Guarantees

We extend a variety of financial, market value and product performance guarantees to third parties. Following the sale of substantially all operations of Rocketdyne on June 14, 2013, certain guarantees of Rocketdyne's performance under then existing contracts remained in place, which resulted in an increase in our performance guarantees of approximately $97 million, with no associated significant carrying amount of a liability as of March 31, 2014. There have been no other material changes to guarantees outstanding since December 31, 2013.

The changes in the carrying amount of service and product warranties and product performance guarantees for the quarters ended March 31, 2014 and 2013 are as follows:



(Dollars in millions)	2014			2013
Balance as of January 1	$	1,360		$	1,332
Warranties and performance guarantees issued	79			94
Settlements made	(71		)	(76		)
Other	(39		)	(14		)
Balance as of March 31	$	1,329		$	1,336