we remain uncertain as to how long current macroeconomic and industry conditions will persist , the pace of any recovery , and the magnitude of the effect of these conditions on the growth of our markets and business , as well as our results of operations . we continue to encounter a highly competitive marketplace for sales of our networking solutions offering , particularly within our packet-optical transport segment . competition has intensified as we and our competitors have introduced new , high-capacity , high-speed network solutions and more aggressively sought to capture market share and displace incumbent vendors at large carrier customers . we have also encountered increased competition as we have expanded our business in emerging geographies and new markets or applications for our communications networking products . for example , we have made early progress in the sale of our products for application in submarine networks and with sales to customers in the middle east . in this competitive environment , securing new opportunities , particularly in international markets , often requires that we agree to less favorable commercial terms or pricing , financial commitments requiring collateralized performance bonds or similar instruments that place cash resources at risk , and other contractual commitments that place a disproportionate allocation of risk upon the vendor . these terms can adversely affect our result of operations . we expect the level of competition , particularly in north america , to continue and potentially increase , as chinese equipment vendors seek to gain entry into the u.s. market , and other multinational competitors seek to retain incumbent positions with large customers in the region . potential supply chain disruption in recent months , several regions of thailand have experienced severe flooding , causing significant damage to infrastructure and factories . flooding has affected the operations of certain component providers in our supply chain , or , in turn , their suppliers of components based in thailand . we are actively monitoring and evaluating stabilization efforts of these suppliers following the flooding and are currently working with existing suppliers and qualifying new sources of supply in order to minimize the effect on our customers and our business . given the severity of the situation and our dependency upon the recovery efforts of these suppliers , however , there can be no assurance that we will not encounter shortages , extended lead 33 times , additional costs or other disruptions in the availability or allocation of components that could affect our business over the next several fiscal quarters . market opportunity and strategy despite recent macroeconomic and competitive dynamics , we believe that a number of important underlying drivers represent significant long-term opportunities and growing demand for converged optical ethernet networking solutions in our target markets . we believe that market trends , including the proliferation of smartphones , tablets and similar devices running mobile web applications , the prevalence of video applications , and the shift of enterprise and consumer applications to cloud-based or virtualized network environments are emblematic of increased use and dependence by consumers and enterprises upon a growing variety of broadband applications and services . we expect that these services will continue to add significant multiservice network traffic , requiring our customers to invest in next-generation , high-capacity network infrastructures that are more efficient , robust and dynamic . to capitalize on the market dynamics above , we invested heavily in our business during fiscal 2011 and are in the process of introducing , or transitioning to new solutions offerings in each of our product segments . simultaneously , we have been investing in market entry into multiple new geographies and customer segments , as well as the expansion of footprint and market share within our traditional customer base across our segments . we have also been making investments in an effort to optimize and gain leverage from our business processes , systems , infrastructure and resources in order to achieve our desired operating model and profitability goals . these investments are a critical element of our effort to address customer business challenges and evolving network requirements and position us to seize market opportunities . we believe these investments , together with the successful completion of significant integration activities relating to the men business during fiscal 2011 , lay a strong foundation for long-term growth of our business . additional components of our overall corporate strategy can be found in item 1 , “ business ” above . acquisition of nortel metro ethernet networks business and effect on results of operations and financial condition on march 19 , 2010 , we completed our acquisition ( the `` men acquisition `` ) of substantially all of the optical networking and carrier ethernet assets of nortel 's metro ethernet networks business ( the “ men business ” ) for a purchase price of $ 676.8 million . see note 2 to the consolidated financial statements in item 8 of part ii of this annual report for more information . the men acquisition represented a transformative opportunity for ciena , strengthening our position as a leader in next-generation , converged optical ethernet networking and accelerating the execution of our corporate and research and development strategies . due to the relative scale of its operations , however , the men acquisition materially affected our operations , financial results and liquidity during the periods covered in this report and may make period to period comparisons difficult . story_separator_special_tag gross margin can vary significantly depending upon the mix and concentration of revenue by segment or product line , the concentration of lower margin common equipment sales within a segment or product line , geographic mix and the mix of customers and services in a given fiscal quarter . gross margin can also be affected by our introduction of new products , charges for excess and obsolete inventory , changes in warranty costs and sales volume . we expect that gross margins will be subject to fluctuation based on our level of success in driving cost reductions , rationalizing our supply chain and consolidating third party contract manufacturers and distribution sites as part of our effort to optimize our operations . gross margin can also be adversely affected by the competitive environment and level of pricing pressure we encounter . the combination of the recent period of uncertain market conditions , constraints on customer capital expenditures and increased competition has resulted in a heightened customer focus on pricing and return on network investment , as customers address network traffic growth and strive to increase revenue and profit . while competition is intense across our segments , our exposure to pricing pressure has been most severe in metro and core applications for our packet-optical transport platforms , particularly in international markets . as a result , in an effort to retain or secure customers , enter new markets or capture market share , in the past we have and in the future we may agree to pricing or other unfavorable commercial terms that result in lower or negative gross margins on a particular order or group of orders . because packet-optical transport and international revenue 38 comprise a greater percentage of our overall revenue than in prior periods , these market dynamics may adversely affect our gross margins and results of operations in certain periods . service gross margin can be affected by the mix of customers and services , particularly the mix between deployment and maintenance services , geographic mix and the timing and extent of any investments in internal resources to support this business . the tables below ( in thousands , except percentage data ) set forth the changes in revenue , cost of goods sold and gross profit for the periods indicated : replace_table_token_5_th _ * denotes % of total revenue * * denotes % change from 2010 to 2011 replace_table_token_6_th _ * denotes % of product revenue * * denotes % change from 2010 to 2011 replace_table_token_7_th _ * denotes % of service revenue * * denotes % change from 2010 to 2011 gross profit as a percentage of revenue increased as a result of the factors described below . gross profit on products as a percentage of product revenue increased , despite less favorable product mix in fiscal 2011 , largely as a result of the adverse effect , in fiscal 2010 , of a number of items relating to the men acquisition that increased costs of goods sold in that period . these items included $ 48.0 million related to the revaluation of inventory and $ 6.6 million in excess purchase commitment losses on ciena 's pre-acquisition inventory relating to product rationalization decisions . fiscal 2011 cost of goods sold included $ 14.3 million related to the revaluation of inventory and an $ 8.8 million increase in amortization of intangible assets . gross profit on services as a percentage of services revenue increased due to higher concentration of professional services as a percentage of revenue , and improved operational efficiencies . 39 operating expense research and development expense primarily consists of salaries and related employee expense ( including share-based compensation expense ) , prototype costs relating to design , development , and testing of our products , depreciation expense and third-party consulting costs . sales and marketing expense primarily consists of salaries , commissions and related employee expense ( including share-based compensation expense ) , and sales and marketing support expense , including travel , demonstration units , trade show expense and third-party consulting costs . general and administrative expense primarily consists of salaries and related employee expense ( including share-based compensation expense ) , and costs for third-party consulting and other services . amortization of intangible assets primarily reflects purchased technology and customer relationships from our acquisitions . the table below ( in thousands , except percentage data ) sets forth the changes in operating expense for the periods indicated : replace_table_token_8_th _ * denotes % of total revenue * * denotes % change from 2010 to 2011 research and development expense was adversely affected by $ 12.2 million as a result of foreign exchange rates , primarily due to the weakening of the u.s. dollar in relation to the canadian dollar . the $ 52.2 million increase primarily reflects increases of $ 47.4 million in employee compensation and related costs , $ 13.6 million in facilities and information systems , $ 4.8 million in depreciation expense and $ 2.5 million in professional services and fees . these increases were partially offset by decreases of $ 9.6 million in prototype expense and a $ 5.5 million benefit related to a conditional grant from the province of ontario . under this strategic jobs investment fund grant , we can receive up to an aggregate of $ 25.0 million canadian dollars in funding for eligible costs relating to certain next-generation , coherent optical transport development initiatives over the period from fiscal 2011 to fiscal 2015. we anticipate receiving future disbursements , approximating cad $ 5.0 million per fiscal year over the period above . amounts received under the grant are subject to recoupment in the event that we fail to achieve certain minimum investment , employment and project milestones . selling and marketing expense was adversely affected by $ 2.5 million due to foreign exchange rates , primarily due to the weakening of the u.s. dollar in relation to the euro and the canadian dollar

cash used by accounts receivable during fiscal 2011 , net of $ 1.7 million in provision for doubtful accounts , was $ 75.6 million primarily due to increased sales volume . our days sales outstanding ( dsos ) decreased from 100 days for fiscal 2010 to 86 days for fiscal 2011 . our dsos level for fiscal 2010 largely reflects the timing of the men acquisition and the effect on this calculation of having only a partial year of revenue from the men business . utilizing annualized fourth quarter revenue for purposes of this calculation would have resulted in dsos of 74 days for fiscal 2010 and 83 days for fiscal 2011. our dsos increased due to growth in international sales , which generally involve longer payment cycles . the following table sets forth ( in thousands ) changes to our accounts receivable , net of allowance for doubtful accounts , from the end of fiscal 2010 through the end of fiscal 2011 : october 31 , increase 2010 2011 ( decrease ) accounts receivable , net $ 343,582 $ 417,509 $ 73,927 inventory cash generated by inventory during fiscal 2011 was $ 14.2 million . our inventory turns increased from 2.3 turns during fiscal 2010 to 3.6 turns during fiscal 2011 . during fiscal 2011 , changes in inventory reflect a $ 17.3 million reduction related to a non-cash provision for excess and obsolescence . the following table sets forth ( in thousands ) changes to the components of our inventory from the end of fiscal 2010 through the end fiscal 2011 : 48 replace_table_token_20_th prepaid expense and other cash used by prepaid expense and other during fiscal 2011 was $ 18.3 million . this usage was primarily related to increases in product demonstration units and deferred deployment expense , partially offset by the receipt of the contingent refund receivable related to the carling lease termination . accounts payable , accruals and other obligations cash used by accounts payable , accruals and other obligations during fiscal 2011 was $ 59.3 million . between the end of fiscal 2010 and fiscal 2011 , the change in unpaid equipment purchases was $ 1.2


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```cash used by accounts receivable during fiscal 2011 , net of $ 1.7 million in provision for doubtful accounts , was $ 75.6 million primarily due to increased sales volume . our days sales outstanding ( dsos ) decreased from 100 days for fiscal 2010 to 86 days for fiscal 2011 . our dsos level for fiscal 2010 largely reflects the timing of the men acquisition and the effect on this calculation of having only a partial year of revenue from the men business . utilizing annualized fourth quarter revenue for purposes of this calculation would have resulted in dsos of 74 days for fiscal 2010 and 83 days for fiscal 2011. our dsos increased due to growth in international sales , which generally involve longer payment cycles . the following table sets forth ( in thousands ) changes to our accounts receivable , net of allowance for doubtful accounts , from the end of fiscal 2010 through the end of fiscal 2011 : october 31 , increase 2010 2011 ( decrease ) accounts receivable , net $ 343,582 $ 417,509 $ 73,927 inventory cash generated by inventory during fiscal 2011 was $ 14.2 million . our inventory turns increased from 2.3 turns during fiscal 2010 to 3.6 turns during fiscal 2011 . during fiscal 2011 , changes in inventory reflect a $ 17.3 million reduction related to a non-cash provision for excess and obsolescence . the following table sets forth ( in thousands ) changes to the components of our inventory from the end of fiscal 2010 through the end fiscal 2011 : 48 replace_table_token_20_th prepaid expense and other cash used by prepaid expense and other during fiscal 2011 was $ 18.3 million . this usage was primarily related to increases in product demonstration units and deferred deployment expense , partially offset by the receipt of the contingent refund receivable related to the carling lease termination . accounts payable , accruals and other obligations cash used by accounts payable , accruals and other obligations during fiscal 2011 was $ 59.3 million . between the end of fiscal 2010 and fiscal 2011 , the change in unpaid equipment purchases was $ 1.2
```    
 Suspicious Activity Report : we remain uncertain as to how long current macroeconomic and industry conditions will persist , the pace of any recovery , and the magnitude of the effect of these conditions on the growth of our markets and business , as well as our results of operations . we continue to encounter a highly competitive marketplace for sales of our networking solutions offering , particularly within our packet-optical transport segment . competition has intensified as we and our competitors have introduced new , high-capacity , high-speed network solutions and more aggressively sought to capture market share and displace incumbent vendors at large carrier customers . we have also encountered increased competition as we have expanded our business in emerging geographies and new markets or applications for our communications networking products . for example , we have made early progress in the sale of our products for application in submarine networks and with sales to customers in the middle east . in this competitive environment , securing new opportunities , particularly in international markets , often requires that we agree to less favorable commercial terms or pricing , financial commitments requiring collateralized performance bonds or similar instruments that place cash resources at risk , and other contractual commitments that place a disproportionate allocation of risk upon the vendor . these terms can adversely affect our result of operations . we expect the level of competition , particularly in north america , to continue and potentially increase , as chinese equipment vendors seek to gain entry into the u.s. market , and other multinational competitors seek to retain incumbent positions with large customers in the region . potential supply chain disruption in recent months , several regions of thailand have experienced severe flooding , causing significant damage to infrastructure and factories . flooding has affected the operations of certain component providers in our supply chain , or , in turn , their suppliers of components based in thailand . we are actively monitoring and evaluating stabilization efforts of these suppliers following the flooding and are currently working with existing suppliers and qualifying new sources of supply in order to minimize the effect on our customers and our business . given the severity of the situation and our dependency upon the recovery efforts of these suppliers , however , there can be no assurance that we will not encounter shortages , extended lead 33 times , additional costs or other disruptions in the availability or allocation of components that could affect our business over the next several fiscal quarters . market opportunity and strategy despite recent macroeconomic and competitive dynamics , we believe that a number of important underlying drivers represent significant long-term opportunities and growing demand for converged optical ethernet networking solutions in our target markets . we believe that market trends , including the proliferation of smartphones , tablets and similar devices running mobile web applications , the prevalence of video applications , and the shift of enterprise and consumer applications to cloud-based or virtualized network environments are emblematic of increased use and dependence by consumers and enterprises upon a growing variety of broadband applications and services . we expect that these services will continue to add significant multiservice network traffic , requiring our customers to invest in next-generation , high-capacity network infrastructures that are more efficient , robust and dynamic . to capitalize on the market dynamics above , we invested heavily in our business during fiscal 2011 and are in the process of introducing , or transitioning to new solutions offerings in each of our product segments . simultaneously , we have been investing in market entry into multiple new geographies and customer segments , as well as the expansion of footprint and market share within our traditional customer base across our segments . we have also been making investments in an effort to optimize and gain leverage from our business processes , systems , infrastructure and resources in order to achieve our desired operating model and profitability goals . these investments are a critical element of our effort to address customer business challenges and evolving network requirements and position us to seize market opportunities . we believe these investments , together with the successful completion of significant integration activities relating to the men business during fiscal 2011 , lay a strong foundation for long-term growth of our business . additional components of our overall corporate strategy can be found in item 1 , “ business ” above . acquisition of nortel metro ethernet networks business and effect on results of operations and financial condition on march 19 , 2010 , we completed our acquisition ( the `` men acquisition `` ) of substantially all of the optical networking and carrier ethernet assets of nortel 's metro ethernet networks business ( the “ men business ” ) for a purchase price of $ 676.8 million . see note 2 to the consolidated financial statements in item 8 of part ii of this annual report for more information . the men acquisition represented a transformative opportunity for ciena , strengthening our position as a leader in next-generation , converged optical ethernet networking and accelerating the execution of our corporate and research and development strategies . due to the relative scale of its operations , however , the men acquisition materially affected our operations , financial results and liquidity during the periods covered in this report and may make period to period comparisons difficult . story_separator_special_tag gross margin can vary significantly depending upon the mix and concentration of revenue by segment or product line , the concentration of lower margin common equipment sales within a segment or product line , geographic mix and the mix of customers and services in a given fiscal quarter . gross margin can also be affected by our introduction of new products , charges for excess and obsolete inventory , changes in warranty costs and sales volume . we expect that gross margins will be subject to fluctuation based on our level of success in driving cost reductions , rationalizing our supply chain and consolidating third party contract manufacturers and distribution sites as part of our effort to optimize our operations . gross margin can also be adversely affected by the competitive environment and level of pricing pressure we encounter . the combination of the recent period of uncertain market conditions , constraints on customer capital expenditures and increased competition has resulted in a heightened customer focus on pricing and return on network investment , as customers address network traffic growth and strive to increase revenue and profit . while competition is intense across our segments , our exposure to pricing pressure has been most severe in metro and core applications for our packet-optical transport platforms , particularly in international markets . as a result , in an effort to retain or secure customers , enter new markets or capture market share , in the past we have and in the future we may agree to pricing or other unfavorable commercial terms that result in lower or negative gross margins on a particular order or group of orders . because packet-optical transport and international revenue 38 comprise a greater percentage of our overall revenue than in prior periods , these market dynamics may adversely affect our gross margins and results of operations in certain periods . service gross margin can be affected by the mix of customers and services , particularly the mix between deployment and maintenance services , geographic mix and the timing and extent of any investments in internal resources to support this business . the tables below ( in thousands , except percentage data ) set forth the changes in revenue , cost of goods sold and gross profit for the periods indicated : replace_table_token_5_th _ * denotes % of total revenue * * denotes % change from 2010 to 2011 replace_table_token_6_th _ * denotes % of product revenue * * denotes % change from 2010 to 2011 replace_table_token_7_th _ * denotes % of service revenue * * denotes % change from 2010 to 2011 gross profit as a percentage of revenue increased as a result of the factors described below . gross profit on products as a percentage of product revenue increased , despite less favorable product mix in fiscal 2011 , largely as a result of the adverse effect , in fiscal 2010 , of a number of items relating to the men acquisition that increased costs of goods sold in that period . these items included $ 48.0 million related to the revaluation of inventory and $ 6.6 million in excess purchase commitment losses on ciena 's pre-acquisition inventory relating to product rationalization decisions . fiscal 2011 cost of goods sold included $ 14.3 million related to the revaluation of inventory and an $ 8.8 million increase in amortization of intangible assets . gross profit on services as a percentage of services revenue increased due to higher concentration of professional services as a percentage of revenue , and improved operational efficiencies . 39 operating expense research and development expense primarily consists of salaries and related employee expense ( including share-based compensation expense ) , prototype costs relating to design , development , and testing of our products , depreciation expense and third-party consulting costs . sales and marketing expense primarily consists of salaries , commissions and related employee expense ( including share-based compensation expense ) , and sales and marketing support expense , including travel , demonstration units , trade show expense and third-party consulting costs . general and administrative expense primarily consists of salaries and related employee expense ( including share-based compensation expense ) , and costs for third-party consulting and other services . amortization of intangible assets primarily reflects purchased technology and customer relationships from our acquisitions . the table below ( in thousands , except percentage data ) sets forth the changes in operating expense for the periods indicated : replace_table_token_8_th _ * denotes % of total revenue * * denotes % change from 2010 to 2011 research and development expense was adversely affected by $ 12.2 million as a result of foreign exchange rates , primarily due to the weakening of the u.s. dollar in relation to the canadian dollar . the $ 52.2 million increase primarily reflects increases of $ 47.4 million in employee compensation and related costs , $ 13.6 million in facilities and information systems , $ 4.8 million in depreciation expense and $ 2.5 million in professional services and fees . these increases were partially offset by decreases of $ 9.6 million in prototype expense and a $ 5.5 million benefit related to a conditional grant from the province of ontario . under this strategic jobs investment fund grant , we can receive up to an aggregate of $ 25.0 million canadian dollars in funding for eligible costs relating to certain next-generation , coherent optical transport development initiatives over the period from fiscal 2011 to fiscal 2015. we anticipate receiving future disbursements , approximating cad $ 5.0 million per fiscal year over the period above . amounts received under the grant are subject to recoupment in the event that we fail to achieve certain minimum investment , employment and project milestones . selling and marketing expense was adversely affected by $ 2.5 million due to foreign exchange rates , primarily due to the weakening of the u.s. dollar in relation to the euro and the canadian dollar

