Note J – Warranty

The Company estimates warranty costs using quantitative measures based on historical warranty claim experience and evaluation of specific Customer warranty issues. Following is a reconciliation of warranty reserves for the nine months ended April 30, 2011 and 2010 (thousands of dollars):


	April 30,
	2011			2010
Beginning balance	$	15,707		$	9,215
Accruals for warranties issued during the reporting period		5,175			7,311
Adjustments related to pre - existing warranties (including changes in estimates)		5,981			(857	)
Less settlements made during the period		(8,347	)		(3,261	)
Ending balance	$	18,516		$	12,408

The increase in warranty accruals is primarily due to three specific warranty matters during the first nine months of Fiscal 2011. One in the Company's Retrofit Emissions Product group for $3.0 million, one in the Company's Off-Road Products group for $1.8 million and one in the On-Road Product group for $3.8 million. These warranty accruals were partially offset by supplier and insurance recoveries of $3.8 million.