Accrued Liabilities

9 Months Ended

Jul. 31, 2012

Accrued liabilities at July 31, 2012 and October 31, 2011 consisted of the following:



	July 31, 2012		October 31, 2011
Accrued payroll and employee benefits ⁽¹⁾	$	3,396	$	4,672
Accrued contract and operating costs ⁽²⁾	44		88
Reserve for product warranty cost ⁽³⁾	1,197		1,134
Reserve for service agreement costs ⁽⁴⁾	9,429		11,096
Reserve for B1200 repair and upgrade program ⁽⁵⁾	4,365		7,949
Accrued taxes, legal, professional and other ⁽⁶⁾	2,023		1,955
	$	20,454	$	26,894


(1)	Balance relates to amounts owed to employees for compensation and benefits as of the end of the period.


(2)	Balance includes estimated losses accrued on product sales contracts.


(3)	Activity in the reserve for product warranty costs for the nine months ended July 31, 2012 included additions for estimates of potential future warranty obligations of $0.5 million on contracts in the warranty period and reserve reductions related to actual warranty spend and reversals to income of $0.4 million as contracts progress through the warranty period or are beyond the warranty period.

(4)

As of July 31, 2012, the loss reserve on service agreement contracts totaled $6.9 million compared to $8.9 million as of October 31, 2011. Also included in this line item is a reserve for performance guarantees penalties under the terms of our customer contracts, which based on our ongoing analysis of historical fleet performance totaled $2.5 million and $2.2 million as of July 31, 2012 and October 31, 2011, respectively.


(5)	For the nine months ended July 31, 2012, the Company incurred actual repair and upgrade costs of approximately $3.6 million.


(6)	Balance includes accrued sales, use and payroll taxes as well as accrued legal, professional and other expenses as of the end of the period.