CIENA Corporate Template

1
Shareholder/Financial Analyst Briefings
CIENA Beyond Optical
March 4, 2004
2
Disclosure Documents
  INVESTORS ARE URGED TO READ THE PROXY
STATEMENT-PROSPECTUS RELATING TO THE PROPOSED
CIENA/CATENA NETWORKS, INC. TRANSACTION AND THE
INFORMATION STATEMENT-PROSPECTUS RELATING TO THE
PROPOSED CIENA/INTERNET PHOTONICS, INC.
TRANSACTION THAT CIENA EXPECTS TO FILE WITH THE
SEC BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. THE PROXY STATEMENT-PROSPECTUS AND
THE INFORMATION STATEMENT PROSPECTUS AND OTHER
DOCUMENTS FILED WITH THE SEC BY CIENA MAY BE
OBTAINED, WHEN THEY BECOME AVAILABLE, FOR FREE AT
THE SECS WEB SITE, WWW.SEC.GOV. THE PROXY
STATEMENT-PROSPECTUS, THE INFORMATION
STATEMENT-PROSPECTUS AND THESE OTHER DOCUMENTS
MAY ALSO BE OBTAINED FOR FREE FROM CIENA, OR WITH
RESPECT TO THE TRANSACTION THAT INVOLVES IT, FROM
EITHER CATENA NETWORKS OR INTERNET PHOTONICS.
REQUESTS TO CIENA MAY BE DIRECTED TO CIENA, 1201
WINTERSON RD., LINTHICUM, MD, 21090-2205,
ATTENTION INVESTOR RELATIONS. REQUESTS TO CATENA
MAY BE DIRECTED TO CATENA NETWORKS, INC., 307
LEGGET DRIVE, KANATA, ON, K2K 3C8, ATTENTION
KEVIN FORBES, VP OF FINANCE. REQUESTS TO INTERNET
PHOTONICS MAY BE DIRECTED TO INTERNET PHOTONICS,
INC., 1030 BROAD STREET, SHREWSBURY, NJ 07702,
ATTENTION STEVE WASZAK, CHIEF FINANCIAL OFFICER.
  CIENA, its directors, executive officers and
certain other members of management and employees
may be soliciting proxies from Catena
stockholders. Catena Networks, Inc., its
directors, executive officers and certain other
members of management and employees may be
soliciting proxies from Catena stockholders.    
3
Forward-Looking Statements

• This presentation includes certain
  forward-looking statements within the meaning
  of Section 27A of the Securities Act of 1933 and
  Section 21E of the Securities Exchange Act of
  1934. The forward-looking statements in this
  broadcast include statements about future
  financial and operating results, expected revenue
  growth, the expected state of the telecom
  industry and the proposed CIENA/Catena Networks,
  Inc. and CIENA/Internet Photonics, Inc.
  transactions. These statements are based on our
  expectations and are naturally subject to
  uncertainty and changes in circumstances. Actual
  results could vary materially from these
  expectations. More detailed information about the
  risks involved in investing in CIENAs stock are
  set forth in CIENAs Quarterly Report on Form
  10-Q for the quarter ended January 31, 2004.
  CIENA is under no obligation (and expressly
  disclaims any such obligation) to update or alter
  its forward-looking statements, whether as a
  result of new information, future events or
  otherwise.

4
Agenda

• Where we were
• What changed?
• CIENA Beyond optical
• CIENAs Transformation Beyond the product
  portfolio

5
CIENA Led the Optical Core Revolution
Success driven by disruptive economics
Core Network
CoreStream
CoreDirector
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CIENAs Optical Portfolio Expansion
Access Network
Core Network
Metro Network
CoreStream
CoreDirector
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What Changed?
Relative cost of capital equipment
18 / Mbps
650 / Mbps
650 / Mbps
Long-Haul Network
Service Distribution Network
Service Distribution Network
Atlanta CO
Baltimore
Linthicum
Alpharetta

• The core is no longer the primary challenge.
• Carriers shifting emphasis from CAPEX/OPEX
  reduction to top-line growth.
• Protecting voice revenues remains a priority.
• Service providers looking for strategic partners
  to deliver profitable broadband services
  originating from the edge.
• Large enterprises taking on increased network
  responsibility.

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The Optical Market
2000 27.0B 2001 20.6B 2002 9.4B
2000 27.0B 2001 20.6B 2002 9.4B 2003
6.8B 2004 6.8B 2005 6.8B
Plus or minus 500M. Plus or minus 700M.
The total optical networking market consists of
optical switches, core/metro/access DWDM, ADMs,
DCSs, and next-generation metro switches.
Sources Based on industry analyst CIENA
estimates.
CIENA Proprietary and Confidential
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Network Philosophy
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Capturing Services Revenue
Access Network
Core Network
Metro Network
An intelligent optical core enables an
all-service network, but CIENAs portfolio lacked
service delivery platforms customers needed to
capture new revenue growth
CoreStream
CoreDirector
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CIENAs Acquisition/Partnership Goals

• Expand addressable market with service delivery
  platforms
• Leverage core leadership/strengths
• Leverage customer base/relationships
• Improve CIENAs business model
• Drive revenue growth
• Improve gross margins
• Push toward sustained profitability

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Disciplined Acquisition Strategy

• Candidates should
• Be disruptive to existing network economics
• Fit with CIENAs network vision
• Have adjacency (via customer or technology)
• Deliver good margin profile
• Have channel fit or provide new channel
• Have visible path to 3 market share in growth
  market

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Capturing Services Revenue
Access Network
Core Network
Metro Network
CoreStream
CoreDirector
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Disciplined Acquisition Strategy - WaveSmith

• Acquisition/Partner candidates should
• Be disruptive to existing network economics
• Fit with CIENAs network vision
• Have adjacency (via customer or technology)
• Deliver good margin profile
• Have channel fit or provide new channel
• Have visible path to 3 market share in growth
  market

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Capturing Services Revenue
Access Network
Core Network
Metro Network
CoreStream
CoreDirector
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Disciplined Acquisition Strategy - Akara

• Acquisition/Partner candidates should
• Be disruptive to existing network economics
• Fit with CIENAs network vision
• Have adjacency (via customer or technology)
• Deliver good margin profile
• Have channel fit or provide new channel
• Have visible path to 3 market share in growth
  market

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Capturing Services Revenue
Access Network
Core Network
Metro Network
CoreStream
CoreDirector
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Background

• A leading innovator in the broadband access
  market
• Founded December 1998
• Offices in Kanata, ON and RTP, NC
• 250 employees
• Customers
• Three RBOCs (including Bell South)
• Major IOCs
• CLECs
• Products
• CNX-5
• CN1000
• CN1000FX

Yankee Group Overall broadband equipment
revenues in the access area will present a market
opportunity in excess of 7.5 billion
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Background

• A leading supplier of carrier-grade optical
  Ethernet transport and switching solutions
• Founded 2000
• Offices in Shrewsbury, NJ and Marlborough, MA
• 110 employees
• Customers
• Six of the top ten U.S. cable operators
  (including Cablevision, Adelphia)
• Carriers such as TDS Metrocom deploying Ethernet
  private-line services
• Products
• LightStack MXA
• LightStack MX
• LightStack GSLAM
• LightHandler

Infonetics Research Worldwide Ethernet services
market will grow from approximately 2.9 billion
in 2003 to 7.5 billion by 2007.
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Transaction Highlights

• 77.5 million shares of CIENA common stock
• Value approximately 486.7 million
• Catena shareholder approval reqd

• Both subject to customary clearances
• Anticipated closing by the end of CIENAs fiscal
  Q3

• 24.4 million shares of CIENA common stock
• Value approximately 150 million

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CIENAs Transformation Beyond the Product
Portfolio

• Shifting investment to access/service delivery
  from core
• Goal of reducing ongoing opex (exclusive of
  Catena/IPI) by 10 to 20 in FY 04
• 2002-2003 investments will enable us to maintain
  core leadership
• Manufacturing nearly 100 outsourced
• Currently working to consolidate contract
  manufacturers
• Services business restructured to profitability
• Sales force revamped to include skills/experience
  required for broader portfolio
• 30 channel partners developed to target
  enterprise opportunities/new geographies

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Transforming CIENA to Encompass Broadband Service
Delivery
From (2003)
To Include (2005)
CAPEX/OPEX Savings
Service Revenues
Value Proposition
Technologies
Core Optical
Broadband Edge Access
High Quality/Low Volumes Direct Sales Only
Low Cost/High Volumes Channels/Enterprise Pull
Competencies
FY 03 283 million
FY 04 (stated goal prior to Catena IPI)
Data Networking/ Service Delivery
T.B.D.
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Thank You!