Commitments and Contingencies:

Product Warranties and Product Related Contingencies

We offer warranties to customers for some of our products and record liabilities for estimated future warranty-related costs based on failure rates, cost experience and other factors. We periodically review the assumptions used to determine the product warranty liabilities and will adjust the liabilities in future periods for changes in assumptions, as necessary.

Liabilities for estimated product warranty costs related to continuing operations are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):



	As of September 30, 2014		As of December 31, 2013
Accrued expenses	$	27.5	$	28.7
Other liabilities	58.6		52.9
Total warranty liability	$	86.1	$	81.6

The changes in product warranty liabilities related to continuing operations for the nine months ended September 30, 2014 were as follows (in millions):



Total warranty liability as of December 31, 2013	$	81.6
Warranty claims paid	(16.6		)
Changes resulting from issuance of new warranties	24.1
Changes in estimates associated with pre-existing liabilities	(2.3		)
Changes in foreign currency translation rates and other	(0.7		)
Total warranty liability as of September 30, 2014	$	86.1

We may also incur costs related to our products that may not be covered under our warranties and are not covered by insurance, and from time to time, we may repair or replace installed products experiencing quality issues in order to satisfy our customers and to protect our brand. These product quality issues may be caused by vendor-supplied components that fail to meet required specifications.

We have liabilities for non-warranty product quality issues related to a heating and cooling product line produced in 2006 and 2007 that we believe resulted from vendor-supplied materials. The changes in the accrued product quality issues for the nine months ended September 30, 2014 were as follows (in millions):



Total accrued product quality issues as of December 31, 2013	$	4.7
Changes in estimates associated with pre-existing liabilities	—
Product quality claims paid	(0.6		)
Total accrued product quality issues as of September 30, 2014	$	4.1

The expenses related to these product quality issues were classified in Cost of goods sold in the Consolidated Statements of Operations and the related liabilities are included in Accrued expenses in the Consolidated Balance Sheets. The expenses for these product quality issues, and the related liabilities, are not included in the above tables related to our estimated product warranty liabilities. We may incur additional charges for these product quality issues in the future as more information becomes available.

Litigation

We are involved in a number of claims and lawsuits incident to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits, including costs to settle claims and lawsuits, based on experience involving similar matters and specific facts known. Costs related to such matters were not material to the periods presented.

Some of these claims and lawsuits allege personal injury or health problems resulting from exposure to asbestos that was integrated into certain of our products. We have never manufactured asbestos and have not incorporated asbestos-containing components into our products for several decades. A substantial majority of asbestos-related claims have been covered by insurance or other forms of indemnity or have been dismissed without payment. The remainder of our closed cases have been resolved for amounts that are not material, individually or in the aggregate. Our defense costs for asbestos-related claims are generally covered by insurance; however, our insurance coverage for settlements and judgments for asbestos-related claims vary depending on several factors and are subject to policy limits. As a result, we may have greater financial exposure for future settlements and judgments. For the nine months ended September 30, 2014, and 2013, expense for asbestos-related litigation was $1.0 million, and $0.5 million, net of insurance recoveries, respectively.

We are the defendant in an attempted class action lawsuit which alleges that evaporator coils in certain of our residential air conditioning products are susceptible to a type of corrosion that can result in coil leaks, and asserts claims for relief. We dispute the allegations in the lawsuit. The outcome related to this action is uncertain and we therefore cannot reasonably estimate the amount of any potential impact.

It is management's opinion that none of these claims or lawsuits or any threatened litigation will have a material adverse effect on our financial condition, results of operations or cash flows. Claims and lawsuits, however, involve uncertainties and it is possible that their eventual outcome could adversely affect our results of operations for a particular period.