We believe that our existing cash balances and investments will be sufficient to meet our liquidity and capital spending requirements over the next twelve months. 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 third quarter of fiscal 2014, there were no material changes to the contractual obligations previously disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 29, 2013, 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.”

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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. Refer to “Note 14. Stock-Based Compensation” for more information.

Pension and Other Post-retirement Benefits

We sponsor significant pension plans for certain past and present employees primarily in the U.K., Germany and Switzerland.  We are also 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 third quarter of fiscal 2014. The U.K. plan and Switzerland plan are 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. As of March 29, 2014, our pension plans were under funded by $100.8 million since the projected benefit obligation exceeded the fair value of its plan assets. Similarly, we had a liability of $0.9 million related to our non-pension post-retirement benefit plan. Pension plan assets are managed by external third parties and we monitor the performance of our investment managers. As of March 29, 2014, the fair value of plan assets had increased approximately 5.0% since June 29, 2013, 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 $7.7 million based upon June 29, 2013 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. Refer to “Note 15. Employee Defined Benefit Plans” for more details.

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 monetary 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 Prepayments and other current assets or Other current liabilities in Consolidated Balance Sheets and the associated gains and losses are reflected in Interest and other income (expense), net 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 monetary assets and liabilities.

Forward contracts, most with a term of less than 120 days, were transacted near quarter-end and therefore, the fair value of the contracts is approximately zero at quarter-end. 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.

48

The following table provides information about our foreign currency forward contracts outstanding as of March 29, 2014.

	Contract		Contract
	Amount		Amount
(in millions)	(Local Currency)		(USD)
Canadian Dollar (contracts to buy CAD / sell USD)	CAD	55.4	$	49.7
Chinese Renmimbi (contracts to buy CNY / sell USD)	CNY	228.4	36.8
British Pound (contracts to buy GBP / sell USD)	GBP	6.6	11.0
Euro (contracts to buy EUR / sell USD)	EUR	61.3	84.4
Singapore Dollar (contracts to sell SGD / buy USD)	SGD	51.3	40.5
Mexican Peso (contracts to buy MXN / sell USD)	MXN	91.5	6.9
Australian Dollar (contracts to sell AUD / buy USD)	AUD	4.3	3.9
Brazilian Real (contracts to sell BRL / buy USD)	BRL	25.5	10.8
Japanese Yen (contracts to buy JPY / sell USD)	JPY	249.5	2.4
Indian Rupee (contracts to sell INR / buy USD)	INR	242.4	3.9
South Korean Won (contracts to sell KRW / buy USD)	KRW	847.4	0.8
Swiss Franc (contracts to buy CHF / sell USD)	CHF	2.7	3.1
Swedish Krona (contracts to buy SEK / sell USD)	SEK	34.0	5.3
Total USD notional amount of outstanding foreign exchange contracts			$	259.5

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 monitoring such exposure on an on-going basis. Nevertheless, under current market conditions, failure of one or more of these financial institutions could result in 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 March 29, 2014.

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 2033 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 decreases as the market price of the stock falls. Interest rate and JDSU stock price 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 March 29, 2014, the fair market value of the 2033 Notes was $683.2 million. Refer to “Note 10. Debt and Letters of Credit” for more details.

49

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. If an unfavorable final outcome occurs, it is possible there could be 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 Annual Report for the fiscal year ended June 29, 2103.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

50

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
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

51

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: May 7, 2014

52

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: May 7, 2014

/s/ THOMAS H. WAECHTER

Thomas H. Waechter

Chief Executive Officer

(Principal Executive Officer)

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: May 7, 2014

/s/ REX S. JACKSON

Rex S. Jackson

Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

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 March 29, 2014 as filed with the Securities and Exchange Commission (the “Report”), I, Thomas H. 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: May 7, 2014

/s/ THOMAS H. WAECHTER

Thomas H. Waechter

Chief Executive Officer

(Principal Executive Officer)

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 March 29, 2014 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: May 7, 2014

/s/ REX S. JACKSON

Rex S. Jackson

Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

XML

Operating Segments (Tables)

9 Months Ended

Mar. 29, 2014

Operating Segments

Schedule of information on reportable segments

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

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Net revenue:
Network Service and Enablement	$	172.3		$	174.2		$	539.2		$	539.1
Communications and Commercial Optical Products	194.6			179.2			597.2			559.9
Optical Security and Performance Products	51.1			51.9			158.2			156.6
Net revenue	$	418.0		$	405.3		$	1,294.6		$	1,255.6
Operating income (loss):
Network Service and Enablement	$	9.9		$	13.0		$	51.2		$	65.1
Communications and Commercial Optical Products	22.4			19.2			73.5			64.2
Optical Security and Performance Products	18.2			18.6			57.8			56.0
Corporate	(23.3		)	(23.2		)	(70.7		)	(70.0		)
Total segment operating income	27.2			27.6			111.8			115.3
Unallocated amounts:
Stock-based compensation	(16.9		)	(15.3		)	(48.3		)	(41.5		)
Amortization of intangibles	(16.2		)	(20.1		)	(43.0		)	(57.5		)
Loss on disposal of long-lived assets	(1.0		)	(0.2		)	(0.8		)	(1.6		)
Restructuring and related charges	(3.6		)	(0.4		)	(3.8		)	(6.1		)
Other charges related to non-recurring activities (1)	(1.1		)	(12.9		)	(1.1		)	(14.9		)
Interest and other income (expense), net	0.6			(0.9		)	0.4			(3.7		)
Interest expense	(7.7		)	(4.2		)	(21.3		)	(15.4		)
Loss from continuing operations before income taxes	$	(18.7	)	$	(26.4	)	$	(6.1	)	$	(25.4	)

(1) During the three months ended March 30, 2013, the Company incurred $11.3 million of inventory related charges, included in Cost of sales, primarily related to a write-off of inventory no longer being sold due to a strategic plan to exit NSE’s low-speed wireline product line approved in the third quarter of fiscal 2013.

XML

Restructuring and Related Charges (Details 2) (USD $) In Millions, unless otherwise specified	Mar. 29, 2014	Jun. 29, 2013
Restructuring accrual
Non-current	$ 2.6	$ 6.2
Other lease exit costs
Non-current	$ 1.9	$ 2.7

XML

Investments and Fair Value Measurements (Details 2) (Short-term investments, Trading securities, USD $) In Millions, unless otherwise specified	Mar. 29, 2014	Jun. 29, 2013
Trading securities related to deferred compensation plan
Deferred compensation plan assets	$ 3.8	$ 4.2
Debt securities
Trading securities related to deferred compensation plan
Deferred compensation plan assets	0.7	0.8
Money market instruments and funds
Trading securities related to deferred compensation plan
Deferred compensation plan assets	0.4	0.3
Marketable equity investments
Trading securities related to deferred compensation plan
Deferred compensation plan assets	$ 2.7	$ 3.1

XML

Income Tax (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013
Components of the Company's income tax (benefit) expense
Income Tax Expense (Benefit)	$ (17.2)	$ 1.6	$ (13.7)	$ 9.1
Uncertain tax benefits related to deferred tax assets due to the expiration of the statute of limitations in a non-US jurisdiction	21.7		21.7
Income tax benefit intraperiod tax allocation related to other comprehensive income			$ 5.1

XML

Balance Sheet and Other Details (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013	Jun. 29, 2013	Dec. 28, 2013 Fabrication facility in California	Mar. 29, 2014 Santa Rosa and Eningen site sale and leaseback transaction	Jun. 29, 2013 Santa Rosa and Eningen site sale and leaseback transaction	Mar. 29, 2014 Land	Jun. 29, 2013 Land	Mar. 29, 2014 Buildings and improvements	Jun. 29, 2013 Buildings and improvements	Mar. 29, 2014 Machinery and equipment	Jun. 29, 2013 Machinery and equipment	Mar. 29, 2014 Furniture, fixtures, software and office equipment	Jun. 29, 2013 Furniture, fixtures, software and office equipment	Mar. 29, 2014 Leasehold improvements	Jun. 29, 2013 Leasehold improvements	Mar. 29, 2014 Construction-in-progress	Jun. 29, 2013 Construction-in-progress
Prepayments and Other Current Assets
Prepayments	$ 30.5		$ 30.5		$ 36.0
Advances to contract manufacturers	13.7		13.7		14.6
Deferred income tax	4.2		4.2		3.9
Refundable income taxes	3.0		3.0		2.3
Other receivables	25.0		25.0		26.1
Assets held for sale					2.2
Other current assets	9.5		9.5		10.2
Prepayments and other current assets	85.9		85.9		95.3
Property, Plant and Equipment
Property, plant and equipment, gross	817.4		817.4		743.8				20.6	14.6	63.7	34.9	482.0	453.8	145.4	132.9	76.8	92.7	28.9	14.9
Less: Accumulated depreciation	(545.5)		(545.5)		(496.8)
Property, plant and equipment, net	271.9		271.9		247.0
Property, plant and equipment, net							20.4	21.8
Purchase cost						14.7
Depreciation expense	18.2	17.0	53.8	50.8
Other Current Liabilities
Deferred compensation plan	3.8		3.8		4.2
Warranty	6.0		6.0		6.0
VAT liabilities	5.7		5.7		5.6
Restructuring	6.4		6.4		10.3
Holdback liabilities from acquisitions	32.2		32.2		13.1
Other	12.0		12.0		6.1
Other current liabilities	66.1		66.1		45.3
Other Non-Current Liabilities
Pension and post-employment benefits	97.4		97.4		92.0
Deferred taxes	8.0		8.0		11.0
Restructuring	2.6		2.6		6.2
Financing obligation	31.7		31.7		32.4
Non-current income taxes payable	13.2		13.2		13.4
Asset retirement obligations	5.4		5.4		8.8
Long-term deferred revenue	26.0		26.0		25.8
Other	18.5		18.5		16.6
Other non-current liabilities	$ 202.8		$ 202.8		$ 206.2

XML

Acquired Developed Technology and Other Intangibles (Tables)

9 Months Ended

Mar. 29, 2014

Acquired Developed Technology and Other Intangibles

Schedule of acquired developed technology, customer relationships and other intangibles

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

	Gross
	Carrying		Accumulated
As of March 29, 2014	Amount		Amortization			Net
Acquired developed technology	$	563.6	$	(447.9	)	$	115.7
Customer relationships	204.4		(137.3		)	67.1
Other	45.3		(42.8		)	2.5
Total intangibles subject to amortization	813.3		(628.0		)	185.3
In-process research and development intangibles	7.1		—			7.1
Total intangibles	$	820.4	$	(628.0	)	$	192.4

	Gross
	Carrying		Accumulated
As of June 29, 2013	Amount		Amortization			Net
Acquired developed technology	$	546.8	$	(437.4	)	$	109.4
Customer relationships	168.5		(131.5		)	37.0
Other	50.3		(47.0		)	3.3
Total intangibles	$	765.6	$	(615.9	)	$	149.7

Schedule of estimated future amortization

Based on the carrying amount of acquired developed technology and other intangibles as of March 29, 2014, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):

Fiscal Years
Remainder of 2014	$	16.0
2015	59.1
2016	38.4
2017	35.2
2018	22.4
Thereafter	14.2
Total amortization	$	185.3

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Stockholders' Equity (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 28, 2013	Mar. 29, 2014
Stockholders' Equity
Outstanding common stock repurchased (in shares)	7.4
Common stock repurchase price per share (in dollars per share)	$ 13.45
Purchase price reflected as a decrease to common stock	$ 100.0	$ 100.0

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Subsequent Events

9 Months Ended

Mar. 29, 2014

Subsequent Events

Subsequent Events

Note 19. Subsequent Events

Conversion of Exchangeable Shares of JDS Uniphase Canada Ltd.

On March 31, 2014 (“the Redemption Date”), the Company exercised its right to redeem the outstanding exchangeable shares of JDS Uniphase Canada Ltd (“Exchangeable Shares”). On the Redemption Date, holders of Exchangeable Shares were entitled to receive one share of the Company’s common stock in exchange for each Exchangeable Share held. As of March 29, 2014, there were 3,157,445 Exchangeable Shares issued and outstanding.

XML

Goodwill (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended			9 Months Ended		9 Months Ended		9 Months Ended					9 Months Ended
	Jun. 29, 2013	Mar. 29, 2014	Mar. 29, 2014 Trendium	Dec. 10, 2013 Trendium	Mar. 29, 2014 Network Instruments	Jan. 06, 2014 Network Instruments	Mar. 29, 2014 Time-Bandwidth Products	Jan. 27, 2014 Time-Bandwidth Products	Mar. 29, 2014 Network and Service Enablement	Mar. 29, 2014 Network and Service Enablement Trendium	Mar. 29, 2014 Network and Service Enablement Network Instruments	Mar. 29, 2014 Optical Security and Performance Products	Jun. 29, 2013 Optical Security and Performance Products	Mar. 29, 2014 Communications and Commercial Optical Products	Mar. 29, 2014 Communications and Commercial Optical Products Time-Bandwidth Products
Changes in goodwill
Balance at the beginning of the period		$ 115.1		$ 14.4		$ 124.4		$ 6.3	$ 106.8			$ 8.3	$ 8.3
Goodwill acquired from acquisition			14.4		124.4		6.3			14.4	124.4			6.5	6.3
Currency translation and other adjustments		4.4							4.2					0.2
Balance at the end of the period	115.1	264.6		14.4		124.4		6.3	249.8			8.3	8.3	6.5
Impairment of goodwill	$ 0

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Earnings Per Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended							3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013	Jun. 29, 2013	Jun. 05, 2006 1% Senior Convertible notes	Mar. 29, 2014 0.625% Senior Convertible Notes	Aug. 21, 2013 0.625% Senior Convertible Notes	Aug. 15, 2013 0.625% Senior Convertible Notes	Mar. 29, 2014 Employee stock options and ESPP	Mar. 30, 2013 Employee stock options and ESPP	Mar. 29, 2014 Employee stock options and ESPP	Mar. 30, 2013 Employee stock options and ESPP	Mar. 29, 2014 RSUs	Mar. 30, 2013 RSUs	Mar. 29, 2014 RSUs	Mar. 30, 2013 RSUs
Numerator:
(Loss) income from continuing operations, net of tax	$ (1.5)	$ (28.0)	$ 7.6	$ (34.5)
Loss from discontinued operations, net of tax				(1.0)
Net (loss) income	(1.5)	(28.0)	7.6	(35.5)
Denominator:
Weighted-average number of common shares outstanding-Basic	234.0	235.9	234.1	234.4
Effect of dilutive securities from stock-based benefit plans (in shares)			3.6
Weighted-average number of common shares outstanding-Diluted	234.0	235.9	237.7	234.4
Basic net (loss) income per share from:
Continuing operations (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Discontinued operations (in dollars per share)				$ 0.00
Net (loss) income (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Diluted net (loss) income per share from:
Continuing operations (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Discontinued operations (in dollars per share)				$ 0.00
Net (loss) income (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Anti-dilutive securities excluded from computation of earnings per share
Total potentially dilutive securities (in shares)	14.8	16.6	4.0	17.2						4.6	7.1	1.1	7.9	10.2	9.5	2.9	9.3
Convertible notes
Interest rate on senior convertible notes (as a percent)						1.00%		0.625%
Conversion price of debt (in dollars per share)						$ 30.30			$ 18.83
Amount outstanding	$ 530.2		$ 530.2		$ 0	$ 266.5	$ 530.2

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Employee Defined Benefit Plans (Tables)

9 Months Ended

Mar. 29, 2014

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):

Pension Benefits

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Service cost	$	0.2		$	0.1		$	0.4		$	0.3
Interest cost	1.2			1.1			3.6			3.3
Expected return on plan assets	(0.4		)	(0.3		)	(1.2		)	(0.9		)
Recognized net actuarial (gains)/losses	—			—			0.1			—
Curtailment/settlement (gains)/losses	—			—			—			(0.2		)
Net periodic benefit cost	$	1.0		$	0.9		$	2.9		$	2.5

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Debts and Letters of Credit (Details) (USD $)			0 Months Ended		3 Months Ended		9 Months Ended	48 Months Ended		0 Months Ended	3 Months Ended	9 Months Ended			3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Mar. 29, 2014 item	Jun. 29, 2013	Aug. 21, 2013 Revolving Credit Facility	Jun. 05, 2006 1% Senior Convertible notes	Mar. 30, 2013 1% Senior Convertible notes	Mar. 30, 2013 1% Senior Convertible notes	Mar. 30, 2013 1% Senior Convertible notes	Jun. 29, 2013 1% Senior Convertible notes	Mar. 29, 2014 1% Senior Convertible notes	Aug. 21, 2013 2033 Notes	Mar. 29, 2014 2033 Notes	Mar. 29, 2014 2033 Notes	Aug. 15, 2013 2033 Notes	Mar. 29, 2014 2033 Notes Other non-current assets	Mar. 29, 2014 2033 Notes Maximum	Mar. 29, 2014 2033 Notes Maximum	Mar. 29, 2014 2033 Notes Minimum D	Mar. 29, 2014 2033 Notes Minimum D
Debt details
Carrying value of the liability component										$ 515,600,000
Total long-term debt	530,200,000	0		266,500,000							530,200,000	530,200,000
Interest rate on senior convertible notes (as a percent)				1.00%						0.625%
Short-term debt											0	0
Aggregate principal amount of convertible debt				425,000,000						650,000,000
Proceeds from issuance of convertible notes after issuance costs				415,900,000						636,300,000
Conversion price of convertible debt (in dollars per share)				$ 30.30									$ 18.83
Conversion price of convertible debt as premium on closing price of common stock (as a percent)													40.00%
Principal amount used for debt instrument conversion										1,000	1,000	1,000
Percentage of the conversion price that the closing price of the entity's common stock must exceed in order for the notes to be convertible																	130.00%	130.00%
Number of trading days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable																	20	20
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 trading days in order for the notes to be redeemable										30 days	30 days	30 days
Number of consecutive business days immediately following any 10 consecutive trading day period										5 days	5 days	5 days
Number of consecutive trading days before five consecutive business-days										10 days	10 days	10 days
Percentage of the trading price to the closing sale price of the entity's common stock															98.00%	98.00%
Percentage of principal amount that the holder of the note may require the entity to repurchase the debt instrument										100.00%	100.00%	100.00%
Percentage of principal amount at which the entity may redeem some or all of the notes for cash										100.00%	100.00%	100.00%
Discount rate used to calculate the carrying value of the liability component of the convertible debt (as a percent)				8.10%						5.40%	5.40%	5.40%
Variable rate basis on which discount rate is based				7-year swap						5-year swap
Effective interest rate (as a percent)				81.00%	81.00%		81.00%			5.40%	5.40%	5.40%
Remaining term of convertible notes											4 years 4 months 24 days	4 years 4 months 24 days
Deferred finance costs										13,700,000
Liability component, debt issuance cost										10,900,000
Equity component, debt issuance cost										2,800,000
Unamortized portion of debt issuance cost			1,300,000											9,700,000
Carrying amounts of the liability and equity components:
Principal amount of notes									0	650,000,000	650,000,000	650,000,000
Unamortized discount of liability component											(119,800,000)	(119,800,000)
Carrying value of the equity component of convertible debt				158,500,000						134,400,000	134,400,000	134,400,000
Fair market value of convertible debt											683,200,000	683,200,000
Effective interest rate and interest expense for the contractual interest and the accretion of debt discount:
Effective interest rate (as a percent)				81.00%	81.00%		81.00%			5.40%	5.40%	5.40%
Interest expense-contractual interest						400,000	1,600,000				1,000,000	2,400,000
Accretion of debt discount						2,800,000	10,600,000				6,000,000	14,600,000
Principal amount of debt repurchased								425,000,000
Amount outstanding									0	650,000,000	650,000,000	650,000,000
Revolving credit facility terminated			250,000,000
Outstanding balance			0
Outstanding Letters of Credit
Number of standby letters of credit	14
Letters of credit outstanding	$ 34,700,000

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013	Jun. 29, 2013
Commitments and Contingencies
Present value of guarantee obligation	$ 0		$ 0		$ 0
Changes in warranty reserve
Balance as of beginning of period	6.8	6.8	6.9	8.1
Provision for warranty	1.7	1.0	6.3	3.9
Utilization of reserve	(1.2)	(0.3)	(4.3)	(1.7)
Adjustments related to pre-existing warranties (including changes in estimates)	(0.4)	(0.7)	(2.0)	(3.5)
Balance as of end of period	$ 6.9	$ 6.8	$ 6.9	$ 6.8
Minimum
Product Warranties
Warranty Term for most products			3 months
Maximum
Product Warranties
Warranty Term for most products			1 year

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Investments and Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013	Jun. 29, 2013
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	$ 630.8		$ 630.8		$ 227.7
Gross Unrealized Gains	0.4		0.4		0.7
Gross Unrealized Losses	(0.4)		(0.4)		(0.4)
Available for Sale Investments at Fair Value	630.8		630.8		228.0
Other-than-temporary impairment loss	0	0	0	0
Gross unrealized losses on available-for-sale securities
Gross unrealized losses, Less than 12 Months	0.1		0.1		0.1
Gross unrealized losses, Greater than 12 Months	0.3		0.3		0.3
Total gross unrealized losses	0.4		0.4		0.4
Cash equivalents
Available-For-Sale Investments
Available for Sale Investments at Fair Value	53.5		53.5		26.2
Short-term investments
Available-For-Sale Investments
Available for Sale Investments at Fair Value	576.5		576.5		201.0
Other non-current assets
Available-For-Sale Investments
Available for Sale Investments at Fair Value	0.8		0.8		0.8
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	401.8		401.8
Amortized cost of amounts maturing in 1-5 years	228.0		228.0
Amortized cost of amounts maturing in more than 5 years	1.0		1.0
Total amortized cost of debt available-for-sale securities	630.8		630.8
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	401.9		401.9
Estimated fair value amounts maturing in 1 -5 years	228.1		228.1
Estimated fair value amounts maturing in more than 5 years	0.8		0.8
Total estimated fair value of debt available-for-sale securities	630.8		630.8
Asset-backed securities
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	104.6		104.6		15.5
Gross Unrealized Gains	0.1		0.1
Gross Unrealized Losses	(0.3)		(0.3)		(0.3)
Available for Sale Investments at Fair Value	104.4		104.4		15.2
Gross unrealized losses on available-for-sale securities
Gross unrealized losses, Greater than 12 Months	0.3		0.3		0.3
Total gross unrealized losses	0.3		0.3		0.3
U.S. treasuries
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	51.1		51.1		12.0
Available for Sale Investments at Fair Value	51.1		51.1		12.0
U.S. Agencies
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	72.8		72.8		52.4
Gross Unrealized Gains	0.1		0.1
Available for Sale Investments at Fair Value	72.9		72.9		52.4
Municipal bonds and sovereign debt instruments
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	16.8		16.8		12.7
Available for Sale Investments at Fair Value	16.8		16.8		12.7
Corporate securities
Available-For-Sale Investments
Amortized Cost/ Carrying Cost	385.5		385.5		135.1
Gross Unrealized Gains	0.2		0.2		0.7
Gross Unrealized Losses	(0.1)		(0.1)		(0.1)
Available for Sale Investments at Fair Value	385.6		385.6		135.7
Gross unrealized losses on available-for-sale securities
Gross unrealized losses, Less than 12 Months	0.1		0.1		0.1
Total gross unrealized losses	$ 0.1		$ 0.1		$ 0.1

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Earnings Per Share

9 Months Ended

Mar. 29, 2014

Earnings Per Share

Earnings Per Share

Note 3. Earnings Per Share

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

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,		March 30,
	2014			2013			2014		2013
Numerator:
(Loss) income from continuing operations, net of tax	$	(1.5	)	$	(28.0	)	$	7.6	$	(34.5	)
Loss from discontinued operations, net of tax	—			—			—		(1.0		)
Net (loss) income	$	(1.5	)	$	(28.0	)	$	7.6	$	(35.5	)
Denominator:
Weighted-average number of common shares outstanding
Basic	234.0			235.9			234.1		234.4
Effect of dilutive securities from stock-based benefit plans	—			—			3.6		—
Diluted	234.0			235.9			237.7		234.4
Basic net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Discontinued operations	—			—			—		0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Diluted net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Discontinued operations	—			—			—		0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)

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

	Three Months Ended		Nine Months Ended
	March 29,	March 30,	March 29,	March 30,
	2014 (1) (2)	2013 (1) (3)	2014 (2)	2013 (1) (3)
Employee stock options and ESPP	4.6	7.1	1.1	7.9
RSUs	10.2	9.5	2.9	9.3
Total potentially dilutive securities	14.8	16.6	4.0	17.2

(1)  As the Company incurred a net loss in the period, potential dilutive securities from employee stock options, employee stock purchase plan (“ESPP”) and Restricted Stock Units (“RSUs”) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive.

(2)  The Company’s 0.625% Senior Convertible Notes due 2033 (the “2033 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 $18.83 per share is payable in cash, shares of the Company’s common stock or a combination of both. Refer to “Note 10. Debts and Letters of Credit” for more details.

(3)  The Company’s 1% Senior Convertible Notes due 2026 (the “2026 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. As of June 29, 2013, no amounts related to the 2026 Notes were outstanding. Refer to “Note 10. Debts and Letters of Credit” for more details.

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Commitments and Contingencies (Details 2) In Millions, unless otherwise specified			1 Months Ended				1 Months Ended
	Mar. 29, 2014 USD ($)	Jun. 29, 2013 USD ($)	Dec. 31, 2011 Eningen EUR (€)	Mar. 29, 2014 Eningen USD ($)	Jun. 29, 2013 Eningen USD ($)	Dec. 16, 2011 Eningen sqft item	Aug. 30, 2007 Santa Rosa USD ($)	Mar. 29, 2014 Santa Rosa USD ($) item	Jun. 29, 2013 Santa Rosa USD ($)	Aug. 21, 2007 Santa Rosa sqft acre item
Financing Obligations
Area of land sold (in square feet)						394,217
Area of land sold (in acres)										45
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
Financing obligation, current				0.1	0.1			1.2	1.1
Financing obligation, noncurrent	31.7	32.4		5.3	5.0			26.5	27.4
Letter of credit issued as a security	34.7							3.8
Number of buildings included in the option to purchase at the end of the lease term								1
Future Minimum Financing Payments Payment Plan Agreement for Software Licenses and Financing Obligations
Remainder of 2014	0.9
2015	3.8
2016	3.5
2017	3.5
2018	3.6
Thereafter	33.9
Total	$ 49.2

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Accumulated Other Comprehensive Income (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Mar. 29, 2014
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	$ 8.6
Other comprehensive income before reclassification adjustments	8.8
Amounts reclassified from accumulated other comprehensive income	0.1
Net current-period other comprehensive income	8.9
Balance at the end of the period	17.5
Unrealized losses on available-for-sale investments
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	(3.1)
Other comprehensive income before reclassification adjustments	0.3
Net current-period other comprehensive income	0.3
Balance at the end of the period	(2.8)
Foreign currency translation adjustments
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	16.4
Other comprehensive income before reclassification adjustments	8.5
Net current-period other comprehensive income	8.5
Balance at the end of the period	24.9
Defined benefit obligation, net of tax
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	(4.7)
Amounts reclassified from accumulated other comprehensive income	0.1
Net current-period other comprehensive income	0.1
Balance at the end of the period	$ (4.6)

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Mergers and Acquisitions (Tables)

9 Months Ended

Mar. 29, 2014

Network Instruments

Acquisitions

Summary of components of the assets acquired at fair value

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

Net tangible assets acquired	$	22.1
Intangible assets acquired:
Developed technology	21.7
Customer relationships	38.3
In-process research and development	1.7
Other	0.3
Goodwill	124.4
Total purchase price	$	208.5

Summary of components of the net tangible assets acquired at fair value

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

Cash	$	9.0
Accounts receivable	13.8
Inventory	7.3
Property and equipment	1.0
Accounts payable	(1.5		)
Deferred tax liabilities, net	(0.6		)
Other liabilities, net of other assets	(4.4		)
Deferred revenue	(2.5		)
Net tangible assets acquired	$	22.1

Time-Bandwidth Products AG

Acquisitions

Summary of components of the assets acquired at fair value

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

Net tangible assets acquired	$	1.7
Intangible assets acquired:
Developed technology	6.7
Customer relationships	0.3
Goodwill	6.3
Total purchase price	$	15.0

Summary of components of the net tangible assets acquired at fair value

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

Accounts receivable	$	1.4
Inventories	4.9
Property and equipment	1.3
Accounts payable	(0.6		)
Accrued expenses and other liabilities, net of other assets	(3.6		)
Deferred tax liabilities, net	(1.7		)
Net tangible assets acquired	$	1.7

Trendium

Acquisitions

Summary of components of the assets acquired at fair value

The Company finalized the purchase price allocation related to this acquisition during the three months ended March 29, 2014. The purchase price was allocated as follows (in millions):

Tangible assets acquired:
Property, plant and equipment	$	0.2
Intangible assets acquired:
Developed technology	6.1
In-process research and development	5.4
Goodwill	14.4
Total purchase price	$	26.1

Arieso

Acquisitions

Summary of components of the assets acquired at fair value

The Company finalized the purchase price allocation related to this acquisition during the three months ended March 29, 2014. The purchase price was allocated as follows (in millions):

Net tangible assets acquired	$	0.2
Intangible assets acquired:
Developed technology	32.8
Customer relationships	14.5
Order backlog	1.4
Goodwill	40.8
Total purchase price	$	89.7

Summary of components of the net tangible assets acquired at fair value

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

Cash	$	4.1
Accounts receivable	8.4
Property and equipment	0.6
Accounts payable	(0.3		)
Accrued expenses, net of other assets	(1.4		)
Employee related liabilities	(1.4		)
Deferred revenue	(1.7		)
Deferred tax liabilities, net	(8.1		)
Net tangible assets acquired	$	0.2

GenComm

Acquisitions

Summary of components of the assets acquired at fair value

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
Order backlog	0.2
Goodwill	5.7
Total purchase price	$	15.2

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Mar. 29, 2014

Accumulated Other Comprehensive Income

Schedule of components of accumulated other comprehensive income

For the nine months ended March 29, 2014, the changes in accumulated other comprehensive income by component net of tax were as follows (in millions)

	Unrealized
	losses on			Foreign currency		Defined benefit
	available-for-			translation		obligation, net
	sale investments			adjustments		of tax (1)			Total
Beginning balance as of June 29, 2013	$	(3.1	)	$	16.4	$	(4.7	)	$	8.6
Other comprehensive income before reclassification adjustments	0.3			8.5		—			8.8
Amounts reclassified from Accumulated other comprehensive income	—			—		0.1			0.1
Net current-period other comprehensive income	0.3			8.5		0.1			8.9
Ending balance as of March 29, 2014	$	(2.8	)	$	24.9	$	(4.6	)	$	17.5

(1) Amount represents the amortization of actuarial losses and is included as a component of Selling, general and administrative expense (“SG&A”) in the Consolidated Statements of Operations for the nine months ended March 29, 2014. There was no tax impact. Refer to “Note 15. Employee Defined Benefit Plans” for more details on the computation of net periodic cost for pension plans.

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Income Tax (Details 2) (USD $) In Millions, unless otherwise specified	Mar. 29, 2014	Jun. 29, 2013
Income Tax
Unrecognized tax benefits	$ 58.4	$ 80.7
Accrued interest and penalties related to unrecognized tax benefits	23.6
Unrecognized tax benefits that may be recognized during the next twelve months	$ 21.4

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Mergers and Acquisitions (Details) (USD $) In Millions, unless otherwise specified			0 Months Ended		0 Months Ended			0 Months Ended						0 Months Ended			0 Months Ended			0 Months Ended	3 Months Ended	0 Months Ended
	Mar. 29, 2014	Jun. 29, 2013	Jan. 06, 2014 Network Instruments item	Jan. 06, 2014 Network Instruments In-process research and development	Jan. 06, 2014 Network Instruments Developed technology	Jan. 06, 2014 Network Instruments Customer relationships	Jan. 06, 2014 Network Instruments Other	Jan. 06, 2014 Network Instruments Trademark/tradename	Jan. 27, 2014 Time-Bandwidth Products AG	Jan. 27, 2014 Time-Bandwidth Products AG Developed technology	Jan. 27, 2014 Time-Bandwidth Products AG Customer relationships	Dec. 10, 2013 Trendium	Dec. 10, 2013 Trendium In-process research and development	Dec. 10, 2013 Trendium Developed technology	Mar. 07, 2013 Arieso	Jun. 29, 2013 Arieso	Mar. 07, 2013 Arieso Developed technology	Mar. 07, 2013 Arieso Customer relationships	Mar. 07, 2013 Arieso Order backlog	Aug. 17, 2012 GenComm	Mar. 29, 2014 GenComm	Aug. 17, 2012 GenComm Developed technology	Aug. 17, 2012 GenComm Customer relationships	Aug. 17, 2012 GenComm Order backlog
Acquisitions
Purchase price paid in cash			$ 208.5						$ 15.0			$ 26.1			$ 89.7					$ 15.2
Working capital adjustment and holdback payment			20.0						2.3			2.5			12.8					3.8
Number of tranches in which net holdback payments will be released			2
Holdback payments, minus any deductions for actual or pending claims to be paid in first tranche			10.0
Period after which the Holdback payments, minus any deductions for actual or pending claims will be released for first tranche			6 months
Holdback payments, minus any deductions for actual or pending claims to be paid in second tranche			10.0
Period after which the Holdback payments, minus any deductions for actual or pending claims will be released for second tranche			1 year
Minimum period after which the holdback payments will be released															1 year
Minimum period after which the holdback payments will be released									18 months			1 year
Holdback payment																					3.3
Purchase price allocation to assets acquired
Net tangible assets acquired			22.1						1.7						0.2					5.9
Intangible assets acquired				1.7									5.4
Intangible assets acquired					21.7	38.3	0.3			6.7	0.3			6.1			32.8	14.5	1.4			3.2	0.2	0.2
Goodwill	264.6	115.1	124.4						6.3			14.4			40.8					5.7
Total purchase price			208.5						15.0			26.1			89.7					15.2
Fair value of acquired tangible assets
Cash			9.0												4.1
Accounts receivable			13.8						1.4						8.4
Inventory			7.3						4.9
Property and equipment			1.0						1.3			0.2			0.6
Accounts payable			(1.5)						(0.6)						(0.3)
Accrued expenses and other liabilities, net of other assets			(4.4)						(3.6)						(1.4)
Employee related liabilities															(1.4)
Deferred revenue			(2.5)												(1.7)
Deferred tax liabilities, net			(0.6)						(1.7)						(8.1)
Net tangible assets acquired			22.1						1.7						0.2					5.9
Additional business acquisition information
Estimated useful lives of intangible assets					5 years	5 years		1 year		8 years	3 years			7 years			5 years	5 years				4 years	4 years
Acquisition-related costs																$ 1.8

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Balance Sheet and Other Details (Tables)

9 Months Ended

Mar. 29, 2014

Balance Sheet and Other Details

Activities and balances for allowance for doubtful accounts

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

	June 29,		Charged to Costs					March 29,
	2013		and Expenses		Deduction (1)			2014
Allowance for doubtful accounts	$	2.1	$	1.0	$	(0.3	)	$	2.8
Allowance for sales returns	0.1		0.3		(0.1		)	0.3
Total accounts receivable reserves	$	2.2	$	1.3	$	(0.4	)	$	3.1

(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):

	March 29,		June 29,
	2014		2013
Finished goods	$	70.2	$	85.7
Work in process	39.9		37.0
Raw materials and purchased parts	37.6		23.1
Inventories, net	$	147.7	$	145.8

Schedule of components of Prepayments and other current assets

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

	March 29,		June 29,
	2014		2013
Prepayments	$	30.5	$	36.0
Advances to contract manufacturers	13.7		14.6
Deferred income tax	4.2		3.9
Refundable income taxes	3.0		2.3
Other receivables	25.0		26.1
Assets held for sale	—		2.2
Other current assets	9.5		10.2
Prepayments and other current assets	$	85.9	$	95.3

Schedule of components of Property, plant and equipment

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

	March 29,			June 29,
	2014			2013
Land	$	20.6		$	14.6
Buildings and improvements	63.7			34.9
Machinery and equipment	482.0			453.8
Furniture, fixtures, software and office equipment	145.4			132.9
Leasehold improvements	76.8			92.7
Construction-in-progress	28.9			14.9
	817.4			743.8
Less: Accumulated depreciation	(545.5		)	(496.8		)
Property, plant and equipment, net	$	271.9		$	247.0

Schedule of components of Other current liabilities

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

	March 29,		June 29,
	2014		2013
Deferred compensation plan	$	3.8	$	4.2
Warranty	6.0		6.0
VAT liabilities	5.7		5.6
Restructuring	6.4		10.3
Holdback liabilities from acquisitions	32.2		13.1
Other	12.0		6.1
Other current liabilities	$	66.1	$	45.3

Schedule of components of Other non-current liabilities

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

	March 29,		June 29,
	2014		2013
Pension and post-employment benefits	$	97.4	$	92.0
Deferred taxes	8.0		11.0
Restructuring	2.6		6.2
Financing obligation	31.7		32.4
Non-current income taxes payable	13.2		13.4
Asset retirement obligations	5.4		8.8
Long-term deferred revenue	26.0		25.8
Other	18.5		16.6
Other non-current liabilities	$	202.8	$	206.2

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Investments and Fair Value Measurements (Tables)

9 Months Ended

Mar. 29, 2014

Investments and Fair Value Measurements

Schedule of available-for-sale securities

As of March 29, 2014, 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	$	51.1	$	—	$	—		$	51.1
U.S agencies	72.8		0.1		—			72.9
Municipal bonds and sovereign debt instruments	16.8		—		—			16.8
Asset-backed securities	104.6		0.1		(0.3		)	104.4
Corporate securities	385.5		0.2		(0.1		)	385.6
Total debt available-for-sale securities	$	630.8	$	0.4	$	(0.4	)	$	630.8

As of June 29, 2013, 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	$	12.0	$	—	$	—		$	12.0
U.S. agencies	52.4		—		—			52.4
Municipal bonds and sovereign debt instruments	12.7		—		—			12.7
Asset-backed securities	15.5		—		(0.3		)	15.2
Corporate securities	135.1		0.7		(0.1		)	135.7
Total debt available-for-sale securities	$	227.7	$	0.7	$	(0.4	)	$	228.0

Schedule of gross unrealized losses on available-for-sale securities

As of March 29, 2014, 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		Greater than
	12 Months		12 Months		Total
Asset-backed securities	$	—	$	0.3	$	0.3
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.3	$	0.4

As of June 29, 2013, 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	$	—	$	0.3	$	0.3
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.3	$	0.4

Schedule of contractual maturities of available-for-sale securities

As of March 29, 2014, 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	$	401.8	$	401.9
Amounts maturing in 1 - 5 years	228.0		228.1
Amounts maturing in more than 5 years	1.0		0.8
Total debt available-for-sale securities	$	630.8	$	630.8

Schedule of assets measured at fair value

Assets measured at fair value as of March 29, 2014 are summarized below (in millions):

			Fair value measurement as of March 29, 2014
			Quoted Prices in		Significant
			Active Markets		Other
			for Identical		Observable
			Assets		Inputs
	Total		(Level 1)		(Level 2)
Assets:
Debt available-for-sale securities
U.S. treasuries	$	51.1	$	51.1	$	—
U.S. agencies	72.9		—		72.9
Municipal bonds and sovereign debt instruments	16.8		—		16.8
Asset-backed securities	104.4		—		104.4
Corporate securities	385.6				385.6
Total debt available-for-sale securities	630.8		51.1		579.7
Money market funds	186.2		186.2		—
Trading securities	3.8		3.8		—
Total assets (1)	$	820.8	$	241.1	$	579.7

(1)  $205.0 million in cash and cash equivalents, $580.3 million in short-term investments, $30.9 million in restricted cash, and $4.6 million in other non-current assets on the Company’s Consolidated Balance Sheet.

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Recently Issued Accounting Pronouncements

9 Months Ended

Mar. 29, 2014

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Note 2. Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance, which specifies that only disposals, such as a disposal of a major line of business, representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. This guidance is effective for the Company in the first quarter of fiscal 2016. The Company does not anticipate that the adoption of this guidance will have a material impact on its consolidated financial statements, absent any disposition representing a strategic shift in the Company’s operations.

In July 2013, the FASB issued authoritative guidance that requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective for the Company in the first quarter of fiscal 2015. The Company does not anticipate that the adoption of this guidance will have a material impact on its consolidated financial statements.

In March 2013, the FASB issued authoritative guidance that resolves the diversity in practice regarding the release into net income of the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity. This guidance will be effective for the Company beginning in the first quarter of fiscal 2015. The Company does not anticipate that the adoption of this guidance will have a material impact on its consolidated financial statements, absent any material transactions involving de-recognition of subsidiaries or groups of assets within a foreign entity.

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Goodwill (Tables)

9 Months Ended

Mar. 29, 2014

Goodwill

Schedule of changes in goodwill

The following table presents the changes in goodwill allocated to the reportable segments (in millions):

	Network and		Communications		Optical Security
	Service		and Commercial		and Performance
	Enablement (1)		Optical Products		Products		Total
Balance as of June 29, 2013	$	106.8	$	—	$	8.3	$	115.1
Goodwill from Trendium acquisition (2)	14.4		—		—		14.4
Goodwill from Network Instruments acquistion (2)	124.4		—		—		124.4
Goodwill from Time Bandwidth Products acquisition (2)	—		6.3		—		6.3
Currency translation and other adjustments	4.2		0.2		—		4.4
Balance as of March 29, 2014	$	249.8	$	6.5	$	8.3	$	264.6

(1) In the first quarter of fiscal 2014, the Company changed the name of the Communications Test and Measurement segment to NSE. Refer to “Note 17. Operating Segments” for more details.

(2) Refer to “Note 5. Mergers and Acquisitions” for more details.

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Discontinued Operations (Tables)

9 Months Ended

Mar. 29, 2014

Discontinued Operations

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

During fiscal 2013 the Company recorded a gain of $0.6 million as a component of Loss from discontinued operations, net of tax on the Consolidated Statement of Operations 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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Restructuring and Related Charges (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended			3 Months Ended			9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended				3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended			3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013	Jun. 29, 2013	Mar. 29, 2014 Central Finance and IT Restructuring Plan (Workforce Reduction) employee	Dec. 28, 2013 Central Finance and IT Restructuring Plan (Workforce Reduction) employee	Mar. 29, 2014 NSE Lease Restructuring Plan (Lease Costs)	Mar. 29, 2014 NSE Lease Restructuring Plan (Lease Costs)	Mar. 29, 2014 Other plans	Mar. 29, 2014 Other plans	Mar. 29, 2014 NSE Operation and Repair Outsourcing Restructuring Plan	Mar. 29, 2014 NSE Operation and Repair Outsourcing Restructuring Plan employee	Mar. 29, 2014 Other plans	Mar. 29, 2014 Plans Prior to Fiscal 2012	Mar. 29, 2014 Germantown and Beijing NSE Lease Restructuring Plan (Lease Costs)	Mar. 29, 2014 Workforce Reduction NSE Product Strategy Restructuring Plan employee item	Mar. 29, 2014 Workforce Reduction NSE Product Strategy Restructuring Plan item	Mar. 29, 2014 Workforce Reduction Central Finance and IT Restructuring Plan (Workforce Reduction)	Mar. 29, 2014 Workforce Reduction Central Finance and IT Restructuring Plan (Workforce Reduction)	Mar. 29, 2014 Workforce Reduction OSP Operational Realignment Plan (Workforce Reduction)	Sep. 28, 2013 Workforce Reduction OSP Operational Realignment Plan (Workforce Reduction) employee	Dec. 28, 2013 Workforce Reduction OSP Operational Realignment Plan (Workforce Reduction) employee	Mar. 29, 2014 Workforce Reduction OSP Operational Realignment Plan (Workforce Reduction) employee	Mar. 29, 2014 Workforce Reduction CCOP Outsourcing Plan employee	Mar. 29, 2014 Workforce Reduction NSE Wireless Business Restructuring Plan (Workforce Reduction) employee	Mar. 29, 2014 Workforce Reduction NSE Operation and Repair Outsourcing Restructuring Plan	Mar. 29, 2014 Workforce Reduction NSE Operation and Repair Outsourcing Restructuring Plan	Mar. 29, 2014 Workforce Reduction NSE Germany Restructuring Plan	Mar. 29, 2014 Ottawa Lease Exit Costs	Mar. 29, 2014 Ottawa Lease Exit Costs	Mar. 29, 2014 Lease Costs NSE Operation and Repair Outsourcing Restructuring Plan	Mar. 29, 2014 Lease Costs NSE Operation and Repair Outsourcing Restructuring Plan
Restructuring and Related Charges
Number of employees expected to be reduced							25						161				63					126	79		44	63
Number of positions eliminated as of the balance sheet date						18							157											42	15	61
Contractual obligations under the operating lease, net of sublease income, fair value	$ 2.7		$ 2.7		$ 3.7											$ 2.6
Summary of various restructuring plans
Accrual balance at the beginning of the period			16.5						5.0		0.5		2.1	0.6	2.9							3.7	3.7	3.7	0.7	1.0		2.0	1.0		3.7		0.1
Restructuring expenses	3.6	0.4	3.8	6.1				0.7	(0.8)	0.1	0.6	(0.5)	(0.4)		0.2	0.8	3.3	3.3	(0.1)	1.5	0.1			(0.7)		0.1	(0.4)	(0.3)		0.1	0.1	(0.1)	(0.1)
Cash Settlements			(11.6)						(1.8)		(1.1)		(1.2)	(0.2)	(1.4)			(1.9)		(1.1)				(1.8)	(0.2)	(0.9)		(1.2)			(1.0)
Non-cash settlements and other adjustments			0.3						0.2						0.1																(0.1)
Accrual balance at the end of the period	$ 9.0		$ 9.0					$ 2.6	$ 2.6			$ 0.5	$ 0.5	$ 0.4	$ 1.8		$ 1.4	$ 1.4	$ 0.4	$ 0.4	$ 1.2			$ 1.2	$ 0.5	$ 0.2	$ 0.5	$ 0.5	$ 1.0	$ 2.7	$ 2.7
Number of positions eliminated as of the balance sheet date																	34	34

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS
Net revenue	$ 418.0	$ 405.3	$ 1,294.6	$ 1,255.6
Cost of sales	222.3	233.0	687.5	690.0
Amortization of acquired technologies	11.0	17.0	32.3	48.7
Gross profit	184.7	155.3	574.8	516.9
Operating expenses:
Research and development	74.1	65.8	216.0	190.9
Selling, general and administrative	113.4	107.3	329.5	317.4
Amortization of other intangibles	5.2	3.1	10.7	8.8
Restructuring and related charges	3.6	0.4	3.8	6.1
Total operating expenses	196.3	176.6	560.0	523.2
(Loss) income from operations	(11.6)	(21.3)	14.8	(6.3)
Interest and other income (expense), net	0.6	(0.9)	0.4	(3.7)
Interest expense	(7.7)	(4.2)	(21.3)	(15.4)
Loss from continuing operations before income taxes	(18.7)	(26.4)	(6.1)	(25.4)
(Benefit from) provision for income taxes	(17.2)	1.6	(13.7)	9.1
(Loss) income from continuing operations, net of tax	(1.5)	(28.0)	7.6	(34.5)
Loss from discontinued operations, net of tax				(1.0)
Net (loss) income	$ (1.5)	$ (28.0)	$ 7.6	$ (35.5)
Basic net (loss) income per share from:
Continuing operations (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Discontinued operations (in dollars per share)				$ 0.00
Net (loss) income (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Diluted net (loss) income per share from:
Continuing operations (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Discontinued operations (in dollars per share)				$ 0.00
Net (loss) income (in dollars per share)	$ (0.01)	$ (0.12)	$ 0.03	$ (0.15)
Shares used in per share calculation:
Basic (in shares)	234.0	235.9	234.1	234.4
Diluted (in shares)	234.0	235.9	237.7	234.4

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Balance Sheet and Other Details (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Mar. 29, 2014	Jun. 29, 2013
Activities and balances for allowance for doubtful accounts and allowance for sales returns
Balance at Beginning of Period	$ 2.2
Charged to Costs and Expenses	1.3
Deduction	(0.4)
Balance at End of Period	3.1
Inventories
Finished goods	70.2	85.7
Work in process	39.9	37.0
Raw materials and purchased parts	37.6	23.1
Inventories, net	147.7	145.8
Allowance for doubtful accounts
Activities and balances for allowance for doubtful accounts and allowance for sales returns
Balance at Beginning of Period	2.1
Charged to Costs and Expenses	1.0
Deduction	(0.3)
Balance at End of Period	2.8
Allowance for sales returns
Activities and balances for allowance for doubtful accounts and allowance for sales returns
Balance at Beginning of Period	0.1
Charged to Costs and Expenses	0.3
Deduction	(0.1)
Balance at End of Period	$ 0.3

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013
OPERATING ACTIVITIES:
Net income (loss)	$ 7.6	$ (35.5)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense	53.8	50.9
Amortization of acquired technologies and other intangibles	43.0	57.7
Stock-based compensation	48.3	41.6
Amortization of debt issuance costs and accretion of debt discount	16.3	11.3
Amortization of discount and premium on investments, net	3.1	3.3
Other	0.9	1.8
Changes in operating assets and liabilities, net of impact of acquisitions of businesses:
Accounts receivable	1.0	17.2
Inventories	4.8	19.8
Other current and non-current assets	(1.5)	(6.4)
Accounts payable	23.2	6.1
Income taxes payable	(0.6)	0.5
Deferred revenue, current and non-current	9.3	(2.0)
Deferred taxes, net	(26.9)	(0.1)
Accrued payroll and related expenses	(33.0)	(24.3)
Accrued expenses and other current and non-current liabilities	(22.9)	(11.2)
Net cash provided by operating activities	126.4	130.7
INVESTING ACTIVITIES:
Purchases of available-for-sale investments	(885.1)	(415.1)
Maturities of available-for-sale investments	327.7	235.1
Sales of available-for-sale investments	186.8	147.1
Changes in restricted cash	(1.8)	0.6
Acquisitions of businesses, net of cash acquired	(219.3)	(83.2)
Capital expenditures	(68.1)	(46.7)
Proceeds from the sales of a business and assets, net of selling costs	8.0	11.7
Net cash used in investing activities	(651.8)	(150.5)
FINANCING ACTIVITIES:
Proceeds from issuance of senior convertible debt	650.0
Payment of debt issuance costs	(13.5)	(0.2)
Repurchase and retirement of common stock	(100.0)
Redemption of senior convertible debt		(145.8)
Payment of financing obligations	(1.3)	(0.6)
Proceeds from exercise of employee stock options and employee stock purchase plan	22.0	21.3
Net cash provided by (used in) financing activities	557.2	(125.3)
Effect of exchange rate changes on cash and cash equivalents	1.7	1.7
Increase (decrease) in cash and cash equivalents	33.5	(143.4)
Cash and cash equivalents at beginning of period	281.0	401.1
Cash and cash equivalents at end of period	$ 314.5	$ 257.7

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Stock-Based Compensation (Details 2) (MSUs, Monte Carlo simulation)	9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013
MSUs | Monte Carlo simulation
Valuation Assumptions
Volatility (as a percent)	53.90%	57.50%
Average volatility of peer companies (as a percent)	58.60%	58.30%
Average correlation coefficient of peer companies	0.2920	0.3208
Risk-free interest rate (as a percent)	0.80%	0.40%

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Restructuring and Related Charges (Tables)

9 Months Ended

Mar. 29, 2014

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 three and nine months ended March 29, 2014 were as follows (in millions):

			Nine Months Ended						Non-cash					Three Months Ended
	Balance		March 29,						Settlements			Balance		March 29,
	June 29,		2014			Cash			and Other			March 29,		2014
	2013		Charges			Settlements			Adjustments			2014		Charges
Fiscal 2014 Plans
NSE Product Strategy Restructuring Plan (Workforce Reduction)	$	—	$	3.3		$	(1.9	)	$	—		$	1.4	$	3.3
Central Finance and IT Restructuring Plan (Workforce Reduction)	—		1.5			(1.1		)	—			0.4		(0.1		)
Fiscal 2013 Plans
OSP Operational Realignment Plan (Workforce Reduction)	3.7		(0.7		)	(1.8		)	—			1.2		0.1
NSE Lease Restructuring Plan	5.0		(0.8		)	(1.8		)	0.2			2.6		0.7
CCOP Outsourcing Plan (Workforce Reduction)	0.7		—			(0.2		)	—			0.5		—
NSE Wireless Business Restructuring Plan (Workforce Reduction)	1.0		0.1			(0.9		)	—			0.2		—
Other plans	0.5		0.6			(1.1		)	—			—		0.1
Fiscal 2012 Plans
NSE Operation and Repair Outsourcing Restructuring Plan:
Workforce Reduction	2.0		(0.3		)	(1.2		)	—			0.5		(0.4		)
Lease Costs	0.1		(0.1		)	—			—			—		(0.1		)
Total NSE Operation and Repair Outsourcing Restructuring Plan	2.1		(0.4		)	(1.2		)	—			0.5		(0.5		)
Other plans	0.6		—			(0.2		)	—			0.4		—
Plans Prior to Fiscal 2012	2.9		0.2			(1.4		)	0.1			1.8		—
Total	$	16.5	$	3.8		$	(11.6	)	$	0.3		$	9.0	$	3.6
Ottawa Lease Exit Costs	$	3.7	$	0.1		$	(1.0	)	$	(0.1	)	$	2.7	$	0.1

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Subsequent Events (Details) (Subsequent Events)	0 Months Ended
	Mar. 31, 2014	Mar. 29, 2014
Subsequent Events
Subsequent Events
Number of shares that holders of exchangeable shares were entitled to receive of the company's common stock in exchange for each exchangeable share held	1
Exchangeable Shares issued		3,157,445
Exchangeable Shares outstanding		3,157,445

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Commitments and Contingencies

9 Months Ended

Mar. 29, 2014

Commitments and Contingencies

Commitments and Contingencies

Note 16. Commitments and Contingencies

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. If an unfavorable final outcome occurs, it is possible there could be 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 March 29, 2014 and June 29, 2013.

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						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Balance as of beginning of period	$	6.8		$	6.8		$	6.9		$	8.1
Provision for warranty	1.7			1.0			6.3			3.9
Utilization of reserve	(1.2		)	(0.3		)	(4.3		)	(1.7		)
Adjustments related to pre-existing warranties (including changes in estimates)	(0.4		)	(0.7		)	(2.0		)	(3.5		)
Balance as of end of period	$	6.9		$	6.8		$	6.9		$	6.8

Financing Obligations — Eningen and Santa Rosa

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 March 29, 2014, of the total financing obligation related to the Eningen Transactions, $0.1 million was included in Other current liabilities, and $5.3 million was included in Other non-current liabilities. As of June 29, 2013, of the total financing obligation related to the Eningen Transactions, $0.1 million was included in Other current liabilities, and $5.0 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 multiple one-year renewal options to a ten-year lease with two five-year renewal options.

As required by the North Coast Regional Water Quality Control Board, the Company has an ongoing obligation to remediate environmental matters, impacting the entire site 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 March 29, 2014, $1.2 million was included in Other current liabilities, and $26.5 million was included in Other non-current liabilities. As of June 29, 2013, $1.1 million was included in Other current liabilities, and $27.4 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.

Future Minimum Financing Payments — Eningen and Santa Rosa Financing Obligations

As of March 29, 2014, future minimum financing payments of the financing obligations are as follows (in millions):

Fiscal Years
Remainder of 2014	$	0.9
2015	3.8
2016	3.5
2017	3.5
2018	3.6
Thereafter	33.9
Total	$	49.2

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Stock-Based Compensation (Tables)

9 Months Ended

Mar. 29, 2014

Stock-Based Compensation

Schedule of the impact on the entity's results of operations of recording stock-based compensation by function

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and nine months ended March 29, 2014 and March 30, 2013 was as follows (in millions):

	Three Months Ended				Nine Months Ended
	March 29,		March 30,		March 29,		March 30,
	2014		2013		2014		2013
Cost of sales	$	2.7	$	2.4	$	7.7	$	6.7
Research and development	4.1		3.7		11.7		10.0
Selling, general and administrative	10.1		9.2		28.9		24.8
	$	16.9	$	15.3	$	48.3	$	41.5

Monte Carlo simulation

Stock-Based Compensation

Schedule of assumptions used to estimate the fair value of awards on the date of grant

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

	Nine Months Ended
	March 29,		March 30,
	2014		2013
Volatility of common stock	53.9	%	57.5	%
Average volatility of peer companies	58.6	%	58.3	%
Average correlation coefficient of peer companies	0.2920		0.3208
Risk-free interest rate	0.8	%	0.4	%

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Discontinued Operations

9 Months Ended

Mar. 29, 2014

Discontinued Operations

Discontinued Operations

Note 18. Discontinued Operations

During the second quarter of fiscal 2013, the Company closed the sale of the Hologram Business, previously within the OSP reportable segment, to OpSec Security Inc. and received gross proceeds of $11.5 million in cash.

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 nine months ended March 30, 2013 was $5.2 million. Net loss for the nine months ended March 30, 2013 was $1.0 million. There was no tax effect associated with the discontinued operations for any periods presented.

During fiscal 2013 the Company recorded a gain of $0.6 million as a component of Loss from discontinued operations, net of tax on the Consolidated Statement of Operations 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

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Basis of Presentation

9 Months Ended

Mar. 29, 2014

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 March 29, 2014 and for the three and nine months ended March 29, 2014 and March 30, 2013 is unaudited, and includes all normal and recurring adjustments 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 Annual Report on Form 10-K/A for the year ended June 29, 2013.

The balance sheet as of June 29, 2013 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 nine months ended March 29, 2014 and March 30, 2013 may not be indicative of results for the year ending June 28, 2014 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 2014 is a 52-week year ending on June 28, 2014. The Company’s fiscal 2013 was a 52-week year ending on June 29, 2013.

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.

Fiscal 2013 Out-of-Period Adjustments

During the nine months ended March 30, 2013, the Company recorded out-of-period adjustments that related to cost of sales and other income in the current and prior fiscal years. The impact of the out-of-period adjustments recorded by the Company resulted in a $2.5 million reduction in net loss during the nine months ended March 30, 2013. 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 fiscal 2013 was not material to the full year fiscal 2013 financial statements.

Discontinued Operations

During the second quarter of fiscal 2013, the Company closed the sale of its hologram business (“Hologram Business”) for $11.5 million in cash. The Consolidated Statements of Operations reflect 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 (LOSS) INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Net (loss) income	$ (1.5)	$ (28.0)	$ 7.6	$ (35.5)
Net change in available-for-sale investments, net of tax:
Unrealized holding gains arising during the period	0.1	0.1	0.3	0.4
Less: reclassification adjustments included in Net income (loss)		(0.3)		(0.4)
Net change in cumulative translation adjustment, net of tax	(1.3)	(3.2)	8.5	3.2
Net change in defined benefit obligation, net of tax:
Amortization of actuarial losses			0.1
Net change in Accumulated other comprehensive income	(1.2)	(3.4)	8.9	3.2
Comprehensive (loss) income	$ (2.7)	$ (31.4)	$ 16.5	$ (32.3)

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Restructuring and Related Charges

9 Months Ended

Mar. 29, 2014

Restructuring and Related Charges

Restructuring and Related Charges

Note 11. Restructuring and Related Charges

The Company continues to reduce costs through targeted restructuring events intended to consolidate its operations, rationalize the manufacturing of its products and align its businesses in response to market conditions. As of March 29, 2014 and June 29, 2013, the Company’s total restructuring accrual was $9.0 million and $16.5 million, respectively. During the three and nine months ended March 29, 2014, the Company incurred restructuring expenses of $3.6 million and $3.8 million, respectively. During the three and nine months ended March 30, 2013, the Company incurred restructuring expenses of $0.4 million and $6.1 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 three and nine months ended March 29, 2014 were as follows (in millions):

			Nine Months Ended						Non-cash					Three Months Ended
	Balance		March 29,						Settlements			Balance		March 29,
	June 29,		2014			Cash			and Other			March 29,		2014
	2013		Charges			Settlements			Adjustments			2014		Charges
Fiscal 2014 Plans
NSE Product Strategy Restructuring Plan (Workforce Reduction)	$	—	$	3.3		$	(1.9	)	$	—		$	1.4	$	3.3
Central Finance and IT Restructuring Plan (Workforce Reduction)	—		1.5			(1.1		)	—			0.4		(0.1		)
Fiscal 2013 Plans
OSP Operational Realignment Plan (Workforce Reduction)	3.7		(0.7		)	(1.8		)	—			1.2		0.1
NSE Lease Restructuring Plan	5.0		(0.8		)	(1.8		)	0.2			2.6		0.7
CCOP Outsourcing Plan (Workforce Reduction)	0.7		—			(0.2		)	—			0.5		—
NSE Wireless Business Restructuring Plan (Workforce Reduction)	1.0		0.1			(0.9		)	—			0.2		—
Other plans	0.5		0.6			(1.1		)	—			—		0.1
Fiscal 2012 Plans
NSE Operation and Repair Outsourcing Restructuring Plan:
Workforce Reduction	2.0		(0.3		)	(1.2		)	—			0.5		(0.4		)
Lease Costs	0.1		(0.1		)	—			—			—		(0.1		)
Total NSE Operation and Repair Outsourcing Restructuring Plan	2.1		(0.4		)	(1.2		)	—			0.5		(0.5		)
Other plans	0.6		—			(0.2		)	—			0.4		—
Plans Prior to Fiscal 2012	2.9		0.2			(1.4		)	0.1			1.8		—
Total	$	16.5	$	3.8		$	(11.6	)	$	0.3		$	9.0	$	3.6
Ottawa Lease Exit Costs	$	3.7	$	0.1		$	(1.0	)	$	(0.1	)	$	2.7	$	0.1

As of March 29, 2014 and June 29, 2013, the Company included the long-term portion of the restructuring liability of $2.6 million and $6.2 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 were included in SG&A expenses. As of March 29, 2014 and June 29, 2013 the fair value of the remaining contractual obligations, net of sublease income, was $2.7 million and $3.7 million, respectively. The Company included the long-term portion of the contract obligations of $1.9 million and $2.7 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.

Fiscal 2014 Plans

NSE Product Strategy Restructuring Plan

During the third quarter of fiscal 2014, Management approved a plan in the NSE segment to realign its services, support and product resources in response to market conditions in the mobile assurance market and to increase focus on software products and next generation solutions through acquisitions and Research and Development (“R&D”). As a result, a restructuring charge of $3.3 million was recorded for severance and employee benefits for 63 employees primarily in SG&A and manufacturing functions located in North America, Latin America, Asia and Europe. As of March 29, 2014, 34 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the second quarter of fiscal 2015.

Central Finance and Information Technology (“IT”) Restructuring Plan

During the second quarter of fiscal 2014, Management approved a plan to eliminate positions and re-define roles and responsibilities in the Finance and IT organizations to align with the future state of the organizations under new executive management and move positions to lower-cost locations where appropriate. As a result, 25 employees primarily in SG&A functions located in North America, Asia and Europe will be impacted. As of March 29, 2014, 18 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the second quarter of fiscal 2015.

Fiscal 2013 Plans

Optical Security and Performance Products (“OSP”) Operational Realignment Plan

During the fourth quarter of fiscal 2013, Management approved a plan in the OSP segment to realign its operations to focus on priority markets such as Anti-counterfeiting, Consumer and Industrial and Other offerings in government, aerospace and defense. As a result, the OSP segment is ceasing production of certain legacy products such as anti-reflection coatings and front-surface mirrors for display and office automation applications, solar cell covers, and select infrared products that use the Multi-layer Anti-reflection Coater, custom display, and certain box coater production platforms which were at the end of their product lifecycle. The business segment phased out production of these product offerings by the end of the third quarter of fiscal 2014 and de-commissioned and disposed of certain related production equipment. This will result in consolidation of manufacturing operations and office space at the Santa Rosa, California site and reduction of workforce by 79 employees primarily in manufacturing, R&D and SG&A functions located in the United States. Management reduced the number of employees impacted by this plan from 126 to 79, which reduced the total liability for this plan by approximately $0.7 million during the nine months ended March 29, 2014. As of March 29, 2014, 42 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2015.

NSE Lease Restructuring Plan

During the fourth quarter of fiscal 2013, Management approved a plan to consolidate workspace in Germantown, Maryland and Beijing, China, primarily used by the NSE segment. As of June 29, 2013, the Company exited the workspace in Germantown and Beijing under the plan. The fair value of the remaining contractual obligations, net of sublease income as of March 29, 2014 was $2.6 million. A $0.8 million benefit was recorded during the nine months ended March 29, 2014, to adjust the estimated lease liability accrual for the Germantown location. Payments related to the Germantown lease costs are expected to be paid by the end of the second quarter of fiscal 2019. Final payments related to the Beijing lease costs were paid during the first quarter of fiscal 2014.

CCOP Outsourcing Plan

During the third quarter of fiscal 2013, Management approved a plan to transition certain functions related to the CCOP segment to an offshore contract manufacturer as part of its continuous efforts to optimize its supply chain. As a result, 44 employees primarily in manufacturing, R&D and SG&A functions located in the United States were impacted. As of March 29, 2014, 15 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the first quarter of fiscal 2015.

NSE Wireless Business Restructuring Plan

During the second quarter of fiscal 2013, Management approved a plan to align the Company’s investment strategy in the NSE segment with customer spending priorities in high-growth product lines such as wireless network assurance. As a result, the segment eliminated positions in R&D, sales and operations functions that supported low-growth product lines and 63 employees primarily in manufacturing, R&D and SG&A functions located in North America, Europe and Asia were impacted. As of March 29, 2014, 61 employees have been terminated. Payments related to the remaining severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2014.

Other Plans

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

Fiscal 2012 Plans

NSE Operation and Repair Outsourcing Restructuring Plan

During the fourth quarter of fiscal 2012, Management approved a plan which focuses on three areas in the NSE 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 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 will impact 161 employees in manufacturing, R&D and SG&A functions and resulted in the exit of workspaces in Techpoint Singapore and Atlanta, Georgia. As of September 29, 2012, the Company exited both workspaces. The employees being affected are located in North America, Europe, Latin America and Asia. As of March 29, 2014, 157 of these employees have been terminated. Payments related to the severance and benefits accrual are expected to be paid by the end of the second quarter of fiscal 2015.

Other Plans

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

Plans Prior to Fiscal 2012

The restructuring accrual for plans that commenced prior to fiscal year 2012 was $1.8 million. Of this amount, $1.0 million is related to severance and benefits accrual for the NSE Germany Restructuring Plan which commenced in the fourth quarter of fiscal 2009. Payments related to the severance and benefits accrual are expected to be paid by the end of the fourth quarter of fiscal 2016. The remaining balance consists of immaterial lease obligation accruals from various restructuring plans that commenced prior to fiscal 2012.

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Document and Entity Information	9 Months Ended
	Mar. 29, 2014	Apr. 26, 2014
Document and Entity Information
Entity Registrant Name	JDS UNIPHASE CORP /CA/
Entity Central Index Key	0000912093
Document Type	10-Q
Document Period End Date	Mar. 29, 2014
Amendment Flag	false
Current Fiscal Year End Date	--06-28
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		234,708,831
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Income Tax

9 Months Ended

Mar. 29, 2014

Income Tax

Income Tax

Note 12. Income Tax

The Company recorded an income tax benefit of $17.2 million and $13.7 million for the three and nine months ended March 29, 2014, respectively. The Company recorded an income tax expense of $1.6 million and $9.1 million for the three and nine months ended March 30, 2013, respectively.

The income tax benefit recorded for the three and nine months ended March 29, 2014, 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 offset by the recognition of $21.7 million of uncertain tax benefits related to deferred tax assets due to the expiration of the statute of limitations in a non-US jurisdiction.  A tax benefit of $5.1 million was recorded for the nine months ended March 29, 2014,  related to the income tax intraperiod tax allocation rules in relation to other comprehensive income. In accordance with authoritative guidance, the year to date benefit may reverse during the year.

The income tax expense recorded for the three and nine months ended March 30, 2013, 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 benefit and 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, due to the income tax benefit recorded in continuing operations under the income tax intraperiod tax allocation rules, and the recognition of the unrecognized tax benefits.

As of March 29, 2014 and June 29, 2013, the Company’s unrecognized tax benefits totaled $58.4 million and $80.7 million, respectively, and are included in deferred taxes and other non-current tax liabilities, net. The Company had $23.6 million accrued for the payment of interest and penalties at March 29, 2014. The unrecognized tax benefits that may be recognized during the next twelve months are approximately $21.4 million.

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CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Mar. 29, 2014	Jun. 29, 2013
Current assets:
Cash and cash equivalents	$ 314.5	$ 281.0
Short-term investments	580.3	205.2
Restricted cash	31.4	29.7
Accounts receivable, net (Note 6)	287.1	273.3
Inventories, net	147.7	145.8
Prepayments and other current assets	85.9	95.3
Total current assets	1,446.9	1,030.3
Property, plant and equipment, net	271.9	247.0
Goodwill	264.6	115.1
Intangibles, net	192.4	149.7
Deferred income taxes	180.0	155.5
Other non-current assets	26.1	17.6
Total assets	2,381.9	1,715.2
Current liabilities:
Accounts payable	129.9	97.7
Accrued payroll and related expenses	63.5	77.0
Income taxes payable	19.2	18.7
Deferred revenue	80.7	71.9
Accrued expenses	28.2	37.1
Other current liabilities	66.1	45.3
Total current liabilities	387.6	347.7
Long-term debt	530.2	0
Other non-current liabilities	202.8	206.2
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred Stock, $0.001 par value; 1 million shares authorized; 1 share at March 29, 2014 and June 29, 2013, issued and outstanding
Common Stock, $0.001 par value; 1 billion shares authorized; 235 million shares at March 29, 2014 and 237 million shares at June 29, 2013, issued and outstanding	0.2	0.2
Additional paid-in capital	69,943.6	69,760.1
Accumulated deficit	(68,700.0)	(68,607.6)
Accumulated other comprehensive income	17.5	8.6
Total stockholders' equity	1,261.3	1,161.3
Total liabilities and stockholders' equity	$ 2,381.9	$ 1,715.2

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Balance Sheet and Other Details

9 Months Ended

Mar. 29, 2014

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 29,		Charged to Costs					March 29,
	2013		and Expenses		Deduction (1)			2014
Allowance for doubtful accounts	$	2.1	$	1.0	$	(0.3	)	$	2.8
Allowance for sales returns	0.1		0.3		(0.1		)	0.3
Total accounts receivable reserves	$	2.2	$	1.3	$	(0.4	)	$	3.1

(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):

	March 29,		June 29,
	2014		2013
Finished goods	$	70.2	$	85.7
Work in process	39.9		37.0
Raw materials and purchased parts	37.6		23.1
Inventories, net	$	147.7	$	145.8

Prepayments and Other Current Assets

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

	March 29,		June 29,
	2014		2013
Prepayments	$	30.5	$	36.0
Advances to contract manufacturers	13.7		14.6
Deferred income tax	4.2		3.9
Refundable income taxes	3.0		2.3
Other receivables	25.0		26.1
Assets held for sale	—		2.2
Other current assets	9.5		10.2
Prepayments and other current assets	$	85.9	$	95.3

Property, Plant and Equipment, Net

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

	March 29,			June 29,
	2014			2013
Land	$	20.6		$	14.6
Buildings and improvements	63.7			34.9
Machinery and equipment	482.0			453.8
Furniture, fixtures, software and office equipment	145.4			132.9
Leasehold improvements	76.8			92.7
Construction-in-progress	28.9			14.9
	817.4			743.8
Less: Accumulated depreciation	(545.5		)	(496.8		)
Property, plant and equipment, net	$	271.9		$	247.0

During the second quarter of fiscal 2014, the Company purchased a fabrication facility in California for $14.7 million which the Company previously leased.

As of March 29, 2014 and June 29, 2013, Property, plant and equipment, net included $20.4 million and $21.8 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. Refer to “Note 16. Commitments and Contingencies” for more details.

During the three months ended March 29, 2014 and March 30, 2013, the Company recorded $18.2 million and $17.0 million of depreciation expense, respectively. During the nine months ended March 29, 2014 and March 30, 2013, the Company recorded $53.8 million and $50.8 million of depreciation expense, respectively.

Other Current Liabilities

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

	March 29,		June 29,
	2014		2013
Deferred compensation plan	$	3.8	$	4.2
Warranty	6.0		6.0
VAT liabilities	5.7		5.6
Restructuring	6.4		10.3
Holdback liabilities from acquisitions	32.2		13.1
Other	12.0		6.1
Other current liabilities	$	66.1	$	45.3

Other Non-Current Liabilities

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

	March 29,		June 29,
	2014		2013
Pension and post-employment benefits	$	97.4	$	92.0
Deferred taxes	8.0		11.0
Restructuring	2.6		6.2
Financing obligation	31.7		32.4
Non-current income taxes payable	13.2		13.4
Asset retirement obligations	5.4		8.8
Long-term deferred revenue	26.0		25.8
Other	18.5		16.6
Other non-current liabilities	$	202.8	$	206.2

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Mergers and Acquisitions

9 Months Ended

Mar. 29, 2014

Mergers and Acquisitions

Mergers and Acquisitions

Note 5. Mergers and Acquisitions

Network Instruments, LLC (“Network Instruments”)

On January 6, 2014 (“Network Instruments Closing Date”), the Company completed the acquisition of Network Instruments, a privately-held leading developer of enterprise network and application-performance management solutions for global 2000 companies. The Company acquired all outstanding shares of Network Instruments for $208.5 million in cash, subject to final cash and working capital adjustments including holdback payments of approximately $20.0 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 in two tranches: $10.0 million to be paid following the six-month anniversary of the Network Instruments Closing Date and the remaining $10.0 million to be paid following the one-year anniversary of the Network Instruments Closing Date.

The acquisition of Network Instruments further strengthens the Company as a key solutions provider to the enterprise, data center and cloud networking markets. In order to improve application performance, reduce costs and address increasing network complexity, enterprise network administrators are rapidly transforming their IT networks while embracing today’s most critical technology initiatives such as unified communications, cloud, and data center consolidation. Network Instruments helps enterprises simplify the management and optimization of their networks with high-performance solutions that provide actionable intelligence and deep network visibility. The Network Instruments acquisition is being integrated into the Company’s Network and Service Enablement (“NSE”) 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):

Net tangible assets acquired	$	22.1
Intangible assets acquired:
Developed technology	21.7
Customer relationships	38.3
In-process research and development	1.7
Other	0.3
Goodwill	124.4
Total purchase price	$	208.5

The amounts above are considered preliminary and are subject to change once the Company receives additional information it believes is necessary to finalize its determination of the fair value of certain assets acquired under the acquisition.

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

Cash	$	9.0
Accounts receivable	13.8
Inventory	7.3
Property and equipment	1.0
Accounts payable	(1.5		)
Deferred tax liabilities, net	(0.6		)
Other liabilities, net of other assets	(4.4		)
Deferred revenue	(2.5		)
Net tangible assets acquired	$	22.1

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, In-process Research and Development (“IPR&D”) and other intangible assets was determined based on an income approach using the discounted cash flow method. The intangible assets, except IPR&D, are being amortized over their estimated useful lives of five years for the majority of acquired developed technology and customer relationships and one year for trade name. Order backlog will be fully amortized in fiscal 2014.

In accordance with authoritative guidance, the Company recognizes IPR&D at fair value as of the Network Instruments Closing Date. The IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. IPR&D is tested for impairment during the period it is considered an indefinite lived asset.

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

Time-Bandwidth Products AG (“Time-Bandwidth”)

On January 27, 2014 (“Time-Bandwidth Closing Date”), the Company completed the acquisition of Time-Bandwidth, a privately-held provider of high powered and ultrafast lasers for industrial and scientific markets. The Company acquired all outstanding shares of Time-Bandwidth for $15.0 million in cash, subject to a holdback payment of approximately $2.3 million which is reserved for potential breaches of representations and warranties. The holdback payment, minus any deductions for actual or pending claims, will be released following the eighteen-month anniversary of the Time-Bandwidth Closing Date.

Time-Bandwidth provides innovative high powered and ultrafast laser technology that can rapidly and precisely process parts at high volumes during the manufacturing process. Use of ultrafast lasers for micromachining applications is being driven primarily by increasing use of consumer electronics and connected devices globally. Manufacturers are taking advantage of high- power and ultrafast lasers to create quality micro parts for consumer electronics and to process semiconductor chips for consumer devices. Time-Bandwidth’s technology complements the Company’s current laser portfolio, while enabling Time-Bandwidth to leverage the Company’s high volume and low-cost manufacturing model, global sales team and channel relationships. Time-Bandwidth is being integrated into the Company’s Communications and Commercial Optical Products (“CCOP”) 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):

Net tangible assets acquired	$	1.7
Intangible assets acquired:
Developed technology	6.7
Customer relationships	0.3
Goodwill	6.3
Total purchase price	$	15.0

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

Accounts receivable	$	1.4
Inventories	4.9
Property and equipment	1.3
Accounts payable	(0.6		)
Accrued expenses and other liabilities, net of other assets	(3.6		)
Deferred tax liabilities, net	(1.7		)
Net tangible assets acquired	$	1.7

The amounts above are considered preliminary and are subject to change once the Company receives additional information it believes is necessary to finalize its determination of the fair value of certain assets acquired under the acquisition.

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 relationships are being amortized over their estimated useful lives of eight and three years, respectively.

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

Time-bandwidth’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.

Trendium Inc.(“Trendium”)

On December 10, 2013 (“Trendium Closing Date”), the Company acquired certain technology and other assets from Trendium, a privately-held U.S. company, for a purchase price of $26.1 million in cash including a holdback payment of approximately $2.5 million which is reserved for potential breaches of representations and warranties. The holdback payment, minus any deductions for actual or pending claims, will be released following the one-year anniversary of the Trendium Closing Date.

Trendium provides real-time intelligence software solutions for customer experience assurance (“CEA”), asset optimization and monetization of big data for 4G/Long term evolution (“LTE”) mobile network operators. The addition of Trendium employees and technology enables the Company to introduce a new paradigm of CEA, enabling operators of 4G/LTE networks to achieve a real and relevant improvement in customer satisfaction while maximizing productivity and profitability for dynamic converged 4G/LTE networks and beyond. The purchased assets are included in the Company’s NSE segment.

The Company finalized the purchase price allocation related to this acquisition during the three months ended March 29, 2014. The purchase price was allocated as follows (in millions):

Tangible assets acquired:
Property, plant and equipment	$	0.2
Intangible assets acquired:
Developed technology	6.1
In-process research and development	5.4
Goodwill	14.4
Total purchase price	$	26.1

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 was determined based on an income approach using the discounted cash flow method and are being amortized over their estimated useful lives of seven years.

In accordance with authoritative guidance, the Company recognized IPR&D at fair value as of the Trendium Closing Date. The IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. IPR&D is tested for impairment during the period it is considered an indefinite lived asset.

The goodwill arising from this acquisition is primarily attributed to product synergies and the assembled workforce of Trendium. Goodwill was assigned to the NSE segment and is deductible for tax purposes. Goodwill is not amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative guidance.

Trendium’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.

Arieso Ltd.(“Arieso”)

On March 7, 2013 (“Arieso Closing Date”), the Company completed the acquisition of Arieso, a privately-held company headquartered in the United Kingdom. Arieso is a provider of location-aware software solutions that enable mobile network operators to boost 2G, 3G and 4G/ LTE network performance and enrich the mobile subscriber experience.

Arieso brings high-caliber mobile software engineering expertise to the Company to address the rapidly growing deployment of small cells and challenges associated with limited spectrum capacity. Utilized by leading wireless network operators and equipment manufacturers, Arieso’s solutions locate, store and analyze data from billions of mobile connection events that translate into rich intelligence, which help enable mobile operators to optimize network performance, improve customer experience and create new revenue-generating services. Arieso was integrated in the Company’s NSE segment.

The Company acquired all outstanding shares of Arieso for approximately $89.7 million in cash, subject to holdback payments of approximately $12.8 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 Arieso Closing Date.

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 Company finalized the purchase price allocation related to this acquisition during the three months ended March 29, 2014. The purchase price was allocated as follows (in millions):

Net tangible assets acquired	$	0.2
Intangible assets acquired:
Developed technology	32.8
Customer relationships	14.5
Order backlog	1.4
Goodwill	40.8
Total purchase price	$	89.7

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

Cash	$	4.1
Accounts receivable	8.4
Property and equipment	0.6
Accounts payable	(0.3		)
Accrued expenses, net of other assets	(1.4		)
Employee related liabilities	(1.4		)
Deferred revenue	(1.7		)
Deferred tax liabilities, net	(8.1		)
Net tangible assets acquired	$	0.2

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 five years. Order backlog was fully amortized in fiscal 2013.

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

In accordance with the authoritative guidance, the Company expensed $1.8 million of acquisition-related costs incurred in fiscal 2013 as SG&A expense in the Company’s Consolidated Statement of Operations.

GenComm Co., Ltd. (“GenComm”)

On August 17, 2012 (“GenComm 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. 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. During the three months ended March 29, 2014, the Company made a holdback payment of $3.3 million dollars. GenComm was integrated in the Company’s NSE 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):

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

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. Order backlog was fully amortized in fiscal 2013.

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

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Operating Segments

9 Months Ended

Mar. 29, 2014

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 H. Waechter, is the Company’s Chief Operating Decision Maker (“CODM”) pursuant to the guidance. The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue and operating results.

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

In the first quarter of fiscal 2014, the Company changed the name of the Communication Test and Measurement segment to Network and Service Enablement, or NSE. The name NSE more accurately reflects the value the Company brings to customers and the evolution of the Company’s product portfolio, one that includes communications test instruments as well as microprobes, software and services that  provide the visibility necessary throughout the network to improve service and application performance.

The Company’s reportable segments are:

(i) Network and Service Enablement:

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

(ii) Communications and Commercial Optical Products:

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

CCOP also provides lasers that address the needs of original equipment manufacturer (“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:

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 gesture-recognition and other applications.

The accounting policies of the reportable segments are the same as those described in the Company’s Annual Report on Form 10-K for the year ended June 29, 2013. The Company evaluates segment performance based on operating income (loss), excluding certain infrequent or unusual items.

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

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

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Net revenue:
Network Service and Enablement	$	172.3		$	174.2		$	539.2		$	539.1
Communications and Commercial Optical Products	194.6			179.2			597.2			559.9
Optical Security and Performance Products	51.1			51.9			158.2			156.6
Net revenue	$	418.0		$	405.3		$	1,294.6		$	1,255.6
Operating income (loss):
Network Service and Enablement	$	9.9		$	13.0		$	51.2		$	65.1
Communications and Commercial Optical Products	22.4			19.2			73.5			64.2
Optical Security and Performance Products	18.2			18.6			57.8			56.0
Corporate	(23.3		)	(23.2		)	(70.7		)	(70.0		)
Total segment operating income	27.2			27.6			111.8			115.3
Unallocated amounts:
Stock-based compensation	(16.9		)	(15.3		)	(48.3		)	(41.5		)
Amortization of intangibles	(16.2		)	(20.1		)	(43.0		)	(57.5		)
Loss on disposal of long-lived assets	(1.0		)	(0.2		)	(0.8		)	(1.6		)
Restructuring and related charges	(3.6		)	(0.4		)	(3.8		)	(6.1		)
Other charges related to non-recurring activities (1)	(1.1		)	(12.9		)	(1.1		)	(14.9		)
Interest and other income (expense), net	0.6			(0.9		)	0.4			(3.7		)
Interest expense	(7.7		)	(4.2		)	(21.3		)	(15.4		)
Loss from continuing operations before income taxes	$	(18.7	)	$	(26.4	)	$	(6.1	)	$	(25.4	)

(1) During the three months ended March 30, 2013, the Company incurred $11.3 million of inventory related charges, included in Cost of sales, primarily related to a write-off of inventory no longer being sold due to a strategic plan to exit NSE’s low-speed wireline product line approved in the third quarter of fiscal 2013.

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Stockholders' Equity

9 Months Ended

Mar. 29, 2014

Stockholders' Equity

Stockholders' Equity

Note 13. Stockholders’ Equity

Repurchase of Common Stock

During the first quarter of fiscal 2014, the Company repurchased 7.4 million shares of its outstanding common stock at $13.45 per share in privately negotiated transactions. The total purchase price of $100.0 million was reflected as a decrease to common stock based on the stated par value per share with the remainder charged to accumulated deficit. All common shares repurchased under this program have been cancelled and retired.

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Acquired Developed Technology and Other Intangibles

9 Months Ended

Mar. 29, 2014

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, customer relationships and other intangibles (in millions)

	Gross
	Carrying		Accumulated
As of March 29, 2014	Amount		Amortization			Net
Acquired developed technology	$	563.6	$	(447.9	)	$	115.7
Customer relationships	204.4		(137.3		)	67.1
Other	45.3		(42.8		)	2.5
Total intangibles subject to amortization	813.3		(628.0		)	185.3
In-process research and development intangibles	7.1		—			7.1
Total intangibles	$	820.4	$	(628.0	)	$	192.4

	Gross
	Carrying		Accumulated
As of June 29, 2013	Amount		Amortization			Net
Acquired developed technology	$	546.8	$	(437.4	)	$	109.4
Customer relationships	168.5		(131.5		)	37.0
Other	50.3		(47.0		)	3.3
Total intangibles	$	765.6	$	(615.9	)	$	149.7

During the three and nine months ended March 29, 2014, the Company recorded $16.2 million and $43.0 million, respectively, of amortization expense relating to acquired developed technology and other intangibles, including customer relationships.

During the three and nine months ended March 30, 2013, the Company recorded $20.1 million and $57.5 million, respectively, of amortization expense relating to acquired developed technology and other intangibles, including customer relationships.

During the three months ended September 29, 2012, the Company approved a plan to exit the concentrated photovoltaic (“CPV”) product line within its CCOP segment and accordingly recorded $2.6 million of accelerated amortization.

During the three months ended March 30, 2013, the Company approved a strategic plan to exit the low-speed wireline product line within the NSE segment. As a result, during the third quarter of fiscal 2013, the Company incurred a $2.2 million charge for accelerated amortization of related intangibles, of which $1.8 million and $0.4 million is included in Amortization of acquired technologies and in Amortization of other intangibles in the Consolidated Statement of Operations, respectively.

Based on the carrying amount of acquired developed technology and other intangibles as of March 29, 2014, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):

Fiscal Years
Remainder of 2014	$	16.0
2015	59.1
2016	38.4
2017	35.2
2018	22.4
Thereafter	14.2
Total amortization	$	185.3

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		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013
Pension Benefit Plans
Components of the net periodic cost for the pension and benefits plans
Service cost	$ 0.2	$ 0.1	$ 0.4	$ 0.3
Interest cost	1.2	1.1	3.6	3.3
Expected return on plan assets	(0.4)	(0.3)	(1.2)	(0.9)
Recognized net actuarial (gains)/losses			0.1
Curtailment/Settlement (gains)/losses				(0.2)
Net periodic benefit cost	1.0	0.9	2.9	2.5
Defined benefit plan contribution during fiscal year			5.4
Change in plan assets:
Contribution incurred			4.2
UK pension plan
Change in plan assets:
Employer contributions			$ 0.7

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Investments and Fair Value Measurements

9 Months Ended

Mar. 29, 2014

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.

As of March 29, 2014, 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	$	51.1	$	—	$	—		$	51.1
U.S agencies	72.8		0.1		—			72.9
Municipal bonds and sovereign debt instruments	16.8		—		—			16.8
Asset-backed securities	104.6		0.1		(0.3		)	104.4
Corporate securities	385.5		0.2		(0.1		)	385.6
Total debt available-for-sale securities	$	630.8	$	0.4	$	(0.4	)	$	630.8

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 March 29, 2014, of the total estimated fair value, $53.5 million was classified as cash equivalents, $576.5 million was classified as short-term investments and $0.8 million was classified as other non-current assets.

In addition to the amounts presented above, as of March 29, 2014, the Company’s short-term investments classified as trading securities related to the deferred compensation plan were $3.8 million, of which $0.7 million was invested in debt securities, $0.4 million was invested in money market instruments and funds and $2.7 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

During the three and nine months ended March 29, 2014 and March 30, 2013, the Company recorded no other-than-temporary impairment charges in each respective period.

As of March 29, 2014, 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		Greater than
	12 Months		12 Months		Total
Asset-backed securities	$	—	$	0.3	$	0.3
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.3	$	0.4

As of March 29, 2014, 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	$	401.8	$	401.9
Amounts maturing in 1 - 5 years	228.0		228.1
Amounts maturing in more than 5 years	1.0		0.8
Total debt available-for-sale securities	$	630.8	$	630.8

As of June 29, 2013, 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	$	12.0	$	—	$	—		$	12.0
U.S. agencies	52.4		—		—			52.4
Municipal bonds and sovereign debt instruments	12.7		—		—			12.7
Asset-backed securities	15.5		—		(0.3		)	15.2
Corporate securities	135.1		0.7		(0.1		)	135.7
Total debt available-for-sale securities	$	227.7	$	0.7	$	(0.4	)	$	228.0

As of June 29, 2013, of the total estimated fair value, $26.2 million was classified as cash equivalents, $201.0 million was classified as short-term investments and $0.8 million was classified as other non-current assets.

In addition to the amounts presented above, as of June 29, 2013, the Company’s short-term investments classified as trading securities related to the deferred compensation plan were $4.2 million, of which $0.8 million was invested in debt securities, $0.3 million was invested in money market instruments and funds and $3.1 million were invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

As of June 29, 2013, 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	$	—	$	0.3	$	0.3
Corporate securities	0.1		—		0.1
Total gross unrealized losses	$	0.1	$	0.3	$	0.4

Fair Value Measurements

Assets measured at fair value as of March 29, 2014 are summarized below (in millions):

			Fair value measurement as of March 29, 2014
			Quoted Prices in		Significant
			Active Markets		Other
			for Identical		Observable
			Assets		Inputs
	Total		(Level 1)		(Level 2)
Assets:
Debt available-for-sale securities
U.S. treasuries	$	51.1	$	51.1	$	—
U.S. agencies	72.9		—		72.9
Municipal bonds and sovereign debt instruments	16.8		—		16.8
Asset-backed securities	104.4		—		104.4
Corporate securities	385.6				385.6
Total debt available-for-sale securities	630.8		51.1		579.7
Money market funds	186.2		186.2		—
Trading securities	3.8		3.8		—
Total assets (1)	$	820.8	$	241.1	$	579.7

(1)  $205.0 million in cash and cash equivalents, $580.3 million in short-term investments, $30.9 million in restricted cash, and $4.6 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 or liabilities, 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 or liabilities. 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 29, 2013 and during the three and nine months ended March 29, 2014, 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 monetary 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 quarter end; therefore, the fair value of the contracts as of both March 29, 2014 and June 29, 2013 is not significant. The change in the fair value of these foreign currency forward contracts is recorded as gain 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

9 Months Ended

Mar. 29, 2014

Goodwill

Goodwill

Note 8. Goodwill

The following table presents the changes in goodwill allocated to the reportable segments (in millions):

	Network and		Communications		Optical Security
	Service		and Commercial		and Performance
	Enablement (1)		Optical Products		Products		Total
Balance as of June 29, 2013	$	106.8	$	—	$	8.3	$	115.1
Goodwill from Trendium acquisition (2)	14.4		—		—		14.4
Goodwill from Network Instruments acquistion (2)	124.4		—		—		124.4
Goodwill from Time Bandwidth Products acquisition (2)	—		6.3		—		6.3
Currency translation and other adjustments	4.2		0.2		—		4.4
Balance as of March 29, 2014	$	249.8	$	6.5	$	8.3	$	264.6

(1) In the first quarter of fiscal 2014, the Company changed the name of the Communications Test and Measurement segment to NSE. Refer to “Note 17. Operating Segments” for more details.

(2) Refer to “Note 5. Mergers and Acquisitions” for more details.

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 2013, 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 nine months ended March 29, 2014 and March 30, 2013.

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Debts and Letters of Credit

9 Months Ended

Mar. 29, 2014

Debts and Letters of Credit

Debts and Letters of Credit

Note 10. Debts and Letters of Credit

As of March 29, 2014, the Company’s Long-term debt of $530.2 million on the Consolidated Balance Sheets represents the carrying amount of the liability component of the 0.625% Senior Convertible Notes as discussed below. The Company held no short-term debt as of March 29, 2014. The Company was in compliance with all debt covenants as of March 29, 2014. The Company had no debt as of June 29, 2013.

0.625% Senior Convertible Notes

On August 21, 2013, the Company issued $650.0 million aggregate principal amount of 0.625% Senior Convertible Notes due 2033 (the “2033 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The proceeds from the 2033 Notes amounted to $636.3 million after issuance costs. The 2033 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 0.625% payable in cash semi-annually in arrears on February 15 and August 15 of each year. The 2033 Notes mature on August 15, 2033 unless earlier converted, redeemed or repurchased.

Under certain circumstances and during certain periods, the 2033 Notes may be converted at the option of the holders into cash up to the principal amount, with the remaining amount converted into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock at the Company’s election. The initial conversion price is $18.83 per share, representing a 40.0% premium to the closing sale price of the Company’s common stock on the pricing date, August 15, 2013, which will be subject to customary anti-dilution adjustments. Holders may convert the 2033 Notes at any time on or prior to the close of business on the business day immediately preceding February 15, 2033, and other than during the period from, and including, February 15, 2018 until the close of business on the business day immediately preceding August 20, 2018, in multiples of $1,000 principal amount, under the following circumstances:

· on any date during any calendar quarter beginning after December 31, 2013 (and only during such calendar quarter) if the closing price of the Company’s common stock was more than 130% of the then current conversion price for at least 20 trading days during the 30 consecutive trading-day period ending the last trading day of the previous calendar quarter;

· if the 2033 Notes are called for redemption;

· upon the occurrence of specified corporate events;

· if the Company is party to a specified transaction, a fundamental change or a make-whole fundamental change (each as defined in the indenture of the 2033 Notes), or

· during the five consecutive business-day period immediately following any 10 consecutive trading-day period in which the trading price per $1,000 principal amount of the 2033 Notes for each day of such 10 consecutive trading-day period was less than 98% of the product of the closing sale price of the Company’s common stock and the applicable conversion rate on such date.

During the periods from, and including, February 15, 2018 until the close of business on the business day immediately preceding August 20, 2018 and from, and including, February 15, 2033 until the close of business on the business day immediately preceding the maturity date, holders may convert the 2033 Notes at any time, regardless of the foregoing circumstances.

Holders of the 2033 Notes may require the Company to purchase all or a portion of the 2033 Notes on each of August 15, 2018, August 15, 2023 and August 15, 2028, or upon the occurrence of a fundamental change, in each case, at a price equal to 100% of the principal amount of the 2033 Notes to be purchased, plus accrued and unpaid interest to, but excluding the purchase date. The Company may redeem all or a portion of the 2033 Notes for cash at any time on or after August 20, 2018, at a redemption price equal to 100% of the principal amount of the 2033 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

In accordance with the authoritative accounting guidance, the Company separated the 2033 Notes into liability and equity components. The carrying value of the liability component at issuance was calculated as the present value of its cash flows using a discount rate of 5.4% based on the 5-year swap rate plus credit spread as of the issuance date. The credit spread for the Company is based on the historical average “yield to worst” rate for BB rated issuers. The difference between the 2033 Notes principal and the carrying value of the liability component, representing the value of conversion premium assigned to the equity component, was recorded as a debt discount on the issuance date and is being accreted using the effective interest rate of 5.4% over the period from the issuance date through August 15, 2018 as a non-cash charge to interest expense. The carrying value of the liability component was determined to be $515.6 million, and the equity component, or debt discount, of the 2033 Notes was determined to be $134.4 million. As of March 29, 2014, the expected remaining term of the 2033 Notes is 4.4 years.

In connection with the issuance of the 2033 Notes, the Company incurred $13.7 million of issuance costs, which were bifurcated into the debt issuance costs, attributable to the liability component of $10.9 million and the equity issuance costs, attributable to the equity component of $2.8 million based on their relative values. The debt issuance costs were capitalized and are being amortized to interest expense using the effective interest rate method from issuance date through August 15, 2018. The equity issuance costs were netted against the equity component in additional paid-in capital at the issuance date. As of March 29, 2014, the unamortized portion of the debt issuance costs related to the 2033 Notes was $9.7 million, which was included in Other non-current assets on the Consolidated Balance Sheets.

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

	March 29,
	2014
Carrying amount of equity component	$	134.4
Principal amount of 0.625% Senior Convertible Notes	650.0
Unamortized discount of liability component	(119.8		)
Carrying amount of liability component	$	530.2

Based on quoted market prices as of March 29, 2014, the fair market value of the 2033 Notes was approximately $683.2 million. The 2033 Notes are classified within Level 2 as they are not actively traded in markets.

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			Nine Months Ended
	March 29,			March 29,
	2014			2014
Effective interest rate	5.4		%	5.4		%
Interest expense-contractual interest	$	1.0		$	2.4
Accretion of debt discount	6.0			14.6

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 (the “2026 Notes”). Proceeds from the 2026 Notes amounted to $415.9 million after issuance costs. The notes bore interest at a rate of 1.0% per year and were convertible into a combination of cash and shares of the Company’s common stock at a conversion price of $30.30 per share.

In accordance with the authoritative guidance which applied to the 2026 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 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 was 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.

During the three and nine months ended March 30, 2013, the Company recognized the contractual interest expense of $0.4 million and $1.6 million, and accreted debt discount of $2.8 million and $10.6 million, respectively. Between fiscal 2009 and fiscal 2013, the Company repurchased or redeemed the $425.0 million aggregate principal amount of the notes. As of March 29, 2014, no amounts were outstanding.

Revolving Credit Facility

On August 21, 2013, in addition to the close of the 2033 Notes offering, the Company terminated its existing $250.0 million revolving credit facility, which had no amounts outstanding upon termination. The $1.3 million of unamortized debt issuance costs was fully amortized to interest expense upon termination in the first quarter of fiscal 2014.

Outstanding Letters of Credit

As of March 29, 2014, the Company had 14 standby letters of credit totaling $34.7 million.

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Discontinued Operations (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 29, 2012	Mar. 30, 2013	Jun. 29, 2013	Oct. 12, 2012
Discontinued Operations
Gross proceeds from sale of business	$ 11.5
Net loss from discontinued operations		1.0
Hologram Business
Discontinued Operations
Gross proceeds from sale of business	11.5		11.5
Net Revenue		5.2
Net loss from discontinued operations		1.0
Tax effect associated with discontinued operation		0
Less: carrying value of net assets			(10.6)
Less: selling costs			(0.3)
Gain on sale of business			0.6
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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Operating Segments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013
Net revenue:
Total net revenue	$ 418.0	$ 405.3	$ 1,294.6	$ 1,255.6
Operating income (loss):
Total operating income	27.2	27.6	111.8	115.3
Unallocated amounts:
Stock-based compensation	(16.9)	(15.3)	(48.3)	(41.5)
Amortization of intangibles	(16.2)	(20.1)	(43.0)	(57.5)
Loss on disposal of long-lived assets	(1.0)	(0.2)	(0.8)	(1.6)
Restructuring and related charges	(3.6)	(0.4)	(3.8)	(6.1)
Other charges related to non-recurring activities	(1.1)	(12.9)	(1.1)	(14.9)
Interest and other income (expense), net	0.6	(0.9)	0.4	(3.7)
Interest expense	(7.7)	(4.2)	(21.3)	(15.4)
Loss from continuing operations before income taxes	(18.7)	(26.4)	(6.1)	(25.4)
Corporate
Operating income (loss):
Total operating income	(23.3)	(23.2)	(70.7)	(70.0)
Network and Service Enablement
Net revenue:
Net Revenue	172.3	174.2	539.2	539.1
Operating income (loss):
Total operating income	9.9	13.0	51.2	65.1
Communications and Commercial Optical Products
Net revenue:
Net Revenue	194.6	179.2	597.2	559.9
Operating income (loss):
Total operating income	22.4	19.2	73.5	64.2
Optical Security and Performance Products
Net revenue:
Net Revenue	51.1	51.9	158.2	156.6
Operating income (loss):
Total operating income	18.2	18.6	57.8	56.0
CommTest Low Speed Wireline Product Line Exit
Unallocated amounts:
Write-downs of inventories		$ 11.3

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Debts and Letters of Credit (Tables)

9 Months Ended

Mar. 29, 2014

Debts and Letters of Credit

Schedule of carrying amounts of the liability and equity components of convertible debt

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

	March 29,
	2014
Carrying amount of equity component	$	134.4
Principal amount of 0.625% Senior Convertible Notes	650.0
Unamortized discount of liability component	(119.8		)
Carrying amount of liability component	$	530.2

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			Nine Months Ended
	March 29,			March 29,
	2014			2014
Effective interest rate	5.4		%	5.4		%
Interest expense-contractual interest	$	1.0		$	2.4
Accretion of debt discount	6.0			14.6

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Acquired Developed Technology and Other Intangibles (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended			3 Months Ended				3 Months Ended			3 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013	Jun. 29, 2013	Sep. 29, 2012 CCOP CPV Plan (Workforce reduction)	Mar. 30, 2013 NSE Low Speed Wireline Product Line Exit	Mar. 29, 2014 Acquired developed technology	Jun. 29, 2013 Acquired developed technology	Mar. 30, 2013 Acquired developed technology NSE Low Speed Wireline Product Line Exit	Mar. 29, 2014 Other	Jun. 29, 2013 Other	Mar. 30, 2013 Other NSE Low Speed Wireline Product Line Exit	Mar. 29, 2014 Customer relationships	Jun. 29, 2013 Customer relationships
Acquired developed technology, customer relationships and other intangibles
Gross carrying amount of finite lived intangibles	$ 813.3		$ 813.3					$ 563.6	$ 546.8		$ 45.3	$ 50.3		$ 204.4	$ 168.5
Accumulated Amortization	(628.0)		(628.0)		(615.9)			(447.9)	(437.4)		(42.8)	(47.0)		(137.3)	(131.5)
Net carrying amount of finite lived intangibles	185.3		185.3					115.7	109.4		2.5	3.3		67.1	37.0
Net Carrying amount of in-process research and development intangibles	7.1		7.1
Gross Carrying Amount	820.4		820.4		765.6
Net carrying amount of intangibles	192.4		192.4		149.7
Amortization expenses	16.2	20.1	43.0	57.5		2.6	2.2			1.8			0.4
Estimated future amortization expense
Remainder of 2014	16.0		16.0
2015	59.1		59.1
2016	38.4		38.4
2017	35.2		35.2
2018	22.4		22.4
Thereafter	14.2		14.2
Net carrying amount of intangibles	$ 185.3		$ 185.3

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Employee Defined Benefit Plans

9 Months Ended

Mar. 29, 2014

Employee Defined Benefit Plans

Employee Defined Benefit Plans

Note 15. Employee Defined Benefit Plans

The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees primarily in the United Kingdom (“U.K.”), Germany and Switzerland. 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 third quarter of fiscal 2014 in connection with acquisitions. Benefits are generally based upon years of service and compensation or stated amounts for each year of service.

As of March 29, 2014, the U.K. plan and Switzerland plan were 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 nine months ended March 29, 2014, 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						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Service cost	$	0.2		$	0.1		$	0.4		$	0.3
Interest cost	1.2			1.1			3.6			3.3
Expected return on plan assets	(0.4		)	(0.3		)	(1.2		)	(0.9		)
Recognized net actuarial (gains)/losses	—			—			0.1			—
Curtailment/settlement (gains)/losses	—			—			—			(0.2		)
Net periodic benefit cost	$	1.0		$	0.9		$	2.9		$	2.5

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 $5.4 million related to its defined benefit pension plans during fiscal 2014 to make current benefit payments and fund future obligations. As of March 29, 2014, approximately $4.2 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 29, 2013.

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Basis of Presentation (Policies)

9 Months Ended

Mar. 29, 2014

Basis of Presentation

Fiscal Years

Fiscal Years

The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2014 is a 52-week year ending on June 28, 2014. The Company’s fiscal 2013 was a 52-week year ending on June 29, 2013.

Principles of Consolidation

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

Fiscal 2013 Out-of-Period Adjustments

During the nine months ended March 30, 2013, the Company recorded out-of-period adjustments that related to cost of sales and other income in the current and prior fiscal years. The impact of the out-of-period adjustments recorded by the Company resulted in a $2.5 million reduction in net loss during the nine months ended March 30, 2013. 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 fiscal 2013 was not material to the full year fiscal 2013 financial statements.

Discontinued Operations

Discontinued Operations

During the second quarter of fiscal 2013, the Company closed the sale of its hologram business (“Hologram Business”) for $11.5 million in cash. The Consolidated Statements of Operations reflect 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

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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Investments and Fair Value Measurements (Details 3) (USD $) In Millions, unless otherwise specified	9 Months Ended	12 Months Ended
	Mar. 29, 2014	Jun. 29, 2013
Maximum
Foreign Currency Forward Contracts
Foreign currency forward contracts, expiration period	120 days	120 days
Level 3
Fair Value Measurements
Total assets	$ 0	$ 0
Recurring basis | Cash and cash equivalents
Fair Value Measurements
Total assets	205.0
Recurring basis | Short-term investments
Fair Value Measurements
Total assets	580.3
Recurring basis | Restricted cash
Fair Value Measurements
Total assets	30.9
Recurring basis | Other non-current assets
Fair Value Measurements
Total assets	4.6
Recurring basis | Total fair value
Fair Value Measurements
Total debt available-for-sale securities	630.8
Money market funds	186.2
Trading securities	3.8
Total assets	820.8
Recurring basis | Total fair value | U.S. treasuries
Fair Value Measurements
Total debt available-for-sale securities	51.1
Recurring basis | Total fair value | U.S. agencies
Fair Value Measurements
Total debt available-for-sale securities	72.9
Recurring basis | Total fair value | Municipal bonds and sovereign debt instruments
Fair Value Measurements
Total debt available-for-sale securities	16.8
Recurring basis | Total fair value | Asset-backed securities
Fair Value Measurements
Total debt available-for-sale securities	104.4
Recurring basis | Total fair value | Corporate securities
Fair Value Measurements
Total debt available-for-sale securities	385.6
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Total debt available-for-sale securities	51.1
Money market funds	186.2
Trading securities	3.8
Total assets	241.1
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. treasuries
Fair Value Measurements
Total debt available-for-sale securities	51.1
Recurring basis | Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Total debt available-for-sale securities	579.7
Total assets	579.7
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. agencies
Fair Value Measurements
Total debt available-for-sale securities	72.9
Recurring basis | Significant Other Observable Inputs (Level 2) | Municipal bonds and sovereign debt instruments
Fair Value Measurements
Total debt available-for-sale securities	16.8
Recurring basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities
Fair Value Measurements
Total debt available-for-sale securities	104.4
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate securities
Fair Value Measurements
Total debt available-for-sale securities	$ 385.6

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Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 29, 2012	Mar. 30, 2013	Jun. 28, 2014	Jun. 29, 2013
Fiscal Years
Number of weeks in fiscal year			364 days	364 days
Out of Period Adjustments
Impact of out-of-period adjustments to net income in the period recorded		$ 2.5
Gross proceeds from sale of business	$ 11.5
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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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 29, 2014	Jun. 29, 2013
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	235,000,000	237,000,000
Common Stock, shares outstanding	235,000,000	237,000,000

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Accumulated Other Comprehensive Income

9 Months Ended

Mar. 29, 2014

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 obligations.

For the nine months ended March 29, 2014, the changes in accumulated other comprehensive income by component net of tax were as follows (in millions)

	Unrealized
	losses on			Foreign currency		Defined benefit
	available-for-			translation		obligation, net
	sale investments			adjustments		of tax (1)			Total
Beginning balance as of June 29, 2013	$	(3.1	)	$	16.4	$	(4.7	)	$	8.6
Other comprehensive income before reclassification adjustments	0.3			8.5		—			8.8
Amounts reclassified from Accumulated other comprehensive income	—			—		0.1			0.1
Net current-period other comprehensive income	0.3			8.5		0.1			8.9
Ending balance as of March 29, 2014	$	(2.8	)	$	24.9	$	(4.6	)	$	17.5

(1) Amount represents the amortization of actuarial losses and is included as a component of Selling, general and administrative expense (“SG&A”) in the Consolidated Statements of Operations for the nine months ended March 29, 2014. There was no tax impact. Refer to “Note 15. Employee Defined Benefit Plans” for more details on the computation of net periodic cost for pension plans.

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Stock-Based Compensation (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended						9 Months Ended
	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014	Mar. 30, 2013	Mar. 29, 2014 Cost of sales	Mar. 30, 2013 Cost of sales	Mar. 29, 2014 Cost of sales	Mar. 30, 2013 Cost of sales	Mar. 29, 2014 Research and development	Mar. 30, 2013 Research and development	Mar. 29, 2014 Research and development	Mar. 30, 2013 Research and development	Mar. 29, 2014 Selling, general and administrative	Mar. 30, 2013 Selling, general and administrative	Mar. 29, 2014 Selling, general and administrative	Mar. 30, 2013 Selling, general and administrative	Mar. 29, 2014 Options	Dec. 28, 2013 Options	Sep. 28, 2013 Options	Mar. 30, 2013 Options	Dec. 29, 2012 Options	Sep. 29, 2012 Options	Mar. 29, 2014 Options	Mar. 29, 2014 Options Minimum	Mar. 29, 2014 Options Maximum	Mar. 29, 2014 Full Value Awards - Total	Mar. 30, 2013 Full Value Awards - Total	Mar. 29, 2014 Full Value Awards - Total Minimum	Mar. 29, 2014 Full Value Awards - Total Maximum	Mar. 29, 2014 RSUs	Mar. 30, 2013 RSUs	Mar. 29, 2014 Restricted Stock Units with Time-based Conditions	Mar. 30, 2013 Restricted Stock Units with Time-based Conditions	Mar. 29, 2014 Restricted Stock Units with Market Conditions (MSU)	Mar. 30, 2013 Restricted Stock Units with Market Conditions (MSU)	Mar. 29, 2014 1998 Employee Stock Purchase Plan
Impact on the entity's results of operations of recording stock-based compensation by function
Stock-based compensation cost (in dollars)	$ 16.9	$ 15.3	$ 48.3	$ 41.5	$ 2.7	$ 2.4	$ 7.7	$ 6.7	$ 4.1	$ 3.7	$ 11.7	$ 10.0	$ 10.1	$ 9.2	$ 28.9	$ 24.8
Stock-based compensation capitalized to inventory (in dollars)			1.8
Vesting period																								3 years	4 years			1 year	4 years			3 years		3 years
Stock awards expiration period																								5 years	10 years
Options granted (in shares)																	0	0	0	0	0	0
Unrecognized stock-based compensation																	0.4						0.4			87.8										0.6
Estimated amortization period																							9 months 18 days			2 years 1 month 6 days
Look-back period																																				6 months
Exercise price (in dollars per share)																										$ 0
Granted (in shares)																														5.5	6.0	4.9	5.3	0.6	0.7
Aggregate grant-date fair value (in dollars)																																		9.2	10.7
Percentage of first tranche vested																																33.00%
Initial vesting period																																1 year
Subsequent vesting period																																2 years
Withholding taxes liability paid																										$ 18.3	$ 12.8

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Earnings Per Share (Tables)

9 Months Ended

Mar. 29, 2014

Earnings Per Share

Schedule of computation of basic and diluted net (loss) income per share

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

	Three Months Ended						Nine Months Ended
	March 29,			March 30,			March 29,		March 30,
	2014			2013			2014		2013
Numerator:
(Loss) income from continuing operations, net of tax	$	(1.5	)	$	(28.0	)	$	7.6	$	(34.5	)
Loss from discontinued operations, net of tax	—			—			—		(1.0		)
Net (loss) income	$	(1.5	)	$	(28.0	)	$	7.6	$	(35.5	)
Denominator:
Weighted-average number of common shares outstanding
Basic	234.0			235.9			234.1		234.4
Effect of dilutive securities from stock-based benefit plans	—			—			3.6		—
Diluted	234.0			235.9			237.7		234.4
Basic net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Discontinued operations	—			—			—		0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Diluted net (loss) income per share from:
Continuing operations	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)
Discontinued operations	—			—			—		0.00
Net (loss) income	$	(0.01	)	$	(0.12	)	$	0.03	$	(0.15	)

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 (loss) income per share because their effect would have been anti-dilutive (in millions):

	Three Months Ended		Nine Months Ended
	March 29,	March 30,	March 29,	March 30,
	2014 (1) (2)	2013 (1) (3)	2014 (2)	2013 (1) (3)
Employee stock options and ESPP	4.6	7.1	1.1	7.9
RSUs	10.2	9.5	2.9	9.3
Total potentially dilutive securities	14.8	16.6	4.0	17.2

(1)  As the Company incurred a net loss in the period, potential dilutive securities from employee stock options, employee stock purchase plan (“ESPP”) and Restricted Stock Units (“RSUs”) have been excluded from the diluted net loss per share computations as their effects were deemed anti-dilutive.

(2)  The Company’s 0.625% Senior Convertible Notes due 2033 (the “2033 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 $18.83 per share is payable in cash, shares of the Company’s common stock or a combination of both. Refer to “Note 10. Debts and Letters of Credit” for more details.

(3)  The Company’s 1% Senior Convertible Notes due 2026 (the “2026 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. As of June 29, 2013, no amounts related to the 2026 Notes were outstanding. Refer to “Note 10. Debts and Letters of Credit” for more details.

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Commitments and Contingencies (Tables)

9 Months Ended

Mar. 29, 2014

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						Nine Months Ended
	March 29,			March 30,			March 29,			March 30,
	2014			2013			2014			2013
Balance as of beginning of period	$	6.8		$	6.8		$	6.9		$	8.1
Provision for warranty	1.7			1.0			6.3			3.9
Utilization of reserve	(1.2		)	(0.3		)	(4.3		)	(1.7		)
Adjustments related to pre-existing warranties (including changes in estimates)	(0.4		)	(0.7		)	(2.0		)	(3.5		)
Balance as of end of period	$	6.9		$	6.8		$	6.9		$	6.8

Schedule of future minimum financing payments of the financing obligations

As of March 29, 2014, future minimum financing payments of the financing obligations are as follows (in millions):

Fiscal Years
Remainder of 2014	$	0.9
2015	3.8
2016	3.5
2017	3.5
2018	3.6
Thereafter	33.9
Total	$	49.2

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Stock-Based Compensation

9 Months Ended

Mar. 29, 2014

Stock-Based Compensation

Stock-Based Compensation

Note 14. Stock-Based Compensation

Overview

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and nine months ended March 29, 2014 and March 30, 2013 was as follows (in millions):

	Three Months Ended				Nine Months Ended
	March 29,		March 30,		March 29,		March 30,
	2014		2013		2014		2013
Cost of sales	$	2.7	$	2.4	$	7.7	$	6.7
Research and development	4.1		3.7		11.7		10.0
Selling, general and administrative	10.1		9.2		28.9		24.8
	$	16.9	$	15.3	$	48.3	$	41.5

Approximately $1.8 million of stock-based compensation was capitalized in inventory at March 29, 2014.

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 three quarters of fiscal 2014 or fiscal 2013.

As of March 29, 2014, $0.4 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 0.8 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-Merton valuation model.

As of March 29, 2014, $0.6 million of unrecognized stock-based compensation cost related to the ESPP remains to be amortized. That cost is expected to be recognized through the first quarter of fiscal 2015.

Full Value Awards

“Full Value Awards” refer to 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.

During the nine months ended March 29, 2014 and March 30, 2013 the Company granted 5.5 million and 6.0 million RSUs, of which 0.6 million and 0.7 million, respectively, are performance-based RSUs with market conditions (“MSUs”). These MSU 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 nine months of fiscal 2014 and fiscal 2013 was estimated to be $9.2 million and $10.7 million, respectively, and was calculated using a Monte Carlo simulation. The remaining 4.9 million and 5.3 million granted during the nine months ended March 29, 2014 and March 30, 2013 are mainly time-based RSUs. The majority of these time-based RSUs vest over three years, with 33% vesting after one year and the balance vesting quarterly over the remaining two years.

As of March 29, 2014, $87.8 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 2.1 years.

Full Value Awards are converted into shares upon vesting.  Shares equivalent in value to the minimum withholding taxes liability on the vested shares are withheld by the Company for the payment of such taxes.  During the nine months ended March 29, 2014 and March 30, 2013 the Company paid $18.3 million and $12.8 million, respectively, and classified the payments as operating cash outflows in the Consolidated Statements of Cash Flows.

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:

	Nine Months Ended
	March 29,		March 30,
	2014		2013
Volatility of common stock	53.9	%	57.5	%
Average volatility of peer companies	58.6	%	58.3	%
Average correlation coefficient of peer companies	0.2920		0.3208
Risk-free interest rate	0.8	%	0.4	%