Schedule II Valuation And Qualifying Accounts

12 Months Ended

Jul. 31, 2014

Schedule II Valuation And Qualifying Accounts

SCHEDULE II

XCERRA CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

For Years Ended July 31, 2014, 2013 and 2012

(in thousands)

Description	Balance at beginning of period		Charged to expense		Transfers, Net(1)		Deductions(2)			Balance at end of period
Reserve for doubtful accounts
July 31, 2014	$	—	$	268	$	—	$	(129	)	$	139
July 31, 2013	$	39	$	—	$	—	$	(39	)	$	—
July 31, 2012	$	40	$	2	$	—	$	(3	)	$	39
Reserve for excess and obsolete inventory (3)
July 31, 2014	$	41,817	$	3,727	$	2,370	$	(2,656	)	$	45,258
July 31, 2013	$	42,392	$	1,822	$	359	$	(2,756	)	$	41,817
July 31, 2012	$	42,978	$	2,360	$	304	$	(3,250	)	$	42,392

(1) Represents transfers from fully reserved vendor liability obligations and internal capital equipment and transfers to fixed assets.

(2) Represents amounts written off or utilization of reserve or recovery of previously written off amounts.

(3) Amounts charged to expense and recorded in cost of sales are costs relating to product deemed defective or unusable during the normal manufacturing process which total $3.7 million, $1.8 million and $2.4 million for fiscal years 2014, 2013, and 2012, respectively. Deductions, which totaled $2.7 million, $2.8 million and $3.3 million for the fiscal years 2014, 2013 and 2012, respectively, are also recorded to cost of sales and primarily represent scrapping of inventory no longer in use, with some release of reserves related to sales of previously reserved inventory,