Fair Value Measurements

3 Months Ended

Jan. 31, 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):

	January 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	530,110	$	—	$	—	$	530,110
U.S. government obligations	—		119,143		—		119,143
Commercial paper	—		19,998		—		19,998
Foreign currency forward contracts	—		52		—		52
Total assets measured at fair value	$	530,110	$	139,193	$	—	$	669,303
Liabilities:
Foreign currency forward contracts	$	—	$	1,587	$	—	$	1,587
Forward starting interest rate swap	—		8,084		—		8,084
Contingent consideration	—		—		10,900		10,900
Total liabilities measured at fair value	$	—	$	9,671	$	10,900	$	20,571

	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 Sheet as follows (in thousands):

	January 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	530,110	$	19,998	$	—	$	550,108
Short-term investments	—		119,143		—		119,143
Prepaid expenses and other	—		52		—		52
Total assets measured at fair value	$	530,110	$	139,193	$	—	$	669,303
Liabilities:
Accrued liabilities	$	—	$	1,587	$	7,491	$	9,078
Other long-term obligations	—		8,084		3,409		11,493
Total liabilities measured at fair value	$	—	$	9,671	$	10,900	$	20,571

	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 January 31, 2019, there was no material change to the fair value.