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Note 9 - Product Warranty Obligations

3 Months Ended

Mar. 31, 2022

Product Warranty Disclosure [Text Block]

9. Product Warranty Obligations

The Company records a liability for standard product warranty obligations accounted for as assurance warranties at the time of sale of the product to a customer based upon historical warranty experience. The Company also records a liability for specific warranty matters when they become known and are reasonably estimable. The following is a tabular reconciliation of the Company’s standard product warranty liability accounted for as an assurance warranty:

	*Three Months Ended March 31,*
	*2022*			*2021*
Balance at beginning of period	$	94,213		$	59,218
Payments		(13,024	)		(9,779	)
Provision for warranty issued		21,425			14,830
Changes in estimates for pre-existing warranties		(1,123	)		1,028
Balance at end of period	$	101,491		$	65,297

Additionally, the Company sells extended warranty coverage for certain products, which it accounts for as a service warranty. The sales of extended warranties are recorded as deferred revenue, and typically have a duration of five to ten years. The deferred revenue related to extended warranty coverage is amortized over the duration of the extended warranty contract period, following the standard warranty period, using the straight-line method. Revenue is recognized on extended warranty contracts when the revenue recognition criteria are met, resulting in ratable recognition over the contract term. The amortization of deferred revenue is recorded to net sales in the condensed consolidated statements of comprehensive income. The following is a tabular reconciliation of the deferred revenue related to extended warranty coverage:

	*Three Months Ended March 31,*
	*2022*			*2021*
Balance at beginning of period	$	111,647		$	89,788
Deferred revenue contracts issued		9,546			8,031
Amortization of deferred revenue contracts		(5,270	)		(4,637	)
Balance at end of period	$	115,923		$	93,182

The timing of recognition of the Company’s deferred revenue balance related to extended warranties on March 31, 2022 is as follows:

Remainder of 2022	$	16,010
2023		22,572
2024		20,855
2025		17,118
2026		13,225
After 2026		26,143
Total	$	115,923

Standard product warranty obligations and extended warranty related deferred revenues are included in the condensed consolidated balance sheets as follows:

	*March 31,*		*December 31,*
	*2022*		*2021*
Product warranty liability
Current portion - other accrued liabilities	$	62,259	$	59,052
Long-term portion - other long-term liabilities		39,232		35,161
Total	$	101,491	$	94,213

Deferred revenue related to extended warranties
Current portion - other accrued liabilities	$	21,898	$	20,556
Long-term portion - other long-term liabilities		94,025		91,091
Total	$	115,923	$	111,647