Note 12: Guarantees

6 Months Ended

Jun. 30, 2012

Notes to Condensed Consolidated Financial Statements [Abstract]

Note 12: Guarantees

Note 12: Guarantees

We extend a variety of financial, market value and product performance guarantees to third parties.As disclosed in Note 1, on June 29, 2012 Pratt & Whitney, Rolls-Royce, MTU and JAEC, completed a restructuring of their interests in IAE. This transaction has resulted in an increase in our proportionate share of IAE's obligations from 33% to 61%. There were no material changes to IAE's financing arrangements, which, as previously disclosed, were $989 million as ofDecember 31, 2011.There have been no other material changes to guarantees outstanding since December 31, 2011.

The changes in the carrying amount of service and product warranties and product performance guarantees for the six months endedJune 30,2012 and 2011 are as follows:

(Dollars in millions)	2012		2011
Balance as of January 1	$	1,468	$	1,136
Warranties and performance guarantees issued		156		289
Settlements made		(152)		(253)
Other		(341)		325
Balance as of June 30	$	1,131	$	1,497

The decrease in the above table in “Other” during the six months ended June 30, 2012 primarily reflects the impact of warranty reserves reclassified to Liabilities of Discontinued Operations. See Note 2 for further discussion. The increase reflected in “Other” during the six months ended June 30, 2011 primarily reflected the impact of finalizing purchase accounting on the acquisition of Clipper.