SEGMENTS AND ENTITY-WIDE DISCLOSURES

Segment Reporting

Ciena manages its business, measures its performance and allocates its resources based on the following operating segments:


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

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Converged Packet Optical — includes the 6500 Packet-Optical Platform, the 5430 Reconfigurable Switching System, 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. As of the first quarter of fiscal 2018, sales of Optical Transport products are also reflected within the Converged Packet Optical product line for all periods presented.


◦	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.

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 Statements 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 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) domain controller solution, SDN Multilayer Controller and V-WAN application.

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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.

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

Ciena's long-lived assets, including equipment, building, furniture and fixtures, finite-lived intangible assets and maintenance spares, are not reviewed by Ciena's chief operating decision maker for purposes of evaluating performance and allocating resources. As of April 30, 2018, equipment, building, furniture and fixtures, net totaled $298.6 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 April 30, 2018, $34.5 million of Ciena's intangible assets, net were assigned to asset groups within Ciena's Networking Platforms segment and $56.1 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, 2018, all of the maintenance spares, net, totaling $43.2 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 April 30,				Six Months Ended April 30,
	2018		2017		2018		2017
Revenue:
Networking Platforms
Converged Packet Optical	$	527,867	$	505,161	$	955,297	$	922,911
Packet Networking	63,815		66,326		132,418		138,520
Total Networking Platforms	591,682		571,487		1,087,715		1,061,431

Software and Software-Related Services
Software Platforms	12,544		13,143		42,120		30,192
Software-Related Services	26,201		24,573		50,112		46,904
Total Software and Software-Related Services	38,745		37,716		92,232		77,096

Global Services
Maintenance Support and Training	60,904		58,241		116,862		113,231
Installation and Deployment	28,209		28,695		58,225		56,614
Consulting and Network Design	10,438		10,883		21,079		20,147
Total Global Services	99,551		97,819		196,166		189,992

Consolidated revenue	$	729,978	$	707,022	$	1,376,113	$	1,328,519

Segment Profit

Segment profit is determined based on internal performance measures used by Ciena's 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; significant asset impairments and restructuring costs; interest and other income (loss), net; interest expense; and provision for income taxes.

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



	Quarter Ended April 30,						Six Months Ended April 30,
	2018			2017			2018			2017
Segment profit:
Networking Platforms	$	126,823		$	150,464		$	215,392		$	264,210
Software and Software-Related Services	8,276			4,551			31,911			12,252
Global Services	41,284			41,602			82,321			77,071
Total segment profit	176,383			196,617			329,624			353,533
Less: Non-performance operating expenses
Selling and marketing	97,359			88,551			185,874			173,553
General and administrative	38,976			34,990			77,382			70,854
Amortization of intangible assets	3,623			10,980			7,246			25,531
Significant asset impairments and restructuring costs	4,359			4,276			10,320			6,671
Add: Other non-performance financial items
Interest expense and other income (loss), net	(11,735		)	(16,226		)	(23,894		)	(31,059		)
Less: Provision for income taxes	6,475			3,568			484,415			3,978
Consolidated net income (loss)	$	13,856		$	38,026		$	(459,507	)	$	41,887

Entity-Wide Reporting

Ciena's revenue includes $392.8 million and $392.0 million of United States revenue for the second quarter of fiscal 2018 and 2017, respectively. Ciena's revenue includes $79.4 million of India revenue for the second quarter of fiscal 2018. For the six months ended April 30, 2018 and 2017, United States revenue was $776.1 million and $771.7 million, 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 U.S. 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, 2018		October 31, 2017
Canada	$	197,632	$	203,491
United States	81,051		90,482
Other International	19,948		14,492
Total	$	298,631	$	308,465

For the periods below, AT&T was the only customer that accounted for at least 10% of Ciena’s revenue as follows (in thousands):



	Quarter Ended April 30,				Six Months Ended April 30,
	2018		2017		2018		2017
AT&T	$	85,419	$	107,532	$	176,065	$	203,969

AT&T purchased products and services from each of Ciena's operating segments.