ACCRUED LIABILITIES AND OTHER SHORT-TERM OBLIGATIONS

As of the dates indicated, accrued liabilities and other short-term obligations are comprised of the following (in thousands):



	January 31, 2019		October 31, 2018
Compensation, payroll related tax and benefits⁽¹⁾	$	63,788	$	140,277
Warranty	44,448		44,740
Vacation	43,614		42,507
Contingent consideration	7,491		—
Capital lease obligations	3,314		3,547
Interest payable	1,005		1,072
Other	109,052		107,932
	$	272,712	$	340,075

⁽¹⁾ Reduction is primarily due to the timing of bonus payments to employees under Ciena's annual cash incentive compensation plan.

The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands):



Three Months Ended January 31,	Beginning Balance		Current Period Provisions	Settlements		Ending Balance
2018	$	42,456	4,657	(4,587	)	$	42,526
2019	$	44,740	3,891	(4,183	)	$	44,448

Settlement of Conversions of New Notes

Debt Conversion Liability Associated With 3.75% Convertible Senior Notes due October 15, 2018 (“New Notes”)

The New Notes provided Ciena the option, at its election, to settle conversions of such notes for cash, shares of its common stock, or a combination of cash and shares equal to the aggregate amount due upon conversion. On August 30, 2018, Ciena notified the noteholders that it had elected to settle conversion of the New Notes in a combination of cash and shares, provided that the cash portion would not exceed an aggregate amount of $400 million. Ciena became obligated to settle a portion of the conversion feature in cash and reclassified the cash conversion feature from equity to a derivative liability at its fair value of $164.2 million. On November 15, 2018, Ciena paid approximately $111.3 million in cash and issued 1.6 million shares in settlement of this embedded conversion feature.