Gary Smith CEO & President March 17, 2004 Gary Smith CEO & President March 17, 2004 Merrill Lynch Global Communications Conference CIENA: Beyond Optical.

Gary SmithCEO & President

March 17, 2004

Gary SmithCEO & President

March 17, 2004

Merrill LynchGlobal Communications Conference

Merrill LynchGlobal Communications Conference

CIENA: Beyond OpticalCIENA: Beyond Optical

2

Disclosure Documents Disclosure Documents

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

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

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Forward-Looking Statements Forward-Looking Statements

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

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

4

AgendaAgenda

• Where we were

• What changed?

• CIENA: Beyond optical

• CIENA’s Transformation: Beyond the product portfolio

5

Core Network

CoreStream™

CoreDirector™

CIENA Led the Optical Core RevolutionCIENA Led the Optical Core Revolution

Acq’d Lightera,January, 1999

2000 - 20032000 - 2003

Ca

pe

x$

/ M

bp

s

Long Haul DWDM TransportLong Haul DWDM Transport

1996 - 20001996 - 2000

$25$25

$5$5

$50$50

CAPEXCAPEX OPEXOPEX REVENUEREVENUE

$ M

illi

on

s$

Mil

lio

ns 43%43%

36%36%16%16%

Core Optical SwitchingCore Optical Switching

0

100

200

300

400

500

600

700

99%99%

CAPEXCAPEXTraditionalTraditional

CIENACIENA 2000 - 20032000 - 2003

Ca

pe

x$

/ M

bp

s

Long Haul DWDM TransportLong Haul DWDM Transport

1996 - 20001996 - 2000

$25$25

$5$5

$50$50

CAPEXCAPEX OPEXOPEX REVENUEREVENUE

$ M

illi

on

s$

Mil

lio

ns 43%43%

36%36%16%16%

Core Optical SwitchingCore Optical Switching

0

100

200

300

400

500

600

700

99%99%

CAPEXCAPEXTraditionalTraditional

CIENACIENA 2000 - 20032000 - 2003

Ca

pe

x$

/ M

bp

s

Long Haul DWDM TransportLong Haul DWDM Transport

1996 - 20001996 - 2000

$25$25

$5$5

$50$50

CAPEXCAPEX OPEXOPEX REVENUEREVENUE

$ M

illi

on

s$

Mil

lio

ns 43%43%

36%36%16%16%

Core Optical SwitchingCore Optical Switching

0

100

200

300

400

500

600

700

99%99%

CAPEXCAPEXTraditionalTraditional

CIENACIENA 2000 - 20032000 - 2003

Ca

pe

x$

/ M

bp

s

Long Haul DWDM TransportLong Haul DWDM Transport

1996 - 20001996 - 2000

$25$25

$5$5

$50$50

CAPEXCAPEX OPEXOPEX REVENUEREVENUE

$ M

illi

on

s$

Mil

lio

ns 43%43%

36%36%16%16%

Core Optical SwitchingCore Optical Switching

0

100

200

300

400

500

600

700

99%99%

CAPEXCAPEXTraditionalTraditional

CIENACIENA 2000 - 20032000 - 2003

Ca

pe

x$

/ G

b/s

Long Haul DWDM TransportLong Haul DWDM Transport

1996 - 20001996 - 2000

$25$25

$5$5

$50$50

CAPEXCAPEX OPEXOPEX REVENUEREVENUE

$ M

illi

on

s$

Mil

lio

ns 43%43%

36%36%16%16%

Core Optical SwitchingCore Optical Switching

0

100

200

300

400

500

600

700

99%99%

CAPEXCAPEXTraditionalTraditional

CIENACIENA 2000 - 20032000 - 2003

Ca

pe

x

Long Haul DWDM TransportLong Haul DWDM Transport

1996 - 20001996 - 2000

$25$25

$5$5

$50$50

CAPEXCAPEX OPEXOPEX REVENUEREVENUE

$ M

illi

on

s$

Mil

lio

ns 43%43%

36%36%16%16%

Core Optical SwitchingCore Optical Switching

0

100

200

300

400

500

600

700

99%99%

CAPEXCAPEXTraditionalTraditional

CIENACIENA

Success driven by disruptive economics

6

Core Network

CoreStream™

CoreDirector™

CIENA’s Optical Portfolio ExpansionCIENA’s Optical Portfolio Expansion

Metro Network

MetroDirectorK2™

Access Network

ONLINE EdgeONLINE Edge

ONLINE™ Metro

Acq’d CyrasDec 2000

Acq’d ONIJune 2002

7

What Changed?What Changed?

• The core is no longer the primary challenge.

• Carriers shifting emphasis from CAPEX/OPEX reduction to top-line growth.

• Protecting voice revenues remains a priority.

• Service providers looking for strategic partners to deliver profitable broadband services originating from the edge.

• Large enterprises taking on increased network responsibility.

ServiceDistribution

Network

Long-HaulNetwork

AtlantaCO

LinthicumLinthicumAlpharettaAlpharetta

ServiceDistribution

NetworkBaltimore

$18 / Mbps$18 / Mbps$650 / Mbps$650 / Mbps $650 / Mbps$650 / Mbps

Relative costof capital

equipment

Relative costof capital

equipment

8

The Optical MarketThe Optical Market

* Plus or minus $500M.**Plus or minus $700M.

The total optical networking market consists of optical switches, core/metro/access DWDM, ADMs, DCSs, and next-generation metro switches. Sources: Based on industry analyst & CIENA estimates.

2000 = $27.0B2001 = $20.6B2002 = $9.4B

2000 = $27.0B2001 = $20.6B2002 = $9.4B

CIENA Proprietary and Confidential

0

5000

10000

15000

20000

25000

30000

2000 2001 2002 2003 2004 2005

$ M

illio

n

2000 = $27.0B2001 = $20.6B2002 = $9.4B2003 = $6.8B*2004 = $6.8B**2005 = $6.8B**

2000 = $27.0B2001 = $20.6B2002 = $9.4B2003 = $6.8B*2004 = $6.8B**2005 = $6.8B**

9

Network PhilosophyNetwork Philosophy

Converge functionality to reduce CAPEXConverge functionality to reduce CAPEX

Control network to reduce OPEXControl network to reduce OPEX

Capture revenues by increasing service bundleCapture revenues by increasing service bundle

10

Core Network

CoreDirector™

Capturing Services RevenueCapturing Services Revenue

Metro Network

MetroDirectorK2™

Access Network

ONLINE EdgeONLINE Edge

ONLINE™ Metro

Voice/video/DSL Services

VoD/HDTVServices

ATM/FR/MPLSServices

IPServices

Private LineServices

StorageServices

EthernetServices

An intelligent optical core enables an all-service network, but CIENA’s portfolio

lacked service delivery platforms customers needed to capture new

revenue growth

An intelligent optical core enables an all-service network, but CIENA’s portfolio

lacked service delivery platforms customers needed to capture new

revenue growthCoreStream™

11

CIENA’s Acquisition/Partnership GoalsCIENA’s Acquisition/Partnership Goals

1. Expand addressable market with service delivery platforms

2. Leverage core leadership/strengths

3. Leverage customer base/relationships

4. Improve CIENA’s business model

– Drive revenue growth

– Improve gross margins

– Push toward sustained profitability

12

Disciplined Acquisition StrategyDisciplined Acquisition Strategy

Candidates should:

– Be disruptive to existing network economics

– Fit with CIENA’s network vision

– Have adjacency (via customer or technology)

– Deliver good margin profile

– Have channel fit or provide new channel

– Have visible path to #3+ market share in growth market

13

DN™ 7

Core Network

CoreDirector™

Metro Network

MetroDirectorK2™

Access Network

ONLINE EdgeONLINE Edge

ONLINE™ Metro

Voice/video/DSL Services

VoD/HDTVServices

ATM/FR/MPLSServices

IPServices

Private LineServices

StorageServices

EthernetServices

Acq’d WaveSmithJune 2003

CoreStream™

Capturing Services RevenueCapturing Services Revenue

14

Disciplined Acquisition Strategy - WaveSmithDisciplined Acquisition Strategy - WaveSmith

Acquisition/Partner candidates should:

– Be disruptive to existing network economics

– Fit with CIENA’s network vision

– Have adjacency (via customer or technology)

– Deliver good margin profile

– Have channel fit or provide new channel

– Have visible path to #3+ market share in growth market

MultiService Switching

Applications: DSL Aggregation, VoD, ATM,

Frame Relay

Applications: DSL Aggregation, VoD, ATM,

Frame Relay

Revenue per $ of CapExRevenue per $ of CapEx

150%increase

150%increase

Traditional DN

15

DN™ 7

Core Network

CoreDirector™

Metro Network

MetroDirectorK2™

Access Network

ONLINE EdgeONLINE Edge

ONLINE™ Metro

Voice/video/DSL Services

VoD/HDTVServices

ATM/FR/MPLSServices

IPServices

Private LineServices

StorageServices

EthernetServices

CN™ 2000

Acq’d AkaraAug 2003

CoreStream™

Capturing Services RevenueCapturing Services Revenue

16

Disciplined Acquisition Strategy - AkaraDisciplined Acquisition Strategy - Akara

SONET/SDH Storage

Traditional CN 2000

230%increase

230%increase

Applications Storage extension, Access WDM,

Low-Cost Ethernet Transport

Applications Storage extension, Access WDM,

Low-Cost Ethernet Transport

Revenue per $ of CapExRevenue per $ of CapEx

Acquisition/Partner candidates should:

– Be disruptive to existing network economics

– Fit with CIENA’s network vision

– Have adjacency (via customer or technology)

– Deliver good margin profile

– Have channel fit or provide new channel

– Have visible path to #3+ market share in growth market

17

DN™ 7Catena

Internet Photonics

PacketWave™ (Luminous)PacketWave™ (Luminous)

ST™ (Laurel)

Core Network

CoreDirector™

Metro Network

MetroDirectorK2™

Access Network

ONLINE EdgeONLINE Edge

ONLINE™ Metro

Voice/video/DSL Services

VoD/HDTVServices

ATM/FR/MPLSServices

IPServices

Private LineServices

StorageServices

EthernetServices

CN™ 2000

Laurel PartnershipSept 2003

Luminous PartnershipSept 2003

CoreStream™

Capturing Services RevenueCapturing Services Revenue

18

BackgroundBackground

• A leading innovator in the broadband access market

• Founded: December 1998

• Offices in Kanata, ON and RTP, NC

• ~250 employees

• Customers– Three RBOCs (including Bell South)

– Major IOCs

– CLECs

• Products– CNX-5

– CN1000

– CN1000FX

Yankee Group: Overall broadband equipment revenues in the access area will present a

market opportunity in excess of $7.5 billion

Yankee Group: Overall broadband equipment revenues in the access area will present a

market opportunity in excess of $7.5 billion

19

BackgroundBackground

• A leading supplier of carrier-grade optical Ethernet transport and switching solutions

• Founded: 2000

• Offices in Shrewsbury, NJ and Marlborough, MA

• ~110 employees

• Customers– Six of the top ten U.S. cable operators (including Cablevision, Adelphia)

– Carriers such as TDS Metrocom deploying Ethernet private-line services

• Products– LightStack MXA

– LightStack MX

– LightStack GSLAM

– LightHandler

Infonetics Research: Worldwide Ethernet services market will grow from approximately

$2.9 billion in 2003 to $7.5 billion by 2007.

Infonetics Research: Worldwide Ethernet services market will grow from approximately

$2.9 billion in 2003 to $7.5 billion by 2007.

20

Transaction HighlightsTransaction Highlights

• 77.5 million shares of CIENA common stock

• Value: approximately $486.7 million

• Catena shareholder approval req’d • Both subject to customary clearances

• Anticipated closing: by the end of CIENA’s fiscal Q3

• 24.4 million shares of CIENA common stock

• Value: approximately $150 million

21

CIENA’s Transformation: Beyond the Product PortfolioCIENA’s Transformation: Beyond the Product Portfolio

• Shifting investment to access/service delivery from core

– Goal of reducing ongoing opex (exclusive of Catena/IPI) by 10% to 20% in FY ‘04

– 2002-2003 investments will enable us to maintain core leadership

• Manufacturing nearly 100% outsourced

– Currently working to consolidate contract manufacturers

• Services business restructured to profitability

• Sales force revamped to include skills/experience required for broader portfolio

• 30+ channel partners developed to target enterprise opportunities/new geographies

22

Transforming CIENA to Encompass Broadband Service DeliveryTransforming CIENA to Encompass Broadband Service Delivery

CAPEX/OPEX Savings

From (2003)From (2003)

High Quality/Low Volumes

Direct Sales Only

Service Revenues

Low Cost/High Volumes

Channels/Enterprise Pull

Value PropositionValue Proposition

CompetenciesCompetencies

Core Optical Broadband Edge & AccessTechnologiesTechnologies

FY ’02$361 million

FY ’02$361 million

FY ’03$283 million

FY ’03$283 million

Core NetworkingCore Networking

Metro NetworkingMetro Networking

Data Networking/Service Delivery

Data Networking/Service Delivery

Solutions & SoftwareSolutions & Software

Service/Tech SupportService/Tech Support

FY ’01$1.6 billion

FY ’01$1.6 billion

FY ’04(stated goal

prior to Catena & IPI)

FY ’04(stated goal

prior to Catena & IPI)

To Include (2005)To Include (2005)

T.B.D.T.B.D.

Thank You!Thank You!