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 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.

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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.

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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 April 30, 2016, equipment, building, furniture and fixtures, net totaling $248.6 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 April 30, 2016, $100.7 million of Ciena's intangible assets, net were assigned to Ciena's Networking Platforms segment and $84.2 million of Ciena's intangible assets, net were assigned to asset groups within Ciena's Software and Software-Related Services segment. As of April 30, 2016, all of the maintenance spares, net, totaling $54.4 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 April 30,				Six Months Ended April 30,
	2016		2015		2016		2015
Revenue:
Networking Platforms
Converged Packet Optical	$	435,173	$	432,911	$	824,341	$	769,471
Packet Networking	68,582		53,288		116,779		108,271
Optical Transport	8,451		16,454		20,596		38,793
Total Networking Platforms	512,206		502,653		961,716		916,535

Software and Software-Related Services
Software Platforms	11,772		9,227		19,851		17,660
Software-Related Services	18,701		14,686		36,048		29,781
Total Software and Software-Related Services	30,473		23,913		55,899		47,441

Global Services
Maintenance Support and Training	57,069		53,085		113,127		106,986
Installation and Deployment	30,232		30,703		61,072		56,884
Consulting and Network Design	10,737		11,248		22,018		22,918
Total Global Services	98,038		95,036		196,217		186,788

Consolidated revenue	$	640,717	$	621,602	$	1,213,832	$	1,150,764

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 income during the respective periods indicated:



	Quarter Ended April 30,						Six Months Ended April 30,
	2016			2015			2016			2015
Segment profit (loss):
Networking Platforms	$	132,606		$	131,252		$	239,588		$	226,326
Software and Software-Related Services	192			806			(3,382		)	3,394
Global Services	35,692			35,151			75,688			67,023
Total segment profit	168,490			167,209			311,894			296,743
Less: Non-performance operating expenses
Selling and marketing	86,668			82,471			169,146			159,183
General and administrative	35,203			30,302			66,345			59,855
Acquisition and integration costs	2,285			1,020			3,584			1,020
Amortization of intangible assets	15,566			11,019			32,428			22,038
Restructuring costs	535			(17		)	919			8,068
Add: Other non-performance financial items
Interest expense and other income (loss), net	(11,641		)	(18,496		)	(33,127		)	(40,390		)
Less: Provision for income taxes	2,595			3,265			3,894			4,315
Consolidated net income	$	13,997		$	20,653		$	2,451		$	1,874

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 April 30,				Six Months Ended April 30,
	2016		2015		2016		2015
North America	$	395,505	$	397,181	$	788,209	$	728,716
EMEA	96,175		102,194		176,897		213,200
CALA	57,896		47,891		101,706		90,633
APAC	91,141		74,336		147,020		118,215
Total	$	640,717	$	621,602	$	1,213,832	$	1,150,764

North America includes $367.1 million and $367.6 million of United States revenue for fiscal quarters ended April 30, 2016 and 2015, respectively. For the six months ended April 30, 2016 and 2015, United States revenue was $732.3 million and $665.3 million, 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):



	April 30, 2016		October 31, 2015
United States	$	97,327	$	96,292
Canada	140,056		84,318
Other International	11,266		11,363
Total	$	248,649	$	191,973

AT&T accounted for greater than 10% of Ciena's revenue in Ciena's fiscal quarters ended April 30, 2016 and 2015 with total revenue of $116.0 million and $117.4 million, respectively. AT&T also accounted for greater than 10% of Ciena's revenue for the six months ended April 30, 2016 and 2015 with total revenue of $242.6 million and $234.0 million, respectively. AT&T purchases products and services from each of Ciena's operating segments.