Note 7 – Revenues

Automotive undercar repair, tire sales and tire services represent the vast majority of our revenues. We also earn revenue from the sale of tire road hazard warranty agreements as well as commissions earned from the delivery of tires on behalf of certain tire vendors.

Revenue from automotive undercar repair, tire sales and tire services is recognized at the time the customers take possession of their vehicle or merchandise. For sales to certain customers that are financed through the offering of credit on account, payment terms are established for customers based on our pre-established credit requirements. Payment terms vary depending on the customer and generally range from 15 to 45 days. Based on the nature of receivables, no significant financing components exist. Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. We estimate the reduction to sales and cost of sales for returns based on current sales levels and our historical return experience. Such amounts are immaterial to our Consolidated Financial Statements.

Revenue from the sale of tire road hazard warranty agreements (included in the Tires product group in the table summarizing disaggregated revenue by product group below) is initially deferred and is recognized over the contract period as costs are expected to be incurred in performing such services, typically 21 to 36 months. The amounts recorded for deferred revenue balances at December 29, 2018 and March 31, 2018 were $17.3 million and $17.2 million, respectively, of which $12.1 million and $11.9 million, respectively, are reported in Warranty reserves and $5.2 million and $5.3 million, respectively, are reported in Other long-term liabilities in our Consolidated Balance Sheets.

The following table summarizes deferred revenue related to road hazard warranty agreements from March 31, 2018 to December 29, 2018:



	Dollars in
	thousands
Balance at March 31, 2018	$	17,182
Deferral of revenue		12,647
Deferral of revenue from acquisitions		566
Recognition of revenue		(13,121)
Balance at December 29, 2018	$	17,274

We expect to recognize $4.0 million of deferred revenue related to road hazard warranty agreements in the remainder of fiscal 2019, $9.7 million of such deferred revenue during our fiscal year ending March 28, 2020, and $3.6 million of such deferred revenue thereafter.

Under various arrangements, we receive from certain tire vendors a delivery commission and reimbursement for the cost of the tire that we may deliver to customers on behalf of the tire vendor. The commission we earn from these transactions (included in the Tires product group in the following table) is as an agent and the net amount retained is recorded as sales.

The following table summarizes disaggregated revenue by product group:



	Quarter Ended				Nine Months Ended
	Fiscal December				Fiscal December
	2018		2017		2018		2017
	(Dollars in thousands)
Revenues:
Brakes	$	38,028	$	33,313	$	124,677	$	109,917
Exhaust		6,802		6,264		22,751		20,137
Steering		23,188		22,778		71,894		69,642
Tires		167,715		152,544		459,236		420,173
Maintenance		73,582		70,043		232,062		219,834
Other		795		788		2,407		2,534
Total	$	310,110	$	285,730	$	913,027	$	842,237