Segment and Entity Wide Disclosures

12 Months Ended

Oct. 31, 2011

Segment Reporting [Abstract]

SEGMENT AND ENTITY WIDE DISCLOSURES

SEGMENT AND ENTITY WIDE DISCLOSURES

Segment Reporting

Effective upon the March 19, 2010 completion of Ciena’s acquisition of the MEN Business, Ciena reorganized its internal organizational structure and the management of its business. Ciena’s chief operating decision maker, its chief executive officer, evaluates performance and allocates resources based on multiple factors, including segment profit (loss) information for the following product categories:

• Packet-Optical Transport — includesoptical transport solutions that increase network capacity and enable more rapid delivery of a broader mix of high-bandwidth services. These products are used by network operators to facilitate the cost effective and efficient transport of voice, video and data traffic in core networks, regional, metro and access networks. Ciena's Packet-Optical Transport products support the efficient delivery of a wide variety of consumer-oriented network services, as well as key managed service and enterprise applications.Ciena's principal products in this segment include the 6500 Packet-Optical Platform, 4200 Advanced Services Platform; Corestream® Agility Optical Transport System, 5100/5200 Advanced Services Platform, Common Photonic Layer (CPL), and 6100 Multiservice Optical Platform. This segment also includes sales from legacy SONET/SDH, transport and data networking products, as well as certain enterprise-oriented transport solutions that support storage and LAN extension, interconnection of data centers, and virtual private networks. This segment also includes operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Consolidated Statement of Operations.

• Packet-Optical Switching — includes optical switching platforms that enable automated optical infrastructures for the delivery of a wide variety of enterprise and consumer-oriented network services. Ciena's principal products in this segment include its family of CoreDirector® Multiservice Optical Switches, its 5430 Reconfigurable Switching System and its OTN configuration for the 5410 Reconfigurable Switching System. These products include multiservice, multi-protocol switching systems that consolidate the functionality of an add/drop multiplexer, digital cross-connect and packet switch into a single, high-capacity intelligent switching system. These products address both the core and metro segments of communications networks and support key managed service services, Ethernet/TDM Private Line, Triple Play and IP services. This segment also includes sales of operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Consolidated Statement of Operations.

• Carrier-Ethernet Solutions - principally includes Ciena's 3000 family of service delivery switches and service aggregation switches, the 5000 series of service aggregation switches, and its Carrier Ethernet packet configuration for the 5410 Service Aggregation Switch. These products support the access and aggregation tiers of communications networks and have principally been deployed to support wireless backhaul infrastructures and business data services. Employing sophisticated Carrier Ethernet switching technology, these products deliver quality of service capabilities, virtual local area networking and switching functions, and carrier-grade operations, administration, and maintenance features. This segment also includes legacy broadband products, including the CNX-5 Broadband DSL System (CNX-5), that transitions legacy voice networks to support Internet-based (IP) telephony, video services and DSL. This segment also includes sales of operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Consolidated Statement of Operations.

• Software and Services - includes the Ciena One software suite, including OneControl, our integrated network and service management software designed to automate and simplify network management,operation and service delivery. These software solutions can track individual services across multiple product suites, facilitating planned network maintenance, outage detection and identification of customers or services affected by network troubles. In addition to Ciena One, this segment includes our ON-Center® Network & Service Management Suite, and the OMEA and Preside platforms from the MEN Business. This segment also includes a broad range of consulting and support services, including installation and deployment, maintenance support, consulting, network design and training activities. Except for revenue from the software portion of this segment, which is included in product revenue, revenue from this segment is included in services revenue on the Consolidated Statement of Operations.

Reportable segment asset information is not disclosed because it is not reviewed by the chief operating decision maker for purposes of evaluating performance and allocating resources.

The table below (in thousands, except percentage data) sets forth Ciena’s segment revenue for the respective periods:

	Fiscal Year
	2009		2010		2011
Revenues:
Packet-Optical Transport	$	299,088	$	705,551	$	1,121,811
Packet-Optical Switching	165,705		112,058		148,395
Carrier Ethernet Solutions	75,125		179,083		127,868
Software and Services	112,711		239,944		343,896
Consolidated revenue	$	652,629	$	1,236,636	$	1,741,970

Segment Profit (Loss)

Segment profit (loss) is determined based on internal performance measures used by the chief executive officer to assess the performance of each operating segment in a given period. In connection with that assessment, the chief executive officer excludes the following non-performance items: selling and marketing costs; general and administrative costs; acquisition and integration costs; amortization of intangible assets; restructuring costs; goodwill impairment; change in fair value of contingent consideration; interest and other financial charges (net); interest expense; gains (losses) on cost method investments, gain on extinguishment of debt, and provisions (benefit) for income taxes.

The table below (in thousands) sets forth Ciena's segment profit (loss) and the reconciliation to consolidated net income (loss) during the respective periods:

	Fiscal Year
	2009			2010			2011
Segment profit:
Packet-Optical Transport	$	21,535		$	69,319		$	191,727
Packet-Optical Switching	60,302			15,662			49,286
Carrier-Ethernet Solutions	(9,575		)	28,742			10,849
Software and Services	22,249			56,152			77,422
Total segment profit	94,511			169,875			329,284
Less: non-performance operating expenses
Selling and marketing	134,527			193,515			251,990
General and administrative	47,509			102,692			126,242
Acquisition and integration costs	—			101,379			42,088
Amortization of intangible assets	24,826			99,401			69,665
Restructuring costs	11,207			8,514			5,781
Goodwill impairment	455,673			—			—
Change in fair value of contingent consideration	—			(13,807		)	(3,289		)
Add: other non-performance financial items
Interest expense and other income (loss), net	2,081			(14,702		)	(31,904		)
Gain (loss) on cost method investments	(5,328		)	—			7,249
Gain on extinguishment of debt	—			4,948			—
Less: Provision (benefit) for income taxes	(1,324		)	1,941			7,673
Consolidated net loss	$	(581,154	)	$	(333,514	)	$	(195,521	)

Entity Wide Reporting

The following table reflects Ciena’s geographic distribution of revenue based on the location of the purchaser, with any country accounting for a significant percentage of total revenue in the period specifically identified. For fiscal 2010 and 2011, revenue attributable to geographic regions outside of the United States is reflected as “Other International” revenue. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands, except percentage data):

	Fiscal Year
	2009		2010		2011
United States	$	419,405	$	744,232	$	930,880
United Kingdom	81,784		n/a		n/a
Other International	151,440		492,404		811,090
Total.	$	652,629	$	1,236,636	$	1,741,970

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n/a Denotes revenue representing less than 10% of total revenue for the period

The following table reflects Ciena's geographic distribution of equipment, furniture and fixtures, with any country

accounting for a significant percentage of total equipment, furniture and fixtures specifically identified. Equipment, furniture and fixtures attributable to geographic regions outside of the United States and Canada are reflected as “Other International.” For the periods below, Ciena's geographic distribution of equipment, furniture and fixtures was as follows (in thousands, except percentage data):

	October 31,
	2009		2010		2011
United States	$	47,875	$	63,675	$	60,848
Canada	n/a		45,103		47,424
Other International	13,993		11,516		14,286
Total	$	61,868	$	120,294	$	122,558

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n/a Denotes equipment, furniture and fixtures representing less than 10% of total equipment, furniture and fixtures

For the periods below, customers accounting for at least 10% of Ciena’s revenue were as follows (in thousands, except percentage data):

	Fiscal Year
	2009		2010		2011
AT&T	$	128,233	$	267,422	$	269,858