INVENTORIES

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



	October 31,
	2011			2012
Raw materials	$	45,333		$	39,678
Work-in-process	13,851			10,736
Finished goods	134,998			178,210
Deferred cost of goods sold	67,665			71,484
	261,847			300,108
Provision for excess and obsolescence	(31,771		)	(40,010		)
	$	230,076		$	260,098

Ciena writes down its inventory for estimated obsolescence or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated market value based on assumptions about future demand and market conditions. During fiscal 2010 and fiscal 2011, recorded provisions for inventory reserves were primarily related to changes in forecasted sales for certain products. During fiscal 2012, recorded provisions for inventory reserves were 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.

The following table summarizes the activity in Ciena’s reserve for excess and obsolete inventory for the fiscal years indicated (in thousands):



	Balance at
Year ended	beginning of						Balance at
October 31,	period		Provisions		Disposals		end of period
2010	$	24,002	$	13,696	$	6,931	$	30,767
2011	$	30,767	$	17,334	$	16,330	$	31,771
2012	$	31,771	$	23,438	$	15,199	$	40,010