Quarterly report pursuant to Section 13 or 15(d)

PRODUCT WARRANTY LIABILITY

v3.22.2
PRODUCT WARRANTY LIABILITY
 6 Months Ended
Jun. 30, 2022
Product Warranties Disclosures [Abstract]  
PRODUCT WARRANTY LIABILITY
NOTE 11. 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 30,
2022		 July 4,
2021
Balance, beginning of year $ 2,425  $ 2,307 
Provision for base warranties issued 267  302 
Deferred revenue on extended warranty contracts sold 145  136 
Provision for product campaigns issued 65  46 
Payments made during period (289) (283)
Amortization of deferred revenue on extended warranty contracts (146) (124)
Changes in estimates for pre-existing product warranties (47) (74)
Foreign currency translation and other 106 
(1)
 (6)
Balance, end of period $ 2,526  $ 2,304 
(1) Includes $95 million of product warranty liability related to the acquisition of Cummins Westport Joint Venture. See NOTE 14, "ACQUISITIONS," to our Condensed Consolidated Financial Statements for additional information.
We recognized supplier recoveries of $10 million and $23 million for the three and six months ended June 30, 2022, compared with $5 million and $9 million for the comparable periods in 2021.
Warranty related deferred revenues and warranty liabilities on our Condensed Consolidated Balance Sheets were as follows:
In millions June 30,
2022		 December 31,
2021		 Balance Sheet Location
Deferred revenue related to extended coverage programs    
Current portion $ 296  $ 286  Current portion of deferred revenue
Long-term portion 720  700  Deferred revenue
Total $ 1,016  $ 986   
Product warranty    
Current portion $ 796  $ 755  Current portion of accrued product warranty
Long-term portion 714  684  Accrued product warranty
Total $ 1,510  $ 1,439   
Total warranty accrual $ 2,526  $ 2,425 
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 June 30, 2022, the remaining accrual balance was $63 million.