Foreign Currency Forward Contracts

3 Months Ended

Apr. 30, 2011

Foreign Currency Forward Contracts [Abstract]

(13) FOREIGN CURRENCY FORWARD CONTRACTS

From time to time, Ciena uses foreign currency forward contracts to reduce variability in certain forecasted non-US dollar denominated operating expenses. Generally, these derivatives have maturities of 12 months or less and are designated as cash flow hedges. Ciena considers several factors when evaluating hedges of its forecasted foreign currency exposures, such as significance of the exposure, offsetting economic exposures, potential costs of hedging, and the potential for hedge ineffectiveness. Ciena does not enter into derivative transactions for purposes other than hedging economic exposures. During the second quarter of fiscal 2011, Ciena entered into forward contracts to reduce the variability in its Canadian Dollar and Indian Rupee denominated operating expenses which principally relate to the Company’s research and development activities. These derivative contracts have been designated as cash flow hedges and are reported on Ciena’s Balance Sheet as derivative assets or liabilities as shown in the table below (in thousands):


														Total
Derivatives Designated as Cash					Derivative Asset					Derivative Liability				Derivative Asset
Flow Hedging Instruments	Notional Amount*				Fair Value					Fair Value				Fair Value as of:
	April 30,		April 30,		April 30,		April 30,			April 30,		April 30,		April 30,		April 30,
	2010		2011		2010		2011			2010		2011		2010		2011
Receive INR / Pay USD	$	—	$	5,259	$	—	$	28		$	—	$	—	$	—	$	28
Receive CAD / Pay USD	$	—	$	12,674	$	—	$	249		$	—	$	—	$	—	$	249

Total Fair Value					$	—	$	277	⁽¹⁾	$	—	$	—	$	—	$	277


		*Notional amounts are computed at the contract exchange rate.

		⁽¹⁾ Amount is included within prepaid expenses and other on the Condensed Consolidated Balance Sheet.

At the inception of the cash flow hedge and on an ongoing basis, Ciena assesses the hedging relationship to determine if the forward contracts have been effective in offsetting changes in cash flows attributable to changes in the relevant foreign currency exchange rate during the hedging period. The effective portion of the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (loss), and upon the occurrence of the forecasted transaction, is subsequently reclassified to the operating expense line item to which the hedged transaction relates. Ciena records the net gain or loss associated with any ineffective portion of the hedging instruments in interest and other income, net. The amounts deferred in other comprehensive income and recorded on the balance sheet and ineffective amounts recorded in other income (in thousands) are shown in the table below:


	Effective Portion
	Quarter Ended April 30,				Six Months Ended April 30,
Line Item in Condensed Consolidated Balance Sheet	2010		2011		2010		2011
Accumulated other comprehensive income	$	—	$	277	$	—	$	277


	Ineffective Portion
	Quarter Ended April 30,				Six Months Ended April 30,
Line Item in Condensed Consolidated Statement of Operations	2010		2011		2010		2011
Other income, net	$	—	$	—	$	—	$	—

	$	—	$	—	$	—	$	—


	Gain Reclassified to Condensed Consolidated Statement of Operations
	Quarter Ended April 30,				Six Months Ended April 30,
Line Item in Condensed Consolidated Statement of Operations	2010		2011		2010		2011
Research and development	$	—	$	71	$	—	$	71

	$	—	$	71	$	—	$	71