Warranty Obligations

12 Months Ended

Dec. 31, 2016

Product Warranties Disclosures [Abstract]

Warranty Obligations

WARRANTY OBLIGATIONS

Expected warranty costs for products sold are recognized principally at the time of sale of the product based on an estimate of the amount that will eventually be required to settle such obligations. These accruals are based on factors such as past experience, production changes, industry developments and various other considerations. The estimated costs related to product recalls based on a formal campaign soliciting return of that product are accrued at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. Delphi has recognized its best estimate for its total aggregate warranty reserves, including product recall costs, across all of its operating segments as of December 31, 2016. The Company estimates the reasonably possible amount to ultimately resolve all matters in excess of the recorded reserves as of December 31, 2016 to be zero to $50 million.

The table below summarizes the activity in the product warranty liability for the years ended December 31, 2016 and 2015:

	Year Ended December 31,
	2016			2015
	(in millions)
Accrual balance at beginning of year	$	131		$	146
Provision for estimated warranties incurred during the year	91			72
Changes in estimate for pre-existing warranties	30			(11		)
Settlements made during the year (in cash or in kind)	(85		)	(70		)
Foreign currency translation and other	(6		)	(6		)
Accrual balance at end of year	$	161		$	131

During the year ended December 31, 2016, the Company recorded $25 million pursuant to a settlement agreement reached with one of the Company's OEM customers regarding warranty claims related to certain components supplied by Delphi’s Powertrain Systems segment.