Product Warranties

12 Months Ended

Dec. 31, 2011

6. Product Warranties

The Company establishes a warranty reserve for equipment project sales and estimates the warranty accrual based on the history of warranty claims to total sales, adjusted for significant known claims in excess of established reserves.

Warranty terms are based on the negotiated equipment project contract and typically are either 18 months from shipment date or 12 months from project startup date. The change in the warranty reserve, which is included in accounts payable and accrued liabilities in the consolidated balance sheets, is as follows:


	December 31
(Dollars in thousands)	2011			2010
Beginning Balance	$	1,340		$	1,140
Payments and replacement product		(440	)		(272	)
Additions to warranty reserve for warranties issued during the period		725			480
Change in the warranty reserve for pre-existing warranties		(1	)		(8	)

Ending Balance	$	1,624		$	1,340