Note 4 — Liabilities

Accrued expenses and other current liabilities

The components of accrued expenses and other current liabilities consist of:

	March 31, 2015		December 31, 2014
	(in thousands)
Payroll and related benefits	$	16,706	$	26,605
Sales, use, and other taxes	2,159		1,776
Warranty	5,505		5,411
Restructuring liability	1,493		1,428
Professional fees	2,881		2,752
Other	7,747		10,446
Total accrued liabilities	$	36,491	$	48,418

Other liabilities consist of accruals for costs associated with installations, sales training, royalties, and travel.

Warranty reserves

Warranties are typically valid for one year from the date of system final acceptance. Estimated warranty costs are determined by analyzing specific product and historical configuration statistics and regional warranty support costs. The estimate is affected by product failure rates, material usage, and labor costs incurred in correcting product failures during the warranty period. Unforeseen component failures or exceptional component performance can impact warranty costs. Changes in Veeco’s product warranty reserves include:

	(in thousands)
Warranty reserves - December 31, 2014	$	5,411
Warranties issued	1,470
Settlements made	(919		)
Changes in estimate	(457		)
Warranty reserves - March 31, 2015	$	5,505

Restructuring accruals

During the three months ended March 31, 2015, additional accruals were recognized and payments made related to the 2014 closing of Veeco’s Ft. Collins, Colorado and Camarillo, California facilities. Business activities formally conducted at these sites have been transferred to the Plainview, New York facility. In addition, as part of the strategic plan to lower spending on its ALD technology and to refocus research and development efforts on other opportunities, Veeco announced the closing of its Hyeongok-ri, South Korea facility and notified 23 employees of their termination from Veeco. As such, Veeco accrued and paid for restructuring activities during the three months ended March 31, 2015. Minimal restructuring costs are expected to be accrued for these activities during the remainder of 2015.

	Personnel
	Severance and			Facility
	Related Costs			Closing Costs			Total
	(in thousands)
Restructuring accrual - December 31, 2014	$	1,428		$	—		$	1,428
Provision	1,532			825			2,357
Payments	(1,839		)	(453		)	(2,292		)
Restructuring accrual - March 31, 2015	$	1,121		$	372		$	1,493

Customer deposits and deferred revenue

Customer deposits totaled $66.7 million and $73.0 million at March 31, 2015 and December 31, 2014, respectively. The remainder of the balance relates to deferred revenue consisting of customer billings for which all revenue recognition criteria have not yet been met.

Long-term debt

Debt consists of a mortgage note payable with a carrying value of $1.8 million at March 31, 2015 and December 31, 2014. The annual interest rate on the mortgage is 7.91%, and the final payment is due on January 1, 2020. The mortgage note payable is secured by certain land and buildings. The property associated with the mortgage is currently held for sale. A discounted cash flow model was used to calculate a level 3 fair value estimate of $1.9 million and $2.0 million at March 31, 2015 and December 31, 2014, respectively.