936395--12/22/2010--CIENA

related topics

{system, service, information}

{customer, product, revenue}

{acquisition, growth, future}

{product, market, service}

{operation, international, foreign}

{property, intellectual, protect}

{regulation, government, change}

{condition, economic, financial}

{personnel, key, retain}

{tax, income, asset}

{control, financial, internal}

{stock, price, operating}

{stock, price, share}

{competitive, industry, competition}

{cost, operation, labor}

{cost, regulation, environmental}

We are relying on an affiliate of Nortel for the performance of certain critical business support services during a transition period following the closing of the MEN Acquisition and there can be no assurance that such services will be performed timely and effectively. The MEN Acquisition may expose us to significant unanticipated liabilities that could adversely affect our business and results of operations. The MEN Acquisition may cause dilution to our earnings per share, which may harm the market price of our common stock. The complexity of the integration and transition associated with the MEN Acquisition, together with Ciena s increased scale and global presence, may affect our internal control over financial reporting and our ability to effectively and timely report our financial results. Risks related to our business and operations Our business and operating results could be adversely affected by unfavorable macroeconomic and market conditions and reductions in the level of capital expenditure by our largest customers in response to these conditions. A small number of communications service providers account for a significant portion of our revenue. The loss of any of these customers, or a significant reduction in their spending, would have a material adverse effect on our business and results of operations. Our revenue and operating results can fluctuate unpredictably from quarter to quarter. We face intense competition that could hurt our sales and results of operations. Our reliance upon third party manufacturers exposes us to risks that could negatively affect our business and operations. Investment of research and development resources in technologies for which there is not a matching market opportunity, or failure to sufficiently or timely invest in technologies for which there is market demand, would adversely affect our revenue and profitability. Product performance problems could damage our business reputation and negatively affect our results of operations. Network equipment sales to large communications service providers often involve lengthy sales cycles and protracted contract negotiations and may require us to assume terms or conditions that negatively affect our pricing, payment terms and the timing of revenue recognition. Difficulties with third party component suppliers, including sole and limited source suppliers, could increase our costs and harm our business and customer relationships. We may not be successful in selling our products into new markets and developing and managing new sales channels. We may experience delays in the development of our products that may negatively affect our competitive position and business. We may be required to write off significant amounts of inventory as a result of our inventory purchase practices, the convergence of our product lines or unfavorable macroeconomic or industry conditions. Restructuring activities could disrupt our business and affect our results of operations. Our failure to manage effectively our relationships with third party service partners could adversely impact our financial results and relationship with customers. Our intellectual property rights may be difficult and costly to enforce. We may incur significant costs in response to claims by others that we infringe their intellectual property rights. Our international operations could expose us to additional risks and expense and adversely affect our results of operations. Our use and reliance upon development resources in India may expose us to unanticipated costs or liabilities. We may be exposed to unanticipated risks and additional obligations in connection with our resale of complementary products or technology of other companies. Our exposure to the credit risks of our customers and resellers may make it difficult to collect receivables and could adversely affect our revenue and operating results. If we are unable to attract and retain qualified personnel, we may be unable to manage our business effectively. We may be adversely affected by fluctuations in currency exchange rates. Our products incorporate software and other technology under license from third parties and our business would be adversely affected if this technology was no longer available to us on commercially reasonable terms. Our business is dependent upon the proper functioning of our internal business processes and information systems and modifications may disrupt our business, processes and internal controls. Strategic acquisitions and investments may expose us to increased costs and unexpected liabilities. Changes in government regulation affecting the communications industry and the businesses of our customers could harm our prospects and operating results. Governmental regulations affecting the use, import or export of products could negatively affect our revenue. Governmental regulations related to the environment and potential climate change, could adversely affect our business and operating results. We may be required to write down long-lived assets and these impairment charges would adversely affect our operating results. Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business, operating results and stock price.

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936395--12/22/2010--CIENA_CORP