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 net 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 of December 31, 2011.

As disclosed in Note 1, on July 26, 2012 we completed the acquisition of Goodrich. The acquisition of Goodrich resulted in an increase in credit facilities and debt obligations of unconsolidated subsidiaries of approximately $156 million related to the maximum potential payout under those facilities and obligations, with no associated carrying amount of a liability as of September 30, 2012.

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 nine months ended September 30, 2012 and 2011 are as follows:

The decrease in the above table in “Other” during the nine months ended September 30, 2012 primarily reflects a decrease for Clipper warranty reserves reclassified to Liabilities of Discontinued Operations during the quarter ended March 31, 2012, partially offset by an increase from our acquisition of Goodrich. See Note 2 and Note 1, respectively, for further discussion. The increase reflected in “Other” during the nine months ended September 30, 2011 primarily reflected the impact of finalizing purchase accounting on the acquisition of Clipper.