68 UNITED TECHNOLOGIES CORPORATION The unaudited supplemental pro-forma data above includes the following significant adjustments made to account for certain costs which would have been incurred if the acquisition had been completed on January 1, 2011, as adjusted for the applicable tax impact. As the Goodrich acquisition was completed on July 26, 2012, the pro-forma adjustments for 2012 and 2011 in the table below only include the required adjustments through July 26, 2012: conditional upon each hour flown by V2500-powered aircraft in service at the closing. The collaboration interest and intellectual property licenses are reflected as intangible assets and will be amortized in relation to the economic benefits received over the remaining estimated 30 year life of the V2500 program. Rolls-Royce will continue to support the program as a strategic supplier for the V2500 engine and continue to manufacture parts and assemble engines. Pratt & Whitney entered into a collaboration arrangement with MTU with respect to a portion of the acquired collaboration interest in IAE for consideration of approximately $233 million with additional payments due to Pratt & Whitney in the future. As a result of these transactions, Pratt & Whitney holds a 61% net interest in the collaboration and a 49.5% ownership interest in IAE. IAE’s business purpose is to coordinate the design, development, manu- facturing and product support of the V2500 program through involvement with the collaborators. IAE retains limited equity with the primary economics of the V2500 program passed to the partic- ipants in the separate collaboration arrangement. As such, IAE was determined to be a variable interest entity (VIE), and Pratt & Whitney its primary beneficiary under the criteria established in the FASB ASC Topic “Consolidations” and has, therefore, been consolidated post-transaction. The consolidation of IAE resulted in a gain of $21 million recognized during the second quarter of 2012 on the re- measurement to fair value of our previously held equity interest. The carrying amounts and classification of assets and liabilities for IAE in our Consolidated Balance Sheet as of December 31, 2012 are as follows: UTC Climate, Controls & Security continued its portfolio transformation efforts in 2012 with the completed and pending disposition of a number of businesses resulting in impairment and other charges totaling approximately $180 million. UTC Climate, Controls & Security also sold a controlling interest in a manufactur- ing and distribution joint venture in Asia generating a gain of approx- imately $215 million, and a controlling interest in a Canadian distribution business generating a gain of approximately $120 million. In November 2011, UTC Climate, Controls & Security formed a venture controlled by Midea Group of China (Midea) for the manufacture and distribution of heating, ventilating, and air- conditioning (HVAC) products in Brazil, Argentina, and Chile. The venture is comprised of UTC Climate, Controls & Security’s existing HVAC operations in the three countries and Midea’s distribution In 2012, UTC approved plans for the divestiture of a num- ber of non-core businesses. Cash generated from these divest- itures is intended to be used to repay debt incurred to finance the Goodrich acquisition. See Note 3 for further discussion. On June 29, 2012, Pratt & Whitney, Rolls-Royce plc (Rolls- Royce), MTU Aero Engines AG (MTU), and Japanese Aero Engines Corporation (JAEC), participants in the IAE collaboration, completed a restructuring of their interests in IAE. Under the terms of the agreement, Rolls-Royce sold its ownership and collaboration inter- ests in IAE to Pratt & Whitney, while also entering into an agreement to license its V2500 intellectual property to Pratt & Whitney. In exchange for the increased ownership and collaboration interests and intellectual property license, Pratt & Whitney paid Rolls-Royce $1.5 billion at closing with additional payments due to Rolls-Royce during the fifteen year period following closing of the purchase, Other Acquisition and Disposition Activity: The unaudited supplemental pro-forma financial information does not reflect the potential realization of cost savings relating to the integration of the two companies. Further, the pro-forma data should not be considered indicative of the results that would have occurred if the acquisition and related financing been con- summated on January 1, 2011, nor are they indicative of future results. 5 Added the additional interest expense for the debt incurred to finance our acquis- ition of Goodrich and reduced interest expense for the debt fair value adjustment which would have been amortized. 4 Added the UTC/Goodrich fees that were incurred in connection with the acquisition of Goodrich to the first quarter of 2011. 3 Added the additional utilization of the Goodrich contractual customer obligation recognized in purchase accounting. 2 Added the additional amortization of the acquired Goodrich intangible assets recognized at fair value in purchase accounting and eliminated the historical Goodrich intangible asset amortization expense. 1 Added the expense for inventory fair value adjustments which would have been amortized as the corresponding inventory would have been completely sold during the first two quarters of 2011, and removed the corresponding expense recognized during the last two quarters of 2012. (DOLLARS IN MILLIONS) 2012 2011 Amortization of inventory fair value adjustment 1 $ (103) $ 103 Amortization of acquired Goodrich intangible assets, net 2 108 184 Utilization of contractual customer obligation 3 (96) (200) UTC/Goodrich fees for advisory, legal, accounting services 4 – 196 Interest expense incurred on acquisition financing, net 5 63 175 (DOLLARS IN MILLIONS) Current assets $ 1,308 Noncurrent assets 899 Total assets $ 2,207 Current liabilities $ 1,468 Noncurrent liabilities 781 Total liabilities $ 2,249