Warranty Obligations
We offer warranties on certain of our product offerings. The majority of our warranty liability relates to implantable devices offered by our CRM business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant, and a partial warranty for a period of time thereafter. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim, and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We assess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary.
Changes in our product warranty accrual during 2013, 2012, and 2011 consisted of the following (in millions):
|
| | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2013 | | 2012 | | 2011 |
Beginning balance | | $ | 26 |
| | $ | 30 |
| | $ | 43 |
|
Provision | | 12 |
| | 8 |
| | 9 |
|
Settlements/ reversals | | (10 | ) | | (12 | ) | | (22 | ) |
Ending balance | | $ | 28 |
| | $ | 26 |
| | $ | 30 |
|
