Good day, ladies and gentlemen. Welcome to the CAE third quarter financial results for fiscal year 2026 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 for analysts 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 today. Today's remarks, including management's outlook and answers to questions, contain forward-looking statements which represent our expectations as of today, February 13, 2026, 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 and MD&A for the three months ended December 31, 2025, which is available on our corporate website and on our filings with the Canadian Securities Administrators on SEDAR+ and the US Securities and Exchange Commission on EDGAR. On the call with me this morning from CAE are Calin Rovinescu, Executive Chairman, Matthew Bromberg, the company's President and Chief Executive Officer, and Constantino Malatesta, our Interim Chief Financial Officer. After formal remarks, we'll open the call to questions from financial analysts. Let me now turn the call over to Calin. Thank you, Andrew, and good morning, everyone. Before Matt and Constantino take us through the Q3 results and discuss the transformation plan, I want to briefly add my perspective. Q3 was a solid quarter, all things considered, despite the civil business experiencing a somewhat softer order activity than expected. Defense, on the other hand, had a stronger quarter than expected, and we're increasing our outlook for that segment. In my view, a quarter like this reinforces why we firmly believe that having two strong businesses with leading positions in attractive markets, like our civil and defense segments, makes so much sense for CAE. As you'll hear from Matt, we're starting to implement the several phases of our multi-pronged transformation plan, with a focus on sharpening our portfolio, disciplined capital management and capital allocation, and improved performance through operational excellence and cost transformation. We expect this plan to lead to increased earnings and cash flow and long-term sustainable value creation. We've already made certain important organizational changes to several areas of our company. We've identified several opportunities for network rationalization and potential non-core divestitures. We've reduced capital expenditures and are building a plan for improved utilization and returns from our simulators. Specific targets resulting from the transformation plan are expected to be made available after next quarter so that you will be able to more closely monitor our progress. As we said on the last call, CAE's culture over the last years has centered primarily on growth, and it's now time to harvest that growth. The board and I are strongly supportive of the disciplined, data-based approach that Matt and the leadership team are undertaking, challenging the status quo while protecting what is core to CAE. We are closely aligned with both the direction and pace of the transformation and fully recognize that some of the actions required to strengthen the business will have some near-term revenue impact. We're comfortable with that trade-off as we position the company to become more resilient and to deliver stronger returns with more disciplined capital allocation. And with that, Matt, over to you. Thank you, Calin, and good morning, everyone. Q3 was a solid quarter, despite the softness in civil. Our performance reflects a more balanced portfolio, improved cost discipline, a focus on program management, and better cash flow collection. I'm very proud of the team for delivering these results ahead of our expectations, especially while advancing the transformation plan. Even in the planning phase, the transformation plan is influencing our decisions with respect to portfolio focus, capital discipline, and performance. For instance, focusing our capital on core opportunities is further reducing our fiscal 2026 CapEx outlook, and our focus on working capital has improved free cash flow. Combined, we've achieved our full-year deleveraging target ahead of schedule and further strengthened our balance sheet. While there is still much to do, these early improvements give us confidence in the strategy and in the opportunity ahead. Over the past 90 days, I've met with over 100 investors to discuss CAE's performance and to review the transformation plan. In these discussions, 4 themes resonated. First, CAE competes in an industry with strong tailwinds. We operate at the intersection of civil aviation and defense, two markets with durable, long-term growth drivers. We have world-class technology, we have unparalleled customer relationships, and most importantly, we have exceptional employees across the organization. In our civil segment, we are the market leader in simulator development and sales, and we operate the largest independent training network in the world. In defense, we operate around the world locally and with a strong core of capabilities in simulation, training, and mission rehearsal....In this segment, we are the largest independent defense training company in the world, and we have unparalleled breadth of platforms and capabilities. These are strategic assets that give us long, consistent runway. Second, we've developed simulation and training solutions for more than 220 aircraft platforms. That's more than anyone in the industry. We bring unmatched depth in system engineering, hardware/software integration, and image generation. Moreover, we have some of the world's most comprehensive databases for geospatial environments, aircraft, airports, sensors, and operational performance. Third, I've been struck by the level of trust our civil aviation and defense customers place in CAE. Our customers trust CAE with their most valuable assets: their pilots, their aircrew, their passengers, and the military personnel. That trust reflects the critical role we play in ensuring readiness in moments that truly matter, and it underscores the responsibility we carry as a company. Finally, building on the strong foundation, the transformation plan will establish a more consistent, higher quality business that generates higher margins and higher cash flow. The transformation plan has three focus areas. Portfolio sharpening will simplify our portfolio and focus our resources on what we do well. Tighter capital discipline will ensure that every investment meets strategic and financial targets, and that capital, R&D, and all expenditures will be assessed against a balanced scorecard to ensure awards, sales, profit, cash flow, and return on investment thresholds are all met. Finally, performance improvement will streamline the business and focus on every element of operations, from engineering to production, from sales to free cash flow. Some of these actions will have near-term revenue impact as we ramp and move through the transformation, and that is expected. Now, I want to briefly touch on our most recent leadership changes. As we announced earlier this quarter, Ryan McLeod will be joining CAE as our Chief Financial Officer. Ryan brings deep experience in operational finance, capital discipline, and transformation execution. His background and approach align closely with the priorities we are driving across the company. His culture will fit exactly with what we are and where we want to go, and I'm very much looking forward to partnering with him as we move into the next phase of CAE's transformation plan. But I also want to take a moment to recognize Constantino Malatesta. Over the past year and a half, Constantino has served as an interim CFO during a period of significant change for CAE. His leadership, his judgment, and his steady hand have been instrumental in strengthening financial discipline and maintaining stakeholder confidence. On a personal note, he has made my own transition into the role as smooth and effective as possible. I'm very grateful for his hard work, his continued support, and I really enjoy working with him. Thank you, Tino. In summary, we operate two strong businesses, and I see clear opportunity to do more. Returns are below where they should be, and capital intensity across CapEx, R&D, SG&A is higher than warranted. Over the past six months, our analysis has confirmed these observations and sharpened our view of the opportunity ahead, and this is precisely what our transformation plan is designed to address. I'll come back to that in a moment, but first, I'll ask Tino to walk through the financial results. Thank you, Matt. I appreciate the kind words. Good morning, everyone. Third quarter consolidated revenue of CAD 1.25 billion increased 2% year-over-year. Adjusted Segment Operating Income was CAD 195.8 million, up 3% from CAD 190 million in the third quarter last year. Adjusted EPS was CAD 0.34, compared to CAD 0.29 a year ago. During the quarter, we incurred CAD 7.3 million of transformation-related expenses, primarily recorded in SG&A. These costs are included in Adjusted Segment Operating Income and Adjusted EPS, and reduced Adjusted EPS by approximately CAD 0.02. Net finance expense this quarter amounted to CAD 54.1 million, down from CAD 56.6 million in the third quarter last year, mainly due to lower finance expense on long-term debt due to a decreased level of borrowings during the period. This was partially offset by higher expenses on lease liabilities. Income tax expense this quarter was CAD 29.6 million, for an effective tax rate of 21% on a statutory and adjusted basis, compared to an adjusted effective tax rate of 29% in the third quarter of fiscal 2025. We continue to expect a run rate effective income tax rate of approximately 25%, reflecting the expected geographical mix of earnings and ongoing tax legislation reforms from various jurisdictions. Net cash flow from operating activities was CAD 407.6 million this quarter, compared to CAD 424.6 million in the third quarter of fiscal 2025. Free cash flow was a solid CAD 411.3 million, above the CAD 409.8 million recorded in the third quarter last year. These underscores continued discipline and operational strength. Capital expenditures totaled CAD 50.6 million this quarter, with approximately 75% invested in growth. Reflecting tighter capital discipline, we now expect full year capital expenditures to be more than 10% lower than last year, driven by a further reduction in civil CapEx, which is now expected to be approximately 30% lower year-over-year.... Our net debt position at the end of the quarter was approximately CAD 2.8 billion for a net debt to Adjusted EBITDA of 2.3 times at the end of the quarter, surpassing our goal to reach 2.5 times net debt to Adjusted EBITDA by the end of the fiscal year. Now, turning to our segmented performance. In Civil, third quarter revenue decreased 5% year-over-year to CAD 717.2 million. Adjusted operating income decreased 6% to CAD 141.8 million, resulting in a margin of 19.8%. These decreases were driven by lower simulator sales and lower utilization in our training centers and were partially offset by the contribution from sales of used simulators across the network. Civil Adjusted Segment Operating Income this quarter includes CAD 4.9 million of transformation-related expenses, which impacted the Adjusted Segment Operating Income margin by approximately 70 basis points. Training Center Utilization was 71%, down from 76% in the prior year period, and we delivered 15 full flight simulators compared to 20 last year. This primarily affects lower demand for commercial and business training and simulator deliveries versus the same period last year. In Defense, revenue increased 14% year-over-year to CAD 534.9 million, while Adjusted Segment Operating Income increased 38% to CAD 54 million, delivering a 10.1% margin, which marks the first time in over 6 years the Defense margin has been at or above 10%. This performance was driven by higher activity and profitability on new higher-margin program awards and the ramp-up of recently awarded contracts in the U.S. and Canada, reflecting a more favorable mix of products. Defense Adjusted Segment Operating Income this quarter includes CAD 2.4 million of transformation-related expenses, which impacted the adjusted segment operating income margin by approximately 40 basis points. With that, I will turn the call over to Matt. Thanks, Tino. Before turning to the outlook, I want to highlight a few recent developments that underscore momentum across both civil and defense segments. In defense, we continue to see strong demand across allied markets, supported by this multigenerational increase in defense spending. Our defense and security segment has unique capabilities and global reach. We operate through strong, locally rooted businesses in the United States, in Canada, and across key international markets, and this allows us to serve sovereign customers with credibility, proximity, and trust. That combination of global scale and local presence positions us to capture international opportunities. A good example is our partnership agreement with Saab, announced in November on the GlobalEye Airborne Early Warning platform. Saab is a well-established global aerospace and defense company serving government customers across many markets. Our agreement on GlobalEye underscores how leading OEMs and airframers view CAE as best-in-class at what we do, as a critical enabler to the effectiveness and competitiveness of their platforms. For Saab, CAE's training and simulation capabilities enhance the operational value of the platform and strengthen its appeal to sovereign customers and operators. Programs like GlobalEye illustrate how CAE partners with leading OEMs to deliver long-tenured integrated training solutions. On GlobalEye, CAE is uniquely positioned to provide integrated training that combines the cockpit, front-end flight training with back-end mission systems training. We do so by leveraging CAE's ability to integrate simulation, mission rehearsal, and system engineering across the full operational lifecycle and across the entire platform. Combined with our global footprint, this enables CAE to deliver scalable training franchises deployable across allied markets. Looking ahead, CAE expects to benefit from Canada's defense spending as international platforms are selected in partnership with leading OEMs across air, maritime, and multi-domain environments. Beyond Saab, CAE works with a broad set of partners, including Lockheed Martin, General Atomics, Leonardo, Airbus, and many others. These partnerships are expected to support CAE's role as a long-term provider of mission-critical training, simulation, and mission rehearsal capabilities to sovereign customers. We intend to continue broadening our relationship with key strategic partners over the next few years. Also, during the quarter, we announced our selection to deliver Australia's Future Air Mission Training System, a highly significant and competitively awarded program for CAE. This award is another example of CAE's differentiation in large, complex, integrated flight training programs, where we bring together simulation, training, and mission rehearsal into a single integrated training ecosystem. With an initial 10-year period of performance and a value of more than $270 million, this contract positions CAE shoulder to shoulder with the Australian Defence Force. It represents a meaningful step forward in advancing next-generation air mission training capabilities for Australia. More broadly, this award underscores an important characteristic of integrated flight training programs. They are not transactional in nature. They provide long-term visibility, deep customer relationships, and establish scalable platforms that expand as customer needs and operational concepts evolve. These programs are supported by dedicated CAE teams, many of whom will spend the majority of their careers working on the same tenured program, working side by side with uniformed personnel.... The Australian Future Air Mission Training program, and as another example, the Canadian Future Aircr ew Training program, or FAcT, are just two of many opportunities and examples where CAE can provide the front-end and the back-end training solution. These are infrastructure-like businesses that leverage all of our capabilities to benefit the warfighter. Now turning to civil. In Civil, we had a highly successful Singapore Airshow, where we signed eight agreements for more than $160 million, and that reflects CAE's position as a long-term training partner across civil aviation. Taken together, these announcements underscore the durability of our customer relationships, the relevance of our global training network, and our ability to support operators across regions, aircraft types, and business models. While we continue to lead the industry in today's training requirements, we are also looking to the future. Over the past quarter, we announced that our training solutions have been selected by two of the pioneering companies in advanced air mobility or eVTOL emerging space. We are proud to be selected by Joby Aviation and Embraer Eve Air Mobility. We are partnering with Joby and Eve to enable an entry into service underpinned by CAE's track record of innovation, integration, and certification. CAE has a long history of industry firsts, and this emerging aviation segment is just another proof point. Joby and Eve have put their confidence in CAE to help establish the training standards for this new category of aircraft. It's my observation that while these companies are focused on developing cutting-edge and disruptive aircraft technologies, they want to leverage our experience and our footprint in end-to-end training. CAE has fielded more than 220 aircraft platforms, as I mentioned before, and operates in every corner of the globe, more than any other provider. Once again, our Prodigy Image Generator is a key differentiator. It allows us to deliver high-fidelity visualization required for complex, low-altitude operations in urban environments, where situational awareness and accurate visual clues are critical. Taken together, these developments reflect our focus on maintaining our customer-centric relationship with existing operators, while also providing, developing new partnerships to ensure CAE continues to lead in the evolving markets. We'll continue to do so where we can differentiate through our intellectual property, our global infrastructure, and our standards. As we do this, we'll maintain focus on the heightened financial expectations that we have set for the entire organization. Now, looking ahead to the balance of the year. CAE's business portfolio is becoming more balanced, and for the year, on a consolidated basis, near-term softness in the civil segment and strength in the defense segment largely offset each other, leaving us in the range of where we expected to be overall. We still expect the fourth quarter to be our strongest of the year in civil. However, our outlook for the year has softened, with mid-single-digit% decline in annual adjusted segment operating income compared to last year. Overall, we expect an annual Civil Adjusted Segment Operating Income margin in the 20% range. This change is driven by three factors: softer-than-expected market conditions, US dollar translation impacts, and the rationalization of our commercial simulator network. The network actions are being accelerated to align capacity with current and expected demand and are intended to prove utilization, returns, and resilience over time. In parallel, we are reinforcing a more disciplined operating and commercial culture, supported by strengthened processes and a more structured go-to-market approach, including the use of a balanced scorecard for capital allocation and commercial decisions. We are prioritizing opportunities that meet our return thresholds and capital objectives while maintaining our leading market position, and as a result, some previously forecasted full-flight simulator orders and deliveries have shifted to the right. While our near-term outlook reflects the factors we've discussed, the long-term fundamentals in the aviation market remain strong. Boeing and Airbus each have backlogs that extend roughly a decade at current production rates, and when combined with other major OEMs, the global commercial aircraft backlog totals approximately 17,000 aircraft, providing multi-year visibility for the industry. Business jet OEMs similarly report healthy backlogs, representing several years of deliveries, and activity in the fractional ownership market continues to strengthen. These fundamentals reinforce our confidence and our bullish view on the secular outlook for aviation. In defense, our performance year to date has been stronger than we expected. We now expect the Defense Adjusted Segment Operating income to grow by more than 20% year-over-year compared to the low double-digit percentage growth we previously guided. We expect the annual adjusted segment operating income margin for defense to be approximately 8.5%. Defense budgets allocate substantial and growing resources to training, simulation, and mission rehearsal, areas where CAE has long-standing capabilities and competitive positioning. While not all this spend is directly addressable, it highlights the size and strategic relevance of the opportunity in front of CAE. Given the geopolitical environment and this multigenerational commitment to increase spending across NATO and allied countries, defense spending will grow at a much faster rate in the future than we've seen historically. Canada's commitment to spend CAD 82 billion in defense over the next 5 years, with a long-term ambition to reach roughly 5% of GDP by 2035, are very important tailwinds for CAE. These commitments will last for decades. For CAE, this is an opportunity. With our capabilities aligned to training, simulation, and mission rehearsal, where a meaningful portion of defense spending flows, and a sovereign credible footprint across many allied markets, we're uniquely positioned... With our strong Montreal-based engineering and manufacturing facility, we're uniquely positioned. With our worldwide footprint, we're uniquely positioned, and with our industry-leading capabilities and technology, we're uniquely positioned. Now, let me pivot and talk about the transformation plan. Before I get started, this is not a sprint, it's not a luge run, it's more of a marathon. It's gonna take time, but we've been training and we're getting ready, and we're gonna start moving quickly forward. This quarter reflects progress in the planning and evaluation phase of the transformation plan. As I mentioned earlier, we're already seeing benefits in our cash flow and leverage ratio. These benefits are a direct result of the team's focus on a sharpened portfolio, improved capital discipline, and our performance-driven operating model. In particular, we have launched a process to explore strategic alternatives for non-core assets. We've commenced rationalizing our civil training network to right size it for market demand, and we are looking at every aspect of our operating model, starting with a shared service outsourcing initiative launched last week. The work is advancing well, and we expect to have the evaluation phase substantially complete by the time we report year-end results in May. At that point, we'll provide an outlook for next year, together with some specific longer-range targets and a clear articulation of how the transformation plan all comes together to benefit the company. We launched the transformation plan in November and established a transformation program office with dedicated executive leadership. The team is currently managing a range of initiatives, each evaluated based on a balanced scorecard and each aligned to one of our three priorities: portfolio focus, capital discipline, and performance excellence. Our governance cadence is rigorous, with detailed line-by-line status reviews with the entire executive management committee meeting every two weeks. This will ensure execution and results. The plan will leverage our market position, our leading civil network, and our unique technology foundation to transform CAE into a higher-performing business with improved margins, stronger free cash flow, and better returns on investment. Now, let's go into a little bit more detail. First, our portfolio refocusing. We have completed our business and asset review and identified several non-core assets, representing approximately 8% of revenue. For each of these assets, we will explore strategic alternatives. We have already identified several potential transactions, engaged advisors, and will quickly move through our execution phase. Announcements will be made when the strategic direction becomes clear with a suitable strategy, a suitable counterparty, an open market, and of course, with economics and timing that enables value creation for CAE. Second, it's our focus on capital discipline, and that starts with taking a rigorous bottoms-up view of the balance sheet to ensure that every dollar of capital employed is delivering maximum value. This includes aggressively removing non-value-added costs from the business. We are also applying a significantly higher bar for returns and payback periods on all newer projects, new capital projects. These process changes are already yielding benefits as we are reducing our CapEx and R&D forecast, as Tino indicated. However, the most significant near-term opportunity lies in the civil training civil training network. Today, we operate 373 full-flight simulators globally, of which 250 are for commercial airline training. The performance across this network varies meaningfully. Our data shows a clear distribution. We know where every simulator is, and we know how it performs. Clearly, there's an upper tier of strong performers, but a lower tier of underperforming assets and a sizable middle market that may be further optimized. As we assess the underperforming tier, we see significant opportunity to rationalize our commercial airline training capacity. As mentioned, we'll move approximately 10% of deployed commercial airline simulators. As we do this, we'll look at our footprint for other opportunities to relocate devices and improve utilization and returns. As I've mentioned, these actions take time. These actions require us to work through customer contracts and commitments to find suitable alternatives for their training. We also need to work through facility leases and local regulation, so overall execution is expected to take between 12 and 24 months. As we move through this process, some near-term revenue impact is expected. Mitigation plans are in place, and customer focus is at the forefront. In parallel, we see opportunities to unlock additional value by selectively integrating elements of our business aviation and commercial aviation training networks. Where it'll be optimal to combine capabilities and footprint, we will do so. The objective is a training network that is right-sized for the market and its expected growth, supported by a leaner cost structure and a stronger go-to-market execution. Given that the training network represents a material portion of our capital base, these actions are central to driving higher margins, stronger cash flow, and improved returns on capital. We are also conducting a comprehensive view of our R&D portfolio to ensure alignment with strategy and return thresholds. Projects that do not meet the bar will be ended or curtailed, and we expect R&D investment to moderate over time. We are demanding greater rigor and discipline around capital approvals. We revised our corporate policies and procedures, in particular, as it relates to CapEx. These changes tighten the standards under which capital investments are approved. As a result, any material capital decisions elevated to my office, raising the bar in returns, cash flow, and capital efficiency. Finally, we have raised the bar in our bidding and commercial decision-making, applying more rigorous standards that prioritize returns, free cash flow, pricing discipline, and are aligned with our current network strategy. We're being more selective by design, reflecting a clear focus on value creation rather than just volume. Taken together, these changes we are putting in place are more about metrics. They represent a shift in culture. In addition to tightening capital approvals and bid discipline, we are reinforcing execution and accountability day to day. We are increasing ownership for non-working capital with a clear expectation and tighter discipline around inventory management, billing accuracy, and timely collection of receivables, and that leads to performance. We're focusing on embedding the same disciplined, balanced scorecard approach we apply to capital allocation and commercial decisions to everything we do. We're simplifying the organization, tightening accountability, and increasing the operating cadence. We recently signed a global partnership with a world-leading enterprise transformation provider to implement a shared service operations model for selected back-office functions. In the initial phase, we are transitioning approximately 80 finance and HR processes into a modernized global shared service operation. This provides CAE immediate access to best-of-breed processes and GenAI-enabled tools. We expect to deliver meaningful reductions in corporate administrative costs while improving the scalability, execution, and quality over time. Free cash flow is strengthened during the quarter, driven by greater discipline around non-cash working capital. In Civil training, accounts receivable improved steadily, primarily due to reductions in aged receivables and tighter collection practices. Even at this early stage of the transformation, we have reinforced clear ownership and instituted weekly tracking and implemented stronger enforcement mechanisms. As a result, utilization of revolving credit facility declined, contributing to lower interest expense for the quarter. More to come. Looking forward, we're developing a Factory of the Future roadmap, designed to build the simulator of the future and strengthened by our commitment and strengthen our competitive edge. This work is focused on modernizing how we design, how we produce, and how we deliver simulators by improving our production processes, logistics, supply chain, quality, and delivery across the products organization. In parallel, we're laying out the groundwork for a modular open architecture product strategy that allows to build more scalable, upgradable simulators and insert new technologies more efficiently over time. While these initiatives are not yet in execution, they're deliberate elements of our longer-term roadmap and are intended to help CAE outpace competitors through lower complexity, shorter lead times, and a more modern, efficient production model. We are also strengthening accountability by more directly aligning executive compensation with the objectives of the transformation. This work began early in my tenure, with discussions with the board starting roughly six months ago, recognizing that calibrating these changes thoughtfully takes time. You should expect a clearer and more direct linkage between compensation and outcomes. Metrics such as return on capital, free cash flow generation, margins, and earnings per share are expected to feature prominently across both short-term and long-term incentive programs. More importantly, it's not just about senior leadership. Over time, we expect these same performance standards and scorecard-driven priorities to cascade more broadly through the organization, so incentives at multiple levels reinforce the behaviors required to improve returns, strengthen cash generation, and deliver sustainable value creation. To sum up, we are challenging assumptions, we are executing with discipline, and we're maintaining a clear focus on improving returns. The actions we are taking are grounded in data and designed to position CAE for stronger performance over time. We benefit from powerful fundamentals across both end markets. As I've mentioned, in civil aviation, we are positioned for long-term growth in our market, driven by global air travel demand, fleet expansion, and pilot requirements. In defense, we're seeing multigenerational growth supported by sustained increases in defense spending across allied nations, in training, simulation, and mission rehearsal, and that'll play an important part in international readiness. I look forward to sharing the details of our transformation plan, and again, specific longer-term targets and our fiscal 2027 outlook when we report our full year results in May. Thank you. Back over to you, Andrew. Thanks, Matt. Operator? Operator, we'd now be pleased to take questions from financial analysts. Thank you. We'll now begin the question- and- answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please lift the handset before pressing any keys. To withdraw your question, please press star then 2. We reserve the call for analyst questions and to send questions to media@cae.com. Your first question comes from Fadi Chamoun with BMO. Your line is now open. Yeah, good morning. And Matt, I think you'll probably realize for us on this side of this, of the equation, we're not known for patience. So I'm gonna ask you a few question about kind of the longer-term perspective that you're providing today. So, can you kind of help us understand where the goalposts are two, three years down the road? Can the civil business generate solid mid-teen return, lower ROIC return? What is the range of kind of, broadly speaking, ROIC target that you think could be achievable as you undergo all of these, kind of changes over the next 24 months? And a couple of quick follow-ups. Can you share what the revenues of the 25 simulators or 10% of capacity that you intend to retire in the commercial full flight simulator side? And when you look at, I mean, utilization in the low 70, the orders lagging full flight simulators deliveries, can civil grow EBITDA in the next 12 months, or this is gonna be with the disruption that you're doing in the short term is going to be a bit of a off year, basically, as we get to the other side of this transformation. A lot there, but any good color you can share would be great. Good morning, Fadi, and thanks for, well, all the questions. Let me try and take them one by one. First, from a longer-term perspective, we're still looking at how each one of these initiatives will impact the portfolio, and that takes time, and we want to be cautious so that we don't over or under commit to you and the other analysts. However, I go back to the longer-term fundamentals of our industry. On the civil side, and this is what matters, the industry grows at 4%-5% every year over the long term. There are disruptions, there are geopolitical disruptions, there are supply chain challenges. We've seen it before, and we'll see it again. But if you step back from an annual disruption, that's the long-term trajectory of the civil market, and we see CAE play a unique role. We're the world leader in full-flight sim production, development, deployment, and we have the largest independent training network in the world. So long term, those fundamentals are strong and will continue. And on the defense side, which I think is unique, we see the same outlook. For the first time in my career, we see 4%-5% of long-term outlook in defense as well, and we're uniquely positioned to capitalize on it. You asked, secondly, about how returns will evolve over time. Give us some time to look at it. It's a complex set of equations, and we have to look at each asset, we have to look at each strategy, and we have to make sure that we understand the impact. But I will answer your question about utilization and what the reduction in the civil training network would do. If, and let me emphasize this, Fadi, if I could take out all those sims immediately, and I can't, remember I said it'll take anywhere from 12-24 months to do it, and if I retain all the customer volume that's in there, and that is our intention, but that requires a lot of negotiations, then civil utilization would go up to 75%, 400 basis points. Now, I can't take them out overnight, and I need to work on retaining it, but that's the impact on utilization. So when you look at those assets, the 25 simulators, they're clearly the underutilized, underperforming assets to our network, but they consume resources. They consume capital, they consume real estate, and they consume inventory. And so by doing this, we'll strengthen the focus of the network, and then we'll attempt to better utilize, better sweat the other assets to improve utilization and focus. And remember, it's not just about utilization, it's about the contract. We have a variety of different contractual mechanisms, and so you need to look at the profitability and the revenue that comes out of it. All that's in front of us. So Fadi, thanks for the question. Thank you. Your next question comes from Krista Friesen with CIBC. Your line is now open. Hi, thanks for taking my question. Maybe just to follow up on the last one there, have you started to have these conversations with your civil customers in terms of rationalizing the network? And how have those been going, and do they seem amicable to the consolidation or some of these changes? Yeah, it's a great question. Thank you for asking it. We have started the conversations, and each one requires a tailored approach. I remind you, when we built the network, every full flight simulator in the training center was built for a reason. And over years, operating strategies, airline strategies, demand for travel changes, and so taking a pause in the network and looking at it is a rational, appropriate thing to do. If we step back from individual conversations, what we're really doing is sizing the network for today's demand. We overbuilt the network. It's too large for the demand that we see today, and so we're going to reduce the size of the network to accommodate today's demand and the expected growth we see. Now, each one of those conversations with airlines requires time and patience. We're a very customer-centric organization, and initial conversations are positive, but we have more work to do. Thanks for the question. Thanks. And if I can just ask a follow-up, it sounds like as 2027 will, will be a noisy year, just as you go through some of these transformations. But, how are you thinking about free cash flow for 2027? Is, is there an opportunity there just as CapEx starts to come down? Yeah. Let me turn that over to Tino. Yep. Thank you, Matt. So definitely, our focus will be continued strong free cash flow generation. I'm really proud of what we delivered in the quarter, and we're maintaining that focus, highlighting some of the things that Matt said: focus on inventory management, payables management, focus on collections of ARs. It really will be continued discipline, and we are committed and expecting to generate strong free cash flows in the future and continue to be below the 2.5x net debt to Adjusted EBITDA leverage on a continued basis. And thanks, Tino. Let me just add, as we generate strong free cash flow and potentially proceeds from some of the portfolio actions that we're taking, the first initiative will be to invest and fund the transformation. A strong balance sheet and strong cash flow will allow us to put those, those resources to work. Each one has a business case, each one has to meet our expected return thresholds, but that's priority one. Obviously, second priority is to make sure we continue to deleverage, and that'll take some time. And after that, when we have the luxury to do so, we'll revisit what to do with the free cash flow. Thanks. I appreciate the color. I'll leave it there. Your next question comes from Konark Gupta with Scotiabank. Your line is now open. Good morning, yeah. Matt, I wanted to dig into the nature of the assets that you identified, the non-core assets, 8% of revenue. Like, is it safe to presume that most of these assets, maybe all, are in the civil segment, or are they in defense as well? And, I mean, when these assets come out of the system, have you identified, you know, how much of the margin drag these were causing, and, what can we expect, post-divestitures? Yeah, thank you for the question. So there are assets, businesses in both the civil and defense side, to be clear, and these are good businesses. These are really good businesses. But as we look at where we do well and where we want to focus our resources, these businesses will do better with another owner, and so that's what we're focused on. And each individual asset business requires us, again, as I mentioned in my comments, to have the right counterparty, the right strategy, and the right economics for CAE. And so we'll give you more details on each one as we get more confidence in the future state. Thanks for the question. I appreciate that. And if I can follow up, I think you mentioned about real estate a few times in the past. With the simulator rationalization and these non-core asset sales, are you taking out some of your real estate portfolio as well? I mean, whether it's leased or owned. Yeah, I appreciate the question. We're looking at it, and the intention is to do that. We have a very large real estate portfolio, but as I mentioned also, we have to look at leases, we have to look at the bay space where the simulators go and see what the opportunities are. And that'll be more of the detail that'll come out in subsequent quarters. But absolutely, we want to look at the real estate portfolio as well as the asset base. Okay, thank you. Your next question comes from Cameron Doerksen with National Bank. Your line is now open. Yes, thanks. Good morning. Maybe a question on, I guess, the market outlook. Obviously, civil continues to be a little bit of a challenge for yourselves. I just wondering if there's, I guess, any light at the end of the tunnel here? I mean, are there, I guess, any indications that you see on the horizon that maybe some of the civil aviation training demand might pick up, or is it kind of, you know, the same as what we've seen in the last couple of quarters? Yeah, I appreciate the question, and I've spent a significant amount of time with the team looking at the civil market. I think we over-indexed ourselves looking at specific metrics. I think if you step back, you have to look at the entire market, aircraft deliveries, grounding, supply chain issues, air traffic control disruptions. It's a complex web of metrics, and we all look at it. From my perspective, this is the market. We're sitting in it. We're not trying to reach some destination. This is the market. And as I mentioned earlier, we overbuilt the network, so we're going to resize the network for the market demand we have today, and that position is well for the future. And as I mentioned, just a couple of moments ago, as we resize the network and stabilize ourselves for the growth, the market will grow long-term at 4%-5%. It has for the past 20 years, it will for the next 20 years. But I'm not in a position to predict exactly what next quarter will look like. The demand that we're seeing today is softer than we expected, but this is the market, and we expect to size everything around it. So I appreciate the question. Okay, that's great. And maybe just a quick follow-up on the, I guess, the divestitures. I mean, have you actually had early conversations with any potential buyers of some of these businesses? Just trying to get a handle on what the timing of, of a sale, you know, of some of these businesses might be. Is this- I mean, is this something that could happen in the next 12 months? Yeah, I, I appreciate the question. I've run portfolio transformations before, and we have a very experienced team. You have to move slowly through this process, and you have to move cautiously through the process to make sure you get everything ready. So it's 18-24 months is typically what these transformations take, and we're not going to rush it, and so it's too early to talk about buyer interest or discussions or any of those details. But again, as each individual business gets more mature in its own process, we'll start to make those announcements when we're ready. Okay, fair enough. Thanks very much. Your next question comes from Kristine Liwag with Morgan Stanley. Your line is now open. Good morning, everyone. Just wanted to follow up on defense. You know, margins were pretty good in the quarter, and so I was wondering, is this a function of the low-performing contracts finally rolling off? Are there any left, or what, did you have a particular gain on sale or, or sorry, incremental benefit from a more profitable contract? So a little bit more details on what's happening in the defense margin would be great. Yeah, look, I appreciate the question. It's a combination of things. It is good focus on existing programs, and going forward, we're going to talk about growth, we're going to talk about margin expansion. There's still some of the legacy programs left to wind down, but I'm confident that the team continues to maintain its focus on execution. In addition, it's been really good focus on cost controls inside the defense business, and that is also helping performance. The defense business has an infrastructure and a cost base, just like the civil business, and focusing on those cost controls is paying dividends. In addition to that, as we look forward, we're going to try and sign contracts that will have margin accretion opportunities, and we've talked about that before. These things are all combining. But in this particular quarter, we had a contract mix that provided some tailwind that we don't expect to reoccur, and that's why we provided guidance for the year that's going to be 8.5% margin. That's solid improvement, and that's not a stopping point. That is a pause in the journey of driving this business to where I expect to achieve, which is like any other strong defense business, between 10%-11%, we'll provide that guidance at the end of the year on how long it'll take to get there. But don't view this quarter as where we are yet, just view it as a combination of those three factors. So I appreciate the question. Great. Thank you, and if I could follow up, Matt, your background's, you know, from U.S. defense companies. When you look at CAE's defense portfolio and you assess its strengths, it is the largest training defense company in the world. How do you assess its strength? What do you think its role is? And when you start looking at, you know, potential $1.5 trillion U.S. budget, the Europeans are spending a lot on defense, too, where do you think CAE fits in that broader picture? Yeah, it's a great question, so let me answer it from a few dimensions. First, when defense money is spent, anywhere from 7-10 cents out of every dollar is related to simulation, training, and mission rehearsal. That money comes out of both procurement dollars and operational maintenance dollars, so that puts us in a fantastic position. Not all of that is addressable to us, because often training is done organically, meaning by the defense departments, but a lot of it will be available to us. Secondly, we have a very large international footprint. That's unique. There are many defense companies that wish they had the international presence we do, in terms of facilities and teams on the ground working side by side, and they have strong relationships. Just a couple of weeks ago, I was in Germany at our Stolberg facility, celebrating its sixty-fifth anniversary, working side by side with the German Air Force. That is a fantastic facility, and that creates fantastic relationships and puts us in a fantastic position. So I think we're, we're well positioned geographically to capture the opportunities you've talked about, and as I mentioned earlier, we're unique in the industry that we have 220 different platforms that we've developed over time. That's a combination of civil and defense. So when someone comes to us and wants to develop a new simulation system, a new mission training center, we're uniquely positioned to do that. We know more about hardware and software integration, how to combine front-end and back-end training, and how to have the best, you know, final output. That uniquely positions us as well. We do one thing: we do training, simulation, and mission rehearsal. And then finally, our ability to do programs like FAcT and the Australian program I mentioned, it's an end-to-end training solution. So we bring our training centers, our training simulation capability, we train integrated flight training, flight ops, we train, we bring courseware. And taking the requirements to train a warfighter, to train a pilot, it's complex. We know how to decompose those, we know how to execute them, and we do it better than anyone else. Thanks for the question. Thank you very much. Your next question comes from James McGarragle with RBC. Your line is now open. Hey, thanks for having me on. Yeah, so I just wanted to follow up on one of the comments in the prepared remarks. Obviously, you know, you're looking for higher return, higher margin type of business. You know, so, you know, well, on one hand, being more selective is gonna help you get higher returns, you know, higher margins. But, you know, how do you also think about being more selective while, you know, driving absolute levels of free cash flow growth and kind of capitalizing on, you know, all the secular opportunity available to you? Yeah. Could you, sorry, repeat the question? I didn't quite follow. I apologize. Yeah, no, no, no worries. So just in the prepared remarks you mentioned, you know, you're looking at higher return and higher margin type of business. You know, so, you know, obviously being more selective is gonna help you get higher returns and, you know, higher margins. But just how do you look at being more selective, you know, while also driving higher absolute levels of free cash flow growth and kind of capitalizing on the secular opportunity available to you? Okay. Yeah, thanks for the question. I think I follow where you're going. First, being more selective in our capital decisions obviously means we'll spend less of our free cash flow on future capital deployments. That's the first step, and we'll make decisions based on a more balanced scorecard. We will try to ensure that every asset meets a higher set of return thresholds, and that's gonna reduce CapEx, and that's gonna improve cash flow. Secondly, we're doing the same thing in our research and development portfolio. I mentioned we're doing a bottoms-up review of every project. We have a significant number of research and development projects, too many, and so we're gonna look at the ones that we're executing, and if they're core strategic, we'll maintain it, but focus on disciplined execution. If they're not, we'll curtail them or wind them down, and then going forward, we'll be more selective about where we spend money on research and development. That'll improve our free cash flow. And then finally, in a big part, it's about solid, sustained performance execution, ensuring that we write the right contracts, that we collect quickly, and that we focus the entire team on free cash flow. That includes inventory management as well. That's new focus for the company. It's not an overnight change, but as I indicated, we're already seeing the benefits of focus on accounts receivable collections, and there's more to come. So everything across the transformation plan will improve our free cash flow. Thanks for the question. And then just a quick follow-up, you know, how are you thinking about your ability to pass on higher pricing? You know, is there any flexibility to drive higher pricing, with your customers in long-term partnerships? Just trying to understand how quickly, you can use price as a driver of, better returns across your customer set. Yeah, I, I appreciate the question. I've been asked this question a lot. We don't operate with a catalog. We don't operate out of a storefront. We negotiate agreements with airlines, and they're sophisticated, very important customers. What matters to, to me and the team is that we get the right value for what we provide, whether it's a full flight simulator or a training center, and that they get the right value out of what they buy. We have long-term agreements and lots of joint ventures and so it's not a catalog, it's not a storefront, but focusing on gaining value for what we provide and making sure we make the right decisions going forward, that's front and center. Thank you. Your next question comes from Benoit Poirier with Desjardins Capital Markets. Your line is now open. Yes, thank you very much. Matt, could you maybe talk about the opportunity to improve pricing through a dynamic approach, but also about the opportunity to leverage synergies between civil and defense? I'm just curious to know where you are in this journey. Thanks. Okay, I appreciate the question. As I mentioned earlier, you know, pricing with sophisticated airline customers is a complex endeavor. It's not a catalog, it's not a shared app of some nature. It's how we create relationships that go many, many years. And so we'll look at providing, as I said previously, the right value to the customers and ensuring that we get the right value back for what we provide. That's what we're going to focus on. When you think about utilization, our focus is to improve it. We want to sweat those assets, we want to harvest them, we want to improve utilization, and that'll improve everything about the business. It'll improve our return on invested capital, it's going to improve the utilization of the assets, it's going to improve free cash flow, and there are a variety of tools that we'll explore in doing it. So sorry, can you repeat the second part? Oh, the question was defense and civil. Yeah. Right. So on defense, yeah, on defense and civil, we already have many opportunities to work closely together. As I mentioned in remarks, the core of our engineering capability and our manufacturing capability is here in Montreal, and that's important because we leverage this large infrastructure, which has higher civil volume than defense volume, to reduce the cost and improve the efficiency of delivering defense products. And on the other side, we leverage defense product development, which is often several years ahead of where the civil market needs, to improve the technology that sits in our portfolio. The hardware-software integration, the system engineering, in some cases, the image generation required for military products can be several years ahead of where we need it for civil products, and we've done that in the past. What we want to do is do more of that. We want to leverage the demanding nature of defense products, simulation, training, mission rehearsal, Live Virtual Constructive environments. We want to leverage all that development and use it to benefit the civil side of our business, and we want to leverage our civil infrastructure, supply chain, factory, to improve the cost effectiveness of the defense solution. I do firmly believe in having a balanced business, and I think they work well together. A lot of that opportunity is in front of us, and we're focused on, on unlocking it, but it's a great question, and thank you for it. Okay, and maybe just a quick follow-up on the balance sheet. You ended the quarter with a strong leverage ratio of 2.3x ahead of the plan. You mentioned the desire to reinvest, put the those resources to work, you need to deliver. But with the upcoming strong free cash flow, it looks like you'll be in a position to discuss about capital deployment opportunity, not far away. So any thoughts about where do you see an optimal leverage ratio for this type of business and your maybe the preferred avenues when it comes to capital deployment to shareholders? Yeah, let me have Tino first answer it, and then I may add a couple of comments. Tino, please. Thank you, Matt. Thank you very much for the questions. So definitely, the expectation is that we do maintain the leverage ratio to be below 2.5x, and we do want to continue to reduce debt and, of course, reduce the interest costs. So that, that'll be very much a focus on our side. I think Matt said it earlier, right? We want to deliver, continue to deliver strong free cash flow. The cash generation will help us position ourselves for the future, right? We want to continue and operationalize the transformation costs, transformation plan, and the costs associated with that. So we are looking at that. We're looking at being below 2.5x and maintaining that. That's our expectations, and we'll continue that focus. But really, it goes back to a disciplined approach, both to, you know, non-cash working capital, CapEx, raising the bar, and making sure that the decisions that we make meet that balanced scorecard approach. I'll- Yeah, and I'll just add, I'd ask everyone internally, externally, to allow us to get a few quarters under our belt. It wasn't too many quarters ago, and we had a lot of pressure in this company because of our balance sheet. So we want to ensure we have sustained, repeatable processes, we want to fund the transformation plan, we want to focus on the right investments when they matter, and, and go forward. So it's great that we all see we're in this inflection point, but let's ensure that we continue to execute and build sustainable cash flow generation for the future. Thank you very much. Your next question comes from Sheila Kahyaoglu with Jefferies. Your line is now open. Good morning, guys, and, congrats on all the things you have going on. It looks like you're going to make a lot of progress. Maybe just on the pilot hiring, in the U.S. at least, it looks like it's rebounding a little bit towards the end of 2025 after a pretty dismal summer. So, you know, but it still seems like conditions are pretty soft within the civil business. How much of that softness is coming from commercial versus business aviation customers? Thanks, Sheila. Appreciate the compliment, and I appreciate the question. I think, as I mentioned earlier, we over-indexed on pilot hiring. We need to step back and look at the overall industry. There are many ratios and metrics that we can look at: aircraft deliveries, aircraft grounding, pilot hiring, crew ratios. There are many factors, bankruptcies and incidents around the world; it's a global industry. As I look today at the softness, it's more on the commercial side than on the business side, but the markets are tied together. The demand for pilots on the commercial side affects directly the demand for pilots on the business side and the demand for new pilot training. It's a combined ecosystem as people progress up through the aircraft types. So as I said earlier, this is the market. This is where we are. We're gonna size our deliveries, and we're gonna size our network for the market, and we're gonna make sure that we're ready to capture the opportunities as the growth occurs. It's almost like, you know, we're-- I hate to use a bad analogy, but it's like on the Wizard of Oz, and we're on the Yellow Brick Road, and we think there's something out there. No, we're there. This is the market. We want to position the network, we want to position our factory, we want to position our customers so that we can grow together. And that's where I step back from a quarter-over-quarter point and say, if you look at this market, it's gonna grow at 4%-5% a year. We're the market leader in full-flight sims, and we have the largest training network. We just got to size it for where we are today. Thanks, Sheila. Got it. If I could ask a follow-up to Christine's question on defense margins, but I understand this is the new baseline we should be working off of with the problematic contracts fully rolled off. I guess from here, how do we think about timing of new contracts anniversaring and resizing, you know, repricing the portfolio? Yeah, let me, let me clarify. I, I didn't say, or I didn't mean to say that we've rolled off the old contracts. We're still in execution, there's time in front of us. What I want to emphasize is that the team is focused on program management, program execution, ensuring that we control costs, as we've been doing for the past couple of years, we'll continue doing it forward. When we look forward, we want to embark and sign contracts that will be value accretive to the business, that have high return thresholds, higher margins, and higher cash flow. That takes time. I've been doing this for a long time, and defense dollars take many years to be awarded, and even when they're awarded, it takes many years to flow to contractors. So Q3 is not a new baseline. As I indicated, we plan to end the year at about 8.5% margin, and our focus is on steady, continued margin expansion in the defense business, which is gonna be based on executing these legacy contracts, focusing on the new contracts, and more importantly, controlling costs, because that's within our control and our timing. And so that'll be more of the guidance we provide at the end of the year. Yes. Thank you. Once again, if you have a question, please press star, then one. Your next question comes from Anthony Valentini with Goldman Sachs. Your line is now open. Hey, guys. Thanks for the question. Matt, just to stick on the defense margin conversation for a second, you know better than anybody else that the international margins for the defense primes are typically, you know, significantly higher than domestic work. And you pointed to the fact that you guys have higher mix to international, which is, you know, exciting, obviously, on the growth side, given everything that's happening. But I guess I'm curious if, you know, there's something structural that will limit you guys in having, you know, higher mix to this higher international, you know, margin, and therefore, you guys can achieve margins higher than the defense primes. Or, if it's the right way to think about it, that that mix to international, you know, means that the margin potential is actually better than what the defense primes achieve, given they're only, you know, 80% or 90% domestic. Yeah, I appreciate the question. When you're looking at defense markets, yes, generally, international margins can be higher, but there's other factors to consider. You have to consider the award channel. Is it a Foreign Military Sale award channel, or is it a Direct Commercial Sale channel? You have to consider the product. When we sell our commercial products to the defense world, and we do, we sell many commercial full flight sims in the defense world because they're used by defense players, they come with commercial margins, but where we sell bespoke defense products, that's different. We also have development work versus production work, so I don't think you can generalize and say defense margins are significantly higher, to use your term, they're not. What we want to do is develop the right mix and the right contract portfolio, and that's where we're gonna focus going forward. It comes back to, as we continue to improve our overall defense margins, we're gonna provide guidance on how we see it increasing. I don't think it'll be an overnight change in defense margins. It's gonna be methodical, controlled improvement in our performance, based on everything I mentioned. Okay, that's incredibly helpful. Maybe on the quickly on the civil side, I think, you know, obviously, you have no control over what's happened historically, but a few years back, there was an initiative to consolidate some facilities and some simulators. And I know that's been a huge part of, you know, your transformation strategy, and you guys are talking more about that today, and it sounds like, you know, it's going to become more efficient. But how do investors get confidence around this not being something that is, like, cyclical, a part of this business, that will need to happen every few years, and get comfortable that, like, you know, this is the last time that they're gonna have to go through this type of thing? Like, is there anything that you guys have learned as you were going through and identifying, that you think, you know, you can make this kind of, be the last time? Yeah, I appreciate the question. I, I can't focus or comment on what happened previously, but I can tell you what we're doing today. What we're doing today is sizing the market for today's demand. That's important. What we're doing today is we're gonna be disciplined about putting new sims in place. It's gonna reduce our CapEx, it's gonna reduce the growth of the network, and we're gonna, we're gonna sweat the assets, we're gonna utilize them. That requires a completely different operating model, a different cadence, and different KPIs, and all that is being deployed. And so the final thing I'll say is, that's why we increase the threshold for capital approvals, to make sure that I see them, so we can control the outflow. There's many elements to how we're gonna control and monitor this, and that's the elements that we put in place that we've talked about. I'm not gonna speak to the past, I'm gonna tell you where we are and where we're going, and we're gonna control it. We're gonna be disciplined. Understood. Thanks so much, Matt. I appreciate it. Operator, I see we- Conclude the question and answer session. Yes, thank you, operator. I see we've overrun here a bit. I want to thank all of the participants today for joining us and for their questions. I'll remind you that later today, a transcript of today's call, including the Q&A session, will be made available on CAE's website. Thanks very much. Have a good day. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.