Segments and Entity Wide Disclosures

3 Months Ended

Jan. 31, 2015

Segment Reporting [Abstract]

SEGMENTS AND ENTITY WIDE DISCLOSURES

SEGMENTS 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 Condensed 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 Condensed 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 Condensed 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 Condensed 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 January 31, 2015, equipment, furniture and fixtures totaling $119.4 million primarily support asset groups within Ciena's Converged Packet Optical, Packet Networking, and Software and Services segments and support Ciena's unallocated selling and general and administrative activities. As of January 31, 2015, all of Ciena's finite-lived intangible assets totaling $115.5 million were assigned to asset groups within Ciena's Converged Packet Optical segment. As of January 31, 2015, all of the maintenance spares totaling $65.2 million were assigned to asset groups within Ciena's Software and Services segment.

Segment Revenue

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

	Quarter Ended January 31,
	2014		2015
Revenue:
Converged Packet Optical	$	333,401	$	336,560
Packet Networking	51,709		54,983
Optical Transport	40,097		22,339
Software and Services	108,496		115,280
Consolidated revenue	$	533,703	$	529,162

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; 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 indicated:

	Quarter Ended January 31,
	2014			2015
Segment profit:
Converged Packet Optical	$	78,698		$	82,657
Packet Networking	385			6,531
Optical Transport	15,650			5,886
Software and Services	29,621			34,460
Total segment profit	124,354			129,534
Less: Non-performance operating expenses
Selling and marketing	78,348			76,712
General and administrative	30,097			29,553
Amortization of intangible assets	12,439			11,019
Restructuring costs	115			8,085
Add: Other non-performance financial items
Interest expense and other income (loss), net	(17,026		)	(21,894		)
Less: Provision for income taxes	2,265			1,050
Consolidated net loss	$	(15,936	)	$	(18,779	)

Entity Wide Reporting

Ciena's operating segments each engage in business across four geographic regions: North America; Europe, Middle East and Africa (“EMEA”); Asia Pacific (“APAC”); and Caribbean and Latin America ("CALA"). North America includes only activities in the United States and Canada. The following table reflects Ciena’s geographic distribution of revenue principally based on the relevant location for Ciena's delivery of products and performance of services. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands):

	Quarter Ended January 31,
	2014		2015
North America	355,848		331,535
EMEA	88,720		111,006
CALA	52,680		42,742
APAC	36,455		43,879
Total	$	533,703	$	529,162

North America includes $317.4 million and $297.7 million of United States revenue for fiscal quarters ended January 31, 2014 and 2015, respectively. No other country accounted for at least 10% of total revenue for the periods presented above.

The following table reflects Ciena's geographic distribution of equipment, furniture and fixtures, net, with any country accounting for a significant percentage 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 was as follows (in thousands):

	October 31, 2014		January 31, 2015
United States	$	73,420	$	71,971
Canada	42,015		36,432
Other International	11,197		11,000
Total	$	126,632	$	119,403

AT&T accounted for greater than 10% of Ciena's revenue for both fiscal quarters ended January 31, 2014 and 2015 and the total revenue was $100.5 million and $116.6 million, respectively. AT&T purchased products and services from each of Ciena's operating segments.