Other Balance Sheet Components

Accrued expenses included the following:



	March 31, 2017		June 30, 2016
Compensation costs (1)	$	53,163	$	56,965
Income and indirect taxes	43,914		39,802
Advertising costs	26,440		26,372
Interest payable	9,920		5,172
Severance costs (2)	6,402		2,242
Shipping costs	8,989		6,843
Production costs	7,722		3,251
Sales returns	4,581		2,882
Purchases of property, plant and equipment	3,077		4,614
Professional costs	2,489		1,543
Other	34,516		29,301
Total accrued expenses (3)	$	201,213	$	178,987

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(1) The decrease in compensation costs is primarily due to payment of our fiscal 2016 bonus and long-term incentive program in the first quarter of fiscal 2017. Effective July 1, 2016, we transitioned the annual bonus program to be included in team members' base salary. These amounts are therefore paid on our typical payroll schedule.

(2) The increase in accrued severance is due to the restructuring initiatives executed during the three months ended March 31, 2017. Refer to Note 15 for additional details.

(3) The increase in accrued expenses was also impacted by our acquisition of National Pen, resulting in an additional $16,617 of accruals as of March 31, 2017, which are included in each of the respective categories within the table.

Other current liabilities included the following:



	March 31, 2017		June 30, 2016
Contingent earn-out liability (4)	$	29,677	$	—
Current portion of lease financing obligation	12,569		12,569
Current portion of capital lease obligations	10,491		8,011
Other	1,163		2,055
Total other current liabilities	$	53,900	$	22,635

Other liabilities included the following:



	March 31, 2017		June 30, 2016
Contingent earn-out liability (4)	$	—	$	3,146
Long-term capital lease obligations	29,962		21,318
Long-term derivative liabilities	4,706		10,949
Other	22,616		24,760
Total other liabilities (5)	$	57,284	$	60,173

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(4) During the third quarter of fiscal 2017, the contingent earn-out liability related to our WIRmachenDRUCk acquisition was re-classed to current liabilities as payment is due in the third quarter of fiscal 2018.

(5) Total other liabilities was impacted by our acquisition of National Pen, resulting in an additional $9,715 of other liabilities as of March 31, 2017, primarily relating to capital lease obligations, which are included in each of the respective categories within the table.

Contingent earn-out liability

Under the original terms of the WIRmachenDRUCK earn-out arrangement, a portion of the earn-out attributed to the minority selling shareholders was included as a component of purchase consideration as of the acquisition date, with any subsequent changes to fair value recognized within general and administrative expense. This earn-out is calculated on a sliding scale, based on the achievement of cumulative gross profit against a predetermined target. The maximum payout is €40,000 and can be paid at our option in cash or ordinary shares.

The remaining portion of the amount payable to the two majority selling shareholders in the WIRmachenDRUCK acquisition was not included as part of the purchase consideration as of the acquisition date as it was contingent upon their post-acquisition employment and planned to be recognized as expense through the required employment period. During the first quarter of fiscal 2017, in response to a statutory tax notice we amended the terms of the compensation portion of the arrangement with the two majority selling shareholders and we removed the post-acquisition employment requirement. As the arrangement was no longer contingent upon continued employment, we accelerated the recognition of the remaining unrecognized compensation expense, $7,034 of additional expense as of the amendment date, as part of general and administrative expense during the first quarter of fiscal 2017.

In addition, the estimated fair value of the contingent liability payable to all selling shareholders in the WIRmachenDRUCK acquisition increased, due to the recent business performance relative to performance targets and the time value impact within the Monte Carlo simulation model. We recognized $4,598 and $20,330 of additional expense for the fair value change during the three and nine months ended March 31, 2017, respectively, as part of general and administrative expense. As of March 31, 2017, the total liability is $29,677, of which $26,040 relates to the majority shareholders and $3,637 relates to the minority shareholders, which is further discussed in Note 3.