CAE Inc.

Good day, ladies and gentlemen. Welcome to the CAE third quarter conference call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Andrew Arnovitz. Please go ahead, Mr. Arnovitz.

Good afternoon, everyone, and thank you for joining us today. Before we begin, I'd like to remind you that today's remarks, including management's outlook for the fiscal 19 and answers to questions contained forward-looking statements, These forward-looking statements represent our expectations as of today, February the 8th, 2019, and accordingly are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on these forward-looking statements. A description of the risks, factors, and assumptions that may affect future results is contained in C's annual MD&A, available on our corporate website, and in our filings with the Canadian Securities Administrators on CDAR and the U.S. Securities and Exchange Commission. On the call with me this afternoon are Marc Perron, C's President and Chief Executive Officer, and Sonia Branco, our Chief Financial Officer. After remarks from Marc and Sonia, we'll take questions from financial analysts and institutional investors. Following the conclusion of that Q&A period, we will open the line to questions from members of the media. Let me now turn the call over to Mark.

Thank you, Andrew, and good afternoon to everyone joining us on the call. I'll first discuss some highlights of the quarter, and then Sonia will review the detailed financials. I'll come back at the end of the call to talk about our outlook. We continue to have good momentum with our training strategy in the third quarter, as demonstrated by order intake of $882 million, which gave us a record $9 billion backlog. We concluded the royalty monetization transaction with Bombardier that we announced in November, and we had good cash performance with over $155 million in free cash flow generation. Operating income was lower year over year, which in part reflects the impact of the five-week work disruption last summer. We were successful during the quarter to accelerate production, to mitigate this impact, and so, as expected, a disproportionate share of our annual growth outlook will be achieved in the last quarter of the fiscal year. Overall, our performance in the quarter and year-to-date supports our full-year outlook. Looking at civil, customer activity for training solutions remained strong with $587 million of orders, and the civil backlog reached a new high of $4.6 billion. Orders included the recently announced exclusive 10-year pilot training contract with EasyJet and a long-term exclusive training contract with Endeavor Air. We also signed exclusive business aviation pilot training contracts with Icon Aviation and WindsorJet. Overall training center utilization remained strong at 75%. In products, Civil sold 16 full-flight simulators during the quarter, to customers including Nippon Cargo Airlines, Aeromexico, Lufthansa Aviation Training, and Shanghai Eastern Flight Training Company. We're having an unprecedented year with 50 full flight simulator orders booked in the first nine months and another 14 in the last six weeks alone. Based on our pipeline, we now expect Civil to book approximately 70 full flight simulator orders for the year which substantially exceeds the previous record. On the order front, the civil book-to-sales ratio for the quarter was 1.28 times, and for the trailing 12-month period was 1.31 times. In defense, performance for the third quarter was mixed. We had strong revenue growth, driven mainly by a higher level of services activity on contracts that are being integrated and ramped up, and there were additional timing-related factors that contributed to the lower defense margin in the quarter. Defense booked orders for $268 million, including the first increment of an eight-year contract with the U.S. Air Force, worth a total of more than $250 million to provide comprehensive C-130H air crew training services. Also of note, we want contracts to provide simulator upgrades and maintenance support for Germany and Spain's Eurofighter Training Program, and with Boeing for upgrades on Poseidon aircraft simulators. We also booked the next increment of a five-year contract with the United States Navy worth a total of more than $160 million to provide primary and advanced virtual instruction services for the Chief of Naval Air Training Program. In addition, under the U.S. Foreign Military SAIL Program, The U.S. Navy awarded us a contract for maintenance and sustainment services for the Royal Australian Navy's MH-60R helicopter training systems. The defense book-to-sales ratio was 0.81 for the quarter and 1.03 times for the last 12 months. And finally, in healthcare, we continue to adapt and ramp up our sales force to pursue the largest segments of the healthcare simulation market, like nursing, and we continue to release new products to simulate the man. Our latest release is CAE Luna, an innovative infant simulator designed to fulfill clinical training requirements for neonatal and infant care. As well, we released CAE Vivimedex 2.0 for ultrasound simulation, which features new educational content and compatibility with our latest augmented reality add-on modules. With that, I'll now turn the call over to Sonia, who will provide a detailed look at our financial performance, and I'll return at the end of the call to comment on our outlook. Sonia?