| PRODUCT WARRANTIES Warranties are offered on the sale of most of our products, and an accrual is recorded for estimated future claims. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The activity in the warranty reserves is summarized in the following table for the three and six months ended June 30, 2026 and 2025 (dollar amounts in millions): | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2026 | | 2025 | | 2026 | | 2025 | | Beginning balance | $ | 7 | | | $ | 6 | | | $ | 6 | | | $ | 6 | | | Change in warranty provision | — | | | — | | | 1 | | | — | | | | | | | | | | | Payments made | — | | | — | | | — | | | (1) | | | Total warranty reserves | 7 | | | 6 | | | 7 | | | 6 | | | Current portion of warranty reserves (included in accounts payable and accrued liabilities) | (1) | | | (2) | | | (1) | | | (2) | | | Long-term portion of warranty reserves (included in other long-term liabilities) | $ | 5 | | | $ | 4 | | | $ | 5 | | | $ | 4 | |
Warranty and other product-related claims continue to be monitored by management, and as of June 30, 2026, the warranty reserve balances associated with these matters are considered adequate to cover future warranty payments. However, it is possible that additional adjustments may be required in the future.
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