Product Warranty and Recall Campaigns

6 Months Ended

Jun. 28, 2020

Product Warranties Disclosures [Abstract]

Product Warranty and Recall Campaigns

Product Warranty and Recall Campaigns

The Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except in Japan, where the Company currently provides a standard three-year limited warranty. The Company also provides a five-year unlimited warranty on the battery for new electric motorcycles. In addition, the Company provides a one-year warranty for parts and accessories. The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company accrues for future warranty claims at the time of sale using an estimated cost based primarily on historical Company claim information.

Additionally, the Company has from time to time initiated certain voluntary recall campaigns. The Company records estimated recall costs when the liability is both probable and estimable. This generally occurs when the Company's management approves and commits to a recall. Changes in the Company’s warranty and recall liabilities were as follows (in thousands):

	Three months ended				Six months ended
	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
Balance, beginning of period	$	86,308	$	122,387	$	89,793	$	131,740
Warranties issued during the period	6,232		17,350		17,257		28,967
Settlements made during the period	(10,737)		(26,768)		(24,894)		(46,385)
Recalls and changes to pre-existing warranty liabilities	1,710		(4,165)		1,357		(5,518)
Balance, end of period	$	83,513	$	108,804	$	83,513	$	108,804

The liability for recall campaigns was $32.0 million, $36.4 million and $47.6 million at June 28, 2020, December 31, 2019 and June 30, 2019, respectively. Additionally, during the six months ended June 30, 2019 the Company recorded supplier recoveries within operating expenses separate from the amounts disclosed above of $28.0 million.