Segment and Entity Wide Disclosures

12 Months Ended

Oct. 31, 2012

Segment Reporting [Abstract]

SEGMENT AND ENTITY WIDE DISCLOSURES

SEGMENT AND ENTITY WIDE DISCLOSURES

Segment Reporting

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 — includes optical 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, 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 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 includes legacy broadband products that transition 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, the 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 the 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
	2010		2011		2012
Revenues:
Packet-Optical Transport	$	705,551	$	1,121,811	$	1,172,159
Packet-Optical Switching	112,058		148,395		132,705
Carrier Ethernet Solutions	179,083		127,868		131,693
Software and Services	239,944		343,896		397,366
Consolidated revenue	$	1,236,636	$	1,741,970	$	1,833,923

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 items: selling and marketing costs; general and administrative costs; acquisition and integration costs; amortization of intangible assets; restructuring costs; change in fair value of contingent consideration; interest and other income (net); interest expense; equity investment gains or losses 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
	2010			2011			2012
Segment profit:
Packet-Optical Transport	$	69,319		$	191,727		$	242,137
Packet-Optical Switching	15,662			49,286			22,842
Carrier-Ethernet Solutions	28,742			10,849			(4,066		)
Software and Services	56,152			77,422			99,132
Total segment profit	169,875			329,284			360,045
Less: non-performance operating expenses
Selling and marketing	193,515			251,990			266,338
General and administrative	102,692			126,242			114,002
Acquisition and integration costs	101,379			42,088			—
Amortization of intangible assets	99,401			69,665			51,697
Restructuring costs	8,514			5,781			7,854
Change in fair value of contingent consideration	(13,807		)	(3,289		)	—
Add: other non-performance financial items
Interest expense and other income (loss), net	(14,702		)	(31,904		)	(54,853		)
Gain on cost method investments	—			7,249			—
Gain on extinguishment of debt	4,948			—			—
Less: Provision for income taxes	1,941			7,673			9,322
Consolidated net loss	$	(333,514	)	$	(195,521	)	$	(144,021	)

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 at least 10% of total revenue in the period specifically identified. Revenue attributable to geographic regions outside of the United States is reflected as International revenue. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands, except percentage data):

	Fiscal Year
	2010		2011		2012
United States	$	744,232	$	930,880	$	972,576
International	492,404		811,090		861,347
Total	$	1,236,636	$	1,741,970	$	1,833,923

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

accounting for at least 10% of total equipment, furniture and fixtures in the period 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,
	2010		2011		2012
United States	$	63,675	$	60,848	$	64,653
Canada	45,103		47,424		48,376
Other International	11,516		14,286		10,551
Total	$	120,294	$	122,558	$	123,580

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

	Fiscal Year
	2010		2011		2012
AT&T	$	267,422	$	269,858	$	248,123