Balance Sheet Components

Inventories

Inventories consist of the following (in thousands):



	December 31,
	2015		2014
Raw materials	$	9,950	$	8,143
Work in process	7,067		2,970
Finished goods	2,448		4,815
Total Inventories	$	19,465	$	15,928

Work in process includes costs to produce our clear aligner and intra-oral scanner products. Finished goods primarily represent our intra-oral scanners and ancillary products that support our clear aligner products.

Property, plant and equipment

Property, plant and equipment consist of the following (in thousands):



	December 31,
	2015			2014
Clinical and manufacturing equipment	$	128,044		$	107,707
Computer hardware	25,843			24,092
Computer software	21,451			22,044
Furniture and fixtures	8,855			7,386
Leasehold improvements	20,172			15,358
Building	4,227			1,868
Land	3,072			1,162
CIP	42,846			18,310
Total	254,510			197,927
Less: Accumulated depreciation and amortization and impairment charges	(118,037		)	(107,802		)
Total Property, plant and equipment, net	$	136,473		$	90,125

As of December 31, 2015, CIP consists primarily of costs for capital equipment to be placed in service in the next year. In late 2014, we started an ERP project and have capitalized $25.4 million as of December 31, 2015, which we anticipate will be placed in service in 2016. Depreciation and amortization was $18.0 million, $17.9 million, and $16.8 million, for the year ended December 31, 2015, 2014 and 2013, respectively.

Accrued liabilities

Accrued liabilities consist of the following (in thousands):



	December 31,
	2015		2014
Accrued payroll and benefits	$	55,430	$	44,610
Accrued accounts payable	13,834		5,736
Accrued sales rebate	8,486		11,110
Accrued sales and marketing expenses	7,071		5,979
Accrued sales tax and value added tax	4,801		5,456
Accrued professional fees	2,775		2,494
Accrued income taxes	2,646		2,027
Accrued warranty	2,638		3,148
Other accrued liabilities	10,084		7,320
Total Accrued Liabilities	$	107,765	$	87,880

Warranty

We regularly review the accrued balances and update these balances based on historical warranty trends. Actual warranty costs incurred have not materially differed from those accrued. However, future actual warranty costs could differ from the estimated amounts.

Clear Aligner

We warrant our Invisalign products against material defects until the Invisalign case is complete. We accrue for warranty costs in cost of net revenues upon shipment of products. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on replacement costs.

Scanners

We warrant our scanners for a period of one year from the date of training and installation. We accrue for these warranty costs which includes materials and labor based on estimated historical repair costs. Extended service packages may be purchased for additional fees.

Warranty accrual as of December 31, 2015 and 2014 consists of the following activity (in thousands):



Warranty accrual, December 31, 2013	$	3,104
Charged to cost of revenues	1,990
Actual warranty expenditures	(1,946		)
Warranty accrual, December 31, 2014	3,148
Charged to cost of revenues	1,796
Actual warranty expenditures	(2,306		)
Warranty accrual, December 31, 2015	$	2,638