Segment and Entity Wide Disclosures

3 Months Ended

Apr. 30, 2011

Segment and Entity Wide Disclosures [Abstract]

(18) SEGMENT AND ENTITY WIDE DISCLOSURES

Segment Reporting

Ciena’s segments are discussed in the following product and service groupings:

	•		Packet-Optical Transport — includes optical transport solutions that increase network capacity and enable more rapid delivery of a broader mix of high-bandwidth services. These products are used by network operators to facilitate the cost effective and efficient transport of voice, video and data traffic in core networks, as well as regional, metro and access networks. Our principal products in this segment include the ActivFlex 6500 Packet-Optical Platform (ActivFlex 6500); ActivFlex 6110 Multiservice Optical Platform (ActivFlex 6110); ActivSpan 5200 (ActivSpan 5200); ActivSpan Common Photonic Layer (CPL); Optical Multiservice Edge 1000 series (OME 1000); and Optical Metro 3500 (OM 3500) from the MEN Business. This segment includes sales of our ActivSpan 4200^® FlexSelect^®Advanced Services Platform (ActivSpan 4200) and our Corestream^® Agility Optical Transport System (Corestream) from Ciena’s pre-acquisition portfolio. This segment also includes sales from legacy SONET/SDH products and legacy 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.

	•		Packet-Optical Switching — includes optical switching platforms that enable automated optical infrastructures for the delivery of a wide variety of enterprise and consumer-oriented network services. Our principal products in this segment include our CoreDirector^® Multiservice Optical Switch, CoreDirector FS; and our ActivFlex 5430 Reconfigurable Switching System, our packet Optical Transport Network (OTN) configuration for the 5400 family. These products include multiservice, multi-protocol switching systems that consolidate the functionality of an add/drop multiplexer, digital cross-connect and packet switch into a single, high-capacity intelligent switching system. These products address both the core and metro segments of communications networks and support key managed service services, Ethernet/TDM Private Line, Triple Play and IP services. 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.

	•		Carrier Ethernet Service Delivery - includes the ActivEdge 3900 family of service delivery switches and service aggregation switches, as well as the ActivEdge 5000 series and ActivEdge 5410 Service Aggregation Switch, our Carrier Ethernet configuration for the 5400 family. These products support the access and aggregation tiers of communications networks and have principally been deployed to support wireless backhaul infrastructures and business data services. Employing sophisticated Carrier Ethernet switching technology, these products deliver quality of service capabilities, virtual local area networking and switching functions, and carrier-grade operations, administration, and maintenance features. This segment includes the legacy metro Ethernet routing switch (MERS) product line, from the MEN Business, and broadband products, including our CNX-5 Broadband DSL System (CNX-5), that transitions legacy voice networks to support Internet-based (IP) telephony, video services and DSL. 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.

	•		Software and Services - includes our integrated network and service management software designed to automate and simplify network management and operation, while increasing network performance and functionality. These software solutions can track individual services across multiple product suites, facilitating planned network maintenance, outage detection and identification of customers or services affected by network troubles. This segment also includes a broad range of consulting and support services, including installation and deployment, maintenance support, consulting, network design 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.

Reportable segment asset information is not disclosed because it is not reviewed by the chief operating decision maker for purposes of evaluating performance and allocating resources.

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


	Quarter Ended April 30,								Six Months Ended April 30,
	2010		%*		2011		%*		2010		%*		2011		%*
Revenue:
Packet-Optical Transport	$	97,689		38.5	$	272,635		65.2	$	181,159		42.2	$	559,116		65.7
Packet-Optical Switching		32,434		12.8		31,267		7.5		55,832		13.0		66,541		7.8
Carrier Ethernet Service Delivery		74,806		29.5		30,931		7.4		115,245		26.8		58,559		6.9
Software and Services		48,542		19.2		83,061		19.9		77,111		18.0		166,986		19.6

Consolidated revenue	$	253,471		100.0	$	417,894		100.0	$	429,347		100.0	$	851,202		100.0


*		Denotes % of total revenue

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; change in fair value of contingent consideration; interest and other income (net); interest expense; equity investment gains or losses and provisions (benefit) for income taxes.

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


	Quarter Ended April 30,						Six Months Ended April 30,
	2010			2011			2010			2011
Segment profit (loss):
Packet-Optical Transport	$	(6,595	)	$	36,506		$	13,528		$	75,532
Packet-Optical Switching		5,467			8,487			3,429			21,364
Carrier Ethernet Service Delivery		25,972			3,497			34,854			5,890
Software and Services		8,956			17,719			12,116			36,139

Total segment profit (loss)		33,800			66,209			63,927			138,925

Other nonperformance items:
Selling and marketing		(45,328	)		(61,768	)		(79,565	)		(118,860	)
General and administrative		(21,503	)		(32,480	)		(34,266	)		(70,794	)
Acquisition and integration costs		(39,221	)		(10,741	)		(66,252	)		(34,926	)
Amortization of intangible assets		(17,121	)		(13,674	)		(23,102	)		(42,458	)
Restructuring costs		(1,849	)		(3,164	)		(1,828	)		(4,686	)
Change in fair value of contingent consideration		—			—			—			3,289
Interest and other financial charges, net		(365	)		(5,177	)		(2,966	)		(8,462	)
(Provision) benefit for income taxes		1,578			(1,891	)		710			(3,770	)

Consolidated net loss	$	(90,009	)	$	(62,686	)	$	(143,342	)	$	(141,742	)

Entity Wide Reporting

The following table reflects Ciena’s geographic distribution of revenue based on the location of the purchaser, with any country accounting for greater than 10% of total revenue in the period specifically identified. Revenue attributable to geographic regions outside of the United States is reflected as “Other International” revenue. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands, except percentage data):


	Quarter Ended April 30,								Six Months Ended April 30,
	2010		%*		2011		%*		2010		%*		2011		%*
United States	$	180,523		71.2	$	230,801		55.2	$	304,435		70.9	$	451,150		53.0
Other International		72,948		28.8		187,093		44.8		124,912		29.1		400,052		47.0

Total	$	253,471		100.0	$	417,894		100.0	$	429,347		100.0	$	851,202		100.0


*		Denotes % of total revenue

The following table reflects Ciena’s geographic distribution of equipment, furniture and fixtures, with any country accounting for greater than 10% of total equipment, furniture and fixtures specifically identified. Equipment, furniture and fixtures 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, except percentage data):


	October 31,				April 30,
	2010		%*		2011		%*
United States	$	63,675		52.9	$	63,649		50.3
Canada		45,103		37.5		50,294		39.8
Other International		11,516		9.6		12,456		9.9

Total	$	120,294		100.0	$	126,399		100.0


*		Denotes % of total equipment, furniture and fixtures

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


	Quarter Ended April 30,								Six Months Ended April 30,
	2010		%*		2011		%*		2010		%*		2011		%*
Company A	$	70,808		27.9	$	66,104		15.8	$	113,323		26.4	$	126,941		14.9
Company B		36,531		14.4		n/a		—		51,867		12.1		n/a		—
Company C		n/a		—		42,159		10.1		n/a		—		89,981		10.6

Total	$	107,339		42.3	$	108,263		25.9	$	165,190		38.5	$	216,922		25.5


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

*		Denotes % of total revenue