Product-Related Liabilities

6 Months Ended

Jun. 30, 2012

Product-Related Liabilities

1.7 Product-Related Liabilities

The Company has reserves for product risks. Such reserves are related to product performance issues including recall, product liability and warranty issues.

The Company records liabilities for product-related risks when probable claims are identified and when it is possible to reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products and the mix and volume of the products sold. The provisions are recorded on an accrual basis. For further explanation, see Note 1.11 Contingent Liabilities below.

The table below summarizes the change in the balance sheet position of the product-related liabilities. The provisions for the three and six months ended June 30, 2012 mainly relate to warranty related issues. The cash paid for the three and six months ended June 30, 2012 mainly relate to recall related issues. The provisions and cash paid for the three and six months ended June 30, 2011 mainly related to warranty related issues.

	Three months ended						Six months ended
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Reserve at beginning of the period	$	39.0		$	39.1		$	33.0		$	39.2
Change in reserve		0.9			2.3			9.8			2.6
Cash payments		(7.5	)		(4.5	)		(10.8	)		(6.1	)
Translation difference		(0.8	)		0.5			(0.4	)		1.7
Reserve at end of the period	$	31.6		$	37.4		$	31.6		$	37.4