PRODUCT WARRANTY

The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one to three years. Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements, as well as product manufacturing and industry developments and recoveries from third parties. The Company actively studies trends of warranty claims and takes action to improve product quality and minimize warranty claims. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of the Company’s warranty accrual at the time an obligation becomes probable and can be reasonably estimated. The Company believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the accrual. The product warranty accrual is allocated to current and non-current liabilities in the Condensed Consolidated Balance Sheets.

The following table summarizes the activity in the product warranty accrual accounts:


(in millions)	2026
Beginning balance, January 1, 2026	$	254

Provisions for current period sales	16
Adjustments of prior estimates	3


Payments	(22)
Other, primarily translation adjustment	(2)
Ending balance, March 31, 2026	$	249

The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows:


	March 31,		December 31,
(in millions)	2026		2025
Other current liabilities	$	87	$	86
Other non-current liabilities	162		168
Total product warranty liability	$	249	$	254