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, 2015		As of December 31, 2014
Accrued expenses	$	25.6	$	27.3
Other liabilities	66.1		59.9
Total warranty liability	$	91.7	$	87.2

The changes in product warranty liabilities related to continuing operations for the nine months ended September 30, 2015 were as follows (in millions):



Total warranty liability as of December 31, 2014	$	87.2
Warranty claims paid	(19.7		)
Changes resulting from issuance of new warranties	27.4
Changes in estimates associated with pre-existing liabilities	(1.6		)
Changes in foreign currency translation rates and other	(1.6		)
Total warranty liability as of September 30, 2015	$	91.7

We have incurred, and will likely continue to incur, product costs not covered by insurance or our suppliers’ warranties, which is not included in the estimated warranty liabilities tables immediately above. Also, to satisfy our customers and protect our brands, we have repaired or replaced installed products experiencing quality-related issues, and will likely continue such repairs and replacements. We currently estimate our probable outstanding liability for a certain supplier quality issue within a range of $0.7 million and $4 million, with all amounts in that range equally likely. In the prior quarter, we accrued a $1.7 million liability related to this supplier quality issue as well as a receivable from the supplier of $2.3 million. In the third quarter of 2015, we recorded a $1.2 million expense to reduce this receivable from the supplier based on the nature and timing of warranty claims. The supplier has previously reimbursed the Company for costs associated with this supplier quality issue and we expect that the supplier will continue to do so.

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 varies depending on several factors and is 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, 2015, and 2014, expense for asbestos-related litigation was $1.0 million, and $1.0 million, net of insurance recoveries, respectively.

We are the defendant in an attempted class action lawsuit alleging evaporator coils in our residential air conditioning products are susceptible to a type of corrosion that can result in coil leaks. We dispute the allegations in the lawsuit. We have reached tentative settlement terms, preliminarily approved by the court, and recorded a liability of $2.4 million in Accrued expenses on the Consolidated Balance Sheet. Any additional liability resulting from the proposed settlement is not currently reasonably estimable, but we do not expect the proposed settlement to have a material adverse effect on our financial condition or results of operations.

A lawsuit related to a vendor-supplied product quality issue settled for a lower amount than expected; accordingly, the Company reversed the $1.2 million excess portion of the loss contingency reserve in the second quarter of 2015. The Company also discovered it underpaid contractor taxes at one of its non-U.S. subsidiaries; accordingly, the Company has recorded a loss contingency charge in the amount of $2.4 million for the nine months ended September 30, 2015. These items were recorded in "Losses (gains) and other expenses, net" on the Consolidated Statements of Operations.

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.