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Income Taxes (Tables)

12 Months Ended

Oct. 31, 2011

For the periods indicated, the provision (benefit) for income taxes consists of the following (in thousands):



	October 31,
	2009			2010			2011
Provision (benefit) for income taxes:
Current:
Federal	$	(3,488	)	$	(918	)	$	(194	)
State	122			223			(518		)
Foreign	2,925			1,936			8,202
Total current	(441		)	1,241			7,490
Deferred:
Federal	(860		)	700			160
State	(23		)	—			23
Foreign	—			—			—
Total deferred	(883		)	700			183
Provision (benefit) for income taxes	$	(1,324	)	$	1,941		$	7,673

Income (Loss) before provision (benefit) for income taxes

For the periods indicated, income (loss) before provision (benefit) for income taxes consists of the following (in thousands):



	October 31,
	2009			2010			2011
United States	$	(591,637	)	$	(317,899	)	$	(240,244	)
Foreign	9,159			(13,674		)	52,396
Total	$	(582,478	)	$	(331,573	)	$	(187,848	)

Tax provision (benefit) reconciles to the amount computed by multiplying income or loss before income taxes by the U.S. federal statutory rate of 35%

For the periods indicated, the tax provision (benefit) reconciles to the amount computed by multiplying income or loss before income taxes by the U.S. federal statutory rate of 35% as follows:



	October 31,
	2009		2010		2011
Provision at statutory rate	35.00	%	35.00	%	35.00	%
State taxes	(0.02	)%	(0.07	)%	0.27	%
Foreign taxes	0.05	%	(4.56	)%	2.32	%
Research and development credit	0.60	%	2.54	%	11.03	%
Goodwill impairment	(27.38	)%	—	%	—	%
Non-deductible compensation and other	(1.42	)%	(1.43	)%	(3.96	)%
Valuation allowance	(6.60	)%	(32.07	)%	(48.74	)%
Effective income tax rate	0.23	%	(0.59	)%	(4.08	)%

Significant components of deferred tax assets and liabilities

The significant components of deferred tax assets and liabilities are as follows (in thousands):



	October 31,
	2010			2011
Deferred tax assets:
Reserves and accrued liabilities	$	30,889		$	30,637
Depreciation and amortization	186,716			259,899
NOL and credit carry forward	1,107,059			1,154,571
Other	38,829			22,304
Gross deferred tax assets	1,363,493			1,467,411
Valuation allowance	(1,363,493		)	(1,467,411		)
Net deferred tax asset	$	—		$	—

Reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):



Unrecognized tax benefits at October 31, 2008	$	4,436
Increase related to positions taken in prior period	106
Increase related to positions taken in current period	1,947
Reductions related to expiration of statute of limitations	(300		)
Unrecognized tax benefits at October 31, 2009	6,189
Increase related to positions taken in prior period	26
Increase related to positions taken in current period	3,383
Reductions related to expiration of statute of limitations	(2,156		)
Unrecognized tax benefits at October 31, 2010	7,442
Increase related to positions taken in prior period	(450		)
Increase related to positions taken in current period	1,847
Reductions related to expiration of statute of limitations	(249		)
Unrecognized tax benefits at October 31, 2011	$	8,590

Summary of valuation allowance against the gross deferred tax assets

The following table summarizes the activity in Ciena’s valuation allowance against its gross deferred tax assets (in thousands):



Year ended	Balance at beginning						Balance at end
October 31,	of period		Additions		Deductions		of period
2009	$	1,164,384	$	33,683	$	—	$	1,198,067
2010	$	1,198,067	$	165,426	$	—	$	1,363,493
2011	$	1,363,493	$	103,918	$	—	$	1,467,411

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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- Definition

Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

+ References+ Details