Accrued Expenses

9 Months Ended

Sep. 30, 2014

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses

Accrued expenses consist of (table in millions):

	September 30, 2014		December 31, 2013
Salaries and benefits	$	1,030	$	1,078
Product warranties	233		289
Dividends payable (see Note 12)	241		205
Partner rebates	199		214
Restructuring, current (See Note 13)	117		84
Derivatives	103		23
Other	961		890
	$	2,884	$	2,783

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, 2014 and 2013 (table in millions):

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Balance, beginning of the period	$	255		$	291		$	289		$	278
Provision	37			39			111			135
Amounts charged to the accrual	(59		)	(45		)	(167		)	(128		)
Balance, end of the period	$	233		$	285		$	233		$	285

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.