Infinera Corporation Reports Fourth Quarter and Fiscal Year 2012 Financial Results

SUNNYVALE, CA -- (Marketwire) -- Feb 05, 2013 -- Infinera Corporation (NASDAQ: INFN), a leading provider of digital optical networks, today released financial results for the fourth quarter and fiscal year ended December 29, 2012.

GAAP revenues for the quarter were $128.1 million compared to $112.2 million in the third quarter of 2012 and $112.0 million in the fourth quarter of 2011.

GAAP gross margins for the quarter were 34% compared to 37% in the third quarter of 2012 and 40% in the fourth quarter of 2011. GAAP net loss for the quarter was $(16.1) million, or $(0.14) per share, compared to net loss of $(19.1) million, or $(0.17) per share, in the third quarter of 2012 and a net loss of $(19.4) million, or $(0.18) per share, in the fourth quarter of 2011.

Non-GAAP gross margins for the quarter were 36% compared to 39% in the third quarter of 2012 and 42% in the fourth quarter of 2011. Non-GAAP net loss for the quarter was $(6.0) million, or $(0.05) per diluted share, compared to net loss of $(7.8) million, or $(0.07) per diluted share in the third quarter of 2012 and net loss of $(6.7) million, or $(0.06) per diluted share, in the fourth quarter of 2011. These Non-GAAP measures exclude non-cash stock-based compensation expenses and restructuring and other related costs.

GAAP revenues for the year were $438.4 million compared to $404.9 million in 2011.

GAAP gross margins for the year were 36% compared to 41% in 2011. GAAP net loss for the year was $(85.3) million, or $(0.77) per share compared to $(81.7) million, or $(0.78) per share in 2011.

Non-GAAP gross margins for the year were 38% compared to 43% in 2011. Non-GAAP net loss for the year was $(43.5) million or $(0.38) per diluted share in 2012, compared to net loss of $(31.7) million or $(0.29) per diluted share in 2011. These Non-GAAP measures exclude non-cash stock-based compensation expenses and restructuring and other related costs.

Management Commentary

"Our fourth quarter results reflected solid execution of our growth strategy and represented a strong finish to a productive year for Infinera," said Tom Fallon, president and chief executive officer. "Our DTN-X continues to gain traction and to date, we have purchase commitments from 22 customers, including seven new to Infinera. These customers represent a broad cross section of our market segments. Revenue from the DTN-X platform continues to ramp."

"During the fourth quarter, we were pleased to announce our first domestic Tier 1 backbone deployment with CenturyLink. We have also successfully completed the OSMINE certification process, another key milestone in demonstrating our US Tier 1 readiness. Our ability to fully service global Tier 1 customers essentially doubles our addressable market. We also added four new DTN customers during the quarter for a total of 111 customers worldwide," continued Mr. Fallon.

"We are optimistic about the outlook for 2013. Interest in our unique 100G converged DWDM/OTN switching solution remains strong, resulting in significant trial activity, which has helped us build a strong pipeline into 2013. A strong focus on winning footprint and gaining market share, balanced with prudent financial management remain our priorities for 2013," Mr. Fallon concluded.

Conference Call Information:

Infinera will host a conference call for analysts and investors to discuss its fourth quarter and fiscal year 2012 results and first quarter outlook today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be accessible from the "Investor Relations" section of the company's website at www.infinera.com. Following the webcast, an archived version will be available on the website for 90 days. To hear the replay, parties in the United States and Canada should call 1-888-566-0401. International parties can access the replay at 1-203-369-3040.

About Infinera

Infinera provides Digital Optical Networking systems to telecommunications carriers worldwide. Infinera's systems are unique in their use of a breakthrough semiconductor technology: the photonic integrated circuit (PIC). Infinera's systems and PIC technology are designed to provide customers with simpler and more flexible engineering and operations, faster time-to-service, and the ability to rapidly deliver differentiated services without reengineering their optical infrastructure. For more information, please visit www.infinera.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding our expectations for customer interest in, adoption of, and revenue and purchase commitments related to our DTN-X product, our ability to fully service Tier 1 customers and the addressable market related to Tier 1 customers, and customer interest in our 100G converged DWDM/OTN switching solution, and our building of a strong pipeline for 2013. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include unexpected delays in the development, production or availability of our products; decisions by customers to delay orders of the product; changes in the marketplace that would affect customer demand for the product, as well as our general ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs and develop new or enhanced products to meet those needs; the adoption rate of our products; our ability to establish and maintain successful relationships with our customers; our ability to reduce customer concentration; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; our ability to operate profitably; aggressive business tactics by our competitors; our reliance on single-source suppliers; shortages or price fluctuations in our supply chain; our ability to protect our intellectual property rights; and general, political, economic and market conditions and events. Further information about these risks and uncertainties, and other risks and uncertainties that affect our business, are contained in the risk factors section and other sections of our annual report on Form 10-K filed with the Securities Exchange Commission on March 6, 2012, as well as subsequent reports filed with or furnished to the SEC. These reports are available on our website at www.infinera.com and the SEC's website at www.sec.gov. We assume no obligation to, and do not currently intend to, update any such forward-looking statements.

Use of Non-GAAP Financial Information

In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP measures that exclude non-cash stock-based compensation expenses. We believe these adjustments are appropriate to enhance an overall understanding of our underlying financial performance and also our prospects for the future and are considered by management for the purpose of making operational decisions. In addition, these results are the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income (loss), basic and diluted net income (loss) per share, or gross margin prepared in accordance with GAAP. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations. For a description of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures, please see the section titled, "GAAP to Non-GAAP Reconciliations." We anticipate disclosing forward-looking non-GAAP information in our conference call to discuss our fourth quarter results, including an estimate of non-GAAP earnings for the first quarter of 2013 that excludes non-cash stock-based compensation expenses.

A copy of this press release can be found on the investor relations page of Infinera's website at www.infinera.com.

Infinera Corporation and the Infinera logo are trademarks or registered trademarks of Infinera Corporation. All other trademarks used or mentioned herein belong to their respective owners.

                                                                            
                                                                                                                                
                                                                                                                                                        
Infinera  Corporation                                                                                                                
GAAP  Condensed  Consolidated  Statements  of  Operations                                                
(In  thousands,  except  share  amounts)                                                                                
(Unaudited)                                                                                                                                  
                                                  Three  Months  Ended                    Twelve  Months  Ended        
                                          --------------------------    --------------------------  
                                          December  29,    December  31,    December  29,    December  31,  
                                                  2012                    2011                    2012                    2011          
                                          ------------    ------------    ------------    ------------  
Revenue:                                                                                                                                        
    Product                        $        109,051    $          93,025    $        378,138    $        349,468  
    Ratable  product                                                                                                                      
      and  related                                                                                                                            
      support  and                                                                                                                            
      services                                      393                      593                  1,897                  3,176  
    Services                                  18,620                18,391                58,402                52,233  
                                          ------------    ------------    ------------    ------------  
        Total  revenue                  128,064              112,009              438,437              404,877  
                                                                                                                                                        
  Cost  of  revenue                                                                                                                        
  (1):                                                                                                                                              
    Cost  of  product                    77,023                61,103              258,874              219,710  
    Cost  of  ratable                                                                                                                      
      product  and                                                                                                                            
      related  support                                                                                                                    
      and  services                              104                      250                      563                  1,096  
    Cost  of  services                    7,669                  5,972                21,431                18,580  
                                          ------------    ------------    ------------    ------------  
        Total  cost  of                                                                                                                      
          revenue                              84,796                67,325              280,868              239,386  
                                                                                                                                                        
Gross  profit                              43,268                44,684              157,569              165,491  
                                                                                                                                                        
Operating  expenses                                                                                                                    
  (1):                                                                                                                                              
    Research  and                                                                                                                            
      development                          26,660                31,218              117,233              127,120  
    Sales  and                                                                                                                                  
      marketing                              20,558                18,336                75,862                64,773  
    General  and                                                                                                                              
      administrative                    11,563                14,119                47,475                54,375  
    Restructuring  and                                                                                                                  
      other  costs                                                                                                                            
      (credit)                                          -                    (129)                        -                    (129)
                                          ------------    ------------    ------------    ------------  
        Total  operating                                                                                                                  
          expenses                            58,781                63,544              240,570              246,139  
                                                                                                                                                        
Loss  from  operations            (15,513)            (18,860)            (83,001)            (80,648)
                                                                                                                                                        
Other  income                                                                                                                                
  (expense),  net:                                                                                                                        
    Interest  income                          233                      272                      911                  1,014  
    Other  gain  (loss),                                                                                                                
      net                                              (158)                  (216)              (1,050)                  (419)
                                          ------------    ------------    ------------    ------------  
        Total  other                                                                                                                          
          income                                                                                                                                  
          (expense),  net                        75                        56                    (139)                    595  
                                                                                                                                                        
Loss  before  income                                                                                                                    
  taxes                                        (15,438)            (18,804)            (83,140)            (80,053)
Provision  for  income                                                                                                                
  taxes                                                650                      546                  2,190                  1,691  
                                          ------------    ------------    ------------    ------------  
Net  loss                          $        (16,088)  $        (19,350)  $        (85,330)  $        (81,744)
                                          ============    ============    ============    ============  
                                                                                                                                                        
Net  loss  per  common                                                                                                                  
  share,  basic  and                                                                                                                      
  diluted                          $            (0.14)  $            (0.18)  $            (0.77)  $            (0.78)
                                          ============    ============    ============    ============  
                                                                                                                                                        
Weighted  average                                                                                                                        
  shares  used  in                                                                                                                          
  computing  basic  and                                                                                                                
  diluted  net  loss                                                                                                                      
  per  common  share                  112,311              106,893              110,739              105,432  
                                          ============    ============    ============    ============  
                                                                                                                                                        
(1)  The  following  table  summarizes  the  effects  of  stock-based  compensation    
        related  to  employees  and  non-employees  for  the  three  and  twelve  months    
        ended  December  29,  2012  and  December  31,  2011:                                                    
                                                                                                                                                        
                                                          Three  Months  Ended              Twelve  Months  Ended      
                                                  -------------------------  -------------------------
                                                  December  29,  December  31,  December  29,  December  31,
                                                          2012                  2011                  2012                  2011        
                                                  ------------  ------------  ------------  ------------
Cost  of  revenue                    $                735  $                710  $            2,710  $            2,923
Research  and  development                2,852                3,915              13,306              14,990
Sales  and  marketing                          2,802                2,317              10,450                8,818
General  and                                                                                                                                  
  administration                                  1,797                4,481                9,529              18,502
                                                  ------------  ------------  ------------  ------------
                                                                8,186              11,423              35,995              45,233
Cost  of  revenue  -                                                                                                                      
  amortization  from                                                                                                                    
  balance  sheet*                                  1,949                1,307                5,824                4,924
                                                  ------------  ------------  ------------  ------------
Total  stock-based                                                                                                                      
  compensation  expense        $          10,135  $          12,730  $          41,819  $          50,157
                                                  ============  ============  ============  ============
                                                                                                                                                        
*  Stock-based  compensation  expense  deferred  to  inventory  and  deferred              
inventory  costs  in  prior  periods  and  recognized  in  the  current  period.            
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
Infinera  Corporation                                                                                                                
GAAP  to  Non-GAAP  Reconciliations                                                                                        
(In  thousands,  except  per  share  data)                                                                              
(Unaudited)                                                                                                                                  
                                                                                                                                                        
                                                        Three  Months  Ended                    Twelve  Months  Ended  
                                          --------------------------------    --------------------  
                                            December      September      December      December      December  
                                            29,  2012      29,  2012        31,  2011      29,  2012      31,  2011  
                                          ---------    ----------    ---------    ---------    ---------  
Reconciliation  of                                                                                                                      
  Gross  Profit:                                                                                                                            
U.S.  GAAP  as                                                                                                                                
  reported                        $    43,268    $      41,500    $    44,684    $  157,569    $  165,491  
Stock-based                                                                                                                                  
  compensation(1)                  2,684              2,389            2,017            8,534            7,847  
                                          ---------    ----------    ---------    ---------    ---------  
Non-GAAP  as  adjusted  $    45,952    $      43,889    $    46,701    $  166,103    $  173,338  
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
Reconciliation  of                                                                                                                      
  Gross  Margin:                                                                                                                            
U.S.  GAAP  as                                                                                                                                
  reported                                      34%                  37%                40%                36%                41%
Stock-based                                                                                                                                  
  compensation(1)                          2%                    2%                  2%                  2%                  2%
                                          ---------    ----------    ---------    ---------    ---------  
Non-GAAP  as  adjusted                36%                  39%                42%                38%                43%
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
Reconciliation  of                                                                                                                      
  Loss                                                                                                                                              
from  Operations:                                                                                                                        
U.S.  GAAP  as                                                                                                                                
  reported                        $  (15,513)  $    (18,205)  $  (18,860)  $  (83,001)  $  (80,648)
Restructuring  and                                                                                                                      
  other  related  costs                                                                                                                
  (credit)(2)                                  -                      -              (129)                  -              (129)
Stock-based                                                                                                                                  
  compensation(1)                10,135            11,317          12,730          41,819          50,157  
                                          ---------    ----------    ---------    ---------    ---------  
Non-GAAP  as  adjusted  $    (5,378)  $      (6,888)  $    (6,259)  $  (41,182)  $  (30,620)
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
Reconciliation  of                                                                                                                      
  Net  Loss:                                                                                                                                    
U.S.  GAAP  as                                                                                                                                
  reported                        $  (16,088)  $    (19,081)  $  (19,350)  $  (85,330)  $  (81,744)
Restructuring  and                                                                                                                      
  other  related  costs                                                                                                                
  (credit)(2)                                  -                      -              (129)                  -              (129)
Stock-based                                                                                                                                  
  compensation(1)                10,135            11,317          12,730          41,819          50,157  
                                          ---------    ----------    ---------    ---------    ---------  
Non-GAAP  as  adjusted  $    (5,953)  $      (7,764)  $    (6,749)  $  (43,511)  $  (31,716)
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
Reconciliation  of                                                                                                                      
  Net  Loss  per  Common                                                                                                                
Share  -  Basic:                                                                                                                            
U.S.  GAAP  as                                                                                                                                
  reported                        $      (0.14)  $        (0.17)  $      (0.18)  $      (0.77)  $      (0.78)
                                          =========    ==========    =========    =========    =========  
Non-GAAP  as  adjusted  $      (0.05)  $        (0.07)  $      (0.06)  $      (0.39)  $      (0.30)
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
Reconciliation  of                                                                                                                      
  Net  Loss  per                                                                                                                              
  CommonShare  -                                                                                                                            
  Diluted:                                                                                                                                      
U.S.  GAAP  as                                                                                                                                
  reported                        $      (0.14)  $        (0.17)  $      (0.18)  $      (0.77)  $      (0.78)
                                          =========    ==========    =========    =========    =========  
Non-GAAP  as                                                                                                                                  
  adjusted(3)                  $      (0.05)  $        (0.07)  $      (0.06)  $      (0.38)  $      (0.29)
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
Weighted  average                                                                                                                        
  shares  used  in                                                                                                                          
  computing  net  loss                                                                                                                  
  per  common  share  -                                                                                                                  
  U.S.  GAAP:                                                                                                                                  
Basic                                    112,311          111,579        106,893        110,739        105,432  
                                          =========    ==========    =========    =========    =========  
Diluted                                112,311          111,579        106,893        110,739        105,432  
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
Weighted  average                                                                                                                        
  shares  used  in                                                                                                                          
  computing  net  loss                                                                                                                  
  per  common  share  -                                                                                                                  
  Non-GAAP:                                                                                                                                    
Basic                                    112,311          111,579        106,893        110,739        105,432  
                                          =========    ==========    =========    =========    =========  
Diluted(3)                          114,115          113,443        110,018        113,124        108,770  
                                          =========    ==========    =========    =========    =========  
                                                                                                                                                        
                                                                                                                                                        
(1)  Stock-based  compensation  expense  is  calculated  in  accordance  with  the      
        fair  value  recognition  provisions  of  Financial  Accounting  Standards          
        Board  Accounting  Standards  Codification  (ASC)  Topic  718,  Compensation-    
        Stock  Compensation  effective  January  1,  2006.  The  following  table              
        summarizes  the  effects  of  stock-based  compensation  related  to  employees  
        and  non-employees:                                                                                                            
                                                                                                                                                        
                                                          Three  Months  Ended                  Twelve  Months  Ended  
                                            --------------------------------  ---------------------
                                              December      September    December      December      December  
                                                    29,                29,                31,                29,                31,      
                                                  2012              2012              2011              2012              2011      
                                            ----------  ----------  ----------  ----------  ----------
Cost  of  revenue              $            735  $            683  $            710  $        2,710  $        2,923
Research  and                                                                                                                                
  development                              2,852            3,439            3,915          13,306          14,990
Sales  and  marketing                2,802            2,685            2,317          10,450            8,818
General  and                                                                                                                                  
  administration                        1,797            2,804            4,481            9,529          18,502
                                            ----------  ----------  ----------  ----------  ----------
                                                      8,186            9,611          11,423          35,995          45,233
Cost  of  revenue  -                                                                                                                      
  amortization  from                                                                                                                    
  balance  sheet*                        1,949            1,706            1,307            5,824            4,924
                                            ----------  ----------  ----------  ----------  ----------
Total  stock-based                                                                                                                      
  compensation  expense  $      10,135  $      11,317  $      12,730  $      41,819  $      50,157
                                            ==========  ==========  ==========  ==========  ==========
                                                                                                                                                        
*  Stock-based  compensation  expense  deferred  to  inventory  and  deferred              
  inventory  costs  in  prior  periods  and  recognized  in  the  current  period.          
                                                                                                                                                        
(2)  Adjustment  amount  represents  equipment  and  facility-related  creidts          
        associated  with  restructuring  recorded  in  relation  to  the  closure  of  our
        Maryland  FAB  announced  on  July  21,  2009.  These  amounts  have  been                
        adjusted  in  arriving  at  our  non-GAAP  results  as  they  are  non-recurring    
        in  nature  and  the  adjusted  numbers  provide  a  better  indication  of  our      
        underlying  business  performance.                                                                                
                                                                                                                                                        
(3)  Diluted  shares  used  to  calculate  net  loss  per  share  on  a  non-GAAP  basis  
        provided  for  informational  purposes  only.                                                              
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
Infinera  Corporation                                                                                                                
Condensed  Consolidated  Balance  Sheets                                                                              
(In  thousands,  except  par  values)                                                                                      
(Unaudited)                                                                                                                                  
                                                                                                                                                        
                                                                                                  December  29,    December  31,  
                                                                                                          2012                    2011          
                                                                                                  ------------    ------------  
ASSETS                                                                                                                                            
                                                                                                                                                        
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents                                            $        104,666    $          94,458  
    Short-term  investments                                                              76,146              101,296  
    Accounts  receivable,  net  of  allowance  for                                                                  
      doubtful  accounts  of  $94  in  2012  and  $0  in                                                              
      2011                                                                                              107,039                80,616  
    Other  receivables                                                                          2,909                  1,346  
    Inventory                                                                                      127,809                88,996  
    Deferred  inventory  costs                                                            1,029                  5,987  
    Prepaid  expenses  and  other  current  assets                          9,899                10,532  
                                                                                                  ------------    ------------  
            Total  current  assets                                                        429,497              383,231  
                                                                                                                                                        
    Property,  plant  and  equipment,  net                                      80,343                76,753  
    Deferred  inventory  costs,  non-current                                      100                  1,020  
    Long-term  investments                                                                  2,874                54,315  
    Cost-method  investment                                                                9,000                  9,000  
    Long-term  restricted  cash                                                          3,868                  3,047  
    Deferred  tax  asset                                                                            805                      822  
    Other  non-current  assets                                                            1,683                  3,516  
                                                                                                  ------------    ------------  
            Total  assets                                                              $        528,170    $        531,704  
                                                                                                  ============    ============  
                                                                                                                                                        
LIABILITIES  AND  STOCKHOLDERS'  EQUITY                                                                                
                                                                                                                                                        
Current  liabilities:                                                                                                                
        Accounts  payable                                                          $          61,428    $          48,838  
        Accrued  expenses                                                                      25,483                22,421  
        Accrued  compensation  and  related  benefits                    22,325                18,966  
        Accrued  warranty                                                                        7,262                  5,692  
        Deferred  revenue                                                                      26,744                22,781  
        Deferred  tax  liability                                                                805                      767  
                                                                                                  ------------    ------------  
            Total  current  liabilities                                              144,047              119,465  
                                                                                                                                                        
        Accrued  warranty,  non-current                                              9,220                  7,173  
        Deferred  revenue,  non-current                                              3,210                  3,410  
        Other  long-term  liabilities                                                15,557                13,853  
                                                                                                                                                        
Commitments  and  contingencies                                                                                              
                                                                                                                                                        
Stockholders'  equity:                                                                                                              
        Preferred  stock,  $0.001  par  value  Authorized                                                        
          shares  -  25,000  and  no  shares  issued  and                                                              
          outstanding                                                                                        -                          -  
        Common  stock,  $0.001  par  value  Issued  and                                                              
          outstanding  shares  -  112,461  as  of  December                                                        
          29,  2012  and  106,976  as  of  December  31,                                                                
          2011                                                                                                  112                      107  
        Additional  paid-in  capital                                                930,618              876,927  
        Accumulated  other  comprehensive  loss                              (2,228)              (2,195)
        Accumulated  deficit                                                            (572,366)          (487,036)
                                                                                                  ------------    ------------  
        Total  stockholders'  equity                                                356,136              387,803  
                                                                                                  ------------    ------------  
            Total  liabilities  and  stockholders'  equity  $        528,170    $        531,704  
                                                                                                  ============    ============  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
Infinera  Corporation                                                                                                                
Condensed  Consolidated  Statements  of  Cash  Flows                                                          
(In  thousands)                                                                                                                            
(Unaudited)                                                                                                                                  
                                                                                                                                                        
                                                                                                          Twelve  Months  Ended        
                                                                                                  --------------------------  
                                                                                                  December  29,    December  31,  
                                                                                                          2012                    2011          
                                                                                                  ------------    ------------  
Cash  Flows  from  Operating  Activities:                                                                              
Net  loss                                                                                  $        (85,330)  $        (81,744)
Adjustments  to  reconcile  net  loss  to  net  cash                                                              
  provided  by  operating  activities:                                                                                    
    Depreciation  and  amortization                                                23,661                17,859  
    Provision  for  doubtful  accounts                                                    94                          -  
    Provision  for  other  receivables                                                      -                      563  
    Non-cash  restructuring  and  other  costs                                                                        
      (credit)                                                                                                  -                    (129)
    Amortization  of  premium  on  investments                                2,068                  4,215  
    Stock-based  compensation  expense                                          41,819                50,157  
    Non-cash  tax  benefit                                                                          (7)                    (95)
    Other  gain                                                                                          (475)                  (335)
    Changes  in  assets  and  liabilities:                                                                                
        Accounts  receivable                                                              (26,517)              (4,686)
        Other  receivables                                                                    (1,894)                3,440  
        Inventories,  net                                                                    (40,623)              (6,007)
        Prepaid  expenses  and  other  assets                                      2,293                12,695  
        Deferred  inventory  costs                                                        5,741                  1,999  
        Accounts  payable                                                                      15,410                  9,342  
        Accrued  liabilities  and  other  expenses                            6,915              (10,282)
        Deferred  revenue                                                                        3,763                    (401)
        Accrued  warranty                                                                        3,616                  1,444  
                                                                                                  ------------    ------------  
            Net  cash  used  in  operating  activities                      (49,466)              (1,965)
                                                                                                                                                        
Cash  Flows  from  Investing  Activities:                                                                              
    Purchase  of  available-for-sale  investments                    (54,150)          (273,334)
    Purchase  of  cost-method  investment                                                -                (4,500)
    Proceeds  from  sale  of  available-for-sale                                                                    
      investments                                                                                  11,584                  4,072  
    Proceeds  from  maturities  and  calls  of                                                                          
      investments                                                                                117,605              287,781  
    Proceeds  from  disposal  of  assets                                                    1                      262  
    Purchase  of  property  and  equipment                                    (25,395)            (39,382)
    Advance  to  secure  manufacturing  capacity                                    -                (1,500)
    Reimbursement  of  manufacturing  capacity                                                                      
      advance                                                                                                  50                      450  
    Change  in  restricted  cash                                                            (827)                    983  
                                                                                                  ------------    ------------  
            Net  cash  provided  by  (used  in)  investing                                                            
              activities                                                                            48,868              (25,168)
                                                                                                                                                        
Cash  Flows  from  Financing  Activities:                                                                              
    Proceeds  from  issuance  of  common  stock                              11,580                10,023  
    Repurchase  of  common  stock                                                          (882)              (1,248)
    Payments  for  purchase  of  assets  under                                                                          
      financing  arrangement                                                                        -                    (262)
                                                                                                  ------------    ------------  
            Net  cash  provided  by  financing  activities                10,698                  8,513  
                                                                                                                                                        
Effect  of  exchange  rate  changes  on  cash                                      108                    (571)
                                                                                                                                                        
Net  change  in  cash  and  cash  equivalents                                10,208              (19,191)
Cash  and  cash  equivalents  at  beginning  of  period              94,458              113,649  
                                                                                                  ------------    ------------  
Cash  and  cash  equivalents  at  end  of  period              $        104,666    $          94,458  
                                                                                                  ============    ============  
                                                                                                                                                        
Supplemental  disclosures  of  cash  flow                                                                              
  information:                                                                                                                              
    Cash  paid  for  income  taxes                                          $                923    $            1,487  
Supplemental  schedule  of  non-cash  investing  and                                                          
  financing  activities:                                                                                                            
    Transfer  of  inventory  to  fixed  assets                    $            3,222    $                    -  
    Non-cash  settlement  for  manufacturing  capacity                                                        
      advance                                                                              $                275    $                    -  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
Infinera  Corporation                                                                                                                
Supplemental  Financial  Information                                                                                    
(Unaudited)                                                                                                                                  
                                                                                                                                                        
----------------------------------------------------------------------------
                                Q1'11      Q2'11      Q3'11    Q4'11      Q1'12      Q2'12      Q3'12      Q4'12
----------------------------------------------------------------------------
Revenue  ($                                                                                                                                    
  Mil)                        $92.9      $96.0  $104.0    $112.0    $104.7      $93.5    $112.2  $128.1
----------------------------------------------------------------------------
Gross  Margin  %                                                                                                                            
  (1)                              48%          41%        41%          42%          40%          37%          39%        36%
----------------------------------------------------------------------------
Invoiced                                                                                                                                        
  Shipment                                                                                                                                      
  Composition:                                                                                                                              
----------------------------------------------------------------------------
Domestic  %                  74%          72%        65%          70%          71%          70%          70%        63%
----------------------------------------------------------------------------
International                                                                                                                              
  %                                  26%          28%        35%          30%          29%          30%          30%        37%
----------------------------------------------------------------------------
Largest                                                                                                                                          
  Customer  %                14%          10%  <  10%          14%          13%          15%          13%        13%
----------------------------------------------------------------------------
Cash  Related                                                                                                                                
  Information:                                                                                                                              
----------------------------------------------------------------------------
Cash  from                                                                                                                                      
  (used  in)                                                                                                                                    
  Operations  ($                                                                                                                            
  Mil)                      $(0.9)    $(0.1)      $4.1    $(5.1)    $(5.8)  $(22.7)  $(29.3)      $8.3
----------------------------------------------------------------------------
Capital                                                                                                                                          
  Expenditures                                                                                                                              
  ($  Mil)                  $10.6        $6.7      $5.9      $16.1      $13.6        $6.1        $2.5      $3.2
----------------------------------------------------------------------------
Depreciation  &                                                                                                                            
  Amortization                                                                                                                              
  ($  Mil)                    $4.2        $4.2      $4.9        $4.5        $5.5        $5.7        $6.1      $6.4
----------------------------------------------------------------------------
DSO's                              60            70          60            65            57            55            74          76
----------------------------------------------------------------------------
Inventory                                                                                                                                      
  Metrics:                                                                                                                                      
----------------------------------------------------------------------------
Raw  Materials                                                                                                                              
  ($  Mil)                  $20.1        $7.3      $7.0      $12.1      $15.3      $14.8      $12.4    $13.0
----------------------------------------------------------------------------
Work  in                                                                                                                                          
  Process  ($                                                                                                                                  
  Mil)                        $17.2      $27.7    $26.9      $37.0      $41.6      $49.4      $59.8    $57.3
----------------------------------------------------------------------------
Finished  Goods                                                                                                                            
  ($  Mil)                  $41.0      $34.4    $36.4      $39.9      $44.7      $50.9      $46.3    $57.5
----------------------------------------------------------------------------
Total                                                                                                                                              
  Inventory  ($                                                                                                                              
  Mil)                        $78.3      $69.4    $70.3      $89.0    $101.6    $115.1    $118.5  $127.8
----------------------------------------------------------------------------
Inventory                                                                                                                                      
  Turns  (1)                  2.5          3.3        3.5          2.9          2.5          2.1          2.3        2.6
----------------------------------------------------------------------------
Worldwide                                                                                                                                      
  Headcount              1,118      1,136    1,151      1,181      1,210      1,228      1,235    1,242
----------------------------------------------------------------------------
                                                                                                                                                        
(1)  Amounts  reflect  non-GAAP  results.  Non-GAAP  adjustments  include  non-cash  
        stock-based  compensation  expense.                                                                              
 

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