CAE reports third quarter financial results for fiscal year 2013

CAE reports third quarter financial results for fiscal year 2013 
- Revenue of C$522.1 million compared to C$453.1 million in prior
year 
- EPS of C$0.15 (C$0.18 before restructuring, integration and
acquisition costs) vs. C$0.18 in prior year   
- Free cash flow of C$90.7 million 
MONTREAL, CANADA -- (Marketwire) -- 02/13/13 -- (NYSE:CAE)(TSX:CAE) -
CAE today reported financial results for the third quarter ended
December 31, 2012. Net income attributable to equity holders was
$37.8 million ($0.15 per share) this quarter, compared to $45.6
million ($0.18 per share) last year. All financial information is in
Canadian dollars. 
Excluding $8.8 million (after-tax) of restructuring, integration and
acquisition costs this quarter, net income attributable to equity
holders was $46.6 million ($0.18 per share).  
Revenue for the quarter was $522.1 million, 15% higher than $453.1
million last year.  
"Our results for the quarter were as we anticipated, given the
integration and restructuring efforts underway in our Civil and
Military segments," said Marc Parent, CAE's President and Chief
Executive Officer. "In Civil Products, simulator wins in the quarter
put us on track for annual sales in the mid-30s. The integration of
recently acquired Oxford is progressing as planned, and we continue
to expect significant synergies in Civil Training as this effort is
concluded. In Military, order levels continued to reflect the delays
currently inherent to the defence market, but we had a good win rate
and we remain confident given our high level of bid activity."  
Summary of consolidated results 


 
(amounts in millions, except                                                
 for operating margins)          Q3-2013  Q2-2013  Q1-2013  Q4-2012  Q3-2012
----------------------------------------------------------------------------
Revenue                      $     522.1    514.4    480.1    506.7    453.1
Operating profit(1)          $      62.4     66.9     44.8     88.7     77.5
                                                                            
As a % of revenue            %      12.0     13.0      9.3     17.5     17.1
Net income                   $      37.5     36.8     21.7     53.7     46.1
Net income attributable to                                                  
 equity holders of the                                                      
 Company                     $      37.8     36.5     21.3     53.2     45.6
Backlog(2)                   $   3,833.0  3,909.1  3,894.5  3,724.2  3,514.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Civil segments  
Revenue for our combined Civil segments increased 41% in the third
quarter to $287.2 million compared to $203.7 million last year. Third
quarter operating income was $47.1 million (16.4% of revenue)
compared to $42.0 million (20.6% of revenue) last year. This
quarter's results include the acquisition of Oxford Aviation Academy
(Oxford), which is still in the process of being integrated with
CAE's existing operations.  
We received six full-flight simulator (FFS) orders in the third
quarter, including orders from COMAC of China for the first two FFSs
for its new C919 passenger aircraft, and two FFSs for the Federal Air
Transportation Agency in Russia. During the quarter, we also obtained
training services contracts expected to generate $149.3 million in
future revenue.  
We received $219.0 million in combined civil segment orders this
quarter representing a book-to-sales ratio of 0.76x. The ratio for
the trailing 12 months was 1.0x. 
Training & Services/Civil (TS/C) 


 
(amounts in millions, except                                                
 operating margins, RSEU and                                                
 FFSs deployed)                  Q3-2013  Q2-2013  Q1-2013  Q4-2012  Q3-2012
----------------------------------------------------------------------------
Revenue                       $    193.8    189.1    170.9    132.3    123.0
                              ----------------------------------------------
Segment operating income      $     29.1     27.3     33.3     30.3     28.8
                              ----------------------------------------------
Operating margins             %     15.0     14.4     19.5     22.9     23.4
                              ----------------------------------------------
Backlog                       $  1,345.8  1,360.9  1,400.0  1,183.4  1,102.8
                              ----------------------------------------------
RSEU(3)                              186      187      164      142      140
                              ----------------------------------------------
FFSs deployed                        222      218      216      171      170
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Simulation Products/Civil (SP/C) 


 
(amounts in millions, except                                                
 operating margins)              Q3-2013  Q2-2013  Q1-2013  Q4-2012  Q3-2012
----------------------------------------------------------------------------
Revenue                       $     93.4     98.9     80.3     83.1     80.7
                              ----------------------------------------------
Segment operating income      $     18.0     18.9     14.4     14.0     13.2
                              ----------------------------------------------
Operating margins             %     19.3     19.1     17.9     16.8     16.4
                              ----------------------------------------------
Backlog                       $    361.2    385.2    361.9    351.6    366.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Military segments  
Revenue for our combined Military segments decreased 7% in the third
quarter to $206.2 million compared to $222.3 million last year.
Operating income was $27.0 million (13.1% of revenue) for the
quarter, compared to $36.9 million (16.6% of revenue) last year.  
We booked orders during the quarter from customers including the U.S.
Navy under its foreign military sale program for two MH-60R Seahawk
helicopter simulators for the Royal Australian Navy. We also received
orders from the U.K. Ministry of Defence for helicopter simulator
upgrades and training services at the Medium Support Helicopter
Aircrew Training Facility, which CAE operates under a long term
services agreement.  
We received $150.1 million in combined military segment orders this
quarter, representing a book-to-sales ratio of 0.73x. The ratio for
the trailing 12 months was 1.11x. 
Simulation Products/Military (SP/M) 


 
(amounts in millions, except                                                
 operating margins)              Q3-2013  Q2-2013  Q1-2013  Q4-2012  Q3-2012
----------------------------------------------------------------------------
Revenue                       $    140.5    130.8    135.4    195.6    152.4
                              ----------------------------------------------
Segment operating income      $     18.3     20.9     19.5     34.6     26.9
                              ----------------------------------------------
Operating margins             %     13.0     16.0     14.4     17.7     17.7
                              ------------------
----------------------------
Backlog                       $    728.9    723.1    755.6    786.0    812.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Training & Services /Military (TS/M) 


 
(amounts in millions, except                                                
 operating margins)              Q3-2013  Q2-2013  Q1-2013  Q4-2012  Q3-2012
----------------------------------------------------------------------------
Revenue                       $     65.7     67.3     67.4     71.5     69.9
                              ----------------------------------------------
Segment operating income      $      8.7      7.4      8.9     11.0     10.0
                              ----------------------------------------------
Operating margins             %     13.2     11.0     13.2     15.4     14.3
                              ----------------------------------------------
Backlog                       $  1,397.1  1,439.9  1,377.0  1,403.2  1,232.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
New Core Markets  
Revenue in New Core Markets was $28.7 million for the quarter, up 6%
from $27.1 million last year. Operating income was $1.7 million for
the quarter, compared to negative $1.4 million last year.  
In CAE Healthcare, we made inroads in global markets with sales of
our products to support new simulation centres in China, including
surgical simulators and associated curriculum packages. We also sold
surgical simulators in Japan. In the U.S., we continued to sell our
full suite of patient simulator products and centre management
systems. 
In CAE Mining, we sold our resource modelling and mine planning
software solutions to major mining customers in Africa, Brazil,
Mexico and Russia.  
New Core Markets (NCM) 


 
(amounts in millions, except                                                
 operating margins)              Q3-2013  Q2-2013  Q1-2013  Q4-2012  Q3-2012
----------------------------------------------------------------------------
Revenue                       $     28.7     28.3     26.1     24.2     27.1
                              ----------------------------------------------
Segment operating income                                                    
 (loss)                       $      1.7      2.2      0.7    (1.2)    (1.4)
                              ----------------------------------------------
Operating margins             %      5.9      7.8      2.7        -        -
                              ----------------------------------------------
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Additional financial highlights  
Income taxes this quarter were $9.4 million representing an effective
tax rate of 20%, compared to 25% last year. The tax rate was lower
than the third quarter last year due to a change in the mix of income
from various jurisdictions and the recognition of a tax asset
generated from profits in one of our foreign operations. 
Free cash flow(4) was positive $90.7 million this quarter. The
increase from last quarter was mainly attributable to favourable
changes in non-cash working capital and higher proceeds from the
disposal of assets. The increase from the third quarter of fiscal
2012 was mainly attributable to favourable changes in non-cash
working capital, and lower maintenance capital expenditures.  
Capital expenditures totalled $32.9 million this quarter, including
$24.0 million in growth capital expenditures and $8.9 million for
maintenance.  
Net debt(5) was $965.4 million as at December 31, 2012, compared with
$994.8 million as at September 30, 2012. 
In December 2012, pursuant to a private placement, CAE issued debt of
$348.9 million ($125.0 million and US$225.0 million) to refinance
existing debt. Of this amount, $50.0 million bears floating interest
rates based on bankers' acceptance rates plus a spread. The remaining
$298.9 million ($75.0 million and US$225.0 million) bear an interest
rate ranging from 3.6% to 4.2%. The notes hold maturity dates ranging
from December 2019 to December 2027. 
CAE will pay a dividend of $0.05 per share effective March 28, 2013
to shareholders of record at the close of business on March 15, 2013. 
Additional information  
You will find a more detailed discussion of our results by segment in
the Management's Discussion and Analysis (MD&A) as well as in our
consolidated interim financial statements which are posted on our
website at www.cae.com/investors. 
CAE's unaudited consolidated interim financial statements and
management's discussion and analysis for the quarter ended December
31, 2012 have been filed with the Canadian securities commissions and
are available on our website (www.cae.com) and on SEDAR
(www.sedar.com). They have also been filed with the U.S. Securities
and Exchange Commission and are available on their website
(www.sec.gov). 
Conference call Q3 FY2013   
CAE will host a conference call focusing on fiscal year 2013 third
quarter financial results today at 1:00 p.m. ET. The call is intended
for analysts, institutional investors and the media. Participants can
listen to the conference by dialling + 1 877 586 3392 or +1 416 981
9024. The conference call will also be audio webcast live for the
public at www.cae.com.  
CAE is a global leader in modeling, simulation and training for civil
aviation and defence. The company employs approximately 8,000 people
at more than 100 sites and training locations in approximately 30
countries. CAE offers civil aviation, military, and helicopter
training services in more than 45 locations worldwide and trains
approximately 100,000 crewmembers yearly. In addition, the CAE Oxford
Aviation Academy offers training to aspiring pilot cadets in 11
CAE-operated flight schools. CAE's business is diversified, ranging
from the sale of simulation products to providing comprehensive
services such as training and aviation services, integrated
enterprise solutions, in-service support and crew sourcing. The
company applies simulation expertise and operational experience to
help customers enhance safety, improve efficiency, maintain readiness
and solve challenging problems. CAE is leveraging its simulation
capabilities in new markets such as healthcare and mining.
www.cae.com  
You will 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 commissions
and are available on our website (www.cae.com), on SEDAR
(www.sedar.com) and a free copy is available upon request to CAE.
They have also been filed with the U.S. Securities and Exchange
Commission under Form 40-F and are available on EDGAR (www.sec.gov).
The forward-looking statements contained in this news release
represent our expectations as of February 13, 2013 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. 
Notes 


 
1.  Operating profit is non-GAAP measure that shows us how we have performed
    before the effects of certain financing decisions and tax structures. We
    track operating profit because we believe it makes it easier to compare
    our performance with previous periods, and with companies and industries
    that do not have the same capital structure or tax laws. 
    
2.  Backlog is a non-GAAP measure that represents the expected value of
    orders we have received but have not yet executed. 
    
3.  Revenue simulator equivalent unit (RSEU) is a financial measure we use
    to show the total average number of FFSs available to generate revenue
    during the period. 
    
4.  Free cash flow is a non-GAAP measure that shows us how much cash we have
    available to build the business, 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, other assets not related to growth and dividends paid and
    adding proceeds from disposal of property, plant and equipment. 
    
5.  Net debt is a non-GAAP measure we use to monitor how much debt we have
    after taking into account liquid assets such as 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. 

 
Consolidated Statement of Financial Position 


 
(Unaudited)                                       December 31      March 31 
(amounts in millions of Canadian dollars)                2012          2012 
----------------------------------------------------------------------------
Assets                                                                      
Cash and cash equivalents                       $       305.0 $       287.3 
Accounts receivable                                     380.8         308.4 
Contracts in progress: assets                           242.5         245.8 
Inventories                                             180.7         153.1 
Prepayments                                              56.7          47.7 
Income taxes recoverable                                124.2          95.5 
Derivative financial assets                               7.6          10.3 
----------------------------------------------------------------------------
Total current assets                            $     1,297.5 $     1,148.1 
Property, plant and equipment                         1,489.0       1,293.7 
Intangible assets                                       783.7         533.2 
Deferred tax assets                                      39.2          24.1 
Derivative financial assets                               4.6           7.2 
Other assets                                            199.6         177.4 
----------------------------------------------------------------------------
Total assets                                    $     3,813.6 $     3,183.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and equity                                                      
Accounts payable and accrued liabilities        $       635.5 $       597.6 
Provisions                                               48.6          21.6 
Income taxes payable                                     10.2          10.9 
Contracts in progress: liabilities                      106.0         104.6 
Current portion of long-term debt                       157.4         136.0 
Derivative financial liabilities                         11.7          12.7 
----------------------------------------------------------------------------
Total current liabilities                       $       969.4 $       883.4 
Provisions                                                7.7           6.0 
Long-term debt                                        1,113.0         685.6 
Royalty obligations                                     157.5         161.6 
Employee benefits obligations                           129.4         114.2 
Deferred gains and other non-current liabilities        183.5         186.0 
Deferred tax liabilities                                137.2          91.8 
Derivative financial liabilities                         12.7          12.9 
----------------------------------------------------------------------------
Total liabilities                               $     2,710.4 $     2,141.5 
----------------------------------------------------------------------------
Equity                                                                      
Share capital                                   $       467.9 $       454.5 
Contributed surplus                                      21.4          19.2 
Accumulated other comprehensive loss                    (17.5)         (9.8)
Retained earnings                                       602.2         558.0 
----------------------------------------------------------------------------
Equity attributable to equity holders of the                                
 Company                                        $     1,074.0 $     1,021.9 
Non-controlling interests                                29.2          20.3 
----------------------------------------------------------------------------
Total equity                                    $     1,103.2 $     1,042.2 
----------------------------------------------------------------------------
Total liabilities and equity                    $     3,813.6 $     3,183.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Consolidated Income Statement 


 
(Unaudited)                    Three months ended         Nine months ended 
                                      December 31               December 31 
(amounts in millions of                                                     
 Canadian dollars,                                                          
 except per share                                                           
 amounts)                       2012         2011         2012         2011 
----------------------------------------------------------------------------
Revenue                 $      522.1 $      453.1 $    1,516.6 $    1,314.5 
Cost of sales                  370.9        300.2      1,062.3        884.5 
----------------------------------------------------------------------------
Gross profit            $      151.2 $      152.9 $      454.3 $      430.0 
Research and development                                                    
 expenses                       14.0         16.5         42.5         47.6 
Selling, general and                                                        
 administrative expenses        67.3         62.5        203.0        184.6 
Other (gains) losses -                                                      
 net                            (5.9)        (3.6)       (20.5)       (15.6)
Restructuring,                                                              
 integration and                                                            
 acquisition costs              13.4            -         55.2            - 
----------------------------------------------------------------------------
Operating profit        $       62.4 $       77.5 $      174.1 $      213.4 
----------------------------------------------------------------------------
Finance income                  (2.7)        (1.6)        (5.8)        (5.1)
Finance expense                 18.2         17.8         55.8         51.1 
----------------------------------------------------------------------------
Finance expense - net   $       15.5 $       16.2 $       50.0 $       46.0 
----------------------------------------------------------------------------
Earnings before income                                                      
 taxes                  $       46.9 $       61.3 $      124.1 $      167.4 
Income tax expense               9.4         15.2         28.1         39.1 
----------------------------------------------------------------------------
Net income              $       37.5 $       46.1 $       96.0 $      128.3 
----------------------------------------------------------------------------
Attributable to:                                                            
Equity holders of the                                                       
 Company                $       37.8 $       45.6 $       95.6 $      127.1 
Non-controlling                                                             
 interests                      (0.3)         0.5          0.4          1.2 
----------------------------------------------------------------------------
                        $       37.5 $       46.1 $       96.0 $      128.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share from                                                     
 continuing operations                                                      
 attributable to equity                                                     
 holders of the Company                                                     
Basic and diluted       $       0.15 $       0.18 $       0.37 $       0.49 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Consolidated Statement of Comprehensive Income 


 
                             Three months ended           Nine months ended 
(Unaudited)                         December 31                 December 31 
(amounts in millions                                                        
 of Canadian                                                                
 dollars)                    2012          2011          2012          2011 
----------------------------------------------------------------------------
Net income           $       37.5  $       46.1  $       96.0  $      128.3 
----------------------------------------------------------------------------
Foreign currency                                                            
 translation                                                                
Net currency                                                                
 translation                                                                
 difference on the                                                          
 translation of                                                             
 financial                                                                  
 statements of                                                              
 foreign operations  $       36.2  $      (39.9) $       (2.2) $       18.6 
Net (losses) gains                                                          
 on certain long-                                                           
 term debt                                                                  
 denominated in                                                             
 foreign currency                                                           
 and designated as                                                          
 hedges of net                                                              
 investments in                                                             
 foreign operations          (7.4)          4.2          (0.2)         (7.3)
Income taxes                  0.8          (0.5)         (0.5)          1.4 
----------------------------------------------------------------------------
                     $       29.6  $      (36.2) $       (2.9) $       12.7 
----------------------------------------------------------------------------
Net changes in cash                                                         
 flow hedges                                                                
Effective portion of                                                        
 changes in fair                                                            
 value of cash flow                                                         
 hedges              $       (6.7) $       13.1  $        2.5  $      (14.8)
Net change in fair                                                          
 value of cash flow                                                         
 hedges transferred                                                         
 to net income or to                                                        
 related non-                                                               
 financial assets or                                                        
 liabilities                 (1.4)          6.4          (9.1)         (0.2)
Income taxes                  2.5          (5.6)          1.9           3.3 
----------------------------------------------------------------------------
                     $       (5.6) $       13.9  $       (4.7) $      (11.7)
----------------------------------------------------------------------------
Defined benefit plan                                                        
 actuarial gains                                                            
 (losses)                                                                   
Defined benefit plan                                                        
 actuarial gains                                                            
 (losses)            $       18.9  $        2.5  $      (20.7) $      (42.3)
Income taxes                 (5.1)         (0.7)          5.5          11.7 
----------------------------------------------------------------------------
                     $       13.8  $        1.8  $      (15.2) $      (30.6)
----------------------------------------------------------------------------
Other comprehensive                                                         
 income (loss)       $       37.8  $      (20.5) $      (22.8) $      (29.6)
----------------------------------------------------------------------------
Total comprehensive                                                         
 income              $       75.3  $       25.6  $       73.2  $       98.7 
----------------------------------------------------------------------------
Attributable to:                                                            
Equity holders of                                                           
 the Company         $       75.5  $       25.2  $       72.7  $       97.4 
Non-controlling                                                             
 interests                   (0.2)          0.4           0.5           1.3 
----------------------------------------------------------------------------
                     $       75.3  $       25.6  $       73.2  $       98.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Consolidated Statement of Changes in Equity 


 
(Unaudited)                   Attributable to equity holders of the Company
                      -----------------------------------------------------
nine months ended                                                          
 December 31, 2012                Common shares                            
(amounts in millions                                           Accumulated 
 of Canadian dollars,                                                other 
 except number of        Number of               Contributed comprehensive 
 shares)                    shares Stated value      surplus (loss) income 
---------------------------------------------------------------------------
Balances, beginning of                                                     
 period                258,266,295 $      454.5 $       19.2  $       (9.8)
Net income                       -            -            -             - 
Other comprehensive                                                        
 income (loss):                                                            
  Foreign currency                                                         
   translation                   -            -            -          (3.0)
  Net changes in cash                                                      
   flow hedges                   -            -            -          (4.7)
  Defined benefit plan                                                     
   actuarial losses              -            -            -             - 
---------------------------------------------------------------------------
Total comprehensive                                                        
 income                          - $          - $          -  $       (7.7)
Stock options                                                              
 exercised                 382,250          3.2            -             - 
Optional cash purchase       1,161            -            -             - 
Stock dividends            940,859          9.3            -             - 
Transfer upon exercise                                                     
 of stock options                -          0.9         (0.9)            - 
Share-based payments             -            -          3.1             - 
Additions to non-                                                          
 controlling interests           -            -            -             - 
Dividends                        -            -            -             - 
---------------------------------------------------------------------------
Balances, end of                                                           
 period                259,590,565 $      467.9 $       21.4  $      (17.5)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
                                                                           
                                                                           
 
(Unaudited)              Attributable to equity                            
                         holders of the Company                            
                      --------------------------                           
nine months ended                                                          
 December 31, 2012                                                         
(amounts in millions                                                       
 of Canadian dollars,                                    Non-              
 except number of         Retained                controlling              
 shares)                  earnings        Total     interests Total equity 
---------------------------------------------------------------------------
Balances, beginning of                                                     
 period                $     558.0  $   1,021.9  $       20.3 $    1,042.2 
Net income                    95.6         95.6           0.4         96.0 
Other comprehensive                                                        
 income (loss):                                                            
  Foreign currency                                                         
   translation                   -         (3.0)          0.1         (2.9)
  Net changes in cash                                                      
   flow hedges                   -         (4.7)            -         (4.7)
  Defined benefit plan                                                     
   actuarial losses          (15.2)       (15.2)            -        (15.2)
---------------------------------------------------------------------------
Total comprehensive                                                        
 income                $      80.4  $      72.7  $        0.5 $       73.2 
Stock options                                                              
 exercised                       -          3.2             -          3.2 
Optional cash purchase           -            -             -            - 
Stock dividends               (9.3)           -             -            - 
Transfer upon exercise                                                     
 of stock options                -            -             -            - 
Share-based payments             -          3.1             -          3.1 
Additions to non-                                                          
 controlling interests           -            -           8.4          8.4 
Dividends                    (26.9)       (26.9)            -        (26.9)
---------------------------------------------------------------------------
Balances, end of                                                           
 period                $     602.2  $   1,074.0  $       29.2 $    1,103.2 
---------------------------------------------------------------------------
---------------------------------------------------------------------------
                                                                           
                                                                           
(Unaudited)                   Attributable to equity holders of the Company
                   --------------------------------------------------------
nine months ended                                                          
 December 31, 2011              Common shares                              
(amounts in                                                                
 millions of                                                  Accumulated  
 Canadian dollars,                                                   other 
 except number of     Number of                 Contributed  comprehensive 
 shares)                 shares  Stated value       surplus  (loss) income 
---------------------------------------------------------------------------
Balances, beginning                                                        
 of period          256,964,756 $       440.7 $        17.1  $        (9.8)
Net income                    -             -             -              - 
Other comprehensive                                                        
 income (loss):                                                            
  Foreign currency                                                         
   translation                -             -             -           12.6 
  Net changes in                                                           
   cash flow hedges           -             -             -          (11.7)
  Defined benefit                                                          
   plan actuarial                                                          
   losses                     -             -             -              - 
---------------------------------------------------------------------------
Total comprehensive                                                        
 income                       - $           - $           -  $         0.9 
Stock options                                                              
 exercised              283,975           2.0             -              - 
Optional cash                                                              
 purchase                   599             -             -              - 
Stock dividends         572,636           5.9             -              - 
Transfer upon                                                              
 exercise of stock                                                         
 options                      -           0.8          (0.8)             - 
Share-based                                                                
 payments                     -             -           3.0              - 
Dividends                     -             -             -              - 
---------------------------------------------------------------------------
Balances, end of                                                           
 period             257,821,966 $       449.4 $        19.3  $        (8.9)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
 
(Unaudited)             Attributable to equity                              
                        holders of the Company                              
                   ----------------------------                             
nine months ended                                                           
 December 31, 2011                                                          
(amounts in                                                                 
 millions of                                                                
 Canadian dollars,                                       Non-               
 except number of       Retained                  controlling               
 shares)                earnings         Total      interests  Total equity 
----------------------------------------------------------------------------
Balances, beginning                                                         
 of period          $      466.4  $      914.4  $        18.5 $       932.9 
Net income                 127.1         127.1            1.2         128.3 
Other comprehensive                                                         
 income (loss):                                                             
  Foreign currency                                                          
   translation                 -          12.6            0.1          12.7 
  Net changes in                                                            
   cash flow hedges            -         (11.7)             -         (11.7)
  Defined benefit                                                           
   plan actuarial                                                           
   losses                  (30.6)        (30.6)             -         (30.6)
----------------------------------------------------------------------------
Total comprehensive                                                         
 income             $       96.5  $       97.4  $         1.3 $        98.7 
Stock options                                                               
 exercised                     -           2.0              -           2.0 
Optional cash                                                               
 purchase                      -             -                            - 
Stock dividends             (5.9)            -              -             - 
Transfer upon                                                               
 exercise of stock                                                          
 options                       -             -              -             - 
Share-based                                                                 
 payments                      -           3.0              -           3.0 
Dividends                  (25.0)        (25.0)             -         (25.0)
----------------------------------------------------------------------------
Balances, end of                                                            
 period             $      532.0  $      991.8  $        19.8 $     1,011.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The total of retained earnings and accumulated other comprehensive loss for 
the nine months ended December 31, 2012 was $584.7 million (2011 - $523.1   
million).                                                                   

 
Consolidated Statement of Cash Flows 


 
(Unaudited)                                                                 
nine months ended December 31                                               
(amounts in millions of Canadian dollars)                2012          2011 
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Operating activities                                                        
Net income                                       $       96.0  $      128.3 
Adjustments to reconcile net income to cash                                 
 flows from operating activities:                                           
  Depreciation of property, plant and equipment          79.5          68.0 
  Amortization of intangible and other assets            34.0          24.3 
  Financing cost amortization                             1.3           1.3 
  Deferred income taxes                                  19.2          18.2 
  Investment tax credits                                (16.6)        (10.6)
  Share-based payments                                   (1.4)          1.2 
  Defined benefit pension plans                          (5.7)         (9.0)
  Amortization of other non-current liabilities         (10.3)         (8.5)
  Other                                                 (11.2)         (5.4)
Changes in non-cash working capital                    (109.0)        (96.0)
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Net cash provided by operating activities        $       75.8  $      111.8 
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Investing activities                                                        
Business combinations, net of cash and cash                                 
 equivalents acquired                            $     (284.6) $     (126.1)
Joint ventures, net of cash and cash equivalents                            
 acquired                                                   -         (27.6)
Capital expenditures for property, plant and                                
 equipment                                             (123.4)       (121.3)
Proceeds from disposal of property, plant and                               
 equipment                                                7.8          28.3 
Capitalized development costs                           (37.0)        (30.0)
Enterprise resource planning (ERP) and other                                
 software                                               (13.9)        (12.3)
Other                                                    (0.8)          4.8 
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Net cash used in investing activities            $     (451.9) $     (284.2)
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Financing activities                                                        
Net borrowing under revolving unsecured credit                              
 facilities                                      $      132.3  $       14.2 
Net effect of current financial assets program          (24.6)         10.4 
Proceeds from long-term debt, net of transaction                            
 costs                                                  703.1         182.1 
Repayment of long-term debt                            (374.1)        (26.7)
Repayment of finance lease                              (17.3)        (19.9)
Dividends paid                                          (26.9)        (25.0)
Common stock issuance                                     3.2           2.0 
Other                                                    (1.6)         (0.9)
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Net cash provided by financing activities        $      394.1  $      136.2 
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Net increase (decrease) in cash and cash                                    
 equivalents                                     $       18.0  $      (36.2)
Cash and cash equivalents, beginning of period          287.3         276.4 
Effect of foreign exchange rate changes on cash                             
 and cash equivalents                                    (0.3)          1.5 
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Cash and cash equivalents, end of period         $      305.0  $      241.7 
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Supplemental information:                                                   
  Dividends received                             $        2.4  $        4.7 
  Interest paid                                          41.5          35.1 
  Interest received                                       4.6           4.3 
  Income taxes paid                                      20.9          23.4 
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Contacts:
Investor relations:
Andrew Arnovitz, Vice President,
Investor Relations and Strategy
(514) 734-5760
andrew.arnovitz@cae.com 
Media:
Nathalie Bourque, Vice President,
Public Affairs and Global Communications
(514) 734-5788
nathalie.bourque@cae.com
 
 
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