HOG » Topics » Note 3 - Product Warranty

This excerpt taken from the HOG 10-Q filed May 5, 2006.

Note 3 – Product Warranty

The Company provides a standard two-year limited warranty on all new motorcycles sold. The warranty coverage for the retail customer includes parts and labor and begins when the motorcycle is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost per unit sold, which is based on historical Company claim information. Changes in the Company’s warranty liability were as follows (in thousands):

Three months ended
March 26,
2006

March 27,
2005

Balance, beginning of period     $ 34,319   $ 39,998  
Warranties issued during the period    10,201    9,209  
Settlements made during the period    (8,765 )  (5,842 )
Changes to the liability for pre-existing  
  warranties during the period    8,517    (2,540 )


Balance, end of period   $ 44,272   $ 40,825  


During the three months ended March 26, 2006, the liability related to warranties issued prior to December 31, 2005 was adjusted to reflect an increase in the estimated cost associated with the second year of the Company’s two-year warranty plan. Beginning with shipments of 2004 model year motorcycles, the Company extended its warranty coverage from one year to two years. The Company has determined, based on actual second year claims data that is now available, that the cost associated with extending the warranty period is higher than originally anticipated.




7


This excerpt taken from the HOG 10-Q filed Nov 3, 2005.

Note 3 — Product Warranty

The Company provides a standard two-year limited warranty on all new motorcycles sold. The warranty coverage includes parts and labor, and begins when the motorcycle is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost per unit sold, which is based on historical Company claim information. Changes in the Company’s warranty liability were as follows (in thousands):

Three months ended
Nine months ended
Sep 25,
2005

Sep 26,
2004

Sep 25,
2005

Sep 26,
2004


Balance, beginning of period
    $ 42,070   $ 36,917   $ 39,998   $ 30,475  
Warranties issued during the period    12,853    10,707    31,318    31,170  
Settlements made during the period    (10,713 )  (9,030 )  (24,566 )  (24,980 )
Changes to the liability for pre-existing warranties  
  during the period    --    --    (2,540 )  1,929  




Balance, end of period   $ 44,210   $ 38,594   $ 44,210   $ 38,594  




This excerpt taken from the HOG 10-Q filed Aug 3, 2005.

Note 3 — Product Warranty

The Company provides a standard two-year limited warranty on all new motorcycles sold. The warranty coverage includes parts and labor, and begins when the motorcycle is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost per unit sold, which is based on historical Company claim information. Changes in the Company’s warranty liability were as follows (in thousands):

Three months ended
Six months ended
June 26,
2005

June 27,
2004

June 26,
2005

June 27,
2004


Balance, beginning of period
    $ 40,825   $ 35,539   $ 39,998   $ 30,475  
Warranties issued during the period    9,256    11,029    18,465    20,463  
Settlements made during the period    (8,011 )  (9,451 )  (13,853 )  (15,950 )
Changes to the liability for pre-existing warranties  
  during the period    --    (200 )  (2,540 )  1,929  




Balance, end of period   $ 42,070   $ 36,917   $ 42,070   $ 36,917  




This excerpt taken from the HOG 10-Q filed May 3, 2005.

Note 3 — Product Warranty

The Company provides a standard two-year limited warranty on all new motorcycles sold. The warranty coverage includes parts and labor, and begins when the motorcycle is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost per unit sold, which is based on historical Company claim information. Changes in the Company’s warranty liability were as follows (in thousands):

Three months ended
March 27,
2005

March 28,
2004

Balance, beginning of period     $ 39,998   $ 30,475  
Warranties issued during the period    9,209    9,434  
Settlements made during the period    (5,842 )  (6,499 )
Changes to the liability for pre-existing  
  warranties during the period    (2,540 )  2,129  


Balance, end of period   $ 40,825   $ 35,539  




This excerpt taken from the HOG 10-Q filed May 2, 2005.

Note 3 — Product Warranty

The Company provides a standard two-year limited warranty on all new motorcycles sold. The warranty coverage includes parts and labor, and begins when the motorcycle is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost per unit sold, which is based on historical Company claim information. Changes in the Company’s warranty liability were as follows (in thousands):

Three months ended
March 27,
2005

March 28,
2004

Balance, beginning of period     $ 39,998   $ 30,475  
Warranties issued during the period    9,209    9,434  
Settlements made during the period    (5,842 )  (6,499 )
Changes to the liability for pre-existing  
  warranties during the period    (2,540 )  2,129  


Balance, end of period   $ 40,825   $ 35,539  




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