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:


•	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.


◦	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 2017, 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.

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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. As Ciena seeks adoption of its Blue Planet software platform and transitions features, functionality and customers to this platform, Ciena expects revenue declines for its other element and network management solutions.


◦	This segment includes Ciena’s Blue Planet network virtualization, service orchestration and network management software platform. Ciena's Blue Planet platform includes multi-domain service orchestration (MDSO), network function virtualization (NFV), management and orchestration (NFV MANO), and Ciena's manage, control and plan (MCP) solution, SDN Multilayer Controller and V-WAN application.

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 July 31, 2017, equipment, building, furniture and fixtures, net totaled $314.9 million primarily supporting asset groups within Ciena's Networking Platforms and Software and Software-Related Services segments and supporting Ciena's unallocated selling and general and administrative activities. As of July 31, 2017, $40.4 million of Ciena's intangible assets, net were assigned to asset groups within Ciena's Networking Platforms segment and $66.6 million of Ciena's intangible assets, net were assigned to asset groups within Ciena's Software and Software-Related Services segment. As of July 31, 2017, all of the maintenance spares, net, totaling $46.6 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 July 31,				Nine Months Ended July 31,
	2017		2016		2017		2016
Revenue:
Networking Platforms
Converged Packet Optical	$	506,532	$	467,615	$	1,421,315	$	1,291,956
Packet Networking	82,121		63,658		220,641		180,437
Optical Transport	3,694		9,619		11,822		30,215
Total Networking Platforms	592,347		540,892		1,653,778		1,502,608

Software and Software-Related Services
Software Platforms	18,395		12,558		48,587		32,409
Software-Related Services	23,856		19,011		70,760		55,059
Total Software and Software-Related Services	42,251		31,569		119,347		87,468

Global Services
Maintenance Support and Training	57,902		55,996		171,133		169,123
Installation and Deployment	27,397		31,245		84,011		92,317
Consulting and Network Design	8,822		10,848		28,969		32,866
Total Global Services	94,121		98,089		284,113		294,306

Consolidated revenue	$	728,719	$	670,550	$	2,057,238	$	1,884,382

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; amortization of intangible assets; acquisition and integration costs; 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 July 31,						Nine Months Ended July 31,
	2017			2016			2017			2016
Segment profit (loss):
Networking Platforms	$	159,649		$	150,521		$	423,859		$	390,109
Software and Software-Related Services	11,133			2,412			23,384			(970		)
Global Services	39,565			38,855			116,637			114,543
Total segment profit	210,347			191,788			563,880			503,682
Less: Non-performance operating expenses
Selling and marketing	86,739			83,732			260,292			252,878
General and administrative	35,569			34,336			106,423			100,681
Amortization of intangible assets	3,837			14,529			29,368			46,957
Acquisition and integration costs	—			1,029			—			4,613
Restructuring costs	2,203			1,138			8,874			2,057
Add: Other non-performance financial items
Interest expense and other income (loss), net	(14,263		)	(19,614		)	(45,322		)	(52,741		)
Less: Provision for income taxes	7,726			3,864			11,704			7,758
Consolidated net income	$	60,010		$	33,546		$	101,897		$	35,997

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 July 31,				Nine Months Ended July 31,
	2017		2016		2017		2016
North America	$	465,238	$	438,013	$	1,295,539	$	1,226,222
EMEA	96,068		104,266		293,387		281,163
CALA	51,709		46,606		120,826		148,312
APAC	115,704		81,665		347,486		228,685
Total	$	728,719	$	670,550	$	2,057,238	$	1,884,382

North America includes $438.1 million and $410.0 million of United States revenue for fiscal quarters ended July 31, 2017 and 2016, respectively. For the nine months ended July 31, 2017 and 2016, United States revenue was $1.2 billion and $1.1 billion, respectively. No other country accounted for 10% or more 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):



	July 31, 2017		October 31, 2016
Canada	$	208,422	$	173,885
United States	94,790		103,018
Other International	11,638		11,503
Total	$	314,850	$	288,406

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



	Quarter Ended July 31,				Nine Months Ended July 31,
	2017		2016		2017		2016
AT&T	$	120,931	$	105,418	$	324,900	$	348,032
Verizon	82,918		n/a		206,272		n/a
Total	$	203,849	$	105,418	$	531,172	$	348,032



n/a	Denotes revenue representing less than 10% of total revenue for the period

The customers identified above purchased products and services from each of Ciena's operating segments.