Other Current Liabilities and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2015

The table below presents the components of other current liabilities.


	December 31,
	2015		2014
	(in millions)
Other Current Liabilities:
Accruals for pending and threatened litigation (see Note 18)	$	6	$	36
Estimated costs in excess of estimated contract value to complete contracts in process in a loss position		82		75
Accrued product warranty costs		70		59
Accrued interest		45		46
Deferred revenues		32		30
Other⁽¹⁾		159		143

Total other current liabilities	$	394	$	389

⁽¹⁾

In November 2015, the Company commenced a voluntary return program and began accepting customer returns for various EoTech holographic weapons sight (HWS) products that may have been affected by certain performance issues. The return program gives eligible owners of such HWS products the option to return their products in exchange for the purchase price, including shipping costs. The Company recorded a reduction to net sales of $20 million in the Warrior Systems sector of the Electronic Systems segment in the 2015 fourth quarter associated with establishing a product returns reserve to reflect the estimated cost of the return program. The Company’s estimated product returns reserve is based on several factors, including the number of HWS units that it anticipates purchasers will return. The Company’s product returns reserve estimate is based on: (1) its analysis of various factors, including an assumed product return rate consistent with claim rates in other circumstances, (2) its experience to date with the voluntary return program, and among other things, an assumption that only a very small percentage of the total number of HWS products sold by the Company and eligible for the voluntary return program will be returned and (3) an assumed average unit purchase price of approximately $500. The voluntary return program is in the early stages of implementation, and the Company will continue to evaluate the amount of the product returns reserve in connection with the voluntary return program. The Company’s evaluation, including as a result of its actual experience with the voluntary return program, may lead it to record an adjustment to the product returns reserve in future periods. Any such adjustment could be material.

Other Liabilities

The table below presents the components of other liabilities.


	December 31,
	2015		2014
	(in millions)
Other Liabilities:
Non-current income taxes payable (see Note 16)	$	161	$	185
Deferred compensation		45		41
Accrued workers’ compensation		38		38
Accrued product warranty costs		35		34
Notes payable and capital lease obligations		10		1
Other		79		61

Total other liabilities	$	368	$	360