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INCOME TAXES
 12 Months Ended
Nov. 02, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
For the periods indicated, the provision for income taxes consists of the following (in thousands):
 Year Ended
 November 2, 2024October 28, 2023October 29, 2022
Provision for income taxes: 
Current: 
Federal$70,208 $36,537 $27,479 
State14,106 18,860 10,289 
Foreign28,390 28,281 19,337 
Total current112,704 83,678 57,105 
Deferred: 
Federal(52,300)(8,010)(30,032)
State(4,868)(17,354)520 
Foreign(19,642)10,512 2,010 
Total deferred(76,810)(14,852)(27,502)
Provision for income taxes$35,894 $68,826 $29,603 

For the periods indicated, income before provision for income taxes consists of the following (in thousands):
 Year Ended
 November 2, 2024October 28, 2023October 29, 2022
United States$244 $93,682 $28,784 
Foreign119,606 229,971 153,721 
Total$119,850 $323,653 $182,505 

Ciena’s foreign income tax as a percentage of foreign income may appear disproportionate compared to the expected tax based on the U.S. federal statutory rate and is dependent on the mix of earnings and tax rates in foreign jurisdictions.
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 2024, fiscal 2023 and fiscal 2022 as follows:
 Year Ended
 November 2, 2024October 28, 2023October 29, 2022
Provision at statutory rate21.00 %21.00 %21.00 %
State taxes5.60 %1.65 %2.31 %
Withholding and other foreign taxes3.53 %(0.09)%(1.37)%
Research and development credit(40.23)%(16.78)%(23.66)%
Non-deductible compensation13.92 %5.29 %5.26 %
U.S. Taxation on foreign activity9.59 %5.08 %1.73 %
Foreign Nontaxable interest(2.96)%(1.06)%(1.90)%
Taxation on foreign inflation3.03 %1.34 %1.41 %
Rate change4.46 %(3.71)%1.27 %
Valuation allowance2.15 %9.44 %8.35 %
Loss on equity transactions— %(1.72)%— %
Uncertain tax positions8.09 %1.72 %1.62 %
Other1.77 %(0.89)%0.20 %
Effective income tax rate29.95 %21.27 %16.22 %
Ciena’s future income tax provisions and deferred tax balances may be affected by the amount of pre-tax income, the jurisdictions where it is earned, the existence and ability to utilize tax attributes and changes in tax laws and business reorganizations.

The significant components of deferred tax assets are as follows (in thousands):
Year Ended
 November 2, 2024October 28, 2023
Deferred tax assets: 
Reserves and accrued liabilities$79,272 $82,160 
Depreciation and amortization760,685 712,098 
NOL and credit carry forward211,792 197,984 
Other26,574 6,934 
Gross deferred tax assets1,078,323 999,176 
Valuation allowance(192,447)(189,870)
Deferred tax asset, net of valuation allowance$885,876 $809,306 

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 30, 2021$77,091 
Increase related to positions taken in prior period4,732 
Reductions related to settlements with taxing authorities(3,229)
Increase related to positions taken in current period2,959 
Reductions related to expiration of statute of limitations(1,039)
Unrecognized tax benefits at October 29, 202280,514 
Increase related to positions taken in prior period9,940 
Reductions related to settlements with taxing authorities(625)
Increase related to positions taken in current period4,960 
Reductions related to expiration of statute of limitations(869)
Unrecognized tax benefits at October 28, 202393,920 
Increase related to positions taken in prior period11,482 
Reductions related to settlements with taxing authorities(4,345)
Increase related to positions taken in current period4,340 
Reductions related to expiration of statute of limitations(116)
Unrecognized tax benefits at November 2, 2024$105,281 

As of November 2, 2024 and October 28, 2023, Ciena had accrued $16.3 million and $7.9 million of interest and penalties, respectively, related to unrecognized tax benefits included in other long-term obligations on the Consolidated Balance Sheets. Interest and penalties of $8.2 million, $2.7 million and $1.7 million were recorded as a net expense to the provision for income taxes during fiscal 2024, fiscal 2023 and fiscal 2022, respectively. If recognized, the entire balance of unrecognized tax benefits would impact the effective tax rate.

Changes in tax laws, regulations, administrative practices, and interpretations may impact Ciena’s tax contingencies. Due to various factors, the amounts ultimately paid, if any, upon the resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next twelve months Ciena will receive additional assessments by various tax authorities or possibly reach resolution of income tax controversies in one or more various jurisdictions. These factors could result in changes to our contingencies related to positions on prior years’ tax filings. Ciena cannot currently provide an estimate of potential changes. As statutes of limitation expire, unrecognized tax benefits including interest and penalties related to contingencies may be reversed, resulting in an income tax benefit. Over the next twelve months,
Ciena estimates that statutes on approximately $26.4 million of unrecognized tax benefits may expire, which would result in a net tax benefit.

As of November 2, 2024, we have approximately $93.0 million of undistributed earnings at our foreign subsidiaries that we identified in fiscal 2023 as no longer indefinitely reinvested and $1.5 million of deferred tax liability remaining on Ciena’s Consolidated Balance sheets for the income tax effects related to the future repatriation of these earnings. No additional income tax expense has been provided for any remaining undistributed foreign earnings, or any additional outside basis difference from investments in the foreign subsidiaries, as these amounts continue to be indefinitely reinvested. If remaining undistributed foreign earnings and profits of $415.0 million were repatriated to the U.S., the provisional amount of unrecognized deferred tax liability, which is primarily related to foreign withholding taxes, is an estimated $34.0 million; however, the amount may be lower depending on Ciena’s ability to utilize tax credits associated with the distribution. Additionally, there are no other significant temporary differences for which a deferred tax liability or asset is not being recognized.

As of November 2, 2024, Ciena continues to maintain a valuation allowance of $192.4 million against its gross deferred tax assets primarily. The valuation allowance is primarily related to state and foreign net operating losses and credits that Ciena estimates that it will not be able to use.

The following table summarizes the activity in Ciena’s valuation allowance against its gross deferred tax assets (in thousands):
Year EndedBeginning BalanceAdditionsDeductionsEnding Balance
October 29, 2022$159,634 $15,245 $12,803 $162,076 
October 28, 2023$162,076 $28,746 $952 $189,870 
November 2, 2024$189,870 $16,816 $14,239 $192,447 

As of November 2, 2024, Ciena had a $31.0 million net operating loss carry forward for U.S. federal income tax which does not expire, and $150.0 million net operating loss carry forwards for U.S. state income taxes which begin to expire in fiscal 2027. As of November 2, 2024, Ciena also had a $174.0 million net operating loss carry forward in non-U.S. jurisdictions which begin to expire in fiscal 2029. Ciena’s ability to use U.S. federal net operating losses is subject to limitations pursuant to the ownership change rules of the Internal Revenue Code Section 382.