XML 31 R18.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Contingent Liabilites and Commitments | 9 Months Ended
--- | ---
May 27, 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 RVs 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. 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 RVs to repurchase current inventory if a dealership exits the business. Our total contingent liability on all repurchase agreements and due to state law or regulatory requirements was approximately $749.2 million and $417.2 million at May 27, 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 22% of our revenues in the first nine 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 and our historical loss experience, we established an associated loss reserve. Our accrued losses on repurchases were $1.0 million as of May 27, 2017 and $0.9 million as of August 27, 2016 and are included in Accrued expenses - Other on the Consolidated Balance Sheets. 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 |  | Nine Months Ended
(In thousands) |  | May 27, 2017 |  | May 28, 2016 |  | May 27, 2017 |  | May 28, 2016
Inventory repurchased |  | $ | 408 |  |  | $ | 445 |  |  | $ | 408 |  |  | $ | 445 |
Cash collected on resold inventory |  | $ | 370 |  |  | $ | — |  |  | $ | 393 |  |  | $ | 36 |
Loss (gain) realized on resold inventory |  | $ | 38 |  |  | $ | — |  |  | $ | 44 |  |  | $ | (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. In May 2016, Winnebago was awarded a favorable settlement of $2.75 million that was recorded within general and administrative expense in the third quarter of Fiscal 2016. 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 |  | $ | 479 |  | $ | 112 |  | $ | 591 |
| 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 |  | $ | 16,150 |  | $ | 2,901 |  | $ | 19,051 |
No other significant changes have been made to lease commitments disclosed in our Form 10-K for the year ended August 27, 2016.

X
- References No definition available. + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=68068213&loc=d3e12565-110249 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25496072&loc=d3e14435-108349 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.25) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73718637&loc=d3e25287-109308 + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration