The rate also does not include liabilities related to

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five year warranty and adjusted for wood rot to reflect more accurately the reserve percentage that relates to aluminum. The rate also does not include liabilities related to glass warranties. This rate is then applied to sales for the respective year in which the product sales occurred. These rates are further discounted by Subsidiary actual manufacturing gross margin of 14.4% and a discount rate of 3.5% at Aug-16. The specific general warranty is used for known defects that are to occur. Currently, there is a specific reserve of $700 for defective Product 1 installed at 11th E. 29th St. (Sky House) building. This $700 is combination of product of $100 and labor of $600. Subsidiary chose to replace the Product 1 and reserve for costs related to the installation to prevent the Company from being liable for attorney fees to defend its position and a unfavorable outcome. The Company determines the reserve for the extended finished warranty using a general reserve calculated through a lag analysis. This warranty only includes paint. The general reserve utilizes a lag analysis based off of the claim rate from Target Co.'s wood division's ten year warranty reserve percentages, converted to a five year warranty and adjusted for wood rot to reflect more accurately the reserve percentage that relates to aluminum. The rate includes a rate for finished products. This rate is then applied to sales for the respective year in which the product sales occurred, including freight and crating revenue. Product sales are multiplied by 32.0%, Subsidiary 's estimate of the product sales that will have an extended warranty. These rates are further discounted by Subsidiary experienced manufacturing gross margin of 14.4% and a discount rate of 3.5% at Aug-16. There is not specific reserve for the extended warranty. Since this warranty is for exclusively for paint, these claims could be passed to the paint manufacturer as the paint manufacturer will guarantee their product for up to 20 years. The Company determines the reserve for the glass warranty using a general reserve calculated through a lag analysis. The reserve percentages utilized are based on Target Co.'s experience and only include glass rates which have been excluded from the general and extended warranty calculations. This rate is then applied to sales for the respective year in which the Product 1 sales occurred, including freight and crating revenue. These rates are further discounted by Subsidiary experienced Product 1 manufacturing gross margin of 18.0% and a discount rate of 3.5% at Aug-16. There is not specific reserve for glass warranties.
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© 2016 Grant Thornton LLP | Project Lightning | October 21, 2016 DRAFT 78 Type Description Location Lease Term Monthly Rate Monthly Rate MLP Facilities State 4a facility MO 08/01/15 - 07/31/25 20,441 20 2,187 Facilities State 4 facility MO 12/01/15 - 11/30/20 23,965 24 1,198 Equipment Tractors and trailers MO Varies VARIES Varies 793 Facilities State 5 center VA 08/01/13 - 07/31/20 14,700 15 691 Facilities State 2 center NV 04/01/15 - 03/31/19 12,381 12 384 Facilities Village 1 center IL 07/01/13 - 06/30/18 16,254 16 341 Copiers Copiers and printers Varies 01/01/15 - 03/01/20 7,996 8 336 Facilities State 4 facility charge MO 02/01/14 - 01/31/19 3,750 4 109 Facilities FG warehouse MO 10/01/16 - 09/30/17 6,301 6 76 Equipment Trailers MO 03/01/15 - 02/28/17 7,083 7 51 Equipment Trailers
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  • Spring '08
  • McCaffrey
  • Revenue, Grant Thornton LLP

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