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 Andrew Arnovitz. Please go ahead. Good afternoon, everyone, and thanks for joining us. Before we begin, I'd like to remind you that today's remarks, including management's outlook and answers to questions, contain forward-looking statements. These forward-looking statements represent our expectations as of today, November 10, 2022, 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 CAE's annual MD&A available on our corporate website in our filings with the Canadian Securities Administrators on SEDAR and the U.S. Securities and Exchange Commission on EDGAR. On the call with me this afternoon are Marc Parent, CAE's President and Chief Executive Officer, and Sonya Branco, our Chief Financial Officer. After remarks from Marc and Sonya, we'll open the call to questions for financial analysts, and at the conclusion of that segment, we'll open the line to members of the media. Let me now turn the call over to Marc. Thanks, Andrew, and good afternoon to everyone joining us on the call. We had strong performance in the second quarter, led by double-digit growth in civil and sequentially better results in defense. We also delivered another quarter of double-digit revenue growth in healthcare with higher profitability. We continued to secure CAE's future with nearly CAD 1.3 billion in total orders for a record CAD 10.6 billion of adjusted backlog and 1.3x book-to-sales ratio. In civil, we made excellent progress converting our larger opportunities pipeline into CAD 751 million of orders, resulting in a 1.48x book-to-sales ratio. This is especially impressive considering that revenue is 40% higher than last year. Orders include long-term training agreements with airlines and business aircraft operators, including a new 15-year pilot training and operations agreement with Qantas, one of the world's most renowned airlines, and like CAE, a name synonymous with safety. We also secured training agreements with Virgin Australia, JetSMART Airlines, DHL Air UK, and American Airlines. Demand for Full-Flight Simulators was robust with 18 sales in a quarter. We sold another five Full-Flight Simulators and actually bringing our total year-to-date tally to 29. Since the end of the quarter, we sold another five Full-Flight Simulators for a total of 34 sales since the start of the fiscal year. Civil's financial and operational performance was also strong in the second quarter, with double-digit growth across all metrics. We delivered 10 Full-Flight Simulators in a quarter, an average training center utilization with 66%, up from 53% last year. This reflects the air traffic recovery in select regions and a measure of summer seasonality. Commercial aviation training demand in the Americas continued to be very strong, while Europe was seasonably lower on a sequential basis. In Asia, the reopening of Japan has been a positive catalyst, but the region overall remained well below pre-pandemic levels due to the ongoing travel restrictions in China. In business aviation, training demand continued to be robust throughout our network, reflecting a high level of pilot training to support business aircraft flight activity, which has shown signs of stabilization at approximately 20% above pre-pandemic levels. In defense, as we've been saying for some time, the earliest signs of our progress towards a larger and more profitable business is order intake. Testament to that, this past quarter marks another step in the right direction. We booked orders for training and mission support solutions valued at $500 billion for a 1.13x book-to-sales, which marks the fifth consecutive quarter that this ratio has been above 1 and situates us with a book-to-sales ratio of 1.33x on a trailing twelve-month basis. We're now sustaining higher order intake, replenishing our backlogs with new and more profitable defense contracts. Defense quarters this quarter reflect our capabilities across all five battlespace domains. In the air domain, we signed a contract with Piaggio Aerospace for the P.180 Avanti Full-Flight Simulator for the Italian Air Force, and we expanded our relationship with Lockheed Martin for system trainers and modifications involving C-130 platforms. A key tenet of our strategy is to develop strategic relationships with platform OEMs, and these agreements, in addition to our recently announced MoU with Boeing for global collaboration, are notable signs of progress. In the land domain, we expanded our capabilities with a prototype development award under the U.S. Army Soldier Virtual Trainer contract, a component of the Synthetic Training Environment, and the Soldier Virtual Trainer contract, or SVT, continues the expansion of Synthetic Training Environments with a platform to empower soldier-led training. Defense also won a contract in the sea domain with the platforms and systems training contract to support the Royal Australian Navy. This program is strategically significant in the context of Australia's defense modernization priorities in light of geopolitical tensions in the Indo-Pacific region. Under a five-year agreement, we'll be supporting the future training transformation of Royal Australian Navy mariners across four sea platforms on site in Port NSC. We're leveraging our experience training mariners worldwide, including the U.S. Navy, on multiple naval aircraft platforms, bridge training for the littoral combat ship and the U.S. Army Maritime Integrated Training System. In the space and cyber domains, we received additional awards from our key space and missile defense customer, along with cyber technology updates on our core platforms and systems from various customers within the U.S. Department of Defense. Our unique combination of experience, digital technology, and subject matter expertise also provided new opportunities this quarter with strategic customers for prototype development. They include an authorization from the Air Force Research Lab to develop and demonstrate innovative, mission-effective unmanned air vehicle capability to assist with manned-unmanned teaming, along with an aviation mission planning prototype for a sensitive customer, both for U.S. national defense priorities and leverage capabilities across CAE's business units. Our financial performance for defense in a quarter improved sequentially consistent with our expectations. This performance is a result of our heightened operational focus in the face of the challenges that we highlighted last quarter, namely the prevailing supply chain and labor headwinds and order delays, all of which are pervasive across the defense sector and broader economy. With that, I'll now turn the call over to Sonya, who'll provide additional details about our financial performance. Sonya. Thanks, Mark, and good afternoon, everyone. Consolidated revenue of CAD 993.2 million was 22% higher compared to the second quarter last year. Adjusted segment operating income was CAD 124.7 million compared to CAD 90.7 million in the second quarter last year. Quarterly adjusted net income was CAD 61.5 million or CAD 0.19 per share, compared to CAD 0.17 in the second quarter last year. We incurred restructuring, integration, and acquisition costs of CAD 22.6 million during the quarter, relating mostly to L3Harris Military Training and AirCentre acquisitions. Net cash provided by operating activities this quarter was CAD 138 million compared to CAD 30.9 million in the second quarter of fiscal 2022. Free cash flow was CAD 108.4 million compared to CAD 19.4 million in the second quarter last year. The increase was mainly due to higher cash provided by operating activities and lower investment in non-cash working capital. CAE usually sees a higher level of investment in non-cash working capital accounts during the first half of the year and tends to see a portion of these investments reversed in the second half. Capital expenditures totaled CAD 68.6 million this quarter, with approximately 80% invested in growth to specifically add capacity to our civil global training network to deliver on the long-term training contracts in our backlog. Income tax expense this quarter was CAD 14.5 million for an effective tax rate of 24%, which is higher than our annual outlook of 22%, which remains our expectation going forward. Our net debt position at the end of the quarter was approximately CAD 3.2 billion for a net debt to adjusted EBITDA of 4.17x at the end of the quarter. We continue to expect net debt to adjusted EBITDA of below 3x by the middle of next fiscal year. Now turning to our segment performance. In civil, second quarter revenue was up 40% to CAD 507.2 million compared to the second quarter last year, and adjusted segment operating income was up 60% to CAD 104.4 million versus the second quarter last year for a margin of 20.6%. Our stronger year-over-year civil performance was mainly due to higher training, network utilization and simulator deliveries. We also integrated into our results, the AirCentre results, which represented approximately 7% of civil revenue in the quarter. In defense, second quarter revenue of CAD 442.4 million was up 6% over Q2 last year. Adjusted segment operating income was CAD 18.4 million for the quarter, down from CAD 26.7 million In the second quarter last year. The revenue growth stems from higher level of activity on programs, while the lower adjusted segment operating income reflects higher costs associated with supply chain and labor shortages, partially mitigated by our cost reduction initiatives. In healthcare, second quarter revenue was CAD 43.6 million, up from CAD 34.9 million in Q2 last year, mainly due to increased sales of patient simulators. Adjusted segment operating income was CAD 1.9 million in the quarter compared to a loss of CAD 1.3 million in Q2 of last year. With that, I'll ask Marc to discuss the way forward. Thanks, Sonya. The strength that we saw during the second quarter gives us the confidence to reaffirm both our fiscal 2023 outlook and our long-term targets. Our outlook for Civil remains strong, with its industry-leading positioning enabling us to grow significantly through the commercial aviation market recovery and beyond. Over the last two years, we've expanded our reach and capabilities to better serve our customers while significantly improving our cost structure. We expect the rate of Civil's commercial aviation training recovery to continue to be driven in large part by the eventual easing of remaining travel restrictions, especially in Asia, where China remains a large component of any global recovery scenario. A potential recovery in China would also be expected to lead to further recovery in Full-Flight Simulator sales. On the macroeconomic front, we're watching the global energy situation closely, and particularly in Europe with respect to operating costs, which have already increased across our network and the potential for impact on travel demand. In business aviation, the consensus view at the recent NBAA conference was highly positive, and we continue to see strong demand for pilot training. In response to market demand, we have new training capacity coming online to include our new business aviation training center in Las Vegas, which opened last month, and Singapore, which began operating this month. For the second half of the fiscal year, we expect Civil to grow faster than it did in the first half and to be weighted more to the fourth quarter. We expect to deliver a higher number of Full-Flight Simulators in the fourth quarter and to have a higher number of simulators or SCUs come online in our training network. In addition to continuing to grow our share of the aviation training market and expanding our position in digital flight services, we expect Civil to maintain its leading share of Full-Flight Simulator sales and to deliver more than 45 Full-Flight Simulators to customers worldwide. This is up from our previous outlook for 40. In Defense, our sequential growth paired with the significant bookings and improved backlog that we're experiencing gives us confidence for stronger near-term performance. In the last two years, Defense has become the world's leading pure-play platform-agnostic training and simulation business. We're well-positioned to address larger, more profitable, and more comprehensive programs across all five battlespace domains. We're closely aligned with national defense priorities focused on near-peer threats and the increased need for digital immersion-based synthetic solutions. We're uniquely positioned in this regard, being able to draw directly from CAE's innovations in the commercial aviation simulation training market. Defense represents a secular growth market for CAE as the sector is in the early stages of what we believe will be an extended upcycle driven by geopolitical realities and increased commitments to defense modernization and readiness. The earliest indications of our success have been orders, leading us to build a more profitable backlog. We're bidding more, and we're bidding larger. What I see ahead is highly encouraging with a pipeline of multiple $100 million+ programs and the number of billion dollar-plus programs that we're bidding over the next three years. As we replenish our backlog, we expect Defense will strengthen the next couple of years to a low double-digit percentage adjusted segment operating income margin profile. Currently, active bids and proposals awaiting customer decisions stand at approximately $8 billion, which is nearly double the amount outstanding three years ago. Looking to the remainder of the fiscal year for Defense, we expect the current widespread macroeconomic headwinds, including supply chain and labor challenges, to persist for some time, and that order delays will continue to be a factor. We're focused on execution, and we're confident in our expected stronger second half performance, which we expect to be substantially weighted to the fourth quarter. Underlying this view is our expectation for select delayed program awards to come to fruition, and that we'll be able to execute on programs and backlog. We also expect to partially mitigate these headwinds with internal cost reductions and efficiencies, which are ramping up toward the end of the fiscal year. In Healthcare, we see potential for more value creation as we gain share in the healthcare simulation and training market and continues to build on its growth momentum and increased profitability. In terms of our capital allocation priorities, we've concluded a heavier-than-usual inorganic growth investment cycle, which spanned the last two years as we seized opportunities in a disrupted market to enable CAE to become a bigger, stronger, and more profitable company for the future. We're now concentrating on organic investments that are made in lockstep with customer demand. We're also focused on reducing leverage. As Sonya indicated, we're confident our net debt to adjusted EBITDA ratio will decrease to below 3x by the middle of next fiscal year, which at that time will further increase our financial flexibility. CAE's management and board of directors are also focused on reinstating and prioritizing return of capital to shareholders on a timely basis, which is a cornerstone of our main capital allocation priorities. In summary, the overall strength that we saw in the quarter and our current expectations for the balance of the year are what allows us to reaffirm our outlook for mid-20% consolidated adjusted Segment Operating Income growth this fiscal year and to maintain our long-term target of a three-year EPS compound growth rate in the mid-20% range. With that, I thank you for your attention, and we're now ready to answer your questions. Thank you, Marc. Operator, we'd now be pleased to take questions from financial analysts. Thank you. For analysts wishing to ask a question or comment, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. One moment, please, for our first question. The first question comes from Kevin Chiang of CIBC. Please go ahead. Thanks for taking my question. Maybe just the first one here. I believe the U.S. Department of Defense issued a memo to contractors for equitable adjustments for cost overruns, just given the unprecedented inflation. I believe CAE has applied for some of these adjustments to maybe help offset previous inflation. Just wondering where that sits. One, if I'm correct. Two, maybe where that sits today, and I know you're starting to see maybe some of those adjustments show up, either in the quarter that just ended or maybe in the back half of this fiscal year. Well, I can certainly confirm that there's a lot of efforts going on in that very regard, Kevin, whether it be direct representation by us to lawmakers of the U.S. Capitol. I can tell you about that, and through you know combined efforts that we do with industry associations. Letters have gone out, and I fully expect, you know, action to occur there. You know, when it happens, you know, I really can't tell you. You know, I've always been of the view that and we've shared this on the last call, that you know we expect that we will have some measure of mitigation on some of these cost overruns that have occurred. We've taken no benefit of that so far, but I fully expect in the future that we'll get some. Okay. That's helpful. Just my second question. On the last quarterly call, you provided a lot of detail on the problem contracts that resulted in the write-down. One of them was the legacy CAE defense contract. I think one of the issues was just the expected renewal of that contract was maybe not coming in as fast as originally anticipated, which maybe drove some of that write-down. Just any update there in terms of the bidding process for that and maybe your confidence in being awarded the renewal? Well, I would tell you that the RFP is out, and we are bidding on it. The nature of the contract has changed. I think it's a lot more attractive in terms of a contract. Look, we'll see. I think we have a very attractive bid. We're the incumbent, so I have high hopes. You know, we'll be very prudent in that regard. Okay. You know, the one thing I'll tell you, which is very a good testament to what I was saying about, you know, in terms of changing nature of this particular contract and others, is you take what that contract looks like. It's changed from really being a lowest price technically acceptable contract we saw initially to now a contract that's based more on best value. That plays very well into CAE's strengths, meaning not just around cost. The way we bid it is per the terms that are in the contract, which includes, you know, specific banding around utilization rates. The risk that we saw in the, you know, on that contract where, you know, we basically bid at a certain level of utilization, and the amount of utilization the customer made of it was much higher. We wouldn't have that risk anymore. That's been completely taken out of the risk profile of the contract. That's good to hear. I'll leave it there. Thank you very much. Thank you. Thank you. The next question comes from Fadi Chamoun of BMO. Please go ahead. Thank you. Good afternoon. Just one quick clarification first. Did I hear you mention that in civil you expect the growth in the second half to exceed the growth in the first half from an EBIT perspective? Is that the guidance? Yep. It is there, Fadi. That's quite stronger than I think what you're expecting maybe at the beginning of the year. What what's driving that specifically in aviation? I mean, you've had some decent amount of orders year to date, and it looks like, you know, sequentially in the second quarter, we've had a big jump, you know, more than seasonal jump, I would say, in the second versus the first. Like, is Asian market coming back a little bit stronger? Is there areas that kind of surprised you on the positive side? I'm just curious about the performance there. Well, look, sorry, didn't mean to interrupt you, Fadi. Look, I think as a general rule that applies to, you know, our consolidated, the outlook that we've given for the back half, it's slightly steeper than normal. Particularly when we talk about Civil, you know, I'd say we're not yet in a normal environment. As I've said in the calls, you know, China's still really not reopened, so that's putting a lid on things there. You know, what you're seeing in the back half is us, first of all, seeing the benefit of all the simulator orders that we've signed this year. We've had more than our fair share of orders there. Very happy to see that. We're seeing a lot of that, you know, order intake translating into deliveries in the back half and specifically in the fourth quarter. I have very high visibility on that. Plus, we're ramping up capital that we've already deployed in terms of simulators in both the commercial and business aircraft training networks. You know, specifically, as I mentioned in my remarks, you see that in the past month, we've opened our new Las Vegas Business Aviation Training Center. You see this, you'll see us just very shortly open our Singapore Business Aviation Training Center. All those factors and the order intake. Look at the order intake again this quarter at 1.48x book-to-sales in civil on top of revenues that are 40% higher year to... year-over-year. I think that's all. That is what's translating into growth that you're seeing. Okay, great. One question on the defense side, if I may. You know, we get a lot of this kind of question from investors. Are there in the backlog other contracts like this CAE legacy contract that you had last quarter where you are still expecting renewal, maybe contracts that are not performing to your expectation and you're still expecting a renewal? Or is this kinda all behind us at this point? Look, if you're referring to the charges, and I think you are, that we recognized in the first quarter. You know, I think as I've said at the time, you know, I really see those as unique and one-off in nature. They're really not typical of the risk profile of our business. I've been, as you know very well, at the business, you know, 17 years, and it's the first time that I've ever seen, you know, charges like that hit, you know, our P&L in a quarter like that. It's not that we don't manage programs that are on watch. We manage hundreds of programs. Some have a higher margin than others, but we manage them well. Obviously, you know, an event like this forces you'd be foolish not to go back and even enhance certain level of scrutiny. Of course, we've done that, and I've been part of a lot of that. But, you know, I specifically to your question, I don't see any similar risk in our backlog programs, certainly are the ones that we see at that time. To give you some more color, if I look at, you know, terms and conditions of contracts that we're bidding these days, I was giving the example of Sinatra there, and the discipline that we're applying to those bids. It gives me a lot of confidence in our current leadership team and the expected margins that we'll be able to execute on those contracts. Okay. Thank you. Thank you. The next question comes from James McGarragle, RBC. Please go ahead. Hey, everyone. Thanks for taking my question. I just had a quick question on the increase on the defense backlog and some of the new contracts you're bidding on. Do you have any protection for any potential supply chain issues on those new contracts? I think, you know, supply chain, it's a bit very uncertain as to when things are gonna get better. You know, if supply chain issues were to persist, you know, just say for another year, another two years, could we see any risk to margins with those new contracts that you're bidding on? Or is there some protection kind of being built into those new agreements that you're working through right now? Well, you can be sure that the contracts that we're bidding now take into account the situation that we see now, including, you know, issues such as continued inflation at the levels that we've seen. The customers, by and large, you know, understand that reality. You know, just a contract that I reviewed the other day where a fairly major contract where, you know, typically as in previous contracts what you would have seen, you would have seen fuel being an element that we would have costed there. With the price of fuel, the way it's escalated and the unpredictability of it, the customers themselves don't want us to bid at, you know, to cover ourselves because we bid that at a very high rate to cover ourselves. What you see specifically in that contract, which is a, I think, a very good example of kind of things that we see, is we bid it basically with that component as an ODC or other direct cost. It means it takes it out completely. It neutralizes it totally. And that's what you see happening. And, you know, by and large, in a previous answer, I was talking about this, that we're seeing a shift in contracts, and certainly the ones we're bidding on, going from really, you know, lowest price wins, what's called lowest cost, technically acceptable contracts to best value, in the U.S. Department of Defense. I'm pretty confident that, you know, the first of all, that the programs that we're winning that earn a backlog for, you know, certainly in the last five quarters where we've seen this strong backlog increase are at profitability levels that support, you know, our objectives for low double-digit profitability. We will, and I'm quite confident we'll execute them at that margin profile. I appreciate that. You know, my last question is on the civil business. The recovery there is obviously predicated, you know, obviously on a recovery to pre-pandemic travel. I know you don't operate in China, but your Asia business is affected by what goes on in that country. You know, how has that country's zero COVID policy affected your recovery? How are you kind of managing through that uncertainty going forward? I think I would start by saying when you look at the margins that we're printing right now in Civil without, you know, China and the Asia market really being back, and we're back to margins that are near pre-pandemic levels, you know, at near 21%. And that's what you're seeing, and obviously at a lower level of revenue than we saw pre-pandemic. That's just showing you know, the cost savings that we've taken out of our network coming to fruition. Expect as the recovery continues to progress, which we fully expect that it will, expect further margin progression in that regard. But going back specifically to your question, the way China affects us is historically we've had a very high market share of selling simulators in China. I fully expect that will continue. Now the market is low right now, so we're not selling a lot of simulators to China. Right now, nobody is. As I look at how else does that China situation affect us, is that all of our training centers in Asia Pacific, the anchor customers that we have that train in those locations, you know, a lot of their flights are to and from China every day. So that, you know, obviously affects the amount of flight activity, and therefore the amount of training activity. That's where there's a lot of expected recovery in that regard. I appreciate it, and I'll turn the line over. Thank you very much. Thank you. Thank you. The next question comes from Konark Gupta of Scotiabank. Please go ahead. Thanks, operator, and good afternoon, everyone. I just wanted to first, you know, I'm trying to make sense of the defense SOI for second quarter, which was, I think, CAD 18 million, still kind of down, below the normal levels that you had before the last quarter. I understand, like, you have supply chain issues you mentioned and the labor issues and some order delays and all those things. Would you say, you know, like if, even if you strip out those issues, the contract adjustments that you took in fiscal Q1, that would have still, you know, like, showed up at the new margin level in fiscal Q2, and that should continue? I'm like, I'm just trying to understand, like, how Defense SOI can go from CAD 18 million in Q2 to, you know, like, significantly higher numbers in Q3 and Q4. I'd start by saying our Q2 performance was as we expected it to be, and it's as I, you know, said it would be on the last call, sequentially ahead of last quarter. Of course, adjusted for the discrete charges that we saw in Q1, which are, as I said, one-off. We're not alone in this. Like our peers, we continue to feel the effects of very real labor and supply challenges across the industry. I think we're managing them well. But as well, we do see select order award delays on order intake. We're continuing to work these, and it's specifically with regards to labor and supply changes. The way we're managing it, of course, how they affect our company, we see these abating by the year end, not going away totally, but certainly abating. That's where you're seeing that plus specific orders that we see coming in that we have high visibility on gives us the confidence that, you know, we can achieve the ramp up in defense numbers in terms of profitability in the third and especially in the fourth quarter. Now, of course, one thing that I think, like me, you'll be excited about is the order intake, which continues to be very strong. We've got five quarters of, you know, book-to-bill higher than one with, you know, 12 months trailing book-to-bill at higher than 1.3. That really points to strong and improved performance in the future. That's helpful, Marc. Thanks so much. One more, perhaps for Sonya. I think in your comments, you mentioned that you want to reinstate shareholder returns over time. So a like two-part question there, like, A, does that mean dividends or buybacks? Would you have to wait until the leverage ratio going down below three times before you reinstate both things? As we mentioned, our first priority is to de-lever, and we continue to be on track to bring our net debt to adjusted EBITDA down to below 3x by mid next fiscal year. We believe we'll then be in a position to consider return of capital to shareholders. Too soon to really speak to the form, but with the added, you know, once we reach kind of a normalized balance sheet and that financial flexibility, you know, we'll turn to returning capital to shareholders. Okay. Thanks, Sonya. Thank you. The next question comes from Kristine Liwag of Morgan Stanley. Please go ahead. Hi. Hey, Marc, maybe circling back on defense, you know, you've highlighted some of the puts and takes there, but can you provide a more detailed bridge on how you get from 4% margin where the business is today and how you get to a high single digit or potentially low double digit at some point? How much of this margin expansion is a function of lower margin contracts rolling off or better execution or better volume to absorb some overhead or anything like that? Any more detail would be appreciated because it seems like there are a lot of moving pieces in terms of that recovery. Well, I think the components are exactly the one you said. It's if you look at our business, and we've been talking about this for a while, we've just come off of five quarters of book-to-bill higher than one. The past three years before that, we were at book-to-bill below one. We're running out of backlog. That's inherently inefficient, okay, by itself. COVID affected us. We are working through labor supply chain, supply chain challenges that the industry itself is facing. For us, it's really rolling off contracts that are lower profitability, replacing them with contracts that we've been winning. Going back to the order intake, the orders that we're winning are accretive to the objectives that we have of low double-digit return on the SOI, operating income, sorry. To me, look, again, I said continue to watch order intake. Order intake is the one to watch. I've been saying this for two quarters now, and order intake is very, very good. As I said, we're bidding more, we're winning larger. Just look at, you know, we've now got outstanding bids and proposals over $8 billion, which is a very substantial increase. All those are the factors that are going to be that bridge that you're looking for. I see. Marc, would you quantify on how much of that lower margin defense revenue is rolling off this year, you know, to help us with modeling? We can't be that specific really at this time. Sonya, anything you would add? No. No, I think you'd have to leave it to what we've said already. Great. If I could add on one more maybe on commercial. You know, you've taken a few restructuring costs. Going forward, can you share the magnitude of what these costs would entail next year? Also, when you think about once you fully realize the cost benefits of these actions, how we should think about incremental margins. Kristine, I'll take this one, but the restructuring program is ended. The costs are behind it. It ended in Q1. As you can see, it's you know, being realized already as we see it sort of go through the Civil margins, right? We had committed to CAD 70 million plus of recurring structural savings, and we see it in those margins. What's left in those accounts is really the integration costs of the major acquisitions. On the L3Harris Military Training, that'll be trailing off in the second half, and AirCentre will continue the integration for the next few quarters. Great. Thank you, Marc. Thank you, Sonya. Thank you. The next question comes from Anthony Valentini of Goldman Sachs. Please go ahead. Hey, guys, this is Anthony on for Noah. How are you? Hello. Good. Thanks, Anthony. I just wanted to focus on the civil segment for a second. If I'm looking at the metrics correctly here, it looks like the simulator deliveries were flat quarter-over-quarter. Utilization was down, and there's less simulators in the network, yet revenues are up 6% sequentially. Can you just, like, help to bridge that for me? Well, I think maybe Sonya can give you some more color, but I think, as I've said in the past, that first of all, margins and utilization aren't perfectly correlated, and you see a lot of mix. Not all simulator orders are created equal either. You know, they can depend quite substantially from one quarter to the next, just specifically, for example, if the data is supplied, you know, dictated by the airline as an example. So maybe, Sonya, you want to expand on or anything to expand on it? Yeah, absolutely. You know, despite the deliveries being flat, you know, I think product mix was even more favorable in quarter. You know, mix matters in terms of the training as well. You know, less seasonality on the business jet side than the commercial side. That helps the margin. You spoke to the sims in the network while the absolute number of sims was lower because we did a bit of a rationalization, the SEUs, which it drives the revenue. Which simulators are active for revenue generation actually went up quarter to quarter. Okay, that's helpful. In terms of the mix, can you guys comment on the amount of deliveries that are wide body and the amount of orders that you guys are getting that are wide body versus narrow? We don't actually break it out, frankly. I think we could follow up, but, you know, we don't have actually that data. We don't break it out that way. Yeah, we don't necessarily break it out, but you can assume that it's mostly narrow body. Okay, great. Last one on this for me is, how much is the revenue and SOI contribution in the quarter from Sabre? 7% revenue. 7% of civil revenue. That equates to about CAD 35 million and a pretty strong accretive margin to the business. Great. Thank you so much. Thank you. The next question comes from Michael Kypreos of Desjardins. Please go ahead. All right. Thank you for taking the question. Maybe just on the announcements with Qantas and Virgin, do you expect further outsourcing of training across the airline industry, given that they're facing higher costs right now in other parts of their business? Yes. I think this is a continued good time for in the future for outsourcing, as we've predicted all along. Look, it's just a natural evolution of the business we've created. They're really the only real global third, you know, third party way to be able to do training, and we're the largest training network in the world, training over 1 million hours of training a year. So we provide huge synergy there and huge benefits to airlines that want to do it. So yes, I continue to see more opportunities out there. We announced the big ones like you were talking about Qantas, but there's a lot that we will do overflow training, and that's been a factor as well. We're putting simulators out there, on contracts to do just that. When we do that, we get long-term contracts that's going to be good going forward. I continue to see that as being a trend going forward. Perfect. Thank you. That's a great color. Maybe just on the fixed-price contracts. I saw that Boeing at their Investor Day came out and said that going forward, they no longer have an appetite for fixed-price programs. Maybe just your opinion if in the industry, aerospace industry as a whole, do you share that view, and if the industry is maybe stepping away from that moving forward? Look, I can only comment about us. You know, we bid on the contracts that fit our strategy, and the capabilities that we have. A lot of them are fixed price, firm price contracts, and we're good at executing those kind of contracts. As I said, notwithstanding the what happened and specifically for one-off reasons last quarter, we have a very good track record of doing over multiple years. You know, I'm very confident that we can execute contracts that are fixed firm price in the future. I think going back to what I was saying a while ago in a previous answer, what we see specifically in the U.S. market is a shift to best value contracts. That is very positive for CAE, you know, with our specific differentiation in the market. I think the last thing to say is, and again, as an answer to previous questions, the government, you know, wants to create an environment in which the risks are well managed. I was using the example of fuel prices, that taking that out of the equation. Look, I think that to summary, you know, we'll continue to bid on contracts whether fixed firm price or not, and we'll execute them well. I'm quite confident with that. Thank you. Appreciate it. Thank you. The next question comes from Fai Lee of Odlum Brown. Please go ahead. Hi. Thank you. It's Dave here. Just a clarification on the civil utilization rate. The sequential decline from the 71% last quarter, it's now 66%. Is that decline due to seasonality, COVID, or are there some other factors involved there? Mainly seasonality. Seasonality? Okay. Yeah. Okay. In terms of looking longer term at that utilization rate, I think prior to COVID was around the mid-70 range. Do you expect to get back to that kind of range longer term, or do you expect to be higher or kind of lower? Can't see any reason why not. That we're operating in the US at a much higher rate than that right now. Look, there's no natural reason why that would stop. It's really going to be, you know, linked as it always is to the amount of flying that are done by the airlines and business aircraft. That's at a very high rate. As I say, you know, business aircraft stabilizing at flight levels, flight activity about 20% over prior to COVID period. I see that continuing. I think that's going to be pretty good. Historically, I think the reason I use that example for business aircraft is usually that'll be a lower utilization by the very nature that, you know, we don't train as much, you know, on a back end of a clock, if you like, in business aviation. Inherently it brings the utilization level down, even though it's still very good revenue. Right. Okay. Thank you. Operator, I want to thank members of the investment community for their questions, and now we'd like to open the line to members of the media. If there are any questions from media, please go ahead. Thank you. As a reminder, if you would like to register a question or comment, please press the one followed by the four on your telephone. Once again, to register a question or comment, the one, four. One moment, please. The first question comes from Stéphane Rolland of La Presse Canadienne. Please go ahead. A augmenté notre carnet de commandes de façon très significative. On voit pas de ralentissement en ce moment, ça, c'est sûr. OK. Peut-être, je sais que vous l'avez expliqué un petit peu en anglais. Bon, les résultats ont été meilleurs que ce à quoi s'attendaient les analystes. Ça avait été un peu plus difficile avec la chaîne d'approvisionnement, puis les charges que vous aviez pris pour la défense. Qu'est-ce qui a changé en trois mois qui fait en sorte que vous êtes en meilleure posture? Les résultats sont les résultats qu'on s'attendait. On a encore des défis qui sont des défis pas juste de CAE, mais de l'industrie au complet dans le secteur de la défense, en ce qui a trait à la main d'œuvre, puis en ce qui a trait à la chaîne d'approvisionnement. Ça a continué de nous affecter dans le second quart. Ça va continuer à nous affecter. On voit quand même que du côté CAE, les effets vont aller en s'amenuisant vers certainement notre quatrième quart. Pour nous, c'est vraiment ça comment ça nous affecte. Nos résultats étaient de façon séquentielle dans le deuxième quart et étaient des résultats qu'on s'attendait. OK. Dernière question. Quand vous dites que vous prévoyez que ça va s'améliorer au quatrième quart, est-ce que c'est le ralentissement de l'économie qui fait que c'est plus facile de garder vos employés? Qu'est-ce qui fait en sorte que vous pensez que ça va s'améliorer? C'est nos efforts particuliers, parce que l'effet pour l'industrie au complet, c'est ceux de la main-d'œuvre et ceux de la chaîne d'approvisionnement. Si on regarde dans les prochains mois qui viennent, on peut voir quelle main-d'œuvre, comment est-ce que nos besoins en main-d'œuvre vont être satisfaits. On a une belle visibilité là-dessus. De la même façon pour les pièces. Quand on regarde ça six mois à l'avance, on est capable de prévoir qu'on va être capable d'effectuer nos programmes parce qu'on va avoir la main-d'œuvre, on va avoir les pièces à ce moment-là. C'est pour ça qu'on est capable de donner cette prévision-là. OK. Merci d'avoir pris mes questions. Merci. Merci, c'était notre dernière question. That was our final question. I'll turn the call back over to our host for any closing remarks. Thank you operator and thanks to everyone for joining us on the call today. I'd remind you that a transcript of today's call will be located on CAE's website for future reference. With that, I wish everyone a good afternoon. Thank you. This does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Thank you and have a good day.