Product Warranty

3 Months Ended

Mar. 31, 2016

Product Warranties Disclosures [Abstract]

Product Warranty

Product Warranty

The Company provides warranties on some, but not all, of its products. The warranty terms are typically from one to three years. Provisions for estimated expenses related to product warranty are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and industry developments and recoveries from third parties. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty claims. Management believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the accrual.

The following table summarizes the activity in the product warranty accrual accounts:

(in millions)	2016			2015
Beginning balance, January 1	$	107.9		$	132.0
Provisions	24.6			6.3
Payments	(19.0		)	(8.2		)
Translation adjustment	2.9			(19.3		)
Ending balance, March 31	$	116.4		$	110.8

The Company’s warranty provision as a percentage of net sales has increased from 0.3% as of March 31, 2015 to 1.1% as of March 31, 2016. This change is primarily related to the Company’s fourth quarter 2015 acquisition of Remy.

The product warranty liability is classified in the Condensed Consolidated Balance Sheets as follows:

	March 31,		December 31,
(in millions)	2016		2015
Accounts payable and accrued expenses	$	72.5	$	70.6
Other non-current liabilities	43.9		37.3
Total product warranty liability	$	116.4	$	107.9