Annual report pursuant to Section 13 and 15(d)

PRODUCT WARRANTY LIABILITY

v3.20.4
PRODUCT WARRANTY LIABILITY
 12 Months Ended
Dec. 31, 2020
Product Warranties Disclosures [Abstract]  
PRODUCT WARRANTY LIABILITY
NOTE 12. 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:
  December 31,
In millions 2020 2019 2018
Balance, beginning of year $ 2,389  $ 2,208  $ 1,687 
Provision for base warranties issued 443  458  437 
Deferred revenue on extended warranty contracts sold 248  356  293 
Provision for product campaigns issued 90  210  481 
Payments made during period (589) (590) (443)
Amortization of deferred revenue on extended warranty contracts (227) (230) (244)
Changes in estimates for pre-existing product warranties (52) (24) 3 
Foreign currency translation and other 5  1  (6)
Balance, end of year $ 2,307  $ 2,389  $ 2,208 
We recognized supplier recoveries of $20 million, $67 million and $26 million for the for the years ended December 31, 2020, 2019 and 2018, respectively.
Warranty related deferred revenues and warranty liabilities on our Consolidated Balance Sheets were as follows:
  December 31,  
In millions 2020 2019 Balance Sheet Location
Deferred revenue related to extended coverage programs      
Current portion $ 261  $ 227  Current portion of deferred revenue
Long-term portion 700  714  Deferred revenue
Total $ 961  $ 941   
Product warranty
Current portion $ 674  $ 803  Current portion of accrued product warranty
Long-term portion 672  645  Accrued product warranty
Total $ 1,346  $ 1,448 
Total warranty accrual $ 2,307  $ 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. In the fourth quarter of 2020, we recorded an additional $20 million charge related to this campaign, as a change in estimate, to bring the total campaign, excluding supplier recoveries, to $430 million. At December 31, 2020, the remaining accrual balance was $151 million.