Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Warranties

The following table is a summary of the Company’s accrued warranty obligations (in millions):


	Year Ended December 31,
Warranty Reserve	2020		2019		2018
Balance at the beginning of the year	$	21	$	22	$	18
Acquisitions	—		—		1
Warranty expense	30		25		34
Warranties fulfilled	(27)		(26)		(31)
Balance at the end of the year	$	24	$	21	$	22

Contingencies

The Company is subject to a variety of investigations, claims, suits, and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort, and breach of contract matters. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and their potential effects may change in the future.

During 2018, the Company settled in its entirety a commercial lawsuit resulting in a $13 million pre-tax charge reflected within General and administrative expenses on the Consolidated Statements of Operations.

In 2020, the Company received approval of its exclusion request of customs duties that had been paid on certain products under Section 301 of the U.S. Trade Act of 1974 from September 1, 2019 through September 1, 2020 and commenced a process to request recovery of previously assessed amounts. During the fourth quarter of 2020, the Company recorded recoveries of $12 million, of which $2 million and $10 million were initially incurred during the years ended December 31, 2020 and 2019, respectively. Recoveries are recognized when the Company has completed all regulatory filing requirements and determined that receipt of amounts is virtually certain. From a segment perspective, $4 million of the recovery related to AIT and $8 million related to EVM. Both the initially incurred costs and related recoveries were included within Cost of sales for Tangible products on the Consolidated Statements of Operations. The Company believes that additional import duties that were

previously paid are potentially recoverable; however, the final amounts and the timings of any such additional recoveries remains uncertain and, therefore, the Company has not recorded any amounts related to potential future recoveries in its financial statements as of December 31, 2020.