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INCOME TAXES (Tables)

12 Months Ended

Oct. 29, 2022

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


	Year Ended
	October 29, 2022		October 30, 2021		October 31, 2020
Provision (benefit) for income taxes:
Current:
Federal	$	27,479	$	72,603	$	4,363
State	10,289		21,400		13,328
Foreign	19,337		25,021		12,640
Total current	57,105		119,024		30,331
Deferred:
Federal	(30,032)		(21,942)		60,679
State	520		(11,546)		4,607
Foreign	2,010		(122,981)		(947)
Total deferred	(27,502)		(156,469)		64,339
Provision (benefit) for income taxes	$	29,603	$	(37,445)	$	94,670

Income before provision (benefit) for income taxes

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


	Year Ended
	October 29, 2022		October 30, 2021		October 31, 2020
United States	$	28,784	$	298,514	$	387,697
Foreign	153,721		164,237		68,264
Total	$	182,505	$	462,751	$	455,961

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 reconciles to the amount computed by multiplying income before income taxes by the U.S. federal statutory rate of 21% for fiscal 2022, fiscal 2021 and fiscal 2020 as follows:


	Year Ended
	October 29, 2022		October 30, 2021		October 31, 2020
Provision at statutory rate	21.00	%	21.00	%	21.00	%
Intercompany IP Restructuring Transaction	—	%	(25.85)	%	—	%
Base Erosion and Anti-Abuse Tax	—	%	—	%	(1.02)	%
State taxes	2.31	%	3.73	%	2.21	%
Foreign taxes	(1.37)	%	2.76	%	0.51	%
Research and development credit	(23.66)	%	(7.99)	%	(7.74)	%
Non-deductible compensation	5.26	%	1.68	%	1.79	%
Foreign derived intangible income	—	%	(1.82)	%	(2.07)	%
Global intangible low taxed income	1.73	%	—	%	—	%
Foreign Nontaxable interest	(1.90)	%	—	%	—	%
Taxation on foreign inflation	1.41	%	0.16	%	(0.01)	%
Transition tax	—	%	—	%	0.02	%
Rate change	1.27	%	(4.33)	%	3.04	%
Valuation allowance	8.35	%	1.77	%	3.58	%
Other	1.82	%	0.80	%	(0.55)	%
Effective income tax rate	16.22	%	(8.09)	%	20.76	%

Significant components of deferred tax assets and liabilities

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


	Year Ended
	October 29, 2022		October 30, 2021
Deferred tax assets:
Reserves and accrued liabilities	$	76,839	$	69,950
Depreciation and amortization	690,636		677,729
NOL and credit carry forward	154,707		165,087
Other	63,902		47,048
Gross deferred tax assets	986,084		959,814
Valuation allowance	(162,076)		(159,634)
Deferred tax asset, net of valuation allowance	$	824,008	$	800,180

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 November 2, 2019	$	94,604
Increase related to positions taken in prior period	653
Increase related to positions taken in current period	1,151
Reductions related to expiration of statute of limitations	(660)
Unrecognized tax benefits at October 31, 2020	95,748
Decrease related to positions taken in prior period	(22,854)
Reductions related to settlements with taxing authorities	(654)
Increase related to positions taken in current period	5,510
Reductions related to expiration of statute of limitations	(659)
Unrecognized tax benefits at October 30, 2021	77,091
Increase related to positions taken in prior period	4,732
Reductions related to settlements with taxing authorities	(3,229)
Increase related to positions taken in current period	2,959
Reductions related to expiration of statute of limitations	(1,039)
Unrecognized tax benefits at October 29, 2022	$	80,514

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 Balance		Additions		Deductions		Ending Balance
October 31, 2020	$	135,978	$	25,749	$	10,300	$	151,427
October 30, 2021	$	151,427	$	17,897	$	9,690	$	159,634
October 29, 2022	$	159,634	$	15,245	$	12,803	$	162,076