Fair Value Measurements

6 Months Ended

Apr. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

As of the date indicated, the following table summarizes the assets and liabilities that are recorded at fair value on a recurring basis (in thousands):

	April 30, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	584,859	$	—	$	—	$	584,859
U.S. government obligations	—		119,327		—		119,327
Foreign currency forward contracts	—		764		—		764
Total assets measured at fair value	$	584,859	$	120,091	$	—	$	704,950
Liabilities:
Foreign currency forward contracts	$	—	$	3,630	$	—	$	3,630
Forward starting interest rate swap	—		10,927		—		10,927
Contingent consideration	—		—		10,900		10,900
Total liabilities measured at fair value	$	—	$	14,557	$	10,900	$	25,457

	October 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	590,684	$	—	$	—	$	590,684
U.S. government obligations	—		197,988		—		197,988
Commercial paper	—		69,888		—		69,888
Foreign currency forward contracts	—		133		—		133
Forward starting interest rate swaps	—		779		—		779
Total assets measured at fair value	$	590,684	$	268,788	$	—	$	859,472
Liabilities:
Foreign currency forward contracts	$	—	$	3,231	$	—	$	3,231
Debt conversion liability	—		164,212		—		164,212
Contingent consideration	—		—		10,900		10,900
Total liabilities measured at fair value	$	—	$	167,443	$	10,900	$	178,343

As of the date indicated, the assets and liabilities above are presented on Ciena’s Condensed Consolidated Balance Sheets as follows (in thousands):

	April 30, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	584,859	$	—	$	—	$	584,859
Short-term investments	—		119,327		—		119,327
Prepaid expenses and other	—		764		—		764
Total assets measured at fair value	$	584,859	$	120,091	$	—	$	704,950
Liabilities:
Accrued liabilities	$	—	$	3,630	$	7,491	$	11,121
Other long-term obligations	—		10,927		3,409		14,336
Total liabilities measured at fair value	$	—	$	14,557	$	10,900	$	25,457

	October 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	590,684	$	59,925	$	—	$	650,609
Short-term investments	—		148,981		—		148,981
Prepaid expenses and other	—		133		—		133
Long-term investments	—		58,970		—		58,970
Other long-term assets	—		779		—		779
Total assets measured at fair value	$	590,684	$	268,788	$	—	$	859,472
Liabilities:
Accrued liabilities	$	—	$	3,231	$	—	$	3,231
Debt conversion liability	—		164,212		—		164,212
Other long-term obligations	—		—		10,900		10,900
Total liabilities measured at fair value	$	—	$	167,443	$	10,900	$	178,343

Ciena did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.

Ciena’s Level 3 liability is included in both accrued liabilities and other long-term obligations and reflects a contingent consideration element of a three-year payout arrangement associated with Ciena’s purchase of DonRiver in the fourth quarter of fiscal 2018. The contingent consideration is valued by applying the income approach based upon a discounted cash flow technique using Monte Carlo simulations. As of April 30, 2019, there was no material change to the fair value.