Accrued Liabilities

3 Months Ended

Mar. 31, 2014

3.	Accrued Liabilities

Accrued liabilities consist of (in millions):


	March 31,		December 31,
	2014		2013
Customer prepayments and billings	$	755	$	673
Accrued vendor costs		562		531
Compensation		348		516
Warranty		248		228
Insurance		137		131
Taxes (non income)		128		188
Accrued Commissions		92		97
Interest		30		11
Fair value of derivatives		21		31
Other		396		357

Total	$	2,717	$	2,763

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, 2013	$	228

Net provisions for warranties issued during the year		29
Amounts incurred		(11	)
Currency translation adjustments and other		2

Balance at March 31, 2014	$	248