Product Warranties

6 Months Ended

Jul. 01, 2011

NOTE 10. PRODUCT WARRANTIES

The Company accrues for warranty costs as part of its cost of sales based on associated material product costs, technical support labor costs, and costs incurred by third parties performing work on the Company's behalf. The Company's expected future costs are primarily estimated based upon historical trends in the volume of product returns within the warranty period and the costs to repair or replace the equipment. The products sold are generally covered by a warranty for periods ranging from 90 days to three years.

While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of component suppliers, its warranty obligation is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage, or service delivery costs differ from the estimates, revisions to the estimated warranty accrual and related costs may be required.

Changes in the Company's product warranty liability during the six months ended July 1, 2011 are as follows:


(Dollars in thousands)
Balance as of December 31, 2010	$	12,868
Acquired warranties		381
Accruals for warranties issued		7,847
Changes in estimates		(800	)
Warranty settlements (in cash or in kind)		(7,133	)

Balance as of July 1, 2011	$	13,163