credits in excess of our annual tax liabilities to an individual state where we no longer generate sufficient state income.  In addition, as of December 31, 2013, we have a deferred tax asset of $11.9 million relating to net operating loss carry- forwards which will expire between 2014 and 2030. These carry-forwards are the result of acquisitions in 2009 and in  2011, plus losses generated in 2012 by a foreign entity. The acquired net operating losses are in excess of the amount of  estimated earnings. We believe it is more likely than not that we will not realize the full benefits of our deferred tax asset  arising from these credits and net operating losses, and accordingly, have provided a full valuation allowance against  them. This valuation allowance is included in non-current deferred tax liabilities in the accompanying balance sheets. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that  the positions become uncertain. We adjust these reserves, including any impact on the related interest and penalties, as  facts and circumstances change. Financial Results 21 n Our products generally include warranties of 90 days to ten years for product defects. We accrue for warranty returns at the time revenue is recognized based on our estimate of the cost to repair or replace the defective products. We engage  in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our  component suppliers. Our products continue to become more complex in both size and functionality as many of our  product offerings migrate from line card applications to systems products. The increasing complexity of our products will cause warranty incidences, when they arise, to be more costly. Our estimates regarding future warranty obligations  may change due to product failure rates, material usage, and other rework costs incurred in correcting a product failure.  In addition, from time to time, specific warranty accruals may be recorded if unforeseen problems arise. Should our  actual experience relative to these factors be worse than our estimates, we will be required to record additional warranty  expense. Alternatively, if we provide for more reserves than we require, we will reverse a portion of such provisions in  future periods. The liability for warranty obligations totaled $9.0 million and $9.7 million at December 31, 2013 and 2012, respectively. These liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets. n Pension benefit plan obligations are based on various assumptions used by our actuaries in calculating these amounts.  These assumptions include discount rates, compensation rate increases, expected return on plan assets, retirement rates,  and mortality rates. Actual results that differ from the assumptions and changes in assumptions could affect future expenses and obligations. Our net pension liability totaled $2.6 million at December 31, 2013 and 2012. This liability is included in other non-current liabilities in the accompanying Consolidated Balance Sheets. n We use the acquisition method to account for business combinations. Under the acquisition method of accounting, we  recognize the assets acquired and liabilities assumed at their fair value on the acquisition date. Goodwill is measured as  the excess of the consideration transferred over the net assets acquired. The acquisition method of accounting requires us  to exercise judgment and make significant estimates and assumptions regarding the fair value of the assets acquired and  liabilities assumed, including the fair values of inventory, unearned revenue, warranty liabilities, identifiable intangible  assets and deferred tax asset valuation allowances. This method also requires us to refine these estimates over a one-year  measurement period to reflect information obtained about facts and circumstances that existed as of the acquisition date  that, if known, would have affected the measurement of the asset and liabilities recorded on that date, which could affect  our net income. n We evaluate the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if  events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. When evaluating whether goodwill is impaired, we first assess qualitative factors to determine  whether it is necessary to perform the two-step quantitative goodwill impairment test. If we determine that the two-step  quantitative test is necessary, then we compare the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair  value, then the amount of the impairment loss is measured. We passed the qualitative assessment in 2013 and 2012; therefore, we did not complete a quantitative assessment. As a result, there were no impairment losses recognized during 2013 or 2012. 