INVENTORIES

As of the dates indicated, inventories are comprised of the following (in thousands):



	October 31, 2011			April 30, 2012
Raw materials	$	45,333		$	40,012
Work-in-process	13,851			12,542
Finished goods	134,998			163,414
Deferred cost of goods sold	67,665			64,478
	261,847			280,446
Provision for excess and obsolescence	(31,771		)	(37,722		)
	$	230,076		$	242,724

Ciena writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated net realizable value based on assumptions about future demand and market conditions. During the first six months of fiscal 2012, Ciena recorded a provision for excess and obsolescence of $14.0 million, primarily related to engineering design changes and the discontinuance of certain parts and components used in the manufacture of our Packet-Optical Transport and Packet-Optical Switching products. Deductions from the provision for excess and obsolete inventory relate to disposal activities.