(14) Commitments and contingencies:

The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments.

The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $439 million and $389 million at July 31, 2015 and 2014, respectively.

A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows:


	Three Months Ended				Nine Months Ended
	July 31				July 31
	2015		2014		2015		2014

Beginning of period balance	$	1,242	$	1,196	$	1,234	$	1,164
Payments		(221)		(206)		(564)		(572)
Amortization of premiums received		(39)		(43)		(121)		(103)
Accruals for warranties		222		183		592		550
Premiums received		51		54		143		150
Foreign exchange		(9)		(1)		(38)		(6)
End of period balance	$	1,246	$	1,183	$	1,246	$	1,183

At July 31, 2015, the Company had approximately $183 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At July 31, 2015, the Company had accrued losses of approximately $7 million under these agreements. The maximum remaining term of the receivables guaranteed at July 31, 2015 was approximately five years.

At July 31, 2015, the Company had commitments of approximately $221 million for the construction and acquisition of property and equipment. Also, at July 31, 2015, the Company had restricted assets of $82 million, primarily as collateral for borrowings and restricted other assets. See Note 11 for additional restricted assets associated with borrowings related to securitizations.

The Company also had other miscellaneous contingent liabilities totaling approximately $37 million at July 31, 2015, for which it believes the probability for payment is substantially remote. The accrued liability for these contingencies was not material at July 31, 2015.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, software licensing, patent, trademark and environmental matters. The Company believes the reasonably possible range of losses for these unresolved legal actions in addition to the amounts accrued would not have a material effect on its consolidated financial statements.