| Segment and Entity Wide Disclosures |
SEGMENT AND ENTITY WIDE DISCLOSURES Segment Reporting
Ciena’s internal organizational structure and the management of its business are grouped into the following operating segments:
| | • | Converged Packet Optical —includes the 6500 Packet-Optical Platform and the 5430 Reconfigurable Switching System, which feature Ciena's WaveLogic coherent optical processors. Products also include Ciena's family of CoreDirector® Multiservice Optical Switches and the OTN configuration for the 5410 Reconfigurable Switching System. 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. |
| | • | Packet Networking — includes Ciena's 3000 family of service delivery switches and service aggregation switches and the 5000 family of service aggregation switches. This segment also includes Ciena’s 8700 Packetwave Platform and Ciena's Ethernet packet configuration for the 5410 Service Aggregation Switch. 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. |
| | • | Optical Transport — includes the 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 includes sales from 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. |
| | • | Software and Services — includes Ciena's Agility software portfolio, which includes a SDN multilayer WAN controller, NFV platform, and network level software applications for enabling on-demand, high-bandwidth WAN services delivered in an open network ecosystem. This segment also includes the OneControl Unified Management System, ON-Center® Network & Service Management Suite, Ethernet Services Manager and Optical Suite Release. This segment includes a broad range of services for consulting and network design, installation and deployment, maintenance support 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. |
Ciena's long-lived assets, including equipment, furniture and fixtures, finite-lived intangible assets and maintenance spares, are not reviewed by the chief operating decision maker for purposes of evaluating performance and allocating resources. As of October 31, 2014, equipment, furniture and fixtures totaling $126.6 million primarily supports asset groups within Ciena's Converged Packet Optical segment, Packet Networking segment, Software and Services segment and Ciena's unallocated selling and general and administrative activities. As of October 31, 2014, all of Ciena's finite-lived intangible assets totaling $128.7 million were assigned to asset groups within Ciena's Converged Packet Optical segment. As of October 31, 2014, all of the maintenance spares totaling $54.1 million were assigned to asset groups within Ciena's Software and Services segment.
Segment Revenue The table below (in thousands, except percentage data) sets forth Ciena’s segment revenue for the respective periods:
| | | | | | | | | | | | | | Fiscal Year | | 2012 | | 2013 | | 2014 | Revenue: | | | | | | Converged Packet Optical | $ | 951,245 |
| | $ | 1,187,231 |
| | $ | 1,455,501 |
| Packet Networking | 128,982 |
| | 222,898 |
| | 244,116 |
| Optical Transport | 353,620 |
| | 233,821 |
| | 127,215 |
| Software and Services | 400,076 |
| | 438,596 |
| | 461,457 |
| Consolidated revenue | $ | 1,833,923 |
| | $ | 2,082,546 |
| | $ | 2,288,289 |
|
Segment Profit Segment profit 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; amortization of intangible assets; restructuring costs; interest and other income (loss), net; interest expense; loss on extinguishment of debt and provisions for income taxes. The table below (in thousands) sets forth Ciena’s segment profit and the reconciliation to consolidated net loss during the respective periods:
| | | | | | | | | | | | | | Fiscal Year | | 2012 | | 2013 | | 2014 | Segment profit: | | | | | | Converged Packet Optical | $ | 148,244 |
| | $ | 242,335 |
| | $ | 353,942 |
| Packet Networking | 1,713 |
| | 22,740 |
| | 19,467 |
| Optical Transport | 116,736 |
| | 89,754 |
| | 38,974 |
| Software and Services | 93,352 |
| | 126,938 |
| | 134,789 |
| Total segment profit | 360,045 |
| | 481,767 |
| | 547,172 |
| Less: non-performance operating expenses | | | | | | Selling and marketing | 266,338 |
| | 304,170 |
| | 328,325 |
| General and administrative | 114,002 |
| | 122,432 |
| | 126,824 |
| Amortization of intangible assets | 51,697 |
| | 49,771 |
| | 45,970 |
| Restructuring costs | 7,854 |
| | 7,169 |
| | 349 |
| Add: other non-performance financial items | | | | | | Interest expense and other income (loss), net | (54,853 | ) | | (49,786 | ) | | (72,377 | ) | Loss on extinguishment of debt | — |
| | (28,630 | ) | | — |
| Less: Provision for income taxes | 9,322 |
| | 5,240 |
| | 13,964 |
| Consolidated net loss | $ | (144,021 | ) | | $ | (85,431 | ) | | $ | (40,637 | ) |
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):
| | | | | | | | | | | | | | Fiscal Year | | 2012 | | 2013 | | 2014 | United States | $ | 972,576 |
| | $ | 1,217,462 |
| | $ | 1,317,981 |
| International | 861,347 |
| | 865,084 |
| | 970,308 |
| Total | $ | 1,833,923 |
| | $ | 2,082,546 |
| | $ | 2,288,289 |
|
The following table reflects Ciena's geographic distribution of equipment, furniture and fixtures, net, with any country accounting for at least 10% of total equipment, furniture and fixtures, net, specifically identified. Equipment, furniture and fixtures, net, 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, net, was as follows (in thousands): | | | | | | | | | | | | | | October 31, | | 2012 | | 2013 | | 2014 | United States | $ | 64,653 |
| | $ | 64,132 |
| | $ | 73,420 |
| Canada | 48,376 |
| | 43,772 |
| | 42,015 |
| Other International | 10,551 |
| | 11,825 |
| | 11,197 |
| Total | $ | 123,580 |
| | $ | 119,729 |
| | $ | 126,632 |
|
For the periods below, customers accounting for at least 10% of Ciena’s revenue were as follows (in thousands):
| | | | | | | | | | | | | | Fiscal Year | | 2012 | | 2013 | | 2014 | AT&T | $ | 248,123 |
| | $ | 373,617 |
| | $ | 423,498 |
|
The customer identified above purchased products and services from each of Ciena's operating segments. |