GE 2015 Annual Report Download - page 226

FINANCIAL STATEMENTS COMMITMENTS, GUARANTEES AND PRODUCT WARRANTIES
198 GE 2015 FORM 10-K
Indemnification Agreements. We have agreements that require us to fund up to $23 million at December 31, 2015 under residual
value guarantees on a variety of leased equipment. Under most of our residual value guarantees, our commitment is secured by the
leased asset. The liability for these indemnification agreements was $10 million at December 31, 2015.
At December 31, 2015, we also had $449 million of other indemnification commitments, substantially all of which relate to
representations and warranties in sales of businesses or assets. The liability for these indemnification commitments was $347 million at
December 31, 2015.
Contingent Consideration. These are agreements to provide additional consideration to a buyer or seller in a business combination if
contractually specified conditions related to the acquisition or disposition are achieved. Amount of contingent consideration was
insignificant at December 31, 2015.
PRODUCT WARRANTIES
We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that
are based on the best available information ± mostly historical claims experience ± claims costs may differ from amounts provided. An
analysis of changes in the liability for product warranties follows.
(
In millions
)
2015 2014 2013
Balance at January 1
$
1,199
$
1,370
$
1,429
Current-year provisions 649 593 798
Expenditures (718) (714) (867)
Other changes (a) 593 (50) 10
Balance at December 31
$
1,723
$
1,199
$
1,370
(a) 2015 included $634 million related to Alstom acquisition.
198 GE 2015 FORM 10-K