Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities consisted of the following:



	As of		As of
(in thousands)	March 31, 2016		September 30, 2015
Compensation	$	2,753	$	3,036
Warranty	1,102		1,664
Termination fee	2,775		2,775
Professional fees	643		1,147
Customer deposits	26		133
Deferred revenue	22		65
Self insurance	277		606
Income and other taxes	974		1,038
Severance and restructuring accruals	611		1,448
Other	676		1,190
Accrued expenses and other current liabilities	$	9,859	$	13,102

Self-insurance: Prior to December 31, 2015, the Company provided health benefits to its employees under a self-insured (stop-loss) plan whereby the Company was responsible for substantially all amounts incurred by the provider related to the benefits provided to members of the plan. Effective January 1, 2016, the Company provides health benefits to its employees through a premium policy based plan and is only responsible for the premium payments for each employee insured under the plan. The balance as of March 31, 2016 relates to the amounts the Company is liable for prior to discontinuing the self-insurance plan.

Income and other taxes: For the three months ended March 31, 2016, the Company recorded income tax benefit from continuing operations of approximately $0.2 million, and $0.2 million of income tax expense within income from discontinued operations. For the six months ended March 31, 2016, the Company recorded income tax benefit from continuing operations of approximately $0.2 million, and $0.2 million of income tax expense within income from discontinued operations. Also see Note 10 - Income and other Taxes.

Severance and restructuring accruals: In the fourth quarter of fiscal year 2014, the Company’s former CEO announced his resignation which became effective in the second quarter of fiscal year 2015. The Company entered into a separation agreement with the individual that provided for among other things, the continuation of his base salary for up to 86 weeks, benefits for 18 months, outplacement services for a period of not more than one year and with a value not in excess of $15,000 and immediate vesting of all his outstanding non-vested equity awards. These payments were not contingent upon any future service by the individual. The Company recorded a charge of approximately $0.8 million in the fiscal year ended September 30, 2014 related to this separation agreement.

In the first quarter of fiscal year 2015, the Company’s former Chief Administrative Officer and General Counsel and Secretary announced their resignations which became effective in the first quarter and second quarter of fiscal year 2015, respectively. The Company entered into separation agreements with each individual that provided for among other things, the continuation of their base salary (74 weeks for the Chief Administrative Officer and 68 weeks for the General Counsel and Secretary), benefits for 18 months, outplacement services for a period of not more than one year and with a value not in excess of $15,000 and immediate vesting of all their outstanding non-vested equity awards. These payments were not contingent upon any future service by either individual. The Company recorded charges of approximately $1.1 million in the six months ended March 31, 2015 related to these separation agreements.

In connection with the abandonment of our Newark, California facility following the closing of the sale of the Digital Products Business, we accrued for the remaining lease costs through the lease termination of May 2016. In December 2015, we entered into an agreement to terminate this lease and related obligations, including asset retirement obligations ("ARO"), as of February 2016 for a payment of $0.2 million. As a result of the agreement, we recorded a gain of $0.3 million on the lease termination. The resulting gain has been recorded in the discontinued operations of the Digital Products Business for the six months ended March 31, 2016. Also see Note 3 - Discontinued Operations.

Our severance and restructuring-related accruals specifically relate to the separation agreements discussed above and non-cancelable obligations associated with an abandoned leased facility. Expense related to severance and restructuring accruals is included in selling, general, and administrative expense on our statement of operations and comprehensive income. The following table summarizes the changes in the severance and restructuring-related accrual accounts:



(in thousands)	Severance-related accruals			Restructuring- related accruals			Total
Balance as of September 30, 2015	$	1,110		$	338		$	1,448
Expense - charged to accrual	—			—			—
Payments and accrual adjustments	(506		)	(331		)	(837		)
Balance as of March 31, 2016	$	604		$	7		$	611

Warranty: We generally provide product and other warranties on our components, power systems, and fiber optic products. Certain parts and labor warranties from our vendors can be assigned to our customers. Our reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information.

The following table summarizes the changes in our product warranty accrual accounts:



Product Warranty Accruals	For the three months ended March 31,						For the six months ended March 31,
(in thousands)	2016			2015			2016			2015
Balance at beginning of period	$	1,564		$	2,435		$	1,664		$	2,816
Provision for product warranty - expense	88			113			234			515
Adjustments and utilization of warranty accrual	(550		)	(624		)	(796		)	(1,407		)
Balance at end of period	$	1,102		$	1,924		$	1,102		$	1,924
Current portion	$	1,102		$	1,723		$	1,102		$	1,723
Non-current portion	—			201			—			201
Product warranty liability at end of period	$	1,102		$	1,924		$	1,102		$	1,924

As of March 31, 2015, the non-current portion of product warranty accruals included Terrestrial Solar Power Generation warranty liabilities retained by EMCORE as part of the Photovoltaics Asset Sale, which were settled during the fiscal year ended September 30, 2015. See Note 3 - Discontinued Operations for additional information.