COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 8. COMMITMENTS AND CONTINGENCIES

For a description of our litigation and contingencies and additional information about our leases, refer to Note 16 and Note 10, respectively, in our 2022 Annual Report on Form 10-K.

Warranty

We generally accrue estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and, in certain instances, estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. During the six-month periods ending June 30, 2023 and July 1, 2022, warranty related activity was immaterial.

Leases

Operating lease cost for the three-month periods ended June 30, 2023 and July 1, 2022 was $12 million and $14 million, respectively. Operating lease costs for the six-month periods ended June 30, 2023 and July 1, 2022 was $24 million and $29 million, respectively. During the six-month periods ended June 30, 2023 and July 1, 2022, cash paid for operating leases included in operating cash flows was $24 million and $26 million, respectively. Right-of-use (“ROU”) assets obtained in exchange for operating lease obligations were $18 million and $6 million during the six-month periods ended June 30, 2023 and July 1, 2022, respectively. Operating lease ROU assets were $158 million and $162 million as of June 30, 2023 and December 31, 2022, respectively. Operating lease liabilities were $166 million and $169 million as of June 30, 2023 and December 31, 2022, respectively. Operating lease ROU assets and operating lease liabilities are reported on the Consolidated Condensed Balance Sheets within Other assets, Accrued expenses and Other current liabilities and Other long-term liabilities, respectively.