Commitments and Contingencies

12 Months Ended

Oct. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Government Grant

During fiscal 2018, Ciena entered into agreements related to the Evolution of Networking Services through a Corridor in Quebec and Ontario for Research and Innovation project with the Canadian federal government, the government of the province of Ontario and the government of the province of Quebec to develop a 5G technology corridor between Quebec and Ontario to promote research and development, small business enterprises and entrepreneurs in Canada. Under these agreements, Ciena can receive up to an aggregate CAD$57.6 million (approximately $43.8 million) in reimbursement from the three Canadian government entities for eligible costs over a period commencing on February 20, 2017 and ending on March 31, 2022. Ciena anticipates receiving recurring disbursements over this period. Amounts received under the agreements are subject to recoupment in the event that Ciena fails to achieve certain minimum investment, employment and project milestones. As of October 31, 2019, Ciena has recorded CAD$28.9 million (approximately $22.0 million) in cumulative benefits as a reduction in research and development expense of which CAD$12.3 million (approximately $9.2 million) was recorded in fiscal 2019. As of October 31, 2019, amounts receivable from this grant were CAD$10.4 million (approximately $7.9 million).

Tax Contingencies

Ciena is subject to various tax liabilities arising in the ordinary course of business. Ciena does not expect that the ultimate settlement of these tax liabilities will have a material effect on its results of operations, financial position or cash flows.

Litigation

Ciena is subject to various legal proceedings, claims and other matters arising in the ordinary course of business, including those that relate to employment, commercial, tax and other regulatory matters. Ciena is also subject to intellectual property related claims, including claims against third parties that may involve contractual indemnification obligations on the part of Ciena. Ciena does not expect that the ultimate costs to resolve such matters will have a material effect on its results of operations, financial position or cash flows.

Lease Commitments

Ciena has certain minimum obligations under non-cancelable leases expiring on various dates through 2032 for equipment and facilities. The following table summarizes Ciena’s future annual minimum lease commitments under non-cancelable leases that are not recorded on the balance sheet as of October 31, 2019 (in thousands):



	2020		2021		2022		2023		2024		Thereafter		Total
Operating leases	$	28,776	$	24,184	$	16,767	$	13,393	$	10,632	$	26,110	$	119,862

Rental expense for fiscal 2019, fiscal 2018 and fiscal 2017 was approximately $22.0 million, $24.1 million and $30.9 million, respectively. In addition, Ciena paid approximately $1.3 million, $1.9 million and $2.7 million during fiscal 2019, fiscal 2018 and fiscal 2017, respectively, related to rent costs for restructured facilities and unfavorable lease commitments, which were offset against Ciena’s restructuring liabilities and unfavorable lease obligations. The amount for operating lease commitments above does not include variable expenses relating to insurance, taxes, maintenance and other costs required by the applicable operating lease. These costs are not expected to have a material impact on Ciena’s financial condition, results of operations or cash flows.