Accrued Liabilities

3 Months Ended

Mar. 31, 2015

4.	Accrued Liabilities

Accrued liabilities consist of (in millions):


	March 31, 2015		December 31, 2014
Accrued vendor costs	$	886	$	815
Customer prepayments and billings		614		703
Fair value of derivative financial instruments		420		297
Compensation		353		662
Warranty		284		272
Taxes (non-income)		159		211
Insurance		132		126
Accrued commissions		102		97
Interest		30		11
Other		320		324

Total	$	3,300	$	3,518

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”. 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, 2014	$	272

Net provisions for warranties issued during the year		27
Amounts incurred		(13	)
Currency translation adjustments and other		(2	)

Balance at March 31, 2015	$	284