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Inventories

9 Months Ended

Jul. 31, 2011

(8) INVENTORIES

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


	October 31,			July 31,
	2010			2011
Raw materials	$	30,569		$	41,970
Work-in-process		6,993			12,271
Finished goods		177,994			154,161
Deferred cost of goods sold		76,830			66,758

		292,386			275,160
Provision for excess and obsolescence		(30,767	)		(31,333	)

	$	261,619		$	243,827

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 nine months of fiscal 2011, Ciena recorded a provision for excess and obsolescence of $11.5 million, primarily related to changes in forecasted sales for certain products. Deductions from the provision for excess and obsolete inventory relate to disposal activities.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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