936395--12/27/2007--CIENA

related topics

{customer, product, revenue}

{system, service, information}

{product, market, service}

{operation, international, foreign}

{acquisition, growth, future}

{stock, price, operating}

{loan, real, estate}

{property, intellectual, protect}

{tax, income, asset}

{personnel, key, retain}

{debt, indebtedness, cash}

{control, financial, internal}

{regulation, government, change}

{cost, operation, labor}

{condition, economic, financial}

Our revenue and operating results can fluctuate unpredictably from quarter to quarter. Our gross margin may fluctuate from quarter to quarter which may adversely affect our level of profitability. 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. 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. We may be exposed to unanticipated risks and additional obligations in connection with our resale of complementary products or technology of other companies. Product performance problems could damage our business reputation and negatively affect our results of operations. 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 and our supplier transitions. Shortages in component supply or manufacturing capacity could increase our costs, adversely affect our results of operations and constrain our ability to grow our business. 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 and enhancement of our products that may negatively affect our competitive position and business. We must manage our relationships with contract manufacturers effectively to ensure that our manufacturing and production requirements are met. We depend on sole and limited source suppliers for some of our product components and the loss of a source, or a lack of availability of key components, could increase our costs and harm our customer relationships. Our failure to manage our relationships with service delivery partners effectively could adversely impact our financial results and relationship with customers. We may incur significant costs and our competitive position may suffer as a result of our efforts to protect and enforce our intellectual property rights or respond to claims of infringement from others. Our international operations could expose us to additional risks and result in increased operating expense. Our use and reliance upon development resources in India may expose us to unanticipated costs or liabilities. Our exposure to the credit risks of our customers and resellers may make it difficult to collect receivables and could adversely affect our operating results and financial condition. Efforts to restructure our operations and align our resources with market opportunities could disrupt our business and affect our results of operations. 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. Strategic acquisitions and investments may expose us to increased costs and unexpected liabilities. Changes in government regulation could lead our customers to reduce investment in their communications networks which would reduce the size of our market and could adversely affect our business. The investment of our substantial cash balance and our investments in marketable debt securities are subject to risks which may cause losses and affect the liquidity of these investments. We may be required to take further write-downs of goodwill and other intangible assets. Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business, operating results and stock price. Obligations associated with our outstanding indebtedness on our convertible notes may adversely affect our business.

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936395--12/27/2007--CIENA_CORP