9.	Warranties

We provide for the estimated costs that may be incurred under product warranties to remedy deficiencies of quality or performance of our products. These product warranties extend over either a specified period of time, units of production or machine hours depending upon the product subject to the warranty. We accrue a provision for estimated future warranty costs based upon the historical relationship of warranty costs to sales. We periodically review the adequacy of the accrual for product warranties and adjust the warranty percentage and accrued warranty reserve for actual experience as necessary.

The following table reconciles the changes in the product warranty reserve:


In thousands	2012			2011
Balance, beginning of year	$	82,737		$	62,351
Accrual for warranty expensed during the year		49,268			37,695
Settlements made during the year		(56,649	)		(32,593	)
Change in liability for pre-existing warranties during the year, including expirations		20,013			1,833
Effect of foreign currency translation		(520	)		170
Acquired warranty accrual		5,797			13,281

Balance, end of year	$	100,646		$	82,737

Adjustments were made in fiscal 2012 to reflect a $16.1 million increase in the liability for pre-existing warranties related to the mining equipment business of LeTourneau.