Accrued Liabilities

3 Months Ended

Mar. 31, 2016

3. Accrued Liabilities

Accrued liabilities consist of (in millions):


	March 31, 2016		December 31, 2015
Accrued vendor costs	$	432	$	449
Customer prepayments and billings		389		426
Compensation		249		241
Warranty		226		244
Fair value of derivative financial instruments		132		261
Taxes (non-income)		127		175
Insurance		115		113
Accrued commissions		68		73
Interest		29		8
Other		291		294

Total	$	2,058	$	2,284

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, 2015	$	244

Net provisions for warranties issued during the year		18
Amounts incurred		(37	)
Currency translation adjustments and other		1

Balance at March 31, 2016	$	226