GUARANTEES

9 Months Ended

Sep. 30, 2020

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 nine months ended September 30, 2020 and 2019 are as follows:


	For the Nine Months Ended September 30,
(dollars in millions)	2020		2019
Balance as of January 1	$	488	$	473
Warranties, performance guarantees issued and changes in estimated liability	131		133
Settlements made	(111)		(126)
Other	1		(2)
Balance as of September 30	$	509	$	478