Infinera Corporation Reports Fourth Quarter and Fiscal Year 2013 Financial Results

Infinera Corporation Reports Fourth Quarter and Fiscal Year 2013 Financial 
Results 
SUNNYVALE, CA -- (Marketwired) -- 01/29/14 --  Infinera Corporation
(NASDAQ: INFN), provider of Intelligent Transport Networks(TM), today
released financial results for the fourth quarter and fiscal year
ended December 28, 2013. 
GAAP revenues for the quarter were $139.1 million compared to $142.0
million in the third quarter of 2013 and $128.1 million in the fourth
quarter of 2012.  
GAAP gross margins for the quarter were 40% compared to 48% in the
third quarter of 2013 and 34% in the fourth quarter of 2012. GAAP net
loss for the quarter was $(10.2) million, or $(0.08) per share,
compared to net income of $3.3 million, or $0.03 per diluted share,
in the third quarter of 2013 and a net loss of $(16.1) million, or
$(0.14) per share, in the fourth quarter of 2012.  
Non-GAAP gross margins for the quarter were 41% compared to 49% in
the third quarter of 2013 and 36% in the fourth quarter of 2012.
Non-GAAP net loss for the quarter was $(0.2) million, or breakeven on
an earnings per share basis, compared to net income of $12.8 million,
or $0.10 per diluted share in the third quarter of 2013 and net loss
of $(6.0) million, or $(0.05) per share, in the fourth quarter of
2012. These Non-GAAP measures exclude non-cash stock-based
compensation expenses and the amortization of debt discount on our
convertible senior notes. 
GAAP revenues for the year were $544.1 million compared to $438.4
million in 2012. 
GAAP gross margins for the year were 40% compared to 36% in 2012.
GAAP net loss for the year was $(32.1) million, or $(0.27) per share
compared to $(85.3) million, or $(0.77) per share in 2012.  
Non-GAAP gross margins for the year were 42% compared to 38% in 2012.
Non-GAAP net income for the year was $4.0 million or $0.03 per
diluted share in 2013, compared to net loss of $(43.5) million or
$(0.38) per diluted share in 2012. These Non-GAAP measures exclude
non-cash stock-based compensation expenses and the amortization of
debt discount on our convertible senior notes. 
A further explanation of the use of non-GAAP financial information
and a reconciliation of the non-GAAP financial measures to the GAAP
equivalents can be found at the end of this release.  
Management Commentary  
"The fourth quarter was a solid finish to a very good year for
Infinera, driven by continued acceptance of the DTN-X," said Tom
Fallon, chief executive officer. "We received purchase commitments
from three additional customers in the quarter, including one new to
Infinera, and we set another quarterly record for 100G port
shipments.  
"Our financial results for 2013 demonstrate the strong potential of
the DTN-X. Revenues grew 24%, at least double the long haul DWDM
market growth estimated by industry analysts; gross margins expanded
significantly; we achieved $4 million Non-GAAP net income compared
with $43.5 million Non-GAAP net loss in 2012; and we generated $12
million in net free cash flow for the year. Since its introduction in
mid 2012, we have received purchase commitments for the DTN-X from a
total of 42 customers, representing a cross section of industries
including Tier 1 carriers, cable operators, Internet content
providers and bandwidth wholesalers. Of these, 15 are new customers
to Infinera. These achievements met or exceeded the targets that we
provided at our Analyst Day in December of 2012. 
"As we look ahead, we believe the opportunity for the DTN-X remains
wide open with the 100G cycle still in its early stages. Infinera's
Intelligent Transport Network and the DTN-X offers important
differentiated features, including its super-channel scale, converged
OTN switching and GMPLS network automation. For 2014, we plan to
continue our focus on winning new deployments and gaining market
share, while driving enhanced profitability, and we remain optimistic
about our outlook over the short, intermediate and long-term."  
Conference Call Information:  
Infinera will host a conference call for analysts and investors to
discuss its fourth quarter results and its outlook for the first
quarter today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A
live webcast of the conference call will also be accessible from the
Investor Relations' section of the company's website at
www.infinera.com. Following the webcast, an archived version will be
available on the website for 90 days. To hear the replay, parties in
the United States and Canada should call 1-866-379-4236.
International parties can access the replay at 1-203-369-0338. 
About Infinera  
Infinera provides Intelligent Transport Networks to help carriers
exploit the increasing demand for cloud-based services and data
center connectivity as they advance into the Terabit Era. Infinera is
unique in its use of breakthrough semiconductor technology to deliver
large scale Photonic Integrated Circuit (PICs) and the application of
PICs to vertically integrated optical networking solutions that
deliver the industry's only commercially available 500 Gb/s
FlexCoherent super-channels. Infinera Intelligent Transport Network
solutions include the DTN-X, DTN and ATN platforms. Find more at
www.infinera.com. 
Forward-Looking Statements  
This press release contains certain forward-looking statements based
on current expectations, forecasts and assumptions that involve risks
and uncertainties. These statements are based on information
available to Infinera as of the date hereof and actual results could
differ materially from those stated or implied due to risks and
uncertainties. Forward-looking statements include statements
regarding Infinera's expectations, beliefs, intentions or strategies
including statements regarding the opportunity for DTN-X and the
Company's plans for 2014. Such forward-looking statements can be
identified by forward-looking words such as "anticipated,"
"believed," "could," "estimate," "expect," "intend," "may," "should,"
"will," and "would" or similar words. The risks and uncertainties
that could cause our results to differ materially from those
expressed or implied by such forward-looking statements include
aggressive business tactics by our competitors, our reliance on
single-source suppliers, our ability to protect our intellectual
property, claims by others that we infringe their intellectual
property, and our ability to respond to rapid technological changes,
and other risks that may impact our business are set forth in our
annual report on Form 10-K filed with the Securities and Exchange
Commission (SEC) on March 5, 2013, as well as subsequent reports
filed with or furnished to the SEC. These reports are available on
our website at www.infinera.com and the SEC's website at www.sec.gov.
Infinera assumes no obligation to, and does not currently intend to,
update any such forward-looking statements. 
Use of Non-GAAP Financial Information
 In addition to disclosing
financial measures prepared in accordance with U.S. Generally
Accepted Accounting Principles (GAAP), this press release and the
accompanying tables contain certain non-GAAP measures that exclude
non-cash stock-based compensation expenses and amortization of debt
discount on our convertible senior notes. We believe these
adjustments are appropriate to enhance an overall understanding of
our underlying financial performance and also our prospects for the
future and are considered by management for the purpose of making
operational decisions. In addition, these results are the primary
indicators management uses as a basis for o
ur planning and
forecasting of future periods. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for net income (loss), basic and diluted net income (loss)
per share, or gross margin prepared in accordance with GAAP. Non-GAAP
financial measures are not based on a comprehensive set of accounting
rules or principles and are subject to limitations. For a description
of these non-GAAP financial measures and a reconciliation to the most
directly comparable GAAP financial measures, please see the section
titled, "GAAP to Non-GAAP Reconciliations." We anticipate disclosing
forward-looking non-GAAP information in our conference call to
discuss our fourth quarter results, including an estimate of non-GAAP
earnings for the first quarter of 2014 that excludes non-cash
stock-based compensation expenses and amortization of debt discount
on our convertible senior notes.  
A copy of this press release can be found on the Investor Relations'
page of Infinera's website at www.infinera.com.  
Infinera Corporation and the Infinera logo are trademarks or
registered trademarks of Infinera Corporation. All other trademarks
used or mentioned herein belong to their respective owners. 


 
                                                                            
                                                                            
                                                                            
Infinera Corporation                                                        
GAAP Condensed Consolidated Statements of Operations                        
(In thousands, except share data)                                           
(Unaudited)                                                                 
                                                                            
                      Three Months Ended            Twelve Months Ended     
                 ----------------------------  ---------------------------- 
                  December 28,   December 29,   December 28,   December 29, 
                      2013           2012           2013           2012     
                 -------------  -------------  -------------  ------------- 
Revenue:                                                                    
  Product        $     115,102  $     109,444  $     465,424  $     380,035 
  Services              23,990         18,620         78,698         58,402 
                 -------------  -------------  -------------  ------------- 
    Total                                                                   
     revenue           139,092        128,064        544,122        438,437 
                                                                            
Cost of revenue                                                             
 (1):                                                                       
  Cost of                                                                   
   product              73,385         77,127        295,715        259,437 
  Cost of                                                                   
   services              9,795          7,669         29,768         21,431 
                 -------------  -------------  -------------  ------------- 
    Total cost                                                              
     of revenue         83,180         84,796        325,483        280,868 
                                                                            
Gross profit            55,912         43,268        218,639        157,569 
                                                                            
Operating                                                                   
 expenses (1):                                                              
  Research and                                                              
   development          30,859         26,660        124,794        117,233 
  Sales and                                                                 
   marketing            19,857         20,558         72,778         75,862 
  General and                                                               
   administrativ                                                            
   e                    12,277         11,563         45,253         47,475 
                 -------------  -------------  -------------  ------------- 
    Total                                                                   
     operating                                                              
     expenses           62,993         58,781        242,825        240,570 
                                                                            
Loss from                                                                   
 operations             (7,081)       (15,513)       (24,186)       (83,001)
                                                                            
Other income                                                                
 (expense), net:                                                            
  Interest                                                                  
   income                  287            233            923            911 
  Interest                                                                  
   expense              (2,634)             -         (6,061)             - 
  Other gain                                                                
   (loss), net:           (336)          (158)        (1,141)        (1,050)
                 -------------  -------------  -------------  ------------- 
    Total other                                                             
     income                                                                 
     (expense),                                                             
     net                (2,683)            75         (6,279)          (139)
                                                                            
Loss before                                                                 
 income taxes           (9,764)       (15,438)       (30,465)       (83,140)
Provision for                                                               
 income taxes              414            650          1,654          2,190 
                 -------------  -------------  -------------  ------------- 
Net loss         $     (10,178) $     (16,088) $     (32,119) $     (85,330)
                 =============  =============  =============  ============= 
                                                                            
Net loss per                                                                
 common share,                                                              
 basic and                                                                  
 diluted         $       (0.08) $       (0.14) $       (0.27) $       (0.77)
                 =============  =============  =============  ============= 
                                                                            
Weighted average                                                            
 shares used in                                                             
 computing basic                                                            
and diluted
 net                                                             
 loss per common                                                            
 share                 119,743        112,311        117,425        110,739 
                 =============  =============  =============  ============= 
                                                                            
                                                                            
(1) The following table summarizes the effects of stock-based compensation  
 related to employees and non-employees for the three and twelve months     
 ended December 28, 2013 and December 29, 2012:                             
                                                                            
                       Three Months Ended           Twelve Months Ended     
                 ----------------------------  ---------------------------- 
                  December 28,   December 29,   December 28,   December 29, 
                      2013           2012           2013           2012     
                 -------------  -------------  -------------  ------------- 
  Cost of                                                                   
   revenue       $         489  $         735  $       1,871  $       2,710 
  Research and                                                              
   development           2,725          2,852         10,900         13,306 
  Sales and                                                                 
   marketing             1,965          2,802          7,624         10,450 
  General and                                                               
   administratio                                                            
   n                     1,789          1,797          5,956          9,529 
                 -------------  -------------  -------------  ------------- 
                         6,968          8,186         26,351         35,995 
  Cost of                                                                   
   revenue -                                                                
   amortization                                                             
   from balance                                                             
   sheet*                1,206          1,949          5,625          5,824 
                 -------------  -------------  -------------  ------------- 
  Total stock-                                                              
   based                                                                    
   compensation                                                             
   expense       $       8,174  $      10,135  $      31,976  $      41,819 
                 =============  =============  =============  ============= 
                                                                            
   * Stock-based compensation expense deferred to inventory and deferred    
 inventory costs in prior periods and recognized in the current period.     
Infinera Corporation           
GAAP to Non-GAAP               
Reconciliations                
(In thousands, except per share
data)                          
(Unaudited)                    
                                                                            
                                             Three Months Ended             
                                ------------------------------------------- 
                                 December 28,  September 28,   December 29, 
                                     2013           2013           2012     
                                -------------  -------------  ------------- 
Reconciliation of Gross Profit:                                             
U.S. GAAP as reported           $      55,912  $      68,371  $      43,268 
Stock-based compensation(1)             1,695          1,549          2,684 
                                -------------  -------------  ------------- 
Non-GAAP as adjusted            $      57,607  $      69,920  $      45,952 
                                =============  =============  ============= 
                                                                            
Reconciliation of Gross Margin:                                             
U.S. GAAP as reported                      40%            48%            34%
Stock-based compensation(1)                 1%             1%             2%
                                -------------  -------------  ------------- 
Non-GAAP as adjusted                       41%            49%            36%
                                =============  =============  ============= 
                                                                            
Reconciliation of Income (Loss)                                             
from Operations:                                                            
U.S. GAAP as reported           $      (7,081) $       6,445  $     (15,513)
Stock-based compensation(1)             8,174          7,643         10,135 
                                -------------  -------------  ------------- 
Non-GAAP as adjusted            $       1,093  $      14,088  $      (5,378)
                                =============  =============  ============= 
                                                                            
Reconciliation of Net Income                                                
 (Loss):                                                                    
U.S. GAAP as reported           $     (10,178) $       3,347  $     (16,088)
Stock-based compensation(1)             8,174          7,643         10,135 
Amortization of debt                                                        
 discount(2)                            1,814          1,770              - 
                                -------------  -------------  ------------- 
Non-GAAP as adjusted            $        (190) $      12,760  $      (5,953)
                                =============  =============  ============= 
                                                                            
Net Income (Loss) per Common                                                
Share - Basic:                                                              
U.S. GAAP as reported           $       (0.08) $        0.03  $       (0.14)
                                =============  =============  ============= 
Non-GAAP as adjusted            $           -  $        0.11  $       (0.05)
                                =============  =============  ============= 
                                                                            
Net Income (Loss) per Common                                                
Share - Diluted:                                                            
U.S. GAAP as reported           $       (0.08) $        0.03  $       (0.14)
                                =============  =============  ============= 
Non-GAAP as adjusted(3)         $           -  $        0.10  $       (0.05)
                                =============  =============  ============= 
                                                                            
Weighted average shares                                                     
used in computing net income                                                
 (loss)                                                                     
per common share - U.S. GAAP:                                               
Basic                                 119,743        118,740        112,311 
                                =============  =============  ============= 
Diluted                               119,743        124,679        112,311 
                                =============  =============  ============= 
                                                                            
Weighted average shares                                                     
used in computing net income                     
                           
 (loss)                                                                     
per common share - Non-GAAP:                                                
Basic                                 119,743        118,740        112,311 
                                =============  =============  ============= 
Diluted(3)                            125,134        124,679        114,115 
                                =============  =============  ============= 
 
                                                             
                                     Twelve Months Ended     
                                ---------------------------- 
                                 December 28,   December 29, 
                                     2013           2012     
                                -------------  ------------- 
Reconciliation of Gross Profit:                              
U.S. GAAP as reported           $     218,639  $     157,569 
Stock-based compensation(1)             7,496          8,534 
                                -------------  ------------- 
Non-GAAP as adjusted            $     226,135  $     166,103 
                                =============  ============= 
                                                             
Reconciliation of Gross Margin:                              
U.S. GAAP as reported                      40%            36%
Stock-based compensation(1)                 2%             2%
                                -------------  ------------- 
Non-GAAP as adjusted                       42%            38%
                                =============  ============= 
                                                             
Reconciliation of Income (Loss)                              
from Operations:                                             
U.S. GAAP as reported           $     (24,186) $     (83,001)
Stock-based compensation(1)            31,976         41,819 
                                -------------  ------------- 
Non-GAAP as adjusted            $       7,790  $     (41,182)
                                =============  ============= 
                                                             
Reconciliation of Net Income                                 
 (Loss):                                                     
U.S. GAAP as reported           $     (32,119) $     (85,330)
Stock-based compensation(1)            31,976         41,819 
Amortization of debt                                         
 discount(2)                            4,164              - 
                                -------------  ------------- 
Non-GAAP as adjusted            $       4,021  $     (43,511)
                                =============  ============= 
                                                             
Net Income (Loss) per Common                                 
Share - Basic:                                               
U.S. GAAP as reported           $       (0.27) $       (0.77)
                                =============  ============= 
Non-GAAP as adjusted            $        0.03  $       (0.39)
                                =============  ============= 
                                                             
Net Income (Loss) per Common                                 
Share - Diluted:                                             
U.S. GAAP as reported           $       (0.27) $       (0.77)
                                =============  ============= 
Non-GAAP as adjusted(3)         $        0.03  $       (0.38)
                                =============  ============= 
                                                             
Weighted average shares                                      
used in computing net income                                 
 (loss)                                                      
per common share - U.S. GAAP:                                
Basic                                 117,425        110,739 
                                =============  ============= 
Diluted                               117,425        110,739 
                                =============  ============= 
                                                             
Weighted average shares                                      
used in computing net income                                 
 (loss)                                                      
per common share - Non-GAAP:                                 
Basic                                 117,425        110,739 
                                =============  ============= 
Diluted(3)                            122,167        113,124 
                                =============  ============= 
                                                                            
(1) Stock-based compensation expense is calculated in accordance with the   
 fair value recognition provisions of Financial Accounting Standards Board  
 Accounting Standards Codification (ASC) Topic 718, Compensation-Stock      
 Compensation effective January 1, 2006. The following table summarizes the 
 effects of stock-based compensation related to employees and non-employees:

 
                                                                            
                                              Three Months Ended            
                                  ----------------------------------------- 
                                   December 28, September 28,  December 29, 
                                       2013          2013          2012     
                                  ------------- ------------- ------------- 
Cost of revenue                   $         489 $         422 $         735 
Research and development                  2,725         2,434         2,852 
Sales and marketing                       1,965         1,853         2,802 
General and administration                1,789         1,807         1,797 
                                  ------------- ------------- ------------- 
                                          6,968         6,516         8,186 
Cost of revenue - amortization                                              
 from balance sheet*                      1,206         1,127         1,949 
                                  ------------- ------------- ------------- 
Total stock-based compensation                                              
 expense                          $       8,174 $       7,643 $      10,135 
                                  ============= ============= ============= 
 
                                                            
                                     Twelve Months Ended    
                                 ---------------------------
                                  December 28,  December 29,
                                      2013          2012    
                                 ------------- -------------
Cost of revenue                  $       1,871 $       2,710
Research and development                10,900        13,306
Sales and marketing                      7,624        10,450
General and administration               5,956         9,529
                                 ------------- -------------
                                        26,351        35,995
Cost of revenue - amortization                              
 from balance sheet*                     5,625         5,824
                                 ------------- -------------
Total stock-based compensation                              
 expense                         $      31,976 $      41,819
                                 ============= =============
                                                                                
                                                                                
                                                                                
                                                                                
                        
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                            
* Stock-based compensation expense deferred to inventory and deferred inventory 
costs in prior periods and recognized in the current period.                    
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                    
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                    
(2) Under GAAP, certain convertible debt instruments that may be settled in 
cash on conversion are required to be separately accounted for as liability 
(debt) and equity (conversion option) components of the instrument in a manner 
that reflects the issuer's non-convertible debt borrowing rate. Accordingly, 
for GAAP purposes, we are required to amortize as a debt discount an amount 
equal to the fair value of the conversion option that was recorded in equity as 
interest expense on our $150 million 1.75% convertible debt issuance in May 
2013 over the term of the notes. These amounts have been adjusted in arriving 
at our non-GAAP results because management believes that this non-cash expense 
is not indicative of ongoing operating performance and provides a better 
indication of our underlying business performance.
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                    
(3) Diluted shares used to calculate net loss per share on a non-GAAP basis 
provided for informational purposes only.                                       
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                        
                                                                            
                                                                            
                                                                            
Infinera Corporation                                                        
Condensed Consolidated Balance Sheets                                       
(In thousands, except par values)                                           
(Unaudited)                                                                 
                                                                            
                                                December 28,   December 29, 
                                                    2013           2012     
                                               -------------  ------------- 
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                    $     124,330  $     104,666 
  Short-term investments                             172,660         76,146 
  Accounts receivable, net of allowance for                                 
   doubtful accounts of $43 in 2013 and $147                                
   in 2012                                           100,643        107,039 
  Other receivables                                    1,313          2,909 
  Inventory                                          123,685        127,809 
  Deferred inventory costs                               705          1,029 
  Deferred tax asset                                   1,322            155 
  Prepaid expenses and other current assets           14,412          9,744 
                                               -------------  ------------- 
    Total current assets                             539,070        429,497 
                                                                            
Property, plant and equipment, net                    79,668         80,343 
Deferred inventory costs, non-current                      2            100 
Long-term investments                                 64,419          2,874 
Cost-method investment                                 9,000          9,000 
Long-term restricted cash                              3,904          3,868 
Other non-current assets                               4,863          2,488 
                                               -------------  ------------- 
    Total assets                               $     700,926  $     528,170 
                                               =============  ============= 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                             $      39,843  $      61,428 
  Accrued expenses                                    22,431         26,288 
  Accrued compensation and related benefits           33,899         22,325 
  Accrued warranty                                    12,374          7,262 
  Deferred revenue                                    32,402         26,744 
                                               -------------  ------------- 
    Total curren
t liabilities                        140,949        144,047 
                                                                            
  Long-term debt                                     109,164              - 
  Accrued warranty, non-current                       10,534          9,220 
  Deferred revenue, non-current                        4,888          3,210 
  Deferred tax liability                               1,364            117 
  Other long-term liabilities                         16,217         15,440 
                                                                            
Commitments and contingencies                                               
                                                                            
Stockholders' equity:                                                       
  Preferred stock, $0.001 par value                                         
    Authorized shares - 25,000 and no shares                                
     issued and outstanding                                -              - 
  Common stock, $0.001 par value                                            
    Authorized shares - 500,000 as of December                              
     28, 2013 and December 29, 2012                                         
    Issued and outstanding shares - 119,887 as                              
     of December 28, 2013 and 112,461 as of                                 
     December 29, 2012                                   120            112 
  Additional paid-in capital                       1,025,661        930,618 
  Accumulated other comprehensive loss                (3,486)        (2,228)
  Accumulated deficit                               (604,485)      (572,366)
                                               -------------  ------------- 
  Total stockholders' equity                         417,810        356,136 
                                               -------------  ------------- 
    Total liabilities and stockholders' equity $     700,926  $     528,170 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
Infinera Corporation                                                        
Condensed Consolidated Statements of Cash Flows                             
(In thousands)                                                              
(Unaudited)                                                                 
                                                                            
                                                    Twelve Months Ended     
                                               ---------------------------- 
                                                December 28,   December 29, 
                                                    2013           2012     
                                               -------------  ------------- 
Cash Flows from Operating Activities:                                       
Net loss                                       $     (32,119) $     (85,330)
Adjustments to reconcile net loss to net                                    
 cashused in operating activities:                                          
  Depreciation and amortization                       24,562         23,661 
  (Recovery of) provision for other                                         
   receivables                                           (88)             - 
  Provision for doubtful accounts                         55             94 
  Amotization of debt discount and issuance                                 
   costs                                               4,522              - 
  Amortization of premium on investments               1,539          2,068 
  Stock-based compensation expense                    31,976         41,819 
  Non-cash tax benefit                                     -             (7)
  Other gain                                            (243)          (475)
  Changes in assets and liabilities:                                        
    Accounts receivable                                6,341        (26,517)
    Other receivables                                  1,435         (1,894)
    Inventory                                         (3,036)       (40,623)
    Prepaid expenses and other assets                 (4,992)         2,293 
    Deferred inventory costs                             395          5,741 
    Accounts payable                                 (20,202)        15,410 
    Accrued liabilities and other expenses            11,272          6,915 
    Deferred revenue                                   7,337          3,763 
    Accrued warranty                                   6,426          3,616 
                                               -------------  ------------- 
      Net cash provided by (used in) operating                              
       activities                                     35,180        (49,466)
                                                                            
Cash Flows from Investing Activities:                                       
  Purchase of available-for-sale investments        (288,140)       (54,150)
  Proceeds from sale of available-for-sale                                  
   investments                                         2,850         11,584 
  Proceeds from maturities and calls of                                     
   investments                                       125,624        117,605 
  Proceeds from disposal of assets                         3              1 
  Purchase of property and equipment                 (21,068)       (25,395)
  Reimbursement of manufacturing capacity                                   
   advance                                                 -             50 
  Change in restricted cash                              (69)          (827)
                                               -------------  ------------- 
      Net cash provided by (used in) investing                              
       activities                                   (180,800)        48,868 
                                                                            
Cash Flows from Financing Activities:                                       
  Proceeds from issuance of debt, net                144,469              - 
  Proceeds from issuance of common stock              23,185         11,580 
  Repurchase of common stock                          (1,544)          (882)
                                               -------------  ------------- 
    Net cash provided by financing activities        166,110         10,698 
                                                                            
Effect of exchange rate changes on cash                 (826)           108 
                                                                            
Net change in cash and cash equivalents               19,664         10,208 
Cash and cash equivalents at beginning of                                   
 period                                              104,666         94,458 
                                               -------------  ------------- 
Cash and cash equivalents at end of period     $     124,330  $     104,666 
                                               =============  ============= 
                                                                            
Supplemental disclosures of cash flow                                       
 information:                                                               
  Cash paid for income taxes                   $       2,135  $         923 
  Cash paid for interest                       $       1,320  $           - 
Supplemental schedule of non-cash financing                                 
 activities:      
                                                          
  Non-cash settlement for manufacturing                                     
   capacity advance                            $           -  $         275 
  Transfer of inventory to fixed assets        $       5,458  $       3,222 
                                                                            
                                                                            
                                                                            
                                                                            
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Infinera Corporation                                                        
Supplemental                                                                
 Financial                                                                  
 Information                                                                
(Unaudited)                                                                 
                                                                            
----------------------------------------------------------------------------
                     Q1'12  Q2'12  Q3'12  Q4'12  Q1'13  Q2'13  Q3'13  Q4'13 
----------------------------------------------------------------------------
Revenue ($ Mil)      $104.7 $93.5  $112.2 $128.1 $124.6 $138.4 $142.0 $139.1
Gross Margin % (1)    40%    37%    39%    36%    36%    39%    49%    41%  
----------------------------------------------------------------------------
Invoiced Shipment                                                           
 Composition:                                                               
Domestic %            71%    70%    70%    63%    63%    64%    73%    54%  
International %       29%    30%    30%    37%    37%    36%    27%    46%  
Largest Customer %    13%    15%    13%    13%    14%  < 10%   17%    11%  
----------------------------------------------------------------------------
Cash Related                                                                
 Information:                                                               
Cash from (used in)                                                         
 Operations ($ Mil)  ($5.8)($22.7)($29.3)  $8.3 ($21.3) $17.9  $12.8  $25.8 
Capital Expenditures                                                        
 ($ Mil)             $13.6   $6.1   $2.5   $3.2   $4.9   $4.5   $4.2   $7.5 
Depreciation &                                                              
 Amortization ($                                                            
 Mil)                 $5.5   $5.7   $6.1   $6.4   $6.3   $6.3   $5.9   $6.0 
DSO's                  57     55     74     76     82     64     56     66  
----------------------------------------------------------------------------
Inventory Metrics:                                                          
Raw Materials ($                                                            
 Mil)                $15.3  $14.8  $12.4  $13.0  $12.2   $9.8  $12.1  $14.3 
Work in Process ($                                                          
 Mil)                $41.6  $49.4  $59.8  $57.3  $53.1  $41.0  $45.7  $49.2 
Finished Goods ($                                                           
 Mil)                $44.7  $50.9  $46.3  $57.5  $65.7  $70.5  $65.7  $60.2 
----------------------------------------------------------------------------
Total Inventory ($                                                          
 Mil)                $101.6 $115.1 $118.5 $127.8 $131.0 $121.3 $123.5 $123.7
Inventory Turns (1)   2.5    2.1    2.3    2.6    2.4    2.8    2.3    2.6  
----------------------------------------------------------------------------
Worldwide Headcount  1,210  1,228  1,235  1,242  1,219  1,238  1,296  1,318 
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--------------------                                                        
(1) Amounts reflect non-GAAP results. Non-GAAP adjustments include non-cash 
 stock-based compensation expense.                                          

  
Contacts:
Media:
Anna Vue
avue@infinera.com
Infinera Corporation
916-595-8157 
Investors/Analysts:
Jenifer Kirtland/Bob Jones 
jkirtland@infinera.com / bjones@infinera.com 
Infinera Corporation
408-543-8139/408-543-8140 
 
 
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