Quarterly report pursuant to Section 13 or 15(d)

PRODUCT WARRANTY LIABILITY

v3.20.2
PRODUCT WARRANTY LIABILITY
 6 Months Ended
Jun. 28, 2020
Product Warranties Disclosures [Abstract]  
PRODUCT WARRANTY LIABILITY
NOTE 10. PRODUCT WARRANTY LIABILITY
A tabular reconciliation of the product warranty liability, including the deferred revenue related to our extended warranty coverage and accrued product campaigns was as follows:
Six months ended
In millions June 28,
2020		 June 30,
2019
Balance, beginning of year $ 2,389    $ 2,208   
Provision for base warranties issued 161    259   
Deferred revenue on extended warranty contracts sold 121    171   
Provision for product campaigns issued 18    134   
Payments made during period (280)   (308)  
Amortization of deferred revenue on extended warranty contracts (115)   (117)  
Changes in estimates for pre-existing product warranties (20)   (8)  
Foreign currency translation and other (11)   (1)  
Balance, end of period $ 2,263    $ 2,338   
We recognized supplier recoveries of $2 million and $11 million for the three and six months ended June 28, 2020, compared with $3 million and $61 million for the comparable periods in 2019.
Warranty related deferred revenues and warranty liabilities on our Condensed Consolidated Balance Sheets were as follows:
In millions June 28,
2020		 December 31,
2019		 Balance Sheet Location
Deferred revenue related to extended coverage programs    
Current portion $ 244    $ 227    Current portion of deferred revenue
Long-term portion 702    714    Deferred revenue
Total $ 946    $ 941     
Product warranty    
Current portion $ 681    $ 803    Current portion of accrued product warranty
Long-term portion 636    645    Accrued product warranty
Total $ 1,317    $ 1,448     
Total warranty accrual $ 2,263    $ 2,389   
Engine System Campaign Accrual
During 2017, the California Air Resources Board (CARB) and the U.S. Environmental Protection Agency (EPA) selected certain of our pre-2013 model year engine systems for additional emissions testing. Some of these engine systems failed CARB and EPA tests as a result of degradation of an aftertreatment component. In the second quarter of 2018, we reached agreement with the CARB and EPA regarding our plans to address the affected populations. From the fourth quarter of 2017 through the second quarter of 2018, we recorded charges for the expected costs of field campaigns to repair these engine systems.

The campaigns launched in the third quarter of 2018 are being completed in phases across the affected population. The total engine system campaign charge, excluding supplier recoveries, was $410 million. At June 28, 2020, the remaining accrual balance was $184 million.