Warranties, Guarantees, Commitments and Contingencies Warranties Products sold by the Company are covered by a basic limited warranty with terms and conditions that vary depending upon the product and country in which it was sold. The limited warranty covers the equipment, parts and labor (in certain cases) necessary to satisfy the warranty obligation generally for a period of two years. Estimated product warranty expenses are accrued in cost of goods sold at the time the related sale is recognized. Estimates of warranty expenses are based primarily on warranty claims experience and specific customer contracts. Warranty expenses include accruals for basic warranties for product sold, as well as accruals for product recalls, service campaigns and other related events when they are known and estimable. Recoveries from suppliers are recognized when an arrangement with the supplier exists and collectibility is assured. Amounts recognized as recoveries do not exceed related warranty costs accrued. To the extent the Company experiences changes in warranty claim activity or costs associated with servicing those claims, its warranty accrual is adjusted accordingly. Warranty accrual estimates and the allocation of warranty between short and long term are updated based upon the most current warranty claims information available. The following is a summary of changes in the Companys product warranty liability for the three and nine month periods ended September 30, 2019 and 2018 . Three Months Ended September 30, Nine Months Ended September 30, (Amount in millions) 2019 2018 2019 2018 Balance of warranty costs accrued, beginning of period $ 44.9 $ 53.9 $ 43.7 $ 50.9 Warranty costs accrued 8.2 5.1 25.1 25.9 Warranty claims settled (4.5 ) (8.4 ) (20.1 ) (24.7 ) Foreign exchange translation effects (1.3 ) 0.1 (1.4 ) (1.4 ) Balance of warranty costs accrued, end of period $ 47.3 $ 50.7 $ 47.3 $ 50.7 Current liability, disclosed as current portion of warranties $ 26.5 $ 29.9 $ 26.5 $ 29.9 Long-term liability, included in other liabilities $ 20.8 $ 20.8 $ 20.8 $ 20.8 Warranty costs accrued $ 8.2 $ 5.1 $ 25.1 $ 25.9 Less: received and anticipated recoveries from suppliers  (0.2 )  (0.5 ) Warranty costs net of received and anticipated recoveries $ 8.2 $ 4.9 $ 25.1 $ 25.4 Guarantees and Commitments The Company has uncollateralized bank guarantees for $27.3 million , of which $16.4 million is related to statutorily-required guarantees for tax and other litigation, $3.0 million is related to letters of credit, and $7.9 million is related to other individually immaterial items. As disclosed in our 2018 Form 10-K, the Company entered into a distribution agreement with Meritor Inc. (Meritor) to serve as the exclusive distributor for a certain range of WABCO Aftermarket products in the U.S. and Canada and also its non-exclusive distributor in Mexico. The agreement provided Meritor with the option to sell these distribution rights to the Company for an exercise price between $225 million and $265 million , based on the earnings of the distribution business, during certain time periods and under certain circumstances, including a change in control of the Company. On September 13, 2019, Meritor exercised its option to terminate the distribution agreement and sell the distribution rights to the Company due to the announcement of the Merger. The purchase price for the distribution rights is payable in cash and will result in an increase to the intangible assets balance. The Company is expected to complete the acquisition in the first quarter of 2020. Right of Recourse As discussed in Note 6, the Company may receive bank acceptance drafts from customers in China in payment of outstanding accounts receivable in the ordinary course of business. These bank acceptance drafts are non-interest bearing obligations of the issuing bank and generally have contractual maturities of six months or less. The Company may use these banker's acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors. Bank acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity date. As of September 30, 2019 and December 31, 2018 , the Company had approximately $17.5 million and $28.2 million , respectively, of bankers acceptance drafts subject to customary right of recourse provisions, which were transferred to vendors and had not reached their scheduled maturity date. Historically, the bankers acceptance drafts have settled upon maturity without any claim of recourse against the Company. Contingencies We are subject to proceedings, lawsuits and other claims related to products and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable and reasonably possible losses. A determination of the amount of liability to be recorded, if any, for these contingencies is made after careful analysis of each individual issue. Under an indemnification agreement, WABCO Brazil is responsible for certain claims related to Trane's (formerly called American Standard) business for periods prior to the Company's spin-off from Trane in 2007. In particular, there are tax claims pending in various stages of the Brazilian legal process related to income, social contribution and/or value added taxes for which a contingency exists and which may or may not ultimately be incurred by the Company. As previously disclosed, this includes one particular case for which an accrual of BRL 38.9 million including interest ( $9.4 million based on September 30, 2019 exchange rates) was recorded based on management's assessment after considering advice of external legal counsel with respect to the likelihood of loss in this case. A corresponding deposit was made in the first quarter of 2017 into an escrow account with the Brazilian government, representing substantially all of the potential liability for the case. In March 2018, our appeal to have this case heard at the Brazilian Superior Court of Justice (the Court) was accepted. The Court subsequently heard the case and rejected our position ultimately ruling in favor of the tax authorities during the first quarter of 2018. There will be no further appeals. Accordingly, management expects this case to be closed by the Brazilian authorities within the next twelve months and has classified the accrual and deposit within other current liabilities and other current assets, respectively, as of September 30, 2019 . The estimated total amount of other remaining contingencies for tax claims under the indemnification agreement as of September 30, 2019 was $15.9 million including interest. However, based on managements assessment following advice of our external legal counsel, the Company believes that it has valid arguments in all of these cases and thus no accrual is required at this time. Merger Litigation Following the announcement of the execution of the Merger Agreement, two putative class action complaints and two individual complaints were filed against the Company and the Board of Directors. On April 23, 2019, the first putative class action complaint was filed against the Company and the Board of Directors in the United States District Court for the District of Delaware under the caption Collier v. WABCO Holdings Inc., et al. , No. 1:19-cv-00729 (D. Del.). On April 24, 2019, the second putative class action complaint was filed against the Company and the Board of Directors in the United States District Court for the District of Delaware under the caption Kent v. WABCO Holdings Inc., et al. , No. 1:19-cv-00735 (D. Del.). On April 29, 2019, a third complaint was filed against the Company and the Board of Directors in the United States District Court for the District of Delaware under the caption Stein v. WABCO Holdings Inc., et al. , No. 1:19-cv-00782 (D. Del.). On May 2, 2019, a fourth complaint was filed against the Company and the Board of Directors in the United States District Court for the District of Delaware under the caption Kengchoon v. WABCO Holdings Inc., et al. , No. 1:19-cv-00816 (D. Del.). The defendants believed that these four lawsuits were without merit and the defendants specifically denied all allegations that any supplemental disclosure was required. However, to moot certain disclosure claims in these lawsuits, to avoid nuisance, potential expense and delay and to provide additional information to WABCOs shareholders, on June 17, 2019, WABCO voluntarily supplemented its definitive proxy statement by publicly filing additional disclosures. In August 2019, each of the plaintiffs in these four lawsuits filed a notice of voluntary dismissal that reserved the right to seek an award of attorneys fees. While these plaintiffs have dismissed these actions, it is possible that additional lawsuits related to the Merger may be filed in the future in the same or other courts that name the same or additional defendants, in which case we could be similarly materially and adversely affected by such additional litigation. We cannot assure you as to the outcome of any future lawsuits, including the costs associated with defending such claims or any other liabilities that may be incurred in connection with litigation or settlement of such claims.