Note 15 Commitments and Contingencies Warranty Changes in the warranty reserves during the three and nine months ended July 31, 2011 and August 1, 2010 were as follows: Three Months Ended Nine Months Ended July 31, August 1, July 31, August 1, 2011 2010 2011 2010 (In millions) Beginning balance $ 184 $ 140 $ 155 $ 117 Provisions for warranty 43 37 142 103 Consumption of reserves (39 ) (30 ) (109 ) (73 ) Ending balance $ 188 $ 147 $ 188 $ 147 Applied products are generally sold with a 12-month warranty period following installation. The provision for the estimated cost of warranty is recorded when revenue is recognized. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product, configuration and geographic region. Quarterly warranty consumption is generally associated with sales that occurred during the preceding four quarters, and quarterly warranty provisions are generally related to the current quarter s sales. Guarantees In the ordinary course of business, Applied provides standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either Applied or its subsidiaries. As of July 31, 2011, the maximum potential amount of future payments that Applied could be required to make under these guarantee agreements was approximately $52 million. Applied has not recorded any liability in connection with these guarantee agreements beyond that required to appropriately account for the underlying transaction being guaranteed. Applied does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee agreements. Applied also has agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. As of July 31, 2011, Applied Materials Inc. has provided parent guarantees to banks