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

Good afternoon, everyone, and thank you for joining us today. Before we begin, I need to read the following. Certain statements made during this conference, including, but not limited to statements that are not historical facts, are forward-looking and are subject to important risks, uncertainties and assumptions. The results or events predicted in these forward-looking statements may differ materially from actual results or events. These statements do not reflect the potential impact of any nonrecurring or other special items or events that are announced or completed after the date of this conference, including mergers, acquisitions or other business combinations and divestitures. You'll find more information about the risks and uncertainties associated with our business in the MD&A section of our annual report and Annual Information Form for the year ended March 31, 2012. These documents have been filed with the Canadian Securities Commission and are available on our website at cae.com and on SEDAR. They've also been filed with the U.S. Securities and Exchange Commission under Form 40-F and are available on EDGAR. Forward-looking statements in this conference represent our expectations as of today, August 9, 2012, and accordingly are subject to change after this date. We do not update or revise forward-looking information even if new information becomes available unless legislation requires us to do so. You should not place undue reliance on forward-looking statements. On the call with me this afternoon are Marc Parent, CAE's President and Chief Executive Officer; and Stephane Lefebvre, our Chief Financial Officer. After comments from Marc and Stephane, we will take questions from financial analysts and institutional investors. Following the conclusion of that Q&A period, we will open the lines to members of the media. Let me now turn the call over to Marc.

Thank you, Andrew, and good afternoon to everyone joining us on the call. I'll first go through some of the highlights of the quarter, and then Stephane will provide more details about our results. I'll come back at the end to talk about our outlook and also use the opportunity to make some comments about our strategy. We made good progress this quarter to strengthen our position and to adapt our business to market conditions. Our results reflect the ongoing efforts associated with the implementation of our restructuring program and the acquisition and integration of Oxford Aviation Academy. On a consolidated basis, we had double-digit revenue growth over last year. And before taking into account integration and restructuring cost, we had higher net income as well. We took in $400 million of new orders, and our backlog reached $3.9 billion. In Civil, we continued to see good demand for our products and services in all regions. We've announced 7 full-flight simulator orders in the quarter and another 3 since then, giving us 10 announced year-to-date. Also during the quarter, we obtained training services contracts, expected to generate $132 million in future revenue. We signed a multiyear agreement with our new JV customers, Cebu Pacific Air in the Philippines. And we signed long-term contract extensions with existing customers, SilkAir in Singapore and KLM Flight Academy to train Ab-initio cadets at the CAE Oxford Aviation Academy. We received $235 million in combined Civil segment orders this quarter, representing a book-to-sales ratio of 0.94x. For the last 12 months, the ratio was 1.24x. We started to integrate Oxford operations with CAE's during the quarter, and I'm very pleased to report that we've made some excellent progress to identify synergies, and we've begun to realize them. And I'll talk more about that in my outlook. Turning to our Defense business, our first quarter performance reflected the late timing of orders we booked last fiscal year. Even though we had record order intake in the United States last year, and some big wins in the emerging markets, much of it came late in the fourth quarter. This means that like last year, revenue and earnings this year are, again, being skewed towards the back half. As we've seen in the past, the Military business is normally lumpy from quarter-to-quarter, and so it's generally more meaningful to evaluate the performance on a 12-month basis. We booked orders during the quarter for a suite of advanced jet trainer simulators and we've received a contract to perform upgrades on the U.S. Navy's MH-60S and MH-60R helicopter maintenance trainers. We also received an order from the U.S. Air Force to upgrade a C-5 Galaxy weapon system trainer. In Services, we received a contract to continue providing in-service support for the Canadian Forces CF-18 aircraft and a contract to provide training support services for the Royal Australian Air Force on the C-130H and C-130J aircraft. We received $146 million in orders from a combined military segment this quarter, and now represents a book-to-sales ratio of 0.72x. The last 12 months, the ratio was 1x sales. In our New Core Markets, we generated $26 million of revenue for the quarter, and as anticipated, we've begun to generate a profit. We continued to gain traction penetrating global markets with our innovative products and services. In CAE Mining, we sold software solutions to customers including Vale, Polymetal International and Somincor during the quarter. And we released new applications and updates to our software and hardware solutions. In CAE Healthcare, we sold solutions within our range of simulator products and central management systems to defend customers in the U.S. and the U.K., and to universities and teaching hospitals in the U.S., Mexico, Slovenia, Poland, the UAE and Japan. Stephane will now take you through some of the financials.

Thank you, Marc, and good afternoon, everyone. Consolidated revenue for the quarter was up 12% year-over-year at $480.1 million. And net income attributable to equity holders was $21.3 million or $0.08 per share. We had $32 million, or $25.4 million after tax, of cost during the quarter related to the restructuring of our Defense business and the integration and acquisition of Oxford Aviation Academy. Excluding these costs, net income attributable to equity holders was $46.7 million or $0.18 per share. Our restructuring program is going as planned with $21.2 million of cost related mainly to severances included in the quarters net income. We're tracking our $25 million total estimated cost with most of the remainder to be incurred in the second quarter. Our net income also includes $10.8 million of cost with the restructuring, integration and acquisition of Oxford. We had estimated a total of $18 million to $20 million, and we're tracking to that range. Income taxes this quarter were $6.2 million, representing an effective tax rate of 22% compared to 24% last year. The lower rate is mainly due to lower income in higher tax jurisdictions, which was further accentuated by our restructuring measures in Europe. Net debt was $988.9 million as of June 30, 2012, compared with $534.3 million last quarter. The increase was mainly due to the financing of our acquisition of Oxford and higher investment in our noncash working capital, which normally occurs in the first quarter of the year and tends to partially reverse in the second half. On the subject of the financing, I'm pleased to report that we recently amended our revolving unsecured term credit facilities with more favorable interest rates, and we extended the maturity date from April 2015 to April 2017. I believe this is a good reflection of the investment quality of CAE's business. The available facility amount was increased from $450 million to $550 million, so that we could refinance $100 million of the 2-year banking facility we put in place specifically for the Oxford acquisition. Net debt to EBITDA stood at 2.4x as of the end of the quarter, which includes relatively little EBITDA from Oxford. On a pro forma basis, net debt to EBITDA is approximately 2.2x. By both measures, we're well within an investment-grade profile. And since the Oxford acquisition gave CAE an even greater proportion of recurring revenue and cash flow as somewhat higher, that level is appropriate. Capital expenditures totaled $46.5 million this quarter, including $34.3 million for growth and $12.2 million for maintenance. We're continuing to invest selectively only where we've secured demand. We have several good investment opportunities in our core business that are being driven by specific customers and high growth markets. A vast majority of the Growth CapEx plan for Civil this year involves keeping pace with the growth of our JV partners like China Southern and InterGlobe and aircraft customers like TAM with long-term service agreements. Another point of interest is that nearly 2/3 of our planned investments are for growth in emerging markets. With the synergies we will derive from the acquisition of Oxford, we expect total capital expenditures for the company to be in the range of $150 million, which is lower than the $166 million invested last year. Now looking at our segmented financial performance. In our combined Civil segments, first quarter revenue increased 20% year-over-year reaching $251.2 million. Combined Civil operating income was up 6% to $47.7 million for an operating margin of 19%. The last 6 weeks of the quarter included performance from Oxford before which our operating margin would have been 21.4%. Utilization for the quarter was 77%, up from 75% last quarter. In our combined Military segments, first quarter revenue was 2% lower year-over-year at $202.8 million. And we generated 14% operating margin as a result of lower volume. This is a very similar situation to what we have experienced last year. And we, again, expect volume to ramp up in the second half of the year. In New Core Markets, first quarter revenue increased 129% year-over-year to $26.1 million, and we moved into the black with small operating profit of $700,000. With that, I'll turn the call over back over to you, Marc.

Thanks, Stephane. The start of fiscal year 2013 is progressing largely the way we've anticipated. Our Civil business continues to show the strength of our global franchise. And in Defense, we expect to see orders, revenue, earnings and margins all ramp up towards the back half of the year. We expect continued double-digit growth in Civil and higher margins in the second half as we continue with the integration of Oxford. The order pipeline remains robust, and we continue to expect civil full-flight simulator orders in the mid-30s by March 31. In Military, we also have a large pipeline of order opportunities, although predicting the timing of contract awards continues to be a challenge. Nevertheless, we again expect modest growth in military with 15%-plus average margins this year. All in all, we remain confident in the way forward. As you will have read in this morning's release, CAE has increased its quarterly dividend for the second time in as many years, this time to $0.05 per share. This is an expression of the board's and management's confidence in CAE's business model, which involves more recurring revenue and cash flows. The dividend increase as well as our recent M&A activity all fit within our overall capital allocation strategy, and the decisions we make are oriented to short, medium and long-term returns. The priorities that come out of our capital allocation strategy are meant to balance the needs of our customers by keeping pace with their growth and the needs of our shareholders with respect to current returns and long-term capital appreciation. We intend to continue to use free cash flow to fund growth CapEx, but as Stephane has said, only where we've already secured demand and we have clear visibility to our target return on capital deployed. Beyond funding growth, our next priority is to keep our balance sheet strong to maintain an investment-grade profile. Next, we'll continue to balance shareholder needs for current returns and long-term capital appreciation. As our business continues to grow, CAE's Board of Directors can again consider options like dividends to optimize that balance. From a strategic standpoint, following our acquisitions of METI and Healthcare last year, and Oxford and Civil this year, we further solidified 2 of our very strong business platforms. With no further material acquisition plans in the near term, we're focused on integration and execution of our business. We seeded New Core Markets with long-term investment Capital to provide CAE with future growth avenues in emerging industries beyond the core of aviation. With METI, we have the right platform in the health care simulation market, and we're now at a size where we can effectively leverage CAE's core competencies to create a much larger business in the years ahead. We'll still look at acquisition opportunities in this area to develop our portfolio of products and capabilities, but anything we consider would be much smaller in size. In Civil, the acquisition of Oxford Aviation Academy presented us with an opportunity to accelerate our short- to medium-term strategy, and we have the right business platform to maintain our leadership and answer the growing needs of our customers. From a market standpoint, we were already #1 in commercial aviation training. And since acquiring Oxford, the third largest, we are even stronger. In a market that seems to be consolidating quite rapidly due to its favorable operating characteristics and exposure to the secular growth in civil aviation, we at CAE believe the position we've built over the last decade represents the best-in-class assets for our customers and stakeholders. The acquisition of Oxford Aviation Academy gives us more recurring revenue and greater cash flow predictability. It will result in more synergies than we originally expected, and it will be more accretive sooner as a result. We indicated an expected $15 million in annual savings. And with the benefit of a closer analysis since taking ownership, we now have visibility to more than $22 million of annual cost savings. We also see more opportunities in terms of revenue and CapEx synergies. As an example, the acquisition has alleviated some of the investments we would have made to keep pace with the growth of our customers. We're also very encouraged by the positive response we've seen already from existing customers vis-à-vis their ability to source more comprehensive solutions from CAE. Just this past month, U.K.-based easyJet selected CAE as a preferred training supplier and agreed a new long-term $60 million solutions deal with CAE. We're leveraging the combination of both CAE's and Oxford's resources to provide easyJet with simulation-based training, AB-initio pilot training, as well as crew sourcing. To me, this is a perfect example of how well CAE is now differentiated in the market with its comprehensive portfolio of training services. In Defense, the market continues to be challenging in terms of predicting the timing of orders. And we recognize the uncertainties around U.S. government budget process and European force structures that will likely persist for some time. Nevertheless, we remain committed to the business, and we're are optimistic given the strength of CAE's position in terms of platform exposure, our global footprint and the fundamental value of our simulation-based solutions. Our restructuring activities this quarter are helping us to manage our costs in line with our backlog and expected orders specifically in Europe. We continue to see higher levels of activity in the emerging markets with programs like our recent deal in Brunei for a multipurpose training center. And in the U.S., the pipeline continues to look good notwithstanding the cloudy environment. CAE is by no means a proxy for top line U.S. defense spending, and we continue to see good opportunities within our defense niche. Even within the current context, the U.S. has continued to enter procurements that bodes well for our industry. For example, the U.S. Navy just last month ordered more than 250 additional Seahawk helicopters, which is a key platform for CAE. We continued to see evidence that the aircraft platforms that matter most to CAE, such as the Seahawk, are durable. The U.S. Military has said that it expects 2 of its biggest export platforms over the next decade to be the MH-60R helicopter and the C-130J transport, both of which CAE leads in terms of simulation-based training solutions. The takeaway is that there's things in the period ahead that, quite frankly, nobody can really predict. And while budgets may be constrained, their still very large. What's most important is where specifically and when governments ultimately decide to appropriate funds. Timing is a variable that remains difficult to predict, but we remain encouraged by our position. CAE is at the intersection of both the most efficient way to train and aircraft platforms with long legs, which continue to be funded in this environment. Finally, in New Core Markets, we're meeting the milestones we set for ourselves with our first profitable quarter now under our belt. And we expect to continue seeing profitability improve as scale increases. To conclude, CAE's growth opportunities remain robust. And with our 3 best-in-class business platforms in Civil, Military and New Core Markets well established, we believe we can strike a balance for all constituents with respect to growth, income, capital appreciation, commitment and service. Thank you for your attention, and we're now ready to take your questions. Andrew?

Operator, we're now ready to take questions from analysts and institutional investors. [Operator Instructions] Operator, please go ahead and open the lines.

[Operator Instructions] Our first question comes from the line of Hamzah Mazari with Crédit Suisse.

The first question is just on the Military business. I know you gave some good color on some of the programs that you're on. Maybe if you could just comment on the visibility that you have in that business now relative to the beginning of the year, relative to last year even, and then maybe just talk about how big your emerging market exposure is in military.

I think, Hamzah, in terms of the visibility that we have, I would tell you it's no different than I've seen in the past few quarters. The pipeline, as I mentioned in my remarks, remains strong and, quite frankly, as strong as I've ever seen. So that's what gives me the confidence that when you put those opportunities of which a lot of them will ascribe a good probability of win on our side, factoring that in then adding that to our backlog, that's where we come up with our expectations that we can continue to grow, albeit modestly, in this kind of environment. And the reason I use the term modestly is mainly because of the -- frankly, the inability of anyone really to predict when orders will go forward. But having said that, we do know and have good visibility with programs of record that aren't going forward, platforms that are being funded in the current funded environment. So if I put all that together, that's what we come up with our outlook from that sector. But as I mentioned, we're -- the next few months, we have to secure orders to keep that going, but that's no different than we were last year. And the [indiscernible] as I mentioned, hasn't really changed. In terms of the emerging market exposure, we have -- you've seen the orders that we secured in the past year. The orders in Brunei, in Malaysia last year, just to quote 2 of them. I think our footprint is quite good. We have quite a lot of personnel [indiscernible] in those countries. What I would tell you is we're well-positioned because from the position that we sit as a Canadian company to start with, historically, we've had -- we've not had a very large home-grown market in Canada to sustain Military. So by definition, we've had to be International for quite a number of years. So we're seeing the fruits of the relationships that we've created and the people that we have on route over the last years. So we have pretty good visibility of pipeline of orders, whether it be in Middle East, in Asia, and I feel good about that.

Our next question comes from the line of Cameron Doerksen with National Bank Financial.

I guess a question on capital deployment. You've increased your dividends, I think your shareholders would be happy to see. You've indicated that you don't really see any more major acquisitions on the, at least, near-term horizon. And it looks like your CapEx is going to be lower this year and then, presumably, maybe going forward as well. So it looks like you're going to be generating a fair bit of a free cash flow here in the next few years. So I'm just wondering if you think that you might be interested in doing a share buyback. And I think you'd probably agree that the current share price is not really reflecting the true value of CAE, so I'm just wondering what your thoughts are on that?

Well, I think that -- you've seen us increase the dividend you mentioned for the second time in as many years. And I think that demonstrates both ours and the board's confidence in the recurring nature of our cash flows and the confidence in business overall. So we consider buybacks albeit, we haven't done any. We consider, I would say, yes to your question. We would see that as another method of addressing shareholder needs for returns -- closure returns. And so we would definitely consider that. We haven't done it yet.

Our next question comes from the line of Steve Arthur with RBC Capital Markets.

Yes, Marc, you made some interesting comments on the Oxford synergies. Then I guess related to that, I'm wondering if you could elaborate a little bit more on some of the CapEx plans and priorities in that area. And then with Oxford, you took over a very large number of generally older simulators, so I was presuming there would be some upgrade work required there, yet CapEx is coming down. So is it fair to assume that there's less capital required than expected before in the Oxford facilities and/or a slowdown in growth in other training facilities?

While it's definitely not a slowdown in growth. I just think that what we're seeing here is something that we'd anticipated. Of any buyers of this business, because of the install base that we have, there was definitely no other company better situated than us to capitalize on synergies and one of those is the synergies that you get out of CapEx and we're seeing it. We're able to continue to fund the growth. And frankly, some of the growth CapEx that we would have planned to deploy this year has mitigated by us being able to, for example, redeploy assets that we have in Oxford, that were not fully utilized, as an example. I can tell you, in the next few months there's at least 6 of those that are currently being moved to other locations. So that'll increase utilization on those and, obviously,increase the revenue percent that we get. And in terms of the work that we need to, if you like, freshen up the simulators and other assets within Oxford, sure there's some. We had anticipated that. But again, because of who we are in the business, first of all, we're not able to optimize what we need to do to bring those simulators up to par. And really what you're talking most of the time is upgrading the configurations to represent the type of aircraft that you're going to be simulating, obviously the, you know what, say, A320 model as an example. So that's what you're seeing. People talk uses uses [ph] term 'older assets,' which is legitimate because the fleet is older. But I wish to use the example that you take -- you get an airline, there's A320 or a Boeing 737, it could be 25 years old. And as a revenue-generating asset, it doesn't matter how old it is. It's airworthy, it's working. In fact, in a lot of cases, it may be more profitable because the fact that, for example, it's fully depreciated. And so the same kind of dynamics happens to -- in our world here.

Our next question comes from the line of David Newman with Cormark Securities.

Just on looking at the Civil side once again, you've increased the production of your sims it would appear in the quarter, it looks like you had a bit of a transition as a de-link with sales with the production side, and now you have $22 million of savings related to Oxford. I guess, my question is related to, how do you think the margin improvement will be staged in with Oxford, as well as the increased production rate? And what do you think the new level of margin improvement could be, I guess, civil overall, and as well as the 2 divisions within it?

Stephane, you want to comment there?

Sure, absolutely. I think, as you know, the Oxford itself, we're -- as we've said in a few times I think in the past couple of weeks, about half of the business is derived from a low margin type of business, which is part. It doesn't require capital, but the margins are fairly low. So in my view, I think here, we could expect a margins dilution of probably at around 3% to 4% for the Civil business as a whole. The impact would be -- probably be heavier on the training service segment alone. You might probably see an impact of 5% to 6%. And we've -- I've looked at it, and you can expect, as I said, maybe 3%, 3.5% of dilution on the SOI margin for both Civil segments.

And just on the back of that, just looking at the $22 million, how is that going to be staged in? And then on the increased production rates, how will that be affected in the margins?

I think what we've said, Steve, is that the cost synergies will be -- we see them ramped up over the next 12 to 15 months and overall and mainly affecting the Civil Training business. Based on what we've seen, as we mentioned, there's more synergy, $22 billion. And if anything, we're trending more towards the 12 months than the 15. It's happening earlier, so you would expect the business, when Stephane talks about a maybe 3% to 4% margin dilution, if you were thinking about, as we've said before, before Oxford, we were talking that the Civil business at a peak would be like 22% margins overall. You saw before Oxford, we weren't too far from that. If you take 3% or 4% off, you're in the 19% range, and you figure that, that would be what you'd be looking at when we fully ramped up the cost synergies.

Our next question comes from the line of Benoit Poirier from Desjardin Capital Markets.

Could you maybe provide more color about the training opportunity for the U.S. Air Force [indiscernible] program? When should we hear more news about it, and what are your expectations?

Yes, sure, Benoit. It's, as you know, a full and open competition. Bids -- your bids went in at the end of May 2012. We expect the U.S. Air Force to take at least 9 months in this environment, maybe a little longer to select the winner. We've bid it as a prime contractor. Now it will be -- there will be a lot of competition on that, so we expect -- -- certainly Boeing to build, Lockheed to bid the L-3, FlightSafety. They'll all be in there. We -- but that's what that bid. And of course, we bid as a prime contractor. We feel good about our bid, but of course, it will be competitive.

Our next question comes from the line of Fadi Chamoun with BMO Capital Markets.

So on capital deployment, I appreciate the comment on visibility of cash that you have. Your payout ratio in dividend is somewhere in the mid-20s now, 26 based on last 12 months. And I was wondering if this is something you were going to try to maintain on a go-forward basis. Secondly in terms of your debt level, you were under 30% or in the low 30% I guess debt to capital, and now we're in the high 40. And is there a target that you have in mind now that you see sort of your business having a little bit more...?

Maybe just start with the first part and let Stephane take it from the target capital structure. In terms of the payout ratio, yes - recognized the number you said that. You said there, that's where we wind up. We don't have a specific policy on it, but clearly we've raised it twice now in the past, as I said, in so many years, and we do want to strike that balance, as I mentioned in my comments about long-term capital appreciation growth and current returns. So it's -- certainly, we don't have a policy, but it's not impossible that we do that again. And maybe I'll cede the second part to Stephane.

Absolutely. On the debt level, Fadi, well, as you say we're at 40%, 48% at the debt to capital at the end of the quarter. We used to see in the past around 30% to 1/3. And when you look back, this allowed us to invest in making those equity [ph] acquisitions that we made in this past year and I think in METI and Oxford and deploy capital in the market, in the debt market that is pretty favorable to us. Now we're not at an uncomfortable level at 48%. We've even, as I mentioned, renegotiated our credit facility of revolving agreements with our banks even ahead of maturity. Now to be prudent, one of the things Marc talked about the capital allocation, one of the things we want to do with our free cash flow is start deleveraging the business. I don't think that we would necessarily target going back at 30%. That market is too good at this point in time. But somewhere midway between 1/3, I guess, where we were some time ago and half, so pretty much half of our capital as we are today, would be a very good sum to be anything [ph].

Okay. And one related follow-up. You're working capital has been fairly negative for a number of years now. I was wondering if you can give us some color about what you see happening in the next 2 quarters on that front.

As you know very well, in the first quarter, we were always -- this is a quarter where we spend a lot of our cash on making some annual payments. So you've seen us investing in noncash working capital every Q1 every year. The good news, if I look at the amount of money that we've invested in this quarter, $120 million is lower than the $160 million that we had invested in Q1 of last year. And just looking at some of the elements of that noncash working cap, you look at the aging of our ARs for instance, receivables over 60 days. The percentage has improved from -- over time from last year to where we are today. Our investment in project-related noncash working cap is less than last year, same thing for inventories. So I think we're managing that side a little bit more closely than we used to. Are we completely happy with where we are? I think we still want to improve that side, and we'll be keep on managing this. But you also -- you always see this in the first quarter, some dip in cash flow from noncash working cap. And we will soonly -- as we did in the past years, reverse some of that in the remainder of the year.

Our next question comes from Turan Quettawala from Scotia Capital.

I guess, I just wanted to get a sense on -- and maybe you can help us understand how the pricing environment is for the Civil simulator business. Obviously, there's has been some increased competition there. It's just if you could give us some color, that would be helpful.

I think on the training side, it's pretty stable. On the simulator product side, it depends on, on --go opportunity by opportunity. I think we see certainly competitors, new competitors wanting to make a dent in there. But I would not say that this, overall, the pricing has changed dramatically one way or another. Not that we've seen so far anyway.

Our next question comes from the line of Chris Murray with PI Financial Corp.

Just, I guess, a quick question on the military segments, and maybe even more specifically the product side. In looking at the way your backlogs are revolving, as you said, you had a couple of slower quarters middle of last year and some good pick-up at the end of the year. Is there anything you think you can do to either smooth out or bring ahead some orders just so that you don't see a revenue drop kind of near term? And if you could give us maybe -- just if you can recap how you think the revenue will build through the year.

I think what you [indiscernible] and Stephane comment what we're mainly seeing in the sim product Civil is, it reflects the mix of order that go through quarter by quarter in terms of the revenue. We have probably [ph] about half the backlog in sim product in Civil that's made up of long programs. Not the, for example, the next A320, but development programs that tend to have a life that is longer, where we -- the institution of the revenue is kind of up and down because mainly sometimes, as a result of the progress of the aircraft program itself. But I think that -- I mean you could expect that, that revenue because of the increased orders we've had over the past year, you gradually see that continue to go up, but it'll fluctuate a bit. You want to add something?

That was for sim product Civil. Was that your question there, Chris?

Yes. What I'm trying to figure out, basically if you kind of think about the fact that you got normal delivery cycles kind of Q2, Q3 last year, you had some lower orders, you made it up in Q4 certainly very strong and even had like a C-130 that you guys had prebuilt a little bit. What I'm trying to figure out is, even for the remainder of this year, if there's anything you can do to accelerate any of the late orders, if you will, into earlier periods this year?

I'm sorry, you're talking about military? Okay.

Yes.

So I think in terms of accelerating orders, I mean it does -- the usual way to accelerate orders into revenue is through advance builds. We don't tend to do that, to be honest. So it's really a question of, for us, just securing orders, executing the backlog that we have. But maybe, I don't know if I'm getting to the root of your question around the production.

Yes, well, what I'm just trying to understand is as we had these dips in kind of the middle of last year, you kind of think about you take an order for a simulator, it should start shipping or building. At what point do you start recognizing revenue. There's a certain -- there's certain timeframe. I'm just trying to think of if there's anything you can do to accelerate some of those orders you received, say, in Q4 more towards Q2 as opposed to the back half of the year? .

Believe me, we try to do that every quarter. We don't necessarily like the quarter over -- the quarter lumpiness that we see. It's unfortunately inherent in the business. If you look at orders in the military, they tend, on average, to be larger. You execute one large order, you generate a lot of revenue in one quarter. If you look at last year, it was very back-end loaded. So you start producing those. But then you get into shifting on another part of the program, which is more R&D intensive, where you're not willing that into revenue. So I really come back to you should look at this on a 12-month viewpoint and the way we're guiding it and that's -- I think that's the way to look at it.

[Operator Instructions] We have the follow-up question from Benoit Poirier with Desjardins Capital.

If we look at the defense side on the military, a lot of companies were very proactive including you last quarter with their restructuring. So right now, in light of the current market environment, should we assume anymore restructuring on your side?

Not at the moment, Benoit. We did what we thought was required in terms of how we looked at our backlog and anticipated orders. And we try to put in a little fact, a little buffer there because of how things can fluctuates. So we don't see any at the moment, but if orders don't materialize the way we want in any big way, we'll have to do it again, but it's not anticipated at the moment.

Operator, I'd like to thank members of the investment community for their participation and now ask that you open the lines to members of the media.

And we have no questions from the media at this time.

Okay, if that is all, I would like to thank all participants in today's call, remind you that a transcript of the call can be found on CAE's website at cae.com. Thank you.

Ladies and gentleman, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.