Business Acquisitions and Dispositions. During the first six months of 2012, our investment in business acquisitions was $358 million (including debt assumed of $149 million).

On September 21, 2011, we announced an agreement to acquire Goodrich Corporation (Goodrich), a global supplier of systems and services to the aerospace and defense industry with 2011 sales of $8.1 billion. Goodrich products include aircraft nacelles and interior systems, actuation and landing systems, and electronic systems. Under the terms of the agreement, Goodrich shareholders will receive $127.50 in cash for each share of Goodrich common stock they own at the time of the closing of the transaction. This equates to a total estimated enterprise value of $18.2 billion, including $1.7 billion in net debt to be assumed. In March 2012, Goodrich received shareholder approval for the transaction. The transaction is subject to customary closing conditions, including regulatory approvals. We expect that this acquisition will close in mid-2012. Once the acquisition is complete, Goodrich and Hamilton Sundstrand will be combined to form a new segment named UTC Aerospace Systems. This segment and our Pratt & Whitney segment will be separately reportable segments although they will both be included within the UTC Propulsion & Aerospace Systems organizational structure. We expect the increased scale, financial strength and complementary products of the new combined business will strengthen our position in the aerospace and defense industry. Further, we expect that this acquisition will enhance our ability to support our customers with more integrated systems.

In 2012, the Company approved plans for the divestiture of a number of non-core businesses. Cash generated from these divestitures is intended to be used to repay a portion of the short-term debt we expect to incur as part of the financing for the proposed acquisition of Goodrich. See Note 2 for further discussion.

In July 2012, we completed the acquisition of Goodrich and announced agreements to sell a number of non-core businesses. See Note 17 for discussion of subsequent events.

On June 29, 2012, Pratt & Whitney, Rolls-Royce plc (Rolls-Royce), and MTU Aero Engines AG (MTU) and Japanese Aero Engines Corporation (JAEC), participants in the IAE International Aero Engines AG (IAE) collaboration, completed a restructuring of their interests in IAE. Under the terms of the agreement, Rolls-Royce sold its ownership and collaboration interests in IAE to Pratt & Whitney, while also entering into a license for its V2500 intellectual property with 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 conditional upon each hour flown by V2500-powered aircraft in service at the closing date of the purchase from Rolls-Royce during the fifteen year period following closing of the purchase. 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 IAE as a strategic supplier for the V2500 engine and continue to perform its key responsibilities for IAE, including the manufacture of parts and assembly of 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 has a 61% net interest in the collaboration and a 49.5% ownership interest in IAE. Based on the criteria set forth in the Consolidation Topic of the FASB Accounting Standards Codification (ASC), we have determined that IAE is a variable interest entity (VIE). IAE's business purpose is to coordinate the design, development, and the manufacture of, and to provide product support to the V2500 program through involvement with the collaborators. IAE retains limited equity with the primary economics of the V2500 program passed to the participants in the separate collaboration arrangement. As such, UTC is determined to be the primary beneficiary of IAE as it absorbs the significant economics of IAE and has the power to direct the activities that are considered most significant to IAE. The consolidation of IAE resulted in a gain of $21 million recognized on the remeasurement to fair value of our previously held equity interest on obtaining control of IAE. The carrying amounts and classification of assets and liabilities for IAE in our condensed consolidated balance sheet as of June 30, 2012 are as follows:


(Dollars in millions)
Current assets		$	1,565
Noncurrent assets			902
	Total assets	$	2,467

Current liabilities		$	1,465
Noncurrent liabilities			902
	Total liabilities	$	2,367

(Dollars in millions)		Balance as of January 1, 2012		Goodwill resulting from business combinations		Foreign currency translation and other		Balance as of June 30, 2012
Otis		$	1,516	$	8	$	(37)	$	1,487
UTC Climate, Controls & Security			9,758		36		(178)		9,616
Pratt & Whitney			1,223		254		(543)		934
Hamilton Sundstrand			4,475		-		(744)		3,731
Sikorsky			348		-		-		348

Total Segments			17,320		298		(1,502)		16,116
Eliminations and other			623		-		(623)		-

	Total	$	17,943	$	298	$	(2,125)	$	16,116

For the six months ended June 30, 2012, Pratt & Whitney recorded $254 million of tax-deductible goodwill resulting from business combinations related to its increased ownership interest and consolidation of IAE. The approximately $2.1 billion decrease reflected under “Foreign currency translation and other” in the table above primarily reflects the decision to divest a number of non-core businesses and the resulting reclassification to Assets of discontinued operations. See Note 2 for further discussion.

Intangible Assets. Identifiable intangible assets are comprised of the following:

			June 30, 2012				December 31, 2011
(Dollars in millions)			Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Amortized:
	Service portfolios		$	2,031	$	(1,100)	$	2,036	$	(1,060)
	Patents and trademarks			390		(153)		463		(183)
	IAE collaboration			1,244		-		-		-
	Other, principally customer relationships			3,173		(1,418)		3,329		(1,429)

				6,838		(2,671)		5,828		(2,672)

Unamortized:
	Trademarks and other			726				762

		Total	$	7,564	$	(2,671)	$	6,590	$	(2,672)

Amortization of intangible assets for the quarter and six months ended June 30, 2012 was $96 million and $195 million respectively, compared with $103 million and $203 million for the same periods of 2011. Average amortization of these intangible assets for 2012 through 2016 is expected to approximate $360 million per year.