Operating Segments

3 Months Ended

Sep. 29, 2012

Operating Segments

Operating Segments

Note 17. Operating Segments

The Company evaluates its reportable segments in accordance with the authoritative guidance on segment reporting. The Company’s Chief Executive Officer, Thomas Waechter, is the Company’s Chief Operating Decision Maker (“CODM”) pursuant to the guidance. The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue, and operating results.

The Company is a leading provider of communications test and measurement solutions and optical products for telecommunications service providers, cable operators, enterprises and network equipment manufacturers. JDSU’s diverse technology portfolio also fights counterfeiting and enables commercial lasers for a range of manufacturing applications.

Effective July 1, 2012, the reporting structure of the previous AOT business segment was reorganized and its previous reporting units, which consisted of COPG, Flex and ASG (excluding the Hologram Business), were merged into the new OSP business segment replacing AOT.The Hologram Business was previously presented within the AOT business segment; however, because it is presented as discontinued operations for financial reporting purposes as of September 29, 2012, it has been excluded from the segment results below.

The major segments the Company serves are:

(i) Communications Test and Measurement Business Segment:

The CommTest segment supplies instruments, software, and services to enable the design, deployment, and maintenance of communication equipment and networks as well as to ensure the quality of services delivered to the end customer. These solutions speed time-to-revenue by accelerating the deployment of new products and services, lower operating expenses, and improve network performance and reliability. Included in the product portfolio are test tools, platforms, software, and services for wireless and fixed networks.

(ii) Communications and Commercial Optical Products Business Segment:

The CCOP segment provides components, modules, subsystems, and solutions used by communications equipment providers for telecommunications and enterprise data communications. These products enable the transmission of video, audio, and text data over high-capacity, fiber-optic cables. The product portfolio includes transmitters, receivers, amplifiers, ROADMs, optical transceivers, multiplexers and demultiplexers, switches, optical-performance monitors and couplers, splitters, and circulators.

This segment also provides a broad laser portfolio that addresses the needs of OEM clients for applications such as micromachining, materials processing, bioinstrumentation, consumer electronics, graphics, medical/dental, and optical pumping. JDSU products include diode, direct-diode, diode-pumped solid-state, fiber, and gas lasers.

(iii) Optical Security and Performance Products Business Segment:

The OSP segment provides innovative optical security solutions with a strategic focus on serving the anti-counterfeiting market through advanced security pigments, thread substrates and printed features for the currency, pharmaceutical and consumer electronic segments. OSP also provides thin-film coating solutions for 3D and gesture recognition applications.

The accounting policies of the reportable segments are the same as those described in the Company’s Annual Report on Form 10-K for the year ended June 30, 2012. The Company evaluates segment performance based on operating income (loss) excluding certain infrequent or unusual items.

The amounts shown as Corporate consist of certain unallocated corporate-level operating expenses. In addition, the Company does not allocate stock-based compensation, restructuring and related charges, or non-operating income and expenses to its segments as highlighted in the table below.

Information on reportable segments is as follows (in millions):

	Three Months Ended
	September 29,			October 1,
	2012			2011
Net revenue:
Communications Test and Measurement	$	169.5		$	185.2
Communications and Commercial Optical Products	194.9			180.3
Optical Security and Performance Products	56.5			50.6
Deferred revenue related to purchase accounting adjustment	—			(0.3		)
Net revenue	$	420.9		$	415.8
Operating income (loss):
Communications Test and Measurement	$	16.8		$	24.1
Communications and Commercial Optical Products	23.8			25.6
Optical Security and Performance Products	21.2			17.7
Corporate	(23.1		)	(21.0		)
Total segment operating income	38.7			46.4
Unallocated amounts:
Stock-based compensation	(12.6		)	(11.5		)
Acquisition-related charges and amortization of intangibles	(21.4		)	(19.7		)
Loss on disposal of long-lived assets	(1.3		)	(0.5		)
Restructuring and related charges	(2.7		)	(1.5		)
Realignment and other charges	(0.6		)	(7.8		)
Interest and other income	(0.5		)	(0.1		)
Interest expense	(6.1		)	(6.6		)
Gain on sale of investments	0.1			1.1
Loss from continuing operations before income taxes	$	(6.4	)	$	(0.2	)