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, 2012 and 2011 (thousands of dollars):


	April 30,
	2012			2011
Balance at beginning of year	$	19,720		$	15,707
Accruals for warranties issued during the reporting period		4,188			5,175
Adjustments related to pre - existing warranties (including changes in estimates)		(1,416	)		5,981
Less settlements made during the period		(7,841	)		(8,347	)
Balance at end of period	$	14,651		$	18,516

The prior year increase in warranty accruals was primarily due to three specific warranty matters: one in the Company's Retrofit Emissions Products group for $3.0 million, one in the Company's Off-Road Products group for $1.8 million, and one in the On-Road Products group for $3.8 million. These warranty accruals were partially offset by supplier and insurance recoveries of $3.8 million. These warranty matters are not expected to have a material impact on our results of operations, liquidity or financial position. The settlements made during the nine months ended April 30, 2012 were primarily in relation to the three above mentioned matters.