Guarantees

3 Months Ended

Mar. 31, 2012

Guarantees [Abstract]

Guarantees

Note 17. Guarantees

The Company extends financial and product performance guarantees to third parties. At March 31, 2012, the following environmental remediation and indemnification and financial guarantees were outstanding:

	Maximum Potential Payment		Carrying Amount of Liability
	(Dollars in millions)
Environmental remediation and other indemnifications (Note 16, “Contingencies”)		No Limit	$	12.7
Guarantees of residual value on leases	$	28.1	$	—
Guarantees of JV debt and other financial instruments	$	49.6	$	—

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 a 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 $129.3 million and a fair value asset of $4.4 million at March 31, 2012. 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 three months ended March 31, 2012, in millions, are as follows:

Balance at December 31, 2011	$	157.9
Net provisions for warranties issued during the period		11.0
Net change to warranties existing at the beginning of the year		(4.6	)
Payments		(14.8	)
Foreign currency translation and other		2.0
Balance at March 31, 2012	$	151.5

The current and long-term portions of service and product warranties were as follows:

	March 31, 2012		December 31, 2011
	(Dollars in millions)
Accrued expenses	$	88.3	$	93.6
Other non-current liabilities		63.2		64.3
Total	$	151.5	$	157.9