5. WARRANTY COSTS

The Company recognizes the cost associated with its standard warranty on its products at the time of sale. The amount recognized is based on historical experience. The following is a reconciliation of the changes in accrued warranty costs for the three and six months ended July 2, 2011 and July 3, 2010 (in thousands):


	Three Months Ended						Six Months Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
Beginning balance	$	12,584		$	13,398		$	12,831		$	13,298
Deduct: Payments		(2,979	)		(3,438	)		(5,833	)		(6,883	)
Add: Provision		31,295			3,148			33,876			6,637
Translation Adjustments		48			(22	)		74			34

Ending balance	$	40,948		$	13,086		$	40,948		$	13,086

The accrued warranty costs for the three and six months ended July 2, 2011 include an incremental $28.0 million in accrued costs due to a production flaw, which has been corrected, in certain standard motors produced in one of the Company's facilities during a limited period in 2011. The $28.0 million accrued is the Company's best estimate of the warranty costs associated with the production flaw based on current analysis and is expected to be paid out within the next twelve months.

The accrued warranty costs are included with Other Accrued Expenses on the balance sheet.