The carrying value of the defendant asbestos and environmental liabilities (“defendant A&E liabilities”), insurance recoveries, future estimated expenses and the fair value adjustments related to DCo and Morse TEC was as follows:


	March 31, 2025		December 31, 2024
	(in millions of U.S. dollars)
Defendant A&E liabilities:
Defendant asbestos liabilities	$	685	$	706
Defendant environmental liabilities	9		9
Estimated future expenses	31		32
Fair value adjustments	(196)		(202)
Defendant A&E liabilities	529		545

Insurance balances recoverable:
Insurance recoverables related to defendant asbestos liabilities (net of allowance: 2025 and 2024 - $4) (1)	212		216
Fair value adjustments	(43)		(44)
Insurance balances recoverable	169		172

Net liabilities relating to defendant A&E exposures	$	360	$	373

(1) A significant portion of the insurance recoverable of $98 million established as part of acquisition accounting in 2019 has been subject to a prolonged contractual coverage dispute. During the quarter, we received a favorable judgment on coverage. While the matter is unsettled and is subject to further legal proceedings and appeal by the insurance company, it could result in significant favorable outcome to us in future periods.

The table below provides a consolidated reconciliation of the beginning and ending liability for defendant A&E liabilities:


	Three Months Ended
	March 31,
	2025		2024
	(in millions of U.S. dollars)
Balance as of January 1	$	545	$	567

Insurance balances recoverable	(172)		(172)


Net balance as of January 1	373		395

Amounts recorded in defendant asbestos and environmental expenses:

Reduction in estimated future expenses	(1)		(1)
Amortization of fair value adjustments	5		4
Total defendant asbestos and environmental expenses	4		3

Total paid claims	(17)		(12)
Net balance as of March 31	360		386
Insurance balances recoverable	169		170
Balance as of March 31	$	529	$	556