GUARANTEES AND INDEMNIFICATIONS

LP is a party to contracts in which LP agrees to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract. In some cases, this indemnity extends to liabilities arising out of the negligence of the indemnified parties, but usually excludes any liabilities caused by gross negligence or willful misconduct of the indemnified parties. LP cannot estimate the potential amount of future payments under these agreements until events arise that would trigger the liability. See Note 20 of the Notes to the financial statements included in LP’s Annual Report on Form 10-K for the year ended December 31, 2014 for further discussion of LP’s guarantees and indemnifications.

LP provides warranties on the sale of most of its products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The activity in warranty reserves for the three months of 2015 and 2014 are summarized in the following table:



	Three Months Ended March 31,
Dollar amounts in millions	2015			2014
Beginning balance	$	31.4		$	29.3
Accrued to expense	0.1			0.2
Foreign currency translation	(1.3		)	(0.4		)
Payments made	(3.1		)	(2.9		)
Total warranty reserves	27.1			26.2
Current portion of warranty reserves	(12.0		)	(12.0		)
Long-term portion of warranty reserves	$	15.1		$	14.2

LP continues to monitor warranty and other claims associated with these products and believes as of March 31, 2015 that the reserves associated with these matters are adequate. However, it is possible that additional charges may be required in the future.

The current portion of the warranty reserve is included in the caption “Accounts payable and accrued liabilities” and the long-term portion is included in the caption “Other long-term liabilities” on LP’s Consolidated Balance Sheets.