SEGMENTS AND ENTITY WIDE DISCLOSURES

3 Months Ended

Jan. 31, 2016

Segment Reporting [Abstract]

SEGMENTS AND ENTITY WIDE DISCLOSURES

SEGMENTS AND ENTITY WIDE DISCLOSURES

Segment Reporting

During the first quarter of fiscal 2016, in connection with the creation of a new Chief Operating Officer organization, Ciena reorganized its internal organizational structure, the management of its business, and the reporting of its operating segments. This resulted in three new operating segments: Networking Platforms, Software and Software-Related Services, and Global Services. Ciena’s previous Converged Packet-Optical, Packet Networking and Optical Transport segments were realigned to form the Networking Platforms segment under a single operating segment manager. Ciena's previous Software and Services operating segment was reorganized into two separate operating segments; (i) Software and Software-Related Services, and (ii) Global Services. Ciena's segment revenue and segment profit (loss) for fiscal 2015 have been restated to reflect the new operating segments adopted in fiscal 2016. The following describes each of the newly reorganized operating segments:

• Networking Platforms reflects sales of Ciena’s Converged Packet Optical, Packet Networking and Optical Transport product lines.

◦ 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 the Waveserver stackable interconnect system, the family of CoreDirector® Multiservice Optical Switches and the OTN configuration for the 5410 Reconfigurable Switching System. This product line also includes sales of the Z-Series Packet-Optical Platform acquired from Cyan.

◦ Packet Networking — includes the 3000 family of service delivery switches and service aggregation switches and the 5000 family of service aggregation switches. This product line also includes the 8700 Packetwave Platform and the Ethernet packet configuration for the 5410 Service Aggregation Switch.

◦ Optical Transport — includes the 4200 Advanced Services Platform, 5100/5200 Advanced Services Platform, Common Photonic Layer (CPL) and 6100 Multiservice Optical Platform. Ciena's Optical Transport products have either been previously discontinued, or, are expected to be discontinued during fiscal 2016, reflecting network operators' transition toward next-generation converged network architectures.

The Networking Platforms segment also includes sales of operating system software and enhanced software features embedded in each of the product lines above. Revenue from this segment is included in product revenue on the Condensed Consolidated Statement of Operations.

• Software and Software-Related Services reflects sales of Ciena’s network virtualization, management, control and orchestration software solutions and software-related services, including subscription, installation, support, and consulting services.

◦ This segment includes Ciena’s element and network management solutions and planning tools, including the OneControl Unified Management System, ON-Center® Network & Service Management Suite, Ethernet Services Manager, Optical Suite Release and Planet Operate.

◦ This segment includes Ciena's Blue Planet network virtualization, service orchestration and network management software platform, including the multi-domain service orchestration (MDSO), network function virtualization (NFV) management and orchestration (NFV MANO), and Management and Control Platform (MCP), and Ciena's SDN Multilayer WAN Controller and its related applications.

Revenue from the software platforms portion of this segment is included in product revenue on the Condensed Consolidated Statement of Operations. Revenue from software-related services is included in services revenue on the Condensed Consolidated Statement of Operations.

• Global Services reflects sales of a broad range of Ciena’s services for consulting and network design, installation and deployment, maintenance support and training activities. Revenue from this segment is included in services revenue on the Condensed Consolidated Statement of Operations.

Ciena's long-lived assets, including equipment, building, 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, 2016, equipment, building, furniture and fixtures totaling $199.6 million primarily supported asset groups within Ciena's Networking Platforms and Software and Software-Related Services segments and supported Ciena's unallocated selling and general and administrative activities. As of January 31, 2016, $94.5 million of Ciena's intangible assets were assigned to Ciena's Networking Platforms segment and $87.7 million of Ciena's intangible assets were assigned to asset groups within Ciena's Software and Software-Related Services segment. As of January 31, 2016, all of the maintenance spares, totaling $56.2 million, were assigned to asset groups within Ciena's Global Services segment.

Segment Revenue

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

	Quarter Ended January 31,
	2016		2015
Revenue:
Networking Platforms	$	449,510	$	413,882
Software and Software-Related Services	25,426		23,528
Global Services	98,179		91,752
Consolidated revenue	$	573,115	$	529,162

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; interest and other income (loss), net; interest expense; and provisions for income taxes.

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

	Quarter Ended January 31,
	2016			2015
Segment profit (loss):
Networking Platforms	$	106,982		$	95,074
Software and Software-Related Services	(3,574		)	2,588
Global Services	39,996			31,872
Total segment profit	143,404			129,534
Less: Non-performance operating expenses
Selling and marketing	82,478			76,712
General and administrative	31,142			29,553
Acquisition and integration costs	1,299			—
Amortization of intangible assets	16,862			11,019
Restructuring costs	384			8,085
Add: Other non-performance financial items
Interest expense and other income (loss), net	(21,486		)	(21,894		)
Less: Provision for income taxes	1,299			1,050
Consolidated net loss	$	(11,546	)	$	(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,
	2016		2015
North America	$	392,704	$	331,535
EMEA	80,722		111,006
CALA	43,810		42,742
APAC	55,879		43,879
Total	$	573,115	$	529,162

North America includes $297.7 million and $365.2 million of United States revenue for fiscal quarters ended January 31, 2015 and 2016, 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, building, furniture and fixtures, net, with any country accounting for at least 10% of total equipment, building, furniture and fixtures, net, specifically identified. Equipment, building, 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, building, furniture and fixtures was as follows (in thousands):

	January 31, 2016		October 31, 2015
United States	$	92,052	$	96,292
Canada	96,665		84,318
Other International	10,844		11,363
Total	$	199,561	$	191,973

AT&T accounted for greater than 10% of Ciena's revenue in Ciena's fiscal quarters ended January 31, 2015 and 2016 with total revenue of $116.6 million and $126.6 million, respectively. AT&T purchases products and services from each of Ciena's operating segments.