Product Warranty and Safety Recall Campaigns

6 Months Ended

Jun. 25, 2017

Product Warranties Disclosures [Abstract]

Product Warranty and Safety Recall Campaigns

Product Warranty and Recall Campaigns

The Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except for Japan, where the Company currently provides a standard three-year limited warranty on all new motorcycles sold. In addition, the Company provides a one-year warranty for Parts & Accessories (P&A). The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost, which is based primarily on historical Company claim information maintained by the Company. Additionally, the Company has from time to time initiated voluntary recall campaigns. The Company reserves for all estimated costs associated with recalls in the period that management approves and commits to the recall.

Changes in the Company’s warranty and recall liability were as follows (in thousands):

	Three months ended						Six months ended
	June 25, 2017			June 26, 2016			June 25, 2017			June 26, 2016
Balance, beginning of period	$	78,211		$	74,836		$	79,482		$	74,217
Warranties issued during the period	18,084			20,202			34,836			38,214
Settlements made during the period	(21,200		)	(22,679		)	(40,533		)	(40,842		)
Recalls and changes to pre-existing warranty liabilities	5,586			10,121			6,896			10,891
Balance, end of period	$	80,681		$	82,480		$	80,681		$	82,480

The liability for recall campaigns was $7.9 million, $13.6 million and $14.3 million as of June 25, 2017, December 31, 2016 and June 26, 2016, respectively.