Accrued Liabilities

3 Months Ended

Mar. 31, 2013

3.	Accrued Liabilities

Accrued liabilities consist of (in millions):


	March 31,		December 31,
	2013		2012
Customer prepayments and billings	$	687	$	699
Accrued vendor costs		493		444
Compensation		321		511
Warranty		188		194
Insurance		108		108
Taxes (non income)		105		150
Fair value of derivatives		47		18
Interest		35		14
Other		484		433

Total	$	2,468	$	2,571

Service and Product Warranties

The Company provides service and warranty policies on certain of its products. The Company accrues liabilities under service and warranty policies based upon specific claims and a review of historical warranty and service claim experience in accordance with Accounting Standards Codification (“ASC”) Topic 450 “Contingencies” (“ASC Topic 450”). Adjustments are made to accruals as claim data and historical experience change. In addition, the Company incurs discretionary costs to service its products in connection with product performance issues and accrues for them when they are encountered.

The changes in the carrying amount of service and product warranties are as follows (in millions):


Balance at December 31, 2012	$	194

Net provisions for warranties issued during the year		18
Amounts incurred		(23	)
Currency translation adjustments and other		(1	)

Balance at March 31, 2013	$	188