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Contingent Liabilites and Commitments | 6 Months Ended
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Feb. 25, 2017
Commitments and Contingencies Disclosure [Abstract] |
Contingent Liabilities and Commitments | Contingent Liabilities and Commitments Repurchase Commitments Generally, manufacturers in the RV industry enter into repurchase agreements with lending institutions which have provided wholesale floorplan financing to dealers. Most dealers' RVs are financed on a "floorplan" basis under which a bank or finance company lends the dealer all, or substantially all, of the purchase price, collateralized by a security interest in the recreation vehicles purchased. Our repurchase agreements provide that, in the event of default by the dealer on the agreement to pay the lending institution, we will repurchase the financed merchandise. The terms of these agreements, which generally can last up to 18 months, provide that our liability will be the lesser of remaining principal owed by the dealer to the lending institution, or dealer invoice less periodic reductions based on the time since the date of the original invoice. Our total contingent liability on all repurchase agreements was approximately $640.2 million and $409.3 million at February 25, 2017 and August 27, 2016, respectively, with the increase attributed primarily to Grand Design. In certain instances, we also repurchase inventory from our dealers due to state law or regulatory requirements that govern voluntary or involuntary relationship terminations. Although laws vary from state to state, some states have laws in place that require manufacturers of recreation vehicles to repurchase current inventory if a dealership exits the business. Incremental repurchase exposure beyond existing repurchase agreements, related to dealer inventory in states that we have had historical experience of repurchasing inventory, totaled $10.9 million and $7.9 million at February 25, 2017 and August 27, 2016, respectively, with the increase attributed primarily to Grand Design. Our risk of loss related to our repurchase commitments is significantly reduced by the potential resale value of any products that are subject to repurchase and is spread over numerous dealers and lenders although two dealer organizations account for approximately 26% of our revenues in the first six months of Fiscal 2017. The aggregate contingent liability related to our repurchase agreements represents all financed dealer inventory at the period reporting date subject to a repurchase agreement, net of the greater of periodic reductions per the agreement or dealer principal payments. Based on the repurchase exposure as previously described, we established an associated loss reserve. Our accrued losses on repurchases were $1.5 million as of February 25, 2017 and $0.9 million as of August 27, 2016. Repurchase risk is affected by the credit worthiness of our dealer network and we do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to establish the loss reserve for repurchase commitments. A summary of repurchase activity is as follows:
|  | Three Months Ended |  | Six Months Ended
(In thousands) |  | February 25, 2017 |  | February 27, 2016 |  | February 25, 2017 |  | February 27, 2016
Inventory repurchased |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cash collected on resold inventory |  | $ | 22 |  |  | $ | — |  |  | $ | 22 |  |  | $ | 36 |
Loss (gain) realized on resold inventory |  | $ | 6 |  |  | $ | — |  |  | $ | 6 |  |  | $ | (1 | )
Litigation We are involved in various legal proceedings which are ordinary litigation incidental to our business, some of which are covered in whole or in part by insurance. While we believe the ultimate disposition of litigation will not have material adverse effect on our financial position, results of operations or liquidity, there exists the possibility that such litigation may have an impact on our results for a particular reporting period in which litigation effects become probable and reasonably estimable. Though we do not believe there is a reasonable likelihood that there will be a material change related to these matters, litigation is subject to inherent uncertainties and management’s view of these matters may change in the future. Lease Commitments As part of our acquisition of Grand Design, we acquired leases to two properties which hold Grand Design’s current principal facilities, and facilities under construction for expansion. The lessor under these leases is an Indiana limited liability company, Three Oaks, LLC, owned by three of Grand Design's selling equity holders. One of the selling equity holders, Mr. Don Clark, has assumed the position of Vice President for Winnebago and is the President of Grand Design. Upon joining our company, Mr. Clark has agreed that as long as he is an employee of Grand Design he has relinquished his voting rights in Three Oaks, LLC while retaining all other economic rights in Three Oaks, LLC. Our future lease commitments included these related party leases as well as a non-related party lease of an office facility as follows:
(In thousands) |  | Related Party Amount | Non-related Party Amount | Total
Year Ended: | 2017 |  | $ | 858 |  | $ | 224 |  | $ | 1,082 |
| 2018 |  | 1,897 |  | 477 |  | 2,374 |
| 2019 |  | 1,800 |  | 505 |  | 2,305 |
| 2020 |  | 1,800 |  | 518 |  | 2,318 |
| 2021 |  | 1,800 |  | 523 |  | 2,323 |
| Thereafter |  | 8,374 |  | 766 |  | 9,140 |
| Total |  | $ | 16,529 |  | $ | 3,013 |  | $ | 19,542 |
No other significant changes have been made to lease commitments disclosed in our Form 10-K for the year ended August 27, 2016.

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