Company: GGG
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0000042888-25-000025
Chunk: 35

Company: GRACO INC
Filing Date: 2025-07-23
Form: 10-Q
Item: Item 8
Chunk 35
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,339 Other32,406 48,008 Total$177,141 $211,728 A liability is established for estimated future warranty and service claims that relate to current and prior period sales. The Company estimates warranty costs based on historical claim experience and other factors, including evaluating specific product warranty issues. Following is a summary of activity in accrued warranty and service liabilities (in thousands):Balance, December 27, 2024$18,712 Charged to expense6,176 Margin on parts sales reversed1,055 Reductions for claims settled(6,006)Balance, June 27, 2025$19,937 Customer Advances and Deferred RevenueRevenue is deferred when cash payments are received or due in advance of performance, including amounts which are refundable. This is also the case for services associated with certain product sales. During the three and six months ended June 27, 2025, we recognized $17 million and $46 million, respectively, that was included in deferred revenue at December 27, 2024. During the three and six months ended June 28, 2024, we recognized $13 million and $42 million, respectively, that was included in deferred revenue at December 29, 2023.

11. Fair Value

Assets and liabilities measured at fair value on a recurring basis and fair value measurement level were as follows (in thousands):Level   June 27,2025December 27,2024AssetsCash surrender value of life insurance2$26,283 $24,411 Forward exchange contracts2— 116 Total assets at fair value$26,283 $24,527 LiabilitiesContingent consideration3$16,281 $14,647 Deferred compensation27,562 8,196 Forward exchange contracts2207 — Total liabilities at fair value$24,050 $22,843 

13

Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds.Contingent consideration liabilities represent the estimated value (using a probability-weighted expected return approach) of future payments to be made to previous owners of certain acquired businesses based on future revenues. The fair value of