Commitments and Contingencies In the ordinary course of business, the Company is subject to proceedings, lawsuits, governmental investigations, claims and other matters, including those that relate to the environment, health and safety, employee benefits, export compliance, intellectual property, tax matters and other regulatory compliance and general matters. We are not currently a party to any litigation, nor are we aware of any pending or threatened litigation against us that we believe would materially affect our business, operating results, financial condition or cash flows. Guarantees and Product Warranties. Guarantees associated with the Companys business activities are reviewed for appropriateness and impact to the Companys financial statements. Periodically, the Companys customers enter into various leasing arrangements coordinated with a leasing company. In some instances, the Company guarantees the leasing company a minimum value at the end of the lease term on the leased equipment. As of March 31, 2018 , the maximum future payment obligation of this guaranteed value and the associated liability balance was $4 million . The Company provides its customers a standard manufacturers warranty and records, at the time of the sale, a corresponding estimated liability for potential warranty costs. Estimated future obligations due to warranty claims are based upon historical factors such as labor rates, average repair time, travel time, number of service calls and cost of replacement parts. For each consummated sale, the Company recognizes the total customer revenue and records the associated warranty liability under other current liabilities in the balance sheet using pre-established warranty percentages for that product class. The following table identifies the activity relating to the warranty reserve for the three months ended March 31 : In millions 2018 2017 Warranty reserve liability Beginning balance at January 1 $ 4 $ 5 Provisions for warranties issued 1 1 Settlements (in cash or in kind) (2 ) (2 )