GUARANTEES

6 Months Ended

Jun. 30, 2020

GUARANTEES The Company provides service and warranty coverage on its products and extends performance and operating cost guarantees beyond normal service and warranty coverage on some of its products. In addition, the Company incurs

discretionary costs to service its products in connection with specific product performance issues. Liabilities for performance and operating cost guarantees are based upon future product performance and durability, and are largely estimated based upon historical experience. Adjustments are recorded to accruals based on claims data and historical experience. The changes in the carrying amount of service and product warranties and product performance guarantees, included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet, for the six months ended June 30, 2020 and 2019 are as follows:


	For the Six Months Ended June 30,
(dollars in millions)	2020		2019
Balance as of January 1	$	488	$	473
Warranties, performance guarantees issued and changes in estimated liability	105		93
Settlements made	(92)		(76)

Balance as of June 30	$	501	$	490