Good day, ladies and gentlemen. Welcome to the CAE second quarter financial results for fiscal year 2025 conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mr. Andrew Arnovitz. Please go ahead, Mr. Arnovitz. Good morning, 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, contain forward-looking statements. These forward-looking statements represent our expectations as of today, November 13, 2024, 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 and in our filings with the Canadian Securities Administrators on SEDAR+ and the U.S. Securities and Exchange Commission on EDGAR. With the divestiture of CAE's healthcare business in fiscal 2024, all comparative figures discussed here and our financial results have been reclassified to reflect discontinued operations. On the call with me this morning, our Marc Parent, CAE's President and Chief Executive Officer, and Constantino Malatesta, our Interim Chief Financial Officer. Nick Leontidis, CAE's Chief Operating Officer, is on hand for the question period with financial analysts. I'm sure you've all seen by now the news release we issued yesterday afternoon that accompanied our Q2 results that after 20 years at CAE, including the last 15 as President and Chief Executive Officer, and after spearheading the making of CAE as a global leader in training for simulation for civil aviation and defense and security forces, Marc Parent will be leading the company at next year's annual general meeting in August 2025 as part of an ongoing succession plan. Until this time, Marc will continue to lead CAE in his role as CEO. The board of directors has retained a leading executive search firm to conduct a comprehensive global search, which will include evaluating internal and external candidates to identify a new CEO to lead the company into the future. The human resources committee of the board will oversee the search process with support and assistance from Marc. On behalf of all of us at CAE, I'd like to say that we're incredibly grateful for Marc's exemplary leadership. His lasting impact on CAE and on the aerospace industry are unanimously recognized, and we look forward to continuing to benefit from his leadership until next year's AGM. With that, I will turn the call over to Marc. Thank you, Andrew, for those kind words, and good morning to everyone joining us on the call. As Andrew said, today is business as usual, and I do want to stay focused on the quarterly results, but this is a big moment for CAE and for me personally, so I'll just take a moment to say that it's been really the privilege of a lifetime to lead this company. I can't tell you how proud I am of what our team has accomplished, and I'm very thankful for all the support that I've received throughout the years. Thanks to our extraordinary people at CAE, we can proudly say that over the last couple of decades, we've absolutely reshaped the aerospace industry by creating something that's truly unique. CAE trains more pilots than anyone else in the world by far. By leveraging technology, we've prepared countless people for the moments that matter and fulfilled our mission to make the world safer. This is the right time for a transition process. As our financial performance shows, which we'll get to in just a moment, we're in a solid financial position. Our markets are on a long-term growth trajectory, and our competitive position in each of those markets is strong. Our innovative technology and our outstanding people now set the standard for safety and training worldwide. I'm confident that CAE has a very bright future ahead. Now, turning to the business at hand in the second quarter, our performance in the second quarter reflects strong demand for our civil and defense market solutions. Despite some of the challenges we faced in commercial aviation from OEM aircraft supply disruptions, we've achieved solid results. Additionally, we extended our positive trend in defense this quarter with growth and margin enhancements that are largely attributable to our dedication to focus, customer centricity, and operational excellence across all of CAE's P&Ls. Highlighting our strong position in growth markets, we secured nearly CAD 3 billion in total orders this quarter, bringing our adjusted backlog to a record CAD 18 billion, which is up over 50% compared to just over a year ago. In civil, we delivered 18 full-flight simulators to customers during the quarter, and our average training center utilization was 70%, a decrease of one percentage point compared to the previous year. This quarter, we experienced year-over-year growth in business aviation training, commercial training in Asia-Pacific, and simulaion products. However, mainly due to OEM aircraft supply disruptions, U.S. pilot hiring remained low during the quarter, impacting the incremental pilot training demand we would have expected under more normal conditions. Overall, commercial aviation training utilization was approximately three percentage points lower than last year on average, which is still very good, but it would have been even stronger if not for the temporary pressures on initial training and pilot churn in the Americas. We continue to deliver strong order flow in the quarter in a large secular growth market, which sees highly differentiated training and flight operation software solutions. We booked CAD 693 million in orders with civil customers worldwide for a 1.08 book-to-sales ratio on revenue that's 12% higher than Q2 of last year. We ended the quarter with a record CAD 6.7 billion total civil adjusted backlog, which is up 13% year-over-year. We received orders for 16 full-flight simulators in the quarter, including four based on the COMAC C919 airliner, and we signed long-term training services and flight operation solution contracts with commercial and business jet operators worldwide. In defense, performance continued to track our expectations, driven by strong execution, risk retirement, significant backlog growth, and improving backlog quality. We made excellent progress during the quarter to renew growth and increase margins, including successfully concluding one of the legacy contracts from the backlog and securing a CAD 1.7 billion transformative award under Canada's Future Airc rew Training Program. For the quarter, we recorded orders worth CAD 2.3 billion, resulting in a 4.6 times book-to-sales ratio, leading to a record CAD 11.4 billion in defense adjusted backlog. This is up approximately 94% year-over-year. Over the past 12 months, the defense book-to-sales ratio was 2.04 times. With that, I'll now turn the call over to Dino, who will provide additional details about our financial performance. Dino? Thank you, Marc. Good morning, everyone. Consolidated revenue of CAD 1.14 billion was 8% higher compared to the second quarter last year, while adjusted segmented operating income was CAD 149.0 million compared to CAD 135.6 million in the second quarter last year. Our quarterly adjusted EPS was CAD 0.24. That compares to CAD 0.26 in the second quarter last year. We incurred restructuring, integration, and acquisition costs of CAD 30.9 million during the quarter. This is comprised of CAD 5.1 million for the now completed integration of AirCentre and CAD 25.8 million in connection with the restructuring program to streamline CAE's operating model and portfolio, optimize our cost structure, and create efficiencies. This restructuring program was also completed in the second quarter, and no further restructuring expenses are expected. The conclusion of these programs is beneficial to the company's free cash flow profile going forward. Also, we continue to expect to fully achieve annual run rate cost savings of approximately CAD 20 million by the end of next fiscal year. Net finance expense this quarter amounted to CAD 52.9 million, which is up from CAD 49.5 million in the preceding quarter and CAD 47.1 million in the second quarter last year. This is mainly the result of higher finance expense on lease liabilities in support of training network expansions, partially offset by lower finance expense on long-term debt due to a decreased level of borrowings during the period. Income tax expense this quarter was CAD 10.4 million for an effective tax rate of 16%. The adjusted effective income tax rate was 18%, which is the basis for the adjusted EPS calculation. Net cash from operating activities this quarter was CAD 162.1 million compared to CAD 180.2 million in the second quarter of fiscal 2024. Free cash flow was CAD 140 million compared to CAD 147.4 million in the second quarter last year. The decrease was mainly due to a lower contribution in non-cash working capital. As in previous years, we usually expect the portion of our non-cash working capital in the first half to reverse in the second half. We also continue to target an average 100% conversion of adjusted net income to free cash flow for the year. Capital expenditures totaled CAD 57.0 million this quarter, with approximately 65% invested in growth, mainly to add capacity to our global training network to deliver on the long-term training contracts in our backlog. We are now expecting total CapEx for fiscal 2025 to be slightly below our previously estimated range, which is indicated at CAD 50 to CAD 100 million higher than the CAD 330 million we invested in fiscal 2024. This change reflects the agility of our investment process and our ability to move in lockstep with the market. Our net debt position at the end of the quarter was approximately $3.1 billion for a net debt to adjusted EBITDA of 3.25 times at the end of the quarter. Before the impact of our legacy contracts, net debt to adjusted EBITDA was 2.97 times. Our increased investment in SIMCOM does not change our leverage expectations. We continue to expect to be below three times net debt to adjusted EBITDA by the end of the fiscal year, and our deleveraging focus remains the same. During the quarter, CAE repurchased and canceled a total of 392,730 common shares under its normal course issuer bid NCIB, which began on May 30, 2024, at a weighted average price of $24.43 per common share for a total consideration of $9.6 million. Now, turning to our segmented performance. In civil, second quarter revenue grew 12% year-over-year to CAD 640.7 million, while adjusted segmented operating income rose 1% to CAD 115.9 million, resulting in an 18.1% margin. With 18 full-flight simulators delivered this quarter, we saw a notable shift in revenue mix, with a higher proportion for products compared to last year when we delivered 11. Defense revenue rose 4% to CAD 495.9 million, while adjusted segmented operating income rose 55% to CAD 33.1 million, delivering a 6.7% margin, right on target, thanks to strong execution from the team. Legacy contracts remain on track, with costs and schedules well managed. As planned, we concluded one legacy contract this quarter and on track to finalize another one next quarter with yet another following in the quarter after. This quarter, legacy contracts contributed around 30 basis points of margin dilution. Without this impact, the adjusted segment operating income margin for defense would have been 7%. With that, I will ask Marc to discuss the way forward. Thanks, Dino. For CAE overall, a key factor driving long-term demand in both our civil and defense segments is the high level of demand for pilots and pilot training to manage growth and replace those that are retiring. The outlook for aviation training solutions in civil is as strong as ever, driven by growth in air travel, the need for more pilots, and the requirement for continuous training to keep up with evolving aviation technologies as well as regulations. Our business is largely supported by the regulatory training pilots and crews need to maintain certification for the global fleet of commercial and business aircraft, and this will only compound as the in-service commercial jet fleet roughly doubles within the next two decades. Factors like the aging pilot workforce, mandatory retirements, and sustained growth in air travel solidify our long-term confidence in CAE's future. OEM aircraft supply disruptions intensified with recent labor disputes, but with that now positively resolved, we believe that the airline industry can now begin to gradually recover from these narrow-body supply challenges, with some relief expected in the coming period as grounded aircraft return service and new aircraft delivery rates eventually rise. Underscoring the temporary nature of these supply burdens, OEM and Airbus have a combined order backlog of nearly 15,000 aircraft, amounting to about a decade's worth of deliveries. With regards to business aviation specifically, I'm thrilled about the agreement announced last week to purchase a majority stake in our SIMCOM joint venture. This strategic organic investment strengthens our position in the core business aviation training market, boosts recurring revenue, and deepens our commitment to delivering top-tier training solutions for a vital customer segment. Under this agreement, both CAE and SIMCOM have also extended our exclusive business aviation training partnerships with Flexjet and its affiliates by an additional five years, securing a 15-year exclusivity period. This long-term agreement functions like an outsourcing agreement with one of the world's premier luxury private jet companies, giving CAE increased exposure to the rapidly growing fractional jet and charter aviation markets. We anticipate that this investment will be accretive to both earnings and free cash flow in our first full year going forward. Regarding our civil outlook, disruptions in aircraft supply have indeed impacted an incremental portion of the demand that we normally see in our commercial aviation training division. Consequently, we've implemented measures to enhance operational efficiency and mitigate the decrease in training demand. Despite persistently low pilot hiring levels in the United States, training bookings for our third and fourth quarters are higher, reinforcing our expectation for a stronger performance in the latter half of the fiscal year. Additional factors that underlie our expectations for a stronger second half include the seasonal improvements in commercial and business aviation, accretion for our increased investment in SIMCOM, and an uptick in volume and profitability from full-flight simulator deliveries. On balance, we're maintaining our target of approximately 10% annual growth in civil adjusted segment operating income for fiscal 2025, and we continue to expect an annual civil adjusted segment operating income margin to be between 22% and 23%, with ample room to grow beyond that on volume, efficiencies, and mix. In defense, we're well positioned in a growth market as the sector moves into a prolonged upcycle with increased budgets across NATO and allied nations. Rising geopolitical tensions are driving a focus on near-peer threats, defense modernization, and readiness, fueling demand for the training and simulation solutions that we offer. Our expertise spanning civil aviation and defense uniquely equips us to meet these needs. Demand for our training solutions remains strong, driven by a global shortage of uniformed personnel, prompting militaries to partner with CAE to support readiness. By leveraging our position on programs like the Canadian FAcT, we aim to advance multi-domain training in secure synthetic environments across our global network. The foundation is solidly set for renewed growth and margin expansion in our defense business in the coming period. We've strengthened our processes, sharpened our strategy, and enhanced our talent to improve efficiency and execution. Meanwhile, we've achieved transformative growth in our backlog of high-quality programs. Our fiscal 2025 defense outlook reflects the business's risk baselining and the improved visibility that it provides. We anticipate annual revenue growth in the low to mid-single digits and expect defense adjusted segment operating income margin to increase to the 6%-7% range, with performance like civil weighted more towards the second half of the year. With that, I thank you for your attention, and we're now ready to answer your questions. Thank you, Marc. Operator, we'd now like to open the line to members of the financial community. Certainly. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, press star then two. Our first question is from Kevin Chiang with CIBC. Please go ahead. Thanks for taking my question, and congrats, Marc, on your pending retirement here. Maybe just on defense, you called out 7% SOI margins excluding the legacy contracts. You have a target of eventually getting to double digits here over time. Just how you think about bridging that gap? Is that 10% of the backlog today, or does this require continued restructuring in how you're bidding and what you're winning in order to ultimately get to that double-digit EBIT margin? Look, I think the factors that's going to drive the growth are the same ones that we've talked before. And thanks for your comment, Kevin, by the way, about me. I appreciate it. It really comes back to the retirement of the legacy contract risk, and we're right on track on that one, and really replacing contracts in our backlog that we've won over the last few years and that are lesser margin than the 10% or so that we target, and replacing them with contracts that have a higher margin. And that's really what's happening here, and I think you can see with the growth in the backlog that we're having quite a good success on that front. I don't know, Dino, or do you want to add anything to that? Yeah, no thanks, Marc. And good morning, Kevin. So absolutely, I think what Marc said is absolutely bang on there. It's really based on continuing strong execution, right, from the team as planned and securing growth for both more transformative backlogs. An example is a CAD 1.7 billion subcontract we awarded in Q2. The defense pipeline is still strong. It's set at CAD 2.2 billion. We'll see the gradual increase over time in the next second half here. Q2 will probably be very similar to—sorry, Q3 will probably be similar to Q2 with some improvement and then a higher improvement on the fourth quarter. Okay. That's helpful. And maybe just my second one here. You're holding the margin guidance for civil. I'm sure SIMCOM helps you in the back half of your fiscal year, but you also- Operator, are you still there? Can you hear me? Yes, the operator is here, and I can hear Mr. Chiang. I believe he's done with his question. Can we move on to the next question? Oh, certainly. Apologies, Mr. Chiang. The next question is from Sheila Kahyaoglu with Jefferies. Please go ahead. Thank you very much, and congratulations, Marc, on what an accomplishment over the last two decades or so. I'm going to steal the last question. So maybe if we could talk about the civil inflection that's underwritten for the second half, how do we think about that? What's driving some of that SIMCOM flight operations, software profitability, and cost out? Maybe if you could comment on some of the drivers into the second half. And then my follow-up would be on just the GTF grounding, how has that shifted over the last three months? Thanks, Sheila. And again, thanks for your comments as well. Look, when we look at things, let's think about all the factors that are affecting us here. I think in commercial aviation training, I mean, you highlighted the issues that are affecting us. It's still affecting us. The lower deliveries that are Boeing's exacerbated by the strike. Of course, that's resolved now. The impacts from all the grounded aircraft, the Airbus aircraft because of the GTF, and that's come off the peak itself. We have cooling off this last summer of really was very hot pilot hiring trend in the United States. So look, I mean, as we look at the period ahead and what underlies our forecast is that, as I mentioned, the impact from the aircraft, the impact of the GTF on Airbus grounding is improving. Peak AOGs are behind us. We see some modest, I'd say modest, but definitely uptick towards more normal pilot hiring by U.S. airlines. We do expect an improvement at some point in Boeing deliveries, although I would say, like anybody else, that remains probably our biggest question mark, something that we're watching. But we see, taking all of that into account specifically for airlines, what we see is improvements in the bookings in Q3, Q4. So there's clearly some pluses and minuses in the outlook, and we've taken control of our own destiny with that in basically managing our costs. And of course, we see the strong position that we have in business aviation training, the contribution of SIMCOM with that. The fact that coming back to airlines as well, I think we tend to look at the U.S. a lot, but I can tell you activity in Asia-Pacific is very strong. So I think all of that is what's contributing to our optimism. Well, maybe just Nick, would you like to add anything to that? It's Sheila's question. Yeah. I mean, I guess from a utilization, we expect the training business, meaning commercial and business, to be much higher in the second half, and historically, Q4 is our biggest quarter, and it looks like it's going to be the same this quarter. We are going to get contribution from SIMCOM that comes with the acquisition, and we're also going to see better contribution by flight services, so you put all that together, and these are kind of higher margin components. You put all those together, it gives us the confidence that whatever outlook we've given you, 22%, we're going to be able to hold it. The next question is from Fadi Shamoun with BMO Capital Markets. Please go ahead. Yeah. Good morning, and congratulations, Marc, on your retirement. Is the full-flight simulator delivery target still in the 50 range this year, or has that changed? And I wanted to ask also if you can give us some perspective on kind of the supply chain issues in the aviation. If the aircraft deliveries from Boeing in particular, but generally Airbus and Boeing, kind of struggle to get off the ground in the next 6-12 months because of these supply chain issues, can we potentially start seeing some of these issues that you're experiencing in the U.S. now spread over to other regions? Is there potential risk for some delivery deferrals? I'm just trying to kind of understand from your conversation with customers, what does this look like? Are they kind of starting to get nervous about potentially aircraft deferrals driving some deferrals on the FFS delivery side? Or, just looking over the next kind of two to four quarters, if you can provide some perspective on that, that would be great. Okay. Thanks again, Fadi, for your comments with regards to myself, and it's been a pleasure working with you for several years, and I look forward to the next two or three quarters to do that. I think going back to some of your questions, start with the first one. Yes, we're still aiming for over 50 deliveries this year. That hasn't changed. We don't expect that to change either. Look, I think the factors you talked about, we're obviously not immune to what may happen in the market, clearly, in terms of delivery of aircraft. But when I look at the situation I talked about with the groundings, we're off the peak because of the issues with the engines. The strike at Boeing is resolved, and I'm sure they're doing their utmost to get deliveries restarted safely, and Boeing's a great company. That's going to happen. We've taken, I think, a pretty sanguine view of how that all would play out. In the meantime, what you see on our side is managing our costs, managing our CapEx to stay in lockstep with demand. With regards to sentiment out there, look, again, we're a global company. So when I look at the situation and utilization in Asia-Pacific, very high. And that's still with a situation that specifically, if I look at geographies like China, there really hasn't been a recovery in international travel. Very big on domestic, but not international. It's still a play there. But again, I don't know. Maybe Nick, you want to provide more color based on what you see out there? Yeah. I mean, I think the opportunities for us right now are, especially in full-flight simulators. Marc said the deliveries; we don't see any slowdown. We don't see people backing off from what they've ordered. I think in terms of the numbers, we'll see by the end of the year. But we are winning business from places like Asia these days more than we did in the last couple of years where they were kind of coming out of it. So China, Marc mentioned, we did see some orders out of China. And I think overall, I mean, at least for now, we don't see any change. Now, the deliveries that you mentioned, I mean, they're low, but they're actually not that different than last year. So it's on both sides, Airbus and Boeing. So they are lower for sure, but they're actually very similar to what was delivered last year. So there are still opportunities for us. New simulator-driven capacity needs, and that drives either the training business or the products business to demand. And so we're capturing it wherever it is geographically. Maybe just add a last point, Fadi, from Marc. These factors, they're clearly temporary. As I was saying in my remarks, there's a backlog of 15,000 airplanes that Airbus and Boeing have to deliver over the next year. That's a lot of pilot demand across the world. And compound that with pilot hiring. And again, you want to think about where that growth is going to come from. I mean, just look at it. Just one factor. You think about India. We do a lot of business in India. We're very strong there. And there's about, in terms of just wide-body aircraft, for a population of what is about 1.3 billion people, there's about 60 wide-body aircraft in India. In Singapore alone, there's about, I think, about 260. Think about that. I mean, clearly, the ratios won't be perfect, but that's just telling you how much growth is remaining. Just one country, of course, one that doesn't have a lot of competing infrastructure that basically competes with airlines, so I mean, that gives you an idea where all those airplanes are going to go to, and they've been spoken for. They're going to be delivered, so make no mistake, this is a temporary situation we see here. We're quite convinced of that. Appreciate it. Thank you. The next question is from James McGarragle with RBC Capital Markets. Please go ahead. Hey, good morning, and congrats on a really good quarter. He's got a question on the book-to-bill. Came in above one this quarter, but below what we've been seeing from your team in the past few quarters. And then we saw the CapEx guidance come down. Anything to read into there? Anything change about how you're looking at the longer-term growth opportunity in civil? Or just more of the impact of near-term headwinds from OEM delays and pilot hiring in the Americas? Actually, the way we look at it, the civil book-to-bill ratio is still comfortably above one. Strong growth. And of course, you got to look at it on that growth is on top of quite a rise in revenue. So that tells you that the market's still pretty hot. But Nick, you want to comment on it? Yeah. I don't think there's anything to read into it. It's above one. As Marc said, revenue is CAD 640 million. So it's a high number compared to last year, which is about CAD 68 million lower. So I think we get the opportunities, book-to-bill above one. So you should take that as growth. Maybe on the CapEx side, effectively, we have changed the guidance to specify that we expect CapEx in FY25 to be slightly below the previous guided range of CAD 50 million-CAD 100 million more than FY24. FY24's number was CAD 330 million. But again, this is an example of our agility in our investment process and to move lockstep with the market as we don't deploy simulators on speculation. Our highest returns we get are from our organic investments. Track record of delivering 20%-30% range incremental pre-tax ROCE on organic growth. So we continue to monitor the market situation, but we never want to be ahead of our customers. So discipline is key. Hey, appreciate the color. And then on the defense margin guide, it implies continued improvement, as you mentioned, in Q3 and then into Q4. So can you just provide some more color on what's driving that? Is there seasonality in the defense business at all? I'm just trying to get a better understanding of the margin exit rate and whether or not that represents a good run rate to use for fiscal 2026. I'll turn the line over after that. Thank you. I mean, we're not going to get into fiscal 2026 at this point, except to say that it's going to be right in line in the guidance that we've previously given. We're definitely reiterating to feel very confident about the guidance we gave in regards to margins and growth for defense this year. I mean, where that's coming from, where that's going, maybe Nick wants. It's coming from both sides, as I think we described at the beginning of the year. The cost savings are definitely running through the P&L now, and obviously, we expect that to continue, too. Some of these cost savings will only be realized by the end of the year, so it's good so far, and also, of course, the execution and the order. There is new business, like FACT, for example, which is only getting started now. This new business is going to drive growth in the, well, not just the backlog, but obviously on the P&L. FACT is a big program. As an example, we've announced a number of other programs recently in Canada in particular, and we've also announced some programs, wins in the US. In terms of, it's just better execution, I think, is the way you should read it. That comes with cost savings, but also comes with winning good orders. I would say, obviously, we've given you this guidance. We have the visibility to get us there. You should take it to the bank. The next question is from Matthew Lee with Canaccord. Please go ahead. Hey, good morning, guys. Thanks for taking my questions, and I'll echo the sentiment, Marc. On the SIMCOM acquisition, you kind of mentioned in the past that consolidating JV partners is an important avenue of organic investment for you. Do you see other opportunities or stable partners to make further transactions of that nature in the medium term, or is this one a bit more attractive right now, just given how well BizJet is performing? Look, I'll reiterate what I've said about this transaction. I'm very excited about it. I was very excited about getting into a joint venture with our partner in that business in the first place. But to me, when you look at things like this, acquisitions happen when they happen, right? And this particular one is kind of, I mean, not really an acquisition, it's an organic investment because we're just basically consolidating the large part of the remaining ownership of that business. So look, if there's more I've always said, if there's more opportunities to consolidate our joint ventures, I mean, those are kinds of transactions, if you like, that are most attractive because we know the business, obviously, and we're in a very strong position to be able to execute on them because we know them. And then obviously, they're in a wheelhouse. This particular one is a really, really great example of basically getting a partner that is an extremely strong player in the fractional charter market. It really doesn't get any better in the most profitable part of our civil business, which is business aircraft. Yeah. And then maybe if I can add to that, effectively, I think this is considering normal course, capital deployment evaluation, right, like we do when we consider deployments to the network, investments in GVs, consolidation opportunities for the network. So again, very excited about the opportunity with SIMCOM. It is our highest margin subsegment. And it does secure upside with a key customer. It's an extension of 15 years exclusivity period with Flexjet. So really excited. After the first year, I think we can expect maybe low single-digit EPS accretion and mid-digit EBITDA and free cash flow accretion. That starts now. Okay. That's helpful. And then maybe one of the cost sides. The construction program seems to expect to take about CAD 20 million off the cost base, and that's great. Are there any other low-hanging fruit on the OpEx side where costs come out from the areas that could perhaps be a little bit more efficient? So again, that's our disciplined approach to managing capital and costs. I think we are looking at various opportunities. One of the examples is managing CapEx, right, where we reduced the guidance this year to be in lockstep with the market. We'll do that as well with all the other types of investment opportunities in research and development and in our overall SG&A. You see SG&A actually being a little bit lower this quarter compared to last year and in previous quarters. And that is, again, a reflection of our cost savings kicking in. Always looking for efficiencies. It's a part of our disciplined approach in how we spend our money. The next question is from Cameron Doerksen with National Bank Financial. Please go ahead. Yeah. Thank you. Good morning. And yeah, let me echo congratulations to Marc on your retirement. I guess, question around the new U.S. incoming administration. Just wondering if you can maybe discuss some of the risks that you might see and potentially even opportunities with a change in government in the U.S. I guess one of the things that is top of mind with a lot of investors is around the impact from tariffs. And obviously, aerospace products has historically been exempt from most of those tariffs. But now we've got an incoming president talking about a 10% blanket tariff on anything imported to the U.S. So I'm just wondering about how you see that risk for CAE and potentially if there's other risks or opportunities that you see. I'm sure you'll pardon me if I don't speculate on the situation, but obviously, we're going to monitor it. We're certainly not forecasting any kind of significant impact for CAE. I remember we have a very strong presence in the United States. Just to give you an idea of that, of a statistic I've talked about in the past, you look at just pilot training, military pilot training. We train all 43,000 air crew in the U.S. military at some point in their career, all branches: Army, Air Force, Marines, Navy. And 50% of our employees are there. It's our largest market. So look, we play a, just going back to what I was saying about the military, we play a vital role in supporting national security, I mean, just from that standpoint. In terms of the overall markets, I think you've seen the reaction to the market. I think the overall market, I think it's good. In some segments that we have, like in business aircraft, I think it's a positive, definitely. So look, I think we're going to continue to monitor the situation, but I don't really see any changes near or longer term at the moment. Of course, we'll keep monitoring the situation. Okay. No, that's fair enough. And just very quickly, just on the defense side, just wanted to ask if you'd had any, I guess, incremental success in accelerating the retirement of some of the legacy contracts. I know that was something that was a goal to maybe get these completed earlier than what's currently scheduled. Look, I'm glad you asked the question, and I'm very happy about the progress that we're making there. We've retired one. There's another one that's a big one that we're retiring literally any day now, literally. We're on pace. Exactly where we want to be. In fact, maybe slightly ahead. Nick might have more details. Yeah. I was going to say overall, I think we're on track to where we want to be with these programs. I think we're over the hump in terms of trying to ring-fence them to a scope that is manageable. And we will, obviously, if there's any change, we'll let everybody know. But right now, the guidance we've given on when these programs are going to retire are good. And the budgets that we have to retire them are also good. So I think we're just going to run through. Obviously, if we can retire them early, we will. But I mean, that's not the plan at the moment. Yeah. I think the key takeaway there is good progress to retire the legacy contracts as planned, as anticipated. One this quarter, one expected next quarter, and one in Q4. We're aiming to outperform on that if we can retire more risks, but it's on plan as tracked. The next question is from Tim James with TD Cowen. Please go ahead. Thanks very much, and good morning, Marc. Congratulations on the retirement. Certainly well-deserved. My first question, just in terms of growth in the network, SEU growth, would it be correct to assume that it's really focused in the kind of short to medium term on business jet platforms, just given the dynamics in the commercial market currently? Maybe turn over to Nick. Yeah. No, actually, it's both. I mean, we have a demand to deploy capacity on the commercial side and on the business side as well. When you take the CapEx number that we've given you guidance, the number of simulators that we're deploying is roughly the same as what you would have seen last year. And we have customers that continue to grow, and we have new customers. And so between the two, we are still deploying SIMs on the commercial side. Okay. Thank you. And my follow-up question, have the challenges facing commercial training just really been creating a volume impact, a throughput impact, or has there been a pricing impact there as well in that business? No, it's just volume. I mean, most of the customers that we have in terms of pricing, I mean, these things are set in the contract. So it's really just some lower volume in some places that drives the pressure. Okay. Great. Thank you very much. The next question is from Ron Epstein with Bank of America. Please go ahead. Hey, good morning. This is Jordan Reiners on for Ron. Thanks for taking the question. For the back half of the year for the civil margins, how much of that should we be expecting to come through from just software sales, similar to Q4 of last year? You're hard to hear, but I think we got the question. Yeah. I think the question is what we learned related to the percentage of software sales. So again, we've completed the integration of that software business, and that's important on a go-forward basis. We won't be expecting any additional cost there. We are still converting and going through the process of converting those contracts onto our platforms. It's a small percentage going forward in the second half. Got it. Thank you. The next question is from Noah Poponak with Goldman Sachs. Please go ahead. Hey, good morning, everyone. Hi, Noah. Marc, I echo the sentiments of others on the call, and thanks for the time that you spent with us over the years. Thank you. Can you guys talk about this defense backlog growth you've had and how we should think about that flowing through your top line? I mean, it's huge growth in the backlog. Are the things going in so long duration that you stay in this low- to mid-single-digit organic revenue growth range, or could we see over the medium term a pretty significant acceleration in your growth rate that you'd often see with a doubling of a backlog? too early to provide longer-term growth that we've given, and I wouldn't want to change it at this point, except the only thing I'll say, it really depends a lot on mix. I think your question, I think, underlies that, Noah, because if you look at some of the contracts we've won, and I'll invite Nick to provide a little bit more detail here. But for example, some of the big backlog growth, not all of it, but some of the big backlog growth you see is, for example, from the FACT contract in Canada. So what that is really, reiterating a bit of what I said before, is us winning pilot training for Canadian military for the next 25 years. So a lot of that backlog is us delivering training for the Canadian Air Force to train your pilots and Canadian, not just pilots, but electronic warfare officers, that kind of thing, complete outsourcing of that segment for the next 25 years. And we already do some of that today, by the way. So some of that is income replacement, but it's just a part of it. And I would say a relatively small part of it because the contract itself, it's much larger. So instead of doing just a part of the training today, we do the complete part training, and its scope has expanded. So that's the training part. But again, to your question, over the next three to four years on that contract alone, we're going to the government's recapitalizing all of its assets, which means we will be building a lot of simulators and similar training devices in our factories. And that has a different profitability mix. We're going to be building new hangars, runways, all kinds of things on bases which have different marginal profile. So again, I've said a lot here, but too early to provide different guidance. It's going to be, but it does give us the confidence in a steady growth of this business. I know I've said too much to Nick. You want to add anything to that? No, that's it. The way to look at that contract, it's the first five years is product delivery, and then the next 20 years is service delivery unless the government does more. So I think Marc said it well. That's going to ramp up the revenue on that contract over the next few years. Yeah. And I think we've concentrated a lot on that contract. But I mean, just we don't spell them out in so much detail. But just in the backlog this quarter, we have some significant F-16 contracts in Asia-Pacific, MH-60 helicopter training contracts in India. We're starting our HADES program for the U.S. Army, the Global Express. So look, I'm not going to overpromise anything, and we know better in our defense. Okay. But when Nick said thank you to the bank, I like him saying that. Okay. And just on the civil margin for the rest of the year, is there any finer points you'd be willing to or could put on the split between the third and fourth quarter? Just if 3Q looks like last year, then 4Q would need to be around 30%. Is the split similar to last year, or is it more like fiscal 2023 when 3Q, 4Q were fairly even? Yeah. Usually, our Q4 is strongest. The second half is always stronger than the first, absolutely. But this year, Q4 is stronger with more deliveries coming in in that back half. Cost savings kicking in as the year progresses. We're expecting the CAD 20 million annual savings at the end of next year, and training performance as well. We see the bookings also variability in every quarter, but we expect the Q4 to be stronger, a bit higher than 20% in Q3, and then the rest in Q4 higher. The next question is from Michael Caranci with Desjardins Capital Markets. Please go ahead. Good morning, and congratulations, Marc, on the pending retirement. Maybe just a question on the CEO search. The press release states that you will be supporting the process, Marc. Can you maybe provide some details on what type of characteristics, attributes, experience you're looking for in a potential candidate? And also maybe clarify if this process will be combined with the ongoing CFO search process or on a separate basis? Just on that one, it's two separate issues altogether. For that one, we're considering internal and external candidates as well. Constant ino is doing a fantastic job here in the interim. With regards to the CEO search, yes, I am participating with the board on that. I'm going to support it. My focus within the board is to make sure that we select the right person, man or woman, that's going to just propel this great company to the next level. I might want to get into the characteristics of what kind of person that is. The net is cast wide across the globe, and we will get the best person. I think surely to provide any more guidance relative to that, except that the process is well underway, and I've been part of quite a few meetings on that subject. Appreciate it, Marc. Thank you, operator. I think that's all the time we have for the call. I think we landed at just shy of 9:00 A.M. I want to thank all participants for joining us this morning and remind you that a transcript of the call will shortly be available on CAE's website. Thank you, and have a good day.