This paper is an attempt to analyze the failure patterns of air conditioning units which have been covered by a number of service contracts. The contracts are being administered by the customer Service Department of one of the major manufacturers in the air conditioning industry and are with various dealers located near the installation locations of these units. The service contracts cover the second through 'fifth year of a five year warranty given to the ultimate user and this particular analysis covers the second and third year of operation only, the first year having been covered by the original manufacturers' warranty.