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Guarantees
6 Months Ended
Jun. 30, 2011
Guarantees [Abstract]  
Guarantees
Note 16. Guarantees
The Company extends financial and product performance guarantees to third parties. At June 30, 2011, the following environmental remediation and indemnification and financial guarantees were outstanding:
                 
    Maximum     Carrying  
    Potential     Amount of  
    Payment     Liability  
    (Dollars in millions)  
Environmental remediation and other indemnifications (Note 15, “Contingencies”)
  No Limit   $ 15.1  
Guarantees of residual value on leases
  $ 28.1     $  
Guarantees of JV debt and other financial instruments
  $ 41.7     $  
The Company has guarantees of residual values on certain lease obligations in which the Company is obligated to either purchase or remarket the assets at the end of the lease term.
The Company is guarantor on a revolving credit agreement totaling £35 million between Rolls-Royce Goodrich Engine Control Systems Limited (JV) and a financial institution. In addition, the Company guarantees the JV’s foreign exchange credit line with a notional amount of $140.7 million and a fair value asset of $5.1 million at June 30, 2011. The Company is indemnified by Rolls-Royce for 50% of the gains/losses resulting from the foreign exchange hedges.
Service and Product Warranties
The Company provides service and warranty policies on certain of its products. The Company accrues liabilities under service and warranty policies based upon specific claims and a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience change. In addition, the Company incurs discretionary costs to service its products in connection with product performance issues.
The changes in the carrying amount of service and product warranties for the six months ended June 30, 2011, in millions, are as follows:
         
Balance at December 31, 2010
  $ 148.5  
Net provisions for warranties issued during the period
    29.1  
Net change to warranties existing at the beginning of the year
    0.5  
Payments
    (26.4 )
Foreign currency translation and other
    9.2  
 
     
Balance at June 30, 2011
  $ 160.9  
 
     
The current and long-term portions of service and product warranties were as follows:
                 
    June 30,     December 31,  
    2011     2010  
    (Dollars in millions)  
Accrued expenses
  $ 98.7     $ 90.0  
Other non-current liabilities
    62.2       58.5  
 
           
Total
  $ 160.9     $ 148.5