Product Warranty Costs and Service Returns

3 Months Ended

Mar. 31, 2012

Product Warranty Costs and Service Returns / Commitments and Contingencies [Abstract]

Product Warranty Costs and Service Returns

Note 7 – Product Warranty Costs and Service Returns

Consistent with industry practice, the Company provides to homeowners limited warranties on certain products, primarily related to window and siding product categories. Warranties are of varying lengths of time from the date of purchase up to and including lifetime. Warranties cover product failures such as seal failures for windows and fading and peeling for siding products, as well as manufacturing defects. The Company has various options for remedying product warranty claims including repair, refinishing or replacement and directly incurs the cost of these remedies. Warranties also become reduced under certain conditions of time and change in home ownership. Certain metal coating suppliers provide warranties on materials sold to the Company that mitigate the costs incurred by the Company. Reserves for future warranty costs are provided based on management’s estimates utilizing an actuarial calculation performed by an independent actuary which projects future remedy costs using historical data trends of claims incurred, claim payments, sales history of products to which such costs relate and other factors.

A reconciliation of the warranty reserve activity is as follows (in thousands):

	Quarters Ended
	March 31, 2012			April 2, 2011
Balance at the beginning of the period	$	101,163		$	94,712
Provision for warranties issued and changes in estimates for pre-existing warranties		2,651			1,372
Claims paid		(2,036	)		(628	)
Foreign currency translation		329			477
Balance at the end of the period	$	102,107		$	95,933