Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark one)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2016
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    
Commission file number: 001-36250
Ciena Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
23-2725311
(I.R.S. Employer Identification No.)
7035 Ridge Road, Hanover, MD
(Address of Principal Executive Offices)
21076
(Zip Code)

(410) 694-5700
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES þ NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
(do not check if smaller reporting company)
Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as determined in Rule 12b-2 of the Exchange Act). YES o NO þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Class
 
Outstanding at September 2, 2016
common stock, $0.01 par value
 
139,341,312





CIENA CORPORATION
INDEX
FORM 10-Q
 
PAGE
NUMBER
 
 

2



PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

 
Quarter Ended July 31,
 
Nine Months Ended July 31,
 
2016
 
2015
 
2016
 
2015
Revenue:
 
 
 
 
 
 
 
Products
$
553,450

 
$
493,919

 
$
1,535,017

 
$
1,428,114

Services
117,100

 
109,013

 
349,365

 
325,582

Total revenue
670,550

 
602,932

 
1,884,382

 
1,753,696

Cost of goods sold:
 
 
 
 
 
 
 
Products
299,381

 
273,837

 
851,641

 
797,283

Services
62,684

 
59,226

 
189,713

 
183,838

Total cost of goods sold
362,065

 
333,063

 
1,041,354

 
981,121

Gross profit
308,485

 
269,869

 
843,028

 
772,575

Operating expenses:
 
 
 
 
 
 
 
Research and development
116,697

 
100,379

 
339,346

 
306,342

Selling and marketing
83,732

 
81,650

 
252,878

 
240,833

General and administrative
34,336

 
29,743

 
100,681

 
89,598

Acquisition and integration costs
1,029

 
2,435

 
4,613

 
3,455

Amortization of intangible assets
14,529

 
11,019

 
46,957

 
33,057

Restructuring costs
1,138

 
192

 
2,057

 
8,260

Total operating expenses
251,461

 
225,418

 
746,532

 
681,545

Income from operations
57,024

 
44,451

 
96,496

 
91,030

Interest and other income (loss), net
(3,647
)
 
(5,491
)
 
(11,456
)
 
(19,273
)
Interest expense
(15,967
)
 
(11,883
)
 
(41,285
)
 
(38,491
)
Income before income taxes
37,410

 
27,077

 
43,755

 
33,266

Provision for income taxes
3,864

 
3,452

 
7,758

 
7,767

Net income
$
33,546

 
$
23,625

 
$
35,997

 
$
25,499

Basic net income per common share
$
0.24

 
$
0.20

 
$
0.26

 
$
0.23

Diluted net income per potential common share
$
0.23

 
$
0.19

 
$
0.26

 
$
0.22

Weighted average basic common shares outstanding
138,881

 
118,413

 
137,835

 
113,189

Weighted average dilutive potential common shares outstanding
169,349

 
133,233

 
139,053

 
114,549


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



3



CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)

 
Quarter Ended July 31,
 
Nine Months Ended July 31,
 
2016
 
2015
 
2016
 
2015
Net income
$
33,546

 
$
23,625

 
$
35,997

 
$
25,499

Change in unrealized gain on available-for-sale securities, net of tax
169

 
(13
)
 
425

 
(37
)
Change in unrealized loss on foreign currency forward contracts, net of tax
(946
)
 
(154
)
 
518

 
(1,626
)
Change in unrealized loss on forward starting interest rate swap, net of tax
(2,270
)
 
(667
)
 
(2,176
)
 
(2,885
)
Change in cumulative translation adjustment
(2,724
)
 
(3,508
)
 
1,969

 
(6,919
)
Other comprehensive income (loss)
(5,771
)
 
(4,342
)
 
736

 
(11,467
)
Total comprehensive income
$
27,775

 
$
19,283

 
$
36,733

 
$
14,032


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



4



CIENA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)

 
July 31,
2016
 
October 31,
2015
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
854,918

 
$
790,971

Short-term investments
295,322

 
135,107

Accounts receivable, net
588,389

 
550,792

Inventories
221,598

 
191,162

Prepaid expenses and other
189,947

 
196,178

Total current assets
2,150,174

 
1,864,210

Long-term investments
115,366

 
95,105

Equipment, building, furniture and fixtures, net
272,955

 
191,973

Goodwill
267,261

 
256,434

Other intangible assets, net
165,169

 
202,673

Other long-term assets
72,733

 
84,656

      Total assets
$
3,043,658

 
$
2,695,051

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
232,736

 
$
222,140

Accrued liabilities
297,123

 
316,283

Deferred revenue
117,952

 
126,111

Current portion of long-term debt
455,465

 
2,500

Total current liabilities
1,103,276

 
667,034

Long-term deferred revenue
70,287

 
62,962

Other long-term obligations
122,852

 
72,540

Long-term debt, net
1,025,684

 
1,271,639

Total liabilities
$
2,322,099

 
$
2,074,175

Commitments and contingencies (Note 22)

 

Stockholders’ equity:
 
 
 
Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding

 

Common stock – par value $0.01; 290,000,000 shares authorized; 139,253,617 and 135,612,217 shares issued and outstanding
1,393

 
1,356

Additional paid-in capital
6,704,349

 
6,640,436

Accumulated other comprehensive loss
(21,390
)
 
(22,126
)
Accumulated deficit
(5,962,793
)
 
(5,998,790
)
Total stockholders’ equity
721,559

 
620,876

Total liabilities and stockholders’ equity
$
3,043,658

 
$
2,695,051



The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


5



CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Nine Months Ended July 31,
 
2016
 
2015
Cash flows provided by operating activities:
 
 
 
Net income
$
35,997

 
$
25,499

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements
46,624

 
41,601

Share-based compensation costs
41,832

 
32,402

Amortization of intangible assets
59,428

 
39,659

Provision for inventory excess and obsolescence
26,663

 
18,010

Provision for warranty
13,114

 
12,549

Other
15,706

 
17,818

Changes in assets and liabilities:
 
 
 
Accounts receivable
(37,768
)
 
(33,362
)
Inventories
(56,267
)
 
40,372

Prepaid expenses and other
16,687

 
(24,297
)
Accounts payable, accruals and other obligations
(5,087
)
 
(21,937
)
Deferred revenue
(4,120
)
 
29,170

Net cash provided by operating activities
152,809

 
177,484

Cash flows used in investing activities:
 
 
 
Payments for equipment, furniture, fixtures and intellectual property
(81,161
)
 
(39,729
)
Restricted cash

 
(42
)
Purchase of available for sale securities
(340,168
)
 
(180,203
)
Proceeds from maturities of available for sale securities
160,606

 
140,000

Settlement of foreign currency forward contracts, net
(9,982
)
 
16,289

Acquisition of business, net of cash acquired
(32,000
)
 

Purchase of cost method investment

 
(2,000
)
Net cash used in investing activities
(302,705
)
 
(65,685
)
Cash flows provided by financing activities:
 
 
 
Proceeds from issuance of term loan, net
248,750

 

Payment of long term debt
(45,990
)
 
(8,901
)
Payment of debt issuance costs
(3,980
)
 
(420
)
Payment of capital lease obligations
(5,359
)
 
(6,441
)
Proceeds from issuance of common stock
22,118

 
19,622

Net cash provided by financing activities
215,539

 
3,860

Effect of exchange rate changes on cash and cash equivalents
(1,696
)
 
(5,288
)
Net increase in cash and cash equivalents
63,947

 
110,371

Cash and cash equivalents at beginning of period
790,971

 
586,720

Cash and cash equivalents at end of period
$
854,918

 
$
697,091

Supplemental disclosure of cash flow information
 
 
 
Cash paid during the period for interest
$
31,787

 
$
31,566

Cash paid during the period for income taxes, net
$
9,947

 
$
8,526

Non-cash investing activities
 
 
 
Purchase of equipment in accounts payable
$
10,204

 
$
16,717

Equipment acquired under capital lease
$
5,322

 
$
464

Building subject to capital lease
$
8,993

 
$
14,939

Construction in progress subject to build-to-suit lease
$
35,875

 
$
8,770

Non-cash financing activities
 
 
 
Conversion of 4.0% convertible senior notes, due March 15, 2015 into 8,898,387 shares of common stock
$

 
$
180,645


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

6



CIENA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1)
 INTERIM FINANCIAL STATEMENTS
The interim financial statements included herein for Ciena Corporation and its wholly owned subsidiaries (“Ciena”) have been prepared by Ciena, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of management, the financial statements included in this report reflect all normal recurring adjustments that Ciena considers necessary for the fair statement of the results of operations for the interim periods covered and of the financial position of Ciena at the date of the interim balance sheets. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. The Condensed Consolidated Balance Sheet as of October 31, 2015 was derived from audited financial statements, but does not include all disclosures required by GAAP. However, Ciena believes that the disclosures are adequate to understand the information presented herein. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with Ciena’s audited consolidated financial statements and the notes thereto included in Ciena’s annual report on Form 10-K for the fiscal year ended October 31, 2015.
Ciena has a 52 or 53-week fiscal year, which ends on the Saturday nearest to the last day of October of each year. Fiscal 2015 and 2016 are 52-week fiscal years. For purposes of financial statement presentation, each fiscal year is described as having ended on October 31, and the fiscal quarters are described as having ended on January 31, April 30 and July 31 of each fiscal year.

Ciena previously identified prior period errors in the classification of foreign currency differences on changes in operating assets and liabilities for each quarterly period during the nine months ended July 31, 2015. The matters identified had no impact on any of the cash flow statement subtotals in any of the quarters, and were limited to equal and offsetting errors within the subtotal of cash provided by operations. Ciena concluded that the errors were not material to any of its previously issued financial statements. Ciena has revised the affected periods as they are presented in fiscal 2016 on a comparable basis to reflect the correction. The revisions resulted in net reclassifications within the cash flows from operating activities section of the cash flow from "Other" to “Changes in assets and liabilities” of $19.0 million for the nine-month period ending July 31, 2015.

(2)
 SIGNIFICANT ACCOUNTING POLICIES

Business Combinations

Ciena records acquisitions using the purchase method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recognized at their fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net tangible and net intangible assets acquired is recorded as goodwill. The application of the purchase method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets that are depreciated and amortized from goodwill. These assumptions and estimates include a market participant's use of the asset and the appropriate discount rates for a market participant. Ciena's estimates are based on historical experience, information obtained from the management of the acquired companies and, when appropriate, includes assistance from independent third-party appraisal firms. Significant assumptions and estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates.

Use of Estimates

The preparation of the financial statements and related disclosures in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates are used for selling prices for multiple element arrangements, shared-based compensation, convertible notes payable valuations, bad debts, valuation of inventories and investments, recoverability of intangible assets, other long-lived assets and goodwill, income taxes, warranty obligations, restructuring liabilities, derivatives, incentive compensation, contingencies and litigation. Ciena bases its estimates on historical experience and assumptions that it believes are reasonable. Actual results may differ materially from management’s estimates.


7



Cash and Cash Equivalents

Ciena considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Any restricted cash collateralizing letters of credit is included in other current assets and other long-term assets depending upon the duration of the restriction.

Investments

Ciena's investments are classified as available-for-sale and are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Ciena recognizes losses in the income statement when it determines that declines in the fair value of its investments below their cost basis are other-than-temporary. In determining whether a decline in fair value is other-than-temporary, Ciena considers various factors, including market price (when available), investment ratings, the financial condition and near-term prospects of the investee, the length of time and the extent to which the fair value has been less than Ciena's cost basis, and Ciena's intent and ability to hold the investment until maturity or for a period of time sufficient to allow for any anticipated recovery in market value. Ciena considers all marketable debt securities that it expects to convert to cash within one year or less to be short-term investments, with all others considered to be long-term investments.

Ciena has a minority equity investment in a privately held technology company that is classified in other long-term assets. This investment is carried at cost because Ciena owns less than 20% of the voting equity and does not have the ability to exercise significant influence over the company. Ciena monitors this investment for impairment and makes appropriate reductions to the carrying value when necessary. As of July 31, 2016, the carrying value of this investment was $2.0 million. Ciena has not estimated the fair value of this cost method investment because determining the fair value is not practicable. Ciena has not evaluated this investment for impairment as there have not been any events or changes in circumstances that Ciena believes would have had a significant adverse effect on the fair value of this investment.

Inventories

Inventories are stated at the lower of cost or market, with cost computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Ciena records a provision for excess and obsolete inventory when an impairment has been identified.

Segment Reporting

Ciena's chief operating decision maker, its chief executive officer, evaluates the company's performance and allocates resources based on multiple factors, including measures of segment profit (loss). Operating segments are defined as components of an enterprise that engage in business activities that may earn revenue and incur expense, for which discrete financial information is available, and for which such information is evaluated regularly by the chief operating decision maker for purposes of allocating resources and assessing performance. As of the first quarter of fiscal 2016, Ciena considers the following to be its operating segments for reporting purposes: (i) Networking Platforms, (ii) Software and Software-Related Services, and (iii) Global Services. See Note 21 below.

Goodwill     

Goodwill is the excess of the purchase price over the fair values assigned to the net assets acquired in a business combination. Ciena tests goodwill for impairment on an annual basis, which it has determined to be the last business day of fiscal September each year. Ciena also tests goodwill for impairment between annual tests if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value.

The first step in the process of assessing goodwill impairment is to compare the fair value of the reporting unit with the unit’s carrying amount, including goodwill. If this test indicates that the fair value is less than the carrying value, then step two is required to compare the implied fair value of the reporting unit’s goodwill with the carrying amount of the reporting unit’s goodwill. A non-cash goodwill impairment charge would have the effect of decreasing earnings or increasing losses in such period. If Ciena is required to take a substantial impairment charge, its operating results would be materially adversely affected in such period.





8



Long-lived Assets

Long-lived assets include: equipment, building, furniture and fixtures; intangible assets; and maintenance spares. Ciena tests long-lived assets for impairment whenever triggering events or changes in circumstances indicate that the asset's carrying amount is not recoverable from its undiscounted cash flows. An impairment loss is measured as the amount by which the carrying amount of the asset or asset group exceeds its fair value. Ciena's long-lived assets are assigned to asset groups that represent the lowest level for which cash flows can be identified.

Equipment, Building, Furniture and Fixtures and Internal Use Software

Equipment, building, furniture and fixtures are recorded at cost. Depreciation and amortization are computed using the straight-line method over useful lives of two to five years for equipment and furniture and fixtures and the shorter of useful life or lease term for leasehold improvements. During fiscal 2015 and fiscal 2016, Ciena gained access to portions of an office building in Ottawa, Canada pursuant to a lease arrangement accounted for as a capital lease, which is depreciated over the lease term. The leased building is part of Ciena's new campus facility that will replace the "Lab 10" research and development center on the former Nortel Carling campus. See Note 11 below.

Ciena establishes assets and liabilities for the estimated construction costs incurred under build-to-suit lease arrangements to the extent that Ciena is involved in the construction of structural improvements or takes construction risk prior to commencement of a lease. See Notes 11 and 14 below.

Qualifying internal use software and website development costs incurred during the application development stage, which consist primarily of outside services and purchased software license costs, are capitalized and amortized straight-line over the estimated useful lives of two to five years.

Intangible Assets

Ciena has recorded finite-lived intangible assets as a result of several acquisitions. Finite-lived intangible assets are carried at cost less accumulated amortization. Amortization is computed using the straight-line method over the expected economic lives of the respective assets, up to seven years, which approximates the use of intangible assets.

Ciena has recorded in-process research and development projects acquired as the result of an acquisition as indefinite-lived intangible assets. Upon completion of the projects, the assets will be amortized on a straight-line basis over the expected economic life of the asset, which will be determined on that date. Should the project be determined to be abandoned, the full value of the asset will be charged to expense.

Maintenance Spares

Maintenance spares are recorded at cost. Spares usage cost is expensed ratably over four years.

Concentrations

Substantially all of Ciena's cash and cash equivalents are maintained at a small number of major U.S. financial institutions. The majority of Ciena's cash equivalents consist of money market funds. Deposits held with banks may exceed the amount of insurance provided on such deposits. Because these deposits generally may be redeemed upon demand, management believes that they bear minimal risk.

Historically, a significant percentage of Ciena's revenue has been concentrated among sales to a small number of large communications service providers. Consolidation among Ciena's customers has increased this concentration. Consequently, Ciena's accounts receivable are concentrated among these customers. See Note 21 below.

Additionally, Ciena's access to certain materials or components is dependent upon sole or limited source suppliers. The inability of any of these suppliers to fulfill Ciena's supply requirements, or significant changes in supply cost, could affect future results. Ciena relies on a small number of contract manufacturers to perform the majority of the manufacturing for its products. If Ciena cannot effectively manage these manufacturers or forecast future demand, or if these manufacturers fail to deliver products or components on time, Ciena's business and results of operations may suffer.

Revenue Recognition


9



Ciena recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the buyer is fixed or determinable; and collectibility is reasonably assured. Customer purchase agreements and customer purchase orders are generally used to determine the existence of an arrangement. Shipping documents and evidence of customer acceptance, when applicable, are used to verify delivery or services rendered. Ciena assesses whether the price is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Ciena assesses collectibility based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer's payment history. Revenue for maintenance services is deferred and recognized ratably over the period during which the services are performed. Shipping and handling fees billed to customers are included in revenue, with the associated expenses included in product cost of goods sold.

Ciena applies the percentage-of-completion method to long-term arrangements where Ciena is required to undertake significant production, customization or modification engineering, and reasonable and reliable estimates of revenue and cost are available. Utilizing the percentage-of-completion method, Ciena recognizes revenue based on the ratio of actual costs incurred to date to total estimated costs expected to be incurred. In instances that do not meet the percentage-of-completion method criteria, recognition of revenue is deferred until there are no uncertainties regarding customer acceptance. Unbilled percentage-of-completion revenues recognized are included in accounts receivable, net. Billings in excess of revenues recognized on these contracts are recorded within deferred revenue. The percentage of total revenue recognized using the percentage-of-completion method for the nine months ended July 31, 2016 and July 31, 2015 was 0.3% and 1.9%, respectively.

Software revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectibility is probable. In instances where final acceptance criteria of the software are specified by the customer, revenue is deferred until there are no uncertainties regarding customer acceptance.

Ciena limits the amount of revenue recognition for delivered elements to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified return or refund privileges.

Revenue for multiple element arrangements is allocated to each unit of accounting based on the relative selling price of each delivered element, with revenue recognized for each delivered element when the revenue recognition criteria are met. Ciena determines the selling price for each deliverable based upon the selling price hierarchy for multiple-deliverable arrangements. Under this hierarchy, Ciena uses vendor-specific objective evidence ("VSOE") of selling price, if it exists, or third party evidence ("TPE") of selling price if VSOE does not exist. If neither VSOE nor TPE of selling price exists for a deliverable, Ciena uses its best estimate of selling price ("BESP") for that deliverable. For multiple element software arrangements where VSOE of undelivered maintenance does not exist, revenue for the entire arrangement is recognized over the maintenance term.

VSOE, when determinable, is established based on Ciena's pricing and discounting practices for the specific product or service when sold separately. In determining whether VSOE exists, Ciena requires that a substantial majority of the selling prices for a product or service fall within a reasonably narrow pricing range. Ciena has been unable to establish TPE of selling price because its go-to-market strategy differs from that of others in its markets, and the extent of customization and differentiated features and functions varies among comparable products or services from its peers. Ciena determines BESP based upon management-approved pricing guidelines, which consider multiple factors including the type of product or service, gross margin objectives, competitive and market conditions, and the go-to-market strategy, all of which can affect pricing practices.

Warranty Accruals

Ciena provides for the estimated costs to fulfill customer warranty obligations upon recognition of the related revenue. Estimated warranty costs include estimates for material costs, technical support labor costs and associated overhead. Warranty is included in cost of goods sold and is determined based upon actual warranty cost experience, estimates of component failure rates and management's industry experience. Ciena's sales contracts do not permit the right of return of the product by the customer after the product has been accepted.

Accounts Receivable, Net

Ciena's allowance for doubtful accounts is based on its assessment, on a specific identification basis, of the collectibility of customer accounts. Ciena performs ongoing credit evaluations of its customers and generally has not required collateral or other forms of security from them. In determining the appropriate balance for Ciena's allowance for doubtful accounts, management considers each individual customer account receivable in order to determine collectibility. In doing so,

10



management considers creditworthiness, payment history, account activity and communication with the customer. If a customer's financial condition changes, Ciena may be required to record an allowance for doubtful accounts for that customer, which could negatively affect its results of operations.

Research and Development

Ciena charges all research and development costs to expense as incurred. Types of expense incurred in research and development include employee compensation, prototype equipment, consulting and third party services, depreciation, facility costs and information technology.

Government Grants

Ciena accounts for proceeds from government grants as a reduction of operating expense when there is reasonable assurance that Ciena has complied with the conditions attached to the grant and that the grant proceeds will be received. Grant benefits are recorded to the line item in the Condensed Consolidated Statement of Operations to which the grant activity relates.

Advertising Costs

Ciena expenses all advertising costs as incurred.

Legal Costs

Ciena expenses legal costs associated with litigation defense as incurred.

Share-Based Compensation Expense

Ciena measures and recognizes compensation expense for share-based awards based on estimated fair values on the date of grant. Ciena estimates the fair value of each option-based award on the date of grant using the Black-Scholes option-pricing model. This model is affected by Ciena's stock price as well as estimates regarding a number of variables, including expected stock price volatility over the expected term of the award and projected employee stock option exercise behaviors. Ciena estimates the fair value of each restricted stock unit award based on the fair value of the underlying common stock on the date of grant. In each case, Ciena only recognizes expense in its Condensed Consolidated Statement of Operations for those stock options or restricted stock units that are expected ultimately to vest. Ciena recognizes the estimated fair value of performance-based awards, net of estimated forfeitures, as share-based expense over the performance period, using graded vesting, which considers each performance period or tranche separately, based upon Ciena's determination of whether it is probable that the performance targets will be achieved. At the end of each reporting period, Ciena reassesses the probability of achieving the performance targets and the performance period required to meet those targets and the expense is adjusted accordingly. Ciena uses the straight-line method to record expense for share-based awards with only service-based vesting. See Note 20 below.

Income Taxes

Ciena accounts for income taxes using an asset and liability approach that recognizes deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases, and for operating loss and tax credit carryforwards. In estimating future tax consequences, Ciena considers all expected future events other than the enactment of changes in tax laws or rates. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

In the ordinary course of business, transactions occur for which the ultimate outcome may be uncertain. In addition, tax authorities periodically audit Ciena's income tax returns. These audits examine significant tax filing positions, including the timing and amounts of deductions and the allocation of income tax expenses among tax jurisdictions. Ciena is currently under audit in India for 2010 and 2012 through 2014 and in Canada for 2010 through 2013. Management does not expect the outcome of these audits to have a material adverse effect on Ciena's consolidated financial position, results of operations or cash flows. Ciena's major tax jurisdictions and the earliest open tax years are as follows: United States (2013), United Kingdom (2013), Canada (2010) and India (2010). Limited adjustments can be made to Federal U.S. tax returns in earlier years in order to reduce net operating loss carryforwards. Ciena classifies interest and penalties related to uncertain tax positions as a component of income tax expense.


11



Ciena has not provided for U.S. deferred income taxes on the cumulative unremitted earnings of its non-U.S. affiliates, as it plans to indefinitely reinvest cumulative unremitted foreign earnings outside the U.S., and it is not practicable to determine the unrecognized deferred income taxes. These cumulative unremitted foreign earnings relate to ongoing operations in foreign jurisdictions and are required to fund foreign operations, capital expenditures and future expansion requirements.

Ciena recognizes windfall tax benefits associated with the exercise of stock options or release of restricted stock units directly to stockholders' equity only when realized. A windfall tax benefit occurs when the actual tax benefit realized by Ciena upon an employee's disposition of a share-based award exceeds the deferred tax asset, if any, associated with the award that Ciena had recorded. When assessing whether a tax benefit relating to share-based compensation has been realized, Ciena follows the “with-and-without” method. Under the with-and-without method, the windfall is considered realized and recognized for financial statement purposes only when an incremental benefit is provided after considering all other tax benefits including Ciena's net operating losses. The with-and-without method results in the windfall from share-based compensation awards always being effectively the last tax benefit to be considered. Consequently, the windfall attributable to share-based compensation will not be considered realized in instances where Ciena's net operating loss carryover (that is unrelated to windfalls) is sufficient to offset the current year's taxable income before considering the effects of current-year windfalls.

Loss Contingencies

Ciena is subject to the possibility of various losses arising in the ordinary course of business. These may relate to disputes, litigation and other legal actions. Ciena considers the likelihood of loss or the incurrence of a liability, as well as Ciena's ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Ciena regularly evaluates current information available to it in order to determine whether any accruals should be adjusted and whether new accruals are required.

Fair Value of Financial Instruments

The carrying value of Ciena's cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair market value due to the relatively short period of time to maturity. For information related to the fair value of Ciena's convertible notes and term loans, see Note 17 below.

Fair value for the measurement of financial assets and liabilities is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Ciena utilizes a valuation hierarchy for disclosure of the inputs for fair value measurement. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 inputs are quoted prices for identical or similar assets or liabilities in less active markets or model-derived valuations in which significant inputs are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and

Level 3 inputs are unobservable inputs based on Ciena's assumptions used to measure assets and liabilities at fair value.

By distinguishing between inputs that are observable in the marketplace, and therefore more objective, and those that are unobservable, and therefore more subjective, the hierarchy is designed to indicate the relative reliability of the fair value measurements. A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Restructuring

From time to time, Ciena takes actions to better align its workforce, facilities and operating costs with perceived market opportunities, business strategies and changes in market and business conditions. Ciena recognizes a liability for the cost associated with an exit or disposal activity in the period in which the liability is incurred, except for one-time employee termination benefits related to a service period, typically of more than 60 days, which are accrued over the service period. See Note 4 below.

12




Foreign Currency

Certain of Ciena's foreign branch offices and subsidiaries use the U.S. dollar as their functional currency because Ciena Corporation, as the U.S. parent entity, exclusively funds the operations of these branch offices and subsidiaries. For those subsidiaries using the local currency as their functional currency, assets and liabilities are translated at exchange rates in effect at the balance sheet date, and the statement of operations is translated at a monthly average rate. Resulting translation adjustments are recorded directly to a separate component of stockholders' equity. Where the monetary assets and liabilities are transacted in a currency other than the entity's functional currency, re-measurement adjustments are recorded in interest and other income (loss), net on the Condensed Consolidated Statement of Operations. See Note 5 below.

Derivatives

From time to time, Ciena uses foreign currency forward contracts to reduce variability in certain forecasted non-U.S. dollar denominated cash flows. Generally, these derivatives have maturities of 12 months or less. Ciena also has interest rate hedge arrangements to reduce variability in certain forecasted interest expense associated with its term loans. All of these derivatives are designated as cash flow hedges. At the inception of the cash flow hedge, and on an ongoing basis, Ciena assesses whether the derivative has been effective in offsetting changes in cash flows attributable to the hedged risk during the hedging period. The effective portion of the derivative's net gain or loss is initially reported as a component of accumulated other comprehensive income (loss), and, upon occurrence of the forecasted transaction, is subsequently reclassified to the line item in the Condensed Consolidated Statement of Operations to which the hedged transaction relates. Any net gain or loss associated with the ineffectiveness of the hedging instrument is reported in interest and other income (loss), net. To date, no ineffectiveness has occurred.

From time to time, Ciena uses foreign currency forward contracts to hedge certain balance sheet exposures. These forward contracts are not designated as hedges for accounting purposes, and any net gain or loss associated with these derivatives is reported in interest and other income (loss), net on the Condensed Consolidated Statement of Operations.

Ciena records derivative instruments in the Condensed Consolidated Statements of Cash Flows within operating, investing, or financing activities consistent with the cash flows of the hedged items.

See Notes 7 and 15 below.

Computation of Net Income (Loss) per Share

Ciena calculates basic earnings per share ("EPS") by dividing earnings attributable to common stock by the weighted average number of common shares outstanding for the period. Diluted EPS includes other potential dilutive shares that would be outstanding if securities or other contracts to issue common stock were exercised or converted into common stock. Ciena uses a dual presentation of basic and diluted EPS on the face of its income statement. A reconciliation of the numerator and denominator used for the basic and diluted EPS computations is set forth in Note 19 below.

Software Development Costs

Ciena develops software for sale to its customers. GAAP requires the capitalization of certain software development costs that are incurred subsequent to the date technological feasibility is established and prior to the date the product is generally available for sale. The capitalized cost is then amortized straight-line over the estimated life of the product. Ciena defines technological feasibility as being attained at the time a working model is completed. To date, the period between Ciena achieving technological feasibility and the general availability of such software has been short, and software development costs qualifying for capitalization have been insignificant. Accordingly, Ciena has not capitalized any software development costs.

Newly Issued Accounting Standards - Not Yet Effective

In May 2014, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The standard will be effective for Ciena

13



beginning in the first quarter of fiscal 2019. Ciena is currently evaluating the impact of the adoption of this ASU on its Consolidated Financial Statements and disclosures.

In April 2015, FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The guidance is effective retrospectively for fiscal years, and interim periods within those years, and will be effective for Ciena beginning in the first quarter of fiscal 2017. Ciena does not expect that the impact of the adoption of this ASU will be material to its Consolidated Financial Statements or disclosures.

In February 2016, FASB issued ASU No. 2016-02, Leases, which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures. ASU 2016-02 is effective for Ciena beginning in the first quarter of fiscal 2020. Ciena is currently evaluating the impact of the adoption of this ASU on its Consolidated Financial Statements and disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which provides guidance on several aspects of accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows. ASU 2016-09 is effective for Ciena beginning in the first quarter of fiscal 2018. Ciena does not expect that the impact of the adoption of this ASU will be material to its Consolidated Financial Statements or disclosures.

(3)
BUSINESS COMBINATIONS

On February 1, 2016, Ciena, through a Canadian subsidiary, acquired certain high-speed photonics components ("HSPC") assets of TeraXion Inc. ("TeraXion") and its wholly-owned subsidiary for approximately $32 million in cash. The assets purchased include TeraXion’s high-speed indium phosphide and silicon photonics technologies, as well as the underlying intellectual property. These technologies support development of Ciena's WaveLogic coherent optical chipsets. This transaction has been accounted for as the acquisition of a business.

The following table summarizes the final purchase price allocation related to the acquisition of the HSPC assets based on the estimated fair value of the acquired assets and assumed liabilities (in thousands):

 
Amount
Inventory
$
119

Fixed assets
1,381

Developed technology
16,468

In-process technology
3,949

Goodwill
10,083

Total purchase consideration
$
32,000


Developed technology represents purchased technology that had reached technological feasibility and for which TeraXion had substantially completed development as of the date of acquisition. Fair value was determined using future discounted cash flows related to the projected income stream of the developed technology for a discrete projection period. Cash flows were discounted to their present value as of the closing date. Developed technology is amortized on a straight line basis over its estimated useful life of five years.

In-process technology represents purchased technology that had not reached technological feasibility as of the date of acquisition. Fair value was determined using future discounted cash flows related to the projected income stream of the in-process technology for a discrete projection period. Cash flows were discounted to their present value as of the closing date. Upon completion of the in-process technology, it will be amortized on a straight line basis over its estimated useful life, which will be determined on that date.

The goodwill generated from the acquisition of the HSPC assets was primarily related to expected synergies and has been allocated to the Networking Platforms segment. The goodwill is not deductible for income tax purposes.

Pro forma disclosures have not been included due to immateriality.


14



(4)
RESTRUCTURING COSTS
Ciena has undertaken a number of restructuring activities intended to reduce expense and better align its workforce and costs with market opportunities, product development and business strategies. The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the nine months ended July 31, 2016 (in thousands):

 
Workforce
reduction
 
Consolidation
of excess
facilities
 
Total
Balance at October 31, 2015
$
591

 
$
688

 
$
1,279

Additional liability recorded
2,067

 
(9
)
 
2,058

Cash payments
(1,736
)
 
(316
)
 
(2,052
)
Balance at July 31, 2016
$
922

 
$
363

 
$
1,285

Current restructuring liabilities
$
922

 
$
363

 
$
1,285

Non-current restructuring liabilities
$

 
$

 
$


The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the nine months ended July 31, 2015 (in thousands):

 
Workforce
reduction
 
Consolidation
of excess
facilities
 
Total
Balance at October 31, 2014
$
181

 
$
1,134

 
$
1,315

Additional liability recorded
8,260

(a)

 
8,260

Cash payments
(7,748
)
 
(370
)
 
(8,118
)
Balance at July 31, 2015
$
693

 
$
764

 
$
1,457

Current restructuring liabilities
$
693

 
$
396

 
$
1,089

Non-current restructuring liabilities
$

 
$
368

 
$
368


(a) During the fiscal quarter ended January 31, 2015, Ciena recorded a charge of $8.1 million of severance and other employee-related costs associated with a global workforce reduction of approximately 125 employees.

(5) INTEREST AND OTHER INCOME (LOSS), NET
The components of interest and other income (loss), net, are as follows (in thousands):
 
Quarter Ended July 31,
 
Nine Months Ended July 31,
 
2016
 
2015
 
2016
 
2015
Interest income
$
1,250

 
$
323

 
$
2,918

 
$
788

Gain (loss) on non-hedge designated foreign currency forward contracts
(4,787
)
 
4,924

 
(20,000
)
 
14,925

Foreign currency exchange gain (loss)
(839
)
 
(10,424
)
 
5,291

 
(32,910
)
Other
729

 
(314
)
 
335

 
(2,076
)
Interest and other income (loss), net
$
(3,647
)
 
$
(5,491
)
 
$
(11,456
)
 
$
(19,273
)
Ciena Corporation, as the U.S. parent entity, uses the U.S. dollar as its functional currency; however, some of its foreign branch offices and subsidiaries use the local currency as their functional currency. During the first nine months of fiscal 2016 and the first nine months of fiscal 2015, Ciena recorded $5.3 million of foreign currency exchange rate gains and $32.9 million in foreign currency exchange rate losses, respectively, as a result of monetary assets and liabilities that were transacted in a currency other than the entity's functional currency, and the re-measurement adjustments were recorded in interest and other income (loss), net on the Condensed Consolidated Statement of Operations. From time to time, Ciena uses foreign currency forwards to hedge these balance sheet exposures. These forwards are not designated as hedges for accounting purposes and any net gain or loss associated with these derivatives is reported in interest and other income (loss), net on the Condensed Consolidated Statement of Operations. During the first nine months of fiscal 2016 and fiscal 2015, Ciena recorded losses of $20.0 million and gains of $14.9 million, respectively, from non-hedge designated foreign currency forward contracts.

15




(6)
SHORT-TERM AND LONG-TERM INVESTMENTS

As of the dates indicated, investments are comprised of the following (in thousands):

 
July 31, 2016
 
Amortized Cost
 
Gross Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated Fair
Value
U.S. government obligations:
 
 
 
 
 
 
 
Included in short-term investments
$
265,168

 
$
187

 
(3
)
 
$
265,352

Included in long-term investments
115,182

 
186

 
(2
)
 
115,366

 
$
380,350

 
$
373

 
$
(5
)
 
$
380,718

 
 
 
 
 
 
 
 
Commercial paper:
 
 
 
 
 
 
 
Included in short-term investments
$
29,970

 

 

 
$
29,970

 
$
29,970

 
$

 
$

 
$
29,970


 
October 31, 2015
 
Amortized Cost
 
Gross Unrealized
Gains
 
Gross Unrealized
Losses
 
Estimated Fair
Value
U.S. government obligations:
 
 
 
 
 
 
 
Included in short-term investments
$
110,108

 
$
10

 
$

 
$
110,118

Included in long-term investments
95,171

 

 
(66
)
 
95,105

 
$
205,279

 
$
10

 
$
(66
)
 
$
205,223

 
 
 
 
 
 
 
 
Commercial paper:
 
 
 
 
 
 
 
Included in short-term investments
$
24,989

 

 

 
$
24,989

 
$
24,989

 
$

 
$

 
$
24,989



The following table summarizes the final legal maturities of debt investments at July 31, 2016 (in thousands):

 
Amortized
Cost
 
Estimated
Fair Value
Less than one year
$
295,138

 
$
295,322

Due in 1-2 years
115,182

 
115,366

 
$
410,320

 
$
410,688


(7)
FAIR VALUE MEASUREMENTS

As of the date indicated, the following table summarizes the assets and liabilities that are recorded at fair value on a recurring basis (in thousands):

16



 
July 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Money market funds
$
665,581

 
$

 
$

 
$
665,581

U.S. government obligations

 
380,718

 

 
380,718

Commercial paper

 
94,944

 

 
94,944

Foreign currency forward contracts

 
261

 

 
261

Total assets measured at fair value
$
665,581

 
$
475,923

 
$

 
$
1,141,504

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Foreign currency forward contracts
$

 
$
1,485

 
$

 
$
1,485

Forward starting interest rate swap

 
7,698

 

 
7,698

Total liabilities measured at fair value
$


$
9,183

 
$

 
$
9,183


 
October 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Money market funds
$
642,073

 
$

 
$

 
$
642,073

U.S. government obligations

 
205,223

 

 
205,223

Commercial paper

 
74,983

 

 
74,983

Foreign currency forward contracts

 
89

 

 
89

Total assets measured at fair value
$
642,073

 
$
280,295

 
$

 
$
922,368

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Foreign currency forward contracts
$

 
$
512

 
$

 
$
512

Forward starting interest rate swap

 
5,522

 

 
5,522

Total liabilities measured at fair value
$

 
$
6,034

 
$

 
$
6,034


As of the date indicated, the assets and liabilities above are presented on Ciena’s Condensed Consolidated Balance Sheet as follows (in thousands):

 
July 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
665,581

 
$
64,974

 
$

 
$
730,555

Short-term investments

 
295,322

 

 
295,322

Prepaid expenses and other

 
261

 

 
261

Long-term investments

 
115,366

 

 
115,366

Total assets measured at fair value
$
665,581

 
$
475,923

 
$

 
$
1,141,504

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Accrued liabilities
$

 
$
1,485

 
$

 
$
1,485

Other long-term obligations

 
7,698

 

 
7,698

Total liabilities measured at fair value
$


$
9,183

 
$

 
$
9,183



17



 
October 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
642,073

 
$
49,994

 
$

 
$
692,067

Short-term investments

 
135,107

 

 
135,107

Prepaid expenses and other

 
89

 

 
89

Long-term investments

 
95,105

 

 
95,105

Total assets measured at fair value
$
642,073

 
$
280,295

 
$

 
$
922,368

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Accrued liabilities
$

 
$
512

 
$

 
$
512

Other long-term obligations

 
5,522

 

 
5,522

Total liabilities measured at fair value
$

 
$
6,034

 
$

 
$
6,034


Ciena did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.


(8)
 ACCOUNTS RECEIVABLE

As of July 31, 2016 and October 31, 2015, one customer accounted for 10.7% and 10.4% of Ciena's net accounts receivable, respectively. Ciena has not historically experienced a significant amount of bad debt expense. Allowance for doubtful accounts was $3.8 million and $3.0 million as of July 31, 2016 and October 31, 2015, respectively.

(9)
INVENTORIES
As of the dates indicated, inventories are comprised of the following (in thousands):
 
July 31,
2016
 
October 31,
2015
Raw materials
$
45,655

 
$
53,082

Work-in-process
13,813

 
9,120

Finished goods
158,756

 
125,966

Deferred cost of goods sold
67,176

 
55,995

 
285,400

 
244,163

Provision for excess and obsolescence
(63,802
)
 
(53,001
)
 
$
221,598

 
$
191,162


Ciena writes down its inventory for estimated obsolescence or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated net realizable value based on assumptions about future demand and market conditions. During the first nine months of fiscal 2016, Ciena recorded a provision for excess and obsolescence of $26.7 million, primarily related to a decrease in the forecasted demand for certain Converged Packet Optical and Optical Transport products. Deductions from the provision for excess and obsolete inventory relate primarily to disposal activities.

(10)
PREPAID EXPENSES AND OTHER
As of the dates indicated, prepaid expenses and other are comprised of the following (in thousands):


18



 
July 31,
2016
 
October 31,
2015
Prepaid VAT and other taxes
$
86,821

 
$
74,754

Product demonstration equipment, net
47,392

 
41,611

Deferred deployment expense
24,662

 
26,193

Prepaid expenses
26,903

 
25,074

Other non-trade receivables
3,137

 
8,588

Financing receivable
771

 
19,869

Derivative assets
261

 
89

 
$
189,947

 
$
196,178


Depreciation of product demonstration equipment was $8.1 million and $7.3 million for the first nine months of fiscal 2016 and 2015, respectively.

(11)
EQUIPMENT, BUILDING, FURNITURE AND FIXTURES
As of the dates indicated, equipment, building, furniture and fixtures are comprised of the following (in thousands):

 
July 31,
2016
 
October 31,
2015
Equipment, furniture and fixtures
$
436,852

 
$
404,935

Building subject to capital lease
23,143

 
13,459

Construction in progress subject to build-to-suit lease
55,023

 
18,663

Leasehold improvements
67,990

 
49,196

 
583,008

 
486,253

Accumulated depreciation and amortization
(310,053
)
 
(294,280
)
 
$
272,955

 
$
191,973


During fiscal 2014, Ciena entered into a lease agreement to lease an office building located in Ottawa, Canada. During fiscal 2015 and fiscal 2016, Ciena gained access to portions of the building and recorded the corresponding capital lease asset and liability.
 
Ciena capitalizes construction in progress and records a corresponding long-term liability for build-to-suit lease agreements where Ciena is considered the owner, for accounting purposes, during the construction period. On April 15, 2015, Ciena entered into a build-to-suit lease arrangement pursuant to which the landlord will construct, and Ciena will subsequently lease, two new office buildings at its new Ottawa, Canada campus. The landlord will construct the buildings and contribute up to a maximum of CAD$290.00 per rentable square foot in total construction costs plus certain allowances for tenant improvements, and Ciena will be responsible for any additional construction costs. As of July 31, 2016, there were $55.0 million in costs incurred under this build-to-suit lease arrangement. Upon occupancy of the facilities, Ciena expects this arrangement to qualify as a capital lease. As a result, the facilities will be depreciated over the shorter of their useful life or the lease term.
  
The total of depreciation of equipment, furniture and fixtures, and amortization of leasehold improvements, was $38.5 million and $34.3 million for the first nine months of fiscal 2016 and 2015, respectively.

(12)
 OTHER INTANGIBLE ASSETS
As of the dates indicated, other intangible assets are comprised of the following (in thousands):

19



 
July 31, 2016
 
October 31, 2015
 
Gross Intangible
 
Accumulated Amortization
 
Net Intangible
 
Gross
Intangible
 
Accumulated
Amortization
 
Net
Intangible
Developed technology
$
347,897

 
$
(237,318
)
 
$
110,579

 
$
506,647

 
$
(382,130
)
 
$
124,517

In-process research and development
4,241

 

 
4,241

 

 

 

Patents and licenses
6,565

 
(6,223
)
 
342

 
46,538

 
(46,072
)
 
466

Customer relationships, covenants not to compete, outstanding purchase orders and contracts
358,647

 
(308,640
)
 
50,007

 
388,621

 
(310,931
)
 
77,690

Total other intangible assets
$
717,350

 
$
(552,181
)
 
$
165,169

 
$
941,806

 
$
(739,133
)
 
$
202,673


In the second quarter of fiscal 2016, certain fully amortized intangible assets of approximately $246.4 million have been eliminated from gross intangible assets and accumulated amortization during the period, with no corresponding impact to the income statement. These assets were primarily technology for products no longer being sold by Ciena. The aggregate amortization expense of intangible assets was $59.4 million and $39.7 million for the first nine months of fiscal 2016 and 2015, respectively. Expected future amortization of intangible assets for the fiscal years indicated is as follows (in thousands):

Period ended October 31,
 
 
2016 (remaining three months)
$
18,851

 
2017
45,309

 
2018
22,629

 
2019
22,081

 
2020
21,055

 
Thereafter
31,003

 
 
$
160,928

(1) 

(1) Does not include amortization of in-process research and development, as estimation of the timing of future amortization expense would be impractical.

(13)
 GOODWILL

Ciena's goodwill was generated from the acquisition of Cyan, Inc. ("Cyan") during fiscal 2015 and the acquisition of the HSPC assets of TeraXion during the second quarter of fiscal 2016, and is primarily related to expected synergies. The following table presents the goodwill allocated to Ciena's reportable segments as of the dates indicated (in thousands):

 
 
Balance at October 31, 2015
 
Acquisitions
 
Impairments
 
Translation(1)
 
Balance at July 31, 2016
Software and Software-Related Services
 
$
201,428

 
$

 
$

 
$

 
$
201,428

Networking Platforms
 
55,006

 
10,083

 

 
744

 
65,833

Total
 
$
256,434

 
$
10,083

 
$

 
$
744

 
$
267,261


(1) Represents translation on goodwill related to the acquisition of the HSPC assets by Ciena's Canadian subsidiary.


(14)
OTHER BALANCE SHEET DETAILS
As of the dates indicated, other long-term assets are comprised of the following (in thousands):


20



 
July 31,
2016
 
October 31,
2015
Maintenance spares, net
$
50,510

 
$
55,259

Deferred debt issuance costs, net
11,676

 
10,820

Financing receivable
385

 
10,107

Other
10,162

 
8,470

 
$
72,733

 
$
84,656


Deferred debt issuance costs relate to Ciena's convertible notes payable (described in Note 17 below), term loans (described in Note 17 below) and ABL Credit Facility (described in Note 18 below). Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate method, through the maturity of the related debt. The amortization of deferred debt issuance costs is included in interest expense, and was $3.1 million and $3.6 million during the first nine months of fiscal 2016 and 2015, respectively.
As of the dates indicated, accrued liabilities and other short-term obligations are comprised of the following (in thousands):
 
July 31,
2016
 
October 31,
2015
Compensation, payroll related tax and benefits
$
92,492

 
$
109,466

Warranty
54,479

 
56,654

Vacation
36,640

 
34,189

Capital lease obligations
2,443

 
4,923

Interest payable
5,909

 
5,389

Other
105,160

 
105,662

 
$
297,123

 
$
316,283


The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands):

Nine months ended
 
Beginning
 
 
 
 
 
Ending
July 31,
 
Balance
 
Provisions
 
Settlements
 
Balance
2015
 
$
55,997

 
12,549

 
(14,712
)
 
$
53,834

2016
 
$
56,654

 
13,114

 
(15,289
)
 
$
54,479


As of the dates indicated, deferred revenue is comprised of the following (in thousands):

 
July 31,
2016
 
October 31,
2015
Products
$
48,826

 
$
66,527

Services
139,413

 
122,546

 
188,239

 
189,073

Less current portion
(117,952
)
 
(126,111
)
Long-term deferred revenue
$
70,287

 
$
62,962


As of the dates indicated, other long-term obligations are comprised of the following (in thousands):


21



 
July 31,
2016
 
October 31,
2015
Construction liability
$
55,023

 
$
18,663

Capital lease obligations
25,402

 
13,794

Income tax liability
12,522

 
13,308

Deferred tenant allowance
9,312

 
9,807

Straight-line rent
6,627

 
6,237

Forward starting interest rate swap
7,698

 
5,522

Other
6,268

 
5,209

 
$
122,852

 
$
72,540

 
Ciena capitalizes construction in progress and records a corresponding long-term liability for build-to-suit lease agreements where Ciena is considered the owner during the construction period for accounting purposes. 

The following is a schedule by fiscal year of future minimum lease payments under capital leases and the present value of minimum lease payments as of July 31, 2016 (in thousands):

Period ended October 31,
 
2016 (remaining three months)
$
1,100

2017
4,200

2018
3,862

2019
3,440

2020
2,460

Thereafter
30,806

Net minimum capital lease payments
45,868

Less: Amount representing interest
(18,023
)
Present value of minimum lease payments
27,845

Less: Current portion of present value of minimum lease payments
(2,443
)
Long-term portion of present value of minimum lease payments
$
25,402



(15)
DERIVATIVE INSTRUMENTS

Foreign Currency Derivatives       

As of July 31, 2016 and October 31, 2015, Ciena had forward contracts in place to reduce the variability in its Canadian Dollar and Indian Rupee denominated expense, which principally related to its research and development activities. The notional amount of these contracts was approximately $50.4 million and $68.1 million as of July 31, 2016 and October 31, 2015, respectively. These foreign exchange contracts have maturities of 12 months or less and have been designated as cash flow hedges.

During the first nine months of fiscal 2016 and fiscal 2015, in order to hedge certain balance sheet exposures, Ciena entered into forward contracts to mitigate risk due to volatility in the Brazilian Real, Canadian Dollar and Mexican Peso. The notional amount of these contracts was approximately $80.2 million and $146.5 million as of July 31, 2016 and October 31, 2015, respectively. These foreign exchange contracts have maturities of 12 months or less and have not been designated as hedges for accounting purposes.

Interest Rate Derivatives

During fiscal 2014, Ciena entered into floating interest rate to fixed interest rate swap arrangements ("interest rate swaps") that fix the interest rate under the 2019 Term Loan (as defined in Note 17) at 5.004% for the period commencing on July 20,

22



2015 through July 19, 2018. The total notional amount of these derivatives as of July 31, 2016 and October 31, 2015 was $245.0 million and $246.9 million, respectively.

In May 2016, Ciena entered into interest rate swaps that fix the total interest rate under the 2021 Term Loan (as defined in Note 17) at 4.62% to 4.87%, depending on the applicable margin, for the period commencing on June 20, 2016 through June 22, 2020. The total notional amount of these derivatives as of July 31, 2016 was $249.4 million.

Ciena expects the variable rate payments to be received under the terms of the interest rate swaps to exactly offset the forecasted variable rate payments on the equivalent notional amounts of the 2019 Term Loan and 2021 Term Loan. These derivative contracts have been designated as cash flow hedges.

Other information regarding Ciena's derivatives is immaterial for separate financial statement presentation. See Note 5 and Note 7 above.

(16) ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table summarizes the changes in accumulated balances of other comprehensive income ("AOCI") for the nine months ending July 31, 2016:
 
Unrealized
 
Unrealized
 
Unrealized
 
Cumulative
 
 
 
Gain/(Loss) on
 
Gain/(Loss) on
 
Gain/(Loss) on Forward
 
Foreign Currency
 
 
 
Marketable Securities
 
Foreign Currency Contracts
 
Starting Interest Rate Swap
 
Translation Adjustment
 
Total
Balance at October 31, 2015
$
(78
)
 
$
(268
)
 
$
(5,522
)
 
$
(16,258
)
 
$
(22,126
)
Other comprehensive income (loss) before reclassifications
425

 
(70
)
 
(4,655
)
 
1,969

 
(2,331
)
Amounts reclassified from AOCI

 
588

 
2,479

 

 
3,067

Balance at July 31, 2016
$
347

 
$
250

 
$
(7,698
)
 
$
(14,289
)
 
$
(21,390
)

The following table summarizes the changes in AOCI for the nine months ending July 31, 2015:

 
Unrealized
 
Unrealized
 
Unrealized
 
Cumulative
 
 
 
Gain/(Loss)
on
 
Gain/(Loss)
on
 
Gain/(Loss) on Forward
 
Foreign Currency
 
 
 
Marketable Securities
 
Foreign Currency Contracts
 
Starting Interest Rate Swap
 
Translation Adjustment
 
Total
Balance at October 31, 2014
$
71

 
$
(173
)
 
(2,083
)
 
$
(12,483
)
 
$
(14,668
)
Other comprehensive income (loss) before reclassifications
(37
)
 
(5,451
)
 
(2,885
)
 
(6,919
)
 
(15,292
)
Amounts reclassified from AOCI

 
3,825

 

 

 
3,825

Balance at July 31, 2015
$
34

 
$
(1,799
)
 
$
(4,968
)
 
$
(19,402
)
 
$
(26,135
)

All amounts reclassified from AOCI related to settlement (gains) losses on foreign currency forward contracts designated as cash flow hedges impacted research and development on the Condensed Consolidated Statements of Operations. All amounts reclassified from AOCI related to settlement (gains) losses on forward starting interest swaps designated as cash flow hedges impacted interest and other income (loss), net on the Condensed Consolidated Statements of Operations.


(17)
 SHORT-TERM AND LONG-TERM DEBT

Term Loan due 2021

On April 25, 2016, Ciena entered into an Incremental Joinder and Amendment Agreement (the “Incremental Term Loan Credit Agreement”) that amends the Credit Agreement (the "Term Loan Credit Agreement"), dated July 15, 2014. The

23



Incremental Term Loan Credit Agreement provides for a new tranche of senior secured term loans under the Term Loan Credit Agreement in an aggregate principal amount of $250 million (the “2021 Term Loan”). The proceeds of approximately $246.1 million, net of fees and expenses, will initially supplement cash on the balance sheet and are expected to provide additional liquidity to contribute, in part, to the repayment of the outstanding principal amount owing under Ciena’s 0.875% senior convertible notes due June 15, 2017.

The 2021 Term Loan will, among other things:

mature on April 25, 2021;
amortize in equal quarterly installments in aggregate amounts of $0.6 million (equal to 0.25% of the original principal amount), with the balance payable at maturity;
be subject to mandatory prepayment on the same basis as Ciena’s existing 2019 Term Loan under the Term Loan Credit Agreement;
bear interest, at Ciena’s election, at a per annum rate equal to (a) LIBOR (subject to a floor of 0.75%) plus a margin ranging from 3.25% to 3.50%, or (b) a base rate (subject to a floor of 1.75%) plus a margin ranging from 2.25% to 2.50%, in each case, with the actual margin determined according to Ciena’s total net leverage ratio;
be repayable at any time at Ciena's election, provided that repayment of the 2021 Term Loan with proceeds of certain indebtedness prior to October 25, 2016 shall require a prepayment premium of 1% of the aggregate principal amount of such prepayment; and
except as described above or otherwise set forth in the Incremental Term Loan Credit Agreement, have identical terms as the existing 2019 Term Loan under the Term Loan Credit Agreement.

Except as amended by the Incremental Term Loan Credit Agreement, the remaining terms of the Term Loan Credit Agreement remain in full force and effect.

The principal balance, unamortized discount and net carrying amount of the 2021 Term Loan were as follows as of July 31, 2016 (in thousands):
 
 
Principal Balance
 
Unamortized Discount
 
Net Carrying Amount
Term Loan Payable due April 25, 2021
 
$
249,375

 
$
1,183

 
$
248,192


The following table sets forth the carrying value and the estimated fair value of the 2021 Term Loan (in thousands):
 
 
July 31, 2016
 
 
Carrying Value
 
Fair Value(2)
Term Loan Payable due April 25, 2021(1)
 
$
248,192

 
$
251,557


(1)
Includes unamortized bond discount.
(2)
The 2021 Term Loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its 2021 Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities.

Term Loan due 2019

On July 15, 2014, Ciena entered into the Term Loan Credit Agreement providing for senior secured term loans in an aggregate principal amount of $250 million (the “2019 Term Loan”) with a maturity date of July 15, 2019. The 2019 Term Loan requires Ciena to make installment payments of approximately $0.6 million on a quarterly basis. The principal balance, unamortized discount and net carrying amount of the 2019 Term Loan were as follows as of July 31, 2016 (in thousands):
 
 
Principal Balance
 
Unamortized Discount
 
Net Carrying Amount
Term Loan Payable due July 15, 2019
 
$
245,000

 
$
856

 
$
244,144


The following table sets forth the carrying value and the estimated fair value of the 2019 Term Loan (in thousands):

24



 
 
July 31, 2016
 
 
Carrying Value
 
Fair Value(2)
Term Loan Payable due July 15, 2019(1)
 
$
244,144

 
$
247,144


(1)
Includes unamortized bond discount.
(2)
The 2019 Term Loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its 2019 Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities.

Outstanding Convertible Notes Payable
During the first nine months of fiscal 2016, Ciena entered into certain private transactions to repurchase $43.5 million of the outstanding principal amount of its 0.875% Convertible Senior Notes due June 15, 2017, for cash purchase prices slightly below par. See Note 23 below for information regarding a repurchase transaction in the fourth quarter of fiscal 2016.

The principal balance, unamortized discount and net carrying amount of the liability and equity components of Ciena's 4.0% Convertible Senior Notes due December 15, 2020 are as follows as of July 31, 2016:
 
Liability Component
 
Equity Component
 
Principal Balance
 
Unamortized Discount
 
Net Carrying Amount
 
Net Carrying Amount
4.0% Convertible Senior Notes due December 15, 2020
$
200,315

 
$
11,967

 
$
188,348

 
$
43,131


The following table sets forth, in thousands, the carrying value and the estimated fair value of Ciena’s outstanding issues of convertible notes as of July 31, 2016:
 
 
July 31, 2016
 
 
Carrying Value
 
Fair Value(1)
0.875% Convertible Senior Notes due June 15, 2017
 
$
450,465

 
$
449,339

3.75% Convertible Senior Notes due October 15, 2018
 
350,000

 
416,938

4.0% Convertible Senior Notes due December 15, 2020 (2)
 
188,348

 
239,072

 
 
$
988,813

 
$
1,105,349



(1)
The convertible notes are categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its outstanding convertible notes using a market approach based upon observable inputs, such as current market transactions involving comparable securities.
(2)
Includes unamortized discount and accretion of principal.


(18)
ABL CREDIT FACILITY
Ciena Corporation and certain of its subsidiaries are parties to a senior secured asset-based revolving credit facility (the “ABL Credit Facility”). Ciena principally uses the ABL Credit Facility to support the issuance of letters of credit that arise in the ordinary course of its business and thereby to reduce its use of cash required to collateralize these instruments.

 On January 8, 2016, Ciena amended the ABL Credit Facility to, among other things:

increase the total commitment from $200 million to $250 million, of which $200 million is available for issuances of letters of credit;
extend the maturity date from December 31, 2016 to December 31, 2020, provided an earlier maturity date would apply in the event that Ciena and its subsidiaries are unable to satisfy a minimum liquidity test 90 days prior to the maturity date of any debt equal to $100 million or greater;

25



reduce the minimum aggregate amount of unrestricted cash and cash equivalents that Ciena and its domestic subsidiaries are required to maintain at all times from $150 million to $100 million; and
reduce the interest rate by 0.25% on borrowings to either (a) LIBOR plus a margin ranging from 1.25% to 1.75% (instead of the previous 1.50% to 2.0%) or (b) a base rate plus a margin ranging from 0.25% to 0.75% (instead of the previous 0.50% to 1.0%), in each case with the actual margin determined according to the Ciena’s utilization of the facility.
As of July 31, 2016, letters of credit totaling $69.0 million were collateralized by the ABL Credit Facility. There were no borrowings outstanding under the ABL Credit Facility as of July 31, 2016.

(19)
 EARNINGS (LOSS) PER SHARE CALCULATION
The following table (in thousands except per share amounts) is a reconciliation of the numerator and denominator of the basic net income per common share (“Basic EPS”) and the diluted net income per potential common share (“Diluted EPS”). Basic EPS is computed using the weighted average number of common shares outstanding. Diluted EPS is computed using the weighted average number of the following, in each case, to the extent the effect is not anti-dilutive: (i) common shares outstanding, (ii) shares issuable upon vesting of restricted stock units, (iii) shares issuable under Ciena’s employee stock purchase plan and upon exercise of outstanding stock options, using the treasury stock method, and (iv) shares underlying Ciena’s outstanding convertible notes.

 
Quarter Ended July 31,
 
Nine Months Ended July 31,
Numerator
2016
 
2015
 
2016
 
2015
Net income
$
33,546

 
$
23,625

 
$
35,997

 
$
25,499

Add: Interest expense associated with 0.875% Convertible Senior Notes due 2017
1,326

 
1,384

 

 

Add: Interest expense associated with 3.75% convertible senior notes due 2018
3,572

 

 

 

Net income used to calculate Diluted EPS
$
38,444

 
$
25,009

 
$
35,997

 
$
25,499


 
Quarter Ended July 31,
 
Nine Months Ended July 31,
Denominator
2016
 
2015
 
2016
 
2015
Basic weighted average shares outstanding
138,881

 
118,413

 
137,835

 
113,189

Add: Shares underlying outstanding stock options and restricted stock units and issuable under employee stock purchase plan
895

 
1,712

 
1,218

 
1,360

Add: Shares underlying 0.875% Convertible Senior Notes due 2017
12,217

 
13,108

 

 

Add: Shares underlying 3.75% convertible senior notes due 2018
17,356

 

 

 

Dilutive weighted average shares outstanding
169,349

 
133,233

 
139,053

 
114,549


 
Quarter Ended July 31,
 
Nine Months Ended July 31,
EPS
2016
 
2015
 
2016
 
2015
Basic EPS
$
0.24

 
$
0.20

 
$
0.26

 
$
0.23

Diluted EPS
$
0.23

 
$
0.19

 
$
0.26

 
$
0.22


The following table summarizes the weighted average shares excluded from the calculation of the denominator for Diluted EPS due to their anti-dilutive effect for the periods indicated (in thousands):

26



 
Quarter Ended July 31,
 
Nine Months Ended July 31,
 
2016
 
2015
 
2016
 
2015
Shares underlying stock options and restricted stock units
2,082

 
755

 
2,089

 
1,534

4.0% Convertible Senior Notes due March 15, 2015

 

 

 
4,515

0.875% Convertible Senior Notes due June 15, 2017

 

 
12,571

 
13,108

3.75% Convertible Senior Notes due October 15, 2018

 
17,356

 
17,356

 
17,356

4.0% Convertible Senior Notes due December 15, 2020
9,198

 
9,198

 
9,198

 
9,198

Total shares excluded due to anti-dilutive effect
11,280

 
27,309

 
41,214

 
45,711


(20)
SHARE-BASED COMPENSATION EXPENSE
Ciena has outstanding equity awards issued under its 2008 Omnibus Incentive Plan, as well as certain legacy equity plans and equity plans assumed as a result of previous acquisitions. In connection with its acquisition of Cyan during the fourth quarter of fiscal 2015, Ciena assumed the Cyan, Inc. 2006 Stock Plan and Cyan, Inc. 2013 Equity Incentive Plan and exchanged Cyan stock options and unvested restricted stock unit awards outstanding thereunder at closing for options to acquire approximately 2.4 million shares of Ciena common stock and 1.0 million Ciena restricted stock units. Ciena grants equity awards under its 2008 Omnibus Incentive Plan (the "2008 Plan") and makes shares of its common stock available for purchase under its Amended and Restated Employee Stock Purchase Plan (the “ESPP”). These plans were approved by stockholders and are described below.
2008 Plan
The 2008 Plan authorizes the issuance of awards including stock options, restricted stock units (RSUs), restricted stock, unrestricted stock, stock appreciation rights (SARs) and other equity and/or cash performance incentive awards to employees, directors and consultants of Ciena. Subject to certain restrictions, the Compensation Committee of the Board of Directors has broad discretion to establish the terms and conditions for awards under the 2008 Plan, including the number of shares, vesting conditions, and the required service or performance criteria. Options and SARs have a maximum term of ten years, and their exercise price may not be less than 100% of fair market value on the date of grant. Repricing of stock options and SARs is prohibited without stockholder approval. Certain change in control transactions may cause awards granted under the 2008 Plan to vest, unless the awards are continued or substituted for in connection with the transaction. The total number of shares authorized for issuance under the 2008 Plan is 25.1 million shares. As of July 31, 2016, approximately 3.7 million shares remained available for issuance under the 2008 Plan.
     Stock Options
Outstanding stock option awards to employees are generally subject to service-based vesting conditions and vest incrementally over a four-year period. The following table is a summary of Ciena’s stock option activity for the period indicated (shares in thousands):

 
Shares Underlying
Options
Outstanding
 
Weighted
Average
Exercise Price
Balance at October 31, 2015
2,293

 
$
24.45

Exercised
(471
)
 
10.57

Canceled
(304
)
 
38.46

Balance at July 31, 2016
1,518

 
$
25.95


The total intrinsic value of options exercised during the first nine months of fiscal 2016 and fiscal 2015 was $4.6 million and $1.8 million, respectively. Ciena did not grant any stock options during the first nine months of fiscal 2016 or fiscal 2015.
The following table summarizes information with respect to stock options outstanding at July 31, 2016, based on Ciena’s closing stock price on the last trading day of Ciena’s third fiscal quarter of 2016 (shares and intrinsic value in thousands):


27



 
 
 
 
 
 
Options Outstanding at
 
Vested Options at
 
 
 
 
 
 
July 31, 2016
 
July 31, 2016
 
 
 
 
 
 
Number
 
Weighted
Average
Remaining
 
Weighted
 
 
 
Number
 
Weighted
Average
Remaining
 
Weighted
 
 
Range of
 
of
 
Contractual
 
Average
 
Aggregate
 
of
 
Contractual
 
Average
 
Aggregate
Exercise
 
Underlying
 
Life
 
Exercise
 
Intrinsic
 
Underlying
 
Life
 
Exercise
 
Intrinsic
Price
 
Shares
 
(Years)
 
Price
 
Value
 
Shares
 
(Years)
 
Price
 
Value
$
0.05

 

 
$
11.16

 
190

 
2.72
 
$
6.05

 
$
2,490

 
188

 
2.68
 
$
6.01

 
$
2,476

$
11.34

 

 
$
17.24

 
355

 
5.25
 
13.34

 
2,080

 
330

 
5.09
 
13.22

 
1,967

$
17.50

 

 
$
30.52

 
393

 
1.50
 
26.58

 
38

 
372

 
1.15
 
27.02

 
19

$
31.93

 

 
$
37.10

 
331

 
2.55
 
35.18

 

 
321

 
2.43
 
35.16

 

$
37.82

 

 
$
55.63

 
249

 
4.99
 
45.81

 

 
211

 
4.66
 
45.83