report on JDS Uniphase

1. 18 August 2011
Americas/United States
Equity Research
Optical Components
JDS Uniphase Corp. (JDSU)
SMALL & MID CAP RESEARCH
Too Soon to Turn Positive
■ Bottom line: JDSU appears to be late cycle; we wait for more positive
channel checks to turn constructive on the stock. JDSU’s June quarter
results showed the first q/q decline in what we see as a 2-3 quarter
correction in optical components & CommsTest markets. Despite the stock’s
big decline we wait for more positive channel checks to turn constructive on
the stock. C11 EPS goes from $0.92 to $0.80 & C12 from $1.03 to $0.76; TP
goes from $15.50 to $11.50 based on 15x our C12 EPS.
■ FQ4 in line; FQ1 guidance below consensus: FQ4 sales of $472.4m
(+3.7% q/q) beat consensus of $466m (+2.7% q/q) & EPS of $0.23 matched
Rating NEUTRAL* [V] consensus. FQ1 guidance of $400-425m revs (-12.7% q/q at mid-pt) &
Price (17 Aug 11, US$) 11.70
Target price (US$) (from 15.50) 11.50¹ implied EPS of $0.13 were well below consensus owing to weaker revs. &
52-week price range 28.16 - 9.19 OpMgn guidance in the CommTest & optical components businesses.
Market cap. (US$ m) 2,702.75
■ Good: Revenue in the CommsTest (+11.7% q/q) & AOT (+3% q/q)
*Stock ratings are relative to the relevant country benchmark.
¹Target price is for 12 months. segments, and OpMgn in the AOT segment beat our model. Revenues in
[V] = Stock considered volatile (see Disclosure Appendix). the commercial laser business were +13% q/q. JDSU recognized first
Research Analysts
revenue in its KW fiber laser product. JDSU announced a tunable SFP+ (to
William Stein, CFA
offset 2nd sourcing in the tunable XFP portfolio), and established plans to
build an LCOS-based WSS (to compete with FNSR). Importantly, bookings
in the optical components business rebounded in August.
Rahul Chadha
■ Bad: Overall GPM was 150 bps below our ests, owing to weaker mix in
optical components. OpMgn in the CommTest & CCOP segments were
below our model. Key optical products revs were weak (ROADMs -24% q/q,
Tunable XFPs -6%). Optical components b/b was <1.0. Overall revs & OPM
guidance was well below our model owing to CCOP & CommTest shortfalls.
■ Neutral / positive for FNSR: JDSU’s uptick in optical components orders in
August may prove positive to FNSR’s October guidance on 9/1.
Financial and valuation metrics
Year 06/10A 06/11E 06/12E 06/13E
EPS - (Excl. ESO) (US$) 0.41 0.93 0.68 0.83
EPS (CS adj.) (US$) 0.41 0.93 0.68 0.83
Prev. EPS (CS adj.) (US$) — — 0.97 1.06
P/E (CS adj., x) 28.4 12.5 17.2 14.0
P/E rel. (CS adj., %) 213.5 110.1 169.5 154.6
Revenue (US$ m) 1,373.4 1,816.2 1,725.3 1,820.2
EBITDA (US$ m) 155.7 296.4 263.3 306.8
Net debt (US$ m) -333 -443 -605 -767
OCFPS (US$) 0.53 0.89 1.09 1.06
P/OCF (x) 18.4 18.7 10.7 11.1
Source: Company data, Credit 231.00 Price/sales(x) 1.49
S i
BV/share ti t
(current, US$) 4.4 P/BVPS (x) 2.7
Net debt (current, US$ m) -419.4 Dividend (06/10A, US$) —
Dividend yield (%) —
Source: Company data, Credit Suisse estimates.
DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, INFORMATION ON
TRADE ALERTS, ANALYST MODEL PORTFOLIOS AND THE STATUS OF NON-U.S ANALYSTS. U.S. Disclosure:
Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be
aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this
report as only a single factor in making their investment decision.

2. 18 August 2011
Optical Component Data Points Continue to Be
Mixed
We’ve recently seen several data points that could be used to argue both sides of the
optical debate. Ultimately we do not see enough evidence of an end to the demand pause;
as a result, we remain Neutral on the optical components companies (JDSU and FNSR)
today, and wait for our channel checks to turn more positive before becoming constructive.
Key points include the following.
■ Infonetics suggests that optical systems demand rebounded in Q2, most
notably at a very important customer, Huawei. Infonetics recently reported that
global optical equipment spending was +12.8% q/q in 2Q driven by a surge in
spending by two major Chinese OEMs: Huawei & ZTE, & that carrier capex spend
ramped up in China but remained healthy in North America. Infonetics noted that
ROADM spending was +9.2% q/q & 40G coherent shipments continue to do well,
highlighting that the excess inventory has burned off. These comments suggest that
Huawei, a critical customer in the optical supply chain, is ordering components again.
While this data is clearly positive, what’s not clear is the timing of the benefit to the
component vendors. If the revenue relates to shipments made in prior quarters, then
the component companies may have seen this benefit months ago; it’s just not clear.
■ FN noted a revenue upside at the end of the June quarter. FN, an optical
components contract manufacturer that offers a broad read on optical component
demand, posted FQ4 (Jun) revs of $190m (-2.3% q/q) about 7% above consensus of
$177m (-9.2% q/q), & guided FQ1 (Sep) revs to be $175.5m (-7.8% q/q), slightly below
consensus. The company saw “drop-in” orders in the last 2 weeks of the June quarter.
To us this offers a reasonable signal that inventory is relatively lean and component
demand is tracking closer to end market demand. On the negative side, the
company’s outlook was slightly below consensus, and did not get any special haircut
owing to the weakening macro environment. So, the data from FN are not conclusive
despite the revenue upside in the June quarter.
■ JDSU’s booking trends. JDSU had “spotty” bookings trends in April, May, June, and
July, with the bookings trend turning positive in August month to date. This could
suggest JDSU has seen the worst of the bookings, but even by management’s own
acknowledgement, two weeks of better orders does not make a trend.
■ Channel checks. Ultimately we view these as the most reliable source of information
on what’s happening in the supply chain. While the tone and content of the discussion
could change very quickly, the last round of checks we’ve done does not show any
meaningful change in the demand trend, which our checks say remains in a flat to
declining trajectory.
JDS Uniphase Corp. (JDSU) 2

3. 18 August 2011
FQ4 Results
In Exhibit 1 we provide a snapshot of JDSU’s FQ4 results and FQ1 guidance.
Exhibit 1: Snapshot
in millions, unless otherwise stated
JDSU 3QF11 4QF11 1QF12
$ millions, except EPS
Actual Actual CS Consensus Guidance CS (new) CS (old) Consensus Guidance
Revenue - non GAAP $ 455.4 $ 472.3 $466.1 $466 $445-475 $ 415.5 $ 454.5 $472 $400-425
change q/q -4.6% 3.7% 2.4% 2.4% -12.0% -2.5% 1.3%
Gross Margin 47.6% 46.7% 48.2% 43.4% 48.0%
Op. Margin 12.1% 12.3% 12.6% 11.5-13.5% 8.3% 12.6% 7.5-9.5%
Oper. EPS, with options exp. $0.22 $0.23 $0.22 $0.23 $0.13 $0.21 $0.24 $0.13 (Implied)
Receivable Days 66.3 63.7 66.3 63.7 66.3
Inventory Days 61.4 60.8 61.4 60.8 61.4
Payable Days 57.9 51.7 57.9 51.7 57.9
Cash Cycle Days 69.8 72.9 69.8 72.9 69.8
Cash from operations $ 52.9 $ 57.0 $ 57.7 $ 89.0 $ 74.2
Free cash flow $ 18.8 $ 26.1 $ 34.4 $ 64.1 $ 53.8
Source: Company data, Credit Suisse estimates; FactSet
Segment performance
In Exhibit 2 we provide a snapshot of JDSU’s FQ4 segment results and our FQ1
estimates.
JDS Uniphase Corp. (JDSU) 3

4. JDS Uniphase Corp. (JDSU)
Exhibit 2: Segment Performance
in millions, unless otherwise stated
JDSU 3QF11 4QF11 1QF12 COMMENTS
$ millions
Actual Actual CS Guidance CS (new) CS (old) Guidance
Communications T&M
Sales $ 189.2 $ 211.3 $ 208.1 Up 6-13% $ 181.7 $ 199.8 Down 12-15% FQ4: Revenues were up 11.7% q/q & up 13.5% y/y. Americas was up q/q &
change q/q -18.2% 11.7% 10.0% -14.0% -4.0% EMEA & Asia Pacific were weak. Book-to-bill was ~1.0. OPM was below our
model & towards the low end of guidance.
Operating Profit $ 22.6 $ 30.4 $ 31.4 $ 16.6 $ 29.7
Op. Margin 11.9% 14.4% 15.1% 14-17% 9.1% 14.9% 8.5-10% FQ1: Mgmt expects revenues to be down 12-15%, below normal seasonality.
CCOP
FQ4: Revenues were down 3.4% q/q & up 28.6% y/y. Optical communication
Sales $ 209.4 $ 202.3 $ 202.9 Down 2-4% $ 178.0 $ 196.8 Down 10-13% revenues were down 5.5% q/q (ROADMs down 24.4% q/q, Tunable XFPs
change q/q 9.6% -3.4% -3.1% -12.0% -3.0% down 6% q/q). Commercial Laser revenue were up 12.6% q/q owing to
strong demand for solid state lasers. book-to-bill in the optical components
business was <1.0 but started picking up in August.
Operating Profit $ 39.6 $ 32.2 $ 36.3 $ 24.9 $ 35.1
FQ1: Mgmt expects revenues to decline 10-13% q/q, below normal
Op. Margin 18.9% 15.9% 17.9% Down 1% q/q 14.0% 17.8% 13-15% seasonality, mostly driven by inventory correction in optical components.
(Implied 17.9%)
AOT
Sales $ 56.8 $ 58.7 $ 55.1 Down 2-4% $ 55.8 $ 57.9 Down 3-6%
FQ4: Revenues were up 3.3% q/q & up 7.5% y/y, within management's
change q/q 3.8% 3.3% -3.0% -5.0% 5.0%
expectations. Book-to-bill was >1.0.
Operating Profit $ 17.9 $ 20.0 $ 16.0 $ 17.5 $ 17.7
FQ1: Mgmt expects revenues to be down 3-6%, below normal seasonality.
Op. Margin 31.5% 34.1% 29.1% 28-30% 31.3% 30.6% 30-32%
18 August 2011
Source: Company data, Credit Suisse estimates
4

5. 18 August 2011
Valuation
Multiple Analysis
In Exhibit 3 we show a price chart with traditional support and resistance P/E bands. In
Exhibit 4, we show the stock’s historical P/E levels compared with that of the industry and
the broader S&P 500.
Exhibit 3: Price Chart Exhibit 4: P/E Multiple
$40 55
$35 50
NTM P/E Multiple
45
$30 40
Stock price
$25 35
30
$20 25
$15 20
$10 15
10
$5 5
$- -
6
7
8
9
0
1
6
7
8
9
0
1
-0
-0
-0
-0
-1
-1
l-0
l-0
l-0
l-0
l-1
l-1
l
l
l
l
l
l
Ju
Ju
Ju
Ju
Ju
Ju
Ju
Ju
Ju
Ju
Ju
Ju
Range JDSU P/E SPX P/E Comps P/E
13.9x P/E 24.5x P/E 35.0x P/E JDSU Price
Source: Credit Suisse and FactSet Source: Credit Suisse and FactSet
Sensitivity Analysis
In Exhibit 5 we provide a sensitivity analysis demonstrating how the company’s earnings
power and our target price could change if our revenue growth assumptions (and resulting
operating leverage) were slightly more bearish or bullish versus our base case view.
Exhibit 5: Target Price Sensitivity
CY12 Estimates Bear Case Base Case Bull Case
Revenue $ 1,688 $ 1,768 $ 1,852
Revenue Growth -4.9% -1.2% 2.7%
Operating Margin 9.7% 11.7% 13.6%
EPS $ 0.59 $ 0.76 $ 0.93
P/E Multiple 13.0 15.0 17.0
Implied Target Price $ 7.7 $ 11.4 $ 15.8
Source: Company data, Credit Suisse estimates
JDS Uniphase Corp. (JDSU) 5

6. JDS Uniphase Corp. (JDSU)
Exhibit 6: Income Statement
in millions, unless otherwise stated
JDS Uniphase Corp
JDSU <--Act Est--> <--Act Est--> <--Act Est-->
INCOME STATEMENT FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 CY10 CY11 CY12 CY13
1QF11 2QF11 3QF11 4QF11 1QF12 2QF12 3QF12 4QF12 1QF13 2QF13 3QF13 4QF13 1QF14 2QF14 3QF14 4QF14
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Dec-10 Dec-11 Dec-12 Dec-13
Revenue $405.2 $473.5 $454.0 $471.8 $414.5 $449.6 $420.9 $436.0 $436.6 $475.0 $445.1 $459.1 $460.0 $500.0 $468.8 $483.6 $1,363.9 $1,804.5 $1,721.0 $1,815.7 $1,912.4 $1,601.9 $1,789.9 $1,768.5 $1,864.1
Change q/q 3.7% 16.9% -4.1% 3.9% -12.2% 8.5% -6.4% 3.6% 0.1% 8.8% -6.3% 3.1% 0.2% 8.7% -6.2% 3.1%
Change y/y 36.1% 38.1% 36.6% 20.7% 2.3% -5.0% -7.3% -7.6% 5.3% 5.6% 5.7% 5.3% 5.4% 5.3% 5.3% 5.3% 5% 32% -5% 6% 5% 34% 12% -1% 5%
Revenue - non-GAAP adjustment 6.1 3.7 1.4 0.5 1.0 1.1 1.1 1.1 1.1 1.2 1.1 1.2 1.2 1.3 1.2 1.2 9.5 11.7 4.3 4.6 4.8 17.6 4.1 4.4 4.7
Revenue - non GAAP 411.3 477.2 455.4 472.3 415.5 450.8 422.0 437.1 437.7 476.2 446.2 460.2 461.1 501.3 470.0 484.8 1,373.4 1,816.2 1,725.3 1,820.2 1,917.2 1,619.5 1,794.0 1,772.9 1,868.8
Change q/q 3.3% 16.0% -4.6% 3.7% -12.0% 8.5% -6.4% 3.6% 0.1% 8.8% -6.3% 3.1% 0.2% 8.7% -6.2% 3.1%
Change y/y 37.7% 38.8% 36.8% 18.6% 1.0% -5.5% -7.3% -7.5% 5.3% 5.6% 5.7% 5.3% 5.4% 5.3% 5.3% 5.3% 6% 32% -5% 6% 5% 35% 11% -1% 5%
COGS 216.2 244.3 238.5 251.8 235.2 239.4 236.1 238.7 241.0 246.0 242.5 244.7 247.2 252.5 248.8 251.2 760.8 950.8 949.4 974.2 999.7 863.7 964.9 961.8 986.9
Gross profit 195.1 232.9 216.9 220.5 180.3 211.4 185.9 198.4 196.6 230.2 203.7 215.5 213.9 248.8 221.3 233.6 612.6 865.4 775.9 846.1 917.5 755.8 829.1 811.1 881.9
Gross Margin 47.4% 48.8% 47.6% 46.7% 43.4% 46.9% 44.0% 45.4% 44.9% 48.3% 45.7% 46.8% 46.4% 49.6% 47.1% 48.2% 44.6% 47.6% 45.0% 46.5% 47.9% 46.7% 46.2% 45.8% 47.2%
R&D - Non-GAAP 54.4 58.1 58.2 60.3 53.7 55.3 54.0 55.1 56.0 58.0 56.6 57.5 58.5 60.6 59.1 60.1 166.3 231.0 218.1 227.99 238.19 202.1 227.5 223.0 233.1
% of sales 13.2% 12.2% 12.8% 12.8% 12.9% 12.3% 12.8% 12.6% 12.8% 12.2% 12.7% 12.5% 12.7% 12.1% 12.6% 12.4%
SG&A - Non-GAAP 96.3 101.7 103.7 102.0 92.0 94.6 92.6 94.1 95.5 98.5 96.4 97.8 99.3 102.4 100.2 101.6 348.9 403.7 373.3 388.2 403.5 377.1 392.3 380.7 395.8
% of sales 23.4% 21.3% 22.8% 21.6% 22.2% 21.0% 21.9% 21.5% 21.8% 20.7% 21.6% 21.2% 21.5% 20.4% 21.3% 21.0%
Total Operating Expenses - non-GAAP 150.7 159.8 161.9 162.3 145.7 149.9 146.6 149.2 151.5 156.5 153.0 155.2 157.7 163.0 159.3 161.7 515.2 634.7 591.4 616.2 641.7 579.2 619.8 603.8 628.9
% of Sales 36.6% 33.5% 35.6% 34.4% 35.1% 33.3% 34.7% 34.1% 34.6% 32.9% 34.3% 33.7% 34.2% 32.5% 33.9% 33.4% 37.5% 34.9% 34.3% 33.9% 33.5% 35.8% 34.5% 34.1% 33.7%
Operating Income (Loss) 44.4 73.1 55.0 58.2 34.6 61.4 39.3 49.2 45.1 73.7 50.8 60.3 56.1 85.8 62.0 71.9 97.4 230.7 184.5 229.9 275.8 176.6 209.3 207.3 253.0
OPM 10.8% 15.3% 12.1% 12.3% 8.3% 13.6% 9.3% 11.3% 10.3% 15.5% 11.4% 13.1% 12.2% 17.1% 13.2% 14.8% 7.1% 12.7% 10.7% 12.6% 14.4% 10.9% 11.7% 11.7% 13.5%
Interest & other income 0.3 1.6 0.1 0.4 0.7 0.8 0.8 0.9 0.9 1.0 1.0 1.1 1.1 1.1 1.2 1.3 9.6 2.4 3.2 3.9 4.7 6.0 2.0 3.6 4.3
Interest expense (6.3) (6.4) (6.2) (6.5) (6.5) (6.6) (6.7) (6.8) (7.0) (7.1) (7.2) (7.3) (7.4) (7.5) (7.6) (7.8) (24.3) (25.4) (26.7) (28.5) (30.3) (24.8) (25.8) (27.6) (29.4)
Gain (loss) on sale of investments 3.2 - - - - - - - - - - - - - - - 13.1 3.2 - - - 16.2 - - -
Impairment of investments - - - - - - - - - - - - - - - - (1.4) - - - - (0.8) - - -
Total Interest & Other Income (Expense) - GAAP (2.8) (4.8) (6.1) (6.1) (5.8) (5.8) (5.9) (6.0) (6.0) (6.1) (6.2) (6.2) (6.3) (6.4) (6.5) (6.5) (3.0) (19.8) (23.5) (24.6) (25.7) (3.4) (23.8) (24.0) (25.1)
Total adjustments to derive non-GAAP interest 1.1 3.9 4.9 4.8 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 - 14.7 18.8 18.8 18.8 (1.9) 19.1 18.8 18.8
Total Interest & Other Income (Expense) (1.7) (0.9) (1.2) (1.3) (1.1) (1.1) (1.2) (1.3) (1.3) (1.4) (1.5) (1.5) (1.6) (1.7) (1.8) (1.8) (3.0) (5.1) (4.7) (5.8) (6.9) (5.3) (4.7) (5.2) (6.3)
Pretax Income 42.7 72.2 53.8 56.9 33.5 60.3 38.1 48.0 43.8 72.3 49.3 58.7 54.5 84.1 60.2 70.1 94.4 225.6 179.9 224.1 269.0 171.3 204.6 202.1 246.6
Pretax Margin 10.4% 15.1% 11.8% 12.0% 8.1% 13.4% 9.0% 11.0% 10.0% 15.2% 11.0% 12.8% 11.8% 16.8% 12.8% 14.5% 6.9% 12.4% 10.4% 12.3% 14.0% 10.7% 11.4% 11.4% 13.2%
Taxes (2.1) 5.2 2.8 3.0 3.4 6.0 3.8 4.8 4.4 7.2 4.9 5.9 5.5 8.4 6.0 7.0 2.5 8.9 18.0 22.4 26.9 3.2 15.2 20.2 24.7
Tax Rate -4.9% 7.2% 5.2% 5.3% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 2.6% 3.9% 10.0% 10.0% 10.0% 1.9% 7.4% 10.0% 10.0%
Income (Loss) from Discontinued Ops. - - - - - - - - - - - - - - - - (2.1) - - - - (0.8) - - -
Net Income 44.8 67.0 51.0 53.9 30.2 54.3 34.3 43.2 39.4 65.1 44.3 52.9 49.1 75.7 54.2 63.1 91.9 216.7 161.9 201.7 242.1 168.1 189.4 181.9 221.9
Net Margin 10.9% 14.0% 11.2% 11.4% 7.3% 12.0% 8.1% 9.9% 9.0% 13.7% 9.9% 11.5% 10.6% 15.1% 11.5% 13.0% 6.7% 11.9% 9.4% 11.1% 12.6% 10.5% 10.6% 10.3% 11.9%
EPS $0.20 $ 0.29 $ 0.22 $ 0.23 $0.13 $0.23 $0.14 $0.18 $0.16 $0.27 $0.18 $0.22 $0.20 $0.31 $0.22 $0.26 $0.41 $0.93 $0.68 $0.83 $0.99 $0.74 $0.80 $0.76 $0.91
Growth y/y NMF NMF NMF 57.2% -35.1% -21.7% -33.6% -21.1% 28.4% 17.9% 27.3% 20.4% 22.5% 14.4% 20.3% 17.4% 126.2% 127.9% -27.1% 22.5% 18.1% 521.8% 8.5% -5.4% 20.0%
Original Diluted Shares 227.5 229.1 235.4 235.7 236.2 237.2 238.2 239.2 240.2 241.2 242.2 243.2 244.2 245.2 246.2 247.2
Stock Split 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Diluted Shares O/S 227.5 229.1 235.4 235.7 236.2 237.2 238.2 239.2 240.2 241.2 242.2 243.2 244.2 245.2 246.2 247.2 222.9 231.9 237.7 241.7 245.7 227.3 236.1 239.7 243.7
18 August 2011
Source: Company data, Credit Suisse estimates
6

7. JDS Uniphase Corp. (JDSU)
Exhibit 7: Balance Sheet
in millions, unless otherwise stated
JDS Uniphase Corp
JDSU <--Act Est--> <--Act Est--> <--Act Est-->
BALANCE SHEET FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 CY10 CY11 CY12 CY13
1QF11 2QF11 3QF11 4QF11 1QF12 2QF12 3QF12 4QF12 1QF13 2QF13 3QF13 4QF13 1QF14 2QF14 3QF14 4QF14
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Dec-10 Dec-11 Dec-12 Dec-13
ASSETS
Cash and Cash Equivalents 370.3 408.6 407.8 395.4 459.5 488.8 545.1 577.8 616.8 652.8 718.5 760.3 807.6 851.7 927.1 977.6 340.2 395.4 577.8 760.3 977.6 408.6 488.8 652.8 851.7
Short-Term Investments 215.6 212.3 256.7 297.4 297.4 297.4 297.4 297.4 297.4 297.4 297.4 297.4 297.4 297.4 297.4 297.4 227.4 297.4 297.4 297.4 297.4 212.3 297.4 297.4 297.4
Restricted Cash 34.1 34.4 36.0 35.9 35.9 35.9 35.9 35.9 35.9 35.9 35.9 35.9 35.9 35.9 35.9 35.9 32.5 35.9 35.9 35.9 35.9 34.4 35.9 35.9 35.9
Accounts Receivable 297.0 339.2 334.5 334.0 293.4 318.3 298.0 308.7 309.1 336.2 315.1 325.0 325.6 354.0 331.9 342.3 271.8 334.0 308.7 325.0 342.3 339.2 318.3 336.2 354.0
Inventories 136.9 145.1 163.8 171.2 168.9 171.7 169.5 171.3 172.8 176.1 173.8 175.3 177.0 180.5 178.0 179.6 125.7 171.2 171.3 175.3 179.6 145.1 171.7 176.1 180.5
Income taxes recoverable 3.9 - - - - - - - - - - - - - - - 4.0 - - - - - - - -
Other Current Assets 63.3 72.6 63.9 70.2 70.2 70.2 70.2 70.2 70.2 70.2 70.2 70.2 70.2 70.2 70.2 70.2 73.0 70.2 70.2 70.2 70.2 72.6 70.2 70.2 70.2
Total Current Assets 1,121.1 1,212.2 1,262.7 1,304.1 1,325.4 1,382.4 1,416.1 1,461.2 1,502.2 1,568.7 1,610.9 1,664.1 1,713.7 1,789.7 1,840.5 1,903.1 1,074.6 1,304.1 1,461.2 1,664.1 1,903.1 1,212.2 1,382.4 1,568.7 1,789.7
PP&E - Net 205.5 214.6 231.9 248.9 254.3 252.3 249.4 247.3 245.4 245.2 243.8 243.0 242.4 243.4 243.1 243.4 183.0 248.9 247.3 243.0 243.4 214.6 252.3 245.2 243.4
Deferred income tax 3.6 - - - - - - - - - - - - - - - 3.2 - - - -
Goodwill 66.0 66.4 66.4 67.4 67.4 67.4 67.4 67.4 67.4 67.4 67.4 67.4 67.4 67.4 67.4 67.4 66.0 67.4 67.4 67.4 67.4 66.4 67.4 67.4 67.4
Intangible Assets - Net 339.5 316.4 296.7 275.4 253.4 231.4 209.4 187.4 165.4 143.4 121.4 99.4 77.4 55.4 33.4 11.4 357.4 275.4 187.4 99.4 11.4 316.4 231.4 143.4 55.4
Investments 4.9 4.8 4.6 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 5.1 2.9 2.9 2.9 2.9 4.8 2.9 2.9 2.9
Other Assets 14.7 16.3 51.7 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 14.3 52.0 52.0 52.0 52.0 16.3 52.0 52.0 52.0
Total Non-Current Assets 634.2 618.5 651.3 646.6 630.0 606.0 581.1 557.0 533.1 510.9 487.5 464.7 442.1 421.1 398.8 377.1 629.0 646.6 557.0 464.7 377.1 618.5 606.0 510.9 421.1
TOTAL ASSETS 1,755.3 1,830.7 1,914.0 1,950.7 1,955.4 1,988.4 1,997.2 2,018.2 2,035.3 2,079.6 2,098.3 2,128.9 2,155.8 2,210.8 2,239.3 2,280.2 1,703.6 1,950.7 2,018.2 2,128.9 2,280.2 1,830.7 1,988.4 2,079.6 2,210.8
LIABILITIES
Accounts Payable 140.6 147.3 154.4 145.4 143.5 145.8 144.0 145.5 146.8 149.6 147.6 148.9 150.3 153.3 151.2 152.6 137.4 145.4 145.5 148.9 152.6 147.3 145.8 149.6 153.3
Current Portion of LTD - - - - - - - - - - - - - - - - 0.2 - - - - - - - -
Accrued payroll and related exps 56.8 81.9 59.9 76.7 76.7 76.7 76.7 76.7 76.7 76.7 76.7 76.7 76.7 76.7 76.7 76.7 62.9 76.7 76.7 76.7 76.7
Taxes Payable 20.6 22.9 21.2 21.5 21.5 21.5 21.5 21.5 21.5 21.5 21.5 21.5 21.5 21.5 21.5 21.5 19.8 21.5 21.5 21.5 21.5 22.9 21.5 21.5 21.5
Deferred Taxes - - - - - - - - - - - - - - - - 2.1 - - - -
Restructuring accrual - - - - - - - - - - - - - - - - 7.1 - - - -
Warranty accrual - - - - - - - - - - - - - - - - 7.3 - - - -
Other 149.6 161.9 170.9 175.0 175.0 175.0 175.0 175.0 175.0 175.0 175.0 175.0 175.0 175.0 175.0 175.0 114.1 175.0 175.0 175.0 175.0 161.9 175.0 175.0 175.0
Total Current Liabilities 367.6 414.0 406.4 418.6 416.7 419.0 417.2 418.7 420.0 422.8 420.8 422.1 423.5 426.5 424.4 425.8 350.9 418.6 418.7 422.1 414.0 419.0 422.8 420.8
Long Term Debt 271.6 276.3 281.1 285.8 290.8 295.8 300.8 305.8 310.8 315.8 320.8 325.8 330.8 335.8 340.8 345.8 267.1 285.8 305.8 325.8 345.8 276.3 295.8 315.8 335.8
Other Non-Current Liabilities 193.4 183.2 189.7 180.9 180.9 180.9 180.9 180.9 180.9 180.9 180.9 180.9 180.9 180.9 180.9 180.9 176.9 180.9 180.9 180.9 180.9 183.2 180.9 180.9 180.9
Total Non-Current Liabilities 465.0 459.5 470.8 466.7 471.7 476.7 481.7 486.7 491.7 496.7 501.7 506.7 511.7 516.7 521.7 526.7 444.0 466.7 486.7 506.7 526.7 459.5 476.7 496.7 516.7
TOTAL LIABILITIES 832.6 873.5 877.2 885.3 888.4 895.7 898.9 905.4 911.7 919.5 922.5 928.8 935.2 943.2 946.1 952.5 794.9 885.3 905.4 928.8 952.5 873.5 895.7 919.5 943.2
SHAREHOLDERS' EQUITY
Attributable to JDS 922.7 957.2 1,036.8 1,065.4 1,067.0 1,092.7 1,098.3 1,112.8 1,123.6 1,160.1 1,175.8 1,200.1 1,220.5 1,267.6 1,293.2 1,327.7 908.7 1,065.4 1,112.8 1,200.1 1,327.7
Noncontrolling Interest - - - - - - - - - - - - - - - - - - - - -
TOTAL SHAREHOLDER'S EQUITY 922.7 957.2 1,036.8 1,065.4 1,067.0 1,092.7 1,098.3 1,112.8 1,123.6 1,160.1 1,175.8 1,200.1 1,220.5 1,267.6 1,293.2 1,327.7 908.7 1,065.4 1,112.8 1,200.1 1,327.7 957.2 1,092.7 1,160.1 1,267.6
TOTAL LIABILITIES & EQUITY 1,755.3 1,830.7 1,914.0 1,950.7 1,955.4 1,988.4 1,997.2 2,018.2 2,035.3 2,079.6 2,098.3 2,128.9 2,155.8 2,210.8 2,239.3 2,280.2 1,703.6 1,950.7 2,018.2 2,128.9 2,280.2 1,830.7 1,988.4 2,079.6 2,210.8
18 August 2011
Source: Company data, Credit Suisse estimates
7

8. JDS Uniphase Corp. (JDSU)
Exhibit 8: Cash Flows
in millions, unless otherwise stated
JDS Uniphase Corp
JDSU <--Act Est--> <--Act Est--> <--Act Est-->
CASH FLOWS FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 CY10 CY11 CY12 CY13
1QF11 2QF11 3QF11 4QF11 1QF12 2QF12 3QF12 4QF12 1QF13 2QF13 3QF13 4QF13 1QF14 2QF14 3QF14 4QF14
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Dec-10 Dec-11 Dec-12 Dec-13
Cash at start of period 340.2 370.3 408.6 407.8 395.4 459.5 488.8 545.1 577.8 616.8 652.8 718.5 760.3 807.6 851.7 927.1 286.9 340.2 395.4 577.8 760.3 364.8 408.6 488.8 652.8
Operating Cash Flow
Net Income 0.1 23.6 38.6 9.3 (9.3) 14.8 (5.3) 3.7 (0.1) 25.6 4.8 13.3 9.6 36.2 14.7 23.6 (61.8) 71.6 3.8 43.6 84.0 13.3 53.4 23.8 63.9
Depreciation 14.8 16.1 16.6 18.2 19.5 19.9 19.8 19.5 19.4 19.2 19.2 19.1 19.0 19.0 19.1 19.0 58.3 65.7 78.7 76.9 76.1 59.3 74.2 77.9 76.3
Asset retirement obligations & deferred rent exps 0.2 0.2 0.2 - - - - - - - - - - - - - (7.1) 0.6 - - - (1.6) 0.2 - -
Amortization of intangible assets 22.7 22.1 22.3 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 78.4 89.1 88.0 88.0 88.0 84.9 88.3 88.0 88.0
Stock-based compensation 9.0 10.0 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9 43.1 40.8 43.6 43.6 43.6 39.0 43.6 43.6 43.6
Amortization of debt issuance costs & debt disc 4.7 4.9 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 17.9 19.6 20.0 20.0 20.0 18.7 20.0 20.0 20.0
Non-cash changes in ST investments 1.5 0.3 0.9 - - - - - - - - - - - - - 2.9 2.7 - - - 3.4 0.9 - -
Gain on disposal of fixed assets (3.2) (0.1) 0.2 - - - - - - - - - - - - - - (3.1) - - - (4.1) 0.2 - -
Loss & impairment of LT assets - - - - - - - - - - - - - - - - (1.3) - - - - (1.3) - - -
Impairment of goodwill - - - - - - - - - - - - - - - - - - - - - - - - -
Impairment of investments - - 0.2 - - - - - - - - - - - - - 1.4 0.2 - - - 0.8 0.2 - -
Activity related to equity investments - - - - - - - - - - - - - - - - (2.0) - - - - - - - -
Provision for allowance for bad debts (0.3) 0.5 0.4 - - - - - - - - - - - - - 0.6 0.6 - - - 0.6 0.4 - -
Change in A/R (19.2) (44.1) 8.4 0.5 40.6 (24.9) 20.3 (10.7) (0.4) (27.2) 21.2 (9.9) (0.6) (28.3) 22.1 (10.4) (61.4) (54.4) 25.3 (16.3) (17.3) (87.5) 24.6 (17.9) (17.7)
Change in inventory (7.7) (8.9) (15.8) (7.4) 2.3 (2.8) 2.2 (1.7) (1.6) (3.3) 2.3 (1.5) (1.7) (3.5) 2.5 (1.6) 22.2 (39.8) (0.1) (4.0) (4.3) (17.8) (23.7) (4.4) (4.4)
Change in other current assets 10.2 (5.8) (22.0) (6.3) - - - - - - - - - - - - 16.4 (23.9) - - - (3.0) (28.3) - -
Change in accs payable (3.0) 10.4 7.5 (9.0) (1.9) 2.4 (1.9) 1.5 1.3 2.8 (2.0) 1.3 1.4 3.0 (2.1) 1.4 20.8 5.9 0.1 3.4 3.7 35.4 (1.1) 3.7 3.7
Change in income taxes payable (3.6) 1.2 (2.2) 0.3 - - - - - - - - - - - - (9.5) (4.3) - - - (10.8) (1.9) - -
Change in deferred taxes, net (1.1) (0.1) 1.2 - - - - - - - - - - - - - (4.5) - - - - (3.6) 1.2 - -
Change in accrued payroll & related exps (10.0) 23.4 (25.3) 16.8 - - - - - - - - - - - - 11.7 4.9 - - - 15.7 (8.5) - -
Other 20.6 7.0 5.8 (3.3) - - - - - - - - - - - - (6.9) 30.1 - - - 18.2 2.5 - -
Net Cash Provided by Operating Activities 35.7 60.7 52.9 57.0 89.0 47.3 73.1 50.1 56.5 55.0 83.4 60.2 65.6 64.2 94.1 69.8 119.2 206.3 259.5 255.2 293.8 159.6 246.2 234.7 273.5
Investing Cash Flow
Purchase of available for sale investments (61.2) (72.0) (117.8) - - - - - - - - - - - - - (427.1) (251.0) - - - (241.4) (117.8) - -
Maturities and sales of investments 72.5 75.8 71.8 - - - - - - - - - - - - - 623.5 220.1 - - - 359.1 71.8 - -
Changes in restricted cash (1.6) 1.3 (1.7) (0.1) - - - - - - - - - - - - (21.1) (2.1) - - - (7.8) (1.8) - -
Acquisitions - - - - - - - - - - - - - - - - (207.3) - - - - (164.3) - - -
Purchases of LT investments - - - - - - - - - - - - - - - - (0.5) - - - - - - - -
Proceeds of sale of assets, net 0.6 - 0.1 - - - - - - - - - - - - - 2.0 0.7 - - - 0.2 0.1 - -
Purchase of PPE (23.3) (28.3) (34.2) (30.9) (24.9) (18.0) (16.8) (17.4) (17.5) (19.0) (17.8) (18.4) (18.4) (20.0) (18.8) (19.3) (36.9) (116.7) (77.1) (72.6) (76.5) (70.8) (108.0) (70.7) (74.6)
Other - - - - - - - - - - - - - - - - 2.0 - - - - - - - -
Net Cash Provided from Investing Activities (13.0) (23.2) (81.8) (31.0) (24.9) (18.0) (16.8) (17.4) (17.5) (19.0) (17.8) (18.4) (18.4) (20.0) (18.8) (19.3) (65.4) (149.0) (77.1) (72.6) (76.5) (125.0) (155.7) (70.7) (74.6)
Financing Cash Flow
Repurchase of convertible debt - (0.2) - - - - - - - - - - - - - - 0.0 (0.2) 0.0 0.0 0.0 (0.2) 0.0 0.0 0.0
Payments on financing obligations (1.9) (1.9) (1.9) - - - - - - - - - - - - - (8.6) (5.7) 0.0 0.0 0.0 (7.3) (1.9) 0.0 0.0
Proceeds from (Payments) financing obligation - - - - - - - - - - - - - - - - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Repurchase of common stock - - - - - - - - - - - - - - - - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Issuance of stock 5.9 2.8 28.0 - - - - - - - - - - - - - 9.6 36.7 0.0 0.0 0.0 16.1 28.0 0.0 0.0
Other - - (38.4) - - - - - - - - - - - - 0.0 (38.4) 0.0 0.0 0.0 0.0 (38.4) 0.0 0.0
Net Cash Used for Financing Activities 4.0 0.7 26.1 (38.4) - - - - - - - - - - - - 1.0 (7.6) - - - 8.6 (12.3) - -
Effect of Exchange Rates 3.4 0.1 2.0 - - - - - - - - - - - - - (1.5) 5.5 - - - 0.6 2.0 - -
Total Change in Cash 30.1 38.3 (0.8) (12.4) 64.1 29.3 56.2 32.7 39.1 36.0 65.6 41.8 47.2 44.2 75.4 50.5 53.3 55.2 182.4 182.6 217.3 43.8 80.2 164.0 198.9
Cash at End of Period 370.3 408.6 407.8 395.4 459.5 488.8 545.1 577.8 616.8 652.8 718.5 760.3 807.6 851.7 927.1 977.6 1,387.4 1,582.1 2,071.2 2,748.5 3,564.0 1,552.7 1,751.6 2,392.5 3,138.1
18 August 2011
Source: Company data, Credit Suisse estimates
8

9. JDS Uniphase Corp. (JDSU)
Exhibit 9: Segments
in millions, unless otherwise stated
JDS Uniphase Corp
JDSU <--Act Est--> <--Act Est--> <--Act Est-->
SEGMENT BREAKOUT FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 CY10 CY11 CY12 CY13
1QF11 2QF11 3QF11 4QF11 1QF12 2QF12 3QF12 4QF12 1QF13 2QF13 3QF13 4QF13 1QF14 2QF14 3QF14 4QF14
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Dec-10 Dec-11 Dec-12 Dec-13
Total Revenues $405.2 $473.5 $454.0 $471.8 $414.5 $449.6 $420.9 $436.0 $436.6 $475.0 $445.1 $459.1 $460.0 $500.0 $468.8 $483.6 $1,363.9 $1,804.5 $1,721.0 $1,815.7 $1,912.4 $1,601.9 $1,789.9 $1,768.5 $1,864.1
Change q/q 4% 17% -4% 4% -12% 8% -6% 4% 0% 9% -6% 3% 0% 9% -6% 3%
Change y/y 36% 38% 37% 21% 2% -5% -7% -8% 5% 6% 6% 5% 5% 5% 5% 5% 5% 32% -5% 6% 5% 34% 12% -1% 5%
Communications Test & Measurement
Revenues 182.8 231.4 189.2 211.3 181.7 209.0 186.0 195.3 187.5 215.6 191.9 201.5 193.4 222.4 198.0 207.9 652.2 814.7 772.0 796.4 821.7 746.1 791.2 784.4 809.2
% total 45% 49% 42% 45% 44% 46% 44% 45% 43% 45% 43% 44% 42% 44% 42% 43% 48% 45% 45% 44% 43% 47% 44% 44% 43%
Total growth q/q -2% 27% -18% 12% -14% 15% -11% 5% -4% 15% -11% 5% -4% 15% -11% 5%
Total growth y/y 27% 31% 30% 13% -1% -10% -2% -8% 3% 3% 3% 3% 3% 3% 3% 3% 7.6% 24.9% -5.2% 3.2% 3.2% 27.5% 6.0% -0.9% 3.2%
-6 to 12%
AFTER $20m
Management's Growth Guidance q/q +6 to 10% budget flush +6 to 13% Dn 12-15%
Typical Seasonal Growth q/q -4% 15% -11% 5% -4% 15% -11% 5% -4% 15% -11% 5%
Other Effects q/q -10% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sensitivity Adjustment 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Organic growth q/q -9% 27% -18% 12% -14% 15% -11% 5% -4% 15% -11% 5% -4% 15% -11% 5%
Organic growth y/y -0.1% 3.6% 2.8% 5.1% -0.6% -9.7% -1.7% -7.6% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% -4.3% 2.9% -5.2% 3.2% 3.2% 4.2% -1.0% -0.9% 3.2%
Gross Profit 111.0 140.9 117.1 125.3
GPM 60.7% 60.9% 61.9% 59.3%
OpEx 89.3 96.1 94.5 94.9
OpEx as percentage of revenue 48.8% 41.5% 50.0% 44.9%
Operating Profit 21.7 44.8 22.6 30.4 16.6 41.1 20.5 28.8 21.8 47.1 25.8 34.4 27.1 53.2 31.2 40.1 81.5 119.5 107.0 129.0 151.8 98.5 110.7 118.2 140.5
Operating Margin 11.9% 19.4% 11.9% 14.4% 9.1% 19.7% 11.0% 14.8% 11.6% 21.8% 13.4% 17.1% 14.0% 23.9% 15.8% 19.3% 12.5% 14.7% 13.9% 16.2% 18.5% 13.2% 14.0% 15.1% 17.4%
Contribution margin -35.3% 47.5% 52.6% 35.3% 50.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% -4.1% 23.4% 29.2% 90.0% 90.0% 17.6% 27.2% -108.4% 90.0%
Other effect on OP ($) 1.0 - - - - - - - - - - -
Communications & Commercial Optical Products (CCOP)
Optical Communications 143.0 168.4 184.7 174.5 426.2 556.0
change q/q 6.2% 17.8% 9.7% -5.5%
Gross Profit 42.2 55.4 60.8 54.3 105.4 164.6
GPM 29.5% 32.9% 32.9% 31.1% 24.7% 29.6%
Commercial Lasers 25.0 22.7 24.7 27.8 73.1 89.0
change q/q 10.6% -9.2% 8.8% 12.6%
Gross Profit 11.4 10.3 11.6 12.1 27.2 39.5
GPM 45.5% 45.5% 46.8% 43.4% 37.2% 44.4%
Total CCOP Revenues 168.0 191.1 209.4 202.3 178.0 186.6 179.1 186.1 191.7 200.9 192.8 200.4 206.4 216.3 207.6 215.7 499.3 770.8 729.8 785.7 846.0 645.0 776.3 757.7 815.8
% total 41% 40% 46% 43% 43% 41% 43% 43% 44% 42% 43% 44% 45% 43% 44% 45% 37% 43% 42% 43% 44% 40% 43% 43% 44%
Total growth q/q 7% 14% 10% -3% -12% 5% -4% 4% 3% 5% -4% 4% 3% 5% -4% 4%
Total growth y/y 66% 70% 63% 29% 6% -2% -14% -8% 8% 8% 8% 8% 8% 8% 8% 8% 4% 54% -5% 8% 8% 59% 20% -2% 8%
Management's Growth Guidance q/q +6 to 10% +6 to 10% -2 to 4% Dn 10-13%
Typical Seasonal Growth q/q 3% 5% -4% 4% 3% 5% -4% 4% 3% 5% -4% 4%
Other Effects q/q -15% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sensitivity Adjustment 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Organic growth q/q 7% 14% 10% -3% -12% 5% -4% 4% 3% 5% -4% 4% 3% 5% -4% 4%
Organic growth y/y 66.2% 70.2% 62.8% 28.6% 6.0% -2.4% -14.5% -8.0% 7.7% 7.7% 7.7% 7.7% 7.7% 7.7% 7.7% 7.7% 3.8% 54.4% -5.3% 7.7% 7.7% 59.4% 20.4% -2.4% 7.7%
Gross Profit 53.6 65.7 72.5 66.4
GPM 31.9% 34.4% 34.6% 32.8%
OpEx 29.4 31.7 32.9 34.2
OpEx as percentage of revenue 17.5% 16.6% 15.7% 16.9%
Operating Profit 24.2 34.0 39.6 32.2 24.9 27.5 25.2 27.3 29.0 31.8 29.4 31.6 33.4 36.4 33.8 36.2 33.4 130.0 105.0 121.8 139.8 89.9 124.2 113.4 130.8
Operating Margin 14.4% 17.8% 18.9% 15.9% 14.0% 14.7% 14.1% 14.7% 15.1% 15.8% 15.2% 15.8% 16.2% 16.8% 16.3% 16.8% 6.7% 16.9% 14.4% 15.5% 16.5% 13.9% 16.0% 15.0% 16.0%
Contribution margin 47.7% 42.4% 30.6% 104.2% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 230.8% 35.6% 61.0% 30.0% 30.0% 42.6% 26.1% 58.4% 30.0%
Other effect on OP ($) - - - - - - - - - - -
Advanced Optical Technologies (AOT)
Revenues 60.5 54.7 56.8 58.7 55.8 55.2 56.9 55.7 58.5 59.7 61.5 58.4 61.3 62.5 64.4 61.2 221.9 230.7 223.6 238.1 249.5 228.4 226.5 230.8 243.7
% total 15% 12% 13% 12% 13% 12% 14% 13% 13% 13% 14% 13% 13% 13% 14% 13% 16% 13% 13% 13% 13% 14% 13% 13% 13%
Total growth q/q 11% -10% 4% 3% -5% -1% 3% -2% 5% 2% 3% -5% 5% 2% 3% -5%
Total growth y/y 12% 0% -3% 8% -8% 1% 0% -5% 5% 8% 8% 5% 5% 5% 5% 5% 6% 4% -3% 6% 5% 9% -1% 2% 6%
Management's Growth Guidance q/q DN >10% +0 to 3% -2 to 4% Dn 3-6%
Typical Seasonal Growth q/q 5% 2% 3% -5% 5% 2% 3% -5% 5% 2% 3% -5%
Other Effects q/q -10% -3% 0% 3% 0% 0% 0% 0% 0% 0% 0% 0%
Sensitivity Adjustment 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Organic growth q/q 11% -10% 4% 3% -5% -1% 3% -2% 5% 2% 3% -5% 5% 2% 3% -5%
Organic growth y/y 11.8% 0.2% -3.1% 7.5% -7.8% 0.9% 0.1% -5.1% 4.9% 8.1% 8.1% 4.8% 4.8% 4.8% 4.8% 4.8% 6.5% 4.0% -3.1% 6.5% 4.8% 8.5% -0.8% 1.9% 5.6%
Gross Profit 30.5 26.3 27.4 29.0
GPM 50.4% 48.0% 48.3% 49.4%
OpEx 8.4 8.6 9.5 9.0
OpEx as percentage of revenue 13.9% 15.6% 16.8% 15.3%
Operating Profit 22.1 17.7 17.9 20.0 17.5 17.2 18.0 17.5 18.7 19.2 20.0 18.7 20.0 20.5 21.4 19.9 82.5 77.7 70.1 76.7 81.8 82.1 72.6 73.4 79.2
Operating Margin 36.5% 32.4% 31.5% 34.1% 31.3% 31.2% 31.6% 31.3% 32.0% 32.2% 32.6% 32.0% 32.6% 32.8% 33.2% 32.6% 37.2% 33.7% 31.4% 32.2% 32.8% 35.9% 32.1% 31.8% 32.5%
Contribution margin 39.0% 75.9% 9.5% 110.5% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 16.3% -54.5% 105.9% 45.0% 45.0% 15.6% 492.4% 18.2% 45.0%
Other effect on OP ($) (1.2) - - - - - - - - - - -
Deferred revenue
Deferred revenue (6.1) (3.7) (1.4) (0.5) (1.0) (1.1) (1.1) (1.1) (1.1) (1.2) (1.1) (1.2) (1.2) (1.3) (1.2) (1.2) (9.5) (11.7) (4.3) (4.6) (4.8) (17.6) (4.1) (4.4) (4.7)
% of GAAP Revenue 1.5% 0.8% 0.3% 0.1% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.7% 0.6% 0.3% 0.3% 0.3% 1.1% 0.2% 0.3% 0.3%
Corporate
Unallocated corporate expense (23.6) (23.4) (25.1) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (24.4) (100.0) (96.5) (97.6) (97.6) (97.6) (93.9) (98.3) (97.6) (97.6)
% of sales 5.8% 4.9% 5.5% 5.2% 5.9% 5.4% 5.8% 5.6% 5.6% 5.1% 5.5% 5.3% 5.3% 4.9% 5.2% 5.0% 7.3% 5.3% 5.7% 5.4% 5.1% 5.9% 5.5% 5.5% 5.2%
Acquisition related charges
18 August 2011
: Company data, Credit Suisse estimates
9

10. 18 August 2011
Companies Mentioned (Price as of 17 Aug 11)
CIENA Corp. (CIEN, $12.22, OUTPERFORM [V], TP $34.00)
Cisco Systems Inc. (CSCO, $15.85, OUTPERFORM [V], TP $25.00)
EMCORE Corporation (EMKR, $1.72)
Fabrinet (FN, $16.38, NOT RATED)
Finisar Corporation (FNSR, $15.63, NEUTRAL [V], TP $16.00)
JDS Uniphase Corp. (JDSU, $11.70, NEUTRAL [V], TP $11.50)
Neophotonics Corp. (NPTN, $6.65, NOT RATED)
Oclaro Inc. (OCLR, $3.85)
ZTE (0763.HK, HK$19.00)
Disclosure Appendix
Important Global Disclosures
I, William Stein, CFA, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and
securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in
this report.
See the Companies Mentioned section for full company names.
The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's total
revenues, a portion of which are generated by Credit Suisse's investment banking activities.
Analysts’ stock ratings are defined as follows:
Outperform (O): The stock’s total return is expected to outperform the relevant benchmark* by at least 10-15% (or more, depending on perceived
risk) over the next 12 months.
Neutral (N): The stock’s total return is expected to be in line with the relevant benchmark* (range of ±10-15%) over the next 12 months.
Underperform (U): The stock’s total return is expected to underperform the relevant benchmark* by 10-15% or more over the next 12 months.
*Relevant benchmark by region: As of 29th May 2009, Australia, New Zealand, U.S. and Canadian ratings are based on (1) a stock’s absolute total
return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe**,
with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities.
Some U.S. and Canadian ratings may fall outside the absolute total return ranges defined above, depending on market conditions and industry
factors. For Latin American, Japanese, and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of
the relevant country or regional benchmark; for European stocks, ratings are based on a stock’s total return relative to the analyst's coverage
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replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively.
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Volatility Indicator [V]: A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24
months or the analyst expects significant volatility going forward.
Analysts’ coverage universe weightings are distinct from analysts’ stock ratings and are based on the expected
performance of an analyst’s coverage universe* versus the relevant broad market benchmark**:
Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.
Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.
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Credit Suisse’s distribution of stock ratings (and banking clients) is:
Global Ratings Distribution
Outperform/Buy* 48% (62% banking clients)
Neutral/Hold* 39% (57% banking clients)
Underperform/Sell* 10% (51% banking clients)
Restricted 2%
*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy,
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JDS Uniphase Corp. (JDSU) 10