Accrued Expenses

9 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses

Accrued expenses consist of (table in millions):

	September 30, 2013		December 31, 2012
Salaries and benefits	$	961	$	1,018
Product warranties	285		278
Dividends payable (see Note 12)	208		—
Partner rebates	174		187
Restructuring, current (See Note 13)	87		76
Derivatives	38		40
Other	946		923
	$	2,699	$	2,522

Product Warranties

Systems sales include a standard product warranty. At the time of the sale, we accrue for systems’ warranty costs. The initial systems’ warranty accrual is based upon our historical experience, expected future costs and specific identification of systems’ requirements. Upon sale or expiration of the initial warranty, we may sell additional maintenance contracts to our customers. Revenue from these additional maintenance contracts is included in deferred revenue and recognized ratably over the service period. The following represents the activity in our warranty accrual for the three and nine months ended September 30, 2013 and 2012 (table in millions):

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Balance, beginning of the period	$	291		$	262		$	278		$	255
Provision	39			41			135			129
Amounts charged to the accrual	(45		)	(38		)	(128		)	(119		)
Balance, end of the period	$	285		$	265		$	285		$	265

The provision includes amounts accrued for systems at the time of shipment, adjustments for changes in estimated costs for warranties on systems shipped in the period and changes in estimated costs for warranties on systems shipped in prior periods. It is not practicable to determine the amounts applicable to each of the components.