Accrued Liabilities, Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Accrued Liabilities, Commitments and Contingencies

Accrued Liabilities, Commitments and Contingencies

Accrued Liabilities

The components of Accrued liabilities are as follows (in millions):

	December 31,
	2021		2020
Accrued payroll and benefits	$	96	$	87
Accrued incentive compensation	155		65
Accrued warranty	26		24
Customer reserves	51		56
Current portion of lease liabilities	33		30
Unremitted cash collections due to banks on factored accounts receivable	141		142
Forward contract liabilities	—		37
Short-term interest rate swaps	15		17
Accrued freight and duty	45		21
Other accrued expenses	77		80
Accrued liabilities	$	639	$	559

The following table is a summary of the Company’s accrued warranty obligations (in millions):

	Year Ended December 31,
Warranty Reserve	2021		2020		2019
Balance at the beginning of the year	$	24	$	21	$	22
Warranty expense	33		30		25
Warranties fulfilled	(31)		(27)		(26)
Balance at the end of the year	$	26	$	24	$	21

Commitments

In the fourth quarter of 2021, we entered into certain multi-year inventory and service-related purchase commitments which contain minimum purchase requirements and are non-cancellable. Long-term commitments under these contracts are as follows (in millions):

2022	$	97
2023	109
2024	107
2025	23
2026	24
Thereafter	—
Total	$	360

Contingencies

The Company is subject to a variety of investigations, claims, suits, and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort, and breach of contract matters. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and their potential effects may change in the future.

In 2020, the Company received approval of its exclusion request of customs duties that had been paid on certain products under Section 301 of the U.S. Trade Act of 1974 from September 1, 2019 through September 1, 2020 and commenced a process to request recovery of previously assessed amounts. Recoveries are recognized when the Company has completed all regulatory filing requirements and determined that receipt of amounts is virtually certain. Recoveries totaling $12 million were recorded in the fourth quarter of 2020, of which $4 million related to our AIT segment and $8 million related to our EVM segment. Recoveries totaling $19 million were recorded during the year ended December 31, 2021, of which $10 million related to our AIT segment and $9 million related to our EVM segment. Both the initially incurred costs and related recoveries were included within Cost of sales for Tangible products on the Consolidated Statements of Operations. The Company believes that it has recovered substantially all of the import duties that it expects to receive on previously paid amounts. The final amounts and the timings of any additional recoveries remain uncertain and, therefore, the Company has not recorded any amounts related to potential future recoveries in its financial statements as of December 31, 2021.