Income Taxes (Tables)

12 Months Ended

Oct. 31, 2017

Income Tax Disclosure [Abstract]

Provision (benefit) for income taxes

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

	Year Ended October 31,
	2017				2016			2015
Provision (benefit) for income taxes:
Current:
Federal	$	—			$	—		$	—
State	6,342				5,281			1,435
Foreign	14,563				9,969			10,662
Total current	20,905				15,250			12,097
Deferred:
Federal	(1,047,699		)	(1)	—			—
State	(77,429		)	(1)	—			—
Foreign	(1,604		)		(1,116		)	—
Total deferred	(1,126,732		)		(1,116		)	—
Provision (benefit) for income taxes	$	(1,105,827	)		$	14,134		$	12,097

_________________________________

(1) The income tax benefit for 2017 includes the reversal of a significant portion of the valuation allowance on

Ciena’s deferred tax assets in the U.S. See further discussion below.

Income before provision (benefit) for income taxes

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

	Year Ended October 31,
	2017		2016		2015
United States	$	114,242	$	58,237	$	(1,029	)
Foreign	41,884		28,481		24,793
Total	$	156,126	$	86,718	$	23,764

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 before income taxes by the U.S. federal statutory rate of 35% as follows:

	Year Ended October 31,
	2017		2016		2015
Provision at statutory rate	35.00	%	35.00	%	35.00	%
State taxes	2.29	%	4.00	%	6.04	%
Foreign taxes	(0.35	)%	3.11	%	28.98	%
Research and development credit	(15.38	)%	(22.61	)%	(25.55	)%
Non-deductible compensation and other	10.12	%	4.13	%	30.16	%
Valuation allowance	(739.97	)%	(7.33	)%	(23.73	)%
Effective income tax rate	(708.29	)%	16.30	%	50.90	%

Significant components of deferred tax assets and liabilities

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

	October 31,
	2017			2016
Deferred tax assets:
Reserves and accrued liabilities	$	56,597		$	59,791
Depreciation and amortization	451,385			298,497
NOL and credit carry forward	803,622			1,109,304
Other	29,398			23,304
Gross deferred tax assets	1,341,002			1,490,896
Valuation allowance	(185,898		)	(1,489,780		)
Deferred tax asset, net of valuation allowance	$	1,155,104		$	1,116

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):

	Amount
Unrecognized tax benefits at October 31, 2014	$	15,100
Increase related to positions taken in prior period	3,658
Increase related to positions taken in current period	9,138
Reductions related to expiration of statute of limitations	(360		)
Unrecognized tax benefits at October 31, 2015	27,536
Increase related to positions taken in prior period	2,187
Increase related to positions taken in current period	2,654
Reductions related to expiration of statute of limitations	(1,709		)
Unrecognized tax benefits at October 31, 2016	30,668
Increase related to positions taken in prior period	122
Increase related to positions taken in current period	111,412
Reductions related to expiration of statute of limitations	(620		)
Unrecognized tax benefits at October 31, 2017	$	141,582

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	Beginning						Ending
October 31,	Balance		Additions		Deductions		Balance
2015	$	1,496,835	$	—	$	1,163	$	1,495,672
2016	$	1,495,672	$	—	$	5,892	$	1,489,780
2017	$	1,489,780	$	—	$	1,303,882	$	185,898