Segment and Entity Wide Disclosures

9 Months Ended

Jul. 31, 2011

Segment Reporting [Abstract]

SEGMENT AND ENTITY WIDE DISCLOSURES

(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. Ciena’s principal products in this segment include the: 6500 Packet-Optical Platform; 4200 Advanced Services Platform; Corestream^® Agility Optical Transport System; 5100/5200 Advanced Services Platform; Common Photonic Layer (CPL); and 6100 Multiservice Optical Platform. This segment also includes sales from legacy SONET/SDH, transport and 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. Ciena’s principal products in this segment include its family of CoreDirector^® Multiservice Optical Switches, its 5430 Reconfigurable Switching System and its packet OTN configuration for the 5410 Reconfigurable Switching System. 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 — principally includes Ciena’s 3000 family of service delivery switches and service aggregation switches, the 5000 series of service aggregation switches, and its Carrier Ethernet configuration for the 5410 Service Aggregation Switch. 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 Ciena’s legacy broadband products, including the 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 Ciena’s 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 July 31,				Nine Months Ended July 31,
	2010		2011		2010		2011
Revenue:
Packet-Optical Transport	$	242,057	$	266,551	$	423,216	$	825,667
Packet-Optical Switching		34,806		40,682		90,638		107,223
Carrier Ethernet Service Delivery		33,802		40,475		149,047		99,034
Software and Services		79,010		87,605		156,121		254,591
Consolidated revenue	$	389,675	$	435,313	$	819,022	$	1,286,515

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 July 31,						Nine Months Ended July 31,
	2010			2011			2010			2011
Segment profit (loss):
Packet-Optical Transport	$	12,874		$	51,827		$	26,402		$	127,359
Packet-Optical Switching		10,320			12,783			13,749			34,147
Carrier Ethernet Service Delivery		(3,212	)		6,519			31,642			12,409
Software and Services		23,158			20,552			35,274			56,691
Total segment profit (loss)		43,140			91,681			107,067			230,606
Other nonperformance items:
Selling and marketing		(52,127	)		(61,895	)		(131,692	)		(180,755	)
General and administrative		(32,649	)		(28,172	)		(66,915	)		(98,966	)
Acquisition and integration costs		(17,033	)		(4,822	)		(83,285	)		(39,748	)
Amortization of intangible assets		(38,727	)		(13,673	)		(61,829	)		(56,131	)
Restructuring costs		(2,157	)		(504	)		(3,985	)		(5,190	)
Change in fair value of contingent consideration		—			—			—			3,289
Interest and other financial charges, net		(8,658	)		(12,630	)		(11,624	)		(21,092	)
Provision for income taxes		(1,644	)		(1,435	)		(934	)		(5,205	)
Consolidated net loss	$	(109,855	)	$	(31,450	)	$	(253,197	)	$	(173,192	)

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 a significant percentage of total revenue in the period specifically identified. Revenue attributable to geographic regions outside of the United States and Canada 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 July 31,				Nine Months Ended July 31,
	2010		2011		2010		2011
United States	$	229,739	$	227,524	$	534,174	$	678,674
Canada		22,840		43,815		65,125		128,770
Other International		137,096		163,974		219,723		479,071
Total	$	389,675	$	435,313	$	819,022	$	1,286,515

     The following table reflects Ciena’s geographic distribution of equipment, furniture and fixtures, with any country accounting for a significant percentage 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,		July 31,
	2010		2011
United States	$	63,675	$	64,624
Canada		45,103		47,424
Other International		11,516		14,126
Total	$	120,294	$	126,174

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

	Quarter Ended July 31,				Nine Months Ended July 31,
	2010		2011		2010		2011
Company A	$	90,769	$	75,068	$	204,092	$	202,009
Company B		40,556		n/a		n/a		131,721
Total	$	131,325	$	75,068	$	204,092	$	333,730

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