With a few weeks left in the year, I'm comfortable with your consensus of $5.32 plus or minus a few pennies. As always, earnings will come with strong cash. We'll exceed net income. And it's on track. At this point, we're going to pay down 1/3 of the Goodrich debt this year. So really no surprises.

Before I get into 2013, I'd want to walk you through some of UTC's long-term strategy. UTC is very well positioned to take advantage of 2 large megatrends: urbanization and the fast-growing commercial aerospace market. Just a few facts to highlight the opportunities that are right in front of us. As I speak here tonight, only 15% of the world's population has ever flown. That's a huge potential. And every year for the next 20 years, 15 to 20 million people will move to urban centers. Our strategy is to capitalize on these opportunities, driving top line growth by investing in the game-changing technologies and keeping our focus on our core businesses. While focused on top line growth, leveraging UTC's operating system will allow us to achieve and sustain best-in-class margins, which is a hallmark in UTC.

The final piece of strategy is effective deployment of our strong cash flow through dividends, share repurchase and M&A to strengthen our core. To execute our strategy, we needed an organizational structure that allowed us to really leverage these strengths across the portfolio.

So opportunities to realize synergies with our existing businesses. At Climate, Controls & Security, Geraud and the team are applying the same experience that they've applied to the Carrier Enterprise to transform the F&S portfolio. The reorganization also combines the building controls business, which is a growth driver particularly in emerging markets. I already see great results, strong results. I mean this year, $100 million of synergies that have been accomplished, growing profits on flat organic sales. And I know that looking ahead with this streamlined portfolio, we're well positioned as the markets begin to recover.

Turning to Propulsion and Aerospace Systems, we see synergies with E&D and technology, the ability to leverage the experience with program execution and leveraging our supply chain. Today, we buy $20 billion of product and non-product. Alain and the team are taking costs out and really leveraging the multiple aerospace platforms we've won on, if you think about GTF, JSF, 53, et cetera and add Goodrich. All of a sudden you have an incredible leverage to go in the supply chain, improve the performance and improve the cost structure as to how we [indiscernible] material in the future.

Today, CCS and PSCs are in place and focused on execution.

We also strengthened the portfolio with our transformational acquisitions. Our investments in commercial aerospace brought the greatest growth opportunity within our core, increased the share in the aerospace market and the narrow body specifically, adding a fleet that eventually will be 7,500 engines. There's currently in flight 4,500 engine. There's backlog for 2,000 additional engine that we're delivering on. And I think by the time we get done with the transition to GPS, there's probably another 1,000 that we'll build and convert. And they're early in their life cycle. I mean the average fleet age is 7 years. And basically what we're going to see is entering the best period for spares on that fleet as we move forward.

Goodrich is a perfect addition to our Hamilton Sundstrand business. And with a strong portfolio of complementary products, Goodrich also brought great leadership balance, great opportunities to provide more integrated systems. And I'll say this: from the time I announced the deal back in September '11 -- September 21, 2011, to today, everything I've seen has come together, and I love this deal even more every single day as we see the opportunities in the market that it creates.

Along with acquisitions, we've made great progress streamlining the portfolio, divesting non-core businesses. In total, we've divested over $4 billion in annual sales. Matt and the team have done a remarkable job basically to move forward with these divestitures. The process is nearly complete. You saw today we closed on the Industrials business, as Greg would say the checks in the bank, and we like that a lot. We've also announced the divestiture of PW Power Systems with MHR earlier in the week, and we're making progress on our Fuel Cell business. And at CCS, happy to report that Geraud on the F&S side is more than 60% complete with that transformation.

So looking ahead of the recent portfolio, a couple of points. Our commercial businesses, Otis and CCS, represent just under 50% of that portfolio going forward. We've increased our commercial aerospace sales by $7 billion. Commercial aerospace is now 30% of the portfolio, up from 22%. U.S. [indiscernible] sales remained flat at about 17%. But Goodrich, I have to say, added strong ISR business. And we decreased our exposure to the uncertain space market. Because there's no U.S. space policy, while it's a good business, there's not a whole lot of upside for years to come until there's definition of a new segment for space.

So taking a closer look at each of our markets. Commercial aerospace markets look strong, growth of 4% to 6%. Given the pressure on DoD spending, we expect to sense markets to be flattish as international defense continues to grow. We expect commercial industrial markets to be growing 3% to 5%, roughly in line with worldwide GDP, with growth coming mostly from emerging markets. In aggregate, 3% to 5% annual growth in our end markets over the rest of this decade.

I'm confident UTC could outperform in all of our markets, starting with our commercial businesses. The largest opportunities for our commercial businesses are in emerging markets, and we're very well positioned there. Today, over 20% of UTC's sale come from the emerging markets, about half of that is in BRIC countries.

Looking at some of our key markets. Even with the tremendous growth in China, over the past decade, elevators per capita are still after the level of U.S. and only 15% of Europe. Now, one could argue China might never be the level of Europe, but I'm pretty confident that with the urbanization momentum, it will increase to U.S. levels within the next 5 years with a high density city and urbanization momentum that's occurring.

There are similar opportunities in the coal chain and with HVAC in emerging markets. Across the portfolio, we're focused on 2 things: innovation in areas like energy efficiency and localizing our products for the fast-growing markets.

We often talk about E&D on the aerospace side. It's important to mention here, CCS has increased their investment in new product development every year for the last 4 years. And the Evergreen chiller highlights our energy-efficient products. This chiller is 44% more efficient than the industry standard, and this energy performance was recognized by China Energy Conservation Association earlier this year.

We're also localizing in the fastest-growing market. For example, Otis' strength in this position in the social housing market for Central and Western China with a lower-cost Gen2 application. And today, 70% of worldwide shipments come from BRIC countries. And that's why earlier in September, I was with Pedro in Chongqing. We opened a new factory to produce this low-cost Gen2 elevator. I'll also say another key important statement is that I salute Pedro, has visited basically BRIC countries but specifically China in these past several months, more than any President of Otis in the history. And I'm very proud of the traction he's getting with the right product line, with the leadership team on the ground, regaining the momentum that Otis deserves as a premier elevator company.

Looking beyond the emerging markets, it is important not to lose sight of the growth opportunities that exist in the developed regions. We've seen some recovery in commercial and residential construction, but we're still well below the peak. There's good run rate for U.S. residential market. We've mentioned before there's 100 million units that are installed, that should drive replacement momentum at a rate of about 5.5 million units per year. Since the downturn, the entire U.S. splits market, replacement and new construction has averaged about 4.5 million units a year. So there's a lot of future demand for replacement units plus the fact that we got a combined replacement cycle with a recovery in the housing market. Current forecast is that it's going to be up next year for residential, 28%, and we expect the starts to be around 980,000 new homes. It should create some nice tailwind for CCS.

There are similar opportunities in commercial construction. We've seen the signs of recovery in our businesses, with new equipment order up 15% year-to-date at Otis North America. So really trending in the right direction. Plenty of opportunity if we could remove some of the uncertainty in the economy and keep the momentum going.

Turning to aerospace. As I said earlier, commercial aerospace market is really poised for strong growth over the next several decades. RPM, if you look at history, they've grown 5% over the past 40 years. The industry projections indicate this trend will continue. Much of this growth is going to come from emerging markets. Also driving growth is the need to replace the aging fleet that we have in North America. We expect 30,000 new aircrafts to enter service in the next 20 years, and I think this is well supported by the OEM forecast and their schedule. So that means based on the production we have these OEMs, we have high confidence in the number of aircraft to be produced. And the repositioning we've done with the narrow-body segment is really going to pay big dividends for us. The strategic investment in game-changing technology gives us a real advantage in this market.

The GTF engine has proven to be truly disruptive technology. The GTF will deliver 15%-plus fuel advantage. This is a big deal. It's also going to deliver 50% lower noise. The fuel, as you know, represents about 1/3 of the airline's operating expenses, so that's why we're getting so much traction and that's why we have sold 3,000 engine in just 18 months because they want these kinds of solutions for their future.

But nice thing here is the GTF technology is real. It really works, and it's simple. It has fewer parts. We know what the operating cost advantage is going to be on top of the fuel savings.

We're getting close to wrapping up the CSeries engine. We got the last significant test occurring in the next couple of weeks. We'll enter then in the paperwork phase, and then we'll have this engine certified basically in the first quarter of 2013. Also you probably saw, we begun the testing on the A320neo GTF. And a special thanks to AvWeek basically for allowing us this evening to use a preview of next week's cover, featuring the GTF neo, we got it right here on the right. So not for public consumption, but they are nice enough to explain at the end of this meeting. And Dave did a good job, and they allowed us to show it here tonight. That's going to be out in paper copy next Monday. We're very proud of that. And GTF is getting a lot of attention by all medias, and we're excited to get a lot closer to entering into service on these multiple platform.

On the system side, we're also extremely well positioned for growth as newer aircraft enter service. We have higher content across all the new platforms. We have a 75% increase of content on the A320neo versus a current CFM-powered A320 for example. We have an 80% increase of content on the A350 versus the current A330. It's also important to note that we don't see a significant reduction for the aftermarket of our legacy engines beyond the normal retirement cycle. As you know, traffic highly is correlated with GDP growth, and we take at 2x GDP. And both passenger and cargo traffic are expected to grow about 5% annually. Given this level of growth, we continue to expect typical aircraft life, which is 25, 25-plus years. While older aircraft may be taken out of passenger service, many of them will be converted to cargo. And it's important to mention to this group that cycles are about the same. Even though annual utilization in hours will differ between cargo and commercial aviation, and the fact is the cycle drives the LLP. And that is why even in this old model, we like the position that we have a whole lot. So again, we don't see a significant reduction in the aftermarket for legacy engines beyond the normal retirement cycle.

With respect to near-term outlook for the Pratt-powered fleet, over the next 5 years, we'll see slight reductions in PW2000 and 4000 fleet. However, this will be more than offset by the significant growth in the B2500 fleet. Bottom line, strong aftermarket growth at Pratt even if the legacy fleet engines, as we all know, it could be lumpy. I mean the airlines, sometime adopt cash conservation behavior, and near term, you can have big cycles. We've seen some of that this year. But after this, the cycles are there, the hours are there. And I don't know exactly when the recovery comes next year, but I know it's coming next year because the engines have to come in for the maintenance to meet the industry standard.

So turning now to defense. We have declining DoD spend that will pressure the defense market. But I like our hand, one of the light platforms. Shipping BLACK HAWKs under Multi-Year 8 locks in the demand until 2017. What's different about this contract and Mick Maurer and the team have done a fantastic job to secure the Multi-Year 8 just at the right window. We keep 100% of the cost savings. So while we got headwind in '13, we've got momentum for the full year to follow. It's also important to note that the biggest volume of Multi-Year 8 is actually higher than the Multi-Year 7 contract.

And we got strong international demand that is out there. You just saw we had an agreement that was signed with Denmark for 9 SEAHAWKs. So continue to be seeing some very robust demand for our military products internationally.

At Pratt, while the GFS program has slid to the right, as you all know, we're now sole source going forward. We signed 5 a couple of months ago, and I'm happy now to see that the airframe side has also reached an agreement, which brings the sole program a lot closer to normal production. Our engines are performing very well. We're meeting our customer commitments. We've committed the 40% cost reduction, although it's really challenging because of the pushout to the right. We are committed to ensuring that we bring the cost on that platform down by 40%. Now this growth is going to help us double the size of Pratt in revenue by 2020. As you know, we got GTF, we got JSF, we got all these new platform coming in, so we're highly confident in the role for the future as David has emphasized to you several times.

At Sikorsky, the CH-53 program is on track. The first helicopter just moved from fine assembly to static tests. This is the beginning of the testing for that platform. It's going to enter service in 2017. That program is a $15 billion program. Once we start accelerating the production, it's about $1.5 billion per year. We also see additional opportunities down line. We got the tanker, volume that's going to be out there, and we got also high interest in the radar platform at this point in time that should convert over the next decade to a new military platform. So whether it's the defense market, commercial aerospace or commercial construction, I would say that UTC is well positioned.

On the CMHP. First of all, let me say that CMHP is the most advanced helicopter of its kind in the world. It has been a complex program using very advanced technologies. As you know, the program has had some challenges, but we have made solid progress overall. These will be truly fantastic aircrafts for the customer. I've been personally to West Palm Beach 3 times recently to personally follow up in the program. Mick has been there also several times. Here are the pictures from my last visit. You could see aircraft 810 is doing some flight testing. And you could see 811 has finished assembly. 24 of 28 aircraft are either in production, assembly or test. For aircraft are the training center in Halifax, and training has commenced. In discussion on the path forward, we're working towards a win-win solution to complete the development and to deliver the aircraft to the DND as soon as possible.

There will be no shipments in 2012. It was likely to be of charge, but we're still confident in our guidance. We expect the discussions to result in a more definitive delivery schedule. For guidance purpose for '13, we're assuming 8 helicopter deliveries in 2013.

Other international customers continue to show high interest in the CYCLONE platform, which would be another win-win given the high content.

So moving to UTC focus on cost. We continue to leverage UTC's global scale through ACE. Common tools on leverage drive productivity across UTC. We've reached our 80% goal for gold and silver ahead of the schedule. So you know me well enough by now, it's time to reset the bar. So with the addition of Goodrich, we have a reset because we start from scratch on Goodrich. So we're now at 70% with Goodrich in, gold and silver. I'm confident we can obtain 80% again by 2015, which represents a lot of opportunities because what we've also done with the reset is we've also raised the bar on performance. There's a new criteria that we've added to ACE silver and gold to make it even more stringent. It's higher on inventory turns, lead time productivity, so the bar has been raised.

Similar opportunity with the supply chain. We have reached 70% of our key supplier spend goal in performing. Thereto, we've raised the bar. On-time delivery was at 90% to achieve performing level. We're now raising that target to 95% to achieve performing. As we prepare for ramp-up, that's going to be fairly substantial. If you think about all the aerospace program that we got, GTF, JSF, 53, et cetera, we have to make sure that supply chain is ready to support us. And quite honestly as we move forward, it's nice to have performing supply. But at 90%, it will not be good enough to sustain the synchronization that we need in the whole supply system.

So I'm confident that after Goodrich reset, we can get to 75% by 2016 with those new crits. This is a big opportunity because ACE truly delivers. We know it delivers margin expansion. Typically, we've seen improvement from 200 basis points to 700 basis points in the period of 5 to 10 years.

Now in addition to ACE at UTC, we know that restructuring will continue to drive big margin expansion and big momentum. A coordinated approach to restructuring across UTC allows us to focus on investments on the right and the highest impact areas. Over the past 5 years, we've invested over $2.5 billion. And some recent examples, CCS has cut the number of headquarter offices in half. Pratt has removed almost 2 million square feet from its production system, driving big momentum as we go forward. The business units also continue to come up with new projects. They come up to Greg and myself if they want to get approval, and as you know, we only approve good projects. So this gives me great confidence as I see the level of projects that are lining at our desks as we have also more ideas to drive momentum in the company. And I remain committed to the UTC approach of restructuring equals gain.

Another big opportunity for margin improvement are cost synergies from Goodrich. Delivering on the Goodrich synergies comes down to execution. We made a commitment and we will deliver on that commitment, $50 million this year, $150 million in 2013. We've identified at this point in time $400 million of synergy that we plan to achieve over the next 5 years. We have a good line of sight. If you think about it, the almost [indiscernible] there by the end of 2013. And that is very encouraging, so I'm confident in Alain and his team, so expect more in the future. And I would say when we achieve big goals, we always raise the bar, so stay tuned. Future gains will come as we leverage the global footprint and global scale of aerospace systems. We're making great progress. We already established centers of excellence around the world, and there's plenty of runway left.

Let me wrap up the strategy part of my presentation with a few words on the strong cash generation that is really the hallmark of UTC. We consistently generate free cash flow in excess of net income, and we'll do so again in 2012 and in the future. We have effectively redeployed this cash, $45 billion in the last 5 years. The majority of acquisitions, the 2 big deals, IAE and Goodrich, will remain disciplined. Our goal is to return 70% of the cash to shareholders. We'll see a little pressure next year on CapEx to support the ramp-up that is in front of us. Of course, dividend is our first priority. We've increased the payout to 35%. We've increased our dividend every 5 quarters in line with EPS growth, and we've paid the dividend for 76 consecutive year, without any breach, without apologizing or going back, that's why the policy of dividend at UTC works so well. Early next year, we'll return to share repurchase, at this point, to have a placeholder of $1 billion. I would love to do more.

I continue to look at M&A. I don't see anything big on the horizon. I would love, basically at this point in time, to continue investing in the portfolio with Otis, with small adhesive piece to aftermarket. But my favorite acquisition of all, at this point in time given our stock price, this is going to be UTX.

Turning now to the 2013 plan. You heard from the BU presidents back in September, so I don't think you'll see any surprises here. The challenging macroeconomic environment will continue. Global GDP forecast has come down by about 80 basis points, about 1/3 over the past year. Expect world GDP to be only 2.6% in 2013. Commercial and industrial growing mid single digits. Defense, down mid single digit on lower DoD spending. Commercial aerospace, up high single digits. Finally, the aftermarket's recovery difficult to predict, but I expect a growth that's coming. It has to come based on cycle and hours.

Around the globe, solid growth in emerging markets, lower growth in America, flattish in Europe. As I mentioned earlier, the euro has been real stronger. We set the plan at $1.28. I believe today, it's about $1.31.

Even with 40% of our sales from Europe and defense, we still see solid mid-single-digit organic sales growth for 2013.

All 5 segments will grow organically next year. At Otis, we expect mid-single-digit growth in both new equipment and service. New equipment should outpace GDP in each market led by double-digit growth in China as we regain momentum; Otis operating profit growth of $100 million to $150 million driven by higher volume; at CCS, strong conversion with profit growth of $150 million to $200 million a mid-single-digit organic sales growth. High single digits in Transicold; mid-single-digit growth in U.S. residential, global commercial HVAC and Fire & Security products.

Turning now to aerospace. Pratt & Whitney, low-single-digit organic sales growth, mid-single-digit growth in large commercial spares in Pratt Canada, partially offset by the decline in the military business. As Dave promised earlier this year, Pratt will grow earnings next year up $100 million to $150 million, driven by higher volume and lower E&D spend between $75 million to $100 million lower than current year.

Restructuring savings will offset pension and FX headwinds. And the IAE acquisition will provide $75 million to $100 million incremental benefits at Pratt offset by the recently announced Power Systems divestiture.

At Sikorsky, sales up low single digit, strong growth in commercial shipments and mid-single-digit growth in aftermarket more than offsetting the decline in military shipments. Sikorsky's operating profits will decline, driven by $120 million of headwind from the CMHP and over $100 million of headwind from the Multi-Year 8 reset, which is year 1 as we convert in the future years.

With a full year of Goodrich, UTC Aerospace operating profit of $2.1 billion on sales of $13.5 billion to $14 billion driven by growth in commercial aerospace and synergies from the acquisition, so strong operating profit growth across 4 of our 5 segments. For 2013, we expect sales of $64 billion to $65 billion. That's up 10% to 12%, 3% to 5% organic growth. We expect earnings per share of $5.85 to $6.15. That's up 10% to 16%. We have $0.70 of accretion from the Goodrich acquisition and $0.05 from IAE. It's clear as usual at UTC we've given the BU stretch plans. We've got $0.55 of earnings growth from Otis, CCS, Pratt and UT Aerospace, offset by $0.21 of headwind at Sikorsky and $0.41 of pension and other expenses. And that includes $0.05 each from minority interest, taxes at 29.5%, and also an average share of 915 million versus 907 million in 2012.

The $0.15 difference from the mid to high end represents contingency at the UTC level. We feel good about the plan for 2013. The 2 biggest drivers of the economy is consumer spending and showing signs of recovery and oil prices that have settled down, helping airlines as we go forward.

While I'm more confident in the recovery off a lower base for 2013, we have 2 large headwinds for next year. The good news is that both these headwinds will reverse in 2014. While Sikorsky has good visibility into international demand in 2014, we've already booked 50% of the volume for '14 on international demand. And following the Multi 8 reset in 2013, the margins should increase as we reduce costs. Multi-Year volumes and funding are protected for the next 2 years.

On pension costs, nobody could have predicted the discount rate to be at 3.8%. Even in this rate and with the addition of Goodrich, we're well funded at 84% as we speak here today. There is no use of funding requirements until 2015. We have taken the tough action, as I've described before, with the FAE subset and the changes to the pension plan, and we rolled in Goodrich for same similar plan. So the tough actions have been taken, and we expect to see benefits in 2014 and beyond. Barring dramatic changes for discount rate that would go lower, I expect that we'll see tailwind in '14 from the current positioning on pension plan.

Turning now to cash. We once again expect free cash flow to equal or exceed net income. We increased the dividend 11.5% in Q3 of this year. In 2013, we expect to pay $1.9 billion in dividends to our shareholder. We'll also return cash through share buyback. We have a placeholder of $1 billion as I said, and I want to do more.

So let me wrap up now before taking a couple of questions. We've accomplished a lot at UTC in 2012. We've strengthened both the organizational structure and the portfolio. Our transformation is nearly complete. All focus now is on execution and integration to deliver UTC-style performance.

We know the formula: earnings growth drives our stock price. So in 2013, we expect to return to double-digit earnings growth, and I'm confident we have positioned the company for strong momentum well into the future.

So with that, I'd be happy to take couple of questions. Thank you very much. Okay, right here and then there. Yes?

Question-and-Answer Session

Unknown Analyst

[indiscernible] from Vertical Research. Can you elaborate a little bit more to the extent that you can what is going on with the repositioning with Canadian Maritime? And the essence of my question is it sounds like you're looking at now a $15 million loss per unit this time on the 2013 guide. You've mentioned the charge, which I was thinking intuitively might bring down the forward loss on the units, it sounds like it's going up. So just where do we stand on how that all shakes out?

Louis R. Chenevert

Well, I think that was pretty specific in my comments. At this point in time, there's ongoing discussions with the Canadian government. And basically, I've said that we're not going to deliver aircraft this year, in which creates upside for Sikorsky, but it's going to be basically compensated by the incremental costs end of charge in 2012. Since we don't have an agreement at this point in time that is specific, I cannot comment that much more. We're going to work to try to deliver these helicopters to the Canadian government as soon as possible. For guidance purpose, we have to pick a number to make the math work for basically the guidance for '13. So we have assumed, as you saw in the forecast, deliveries for 8. At this point in time, I cannot say more because we have to work with the Canadian government to make sure that we bring these helicopters to service as soon as possible. Stay tuned. You'll hear more in the future, okay? Yes. Go there first and then move the mic down here. Okay? Mic? I wanted him to get the mic.

Deane M. Dray - Citigroup Inc, Research Division

It's Deane Dray with Citi Research. Louis, I was hoping you could expand on a couple of the updates that you provided here. The first on Otis comment about increased momentum of order growth in China. And then the second one was in Fire & Security, the comments that half of the restructuring is now complete. And is that based upon the businesses that need to be divested, attrition? Any color would be helpful.

Louis R. Chenevert

Sure. So I mentioned in the presentation the fact that we're regaining momentum in China. That factory that we established in Chongqing to support Central and West momentum [ph]. As you know, there's been a big shift with the development from the coastal areas for the last decade, moving more and more in land. So Central and West is accelerating. But mix has changed from high-end residentials to low-cost housing. That's where we got a gap in our product line, and that's why Pedro and the team have been very aggressive to bring that new factory in line with the low-cost Gen2. So that's why we feel good about the momentum [ph]. The promise from Pedro and the team is that we will be back at the 2011 level of share for that market, by -- which is 2011, if you remember, was the solid year before we had the decline. We'll be back to that level by the end of the first quarter of 2013. So that is absolutely on track. Your second point was on the Fire & Security transformation. You saw the announcement recently of the manned guarding business in Hong Kong. And with that transaction basically and the cash in transit, that is what brings the whole transformation plan to over 50% of the actions. Remember there's a slide Geraud has shown before with all the businesses and what he was focused on. I mean I applaud the momentum that exists at CCS. They're basically on track with what they committed to you. And more importantly as you saw the integration this year and the reduction in the headquarter has driven $100 million of savings. So great performance by Geraud and his team, okay? And we go back right here. We have the mic.

Carter Copeland - Barclays Capital, Research Division

Carter Copeland with Barclays. Just wondered if you could talk briefly about cash. Obviously, you've got big noncash pension expense and no funding to speak out for next year. And you've got a lot of work you're doing on CMH from a cost standpoint -- cash cost standpoint this year, probably less next year. I know you have the usual rule of free cash flow exceeding income, but it seems like it would be substantially ahead of net income. Can you speak to that for next year?

Louis R. Chenevert

Well, I think again I was pretty clear in my comments, I mean this is hallmark UTC. I mean we have businesses that generate fabulous cash. And I would say with the acquisition of Goodrich behind and IAE, I mean we've added a nice portfolio that has a strong aftermarket going forward. You could expect that you're going to continue to see free cash flow equal or in excess to net income. Basically, Greg and the team have been working on this. Obviously, I mentioned the fact that if we're going to have some investments to do as we go forward to ramp up production. But, Greg, you want to add anything specific?

Gregory J. Hayes

Yes, maybe just a couple comments on cash. And I know everyone is thinking, next year cash is going to be great because we've got all this amortization from Goodrich that's a noncash charge. But if you think -- if you look at the way that amortization flows, it's really only about $60 million of net amortization. So there's not a big cash pickup next year due to amortization. Louis' other point I think is important, is there is a desire to spend a lot more on CapEx to try and get ahead of this aero cycle. So I think there's going to be pressure as we see it today on CapEx that wants to go up. It's early. The other point, and I think just to be clear on CMH, I know Mick has done a lot of work. There's still a lot of work that we have yet to do on the CMH to get them deliver. We'll continue to spend money, and we've actually received most of that cash already, so more cash pressure at Sikorsky. So it's not like a walk in the park, I think, for next year. I think cash will be good, as it typically is. But I wouldn't expect that we're going to deliver 120% or 130% as we sit here today.

Louis R. Chenevert

[indiscernible]

Gregory J. Hayes

Cash taxes will always be a benefit, right? I think again the rate should be about 29.5% next year. I think we pay about $2 billion of cash taxes, annual $2.1 billion this year.

Louis R. Chenevert

Okay. right there, and then...

Douglas S. Harned - Sanford C. Bernstein & Co., LLC., Research Division

Doug Harned, Bernstein. On CC&S, again, when you -- you talked about the $100 million that you've already achieved through synergies. When you look at the endgame here when this is complete, you're 50% done now, what do you expect in terms of additional synergy value? I'm not talking about the divestitures, but really what additional earnings will be expected too?

Louis R. Chenevert

Well, I think first of all, we've leaned out all of CCS so much on the Carrier side and now on the F&S side, that when the markets recover, we're going to see very strong conversion, number one. I think Geraud and the team have done a very good job at looking at the investment in R&D, the technology required. As you look at these megacities, if you think about the controls piece in the middle, I mean and energy efficiency, there are lots of opportunities basically to crystallize those investment in a more effective way. And that's occurring as we speak. So moving forward, I have high confidence in achieving, first of all, the big goal but also continuing with robust top line growth. I mean think about the recovery in resi market, I mean it's coming. Think about commercial construction. Think about Transicold. I mean Transicold, it's been a tough year. And at some point, I mean we're shipping goods for the cold chain for pharmaceuticals and how it will recover. So I think there's going to be nice momentum, and that's basically incorporated at this point in time in the forecast for next year. But there's going to be even more, because even with good players or team, we're still way off some of the prior peaks in many of these markets, okay?

Douglas S. Harned - Sanford C. Bernstein & Co., LLC., Research Division

But there's not -- is there an additional -- headquarters consolidation, is there an additional amount we would expect to come out in terms of benefits through the cost synergies there?

Gregory J. Hayes

Yes, let me just -- again, I think the point is we've got about $100 million this year that we've already realized. There's probably another $100 million of restructuring in productivity benefits assumed in guidance for next year. That's to offset really by about $50 million of divestitures and another $50 million of pension cost headwind. So you get $100 million gross, net is really about 0. I think 0, that's about right.

Louis R. Chenevert

Yes, that's correct. But I think your question is on the synergies of putting those 2 entities together. So let me try that. Beyond the $100 million, which is kind of the easy stuff to do in consolidating the headquarters, et cetera, there are more opportunities. Let me give you some examples. If you look at the overhead rate of Carrier, it went down from 10 years back to 26% to about 18%. And then of that, I mentioned the business and integration of the businesses, the integration part of F&S remains an opportunity. A lot of small businesses acquired, remember about 2 50 over a period of time. And as we realign those to come to one phase to the customers, we moved offices, we moved factories, just think about 60 factories on that side, there's opportunity. Those things don't happen overnight, because if you're going to be careful not to miss the customer side and actually you want to enhance the customer value, but there are opportunities. And a few more points of opportunity moving forward on the F&S side very clearly. There's also an opportunity on the go-to-market strategy, where we've already captured on the emerging market the stronger presence of Carrier on the channel side to accelerate penetration of customer penetration accounts and revenue of the F&S side. I mentioned [indiscernible] of Middle East, where Carrier is about $1 billion of revenue. F&S has less than 100. And as we rely on things, we captured the opportunity of all the knowledge, presence, relationship that we have on the Carrier side of the deal with the F&S.

Louis R. Chenevert

Same comments for March, right? Thank you. Okay, right there.

Noah Poponak - Goldman Sachs Group Inc., Research Division

Noah Poponak from Goldman Sachs. Louis, you mentioned that it's difficult to pin down the precise timing of the aftermarket recovery. But I wondered if you could just sort of try to elaborate a little more on the real-time trends you're seeing there. Is it improving month-to-month Q4 versus Q3 or not? And then secondarily, with the high-single-digit commercial aerospace forecast for next year, can you tell us what's in there for large commercial versus aftermarket versus the general aviation markets?

Louis R. Chenevert

Sure. So as I said in my remarks, I mean the fact that the cycles are there and the hours are there gives me high confidence. The airlines has done a magnificent job, given some of the pressures that they have on bottom line profitability to basically push out some maintenance by reducing content on some of these business. So we've seen throughout the year basically where a shop on the 4000 or 2000 should have generated more revenue. So they put back some LLPs or parts in there that cause for these engines to come back to service sooner. That's what gives me the great confidence in the recovery. You can never pinpoint specifically exactly when it's going to happen. But I would say it has to happen in '13 because if you put parts back that have 3,000 cycles, typically, these aircrafts fly 2,500 to 3,000 cycles a year. That means mathematically you're going to see them sometime throughout next year. The fact is also we've got the V2500 fleet now. That is also applying high cycles. It's a fleet that's getting great use. If you look at basically the whole commercial segment, there is no doubt that worldwide, the numbers are clicking, and it's a matter of time. I said it, it's lumpy. But my view would be if not in Q1, more likely in Q2. But for sure by Q3, we'll see the recovery. And, of course, we got the normal price adjustments that we've done way back in September. So I feel quite good though that we're going to see this momentum develop. As far as the general aviation market, I would say that we see also some small progress there. Relative to Q3 -- Q4 versus Q3, I would say we've seen some improvement, Dave, and the orders in the month of November. We'll see what happens in December. But we've seen a bit of momentum pick up, so that gives me also good confidence that is going to come.

Noah Poponak - Goldman Sachs Group Inc., Research Division

And can you give us the breakdown by the component of aerospace that adds up to that high single for next year or not?

Louis R. Chenevert

I can let you all go ahead, I mean you have all these numbers and you can maybe give also the airframe side of UT Aerospace.

Unknown Executive

Yes. On the Pratt side, it would have LCE aftermarket, which is going to be low -- up low single digit. You're going to have LCE benefiting from the IAE acquisition, which is going to be in the mid single digit up. And turn [indiscernible] Pratt aftermarket on a reported basis is going to be up -- the spares, going to be up 30% on a reported basis. So significant growth there, largely driven by IAE. Pratt Canada is going to be up, mid to high single digits, and military is going to be down mid to high single digit. On the UTAS side, commercial aftermarket is going to be up in the range of 10%. Commercial OE is going to be up in the mid-teens. And on the military side, we expect to be down roughly low to mid single digit.

Louis R. Chenevert

Okay. I think there are other question right here.

Unknown Analyst

Clifford Hansen [ph]. Louis, were there any particular issues that you have not anticipated when you merged the culture that was already lean and fat as Goodrich was into the ACE system? Were there things that were either big surprises positively or negatively in the merging of those cultures or are we still too early to make that judgment?

Louis R. Chenevert

Early signs is really that, number one, Goodrich had done a great job to implement its own production system. But it's clear to me that they were also much more decentralized than we are. And we're seeing a lot of benefits, number one, at having single platform. I would say there were more variations plant to plant are now, continuous improvement was applied than what we would normally do at UTC. And the nice thing is from a leadership perspective of Goodrich, from a local plant perspective, what we have seen so far is that workforce is ready to embrace our operating system, is excited about what we bring with ACE. They're excited about some of our ERP platform. They have done some great work on their side that were leveraged on the Hamilton function end side. So the culture is really meshing. It's now a couple of months since we closed the deal. And I would say all the signs are there that this is going to be in perfect marriage for years to come. And the product line, by the way, same customer base, I mean the ultimate test, I think, also of how this transaction has gone is a feedback from customer. And so far, everything I hear is very positive from the customer. They like UTC as the owner, the culture has gone well. And there are some benefits in how we manage UTC from a more centralized approach on procurement, on low-cost sourcing, et cetera, and that's going to pay a big dividend, okay? Okay, right there, and then we'll go on.

Julian Mitchell - Crédit Suisse AG, Research Division

Julian Mitchell from Crédit Suisse. I guess one of the main problems this year has been Otis aftermarket in Europe, and that's really been a big a drag on EBIT there than the China stuff, which is always discussed. So maybe you could talk a little bit about European aftermarket trends in Otis right now?

Louis R. Chenevert

Yes. Europe is still a challenging situation. There's not as much newly install there. Obviously, I mean everything just in China at this point in time from [indiscernible] to 60% of unit install. From an aftermarket perspective, obviously, Otis has got the scale and has got the large installed base. So I think it has still lot of productivity opportunity that Pedro is pursuing, despite the fact that it's a tough market and there's a lot of pressure on basically these aftermarket contract. I think Otis has got a strategy that's in place that's going to help them basically hold their fair share of that market and continue the momentum. I mean the density of the install base that they have gives them the opportunity to basically go and create value for the customer, but also for our shareholders, okay?

Julian Mitchell - Crédit Suisse AG, Research Division

Then just a quick follow-up on overall restructuring. You spent about $600 million this year. It sounds like maybe with some higher organic growth in '13, that will come down. But you also raised the bar on productivity metrics.

Louis R. Chenevert

Well, restructuring is part of our DNA. At this point in time, basically restructuring this year was high at $600 million. We see next year about $200 million restructuring that will come from $100 million that is the Goodrich piece, the balance of the restructuring, and the rest being the execution project that we've announced and launched at this point in time. And as I said also, gain equal restructuring for next year, okay? Joe on top there, the mic? See his hand right there? Perfect, okay.

Joseph B. Nadol - JP Morgan Chase & Co, Research Division

Louis, just a couple. One is 14 x 14 still on track for Sikorsky?

Louis R. Chenevert

Well, X CMH, I think the roadmap is there. There's some challenges because of the Multi-Year 8 reset, but I would say that Mick and the team are working on it aggressively. As you know, we basically or the Multi-Year reset, the good news as we got Multi-Year 8. The bad news is [indiscernible] our cost and basically all the benefits that you accumulated through that period go back to the customer. So that's what we call the reset. But going forward, I mean we're not out of ideas. I mean the team is working hard to create opportunities. And the volume that's in the military platform and the international demand give us a great hope that we're going to be able to close that gap quickly. And if you exclude the CMH situation, which will also resolve, I can guarantee that I perform these 3 times. There's a reason I want to see firsthand. We want to make sure as we have discussions with Canadian government. We created that one with, did about fantastic helicopters. So ultimately, that's going to get resolved as we go forward. The rest of the business, I mean the demand for F-92, the backlog is fantastic. It's at the highest level ever. The F-76 just got introduced in the market. We're starting deliveries in December. So all the right pieces in the aftermarket will continue also to be an important element of the Sikorsky structure, okay?

Unknown Analyst

Second question is on share repurchase. You noted that you want to do more possible than $1 billion. As we look forward and as it all play out over the year, I'm sure. But as we look forward to '14, you used to buy back -- the company used to buy back $3 billion a year for a number of years before the financial crisis. Is that a reasonable expectation since you have said no big deals for the next couple of years? Is that a reasonable expectation for 2014?

Gregory J. Hayes

Let me just clarify. First of all, I think pre-'08, it's fair to say we have done share repurchase at a rate that goes from 1.5 million to 3.5 million, anywhere between that. One could say that we've run certainly $2 billion or around $2 billion repeatedly. I would say that, that's probably a proper expectation. I've said $1 billion now. Greg said I go talk to these agencies. Obviously, we've done a lot better on the Goodrich acquisition. The synergies, the integration plan, and there's no better value today as I speak here to you than buying UTX. So back up the truck and the barge too and load it up. I'll take one more question. Cai?

Cai Von Rumohr - Cowen and Company, LLC, Research Division

Yes, A follow-up on CMH. So you slipped 4 out of '12 into '13. You were going to do 19 in '13. So that's 23 helicopters to go, and you're going to do 8 next year. By my math, you have 15 to go in 2014 versus 0. Do they go out at 15 million hit every single one, so that basically CMH lost peak in '14? Is that the way to think about it?

Louis R. Chenevert

It is totally premature to make any assumptions there. Basically, there's 4 that have been delivered at this point in time. There's 24 to go. Now they've been delivered to Canada for training purpose. We're supposed to deliver 5 this year, not you said 4, I think. It's supposed to be 5. We have declared we wouldn't deliver these 5. Now there are assembly, you saw them in the pictures. I mean we're assembled outside the shop, basically ready to go and run the helicopter mechanically. Done with software. There's still finalizing the software that has to be done, that's what we're working on. So ultimately, it's premature. There's a big aftermarket. There's a 20-year aftermarket contract basically to support the CMH in service. So all this will be handled in basically the discussions that we hope to conclude because it's a fantastic helicopter. And basically, we're committed to delivering these helicopters to the government that will meet the requirement of the Canadian DND.

Cai Von Rumohr - Cowen and Company, LLC, Research Division

Yes, but the way you were accounting for it was you were taking a charge for each delivery. And so there should be 15 helicopters still to go and 14 more left if the accounting is still that you would take a charge for each helicopter, whatever that charge is.

Louis R. Chenevert

At this point, I have to say yes until we finalize the changes. That's the only answer. I have the contract, and that is the contract. But at the same time, we didn't build the 5 this year, and I think we'll see what develops as we engage in these discussions, okay?

Thank you very much. As you can see, this team has done a fantastic job of portfolio transformation. We now shift to execution. I'm excited as we see some of these markets recover, as we see the focus that is clear between the big mega trends. And we look forward to a solid year in Turkey and delivering on our promises to shareholder. Thank you very much. We look forward to talking to you.

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