Guarantees

We extend a variety of financial, market value and product performance guarantees to third parties. As disclosed in Note 2, on June 14, 2013 we completed the sale of substantially all operations of Rocketdyne to GenCorp Inc. Following the sale, certain guarantees of Rocketdyne's performance under existing contracts remain in place, which resulted in an increase in our performance guarantees of approximately $123 million, with no associated significant carrying amount of a liability as of June 30, 2013. There have been no other material changes to guarantees outstanding since December 31, 2012.

The changes in the carrying amount of service and product warranties and product performance guarantees for the six months ended June 30, 2013 and 2012 are as follows:



	Six Months Ended June 30,
(Dollars in millions)	2013			2012
Balance as of January 1	$	1,332		$	1,468
Warranties and performance guarantees issued	159			156
Settlements made	(132		)	(152		)
Other	—			(341		)
Balance as of June 30	$	1,359		$	1,131

The decrease reflected in “Other” during the six months ended June 30, 2012 primarily reflects the impact of warranty reserves reclassified to Liabilities held for sale, as part of the Clipper disposition. See Note 2 for further discussion.