Honeywell 2014 Annual Report Download - page 75

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Warranties and Guarantees
Maximum
Potential
Future
Payments
Operating lease residual values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41
Other third parties’ financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Customer financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
$49
In the normal course of business we issue product warranties and product performance
guarantees. We accrue for the estimated cost of product warranties and performance guarantees
based on contract terms and historical experience at the time of sale. Adjustments to initial obligations
for warranties and guarantees are made as changes in the obligations become reasonably estimable.
The following table summarizes information concerning our recorded obligations for product warranties
and product performance guarantees:
2014 2013 2012
Years Ended
December 31,
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 405 $ 407 $ 402
Accruals for warranties/guarantees issued during the year . . . . . . . . . 225 212 196
Adjustment of pre-existing warranties/guarantees . . . . . . . . . . . . . . . . . . (34) (1) (20)
Settlement of warranty/guarantee claims . . . . . . . . . . . . . . . . . . . . . . . . . . (193) (213) (171)
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 403 $ 405 $ 407
Product warranties and product performance guarantees are included in the following balance
sheet accounts:
2014 2013
December 31,
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $332 $323
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 82
$403 $405
66
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)