BALANCE SHEET DETAIL



In thousands	December 31, 2013			December 31, 2012
Inventories, net:
Raw materials	$	19,800		$	19,597
Work-in-process	9,435			9,708
Finished products	18,549			17,489
Total (net of reserves)	$	47,784		$	46,794
Property, plant, and equipment, net
Machinery and equipment	$	42,035		$	37,598
Leasehold improvements	15,434			14,141
Office equipment and furniture	15,229			13,458
	72,698			65,197
Accumulated depreciation and amortization	(50,887		)	(45,396		)
Total	$	21,811		$	19,801
Other assets:
Deferred compensation plan assets	3,242			2,070
Demonstration and laboratory equipment	7,777			1,422
Other	841			1,340
Total	$	11,860		$	4,832
Accrued expenses:
Accrued payroll-related liabilities	$	8,771		$	10,359
Advanced billings	2,522			29
Warranty accrual	1,142			2,273
Capital lease, current portion	—			15
Other	2,660			2,184
Total	$	15,095		$	14,860
Other Liabilities:
Deferred compensation plan liabilities	$	3,874		$	2,477
Asset retirement obligations	2,248			2,123
Deferred service income - long term	1,460			1,631
Postretirement benefits obligation	1,032			967
Income tax payable - long term	2,574			3,710
Deferred income tax liabilities - long term	125			—
Other	610			327
Total	$	11,923		$	11,235

Warranty Accrual

We generally warrant our products for a period of 12 months for new products, or three months for refurbished products, from the date of system acceptance for material and labor to repair the product; accordingly, an accrual for the estimated cost of the warranty is recorded at the time the product is shipped. Extended warranty terms, if granted, result in deferral of revenue equating to our standard pricing for similar service contracts. Recognition of the related warranty cost is deferred until product revenue is recognized. Factors that affect our warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

Changes in our product liability are as follows:



In thousands	December 31, 2013			December 31, 2012
Balance, beginning of year	$	2,273		$	2,398
Liabilities accrued for warranties issued	1,394			3,606
Warranty claims paid and utilized	(2,665		)	(2,525		)
Changes in accrued warranty liabilities	140			(1,206		)
Balance, end of year	$	1,142		$	2,273

Deferred Service Income

We sell service contracts for which revenue is deferred and recognized ratably over the contract period (for time based service contracts) or as service hours are delivered (for contracts based on a purchased quantity of hours). Changes in our deferred service revenue are as follows:



In thousands	December 31, 2013			December 31, 2012
Balance, beginning of year	$	6,062		$	4,991
Service contracts billed during year	5,849			6,914
Service contract revenue recognized during year	(6,412		)	(5,843		)
Balance, end of year	$	5,499		$	6,062

Balance sheet classification
Service contracts classified as short-term	$	4,039		$	4,431
Service contracts classified as long-term	1,460			1,631
Balance, end of year	$	5,499		$	6,062

Asset Retirement Obligations

In accordance with ASC 410, Asset Retirement and Environmental Obligations, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation (“ARO”) if the fair value of the liability can be reasonably estimated, even if conditional on a future event. The ARO liability is principally for estimable retirement obligations related to remediation costs, which we estimate will be incurred upon the expiration of certain operating leases.

The following table sets forth an analysis of the ARO activity for the years ended December 31, 2013 and 2012:



In thousands	2013		2012
Balance as of January 1	$	2,123	$	1,925
Accretion expense	125		117
Liabilities incurred	—		81
Balance as of December 31	$	2,248	$	2,123

Advanced Billings

On occasion, we require, or our customers pay, a deposit in advance of order shipment. These amounts are classified as advanced billings until the related order ships. At December 31, 2013, we have received $2.5 million in advanced billings from our customers and an insignificant amount at December 31, 2012.