Accrued Liabilities

9 Months Ended

Sep. 30, 2013

3.	Accrued Liabilities

Accrued liabilities consist of (in millions):


	September 30,		December 31,
	2013		2012
Customer prepayments and billings	$	786	$	699
Accrued vendor costs		648		444
Compensation		424		511
Warranty		222		194
Taxes (non income)		136		150
Insurance		128		108
Fair value of derivatives		16		18
Interest		31		14
Other		466		433

Total	$	2,857	$	2,571

Service and Product Warranties

The Company provides certain service and product warranties. 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 Company monitors the actual cost of performing these discretionary services and adjusts the accrual based on the most current information available.

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		75
Amounts incurred		(53	)
Currency translation adjustments and other		6

Balance at September 30, 2013	$	222