CAE Inc.

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

Good afternoon, everyone, and thank you for joining us. Before we begin, I'd like to remind you that today's remarks, including management's outlook and answers to questions contained forward-looking statements, These forward-looking statements represent our expectations as of today, November the 14th, 2023, 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 and sees annual MV&A available on our corporate website and in our filings with the Canadian Securities Administrators on CDAR Plus and the U.S. Securities and Exchange Commission on EDGAR. On the call with me this afternoon are Marc Perron, who is President and Chief Executive Officer, and Sonia Branco, our Chief Financial Officer. After remarks from Marc and Sonia, we'll open the call to questions from financial analysts. And at the end of that segment, we'll open the line to members of the media, should there be any questions. Let me now turn the call over to Mark.

Thank you, Andrew, and good afternoon to everyone joining us on the call. We delivered a good performance overall in the second quarter with double-digit top and bottom line growth, driven mainly by continued strong momentum in civil and a higher contribution from defense compared to the second quarter last year. We made excellent progress to secure CE's future with nearly $1.2 billion in total adjusted order intake for a record $11.8 billion of adjusted backlog. We further bolstered our financial position on the path to meeting our short-term leverage target. In civil, we had another quarter of excellent performance with demand for our training and flight operation solutions continued to be robust across all regions, and notably in Asia, which has lagged in the global recovery in air travel. We booked $618 million of orders with customers worldwide for a 1.08 times book-to-sales ratio. We received orders for 15 full-flight simulators, including a multi-year purchase of eight new Boeing 737 MAX simulators for Ryanair and two Airbus A320 simulators to United Airlines. In commercial aviation training, we signed a multi-year training agreement with Delta Airlines. And in business aviation, we signed a multi-year agreement with Windrow with Air Jet Charter. In flight operations, we signed long-term next-generation solutions agreements with Wizz Air and Air India. We delivered 11 full-flight simulators to customers during the quarter, and our average training center utilization was 71%. which is up nicely from 66% last year. The year-over-year increase points to the strength of the underlying commercial and business aviation train demand across all regions. Anyone who's traveled by air this summer will know just how busy the airlines have been trying to meet passenger demand. The sequential decrease in training center utilization that we experienced during the summer is a direct reflection of seasonality we typically see as pilots are actively flying during that period. In defense, performance was a bit lower than the first quarter, but still higher than the second quarter last year. We booked orders for $527 million for a one-time book-to-sales ratio, giving us a record $5.9 billion of adjusted defense backlog. They include strategic opportunities, like the formalization of our contract with Bell Textron as part of Team Valor to provide simulation training solutions for the all-important V-280 Tilt Rotor, the platform for the next-generation U.S. Army Future Long Range Assault Aircraft program. Other notable wins include the previously announced simulation-based training contract for the U.S. Army's key next-generation airborne ISR system, which is called the High Accuracy Detection Exportation System, or HADES,