CAE reports third quarter fiscal 2024 results
- Strong revenue growth of 13% year-over-year.
- Decline in EPS from continuing operations.
- Operating income decreased by 14% compared to the prior year.
- Adjusted order intake of $1.3 billion with an $11.7 billion backlog.
- Positive outlook for Civil segment growth and Defense transformation.
- Focus on margin improvement and strategic growth objectives.
- Recognition for sustainability and governance practices.
- Commitment to shareholder returns and future investments.
- Decrease in net income attributable to equity holders by 28%.
- Negative impact of Legacy Contracts on Defense segment profitability.
- Net loss from discontinued operations due to transaction costs.
- Decline in free cash flow compared to the previous year.
- Reduction in adjusted segment operating income for Defense.
Insights
The reported results show an increase in revenue by 13% year-over-year, which indicates a positive trend in sales and market demand. However, the decline in earnings per share (EPS) from $0.24 to $0.18 and the decrease in operating income from $142.1 million to $121.6 million suggest that the company is facing higher costs or inefficiencies that are impacting profitability. The net debt-to-adjusted EBITDA ratio has slightly improved from 3.25x to 3.16x, indicating a better leverage position, but it remains above the typical comfort level of 2.0x - 3.0x for many firms. The adjusted backlog of $11.7 billion is a critical figure, as it represents future revenue potential, but the company must manage this effectively to improve margins and bottom-line results.
CAE's Civil Aviation segment shows a robust book-to-sales ratio of 1.36, indicating strong demand for its products and services. The 20% increase in Civil Aviation revenue and the 44% increase in full-flight simulator (FFS) deliveries are significant, as they demonstrate CAE's ability to capitalize on the growing aviation market. The Defense segment's revenue increase is modest at 4% and the adjusted segment operating income declined by 18%, reflecting the challenges mentioned regarding legacy contracts. The backlog in Defense is also growing, which could signal future revenue growth if managed properly. CAE's focus on ESG initiatives is likely to enhance its brand reputation and could attract investors who prioritize sustainable and ethical business practices.
CAE's disclosure of the impact of legacy Defense contracts on profitability is crucial for investor transparency. The discussion around these contracts and their expected retirement over the next 6 to 8 quarters provides an outlook that may affect investor sentiment. The company's proactive approach to managing these contracts and mitigating associated risks is a positive sign of strong corporate governance. Additionally, CAE's restructuring and integration costs related to the acquisition of Sabre's AirCentre airline operations portfolio highlight the legal and financial complexities inherent in such transactions. The costs are expected to decrease by the first half of fiscal 2025, which could have a favorable impact on future profitability.
- Revenue of
$1,094.5 million $969.9 million - Earnings per share (EPS) from continuing operations of
$0.18 $0.24 - Adjusted EPS(1) of
$0.24 $0.27 - Operating income of
$121.6 million $142.1 million - Adjusted segment operating income(1) of
$145.1 million $156.8 million - Adjusted order intake(1) of
$1,273.9 million $11.7 billion - Net debt-to-adjusted EBITDA(1) of 3.16x vs. 3.25x at the end of the preceding quarter
- Comparative figures have been reclassified to reflect discontinued operations
Operating income this quarter was
Summary of consolidated results | ||||||
(amounts in millions, except per share amounts) | Q3-2024 | Q3-2023 | Variance % | |||
Revenue | $ | 1,094.5 | $ | 969.9 | 13 % | |
Operating income | $ | 121.6 | $ | 142.1 | (14 %) | |
Adjusted segment operating income(1) | $ | 145.1 | $ | 156.8 | (7 %) | |
As a % of revenue(1) | % | 13.3 | % | 16.2 | ||
Net income attributable to equity holders of the Company | $ | 56.5 | $ | 78.1 | (28 %) | |
Earnings per share (EPS) from continuing operations | $ | 0.18 | $ | 0.24 | (25 %) | |
EPS from discontinued operations | $ | (0.01) | $ | 0.01 | (200 %) | |
Adjusted EPS(1) | $ | 0.24 | $ | 0.27 | (11 %) | |
Adjusted order intake(1) | $ | 1,273.9 | $ | 1,189.7 | 7 % | |
Adjusted backlog(1) | $ | 11,746.3 | $ | 10,795.1 | 9 % | |
(1) This press release includes non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. Refer to the Non-IFRS and other financial measures section of this press release for the definitions and a reconciliation of these measures to the most directly comparable measure under IFRS. |
"Our performance in the third quarter reflects strong underlying demand for our Civil market solutions, and points to the ongoing progress to transform our Defense business. We also generated strong free cash flow, enabling us to bolster our financial position in line with our leverage targets," said Marc Parent, CAE's President and Chief Executive Officer. "Further securing CAE's future, we booked nearly
As we look to the remainder of the fiscal year, we continue to expect annual Civil adjusted segment operating income growth in the mid- to high-teens percentage range. In Defense, our focus remains on completing the remaining work scope on legacy contracts and as much as possible, accelerating risk retirements in the fourth quarter and into fiscal 2025. We expect to close the sale of our Healthcare business before the end of the fiscal year, subject to closing conditions, including customary regulatory approvals. This is a milestone toward the reinstatement of cash returns to shareholders and the Board is now actively evaluating options in terms of the form, quantum, and timing of such returns."
Civil Aviation (Civil)
Third quarter Civil revenue was
During the quarter, Civil signed training solutions contracts valued at
The Civil book-to-sales ratio(1) was a robust 1.36 times for the quarter and 1.27 times for the last 12 months. The Civil adjusted backlog at the end of the quarter was a record
Summary of Civil Aviation results | ||||||
(amounts in millions) | Q3-2024 | Q3-2023 | Variance % | |||
Revenue | $ | 622.1 | $ | 517.4 | 20 % | |
Operating income | $ | 101.0 | $ | 117.2 | (14 %) | |
Adjusted segment operating income | $ | 124.2 | $ | 131.4 | (5 %) | |
As a % of revenue | % | 20.0 | % | 25.4 | ||
Adjusted order intake | $ | 845.4 | $ | 713.0 | 19 % | |
Adjusted backlog | $ | 6,119.8 | $ | 5,647.6 | 8 % | |
Supplementary non-financial information | ||||||
Simulator equivalent unit | 275 | 263 | 5 % | |||
FFSs in CAE's network | 336 | 323 | 4 % | |||
FFS deliveries | 13 | 9 | 44 % | |||
Utilization rate | % | 76 | % | 73 | 4 % | |
Defense and Security (Defense)
Third quarter Defense revenue was
Additional information pertaining to Defense Legacy Contracts
Within Defense, there are a number of fixed-price contracts which offer certain potential advantages and efficiencies but can also be negatively impacted by execution difficulties and adverse changes to general economic conditions, including unforeseen supply chain disruptions, inflationary pressures and availability of labour. These risks can result in cost overruns and reduced profit margins or losses. While these risks can often be managed or mitigated, there are eight distinct legacy contracts entered into prior to the COVID-19 pandemic that are firm fixed price in structure, with little to no provision for cost escalation, and that have been more significantly impacted by these risks (the Legacy Contracts). Although they represent only a small fraction of the current business, these contracts have disproportionately impacted overall Defense profitability.
For the third quarter of fiscal 2024, the ongoing execution of Legacy Contracts had a negative impact of approximately two percentage points on the Defense adjusted segment operating income margin.
Management is closely monitoring these Legacy Contracts as a separate group and continues to be highly focused on the execution and the retirement of these Legacy Contracts and mitigating the finite cost pressures associated with them. These Legacy Contracts have completion dates mainly within the Company's next two fiscal years and the risks associated with them will be reduced as they are substantially retired over the next 6 to 8 quarters, with variability in quarterly financial impacts resulting from the timing of program close outs, customer acceptance, and the ability to mitigate associated risks and costs as we continue to execute them.
Defense booked orders for
The Defense book-to-sales ratio was 0.91 times for the quarter and 0.90 times for the last 12 months. The Defense adjusted backlog, including unfunded contract awards and CAE's interest in joint ventures, at the end of the quarter was
Summary of Defense and Security results | ||||||
(amounts in millions) | Q3-2024 | Q3-2023 | Variance % | |||
Revenue | $ | 472.4 | $ | 452.5 | 4 % | |
Operating income | $ | 20.6 | $ | 24.9 | (17 %) | |
Adjusted segment operating income | $ | 20.9 | $ | 25.4 | (18 %) | |
As a % of revenue | % | 4.4 | % | 5.6 | ||
Adjusted order intake | $ | 428.5 | $ | 476.7 | (10 %) | |
Adjusted backlog | $ | 5,626.5 | $ | 5,147.5 | 9 % | |
Additional financial highlights
CAE incurred restructuring, integration and acquisition costs of
Net finance expense this quarter amounted to
Income tax expense this quarter amounted to
Net loss from discontinued operations was
Summary of results from discontinued operations | |||||||
(amounts in millions) | Q3-2024 | Q3-2023 | |||||
Revenue | $ 36.0 | $ 50.4 | |||||
Expenses | 34.3 | 46.6 | |||||
Operating income | $ 1.7 | $ 3.8 | |||||
Transaction costs | 2.2 | — | |||||
Finance expense | 1.1 | 1.1 | |||||
(Loss) earnings before income taxes | $ (1.6) | $ 2.7 | |||||
Income tax expense | 0.3 | 0.6 | |||||
Net (loss) income from discontinued operations | $ (1.9) | $ 2.1 | |||||
Net cash provided by operating activities was
Growth and maintenance capital expenditures(1) totaled
Net debt(1) at the end of the quarter was
Adjusted return on capital employed(1) was
(1) This press release includes non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. Refer to the Non-IFRS and other financial measures section of this press release for the definitions and a reconciliation of these measures to the most directly comparable measure under IFRS. |
Environmental, Social, and Governance (ESG)
During the quarter, CAE continued to demonstrate its commitment to sustainability, diversity, and ethical business practices. The company was honored to be selected as one of
For more information on how CAE supports the aviation industry's decarbonization journey and contributes to a more sustainable future for all, the report can be downloaded at https://www.cae.com/social-responsibility/.
Management outlook
CAE is pursuing a growth strategy to become a bigger, stronger, and more profitable company. Through accretive growth capital deployments and strong execution, its Civil segment, the largest within CAE, continues to experience strong growth momentum. Management has targeted a three-year (FY22-FY25) EPS compound growth rate in the mid
Management has a highly positive view of its growth potential over a multi-year period, underpinned by favourable secular trends across business segments. It expects Civil to continue growing at an above market rate, driven by growth and recovery in air travel, increased penetration of the existing addressable market for training and flight services solutions, and a sustained high level of demand for pilots and pilot training across all segments of civil aviation. In fiscal 2024, driven in large part by an expected strong margin in the fourth quarter, management continues to expect mid-to high-teens percentage range growth in annual adjusted segment operating income. On an annual basis, Management continues to expect the Civil adjusted segment operating income margin to be in the range of fiscal 2023. In addition to growing its share of the aviation training market and expanding its position in digital flight services, Civil expects to maintain its leading share of FFS sales and to deliver approximately 50 FFSs for the year to customers worldwide.
CAE's Defense segment is in the process of a multi-year transformation, which is expected to yield a substantially bigger and more profitable business. Since transforming its scale and capabilities through acquisition in fiscal 2022, Defense has become the world's leading pure-play, platform independent, training and simulation business, providing solutions across all five domains, and has grown its adjusted backlog by over 20 percent. Defense's recent strategic program wins,
For the remainder of fiscal 2024, Defense expects to continue replenishing its adjusted backlog with larger and more profitable contracts and to accelerate the retirement of risks associated with the Legacy Contracts which have been an acute drag on overall Defense profitability. Management is closely monitoring these contracts as a separate group with a dedicated team that continues to be highly focused on the execution and the substantial retirement of these Legacy Contract risks over the next six to eight quarters. Despite our efforts, management notes the potential risk of additional cost overruns, reduced profit margins, or further losses arising from the Legacy Contracts, with variability in quarterly financial impacts resulting from the timing of program close outs, customer acceptance, and Defense's ability to mitigate associated risks and costs. Through backlog replenishment and the Legacy Contract closeouts, the anticipated positive inflection in Defense performance is expected to begin to appear in the second half of the next fiscal year, and will also depend on the duration and magnitude of delays to new programs in the current environment.
Total capital expenditures in fiscal 2024 are expected to be approximately
Management's outlook for fiscal 2024 and the above targets and expectations constitute forward-looking statements within the meaning of applicable securities laws, and are based on a number of assumptions, including in relation to prevailing market conditions, macroeconomic and geopolitical factors, supply chains and labor markets. As the basis of its fiscal 2024 outlook, management assumes no further disruptions to the global economy, air traffic, CAE's operations, and its ability to deliver products and services. Expectations are also subject to a number of risks and uncertainties and based on assumptions about customer receptivity to CAE's training solutions and operational support solutions as well as material assumptions contained in this press release, quarterly Management's Discussion and Analysis (MD&A) and in CAE's fiscal 2023 MD&A, all available on our website (www.cae.com), SEDAR+ (www.SEDARplus.ca) and EDGAR (www.sec.gov). Please see the sections below entitled: "Caution concerning forward-looking statements", "Material assumptions" and "Material risks".
Detailed information
Readers are strongly advised to view a more detailed discussion of our results by segment in the MD&A and CAE's consolidated financial statements for the quarter ended December 31, 2023, which are available on our website (www.cae.com), SEDAR+ (www.SEDARplus.ca) and EDGAR (www.sec.gov). Holders of CAE's securities may also request a printed copy of the Company's consolidated financial statements and MD&A free of charge by contacting Investor Relations (investor.relations@cae.com).
Conference call Q3 FY2024
Marc Parent, CAE President and CEO; Sonya Branco, Executive Vice President, Finance, and CFO; and Andrew Arnovitz, Senior Vice President, Investor Relations and Enterprise Risk Management, will conduct an earnings conference call today at 2:00 p.m. ET. The call is intended for analysts, institutional investors and the media. Participants can listen to the conference by dialing + 1 877 586 3392 or +1 416 981 9024. The conference call will also be audio webcast live at www.cae.com.
At CAE, we equip people in critical roles with the expertise and solutions to create a safer world. As a technology company, we digitalize the physical world, deploying software-based simulation training and critical operations support solutions. Above all else, we empower pilots, cabin crew, airlines, and defence and security forces to perform at their best every day and when the stakes are the highest. Around the globe, we're everywhere customers need us to be with more than 13,000 employees in approximately 250 sites and training locations in over 40 countries. CAE represents more than 75 years of industry firsts–the highest‑fidelity flight and mission simulators as well as training programs powered by digital technologies. We embed sustainability in everything we do. Today and tomorrow, we'll make sure our customers are ready for the moments that matter.
Caution concerning limitations of summary earnings press release
This summary earnings press release contains limited information meant to assist the reader in assessing CAE's performance, but it is not a suitable source of information for readers who are unfamiliar with CAE and is not in any way a substitute for the Company's financial statements, notes to the financial statements, and MD&A reports.
Caution concerning forward-looking statements
This press release includes forward-looking statements about our activities, events and developments that we expect to or anticipate may occur in the future including, for example, statements about our vision, strategies, market trends and outlook, future revenues, earnings, cash flow growth, profit trends, growth capital spending, expansions and new initiatives, including initiatives that pertain to ESG matters, financial obligations, available liquidities, expected sales, general economic and political outlook, inflation trends, prospects and trends of an industry, expected annual recurring cost savings from operational excellence programs, our management of the supply chain, estimated addressable markets, demands for CAE's products and services, our access to capital resources, our financial position, the expected accretion in various financial metrics, the expected capital returns to shareholders, the sale of our Healthcare business (the Sale Transaction), the anticipated benefits and expected impacts therefrom on CAE's strategic and operational plans and financial results, the expected terms, conditions (including receipt of necessary regulatory approvals) and completion of the Sale Transaction, the anticipated cash consideration therefrom and the timing for completion thereof, our business outlook, business opportunities, objectives, development, plans, growth strategies and other strategic priorities, and our competitive and leadership position in our markets, the expansion of our market shares, CAE's ability and preparedness to respond to demand for new technologies, the sustainability of our operations, the ability of CAE to retire the Legacy Contracts as expected and to manage and mitigate the risks associated therewith, the impact of the retirement of the Legacy Contracts, notably on the expected positive inflection on underlying profit performance in the second half of fiscal 2025, and other statements that are not historical facts.
Since forward-looking statements and information relate to future events or future performance and reflect current expectations or beliefs regarding future events, they are typically identified by words such as "anticipate", "believe", "could", "estimate", "expect", "intend", "likely", "may", "plan", "seek", "should", "will", "strategy", "future" or the negative thereof or other variations thereon suggesting future outcomes or statements regarding an outlook. All such statements constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995.
By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties associated with our business which may cause actual results in future periods to differ materially from results indicated in forward-looking statements. While these statements are based on management's expectations and assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that we believe are reasonable and appropriate in the circumstances, readers are cautioned not to place undue reliance on these forward-looking statements as there is a risk that they may not be accurate. The forward-looking statements contained in this press release describe our expectations as of February 14, 2024, and, accordingly, are subject to change after such date. Except as required by law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. The forward-looking information and statements contained in this press release are expressly qualified by this cautionary statement. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. Except as otherwise indicated by CAE, forward-looking statements do not reflect the potential impact of any special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations or other transactions that may occur after February 14, 2024.The financial impact of these transactions and special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business. Forward-looking statements are presented in this press release for the purpose of assisting investors and others in understanding certain key elements of our expected fiscal 2024 financial results and in obtaining a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Material assumptions
The forward-looking statements set out in this press release are based on certain assumptions including, without limitation: the prevailing market conditions, geopolitical instability, the customer receptivity to our training and operational support solutions, the accuracy of our estimates of addressable markets and market opportunity, the realization of anticipated annual recurring cost savings and other intended benefits from restructuring initiatives and operational excellence programs, the ability to respond to anticipated inflationary pressures and our ability to pass along rising costs through increased prices, the actual impact to supply, production levels, and costs from global supply chain logistics challenges, the stability of foreign exchange rates, the ability to hedge exposures to fluctuations in interest rates and foreign exchange rates, the availability of borrowings to be drawn down under, and the utilization, of one or more of our senior credit agreements, our available liquidity from cash and cash equivalents, undrawn amounts on our revolving credit facility, the balance available under our receivable purchase facility, the assumption that our cash flows from operations and continued access to debt funding will be sufficient to meet financial requirements in the foreseeable future, access to expected capital resources within anticipated timeframes, no material financial, operational or competitive consequences from changes in regulations affecting our business, our ability to retain and attract new business, our ability to effectively execute and retire the Legacy Contracts while managing the risks associated therewith, our ability to achieve synergies and maintain market position arising from successful integration plans relating to the L3H MT and AirCentre acquisitions, our ability to otherwise complete the integration of the L3H MT and AirCentre businesses acquired within anticipated time periods and at expected cost levels, our ability to attract and retain key employees in connection with the L3H MT and AirCentre acquisitions, management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the L3H MT and AirCentre acquisitions and resulting impact on growth and accretion in various financial metrics, the realization of the expected strategic, financial and other benefits of the L3H MT and AirCentre acquisitions in the timeframe anticipated, economic and political environments and industry conditions, the accuracy and completeness of public and other disclosure, including financial disclosure, by L3Harris Technologies and AirCentre, the absence of significant undisclosed costs or liabilities associated with the L3H MT and AirCentre acquisitions, the satisfaction of all closing conditions of the Sale Transaction, including receipt of all necessary regulatory approvals and other consents and approvals in a timely manner and on terms acceptable to CAE, our ability to otherwise complete the Sale Transaction within anticipated time periods and at expected cost levels, management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the Sale Transaction, the realization of the expected strategic, financial and other benefits of the Sale Transaction in the timeframe anticipated (including receipt of expected proceeds and intended use thereof), and fulfillment by the other parties of their respective obligations, commitments and undertakings pursuant to the Sale Transaction documentation. Air travel is a major driver for CAE's business and management relies on analysis from the International Air Transport Association (IATA) to inform its assumptions about the rate and profile of recovery in its key civil aviation market. Accordingly, the assumptions outlined in this press release and, consequently, the forward‑looking statements based on such assumptions, may turn out to be inaccurate.
Material risks
Important risks that could cause actual results or events to differ materially from those expressed in or implied by our forward-looking statements are set out in CAE's MD&A for the fiscal year ended March 31, 2023 and MD&A for the three months ended December 31, 2023, available on our website (www.cae.com), SEDAR+ (www.SEDARplus.ca) and EDGAR (www.sec.gov). Readers are cautioned that any of the disclosed risks could have a material adverse effect on our forward-looking statements. We caution that the disclosed list of risk factors is not exhaustive and other factors could also adversely affect our results.
Non-IFRS and other financial measures
This press release includes non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. Management believes that these measures provide additional insight into our operating performance and trends and facilitate comparisons across reporting periods.
Certain non-IFRS and other financial measures are provided on a consolidated basis and separately for each of our segments (Civil Aviation and Defense and Security) since we analyze their results and performance separately.
Reconciliations and calculations of non-IFRS measures to the most directly comparable measures under IFRS are also set forth below in the section Reconciliations and Calculations of this press release.
Performance measures
Operating income margin (or operating income as a % of revenue)
Operating income margin is a supplementary financial measure calculated by dividing our operating income by revenue for a given period. We track it because we believe it provides an enhanced understanding of our operating performance and facilitates the comparison across reporting periods.
Adjusted segment operating income or loss
Adjusted segment operating income or loss is a non-IFRS financial measure that gives us an indication of the profitability of each segment because it does not include the impact of any items not specifically related to the segment's performance. We calculate adjusted segment operating income by taking operating income and adjusting for restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or specific events. Impairments and other gains and losses arising from significant strategic transactions or specific events consist of the impairment reversal of non-financial assets following their repurposing and optimization (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2023) and cloud computing transition adjustment (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2022). We track adjusted segment operating income because we believe it provides an enhanced understanding of our operating performance and facilitates the comparison across reporting periods. Adjusted segment operating income on a consolidated basis is a total of segments measure since it is the profitability measure employed by management for making decisions about allocating resources to segments and assessing segment performance.
Adjusted segment operating income margin (or adjusted segment operating income as a % of revenue)
Adjusted segment operating income margin is a non-IFRS ratio calculated by dividing our adjusted segment operating income by revenue for a given period. We track it because we believe it provides an enhanced understanding of our operating performance and facilitates the comparison across reporting periods.
Adjusted effective tax rate
Adjusted effective tax rate is a supplementary financial measure that represents the effective tax rate on adjusted net income or loss. It is calculated by dividing our income tax expense by our earnings before income taxes, adjusting for the same items used to determine adjusted net income or loss. We track it because we believe it provides an enhanced understanding of the impact of changes in income tax rates and the mix of income on our operating performance and facilitates the comparison across reporting periods.
Adjusted net income or loss
Adjusted net income or loss is a non-IFRS financial measure we use as an alternate view of our operating results. We calculate it by taking our net income attributable to equity holders of the Company from continuing operations and adjusting for restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or specific events, after tax, as well as significant one-time tax items. Impairments and other gains and losses arising from significant strategic transactions or specific events consist of the impairment reversal of non-financial assets following their repurposing and optimization (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2023) and cloud computing transition adjustment (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2022). We track adjusted net income because we believe it provides an enhanced understanding of our operating performance and facilitates the comparison across reporting periods.
Adjusted earnings or loss per share (EPS)
Adjusted earnings or loss per share is a non-IFRS ratio calculated by dividing adjusted net income or loss by the weighted average number of diluted shares. We track it because we believe it provides an enhanced understanding of our operating performance on a per share basis and facilitates the comparison across reporting periods.
EBITDA and Adjusted EBITDA
EBITDA is a non-IFRS financial measure which comprises net income or loss from continuing operations before income taxes, finance expense – net, depreciation and amortization. Adjusted EBITDA further adjusts for restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or specific events. Impairments and other gains and losses arising from significant strategic transactions or specific events consist of the impairment reversal of non-financial assets following their repurposing and optimization (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2023) and cloud computing transition adjustment (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2022). We use EBITDA and adjusted EBITDA to evaluate our operating performance, by eliminating the impact of non-operational or non-cash items.
Free cash flow
Free cash flow is a non-IFRS financial measure that shows us how much cash we have available to invest in growth opportunities, repay debt and meet ongoing financial obligations. We use it as an indicator of our financial strength and liquidity. We calculate it by taking the net cash generated by our continuing operating activities, subtracting maintenance capital expenditures, changes in enterprise resource planning (ERP) and other assets not related to growth and dividends paid and adding proceeds from the disposal of property, plant and equipment, dividends received from equity accounted investees and proceeds, net of payments, from equity accounted investees.
Liquidity and Capital Structure measures
Adjusted return on capital employed (ROCE)
Adjusted ROCE is a non-IFRS ratio calculated over a rolling four-quarter period by taking net income attributable to equity holders of the Company from continuing operations adjusting for net finance expense, after tax, restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or specific events divided by the average capital employed from continuing operations. Impairments and other gains and losses arising from significant strategic transactions or specific events consist of the impairment reversal of non-financial assets following their repurposing and optimization (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2023) and cloud computing transition adjustment (as described in Note 5 of our consolidated financial statements for the year ended March 31, 2022). We use adjusted ROCE to evaluate the profitability of our invested capital.
Net debt
Net debt is a capital management measure we use to monitor how much debt we have after taking into account cash and cash equivalents. We use it as an indicator of our overall financial position, and calculate it by taking our total long-term debt, including the current portion of long-term debt, and subtracting cash and cash equivalents.
Net debt-to-adjusted EBITDA
Net debt-to-adjusted EBITDA is a non-IFRS ratio calculated as net debt divided by the last twelve months adjusted EBITDA. We use it because it reflects our ability to service our debt obligations.
Maintenance and growth capital expenditures
Maintenance capital expenditure is a supplementary financial measure we use to calculate the investment needed to sustain the current level of economic activity. Growth capital expenditure is a supplementary financial measure we use to calculate the investment needed to increase the current level of economic activity. The sum of maintenance capital expenditures and growth capital expenditures represents our total property, plant and equipment expenditures.
Growth measures
Adjusted order intake
Adjusted order intake is a supplementary financial measure that represents the expected value of orders we have received:
- For the Civil Aviation segment, we consider an item part of our adjusted order intake when we have a legally binding commercial agreement with a client that includes enough detail about each party's obligations to form the basis for a contract. Additionally, expected future revenues from customers under short-term and long-term training contracts are included when these customers commit to pay us training fees, or when we reasonably expect the revenue to be generated;
- For the Defense and Security segment, we consider an item part of our adjusted order intake when we have a legally binding commercial agreement with a client that includes enough detail about each party's obligations to form the basis for a contract. Defense and Security contracts are usually executed over a long-term period but some of them must be renewed each year. For this segment, we only include a contract item in adjusted order intake when the customer has authorized the contract item and has received funding for it.
Adjusted backlog
Adjusted backlog is a supplementary financial measure that represents expected future revenues and includes obligated backlog, joint venture backlog and unfunded backlog and options:
- Obligated backlog represents the value of our adjusted order intake not yet executed and is calculated by adding the adjusted order intake of the current period to the balance of the obligated backlog at the end of the previous fiscal year, subtracting the revenue recognized in the current period and adding or subtracting backlog adjustments. If the amount of an order already recognized in a previous fiscal year is modified, the backlog is revised through adjustments;
- Joint venture backlog is obligated backlog that represents the expected value of our share of orders that our joint ventures have received but have not yet executed. Joint venture backlog is determined on the same basis as obligated backlog described above;
- Unfunded backlog represents legally binding Defense and Security orders with the
U.S. government that we have received but have not yet executed and for which funding authorization has not yet been obtained. The uncertainty relates to the timing of the funding authorization, which is influenced by the government's budget cycle, based on a September year-end. Options are included in adjusted backlog when there is a high probability of being exercised, which we define as at least80% probable, but multi-award indefinite-delivery/indefinite-quantity (ID/IQ) contracts are excluded. When an option is exercised, it is considered adjusted order intake in that period, and it is removed from unfunded backlog and options.
Book-to-sales ratio
The book-to-sales ratio is a supplementary financial measure calculated by dividing adjusted order intake by revenue in a given period. We use it to monitor the level of future growth of the business over time.
Supplementary non-financial information definitions
Full-flight simulators (FFSs) in CAE's network
A FFS is a full-size replica of a specific make, model and series of an aircraft cockpit, including a motion system. In our count of FFSs in the network, we generally only include FFSs that are of the highest fidelity and do not include any fixed based training devices, or other lower-level devices, as these are typically used in addition to FFSs in the same approved training programs.
Simulator equivalent unit (SEU)
SEU is a measure we use to show the total average number of FFSs available to generate earnings during the period. For example, in the case of a 50/50 flight training joint venture, we will report only
Utilization rate
Utilization rate is a measure we use to assess the performance of our Civil simulator training network. While utilization rate does not perfectly correlate to revenue recognized, we track it, together with other measures, because we believe it is an indicator of our operating performance. We calculate it by taking the number of training hours sold on our simulators during the period divided by the practical training capacity available for the same period.
Reconciliations and Calculations
Reconciliation of adjusted segment operating income
Defense | ||||||
(amounts in millions) | Civil Aviation | and Security | Total | |||
Three months ended December 31 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Operating income | $ 101.0 | $ 117.2 | $ 20.6 | $ 24.9 | $ 121.6 | $ 142.1 |
Restructuring, integration and acquisition costs | 23.2 | 11.2 | 0.3 | (6.3) | 23.5 | 4.9 |
Impairments and other gains and losses arising from | ||||||
significant strategic transactions or specific events: | ||||||
Impairment reversal of non-financial assets | ||||||
following their repurposing and optimization | — | 3.0 | — | 6.8 | — | 9.8 |
Adjusted segment operating income | $ 124.2 | $ 131.4 | $ 20.9 | $ 25.4 | $ 145.1 | $ 156.8 |
Reconciliation of adjusted net income and adjusted EPS
Three months ended | |||||||
December 31 | |||||||
(amounts in millions, except per share amounts) | 2023 | 2022 | |||||
Net income attributable to equity holders of the Company | $ 56.5 | $ 78.1 | |||||
Net loss (income) from discontinued operations | 1.9 | (2.1) | |||||
Restructuring, integration and acquisition costs, after tax | 18.2 | 4.0 | |||||
Impairments and other gains and losses arising from | |||||||
significant strategic transactions or specific events: | |||||||
Impairment reversal of non-financial assets following | |||||||
their repurposing and optimization, after tax | — | 7.1 | |||||
Adjusted net income | $ 76.6 | $ 87.1 | |||||
Average number of shares outstanding (diluted) | 319.1 | 318.3 | |||||
Adjusted EPS | $ 0.24 | $ 0.27 | |||||
Calculation of adjusted effective tax rate
Three months ended | |||||||||
December 31 | |||||||||
(amounts in millions, except effective tax rates) | 2023 | 2022 | |||||||
Earnings before income taxes | $ 69.2 | $ 94.4 | |||||||
Restructuring, integration and acquisition costs | 23.5 | 4.9 | |||||||
Impairments and other gains and losses arising from | |||||||||
significant strategic transactions or specific events: | |||||||||
Impairment reversal of non-financial assets | |||||||||
following their repurposing and optimization | — | 9.8 | |||||||
Adjusted earnings before income taxes | $ 92.7 | $ 109.1 | |||||||
Income tax expense | $ 8.2 | $ 16.5 | |||||||
Tax impact on restructuring, integration and acquisition costs | 5.3 | 0.9 | |||||||
Tax impact on impairments and other gains and losses arising | |||||||||
from significant strategic transactions or specific events: | |||||||||
Tax impact on impairment reversal of non-financial assets | |||||||||
following their repurposing and optimization | — | 2.7 | |||||||
Adjusted income tax expense | $ 13.5 | $ 20.1 | |||||||
Effective tax rate | 12 % | 17 % | |||||||
Adjusted effective tax rate | 15 % | 18 % | |||||||
Reconciliation of free cash flow
Three months ended | ||||||||||
December 31 | ||||||||||
(amounts in millions) | 2023 | 2022 | ||||||||
Cash provided by operating activities* | $ 148.6 | $ 158.7 | ||||||||
Changes in non-cash working capital | 72.2 | 93.7 | ||||||||
Net cash provided by operating activities | $ 220.8 | $ 252.4 | ||||||||
Maintenance capital expenditures | (20.7) | (16.1) | ||||||||
Change in ERP and other assets | (10.4) | (10.8) | ||||||||
Proceeds from the disposal of property, plant and equipment | 0.1 | 0.3 | ||||||||
Net payments to equity accounted investees | (14.9) | (2.0) | ||||||||
Dividends received from equity accounted investees | 13.2 | 13.9 | ||||||||
Impact of discontinued operations | 1.9 | 2.1 | ||||||||
Free cash flow | $ 190.0 | $ 239.8 | ||||||||
* before changes in non-cash working capital | ||||||||||
Reconciliation of EBITDA, adjusted EBITDA, net debt-to-EBITDA and net debt-to-adjusted EBITDA
Last twelve months ended | |||||||
December 31 | |||||||
(amounts in millions, except net debt-to-EBITDA ratios) | 2023 | 2022 | |||||
Operating income | $ 525.9 | $ 371.6 | |||||
Depreciation and amortization | 359.7 | 320.8 | |||||
EBITDA | $ 885.6 | $ 692.4 | |||||
Restructuring, integration and acquisition costs | 91.5 | 83.3 | |||||
Impairments and other gains and losses arising from | |||||||
significant strategic transactions or specific events: | |||||||
Impairment reversal of non-financial assets | |||||||
following their repurposing and optimization | — | 9.8 | |||||
Cloud computing transition adjustment | — | 13.4 | |||||
Adjusted EBITDA | $ 977.1 | $ 798.9 | |||||
Net debt | $ 3,085.4 | $ 3,073.0 | |||||
Net debt-to-EBITDA | 3.48 | 4.44 | |||||
Net debt-to-adjusted EBITDA | 3.16 | 3.85 | |||||
Reconciliation of capital employed and net debt
As at December 31 | As at March 31 | |||||
(amounts in millions) | 2023 | 2023 | ||||
Use of capital: | ||||||
Current assets | $ | 2,410.5 | $ | 2,235.0 | ||
Less: cash and cash equivalents | (124.5) | (217.6) | ||||
Less: assets net of liabilities held for sale | (224.6) | — | ||||
Current liabilities | (2,669.5) | (2,246.7) | ||||
Less: current portion of long-term debt | 592.8 | 214.6 | ||||
Non-cash working capital | $ | (15.3) | $ | (14.7) | ||
Assets net of liabilities held for sale | 224.6 | — | ||||
Property, plant and equipment | 2,451.1 | 2,387.1 | ||||
Intangible assets | 3,830.3 | 4,050.8 | ||||
Other long-term assets | 1,779.7 | 1,763.6 | ||||
Other long-term liabilities | (456.7) | (565.4) | ||||
Capital employed | $ | 7,813.7 | $ | 7,621.4 | ||
Source of capital: | ||||||
Current portion of long-term debt | $ | 592.8 | $ | 214.6 | ||
Long-term debt | 2,617.1 | 3,035.5 | ||||
Less: cash and cash equivalents | (124.5) | (217.6) | ||||
Net debt | $ | 3,085.4 | $ | 3,032.5 | ||
Equity attributable to equity holders of the Company | 4,648.8 | 4,507.7 | ||||
Non-controlling interests | 79.5 | 81.2 | ||||
Capital employed | $ | 7,813.7 | $ | 7,621.4 | ||
For non-IFRS and other financial measures monitored by CAE, and a reconciliation of such measures to the most directly comparable measure under IFRS, please refer to Section 11 of CAE's MD&A for the quarter ended December 31, 2023 (which is incorporated by reference into this press release) available on our website (www.cae.com), SEDAR+ (www.SEDARplus.ca) and EDGAR (www.sec.gov).
Consolidated Income Statement
(Unaudited) | Three months ended December 31 | Nine months ended December 31 | |||||||
(amounts in millions of Canadian dollars, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||
Reclassified | Reclassified | ||||||||
Continuing operations | |||||||||
Revenue | $ | 1,094.5 | $ | 969.9 | $ | 3,156.5 | $ | 2,813.2 | |
Cost of sales | 791.9 | 693.0 | 2,283.5 | 2,066.5 | |||||
Gross profit | $ | 302.6 | $ | 276.9 | $ | 873.0 | $ | 746.7 | |
Research and development expenses | 38.1 | 27.1 | 108.1 | 91.2 | |||||
Selling, general and administrative expenses | 140.9 | 124.1 | 396.9 | 367.3 | |||||
Other (gains) and losses | (4.8) | (6.9) | (8.4) | (13.1) | |||||
Share of after-tax profit of equity accounted investees | (16.7) | (14.4) | (47.6) | (33.9) | |||||
Restructuring, integration and acquisition costs | 23.5 | 4.9 | 76.4 | 47.5 | |||||
Operating income | $ | 121.6 | $ | 142.1 | $ | 347.6 | $ | 287.7 | |
Finance expense – net | 52.4 | 47.7 | 152.6 | 123.2 | |||||
Earnings before income taxes | $ | 69.2 | $ | 94.4 | $ | 195.0 | $ | 164.5 | |
Income tax expense | 8.2 | 16.5 | 7.8 | 31.8 | |||||
Net income from continuing operations | $ | 61.0 | $ | 77.9 | $ | 187.2 | $ | 132.7 | |
Net (loss) income from discontinued operations | (1.9) | 2.1 | 0.8 | (2.7) | |||||
Net income | $ | 59.1 | $ | 80.0 | $ | 188.0 | $ | 130.0 | |
Attributable to: | |||||||||
Equity holders of the Company | $ | 56.5 | $ | 78.1 | $ | 180.2 | $ | 124.3 | |
Non-controlling interests | 2.6 | 1.9 | 7.8 | 5.7 | |||||
Earnings per share attributable to equity holders of the Company | |||||||||
Basic and diluted – continuing operations | $ | 0.18 | $ | 0.24 | $ | 0.56 | $ | 0.40 | |
Basic and diluted – discontinued operations | (0.01) | 0.01 | — | (0.01) | |||||
Consolidated Statement of Comprehensive Income
(Unaudited) | Three months ended December 31 | Nine months ended December 31 | |||||||
(amounts in millions of Canadian dollars) | 2023 | 2022 | 2023 | 2022 | |||||
Reclassified | Reclassified | ||||||||
Net income from continuing operations | $ | 61.0 | $ | 77.9 | $ | 187.2 | $ | 132.7 | |
Items that may be reclassified to net income | |||||||||
Foreign currency exchange differences on translation of foreign operations | $ | (77.7) | $ | 20.3 | $ | (105.3) | $ | 304.7 | |
Net gain (loss) on hedges of net investment in foreign operations | 56.2 | 30.3 | 54.6 | (113.0) | |||||
Reclassification to income of gains on foreign currency exchange differences | (0.1) | (3.8) | (0.2) | (6.2) | |||||
Net gain (loss) on cash flow hedges | 8.3 | (4.7) | 7.4 | (10.2) | |||||
Reclassification to income of losses (gains) on cash flow hedges | 1.8 | 9.5 | 4.9 | (11.5) | |||||
Income taxes | (5.5) | (0.2) | (9.5) | 12.2 | |||||
$ | (17.0) | $ | 51.4 | $ | (48.1) | $ | 176.0 | ||
Items that will never be reclassified to net income | |||||||||
Remeasurement of defined benefit pension plan obligations | $ | (34.5) | $ | 8.8 | $ | (22.5) | $ | 55.7 | |
Income taxes | 9.2 | (2.4) | 6.0 | (14.9) | |||||
$ | (25.3) | $ | 6.4 | $ | (16.5) | $ | 40.8 | ||
Other comprehensive (loss) income from continuing operations | $ | (42.3) | $ | 57.8 | $ | (64.6) | $ | 216.8 | |
Net (loss) income from discontinued operations | (1.9) | 2.1 | 0.8 | (2.7) | |||||
Other comprehensive (loss) income from discontinued operations | (3.2) | (1.7) | (1.7) | 5.8 | |||||
Total comprehensive income | $ | 13.6 | $ | 136.1 | $ | 121.7 | $ | 352.6 | |
Attributable to: | |||||||||
Equity holders of the Company | $ | 11.7 | $ | 133.9 | $ | 114.9 | $ | 343.1 | |
Non-controlling interests | 1.9 | 2.2 | 6.8 | 9.5 | |||||
Consolidated Statement of Financial Position
(Unaudited) | December 31 | March 31 | |||
(amounts in millions of Canadian dollars) | 2023 | 2023 | |||
Assets | |||||
Cash and cash equivalents | $ | 124.5 | $ | 217.6 | |
Accounts receivable | 566.4 | 615.7 | |||
Contract assets | 641.2 | 693.8 | |||
Inventories | 601.0 | 583.4 | |||
Prepayments | 69.6 | 64.1 | |||
Income taxes recoverable | 56.7 | 48.3 | |||
Derivative financial assets | 21.0 | 12.1 | |||
Assets of discontinued operations classified as held for sale | 330.1 | — | |||
Total current assets | $ | 2,410.5 | $ | 2,235.0 | |
Property, plant and equipment | 2,451.1 | 2,387.1 | |||
Right-of-use assets | 458.4 | 426.9 | |||
Intangible assets | 3,830.3 | 4,050.8 | |||
Investment in equity accounted investees | 556.4 | 530.7 | |||
Employee benefits assets | 32.6 | 51.1 | |||
Deferred tax assets | 150.9 | 125.1 | |||
Derivative financial assets | 15.5 | 9.2 | |||
Other non-current assets | 565.9 | 620.6 | |||
Total assets | $ | 10,471.6 | $ | 10,436.5 | |
Liabilities and equity | |||||
Accounts payable and accrued liabilities | $ | 999.5 | $ | 1,036.7 | |
Provisions | 19.1 | 26.7 | |||
Income taxes payable | 21.2 | 21.1 | |||
Contract liabilities | 906.9 | 905.7 | |||
Current portion of long-term debt | 592.8 | 214.6 | |||
Derivative financial liabilities | 24.5 | 41.9 | |||
Liabilities of discontinued operations classified as held for sale | 105.5 | — | |||
Total current liabilities | $ | 2,669.5 | $ | 2,246.7 | |
Provisions | 18.4 | 20.1 | |||
Long-term debt | 2,617.1 | 3,035.5 | |||
Royalty obligations | 79.0 | 119.4 | |||
Employee benefits obligations | 100.2 | 91.9 | |||
Deferred tax liabilities | 75.0 | 129.3 | |||
Derivative financial liabilities | 2.4 | 6.5 | |||
Other non-current liabilities | 181.7 | 198.2 | |||
Total liabilities | $ | 5,743.3 | $ | 5,847.6 | |
Equity | |||||
Share capital | $ | 2,252.6 | $ | 2,243.6 | |
Contributed surplus | 59.3 | 42.1 | |||
Accumulated other comprehensive income | 118.4 | 167.2 | |||
Retained earnings | 2,218.5 | 2,054.8 | |||
Equity attributable to equity holders of the Company | $ | 4,648.8 | $ | 4,507.7 | |
Non-controlling interests | 79.5 | 81.2 | |||
Total equity | $ | 4,728.3 | $ | 4,588.9 | |
Total liabilities and equity | $ | 10,471.6 | $ | 10,436.5 | |
Consolidated Statement of Changes in Equity
(Unaudited) | Attributable to equity holders of the Company | |||||||||||||||
Nine months ended December 31, 2023 | Common shares | Accumulated other | ||||||||||||||
(amounts in millions of Canadian dollars, | Number of | Stated | Contributed | comprehensive | Retained | Non-controlling | Total | |||||||||
except number of shares) | shares | value | surplus | income | earnings | Total | interests | equity | ||||||||
Balances as at March 31, 2023 | 317,906,290 | $ | 2,243.6 | $ | 42.1 | $ | 167.2 | $ | 2,054.8 | $ | 4,507.7 | $ | 81.2 | $ | 4,588.9 | |
Net income | — | $ | — | $ | — | $ | — | $ | 180.2 | $ | 180.2 | $ | 7.8 | $ | 188.0 | |
Other comprehensive loss | — | — | — | (48.8) | (16.5) | (65.3) | (1.0) | (66.3) | ||||||||
Total comprehensive (loss) income | — | $ | — | $ | — | $ | (48.8) | $ | 163.7 | $ | 114.9 | $ | 6.8 | $ | 121.7 | |
Exercise of stock options | 396,018 | 9.0 | (1.4) | — | — | 7.6 | — | 7.6 | ||||||||
Equity-settled share-based payments expense | — | — | 18.6 | — | — | 18.6 | — | 18.6 | ||||||||
Transactions with non-controlling interests | — | — | — | — | — | — | (8.5) | (8.5) | ||||||||
Balances as at December 31, 2023 | 318,302,308 | $ | 2,252.6 | $ | 59.3 | $ | 118.4 | $ | 2,218.5 | $ | 4,648.8 | $ | 79.5 | $ | 4,728.3 | |
Attributable to equity holders of the Company | ||||||||||||||||
Nine months ended December 31, 2022 | Common shares | Accumulated other | ||||||||||||||
(amounts in millions of Canadian dollars, | Number of | Stated | Contributed | comprehensive | Retained | Non-controlling | Total | |||||||||
except number of shares) | shares | value | surplus | income | earnings | Total | interests | equity | ||||||||
Balances as at March 31, 2022 | 317,024,123 | $ | 2,224.7 | $ | 38.6 | $ | (31.2) | $ | 1,777.6 | $ | 4,009.7 | $ | 76.9 | $ | 4,086.6 | |
Net income | — | $ | — | $ | — | $ | — | $ | 124.3 | $ | 124.3 | $ | 5.7 | $ | 130.0 | |
Other comprehensive income | — | — | — | 178.0 | 40.8 | 218.8 | 3.8 | 222.6 | ||||||||
Total comprehensive income | — | $ | — | $ | — | $ | 178.0 | $ | 165.1 | $ | 343.1 | $ | 9.5 | $ | 352.6 | |
Exercise of stock options | 835,392 | 18.0 | (2.5) | — | — | 15.5 | — | 15.5 | ||||||||
Equity-settled share-based payments expense | — | — | 5.1 | — | — | 5.1 | — | 5.1 | ||||||||
Transactions with non-controlling interests | — | — | — | — | — | — | (5.0) | (5.0) | ||||||||
Balances as at December 31, 2022 | 317,859,515 | $ | 2,242.7 | $ | 41.2 | $ | 146.8 | $ | 1,942.7 | $ | 4,373.4 | $ | 81.4 | $ | 4,454.8 | |
Consolidated Statement of Cash Flows
(Unaudited) | ||||||
Nine months ended December 31 | ||||||
(amounts in millions of Canadian dollars) | 2023 | 2022 | ||||
Operating activities | ||||||
Net income | $ | 188.0 | $ | 130.0 | ||
Adjustments for: | ||||||
Depreciation and amortization | 278.6 | 252.8 | ||||
Share of after-tax profit of equity accounted investees | (47.6) | (33.9) | ||||
Deferred income taxes | (39.8) | (0.3) | ||||
Investment tax credits | (9.2) | 0.4 | ||||
Equity-settled share-based payments expense | 18.6 | 5.1 | ||||
Defined benefit pension plans | 4.5 | 6.2 | ||||
Other non-current liabilities | (7.3) | (13.5) | ||||
Derivative financial assets and liabilities – net | (17.5) | 20.0 | ||||
Other | 23.8 | (2.4) | ||||
Changes in non-cash working capital | (40.4) | (136.6) | ||||
Net cash provided by operating activities | $ | 351.7 | $ | 227.8 | ||
Investing activities | ||||||
Business combinations, net of cash acquired | $ | — | $ | (6.4) | ||
Property, plant and equipment expenditures | (238.1) | (205.9) | ||||
Proceeds from disposal of property, plant and equipment | 3.7 | 4.8 | ||||
Advance payments for property, plant and equipment | — | (30.1) | ||||
Intangible assets expenditures | (105.8) | (89.9) | ||||
Net payments to equity accounted investees | (40.5) | (10.5) | ||||
Dividends received from equity accounted investees | 30.3 | 20.3 | ||||
Other | (7.2) | (5.0) | ||||
Net cash used in investing activities | $ | (357.6) | $ | (322.7) | ||
Financing activities | ||||||
Net (repayment of) proceeds from borrowing under revolving credit facilities | $ | (407.8) | $ | 8.6 | ||
Proceeds from long-term debt | 426.1 | 22.1 | ||||
Repayment of long-term debt | (41.1) | (55.7) | ||||
Repayment of lease liabilities | (57.0) | (62.1) | ||||
Net proceeds from the issuance of common shares | 7.6 | 15.5 | ||||
Other | — | (1.8) | ||||
Net cash used in financing activities | $ | (72.2) | $ | (73.4) | ||
Effect of foreign currency exchange differences on cash and cash equivalents | $ | (15.0) | $ | 13.8 | ||
Net decrease in cash and cash equivalents | $ | (93.1) | $ | (154.5) | ||
Cash and cash equivalents, beginning of period | 217.6 | 346.1 | ||||
Cash and cash equivalents, end of period | $ | 124.5 | $ | 191.6 | ||
Contacts
Investor Relations:
Andrew Arnovitz, Senior Vice President, Investor Relations and Enterprise Risk Management, 1-514-734-5760, andrew.arnovitz@cae.com
Media:
Samantha Golinski, Vice President, Public Affairs and Global Communications, 514-341-2000 ext 7939, samantha.golinski@cae.com
View original content:https://www.prnewswire.com/news-releases/cae-reports-third-quarter-fiscal-2024-results-302061877.html
SOURCE CAE Inc.
FAQ
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