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Warranty Guarantees
The company’s products are warranted to ensure customer confidence in design, workmanship, and overall quality. Warranty coverage is for specified periods of time and on select products’ hours of usage, and generally covers parts, labor, and other expenses for non-maintenance repairs. Warranty coverage generally does not cover operator abuse or improper use. An authorized company distributor or dealer must perform warranty work. Distributors and dealers submit claims for warranty reimbursement and are credited for the cost of repairs, labor, and other expenses as long as the repairs meet prescribed standards. Warranty expense is accrued at the time of sale based on the estimated number of products under warranty, historical average costs incurred to service warranty claims, the trend in the historical ratio of claims to sales, the historical length of time between the sale and resulting warranty claim, and other minor factors. Special warranty reserves are also accrued for major rework campaigns. The company also sells extended warranty coverage on select products for a prescribed period after the factory warranty period expires.
Warranty provisions, claims, and changes in estimates for the first nine-month periods in fiscal 2011 and 2010 were as follows:
|
(Dollars in thousands) |
|
Beginning |
|
Warranty |
|
Warranty |
|
Changes in |
|
Ending |
|
|
Nine Months Ended |
|
Balance |
|
Provisions |
|
Claims |
|
Estimates |
|
Balance |
|
|
July 29, 2011 |
|
$ |
56,934 |
|
$ |
32,739 |
|
$ |
(21,538 |
) |
$ |
2,179 |
|
$ |
70,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 30, 2010 |
|
54,273 |
|
29,374 |
|
(22,135 |
) |
1,164 |
|
62,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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