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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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77-0560433
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 Par Value
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The NASDAQ Global Select Market
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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high-capacity solutions that scale transmission capacity to meet increasing bandwidth demand;
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•
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efficient solutions that optimize performance and increase reliability while reducing physical space, power consumption and heat dissipation;
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•
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easy to use solutions that reduce the time to deploy new transmission capacity while lowering operational expenses; and
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•
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improved integration between Internet Protocol equipment such as routers and optical transport networking equipment.
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•
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Increasing our customer base and expanding our geographical footprint.
We continue to diversify our customer base across multiple markets. In 2015 and beyond, we intend to increase our penetration with new and existing customers while leveraging our Infinera DTN-X and Cloud Xpress platforms. In 2014, we further increased our presence outside of the United States, with the addition of new customers across multiple regions.
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•
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Penetrating adjacent markets.
We are developing and building new products for specific markets, including the metro aggregation and metro cloud markets. In 2014, we increased our addressable markets by introducing the Cloud Xpress platform for the metro cloud market. In addition, we plan to introduce a product to address the metro aggregation market towards the end of 2015, allowing us to further expand our total addressable market. We intend to continually add functionality to our existing
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•
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Continuing commitment to provide world-class support services to our customers.
We believe that our lead in customer experience capabilities is a major differentiator.
Infinera's global customer service and technical support team is committed to making our customers successful by providing the highest quality support services to deploy, operate and maintain their networks.
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•
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Maintaining and extending our technology lead.
We plan to incorporate the functionality of additional discrete functions into our PICs in order to continue to increase our technology lead. In addition, we intend to pursue the expansion of our digital switching and bandwidth management capabilities in order to enhance the performance, scalability and economic advantages of our products.
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•
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Continuing investment in PIC manufacturing activities.
We believe that our vertical integration and manufacturing capabilities serve as competitive advantages. We intend to continue to invest in the manufacturing capabilities needed to produce new generations of PICs.
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•
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Investing in Software Defined Networking.
We are seeing a trend in which Service Providers are looking for more programmable networks and we plan to add application programming interfaces to our Intelligent Transport Network architecture so they can be used by Service Providers to build more agile networks that can deliver competitive services. Although this trend has not really taken hold yet in the wide area networking space, we believe that our products are uniquely architected to handle the needs of software defined networks (“SDN”) with large pools of intelligent bandwidth.
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•
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Tier-1 carriers for domestic and international networks;
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•
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Tier-2 carriers;
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•
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internet content provider/data center operators;
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•
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wholesale and enterprise carriers;
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•
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multiple system operators/cable companies; and
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•
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research and education/government entities.
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•
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Scalability.
The proliferation of data centers, rise of big data and increasing consumption of video are fundamentally changing traffic characteristics in operator networks. The Infinera Intelligent Transport Network delivers 500 Gbps FlexCoherent super-channels today and is designed to scale without compromise to enable terabit super-channels and terabit Ethernet in the future.
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•
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Convergence.
Networks are growing in complexity with the proliferation of chassis, network layers and fiber interconnects. Complexity increases the time it takes to plan and deploy network services and increases the cost of maintenance, operation, power, space and cooling. By converging packet and OTN switching functions with WDM, the Infinera Intelligent Transport Network is designed to reduce complexity while lowering overall network spending without compromising performance.
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•
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Automation.
Network operators face intensifying competition to meet customer demand for immediate bandwidth needs and better visibility into the network. The Infinera Intelligent Transport Network features intelligent software control and open SDN application programming interfaces (“APIs”) to help simplify multi-layer provisioning. Automation allows the end-user to control their own network services. Furthermore, our Infinera Instant Bandwidth offering enables our customers to align service revenue to transport network growth by instantly provisioning additional capacity when it is needed.
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•
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a WDM transmission system based on the world’s first 500 Gbps super-channels, which enable cost-effective WDM transmission capacity;
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•
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an integrated OTN switching system that will scale from 5 Tbps in its first release and up to 100 Tbps in the future and will enable operators to efficiently manage larger data transmission with grooming of traffic down to 1 Gbps granularity; and
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a system that is designed to be upgradeable to Multi-Protocol Label Switching (“MPLS”) switching in the future which will help further enable convergence of the network for improved efficiency, reducing the number interconnections between network layers.
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a packet switching module (“PXM”) that provides highly-efficient packet-optical transport network architectures, which enables Service Providers to reduce the number of expensive router ports required to offer a portfolio of services based on Carrier Ethernet and MPLS; and
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a highly software controllable system designed to support programmatic control of the network by SDN and other software enablers developed by Infinera or third parties.
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Hyper-scale Density -
The Cloud Xpress platform delivers 1 Tbps of combined input and output capacity in just two rack units (“RUs”) with up to 500 Gbps of line-side capacity and a 40 GbE client-side interface. We are currently developing offerings of 10Gbe and 100 GbE client-side interfaces. For network operators that need to scale the metro cloud in the least amount of space, the Cloud Xpress leads the industry with 21 Tbps of combined input and output capacity per 42 RUs.
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Simplified Operations -
Cloud data centers use a different operational model than traditional service provider central offices. The Cloud Xpress platform is designed with a rack-and-stack form factor and a new software approach that will enable it to plug into existing cloud provisioning systems using open SDN APIs. By offering an experience similar to the server and storage infrastructure currently deployed in the cloud, the Cloud Xpress platform enables smooth integration into existing operational processes enabling cloud providers to scale quickly, reduce human errors and lower operational costs.
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Low Power -
The Cloud Xpress platform consumes half as much power as compared to other similar metro cloud solutions currently in the market.
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•
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price and other commercial terms;
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functionality;
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form factor or density;
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power consumption;
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customer qualification testing;
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existing business and customer relationships;
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the ability of products and services to meet customers’ immediate and future network requirements;
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installation simplicity;
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service and support;
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scalability and investment protection; and
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•
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length of product lead times.
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Name
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Age
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Position
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Thomas J. Fallon
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53
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Chief Executive Officer and Director
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David F. Welch, Ph.D.
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54
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Co-founder, President and Director
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Brad Feller
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41
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Chief Financial Officer
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Robert J. Jandro
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59
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Senior Vice President, Worldwide Sales
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James L. Laufman
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49
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Senior Vice President, General Counsel and Corporate Secretary
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•
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fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures;
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fluctuations in our customer or product mix, including the impact of new customer deployments, which typically carry lower gross margins;
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changes in customers’ budgets for optical transport network equipment purchases and changes in their purchasing cycles;
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order cancellations or reductions or delays in delivery schedules by our customers;
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the payment terms offered to our customers;
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our ability to control costs, including our operating expenses and the costs of components we purchase for our products;
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readiness of customer sites for installation of our products;
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the timing of product releases or upgrades by us or by our competitors.
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any significant changes in the competitive dynamics of our market, including any new entrants, or customer or competitor consolidation;
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availability of third party suppliers to provide contract engineering and installation services for us;
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the timing of recognizing revenue in any given quarter, including the impact of revenue recognition standards and any future changes in United States generally accepted accounting principles ("U.S. GAAP") or new interpretations of existing accounting rules;
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the impact of a significant natural disaster, such as an earthquake, severe weather, or tsunami or other flooding, as well as interruptions or shortages in the supply of utilities such as water and electricity, in a key location such as our Northern California facilities, which is located near major earthquake fault lines and in a designated flood zone; and
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general economic conditions in domestic and international markets.
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the mix in any period of the types of customers purchasing our products as well as the product mix;
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significant new customer deployments, often with a higher portion of lower margin common equipment as we try to build footprint;
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price discounts negotiated by our customers;
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charges for excess or obsolete inventory;
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changes in the price or availability of components for our products;
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changes in our manufacturing costs, including fluctuations in yields and production volumes; and
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increased warranty or repair costs.
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aggressively pricing their optical transport products and other portfolio products, including offering significant one-time discounts and guaranteed future price decreases;
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offering optical products at a substantial discount or free when bundled together with the customers' router or wireless equipment spend;
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providing financing, marketing and advertising assistance to customers;
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influencing customer requirements to emphasize different product capabilities, which better suit their products;
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offering to repurchase our equipment from existing customers; and
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asserting intellectual property rights.
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completion of product development, including the completion of any associated PIC development, such as our next-generation PICs, and the completion of associated module development, including modules developed by third parties;
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the qualification and multiple sourcing of critical components;
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validation of manufacturing methods and processes;
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extensive quality assurance and reliability testing and staffing of testing infrastructure;
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•
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validation of software; and
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establishment of systems integration and systems test validation requirements.
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•
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reduced control over delivery schedules, particularly for international contract manufacturing sites;
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•
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reliance on the quality assurance procedures of third parties;
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•
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potential uncertainty regarding manufacturing yields and costs;
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potential lack of adequate capacity during periods of high demand;
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potential uncertainty related to the use of international contract manufacturing sites;
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limited warranties on components supplied to us;
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potential misappropriation of our intellectual property; and
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potential manufacturing disruptions (including disruptions caused by geopolitical events, military actions or natural disasters).
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reduced demand for our products as a result of constraints on capital spending by our customers, particularly service providers;
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increased price competition for our products, not only from our competitors, but also as a result of our customer’s or potential customer’s utilization of inventoried or underutilized products, which could put additional downward pressure on our near term gross profits;
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risk of excess or obsolete inventories;
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excess manufacturing capacity and higher associated overhead costs as a percentage of revenue; and
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more limited ability to accurately forecast our business and future financial performance.
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•
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delays in our ability to recognize revenue;
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•
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costs associated with fixing software or hardware defects or replacing products;
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•
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high service and warranty expenses;
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•
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delays in shipments;
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high inventory excess and obsolescence expense;
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high levels of product returns;
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•
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diversion of our engineering personnel from our product development efforts;
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•
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delays in collecting accounts receivable;
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payment of liquidated damages, performance guarantees or similar penalties;
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•
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reduced orders from existing customers; and
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declining interest from potential customers.
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our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, litigation, general corporate or other purposes may be limited;
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a substantial portion of our future cash balance may be dedicated to the payment of the principal of our indebtedness as we have the intention to pay the principal amount of the Notes in cash upon conversion if specified conditions are met or when due, such that we would not have those funds available for use in our business; and
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if upon any conversion of the Notes we are required to satisfy our conversion obligation with shares of our common stock or if a make-whole fundamental change occurs, our existing stockholders’ interest in us would be diluted.
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greater difficulty in collecting accounts receivable and longer collection periods;
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difficulties of managing and staffing international offices, and the increased travel, infrastructure and legal compliance costs associated with multiple international locations;
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political, social and economic instability, including wars, terrorism, political unrest, boycotts, curtailment of trade and other business restrictions;
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•
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tariff and trade barriers and other regulatory requirements or contractual limitations on our ability to sell or develop our products in certain foreign markets;
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less effective protection of intellectual property than is afforded to us in the United States or other developed countries;
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•
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local laws and practices that favor local companies, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations;
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•
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certification requirements;
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•
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potentially adverse tax consequences; and
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•
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effects of changes in currency exchange rates, particularly relative increases in the exchange rate of the U.S. dollar versus other currencies that could negatively affect our financial results and cash flows.
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•
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issue stock that would dilute our current stockholders’ percentage ownership;
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•
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incur debt and assume other liabilities;
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•
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use a substantial portion of our cash resources; or
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•
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incur amortization expenses related to other intangible assets and/or incur large and immediate write-offs.
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•
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problems integrating the acquired operations, technologies or products with our own;
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•
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diversion of management’s attention from our core business;
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•
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assumption of unknown liabilities;
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•
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adverse effects on existing business relationships with suppliers and customers;
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•
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increased accounting compliance risk;
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•
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risks associated with entering new markets; and
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•
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potential loss of key employees.
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•
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variations in our operating results;
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•
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announcements of technological innovations, new services or service enhancements, strategic alliances or agreements by us or by our competitors;
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•
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the gain or loss of customers;
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•
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recruitment or departure of key personnel;
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•
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changes in the estimates of our future operating results or external guidance on those results or changes in recommendations by any securities analysts that elect to follow our common stock;
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•
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market conditions in our industry, the industries of our customers and the economy as a whole; and
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•
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adoption or modification of regulations, policies, procedures or programs applicable to our business.
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•
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authorize the issuance of “blank check” convertible preferred stock that could be issued by our board of directors to thwart a takeover attempt;
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•
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establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election;
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•
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require that directors only be removed from office for cause and only upon a supermajority stockholder vote;
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•
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provide that vacancies on the board of directors, including newly-created directorships, may be filled only by a majority vote of directors then in office rather than by stockholders;
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•
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prevent stockholders from calling special meetings; and
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•
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prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders.
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Location
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Function
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Square
Footage
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Sunnyvale, CA
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Corporate headquarters and manufacturing
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211,000
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Allentown, PA
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Manufacturing and research and development
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44,000
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Annapolis Junction, MD
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Research and development, service and support
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12,000
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Bangalore, India
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Software development
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70,000
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Beijing, China
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Research and development
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22,000
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Kanata, Canada
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Research and development
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6,000
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London, United Kingdom
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Sales, service and support
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6,000
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Hong Kong, China
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Sales, service and support
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2,000
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Tokyo, Japan
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Sales and support
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2,000
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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||||
Fourth Quarter 2014
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$
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15.74
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|
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$
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9.15
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Third Quarter 2014
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$
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11.84
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$
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8.32
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Second Quarter 2014
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$
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9.65
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|
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$
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7.89
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First Quarter 2014
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$
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10.14
|
|
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$
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6.96
|
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Fourth Quarter 2013
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$
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11.91
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|
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$
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8.59
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Third Quarter 2013
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$
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12.16
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$
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9.24
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Second Quarter 2013
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$
|
11.65
|
|
|
$
|
6.06
|
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First Quarter 2013
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$
|
7.75
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|
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$
|
5.66
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Years Ended
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||||||||||||||||||
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December 27,
2014
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|
December 28,
2013 |
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December 29,
2012 |
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December 31,
2011 |
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December 25,
2010 |
||||||||||
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(In thousands, except per share data)
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||||||||||||||||||
Revenue
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$
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668,079
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|
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$
|
544,122
|
|
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$
|
438,437
|
|
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$
|
404,877
|
|
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$
|
454,352
|
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Gross profit
|
$
|
288,304
|
|
|
$
|
218,639
|
|
|
$
|
157,569
|
|
|
$
|
165,491
|
|
|
$
|
206,189
|
|
Net income (loss)
|
$
|
13,659
|
|
|
$
|
(32,119
|
)
|
|
$
|
(85,330
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)
|
|
$
|
(81,744
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)
|
|
$
|
(27,932
|
)
|
Net income (loss) per common share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
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0.11
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.28
|
)
|
Diluted
|
$
|
0.11
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.28
|
)
|
Weighted average number of shares used in computing basic and diluted net income (loss) per common share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
123,672
|
|
|
117,425
|
|
|
110,739
|
|
|
105,432
|
|
|
99,380
|
|
|||||
Diluted
|
128,565
|
|
|
117,425
|
|
|
110,739
|
|
|
105,432
|
|
|
99,380
|
|
|||||
Total cash and cash equivalents, investments and restricted cash
|
$
|
390,816
|
|
|
$
|
365,313
|
|
|
$
|
187,554
|
|
|
$
|
253,116
|
|
|
$
|
295,706
|
|
Cost-method investment
|
$
|
14,500
|
|
|
$
|
9,000
|
|
|
$
|
9,000
|
|
|
$
|
9,000
|
|
|
$
|
4,500
|
|
Total assets
|
$
|
818,016
|
|
|
$
|
700,926
|
|
|
$
|
528,170
|
|
|
$
|
531,704
|
|
|
$
|
551,525
|
|
Long term debt, net
|
$
|
116,894
|
|
|
$
|
109,164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock and additional paid-in capital
|
$
|
1,077,351
|
|
|
$
|
1,025,781
|
|
|
$
|
930,730
|
|
|
$
|
877,034
|
|
|
$
|
817,302
|
|
Stockholders’ equity
|
$
|
481,907
|
|
|
$
|
417,810
|
|
|
$
|
356,136
|
|
|
$
|
387,803
|
|
|
$
|
410,749
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
|
|
Years Ended
|
|
|
|
|
|||||||||||||||
|
December 27,
2014
|
|
% of total
revenue
|
|
December 28,
2013 |
|
% of total
revenue
|
|
Change
|
|
% Change
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
572,276
|
|
|
86
|
%
|
|
$
|
465,424
|
|
|
86
|
%
|
|
$
|
106,852
|
|
|
23
|
%
|
Services
|
95,803
|
|
|
14
|
%
|
|
78,698
|
|
|
14
|
%
|
|
17,105
|
|
|
22
|
%
|
|||
Total revenue
|
$
|
668,079
|
|
|
100
|
%
|
|
$
|
544,122
|
|
|
100
|
%
|
|
$
|
123,957
|
|
|
23
|
%
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
340,856
|
|
|
51
|
%
|
|
$
|
295,715
|
|
|
54
|
%
|
|
$
|
45,141
|
|
|
15
|
%
|
Services
|
38,919
|
|
|
6
|
%
|
|
29,768
|
|
|
6
|
%
|
|
9,151
|
|
|
31
|
%
|
|||
Total cost of revenue
|
$
|
379,775
|
|
|
57
|
%
|
|
$
|
325,483
|
|
|
60
|
%
|
|
$
|
54,292
|
|
|
17
|
%
|
Gross profit
|
$
|
288,304
|
|
|
43
|
%
|
|
$
|
218,639
|
|
|
40
|
%
|
|
$
|
69,665
|
|
|
32
|
%
|
|
Years Ended
|
|
|
|
|
|||||||||||||||
|
December 28,
2013 |
|
% of total
revenue
|
|
December 29,
2012
|
|
% of total
revenue
|
|
Change
|
|
% Change
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
465,424
|
|
|
86
|
%
|
|
$
|
380,035
|
|
|
87
|
%
|
|
$
|
85,389
|
|
|
22
|
%
|
Services
|
78,698
|
|
|
14
|
%
|
|
58,402
|
|
|
13
|
%
|
|
20,296
|
|
|
35
|
%
|
|||
Total revenue
|
$
|
544,122
|
|
|
100
|
%
|
|
$
|
438,437
|
|
|
100
|
%
|
|
$
|
105,685
|
|
|
24
|
%
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product
|
$
|
295,715
|
|
|
54
|
%
|
|
$
|
259,437
|
|
|
59
|
%
|
|
$
|
36,278
|
|
|
14
|
%
|
Services
|
29,768
|
|
|
6
|
%
|
|
21,431
|
|
|
5
|
%
|
|
8,337
|
|
|
39
|
%
|
|||
Total cost of revenue
|
$
|
325,483
|
|
|
60
|
%
|
|
$
|
280,868
|
|
|
64
|
%
|
|
$
|
44,615
|
|
|
16
|
%
|
Gross profit
|
$
|
218,639
|
|
|
40
|
%
|
|
$
|
157,569
|
|
|
36
|
%
|
|
$
|
61,070
|
|
|
39
|
%
|
|
Years Ended
|
|
|
|
|
|||||||||||||||
|
December 27,
2014
|
|
% of total revenue
|
|
December 28,
2013 |
|
% of total revenue
|
|
Change
|
|
% Change
|
|||||||||
Total revenue by geography
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic
|
$
|
476,172
|
|
|
71
|
%
|
|
$
|
345,734
|
|
|
64
|
%
|
|
$
|
130,438
|
|
|
38
|
%
|
International
|
191,907
|
|
|
29
|
%
|
|
198,388
|
|
|
36
|
%
|
|
(6,481
|
)
|
|
(3
|
)%
|
|||
|
$
|
668,079
|
|
|
100
|
%
|
|
$
|
544,122
|
|
|
100
|
%
|
|
$
|
123,957
|
|
|
23
|
%
|
Total revenue by sales channel
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct
|
$
|
633,619
|
|
|
95
|
%
|
|
$
|
501,375
|
|
|
92
|
%
|
|
$
|
132,244
|
|
|
26
|
%
|
Indirect
|
34,460
|
|
|
5
|
%
|
|
42,747
|
|
|
8
|
%
|
|
(8,287
|
)
|
|
(19
|
)%
|
|||
|
$
|
668,079
|
|
|
100
|
%
|
|
$
|
544,122
|
|
|
100
|
%
|
|
$
|
123,957
|
|
|
23
|
%
|
|
Years Ended
|
|
|
|
|
|||||||||||||||
|
December 28,
2013 |
|
% of total revenue
|
|
December 29,
2012
|
|
% of total revenue
|
|
Change
|
|
% Change
|
|||||||||
Total revenue by geography
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic
|
$
|
345,734
|
|
|
64
|
%
|
|
$
|
296,849
|
|
|
68
|
%
|
|
$
|
48,885
|
|
|
16
|
%
|
International
|
198,388
|
|
|
36
|
%
|
|
141,588
|
|
|
32
|
%
|
|
56,800
|
|
|
40
|
%
|
|||
|
$
|
544,122
|
|
|
100
|
%
|
|
$
|
438,437
|
|
|
100
|
%
|
|
$
|
105,685
|
|
|
24
|
%
|
Total revenue by sales channel
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct
|
$
|
501,375
|
|
|
92
|
%
|
|
$
|
428,734
|
|
|
98
|
%
|
|
$
|
72,641
|
|
|
17
|
%
|
Indirect
|
42,747
|
|
|
8
|
%
|
|
9,703
|
|
|
2
|
%
|
|
33,044
|
|
|
341
|
%
|
|||
|
$
|
544,122
|
|
|
100
|
%
|
|
$
|
438,437
|
|
|
100
|
%
|
|
$
|
105,685
|
|
|
24
|
%
|
|
Years Ended
|
|
|
|
|
|||||||||||||||
|
December 27,
2014
|
|
% of total
revenue
|
|
December 28,
2013 |
|
% of total
revenue
|
|
Change
|
|
% Change
|
|||||||||
Research and development
|
$
|
133,484
|
|
|
20
|
%
|
|
$
|
124,794
|
|
|
23
|
%
|
|
$
|
8,690
|
|
|
7
|
%
|
Sales and marketing
|
79,026
|
|
|
12
|
%
|
|
72,778
|
|
|
14
|
%
|
|
6,248
|
|
|
9
|
%
|
|||
General and administrative
|
48,452
|
|
|
7
|
%
|
|
45,253
|
|
|
8
|
%
|
|
3,199
|
|
|
7
|
%
|
|||
Total operating expenses
|
$
|
260,962
|
|
|
39
|
%
|
|
$
|
242,825
|
|
|
45
|
%
|
|
$
|
18,137
|
|
|
7
|
%
|
|
Years Ended
|
|
|
|
|
|||||||||||||||
|
December 28,
2013 |
|
% of total
revenue
|
|
December 29,
2012
|
|
% of total
revenue
|
|
Change
|
|
% Change
|
|||||||||
Research and development
|
$
|
124,794
|
|
|
23
|
%
|
|
$
|
117,233
|
|
|
27
|
%
|
|
$
|
7,561
|
|
|
6
|
%
|
Sales and marketing
|
72,778
|
|
|
14
|
%
|
|
75,862
|
|
|
17
|
%
|
|
(3,084
|
)
|
|
(4
|
)%
|
|||
General and administrative
|
45,253
|
|
|
8
|
%
|
|
47,475
|
|
|
11
|
%
|
|
(2,222
|
)
|
|
(5
|
)%
|
|||
Total operating expenses
|
$
|
242,825
|
|
|
45
|
%
|
|
$
|
240,570
|
|
|
55
|
%
|
|
$
|
2,255
|
|
|
1
|
%
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
Research and development
|
$
|
8,927
|
|
|
$
|
10,900
|
|
|
$
|
13,306
|
|
Sales and marketing
|
7,477
|
|
|
7,624
|
|
|
10,450
|
|
|||
General and administration
|
6,383
|
|
|
5,956
|
|
|
9,529
|
|
|||
Total
|
$
|
22,787
|
|
|
$
|
24,480
|
|
|
$
|
33,285
|
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
|
(In thousands)
|
||||||||||
Interest income
|
$
|
1,456
|
|
|
$
|
923
|
|
|
$
|
911
|
|
Interest expense
|
(11,021
|
)
|
|
(6,061
|
)
|
|
—
|
|
|||
Other gain (loss), net
|
(1,365
|
)
|
|
(1,141
|
)
|
|
(1,050
|
)
|
|||
Total other income (expense), net
|
$
|
(10,930
|
)
|
|
$
|
(6,279
|
)
|
|
$
|
(139
|
)
|
|
Years Ended
|
||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 29,
2012 |
||||||
|
(In thousands)
|
||||||||||
Net cash flow provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
35,963
|
|
|
$
|
35,180
|
|
|
$
|
(49,466
|
)
|
Investing activities
|
$
|
(96,059
|
)
|
|
$
|
(180,800
|
)
|
|
$
|
48,868
|
|
Financing activities
|
$
|
22,861
|
|
|
$
|
166,110
|
|
|
$
|
10,698
|
|
|
Years Ended
|
||||||
|
December 27,
2014
|
|
December 28,
2013 |
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
86,495
|
|
|
$
|
124,330
|
|
Short-term and long-term investments
|
298,861
|
|
|
237,079
|
|
||
Long-term restricted cash
|
5,460
|
|
|
3,904
|
|
||
|
$
|
390,816
|
|
|
$
|
365,313
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
More than
5 years
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Purchase obligations
(1)
|
$
|
128,261
|
|
|
$
|
126,211
|
|
|
$
|
2,050
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
(2)
|
38,053
|
|
|
7,063
|
|
|
11,994
|
|
|
10,450
|
|
|
8,546
|
|
|||||
Convertible senior notes, including interest
|
159,188
|
|
|
2,625
|
|
|
156,563
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
(3)
|
$
|
325,502
|
|
|
$
|
135,899
|
|
|
$
|
170,607
|
|
|
$
|
10,450
|
|
|
$
|
8,546
|
|
|
|
(1)
|
We have service agreements with our major production suppliers under which we are committed to purchase certain parts.
|
(2)
|
We lease facilities under non-cancelable operating lease agreements. These leases have varying terms, predominantly no longer than ten years each and contain leasehold improvement incentives, rent holidays and escalation clauses that range from one to 10 years. In addition, some of these leases have renewal options for up to five years. We also have contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate. At the inception of a lease with such conditions, we record an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset. An assumption of lease renewal where a renewal option exists is used only when the renewal has been determined to be reasonably assured. The estimated useful life of leasehold improvements is one to ten years.
|
(3)
|
Tax liabilities of $2.2 million related to uncertain tax positions are not included in the table because we are unable to determine the timing of settlement if any, of these future payments with a reasonably reliable estimate.
|
•
|
The expected forfeiture rate is estimated based on our historical forfeiture data and compensation costs are recognized only for those equity awards expected to vest. The estimation of the forfeiture rate requires judgment, and to the extent actual forfeitures differ from expectations, changes in estimate will be recorded as an adjustment in the period when such estimates are revised. Actual results may differ substantially from the estimates. We record stock-based compensation expense to adjust estimated forfeiture rates to actual.
|
•
|
The expected term represents the weighted-average period that the stock options are expected to be outstanding prior to being exercised. The expected term is estimated based on our historical
|
•
|
Expected volatility of our stock has been historically based on the weighted-average implied and historical volatility of Infinera and its peer group. The peer group is comprised of similar companies in the same industrial sector. As we gained more historical volatility data, the weighting of our own data in the expected volatility calculation associated with options gradually increased to 100% by 2013.
|
Level 1
|
|
–
|
|
Quoted prices in active markets for identical assets or liabilities.
|
|
|
|
|
|
Level 2
|
|
–
|
|
Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
|
|
|
|
Level 3
|
|
–
|
|
Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
Page
|
|
December 27, 2014
|
|
December 28, 2013
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
86,495
|
|
|
$
|
124,330
|
|
Short-term investments
|
239,628
|
|
|
172,660
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $38 in 2014 and $43 in 2013
|
154,596
|
|
|
100,643
|
|
||
Inventory
|
146,500
|
|
|
123,685
|
|
||
Prepaid expenses and other current assets
|
24,636
|
|
|
17,752
|
|
||
Total current assets
|
651,855
|
|
|
539,070
|
|
||
Property, plant and equipment, net
|
81,566
|
|
|
79,668
|
|
||
Long-term investments
|
59,233
|
|
|
64,419
|
|
||
Cost-method investment
|
14,500
|
|
|
9,000
|
|
||
Long-term restricted cash
|
5,460
|
|
|
3,904
|
|
||
Other non-current assets
|
5,402
|
|
|
4,865
|
|
||
Total assets
|
$
|
818,016
|
|
|
$
|
700,926
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
61,533
|
|
|
$
|
39,843
|
|
Accrued expenses
|
26,441
|
|
|
22,431
|
|
||
Accrued compensation and related benefits
|
38,795
|
|
|
33,899
|
|
||
Accrued warranty
|
12,241
|
|
|
12,374
|
|
||
Deferred revenue
|
35,321
|
|
|
32,402
|
|
||
Total current liabilities
|
174,331
|
|
|
140,949
|
|
||
Long-term debt, net
|
116,894
|
|
|
109,164
|
|
||
Accrued warranty, non-current
|
14,799
|
|
|
10,534
|
|
||
Deferred revenue, non-current
|
10,758
|
|
|
4,888
|
|
||
Other long-term liabilities
|
19,327
|
|
|
17,581
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
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 in 2014 and 2013
Issued and outstanding shares—126,160 in 2014 and 119,887 in 2013
|
126
|
|
|
120
|
|
||
Additional paid-in capital
|
1,077,225
|
|
|
1,025,661
|
|
||
Accumulated other comprehensive loss
|
(4,618
|
)
|
|
(3,486
|
)
|
||
Accumulated deficit
|
(590,826
|
)
|
|
(604,485
|
)
|
||
Total stockholders’ equity
|
481,907
|
|
|
417,810
|
|
||
Total liabilities and stockholders’ equity
|
$
|
818,016
|
|
|
$
|
700,926
|
|
|
Years Ended
|
||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 29, 2012
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Product
|
$
|
572,276
|
|
|
$
|
465,424
|
|
|
$
|
380,035
|
|
Services
|
95,803
|
|
|
78,698
|
|
|
58,402
|
|
|||
Total revenue
|
668,079
|
|
|
544,122
|
|
|
438,437
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of product
|
340,856
|
|
|
295,715
|
|
|
259,437
|
|
|||
Cost of services
|
38,919
|
|
|
29,768
|
|
|
21,431
|
|
|||
Total cost of revenue
|
379,775
|
|
|
325,483
|
|
|
280,868
|
|
|||
Gross profit
|
288,304
|
|
|
218,639
|
|
|
157,569
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
133,484
|
|
|
124,794
|
|
|
117,233
|
|
|||
Sales and marketing
|
79,026
|
|
|
72,778
|
|
|
75,862
|
|
|||
General and administrative
|
48,452
|
|
|
45,253
|
|
|
47,475
|
|
|||
Total operating expenses
|
260,962
|
|
|
242,825
|
|
|
240,570
|
|
|||
Income (loss) from operations
|
27,342
|
|
|
(24,186
|
)
|
|
(83,001
|
)
|
|||
Other income (expense), net:
|
|
|
|
|
|
||||||
Interest income
|
1,456
|
|
|
923
|
|
|
911
|
|
|||
Interest expense
|
(11,021
|
)
|
|
(6,061
|
)
|
|
—
|
|
|||
Other gain (loss), net
|
(1,365
|
)
|
|
(1,141
|
)
|
|
(1,050
|
)
|
|||
Total other income (expense), net
|
(10,930
|
)
|
|
(6,279
|
)
|
|
(139
|
)
|
|||
Income (loss) before income taxes
|
16,412
|
|
|
(30,465
|
)
|
|
(83,140
|
)
|
|||
Provision for income taxes
|
2,753
|
|
|
1,654
|
|
|
2,190
|
|
|||
Net income (loss)
|
$
|
13,659
|
|
|
$
|
(32,119
|
)
|
|
$
|
(85,330
|
)
|
Net income (loss) per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.11
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.77
|
)
|
Diluted
|
$
|
0.11
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.77
|
)
|
Weighted average shares used in computing net income (loss) per common share:
|
|
|
|
|
|
||||||
Basic
|
123,672
|
|
|
117,425
|
|
|
110,739
|
|
|||
Diluted
|
128,565
|
|
|
117,425
|
|
|
110,739
|
|
|
Years Ended
|
||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 29, 2012
|
||||||
Net income (loss)
|
$
|
13,659
|
|
|
$
|
(32,119
|
)
|
|
$
|
(85,330
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Reclassification of realized gain on auction rate securities
|
—
|
|
|
(166
|
)
|
|
(141
|
)
|
|||
Unrealized gain (loss) on all other available-for-sale investments
|
(320
|
)
|
|
(140
|
)
|
|
158
|
|
|||
Foreign currency translation adjustment
|
(812
|
)
|
|
(952
|
)
|
|
(43
|
)
|
|||
Tax effect on items related to available-for-sale investment
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||
Net change in accumulated other comprehensive loss
|
(1,132
|
)
|
|
(1,258
|
)
|
|
(33
|
)
|
|||
Comprehensive income (loss)
|
$
|
12,527
|
|
|
$
|
(33,377
|
)
|
|
$
|
(85,363
|
)
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Deficit
|
|
Total
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2011
|
|
106,976
|
|
|
$
|
107
|
|
|
$
|
876,927
|
|
|
$
|
(2,195
|
)
|
|
$
|
(487,036
|
)
|
|
$
|
387,803
|
|
Stock options exercised
|
|
582
|
|
|
1
|
|
|
2,552
|
|
|
—
|
|
|
—
|
|
|
2,553
|
|
|||||
ESPP shares issued
|
|
1,653
|
|
|
1
|
|
|
9,029
|
|
|
—
|
|
|
—
|
|
|
9,030
|
|
|||||
Shares withheld for tax obligations
|
|
(128
|
)
|
|
—
|
|
|
(882
|
)
|
|
—
|
|
|
—
|
|
|
(882
|
)
|
|||||
Restricted stock units released
|
|
3,378
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
42,995
|
|
|
—
|
|
|
—
|
|
|
42,995
|
|
|||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized gain on auction rate securities classified as available-for-sale investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
(141
|
)
|
|||||
Unrealized gain on all other available-for-sale investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
—
|
|
|
158
|
|
|||||
Foreign currency translation adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||
Tax effect on items related to available-for-sale investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85,330
|
)
|
|
(85,330
|
)
|
|||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
(85,363
|
)
|
||||||||||
Balance at December 29, 2012
|
|
112,461
|
|
|
$
|
112
|
|
|
$
|
930,618
|
|
|
$
|
(2,228
|
)
|
|
$
|
(572,366
|
)
|
|
$
|
356,136
|
|
Stock options exercised
|
|
2,217
|
|
|
2
|
|
|
14,616
|
|
|
—
|
|
|
—
|
|
|
14,618
|
|
|||||
ESPP shares issued
|
|
1,656
|
|
|
2
|
|
|
8,557
|
|
|
—
|
|
|
—
|
|
|
8,559
|
|
|||||
Shares withheld for tax obligations
|
|
(223
|
)
|
|
—
|
|
|
(1,544
|
)
|
|
—
|
|
|
—
|
|
|
(1,544
|
)
|
|||||
Restricted stock units released
|
|
3,754
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Warrants exercised
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
30,077
|
|
|
—
|
|
|
—
|
|
|
30,077
|
|
|||||
Conversion option related to convertible senior notes, net of allocated costs
|
|
—
|
|
|
—
|
|
|
43,341
|
|
|
—
|
|
|
—
|
|
|
43,341
|
|
|||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized gain on auction rate securities classified as available-for-sale investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
—
|
|
|
(166
|
)
|
|||||
Unrealized gain on all other available-for-sale investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
|||||
Foreign currency translation adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(952
|
)
|
|
—
|
|
|
(952
|
)
|
|||||
Tax effect on items related to available-for-sale investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,119
|
)
|
|
(32,119
|
)
|
|||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
(33,377
|
)
|
||||||||||
Balance at December 28, 2013
|
|
119,887
|
|
|
$
|
120
|
|
|
$
|
1,025,661
|
|
|
$
|
(3,486
|
)
|
|
$
|
(604,485
|
)
|
|
$
|
417,810
|
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Deficit
|
|
Total
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 28, 2013
|
|
119,887
|
|
|
$
|
120
|
|
|
$
|
1,025,661
|
|
|
$
|
(3,486
|
)
|
|
$
|
(604,485
|
)
|
|
$
|
417,810
|
|
Stock options exercised
|
|
2,001
|
|
|
2
|
|
|
13,981
|
|
|
—
|
|
|
—
|
|
|
13,983
|
|
|||||
ESPP shares issued
|
|
1,438
|
|
|
1
|
|
|
10,727
|
|
|
—
|
|
|
|
|
|
10,728
|
|
|||||
Shares withheld for tax obligations
|
|
(217
|
)
|
|
—
|
|
|
(1,846
|
)
|
|
—
|
|
|
—
|
|
|
(1,846
|
)
|
|||||
Restricted stock units released
|
|
3,051
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
28,705
|
|
|
|
|
|
—
|
|
|
28,705
|
|
|||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized loss on available-for-sale investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(320
|
)
|
|
—
|
|
|
(320
|
)
|
|||||
Foreign currency translation adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(812
|
)
|
|
—
|
|
|
(812
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,659
|
|
|
13,659
|
|
|||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
12,527
|
|
||||||||||
Balance at December 27, 2014
|
|
126,160
|
|
|
$
|
126
|
|
|
$
|
1,077,225
|
|
|
$
|
(4,618
|
)
|
|
$
|
(590,826
|
)
|
|
$
|
481,907
|
|
|
Years Ended
|
||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 29, 2012
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
13,659
|
|
|
$
|
(32,119
|
)
|
|
$
|
(85,330
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
25,917
|
|
|
24,562
|
|
|
23,661
|
|
|||
Amortization of debt discount and issuance costs
|
8,395
|
|
|
4,522
|
|
|
—
|
|
|||
Amortization of premium on investments
|
3,772
|
|
|
1,539
|
|
|
2,068
|
|
|||
Stock-based compensation expense
|
28,394
|
|
|
31,976
|
|
|
41,819
|
|
|||
Other gain
|
(9
|
)
|
|
(276
|
)
|
|
(388
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(53,951
|
)
|
|
6,341
|
|
|
(26,517
|
)
|
|||
Inventory
|
(25,486
|
)
|
|
(3,036
|
)
|
|
(40,623
|
)
|
|||
Prepaid expenses and other assets
|
(8,324
|
)
|
|
(3,162
|
)
|
|
6,140
|
|
|||
Accounts payable
|
18,810
|
|
|
(20,202
|
)
|
|
15,410
|
|
|||
Accrued liabilities and other expenses
|
11,866
|
|
|
11,272
|
|
|
6,915
|
|
|||
Deferred revenue
|
8,788
|
|
|
7,337
|
|
|
3,763
|
|
|||
Accrued warranty
|
4,132
|
|
|
6,426
|
|
|
3,616
|
|
|||
Net cash provided by (used in) operating activities
|
35,963
|
|
|
35,180
|
|
|
(49,466
|
)
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Purchase of available-for-sale investments
|
(302,398
|
)
|
|
(288,140
|
)
|
|
(54,150
|
)
|
|||
Purchase of cost-method investment
|
(5,500
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales of available-for-sale investments
|
28,481
|
|
|
2,850
|
|
|
11,584
|
|
|||
Proceeds from maturities and calls of investments
|
208,051
|
|
|
125,624
|
|
|
117,605
|
|
|||
Purchase of property and equipment
|
(23,122
|
)
|
|
(21,065
|
)
|
|
(25,394
|
)
|
|||
Reimbursement of manufacturing capacity advance
|
—
|
|
|
—
|
|
|
50
|
|
|||
Change in restricted cash
|
(1,571
|
)
|
|
(69
|
)
|
|
(827
|
)
|
|||
Net cash provided by (used in) investing activities
|
(96,059
|
)
|
|
(180,800
|
)
|
|
48,868
|
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of debt, net
|
—
|
|
|
144,469
|
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
24,707
|
|
|
23,185
|
|
|
11,580
|
|
|||
Minimum tax withholding paid on behalf of employees for net share settlement
|
(1,846
|
)
|
|
(1,544
|
)
|
|
(882
|
)
|
|||
Net cash provided by financing activities
|
22,861
|
|
|
166,110
|
|
|
10,698
|
|
|||
Effect of exchange rate changes on cash
|
(600
|
)
|
|
(826
|
)
|
|
108
|
|
|||
Net change in cash and cash equivalents
|
(37,835
|
)
|
|
19,664
|
|
|
10,208
|
|
|||
Cash and cash equivalents at beginning of period
|
124,330
|
|
|
104,666
|
|
|
94,458
|
|
|||
Cash and cash equivalents at end of period
|
$
|
86,495
|
|
|
$
|
124,330
|
|
|
$
|
104,666
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds
|
$
|
1,697
|
|
|
$
|
2,135
|
|
|
$
|
923
|
|
Cash paid for interest
|
$
|
2,625
|
|
|
$
|
1,320
|
|
|
$
|
—
|
|
Supplemental schedule of non-cash financing activities
|
|
|
|
|
|
||||||
Non-cash settlement for manufacturing capacity advance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
275
|
|
Transfer of inventory to fixed assets
|
$
|
2,569
|
|
|
$
|
5,458
|
|
|
$
|
3,222
|
|
Warrant exercise
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
•
|
The expected forfeiture rate is estimated based on the Company’s historical forfeiture data and compensation costs are recognized only for those equity awards expected to vest. The estimation of the forfeiture rate requires judgment, and to the extent actual forfeitures differ from expectations, changes in estimate will be recorded as an adjustment in the period when such estimates are revised. Actual results may differ substantially from the estimates. The Company records stock-based compensation expense to adjust estimated forfeiture rates to actual.
|
•
|
The expected term represents the weighted-average period that the stock options are expected to be outstanding prior to being exercised. The expected term is estimated based on the Company’s historical data on employee exercise patterns and post vesting termination behavior to estimate expected exercises over the contractual term of grants.
|
•
|
Expected volatility of the Company’s stock has been historically based on the weighted-average implied and historical volatility of Infinera and its peer group. The peer group is comprised of similar companies in the same industrial sector. As the Company gained more historical volatility data, the weighting of its own data in the expected volatility calculation associated with options gradually increased to 100% by 2013.
|
Level 1
|
|
–
|
|
Quoted prices in active markets for identical assets or liabilities.
|
|
|
|
|
|
Level 2
|
|
–
|
|
Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
|
|
|
|
Level 3
|
|
–
|
|
Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable.
|
|
Estimated Useful Lives
|
Laboratory and manufacturing equipment
|
1.5 to 10 years
|
Furniture and fixtures
|
3 to 5 years
|
Computer hardware and software
|
1.5 to 7 years
|
Leasehold improvements
|
1 to 10 years
|
|
As of December 27, 2014
|
|
As of December 28, 2013
|
||||||||||||||||||||||||||||
|
Fair Value Measured Using
|
|
Fair Value Measured Using
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
21,478
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,478
|
|
|
$
|
51,749
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,749
|
|
Certificates of deposit
|
—
|
|
|
8,060
|
|
|
—
|
|
|
8,060
|
|
|
—
|
|
|
3,840
|
|
|
—
|
|
|
3,840
|
|
||||||||
Commercial paper
|
—
|
|
|
46,072
|
|
|
—
|
|
|
46,072
|
|
|
—
|
|
|
85,860
|
|
|
—
|
|
|
85,860
|
|
||||||||
Corporate bonds
|
—
|
|
|
235,285
|
|
|
—
|
|
|
235,285
|
|
|
—
|
|
|
150,595
|
|
|
—
|
|
|
150,595
|
|
||||||||
U.S. treasuries
|
14,810
|
|
|
—
|
|
|
—
|
|
|
14,810
|
|
|
4,804
|
|
|
—
|
|
|
—
|
|
|
4,804
|
|
||||||||
Foreign currency exchange forward contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
29
|
|
Total assets
|
$
|
36,288
|
|
|
$
|
289,417
|
|
|
$
|
—
|
|
|
$
|
325,705
|
|
|
$
|
56,553
|
|
|
$
|
240,324
|
|
|
$
|
—
|
|
|
$
|
296,877
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency exchange forward contracts
|
$
|
—
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
|
December 29,
2012
|
|
Total Net Gains
Included in Other
Comprehensive Income
|
|
Calls
|
|
|
Sold
|
|
December 28,
2013
|
||||||||||
ARS—available-for-sale
|
$
|
2,873
|
|
|
$
|
—
|
|
|
$
|
(92
|
)
|
(1)
|
|
$
|
(2,781
|
)
|
(2)
|
$
|
—
|
|
|
|
(1)
|
Amount represents the fair market value of the securities called. Realized gains on these calls were not significant in 2013.
|
(2)
|
Amount represents the fair market value of the securities sold at
95%
par value. Realized gains for 2013 were
$0.2 million
.
|
|
December 27, 2014
|
||||||||||||||
|
Adjusted
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
21,478
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,478
|
|
Certificates of deposit
|
8,060
|
|
|
—
|
|
|
—
|
|
|
8,060
|
|
||||
Commercial paper
|
46,073
|
|
|
—
|
|
|
(1
|
)
|
|
46,072
|
|
||||
Corporate bonds
|
235,713
|
|
|
2
|
|
|
(430
|
)
|
|
235,285
|
|
||||
U.S. treasuries
|
14,825
|
|
|
1
|
|
|
(16
|
)
|
|
14,810
|
|
||||
Total available-for-sale investments
|
$
|
326,149
|
|
|
$
|
3
|
|
|
$
|
(447
|
)
|
|
$
|
325,705
|
|
|
December 28, 2013
|
||||||||||||||
|
Adjusted
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
51,749
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,749
|
|
Certificates of deposit
|
3,840
|
|
|
—
|
|
|
—
|
|
|
3,840
|
|
||||
Commercial paper
|
85,870
|
|
|
2
|
|
|
(12
|
)
|
|
85,860
|
|
||||
Corporate bonds
|
150,711
|
|
|
27
|
|
|
(143
|
)
|
|
150,595
|
|
||||
U.S. treasuries
|
4,802
|
|
|
2
|
|
|
—
|
|
|
4,804
|
|
||||
Total available-for-sale investments
|
$
|
296,972
|
|
|
$
|
31
|
|
|
$
|
(155
|
)
|
|
$
|
296,848
|
|
|
Amortized
Cost
|
|
Cumulative
OTTI in
Earnings
|
|
|
Unrealized
Gain
|
|
OTTI Loss in
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||||
Balance at December 29, 2012
|
$
|
2,707
|
|
|
$
|
(394
|
)
|
|
|
$
|
784
|
|
|
$
|
(618
|
)
|
|
$
|
166
|
|
Call on investments
|
(87
|
)
|
|
13
|
|
|
|
(25
|
)
|
|
20
|
|
|
(5
|
)
|
|||||
Investments sold
|
(2,620
|
)
|
|
381
|
|
|
|
(759
|
)
|
|
598
|
|
|
(161
|
)
|
|||||
Balance at December 28, 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
As of December 27, 2014
|
|
As of December 28, 2013
|
||||||||||||||||||||
|
Gross
Notional
(1)
|
|
Prepaid Expenses and Other Assets
|
|
Other
Accrued
Liabilities
|
|
Gross
Notional
(1)
|
|
Prepaid Expenses and Other Assets
|
|
Other
Accrued
Liabilities
|
||||||||||||
Foreign currency exchange forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Related to euro denominated receivables
|
$
|
34,445
|
|
|
$
|
—
|
|
|
$
|
(53
|
)
|
|
$
|
16,867
|
|
|
$
|
27
|
|
|
$
|
—
|
|
Related to British pound denominated receivables
|
$
|
2,678
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
13,271
|
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
Related to restricted cash
|
$
|
1,236
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
1,391
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Total
|
|
|
$
|
—
|
|
|
$
|
(64
|
)
|
|
|
|
$
|
29
|
|
|
$
|
(26
|
)
|
|
|
(1)
|
Represents the face amounts of forward contracts that were outstanding as of the period noted.
|
|
December 27,
2014
|
|
December 28,
2013 |
||||
Inventory:
|
|
|
|
||||
Raw materials
|
$
|
15,169
|
|
|
$
|
14,311
|
|
Work in process
|
50,046
|
|
|
49,172
|
|
||
Finished goods
(1)
|
81,285
|
|
|
60,202
|
|
||
Total
(2)
|
$
|
146,500
|
|
|
$
|
123,685
|
|
Property, plant and equipment, net:
|
|
|
|
||||
Computer hardware
|
$
|
8,785
|
|
|
$
|
9,692
|
|
Computer software
(3)
|
17,684
|
|
|
16,988
|
|
||
Laboratory and manufacturing equipment
|
162,004
|
|
|
146,834
|
|
||
Furniture and fixtures
|
1,340
|
|
|
1,347
|
|
||
Leasehold improvements
|
37,825
|
|
|
35,913
|
|
||
Construction in progress
|
14,726
|
|
|
8,950
|
|
||
Subtotal
|
$
|
242,364
|
|
|
$
|
219,724
|
|
Less accumulated depreciation and amortization
(4)
|
(160,798
|
)
|
|
(140,056
|
)
|
||
Total
|
$
|
81,566
|
|
|
$
|
79,668
|
|
Accrued expenses:
|
|
|
|
||||
Loss contingency related to non-cancelable purchase commitments
|
$
|
5,390
|
|
|
$
|
5,120
|
|
Professional and other consulting fees
|
1,831
|
|
|
1,411
|
|
||
Taxes payable
|
3,993
|
|
|
2,372
|
|
||
Royalties
|
2,648
|
|
|
1,540
|
|
||
Accrued rebate and customer prepay liability
|
941
|
|
|
3,807
|
|
||
Accrued interest on convertible senior notes
|
219
|
|
|
219
|
|
||
Other accrued expenses
|
11,419
|
|
|
7,962
|
|
||
Total
|
$
|
26,441
|
|
|
$
|
22,431
|
|
|
|
(1)
|
Included in finished goods inventory at December 27, 2014 and December 28, 2013 were
$10.2 million
and
$9.2 million
, respectively, of inventory at customer locations for which product acceptance had not occurred.
|
(2)
|
As of December 27, 2014 and December 28, 2013, the Company’s inventory value had been reduced by
$10.1 million
and
$8.7 million
, respectively, for excess and obsolescence, and
$7.1 million
and
$5.0 million
, respectively, for LCM adjustments.
|
(3)
|
Included in computer software at December 27, 2014 and December 28, 2013 were
$7.9 million
and
$7.9 million
, respectively, related to an enterprise resource planning (“ERP”) system that the Company implemented during 2012. The unamortized ERP costs at December 27, 2014 and December 28, 2013 were
$5.2 million
and
$6.3 million
, respectively.
|
(4)
|
Depreciation expense was
$25.9 million
,
$24.5 million
and
$23.5 million
(which includes depreciation of capitalized ERP costs of
$1.1 million
,
$1.1 million
and
$0.4 million
, respectively) for 2014, 2013 and 2012, respectively.
|
|
Unrealized Gain (Loss)
on Auction Rate
Securities
|
|
Unrealized Gain (Loss)
on Other
Available-for-Sale
Securities
|
|
Foreign Currency Translation
|
|
Accumulated
Tax Effect
|
|
Total
|
||||||||||
Balance at December 31, 2011
|
$
|
307
|
|
|
$
|
(142
|
)
|
|
$
|
(1,607
|
)
|
|
$
|
(753
|
)
|
|
$
|
(2,195
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
158
|
|
|
(43
|
)
|
|
(7
|
)
|
|
108
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|||||
Net current-period other comprehensive loss
|
(141
|
)
|
|
158
|
|
|
(43
|
)
|
|
(7
|
)
|
|
(33
|
)
|
|||||
Balance at December 29, 2012
|
$
|
166
|
|
|
$
|
16
|
|
|
$
|
(1,650
|
)
|
|
$
|
(760
|
)
|
|
$
|
(2,228
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(140
|
)
|
|
(952
|
)
|
|
—
|
|
|
(1,092
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|||||
Net current-period other comprehensive loss
|
(166
|
)
|
|
(140
|
)
|
|
(952
|
)
|
|
—
|
|
|
(1,258
|
)
|
|||||
Balance at December 28, 2013
|
$
|
—
|
|
|
$
|
(124
|
)
|
|
$
|
(2,602
|
)
|
|
$
|
(760
|
)
|
|
$
|
(3,486
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(320
|
)
|
|
(812
|
)
|
|
—
|
|
|
(1,132
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net current-period other comprehensive loss
|
—
|
|
|
(320
|
)
|
|
(812
|
)
|
|
—
|
|
|
(1,132
|
)
|
|||||
Balance at December 27, 2014
|
$
|
—
|
|
|
$
|
(444
|
)
|
|
$
|
(3,414
|
)
|
|
$
|
(760
|
)
|
|
$
|
(4,618
|
)
|
Details about Accumulated Other Comprehensive Loss Components
|
|
Amount Reclassified from Accumulated Other
Comprehensive Loss |
|
Affected Line Item in
the Statement Where Net Loss is Presented |
||||||||||
|
|
Years Ended
|
|
|
||||||||||
|
|
December 27, 2014
|
|
December 28, 2013
|
|
December 29, 2012
|
|
|
||||||
Unrealized gain on auction rate securities
|
|
$
|
—
|
|
|
$
|
(166
|
)
|
|
$
|
(141
|
)
|
|
Other gain (loss), net
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Provision for income taxes
|
|||
Total reclassifications for the period
|
|
$
|
—
|
|
|
$
|
(166
|
)
|
|
$
|
(141
|
)
|
|
Total, net of income tax
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013
|
|
December 29,
2012
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
13,659
|
|
|
$
|
(32,119
|
)
|
|
$
|
(85,330
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average common shares outstanding
|
123,672
|
|
|
117,425
|
|
|
110,739
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Employee equity plans
|
4,778
|
|
|
—
|
|
|
—
|
|
|||
Assumed conversion of convertible senior notes from conversion spread
|
115
|
|
|
—
|
|
|
—
|
|
|||
Dilutive weighted average common shares outstanding
|
128,565
|
|
|
117,425
|
|
|
110,739
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.11
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.77
|
)
|
Diluted
|
$
|
0.11
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.77
|
)
|
|
As of
|
|||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
|||
Stock options outstanding
|
362
|
|
|
6,367
|
|
|
9,008
|
|
Restricted stock units
|
331
|
|
|
6,583
|
|
|
6,703
|
|
Performance stock units
|
124
|
|
|
721
|
|
|
1,368
|
|
Employee stock purchase plan shares
|
741
|
|
|
661
|
|
|
1,100
|
|
Warrants to purchase common stock
|
—
|
|
|
—
|
|
|
93
|
|
Total
|
1,558
|
|
|
14,332
|
|
|
18,272
|
|
9.
|
Convertible Senior Notes
|
•
|
during any fiscal quarter commencing after the fiscal quarter ending on September 28, 2013 (and only during such fiscal quarter) if the last reported sale price of the common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per
$1,000
principal amount of Notes for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;
|
•
|
upon the occurrence of specified corporate events described under the Indenture, such as a consolidation, merger or binding share exchange; or
|
•
|
at any time on or after December 1, 2017 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances.
|
|
December 27,
2014
|
|
December 28,
2013 |
||||
Principal
|
$
|
150,000
|
|
|
$
|
150,000
|
|
Unamortized discount
(1)
|
(30,257
|
)
|
|
(37,322
|
)
|
||
Carrying amount
|
119,743
|
|
|
112,678
|
|
|
|
(1)
|
Unamortized discount includes debt conversion discount and issuance costs, which will be amortized over the remaining life of the Notes, which is approximately
4
years.
|
Debt discount related to value of conversion option
|
45,000
|
|
Debt issuance cost
|
(1,659
|
)
|
Total
|
43,341
|
|
|
Years Ended
|
||||||
|
December 27, 2014
|
|
December 28, 2013
|
||||
Contractual interest expense
|
$
|
2,626
|
|
|
$
|
1,539
|
|
Amortization of debt issuance costs
|
665
|
|
|
358
|
|
||
Amortization of debt discount
|
7,730
|
|
|
4,164
|
|
||
Total interest expense
|
$
|
11,021
|
|
|
$
|
6,061
|
|
10.
|
Commitments and Contingencies
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating lease payments
|
$
|
7,063
|
|
|
$
|
6,419
|
|
|
$
|
5,575
|
|
|
$
|
5,106
|
|
|
$
|
5,344
|
|
|
$
|
8,546
|
|
|
$
|
38,053
|
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Purchase obligations
|
$
|
126,211
|
|
|
$
|
2,050
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
128,261
|
|
|
December 27,
2014
|
|
December 28,
2013 |
||||
Beginning balance
|
$
|
22,908
|
|
|
$
|
16,482
|
|
Charges to operations
|
22,697
|
|
|
21,193
|
|
||
Utilization
|
(10,860
|
)
|
|
(9,404
|
)
|
||
Change in estimate
(1)
|
(7,705
|
)
|
|
(5,363
|
)
|
||
Balance at the end of the period
|
$
|
27,040
|
|
|
$
|
22,908
|
|
|
|
(1)
|
The Company records hardware warranty liabilities based on the latest quality and cost information available as of that date. The changes in estimate shown here are due to changes in overall actual failure rates and the
|
12.
|
Legal Matters
|
13.
|
Stockholders’ Equity
|
|
|
|
|
December 27,
2014
|
|
Outstanding stock options and awards
|
11,217
|
|
Reserved for future option and award grants
|
17,256
|
|
Reserved for future ESPP
|
7,262
|
|
Total common stock reserved for stock options and awards
|
35,735
|
|
|
Number of
Options
|
|
Weighted-Average
Exercise Price
Per Share
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at December 31, 2011
|
9,873
|
|
|
$
|
7.03
|
|
|
$
|
7,924
|
|
Options granted
|
127
|
|
|
$
|
7.18
|
|
|
|
||
Options exercised
|
(582
|
)
|
|
$
|
4.39
|
|
|
$
|
1,484
|
|
Options canceled
|
(410
|
)
|
|
$
|
8.50
|
|
|
|
||
Outstanding at December 29, 2012
|
9,008
|
|
|
$
|
7.13
|
|
|
$
|
5,726
|
|
Options granted
|
—
|
|
|
$
|
—
|
|
|
|
||
Options exercised
|
(2,217
|
)
|
|
$
|
6.59
|
|
|
$
|
7,583
|
|
Options canceled
|
(424
|
)
|
|
$
|
8.04
|
|
|
|
||
Outstanding at December 28, 2013
|
6,367
|
|
|
$
|
7.26
|
|
|
$
|
17,452
|
|
Options granted
|
25
|
|
|
$
|
9.02
|
|
|
|
||
Options exercised
|
(2,001
|
)
|
|
$
|
6.99
|
|
|
$
|
8,182
|
|
Options canceled
|
(93
|
)
|
|
$
|
12.38
|
|
|
|
||
Outstanding at December 27, 2014
|
4,298
|
|
|
$
|
7.29
|
|
|
$
|
32,833
|
|
Vested and expected to vest as of December 27, 2014
|
4,296
|
|
|
|
|
$
|
32,814
|
|
||
Exercisable at December 27, 2014
|
4,219
|
|
|
$
|
7.28
|
|
|
$
|
32,261
|
|
|
Number of
Restricted
Stock Units
|
|
Weighted-Average
Grant Date
Fair Value
Per Share
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at December 31, 2011
|
5,957
|
|
|
$
|
8.77
|
|
|
$
|
37,407
|
|
RSUs granted
|
3,620
|
|
|
$
|
7.51
|
|
|
|
||
RSUs released
|
(2,495
|
)
|
|
$
|
9.07
|
|
|
$
|
17,742
|
|
RSUs canceled
|
(379
|
)
|
|
$
|
8.27
|
|
|
|
||
Outstanding at December 29, 2012
|
6,703
|
|
|
$
|
8.01
|
|
|
$
|
38,873
|
|
RSUs granted
|
3,602
|
|
|
$
|
7.63
|
|
|
|
||
RSUs released
|
(3,070
|
)
|
|
$
|
8.26
|
|
|
$
|
25,028
|
|
RSUs canceled
|
(652
|
)
|
|
$
|
7.63
|
|
|
|
||
Outstanding at December 28, 2013
|
6,583
|
|
|
$
|
7.72
|
|
|
$
|
64,443
|
|
RSUs granted
|
2,705
|
|
|
$
|
8.80
|
|
|
|
|
|
RSUs released
|
(2,797
|
)
|
|
$
|
7.84
|
|
|
$
|
24,858
|
|
RSUs canceled
|
(449
|
)
|
|
$
|
7.85
|
|
|
|
||
Outstanding at December 27, 2014
|
6,042
|
|
|
$
|
8.14
|
|
|
$
|
90,085
|
|
Expected to vest as of December 27, 2014
|
5,850
|
|
|
|
|
$
|
87,221
|
|
|
Number of
Performance
Stock Units
|
|
Weighted-Average
Grant Date
Fair Value Per Share
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at December 31, 2011
|
2,595
|
|
|
$
|
10.51
|
|
|
$
|
16,304
|
|
PSUs granted
|
515
|
|
|
$
|
7.85
|
|
|
|
||
PSUs released
|
(883
|
)
|
|
$
|
9.40
|
|
|
$
|
5,448
|
|
PSUs canceled
|
(859
|
)
|
|
$
|
10.04
|
|
|
|
||
Outstanding at December 29, 2012
|
1,368
|
|
|
$
|
10.53
|
|
|
$
|
7,933
|
|
PSUs granted
|
552
|
|
|
$
|
6.63
|
|
|
|
||
PSUs released
|
(684
|
)
|
|
$
|
10.53
|
|
|
$
|
4,284
|
|
PSUs canceled
|
(515
|
)
|
|
$
|
11.31
|
|
|
|
||
Outstanding at December 28, 2013
|
721
|
|
|
$
|
7.04
|
|
|
$
|
7,054
|
|
PSUs granted
|
508
|
|
|
$
|
8.34
|
|
|
|
|
|
PSUs released
|
(255
|
)
|
|
$
|
6.36
|
|
|
$
|
2,097
|
|
PSUs canceled
|
(98
|
)
|
|
$
|
7.18
|
|
|
|
||
Outstanding at December 27, 2014
|
876
|
|
|
$
|
7.49
|
|
|
$
|
13,067
|
|
Expected to vest as of December 27, 2014
|
663
|
|
|
|
|
$
|
9,884
|
|
|
Unrecognized
Compensation
Expense, Net
|
|
Weighted-
Average Period
(in years)
|
||
Stock options
|
$
|
239
|
|
|
1.5
|
RSUs
|
$
|
28,287
|
|
|
2.3
|
PSUs
|
$
|
2,055
|
|
|
1.5
|
|
|
Options Outstanding
|
|
Vested and Exercisable
Options
|
||||||||||||
Exercise Price
|
|
Number of
Shares
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Weighted-
Average
Exercise
Price
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
||||||
|
|
(In thousands)
|
|
(In years)
|
|
|
|
(In thousands)
|
|
|
||||||
$0.76 - $ 4.04
|
|
754
|
|
|
1.51
|
|
$
|
2.06
|
|
|
754
|
|
|
$
|
2.06
|
|
$6.30 - $ 7.25
|
|
536
|
|
|
5.29
|
|
$
|
6.87
|
|
|
504
|
|
|
$
|
6.88
|
|
$7.45 - $ 7.61
|
|
706
|
|
|
3.72
|
|
$
|
7.54
|
|
|
704
|
|
|
$
|
7.54
|
|
$7.68 - $ 8.19
|
|
1,069
|
|
|
3.91
|
|
$
|
8.12
|
|
|
1,049
|
|
|
$
|
8.13
|
|
$8.39 - $ 8.58
|
|
627
|
|
|
6.01
|
|
$
|
8.57
|
|
|
627
|
|
|
$
|
8.57
|
|
$8.85 - $ 22.36
|
|
606
|
|
|
3.91
|
|
$
|
11.05
|
|
|
581
|
|
|
$
|
11.14
|
|
|
|
4,298
|
|
|
3.94
|
|
$
|
7.29
|
|
|
4,219
|
|
|
$
|
7.28
|
|
|
Years Ended
|
||||
Employee and Director Stock Options
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
Volatility
|
52%
|
|
N/A
|
|
65% - 68%
|
Risk-free interest rate
|
1.3%
|
|
N/A
|
|
0.7% - 1.0%
|
Expected life
|
4.3 years
|
|
N/A
|
|
4.0 - 5.3 years
|
Estimated fair value
|
3.85
|
|
N/A
|
|
$3.75 - $3.76
|
Total stock-based compensation expense
|
$702
|
|
$2,792
|
|
$8,436
|
|
|
|
Years Ended
|
||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
Volatility
|
46% - 51%
|
|
46% - 49%
|
|
54% - 57%
|
Risk-free interest rate
|
0.02% - 0.11%
|
|
0.10% - 0.14%
|
|
0.16% - 0.17%
|
Expected life
|
0.3 - 0.5 years
|
|
0.5 years
|
|
0.5 years
|
Estimated fair value
|
$2.05 - $2.57
|
|
$1.87 - $3.00
|
|
$1.73 - $2.63
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
Stock-based compensation expense
|
$
|
3,760
|
|
|
$
|
3,022
|
|
|
$
|
3,586
|
|
Employee contributions
|
$
|
10,728
|
|
|
$
|
8,559
|
|
|
$
|
9,030
|
|
Shares purchased
|
1,438
|
|
|
1,656
|
|
|
1,653
|
|
|
|
Year Ended
|
|
|
December 27, 2014
|
Infinera Volatility
|
|
49% - 50%
|
IGN Index Volatility
|
|
25%
|
Risk-free interest rate
|
|
0.66% - 0.71%
|
Correlation with IGN Index
|
|
0.60
|
Estimated fair value
|
|
$6.59 - $7.60
|
|
Year Ended
|
|
December 28,
2013
|
Infinera Volatility
|
55%
|
NASDAQ Telecom Composite Index Volatility
|
23%
|
Risk-free interest rate
|
0.42%
|
Correlation with NASDAQ Telecom Composite Index
|
0.56
|
Estimated fair value
|
$6.27 - $7.06
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
Stock-based compensation effects in inventory
|
$
|
3,088
|
|
|
$
|
3,189
|
|
|
$
|
4,891
|
|
Stock-based compensation effects in deferred inventory cost
|
$
|
13
|
|
|
$
|
15
|
|
|
$
|
42
|
|
Stock-based compensation effects in fixed assets
|
$
|
119
|
|
|
$
|
145
|
|
|
$
|
146
|
|
Stock-based compensation effects in net income (loss) before income taxes
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
1,921
|
|
|
$
|
1,871
|
|
|
$
|
2,710
|
|
Research and development
|
8,927
|
|
|
10,900
|
|
|
13,306
|
|
|||
Sales and marketing
|
7,477
|
|
|
7,624
|
|
|
10,450
|
|
|||
General and administrative
|
6,383
|
|
|
5,956
|
|
|
9,529
|
|
|||
|
24,708
|
|
|
26,351
|
|
|
35,995
|
|
|||
Cost of revenue—amortization from balance sheet
(1)
|
3,686
|
|
|
5,625
|
|
|
5,824
|
|
|||
Total stock-based compensation expense
|
$
|
28,394
|
|
|
$
|
31,976
|
|
|
$
|
41,819
|
|
|
|
(1)
|
Represents stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period.
|
14.
|
Income Taxes
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(133
|
)
|
State
|
446
|
|
|
(135
|
)
|
|
22
|
|
|||
Foreign
|
2,423
|
|
|
1,719
|
|
|
2,169
|
|
|||
Total current
|
$
|
2,869
|
|
|
$
|
1,584
|
|
|
$
|
2,058
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
(116
|
)
|
|
70
|
|
|
132
|
|
|||
Total deferred
|
$
|
(116
|
)
|
|
$
|
70
|
|
|
$
|
132
|
|
Total provision
|
$
|
2,753
|
|
|
$
|
1,654
|
|
|
$
|
2,190
|
|
|
Years Ended
|
|||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
|||
Expected tax at federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of federal benefit
|
1.8
|
%
|
|
0.3
|
%
|
|
—
|
%
|
Research credits
|
(11.4
|
)%
|
|
4.9
|
%
|
|
—
|
%
|
Stock-based compensation
|
14.7
|
%
|
|
(12.2
|
)%
|
|
(3.9
|
)%
|
Change in valuation allowance
|
(25.3
|
)%
|
|
(34.2
|
)%
|
|
(33.5
|
)%
|
Other
|
2.0
|
%
|
|
0.8
|
%
|
|
(0.2
|
)%
|
Effective tax rate
|
16.8
|
%
|
|
(5.4
|
)%
|
|
(2.6
|
)%
|
|
Years Ended
|
||||||
|
December 27,
2014
|
|
December 28,
2013 |
||||
Deferred tax assets:
|
|
|
|
||||
Net operating losses
|
$
|
107,601
|
|
|
$
|
123,908
|
|
Research credits
|
37,435
|
|
|
33,647
|
|
||
Nondeductible accruals
|
31,151
|
|
|
26,365
|
|
||
Inventory valuation
|
19,625
|
|
|
13,540
|
|
||
Property, plant and equipment
|
1,387
|
|
|
1,453
|
|
||
Intangible assets
|
2,119
|
|
|
3,446
|
|
||
Stock-based compensation
|
12,830
|
|
|
15,454
|
|
||
Total deferred tax assets
|
$
|
212,148
|
|
|
$
|
217,813
|
|
Valuation allowance
|
(199,698
|
)
|
|
(202,747
|
)
|
||
Net deferred tax assets
|
$
|
12,450
|
|
|
$
|
15,066
|
|
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
(203
|
)
|
|
(161
|
)
|
||
Convertible senior notes
|
(12,167
|
)
|
|
(14,941
|
)
|
||
Total deferred tax liabilities
|
$
|
(12,370
|
)
|
|
$
|
(15,102
|
)
|
Net deferred tax assets (liabilities)
|
$
|
80
|
|
|
$
|
(36
|
)
|
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
Beginning balance
|
$
|
15,148
|
|
|
$
|
13,902
|
|
|
$
|
13,066
|
|
Tax position related to current year
|
|
|
|
|
|
||||||
Additions
|
1,990
|
|
|
1,676
|
|
|
1,437
|
|
|||
Tax positions related to prior years
|
|
|
|
|
|
||||||
Additions
|
140
|
|
|
32
|
|
|
75
|
|
|||
Reductions
|
(76
|
)
|
|
(132
|
)
|
|
(580
|
)
|
|||
Lapses of statute of limitations
|
(224
|
)
|
|
(330
|
)
|
|
(96
|
)
|
|||
Ending balance
|
$
|
16,978
|
|
|
$
|
15,148
|
|
|
$
|
13,902
|
|
15.
|
Segment Information
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
Americas:
|
|
|
|
|
|
||||||
United States
|
$
|
476,172
|
|
|
$
|
345,734
|
|
|
$
|
296,849
|
|
Other Americas
|
34,379
|
|
|
10,377
|
|
|
11,811
|
|
|||
|
$
|
510,551
|
|
|
$
|
356,111
|
|
|
$
|
308,660
|
|
Europe, Middle East and Africa
|
132,271
|
|
|
150,912
|
|
|
116,663
|
|
|||
Asia Pacific
|
25,257
|
|
|
37,099
|
|
|
13,114
|
|
|||
Total revenue
|
$
|
668,079
|
|
|
$
|
544,122
|
|
|
$
|
438,437
|
|
|
December 27,
2014
|
|
December 28,
2013 |
||||
United States
|
$
|
79,025
|
|
|
$
|
76,850
|
|
Other Americas
|
196
|
|
|
319
|
|
||
Asia Pacific
|
1,477
|
|
|
1,451
|
|
||
Europe, Middle East and Africa
|
868
|
|
|
1,048
|
|
||
Total property, plant and equipment, net
|
$
|
81,566
|
|
|
$
|
79,668
|
|
16.
|
Employee Benefit Plan
|
17.
|
Financial Information by Quarter (Unaudited)
|
|
For the Three Months Ended (Unaudited)
|
||||||||||||||||||||||||||||||
|
|
|
2014
|
|
|
|
2013
|
||||||||||||||||||||||||
|
Dec. 27
|
|
Sep. 27
|
|
Jun. 28
|
|
Mar. 29
|
|
Dec. 28
|
|
Sep. 28
|
|
Jun. 29
|
|
Mar. 30
|
||||||||||||||||
|
|
|
|
|
(In thousands, except per share data)
|
|
|
|
|
||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Product
|
$
|
158,492
|
|
|
$
|
147,178
|
|
|
$
|
142,364
|
|
|
$
|
124,242
|
|
|
$
|
115,102
|
|
|
$
|
121,332
|
|
|
$
|
120,647
|
|
|
$
|
108,343
|
|
Services
|
27,814
|
|
|
26,381
|
|
|
23,035
|
|
|
18,573
|
|
|
23,990
|
|
|
20,688
|
|
|
17,738
|
|
|
16,282
|
|
||||||||
Total revenue
|
186,306
|
|
|
173,559
|
|
|
165,399
|
|
|
142,815
|
|
|
139,092
|
|
|
142,020
|
|
|
138,385
|
|
|
124,625
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of product
|
89,809
|
|
|
86,703
|
|
|
85,906
|
|
|
78,438
|
|
|
73,385
|
|
|
66,685
|
|
|
80,198
|
|
|
75,447
|
|
||||||||
Cost of services
|
12,154
|
|
|
11,554
|
|
|
9,240
|
|
|
5,971
|
|
|
9,795
|
|
|
6,964
|
|
|
6,533
|
|
|
6,476
|
|
||||||||
Total cost of revenue
|
101,963
|
|
|
98,257
|
|
|
95,146
|
|
|
84,409
|
|
|
83,180
|
|
|
73,649
|
|
|
86,731
|
|
|
81,923
|
|
||||||||
Gross profit
|
84,343
|
|
|
75,302
|
|
|
70,253
|
|
|
58,406
|
|
|
55,912
|
|
|
68,371
|
|
|
51,654
|
|
|
42,702
|
|
||||||||
Operating expenses
|
71,477
|
|
|
67,822
|
|
|
62,201
|
|
|
59,462
|
|
|
62,993
|
|
|
61,926
|
|
|
60,262
|
|
|
57,644
|
|
||||||||
Income (loss) from operations
|
12,866
|
|
|
7,480
|
|
|
8,052
|
|
|
(1,056
|
)
|
|
(7,081
|
)
|
|
6,445
|
|
|
(8,608
|
)
|
|
(14,942
|
)
|
||||||||
Other income (expense), net
|
(2,773
|
)
|
|
(2,432
|
)
|
|
(2,655
|
)
|
|
(3,070
|
)
|
|
(2,683
|
)
|
|
(2,790
|
)
|
|
(800
|
)
|
|
(6
|
)
|
||||||||
Income (loss) before income taxes
|
10,093
|
|
|
5,048
|
|
|
5,397
|
|
|
(4,126
|
)
|
|
(9,764
|
)
|
|
3,655
|
|
|
(9,408
|
)
|
|
(14,948
|
)
|
||||||||
Provision for income taxes
|
1,683
|
|
|
205
|
|
|
617
|
|
|
248
|
|
|
414
|
|
|
308
|
|
|
601
|
|
|
331
|
|
||||||||
Net income (loss)
|
$
|
8,410
|
|
|
$
|
4,843
|
|
|
$
|
4,780
|
|
|
$
|
(4,374
|
)
|
|
$
|
(10,178
|
)
|
|
$
|
3,347
|
|
|
$
|
(10,009
|
)
|
|
$
|
(15,279
|
)
|
Net income (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.07
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.13
|
)
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.13
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
Page
|
|
Years Ended
|
||||||||||
|
December 27,
2014
|
|
December 28,
2013 |
|
December 29,
2012 |
||||||
|
(In thousands)
|
||||||||||
Deferred tax asset, valuation allowance
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
202,747
|
|
|
$
|
213,449
|
|
|
$
|
188,351
|
|
Additions
|
17,276
|
|
|
5,706
|
|
|
25,098
|
|
|||
Reductions
|
(20,325
|
)
|
|
(16,408
|
)
|
|
—
|
|
|||
Ending balance
|
$
|
199,698
|
|
|
$
|
202,747
|
|
|
$
|
213,449
|
|
Allowance for doubtful accounts
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
43
|
|
|
$
|
94
|
|
|
$
|
—
|
|
Additions
|
18
|
|
|
56
|
|
|
94
|
|
|||
Reductions
|
(23
|
)
|
|
(107
|
)
|
|
—
|
|
|||
Ending balance
|
$
|
38
|
|
|
$
|
43
|
|
|
$
|
94
|
|
Provision for other receivables
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
563
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reductions
|
—
|
|
|
—
|
|
|
(563
|
)
|
|||
Ending balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Exhibit No.
|
|
Description
|
3.1
|
|
Amended and Restated Certificate of Incorporation, incorporated herein by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on June 12, 2007.
|
3.2
|
|
Amended and Restated Bylaws, incorporated herein by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on February 17, 2009.
|
4.1
|
|
Form of Common Stock Certificate, incorporated herein by reference to Exhibit 4.1 of the Registrant’s Form S-1/A (No. 333-140876), filed with the SEC on April 27, 2007.
|
4.2
|
|
Indenture dated May 30, 2013, between the Registrant and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on May 30, 2013.
|
10.1*
|
|
Form of Indemnification Agreement between Registrant and each of its directors and executive officers, incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form S-1 (No. 333-140876), filed with the SEC on February 26, 2007.
|
10.2*
|
|
2000 Stock Plan, as amended, and forms of stock option agreements thereunder, incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form S-1 (No. 333-140876), filed with the SEC on February 26, 2007.
|
10.3*
|
|
2007 Equity Incentive Plan.
|
10.4*
|
|
Infinera Corporation 2007 Employee Stock Purchase Plan, incorporated herein by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K (no. 001-33486), filed with the SEC on May 20, 2014.
|
10.5*
|
|
Form of 2007 Employee Stock Purchase Plan Subscription Agreement, incorporated herein by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K (no. 001-33486), filed with the SEC on May 20, 2014.
|
10.6*
|
|
Bonus Plan, incorporated by reference herein to Exhibit 10.1 of the Registrant’s Current Report on 8-K (No. 001-33486), filed with the SEC on February 14, 2011.
|
10.7*
|
|
Form of Section 16 Officer Restricted Stock Unit Agreement under the 2007 Equity Incentive Plan.
|
10.8*
|
|
Form of Section 16 Officer Performance Share Agreement under the 2007 Equity Incentive Plan.
|
10.9*
|
|
Form of Director Restricted Stock Unit Agreement under the 2007 Equity Incentive Plan.
|
10.10*
|
|
Form of Stock Option Agreement under the 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q (No. 001-33486), filed with the SEC on May 5, 2010.
|
10.11*
|
|
Form of CEO Amended and Restated Change of Control Severance Agreement, incorporated herein by reference to Exhibit 10.10 of the Registrant’s Annual Report on Form 10-K (No. 001-33486), filed with the SEC on March 5, 2013.
|
10.12*
|
|
Form of Section 16 Officer Amended and Restated Change of Control Severance Agreement, incorporated herein by reference to Exhibit 10.11 of the Registrant’s Annual Report on Form 10-K (No. 001-33486), filed with the SEC on March 5, 2013.
|
10.13*
|
|
Executive Clawback Policy, incorporated herein by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on January 17, 2013.
|
10.14
|
|
Separation Agreement and General Release of All Claims between Ronald D. Martin and the Registrant dated January 15, 2013, incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on January 17, 2013.
|
10.15
|
|
Consulting Agreement dated April 10, 2013, between the Registrant and Michael O. McCarthy III, incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on April 11, 2013.
|
10.16
|
|
Purchase Agreement dated May 23, 2013, between the Registrant and Morgan Stanley and Co. LLC and Goldman, Sachs & Co., as representatives of the initial purchasers, incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on May 24, 2013.
|
10.17
|
|
Consulting Agreement between Ita Brennan and the Company dated February 28, 2014, Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on March 3, 2014.
|
10.18
|
|
Separation Agreement and General Release of All Claims between Alastair A. Short and the Company, incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (No. 001-33486), filed with the SEC on July 17, 2014.
|
10.19*
|
|
Executive Severance Policy.
|
21.1
|
|
Subsidiaries.
|
23.1
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1**
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
*
|
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
|
**
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
|
Infinera Corporation
|
||
|
|
|
|
|
By:
|
|
/s/ BRAD FELLER
|
|
|
|
Brad Feller
Chief Financial Officer
Principal Financial and Accounting Officer
|
Name and Signature
|
Title
|
Date
|
|
|
|
/s/ THOMAS J. FALLON
|
Chief Executive Officer and Director and Principal Executive Officer
|
February 18, 2015
|
Thomas J. Fallon
|
||
|
|
|
/s/ BRAD FELLER
|
Chief Financial Officer, Principal Financial and
Accounting Officer |
February 18, 2015
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Brad Feller
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/s/ DAVID F. WELCH, PH.D.
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Co-founder, President and Director
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February 18, 2015
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David F. Welch, Ph.D.
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/s/ KAMBIZ Y. HOOSHMAND
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Chairman of the Board
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February 18, 2015
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Kambiz Y. Hooshmand
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/s/ JAMES DOLCE
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Director
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February 18, 2015
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James Dolce
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/s/ MARCEL GANI
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Director
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February 18, 2015
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Marcel Gani
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/s/ PAUL J. MILBURY
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Director
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February 18, 2015
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Paul J. Milbury
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/s/ CARL REDFIELD
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Director
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February 18, 2015
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Carl Redfield
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/s/ MARK A. WEGLEITNER
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Director
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February 18, 2015
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Mark A. Wegleitner
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•
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to attract and retain the best available personnel for positions of substantial responsibility,
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•
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to provide additional incentive to Employees, Directors and Consultants, and
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•
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to promote the success of the Company’s business.
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3.
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Stock Subject to the Plan
.
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4.
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Administration of the Plan
.
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Participant:
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Address:
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Grant Number
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Date of Grant
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Vesting Commencement Date
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Number of Restricted Stock Units
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SHARES
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VEST DATE
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Participant:
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Address:
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Grant Number:
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Date of Grant:
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Vesting Commencement Date:
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Number of Performance Shares:
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Target:
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Max:
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Career Level Definition
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Base Salary Multiple
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COBRA Premiums
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Chief Executive Officer
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1.5
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18 Months
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President, Executive Vice President or Senior Vice President, who is designated as a Section 16 Officer
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1.0
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12 Months
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Senior Vice President, who is not designated as a Section 16 Officer
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0.5
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6 Months
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(i)
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a change of control of the Company, or
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(ii)
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for Cause (as defined below).
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By:
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/
s
/ T
HOMAS
J. F
ALLON
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Thomas J. Fallon
Chief Executive Officer
(Principal Executive Officer)
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By:
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/s/ BRAD FELLER
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Brad Feller
Chief Financial Officer
(Principal Financial and Accounting Officer)
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(a)
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the Annual Report on Form 10-K of Infinera Corporation for the year ended December 27, 2014 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(b)
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the information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Infinera Corporation.
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/s/ T
HOMAS
J. F
ALLON
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Thomas J. Fallon
Chief Executive Officer
(Principal Executive Officer)
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(a)
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that the Annual Report on Form 10-K of Infinera Corporation for the year ended December 27, 2014 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(b)
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the information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Infinera Corporation.
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/s/ BRAD FELLER
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Brad Feller
Chief Financial Officer
(Principal Financial and Accounting Officer)
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