INVENTORIES

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



	October 31, 2013			July 31, 2014
Raw materials	$	53,274		$	61,429
Work-in-process	7,773			8,268
Finished goods	153,855			172,321
Deferred cost of goods sold	75,764			103,701
	290,666			345,719
Provision for excess and obsolescence	(41,563		)	(52,627		)
	$	249,103		$	293,092

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 net realizable value based on assumptions about future demand and market conditions. During the first nine months of fiscal 2014, Ciena recorded a provision for excess and obsolescence of $22.0 million, primarily related to engineering design changes and the discontinuance of certain parts and components used in the manufacture of our Optical Transport products, including our Corestream® Agility Optical Transport platform, and Converged Packet Optical products. Deductions from the provision for excess and obsolete inventory relate to disposal activities.