Current Liabilities

Deferred Services Revenue

A portion of our revenue is generated from service contracts. Payments from certain of these service contracts are collected in advance. As such, revenues from these service contracts are deferred and recognized ratably over the contract period for time-based service contracts, or as service hours are delivered for contracts based on a purchased quantity of hours. Changes in our deferred service revenue are as follows:



	Three Months Ended						Nine Months Ended
(In thousands)	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Balance, beginning of the period	$	5,602		$	4,717		$	4,991		$	2,903
Additions	1,478			1,374			5,332			6,585
Revenue recognized	(1,153		)	(1,362		)	(4,396		)	(4,759		)
Balance, end of the period	$	5,927		$	4,729		$	5,927		$	4,729
Balance sheet classification
Deferred service income-short term	$	4,636		$	3,360
Deferred service income-long term	1,291			1,369
Balance, end of period	$	5,927		$	4,729

Other current liabilities

Other current liabilities consist of the following:



(In thousands)	September 29, 2012		December 31, 2011
Salaries and benefits	$	9,762	$	10,023
Warranty accrual	2,785		2,398
Advanced billing	411		5,809
Accrued taxes-other	591		1,729
Capital lease, current portion	45		176
Other	2,201		2,238
Balance, end of the period	$	15,795	$	22,373

Warranty Accrual

We generally warrant our new and refurbished products for material and labor to repair the product for periods of twelve months and three months, respectively, from the date of system acceptance. Accordingly, an accrual for the estimated cost of the warranty is recorded at the time the product is shipped. Extended warranty terms, if granted, result in deferral of revenue equating to our standard pricing for similar service contracts. Recognition of the related warranty cost is deferred until product revenue is recognized. Factors that affect our warranty liability include the number of installed units, historical and anticipated rates of warranty claims and cost per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. We believe our warranty accrual, as of September 29, 2012, is sufficient to satisfy outstanding obligations as of that date. Changes in our warranty accrual are as follows:



	Three Months Ended						Nine Months Ended
(In thousands)	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Balance, beginning of the period	$	2,795		$	2,674		$	2,398		$	2,111
Liabilities accrued for warranties issued	730			545			2,797			2,313
Warranty claims paid and utilized	(793		)	(529		)	(2,075		)	(1,633		)
Changes in accrued warranty liabilities	53			(414		)	(335		)	(515		)
Balance, end of the period	$	2,785		$	2,276		$	2,785		$	2,276

Advanced Billings

On occasion, we require, or our customers pay, a deposit in advance of order shipment. These amounts are classified as advanced billings until the related order ships. The balance of $0.4 million of advanced billings was from multiple customers as of September 29, 2012. There were $5.8 million of advance payments received as of December 31, 2011.