Mesdames et messieurs, bonjour. Je suis Alan MacGibbon, President-
Ladies and gentlemen, good morning. My name is Alan MacGibbon, Chair of CAE's Board of Directors. On behalf of the Board and CAE's management team, it is my pleasure to welcome you to the 2023 Annual and Special Meeting of Shareholders.
We're holding the meeting once again in the virtual format. This format allows all shareholders and appointed proxy holders, regardless of their geographic location, to attend, participate in real time, and vote at the meeting online through the web-based platform, and helps us to reduce the carbon footprint of our activities. Guests are also welcome to attend and listen to the meeting. The meeting will be conducted in both French and English. You can listen to the webcast and view the presentation slides in either French or English. If you wish to change the languages, click on the language of your choice shown under the broadcast. Fiscal year 2023 marked my first year as Chair of the Board, and I am proud of everything that together we have accomplished.
Over fiscal 2023, we took action and launched initiatives directly aligned with the company's high-tech ambitions to drive solid performance. From a financial standpoint, CAE drove consistent sequential improvement in key metrics and consolidate overall performance throughout the year. Underpinning our success is a dedication to our mission to lead at the frontier of digital immersion through the high-tech training and operational support solution that make the world a safer place. In the past year, CAE has made meaningful progress to become a more resilient and profitable company, and we look forward to capitalizing on the robust demand for our end-to-end training services. During this fiscal year, the board took numerous governance actions, including the continuation of its director renewal process.
As a result, CAE strengthened its board oversight in the areas of strategic planning, enterprise risk management at the operational and corporate levels, cybersecurity, technology, and human resources. Over the past 12 months, CAE has made substantial progress in the company's environmental, social, and governance mandate to deliver results across our broad sustainability strategy. We took important steps to promote responsible business practices throughout CAE's supply chain and create a positive impact on our company and the community at large. CAE's new fiscal year 2024-2028 strategic roadmap reinforces our commitment to sustainability by enhancing our influence and performance where it matters most. Now for introductions. I'm here in Montreal, Quebec, at CAE's headquarters, which are located on the Kanien'kehá:ka lands. The Kanien'kehá:ka land nation is recognized as the custodian of the lands and waters on which we gather today.
With me today are members of CAE's executive management team, including Marc Parent, our President and CEO, and Director. Constantino Malatesta, our Chief Accounting Officer and Vice President Corporate Controller, who is standing in for Sonya Branco, Executive Vice President, Finance, and Chief Financial Officer, who unfortunately is not feeling well this morning. Mark Hounsell, General Counsel, Chief Compliance Officer, and Corporate Secretary, who will be acting as the secretary of this meeting, and Samantha Golinski, Vice President, Public Affairs and Global Communications, who will be acting as moderator with respect to any questions that you may have. In attendance today are also members of the CAE Inc. and CAE USA Board of Directors. Of course, our shareholders and guests are calling in from around the country and around the world. As outlined in the agenda, we have a few business items to cover today.
In addition to tabling our financial statements, there are four motions for consideration. Once all four motions have been voted on, we will announce our preliminary voting results. Immediately following the formal agenda, the President's report will be presented by Marc Parent and Constantino Malatesta. Our Chief Accounting Officer and Vice President Corporate Controller will provide the financial update. As a reminder, Constantino is standing in this morning for Sonya Branco, our Chief Financial Officer. An opportunity will be provided at the end of their presentation for shareholders to raise questions. Before we begin, I'd like to remind you that today's remarks, including answers to questions, contain forward-looking information. These forward-looking statements represent our expectations as of today, August 9, 2023, and accordingly, are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks and uncertainties.
Actual results may differ materially, and listeners are cautioned not to place undue reliance on these forward-looking statements. I would now like to proceed with the formal portion of today's meeting. I now call to order the annual and special meeting of the corporation shareholders. Our corporate secretary has received a certificate of our transfer agent, Computershare Trust Company of Canada, indicating that proper notice of the meeting has been given in accordance with the Canadian Business Corporations Act and the bylaws of the corporation. I direct that a copy of the notice with proof of service, be kept by the secretary with the records of this meeting. With the consent of the meeting, I appoint Martin Gauthier, representative of Computershare, as scrutineer of this meeting. Let us now turn to the meeting procedures.
CAE's bylaws provide that a quorum of shareholders is present at a meeting of shareholders if two or more persons holding not less than 25% of the shares entitled to vote at the meeting are present or represented by proxy. The scrutineer has advised that we have the necessary quorum present. I now declare this meeting as regularly called and properly constituted for the transaction of business. I would now ask the corporate secretary to explain the basic features of our virtual meeting and how you can vote at our meeting.
Thank you, Mr. Chair. When you are logged in as a shareholder or as a guest, you can see the info screen display. Here, you can read information about CAE, and you can ask questions. To see the slide presentation while you're listening to our webcast, simply click the broadcast icon or the arrow.
When you wish to ask a question, please select the messaging icon and type your question in the message box at the bottom of the screen. Click the Send button, and you should receive a confirmation that your message has been received. You may ask your questions in French or in English. Note that only registered shareholders or validly appointed proxy holders are permitted to ask questions. Mrs. Samantha Golinski will be monitoring all questions being submitted and will relay them to the chair or the relevant executive team member.
You also have the opportunity to ask questions verbally over the phone. If you wish to do so, enter your phone number and the subject of your question instead in the text box and click the Send button. A technician will call you. Once you have answered our call, you will hear the meeting from your phone. We ask that you mute your computer and listen to the live feed from your phone. This will prevent any delay or noise annoyance. When called upon to ask your question, you will then be unmuted.
If there are many similar questions on the same topics, Samantha may pick one question or summarize the nature of the questions. I'd like to remind you that the questions should relate to the business or affairs of CAE, and that they should not be of a personal nature.
Question during the meeting, or if your question is related to a personal matter, a CAE representative will follow up directly with you after the meeting.
Voting on the four resolutions will be conducted by an online poll. Only registered shareholders or validly appointed proxy holders may vote on the four items of business. You will see a voting icon on your screen. A resolution wording will be displayed. To vote, select one of the voting options. Your response will be highlighted. A confirmation message will appear to show you that your vote has been received. To change your vote, simply select the other option. In order for your vote to be properly recorded, it is important that you remain connected to the Internet at all times. If you are not connected, your vote will not be recorded.
The polls are now open on all four items of business. This will give you ample time to vote while we introduce each resolution. The chair will remind you of your choice for each item. After the last item of business, the chair will close the poll and provide a reminder to input your vote if you have not already done so.
You should know that while each of the ballots cast today will be accounted for in the final results, proxies lodged with our registrar and transfer agent before this meeting, allowed, allow the chair as proxy holders to determine the outcome of each of the motions that will go to a vote today.
When each item of business is completed and the ballots have been completed. Facilitate the flow of the meeting. Since the meeting is conducted in a virtual-only format, the chair has asked me, as a registered shareholder, to move all motions. The chair will call on me at the appropriate time. Mr. Chair?
Thank you, Mark. I hereby table the minutes of the annual meeting of shareholders held on August 10, 2022, which will be inserted in the minute book of the Corporation. Copies of the minutes will be made available upon request. The next matter is to place before the meeting the financial statements and auditor's report thereon for the year ended March 31, 2023. Copies of which were made available to shareholders in May. I will entertain questions with respect to the financial statements of the corporation in the general question period. We will now turn to the first item of business for which the shareholders are asked to vote, the election of the directors. The Management Proxy Circular contain the list and biographical profile of the 13 nominees recommended for elections as director.
Each nominee was elected at our 2022 shareholders' meeting, except for Sophie Brochu, who is a first-time nominee this year. I've already introduced our CEO, Marc Parent. The other director nominees are as follows: Ayman Antoun from Ontario, Margaret S. Billson from New Mexico, Elise Eberwein from Arizona, Marianne Harrison from Massachusetts, Mary Lou Maher from Ontario, François Olivier from Quebec, General David Perkins from New Hampshire, Michael E. Roach from Quebec, Andrew Stevens from the U.K., Patrick M. Shanahan from Washington, and finally, Sophie Brochu from Quebec. Ms. Brochu has a distinguished career as an executive in the energy sector. From 2020 until 2023, Ms. Brochu was President and Chief Executive Officer of Hydro-Québec, one of the world's largest hydropower utilities. Before Hydro-Québec, Ms.
Brochu was president and chief executive officer of Énergir, one of Canada's largest distributors of natural gas and an investor in renewable energy. I would also like to take this opportunity to recognize outgoing director, the Honorable Michael Fortier, who is retiring from CAE's board. First elected to our board in 2010, he has served on several committees, including most recently as chair of the Human Resources Committee. Michael has played a pivotal role in shaping CAE's growth and success. We thank Michael for his significant contributions to CAE over the past 13 years. Pursuant to a resolution adopted by the board of directors, the number of directors has been set at 13, and 13 eligible candidates have been nominated. Mark, may I ask you to move to elect each of the 13 nominees as directors?
I so move.
For the election of directors, you will see the names of all 13 nominees. Please scroll down to make sure you voted for all 13 nominees. To cast your vote for a nominee, please select For, and to vote against the nominee, please select Against. If you do note, if you do note, press either For or Against, as applicable, when voting is open, your vote will not be recorded, and you will be regarded as having abstained from voting. Preliminary results will be announced later today. The final results will be posted on our website. The next item on the agenda is the appointment of auditors.
I will ask Mark Hounsell to introduce a motion to appoint PricewaterhouseCoopers as auditors of the corporation, to hold office until the close of the next annual meeting of shareholders, and for authorization for the directors to fix their remuneration.
I so move.
For the appointment of auditors, to cast your vote in favor, please select For, and to withhold your vote, please select Withhold. The next motion is to approve, on an advisory basis, our approach to management compensation. CAE's management compensation is fully disclosed in the proxy circular made available to all shareholders in advance of this AGM. Since last year's shareholders meeting, CAE's management and Board of Directors conducted an extensive stakeholder outreach, with close to 20 of our shareholders, accounting for approximately 40% of the company's ownership, as well as other stakeholders, seeking their input in our compensation programs. We conducted a full review of our compensation programs and governance, as well as incentive plan designs, to address comments received from our shareholders.
The CAE Board of Directors believes that the changes to our compensation program further enhances the alignment between our performance and compensation outcomes, as well as the interests of our shareholders. We will now vote on the following resolution: Resolved that the shareholders accept the approach to executive compensation disclosed in the Management Proxy Circular. I understand that Mark Hounsell wishes to propose a motion for approval.
I so move.
To cast your vote for the executive management compensation, please select For, and to vote against this resolution, please select Against. The last motion is to approve the Omnibus Incentive Plan, as well as conditional grants made pursuant to the terms of the Omnibus Incentive Plan. The board of CAE adopted on May 31, 2023, the Omnibus Incentive Plan, which allows for a variety of equity-based awards that provide different types of incentives, namely stock options, performance share units, and restricted share units, to be granted to eligible participants. The company believes that the Omnibus Incentive Plan will enhance its ability to attract, retain, and motivate capable persons to advance its business strategy.
A summary of the CAE's Omnibus Incentive Plan is disclosed in the proxy circular, and the full text was made available to all shareholders on the online platform and can be accessed as well on SEDAR or EDGAR. The CAE Board of Directors believes that the Omnibus Incentive Plan is appropriate and that it directly streamlines our equity-based incentive plans to encourage greater share ownership by employees and to foster a greater alignment between the long-term interests of the shareholders and the interests of employees. We will now vote on a resolution regarding the approval of the Omnibus Incentive Plan and on the ratification of the conditional grants. The full text of the resolution is set forth in item five of the Management Information Circular, made available to all shareholders in advance of the AGM. I understand that Mark Hounsell wishes to propose a motion for approval.
I so move.
To cast your vote for the approval of the Omnibus Incentive Plan and the ratification of conditional grants, please select "for," and to vote against this resolution, please select "against." We will now continue with the voting. If you've not already done so, please vote on all four items of business, and I'll give you some additional time now to finalize your voting selection. If you've already voted or sent in a proxy, there's no need for you to do anything unless you would like to change your vote. I declare the polls now closed on all four items of business. Thank you.
Thank you, Mr. Chair.
The scrutineer's preliminary report indicates that 69.41% of the eligible shares have been voted at this meeting. The results with respect to the election of directors are: a substantial majority of the votes cast at the meeting were voted in favor of the 13 of the 13 nominees named in the Management Proxy Circular, with each nominee receiving in excess of 96.48% in favor. The result with respect to the appointment of auditors is 92.75% voted in favor of PricewaterhouseCoopers. The result with respect to the advisory vote on the approach of the executive compensation is 92.55% in favor of the resolution. The result with respect to the vote on the approval of the Omnibus Incentive Plan and the ratification of conditions grants is 95.45% voted in favor of the resolution.
Final detailed results will be publicly available on sedar.com in the coming days.
Thank you, Marc. The next item on the agenda is the president's address to shareholders. Before I turn the floor over to our CEO, Marc Parent, let's watch a short video that was produced for the closing of CAE's 75th Anniversary Celebration and as a summary of the achievements of the fiscal year. I think it is does a great job of calculating all of the ways in which each and every CAE employee strives to push the boundaries of innovation and making the world safer.
...
I think as you saw in the video, fiscal 2023 was another very impactful year for our great company. And really true to our, you know, noble mission and our vision, we leverage our technology, our unparalleled thought leadership, and the partnerships that we derive for our customers to equip people in critical roles with the expertise and solutions to create a safer world. That's what we do. As we close on a year of 75th Anniversary Celebrations, we continued to build on our rich history, and we took a variety of actions to retransform our industry and our business. If you look at each one of our segments, in civil aviation, we eclipsed prior peak performance even before global passenger traffic had fully recovered to pre-pandemic levels. While defense and security, we continued to make solid progress in our multi-year transformation in this sector.
In healthcare, we delivered double-digit revenue growth through our dynamic team and our highly innovative solutions in the sector. Really around the globe, we work as one CAE, which is our mantra, to expand our technology and our market positioning, and to revolutionize training and critical operations for our customers. You know, further deepening our differentiators, our digital transformation at CAE and our expansion to markets and business verticals have really propelled us forward in the journey that we're on to become an even more resilient and profitable company, better positioned to capitalize on an increased demand that we see out there for our products and services. As we look at towards the future, you know, we see very highly favorable secular trends in all of our end markets that bode fantastically for our growth.
For one, as we shared at the Paris Air Show in June, we estimate that 1.3 million new aviation professionals will be needed around the world over the next 10 years. They will have, of course, to be trained, which is, as you know, core to CAE's mission. We increased spending and specific prioritization on defense readiness and geopolitical events have. This readiness and this have galvanized national defense priorities in the U.S. and among allies. We also continue to see a high demand for nurses and increased opportunities for medical simulation, increased business opportunities. Those are two dynamics that CAE solutions were well-positioned to respond to. Over fiscal 2023, we continued to revolutionize our customers' training and critical operations with digitally immersive solutions.
As they prepare every day for the moments that matter the most, CAE's next-generation technology offerings continue to elevate safety standards and enhance human performance.
In civil aviation, what this means is providing comprehensive training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation. No exaggeration that today we are by far the world's largest provider of training services, with a global network of training centers where we're on track to deliver this year alone, 1.2 million hours of training. No matter where you fly, chances are that your pilot or your first officer has been trained in one of our training centers around the world, or in a flight simulator designed and built right here at CAE, here in Montreal. If you traveled in the last few months, as I have quite a few times, you may have noticed how busy airports are, and that's testament to the rebound, which is incredibly strong in air travel.
For the first quarter of this calendar year alone, worldwide passenger traffic increased by 58% compared to the same period in 2022. At the end of May, global passenger traffic was at 96% of pre-pandemic levels. Just recently, in the United States, the Transportation Security Administration reported a new daily record for passenger screening on June thirtieth, making it the busiest day in U.S. aviation history. History! Still, not the world is not homogeneous, and you look, not all our airline customers are back to their 2019 levels, specifically in Asia, where international traffic is still lagging at about 75% of pre-pandemic activity, so room to grow in that sector.
If you look at our strong competitive moat in the aviation market, comprising an extensive global training network, best-in-class instructors, comprehensive training programs, unique technology, data-driven and strength in training partnerships, really positions us extremely strongly for as the recovery in air travel continues. During 2023, in the months since then, we launched, we broke ground on and expanded eight new training centers. We secured more long-term training agreements, we delivered 46 full flight simulators, and we sold 62 more, contributing to the strong book-to-bill that we have. We recorded this testimony to that book-to-bill. We booked a record $2.8 billion in annual Civil orders, demonstrating the sustained high demand for pilot training solutions and our next-generation digital flight services. Civil concluded the year with a record adjusted backlog of $5.7 billion.
Really testament to our success and our resilience, our long trainings, our long-term training service agreements now include nearly every major air U.S. airline. For comparison purposes, that compares to none of them. None of them were training with us prior to the pandemic. They bought a lot of simulators. This demonstrates the trend towards outsourcing and the fact that we are expanding our partnerships and earning the trust of airlines around the world, and specifically with major airlines in the United States. Our teams have made really excellent progress in, in expanding our reach in digital flight solutions with, you know, the ongoing integration of the Sabre AirCentre acquisition that we did just recently.
This has really granted CAE a unique capability to offer our customers really scalable solutions that support end-to-end flight operations management, operational performance, profitability enhancement, and an enhanced passenger experience. You know, to me, it's extremely impressive on top of the impressive track record that we have in training around the globe, to think that today, again, around the world, around the world, every five seconds, a flight takes off using CAE software solutions. In fiscal 2023, we deepened those partnerships with the announcement of a joint venture with Aegean, you saw that during the video, Greece's largest airline, and a 15-years exclusive training agreement with the Qantas Group in Australia to develop and operate a new state-of-the-art pilot training in Sydney.
To be closer, testament to that, to be closer to where our customers need us to be, we strategically expanded our business aviation network in key locations where, again, we broke ground on a new training facility in Savannah, Georgia, launched another training center in Las Vegas, Nevada, and we also announced an upcoming business aviation training center in Vienna, Austria, the first of its kind in Central Europe. As partner of choice, we further solidified our long-term standing collaboration with Boeing, spanning both commercial and defense portfolios across the globe. First, we announced a teaming agreement with Boeing in Defense to expand multi-mission platform collaboration in Canada, in Germany, and in Norway as part of the P-8A Poseidon program.
Two months later, we announced an agreement to which CAE will become a Boeing-authorized training provider and the first to offer its competency-based training and assessment curriculum. With this arrangement, Boeing and CAE will expand quality and accessibility to innovative flight training to commercial aviation customers worldwide that operate Boeing aircraft. Really, our ability to offer partners such as Boeing, a wide range of different cross-industry training solutions, is one of the unique qualities and differentiators that we're able to offer, again, by operating as one CAE. We expect that the change, the pace of change in aviation is going to be substantial in the next few years. I mean, the demand that we talked about for trained aviation professionals continues to be driven by air traffic growth, retirements, and by the number of aircraft deliveries. Over...
Notably, over half the commercial and business aviation pilots who will be active a decade from now, haven't even begun their training yet. Think about that. Shifting to defense and security, we are the world's leading pure-play, platform-independent training and simulation business, providing solutions across all five domains and addressing the critical needs of our customers related to a rapidly changing environment from a geopolitical standpoint and challenges that are inherent to global security. We are uniquely positioned to draw on CAE's innovations and our industry-leading training solutions in commercial aviation to transform defense training with the application of advanced analytics and leading-edge technologies.
Just at the end of fiscal 2023, our, our backlog stood at $5.1 billion in defense. We expect to continue growing it with very attractive opportunities in our pipeline of bids. Let me just tell you about some of the recent successes that I'm particularly excited about. In the United States, we have won a $455 million U.S. contract for flight school training support services at Fort Novosel, Alabama, where we are going to train all of the U.S. Army's rotary wing pilots, helicopter pilots. CAE is also a key partner in Team Valor, providing training and simulation solutions for the U.S. Army's future long-range assault aircraft. It doesn't stop there.
We were recently awarded a $111 million U.S. contract for the U.S. Air Force's Rotary Wing Introductory Flight Training contract. With this, with these wins, no exaggeration, CAE now trains all 43,000 pilots across all branches of the U.S. military at some point in their career. In the last month, we announced two new important contracts in the land domain, which are critical. Talking about those, one of them is the one that's critical to U.S. Army's rapid prototyping effort, supporting what's called a Soldier Virtual Trainer program. This contract alone is intended to replace more than 800 legacy training systems in the U.S. Army.
Also, we just announced that we're leveraging industry-leading business aviation training expertise, think about it, business aviation, to provide mission-critical solutions for the United States Army, with a contract for simulation-based training for the Army's key airborne intelligence, surveillance, and reconnaissance system. What's called the High Accuracy Detection and Exploitation System, otherwise known as HADES, with the acronym, is based on the Bombardier Global 6500 business jet, a platform which we are the global authorized training provider. Outside of the United States, we provide both basic and advanced training at NATO flight training centers across multiple sites in Canada. Additionally, leveraging our expertise and our strategic partnerships, CAE has expanded our military training in Europe with the International Flight Training School in Italy, which is a joint venture with Leonardo Helicopters.
We also provide habituation training for the German Air Force at CAE's Bremen Training Center in Germany and in Montpellier, France. When it comes to training defense forces, our goal and mission here is to make sure that we are training our personnel, military personnel, to be able to execute their mission and return home safely. With that backdrop, I couldn't be happier, happier to share the fantastic news that SkyAlyne, the joint venture between CAE and KF Aerospace, both Canadian, you know, fantastic Canadian stories in terms of success, has recently been selected by the government of Canada as the preferred bidder for the Future Aircrew Training, or FAcT contract. That program, which is, which supports next-generation pilot and aircrew training for the Royal Canadian Air Force, is really generational in construct.
You know, we're now going to move in the negotiation phase with the eventual contract award expected in 2024. This, as mentioned, this is really transformational in terms of a capture for our defense and security business. Truly a once-in-a-generation contract, representing really a multibillion-dollar training opportunity that, once awarded, will secure work for the next quarter century. All of those recent wins, to me, are very significant because they come at a time when governments worldwide are looking to private industry to help train more aircrew. It's clear, as testified by the bids and orders that we're signing, that CAE is there as their long-trusted partner. Switching to healthcare. Simulation-based training is one of the most effective ways to prepare practitioners for the moments that matter: treating patients, handling critical situations, and enhancing patient safety.
In addition, the aging global population is going to necessitate more care at a time when there's limited talent and resources available to meet that increasing demand. This dynamic requires innovative solutions, and we believe that medical simulation-based training is going to be a key contributor to solving many of the challenges that society continues to face. We're very, very proud to continue to make market share gains in this area. As an industry thought leader, you know, just testimony to that, CAE was selected recently to present an immersive learning lab at the industry's largest simulation event, what's called the International Meeting on Simulation in Healthcare, in a session that was focused on the parallels between aviation and healthcare, to, in terms of training, to elevate safety and quality.
In terms of our business, healthcare continues to deliver year-over-year revenue growth with an organization, a strong organization, that's focused on operational excellence and achieving even greater scale.
CAE's markets are expanding. Our offerings in civil aviation and defense share multiple layers of commonality, and as one CAE, we are finding ways to leverage existing technologies to gain new customers across many industries. We have a rich and long history of innovation in delivering state-of-the-art technology solutions that define the forefront of the industries we operate in. For example.
...We conducted a field study with Japan Air Self-Defense Force on our latest virtual reality and artificial intelligence-enabled digital solutions. It included biometric feedback technology to adjust complexity on data points, like student stress or cognitive workload. Moving forward, our approach is based on common solutions applicable to all our segments. This means that more and more, we're integrating our best-of-breed technologies, benefiting from the scale of acquisitions that we have done over the past three years, and finding new ways to leverage those technologies within new markets. With CAE Rise, for instance, we are taking a data-driven training system, originally conceived for civil aviation, that leverages analytics to make pilot training more effective and applying it to defense training scenarios.
Similarly, with CAE Prodigy, we are taking a defense-driven technology that offers immersive training through a one-stop-shop visual solution and applying it in our civil training portfolio. During the fiscal year, we introduced several new mixed reality training solutions that both utilize next-generation technologies and deliver ultra-realistic simulations. For example, we have launched a new mixed reality simulator for the advanced air mobility or air taxi market. With this sector, we're entering a new era of aviation driven by electric propulsion, propulsion technology. CAE has already established a great number of partnerships with electric air taxi developers and looks forward to bringing advanced training solutions to market in lockstep with customer demand as the segment develops. All these are highly innovative concepts with real-life applications and are important building blocks that will drive greater levels of training, efficacy, and safety.
With these CAE innovations, we expect to further widen our competitive edge and unlock new revenue streams. Looking ahead, we are truly excited about this potential and by our R&D advantage, which we believe will define the technological forefront of our core markets in the years to come.
CAE really continues to make great strides in integrating environmental, social, and governance matters into really, in all aspects of our operations. We see sustainability as a critical component of our competitive advantage. We were very proud and are remain proud to become CAE's first carbon neutral aerospace company back in fiscal 2020. Embarking on our next leg of our sustainability journey, CAE has built a five-year sustainability strategic roadmap to align with industry best practices. Earlier this year, we were admitted to the Climate Group's Renewable Energy One Hundred Initiative, a group of influential businesses which are cross-sector and worldwide, united in a commitment to accelerate renewable energy use. We're also making advancements in green technology aviation.
In partnership with Piper Aircraft, we launched our electric aircraft modification program in an effort, again, to bring an electric variant option to market. We're making great progress in that regard. As the advanced air mobility sector continues to develop, we're also going to be a leader in governance to help define the training standards to achieve the highest level of safety, as well as movements in improving the ESG in our sector. We. Switching gears, making this all possible, you know, I couldn't be more proud in CAE's talented workforce and continuing the efforts we're doing and the success we've had in continuing to nurture our unique workplace culture, which is, to me, at the heart of our success.
You know, to that end, I'm really honored to share that CAE was recognized this year as one of Canada's top 100 employers. You know, something, again, you can't help but be proud of. Ultimately, our goal is to build a workplace where everyone feels valued, included, with a sense of belonging. Towards that end, we continue to foster a culture that rewards diversity, equity, and inclusion across the organization and in our communities in which we live. Once again, in 2023, we achieved our target of increasing the diversity of our leadership team by 10% year-over-year. For the fifth consecutive year, we've been named to the Bloomberg Gender-Equality Index. We've also expanded again this year, our Women in Flight Ambassador Program, intended to encourage young women to pursue a career in aviation.
We're also continuing our journey to build positive and meaningful relationships with indigenous businesses and communities. To me, those are only a few of the highlights that we're taking, but some of those that, you know, are dear to my heart. You can get a much broader view of all the efforts that we've, and the, and the initiatives that we've, you know, launched across the company by reading our fiscal 23, 2023 Annual Activity and Sustainability Report, which you'll find quite comprehensive. Just said, maintenant la parole à Constantino Malatesta.
... I will now give the mic to Constantino Malatesta, our accounting, Head of Accounting and Vice President Controller.
Thank you, Marc. We delivered strong results in 2023, with consolidated revenue for the year up 25% to $4.2 billion. Adjusted segment operating income was up 23% to $548.1 million, and annual adjusted net income was $279.2 million, or $0.88 per share, compared to $0.84 last year.
An annual cash conversion rate of 120%. We continue to target an average of 100% conversion rate going forward. Uses of cash involve funding capital expenditures for $268.8 million for the year, driven mainly by the expansion of our civil aviation training network in lockstep with secured customer demand. One example is the new business aviation training center that we launched in Las Vegas in April. These opportunities translate to strong returns as our similar assets ramp up within the first years of their deployment.
Our leverage ratio has been improving rapidly since the middle of fiscal 2023, and we continue to expect net debt to Adjusted EBITDA to decrease to a ratio of below 3 x by the middle of the fiscal year, taking into consideration our expanding EBITDA and ongoing funding of the aforementioned accretive organic growth investments. To briefly recap our segmented performance. In civil, revenue was up 34% to $2.2 billion, and adjusted segmented operating income was up 54% to $485.3 million, for a record annual margin of 22.4%. The higher revenue was driven by higher training volumes and a higher number of full flight simulator deliveries compared to the prior year.
We achieved a record margin for the year, despite, as Marc referenced, air travel not having fully recovered to 2019 levels in all regions. That's because of the excellent work that was done at CAE over the last couple of years to lower our recurring cost base. We are also benefiting from some mixed improvements from the structural expansion of our business aviation and a greater proportion of revenue coming from training services overall. For the year, defense revenue was up 15% to $1.8 billion, adjusted operating income was down 55% to $53.1 million, representing a margin of 2.9%.
Over the course of the year, we had sequentially stronger quarterly results as a function of our execution on legacy contracts, cost mitigations, and some gradual improvements in the economic headwinds we have been facing. In healthcare, revenue was $192.7 million for the year, up 27%, and adjusted segmented operating income was $9.7 million, for a margin of 5%. As a result of its operational improvements and its market share gains, healthcare continues to deliver both top and bottom line growth at rates that are above market.
As you may have seen in the financial results we published this morning, we are off to a strong start into fiscal 2024. We reported consolidated revenues of $1.05 billion, 13% higher than the first quarter last year, and adjusted segment operating income of $145.1 million, compared to $60.9 million in the first quarter last year. Adjusted EPS in the first quarter was $0.24 compared to $0.06 last year. We also further bolstered our financial position and are on track to meet our leverage target by mid-fiscal year. Thank you for your attention, and I will now turn the microphone back to our CEO, Marc Parent.
Thank you, Constantino.
Thank you, Constantino.
Bear with us. You're now-
1 year ago, we were just seeing the light of day after the disruption that the pandemic has caused. At that time, we set ourselves some ambitious goals for the way forward in terms of building partnerships, expanding our network, and leveraging our technologies across new markets. When I think about everything we've achieved over the last 12 months, I could not be prouder of this company. We're well on our way to achieving our goal of building a bigger, stronger, and more profitable CAE, and we believe that we have a bright future ahead of us. For fiscal 2024 and beyond, we have a highly positive outlook with clearly defined trends that are favorable across all of CAE's segments.
As always, we are working to capture more than our fair share in all our segments, extend our competitive advantages, and continue to capitalize on emerging opportunities. We are delivering tangible success and driving strong order flow with our significant backlog, backlog growing across all our markets. CAE remains strategically positioned to meet our customers' needs and drive substantial top and bottom line growth in the years ahead.
Air travel nears pre-pandemic levels, most airlines are relying on CAE for their critical training, their digital operation solutions, and crew management needs. As a result, we expect our civil aviation business to continue growing at an above-market rate. In defense, secular tailwinds that favor our business include the increased focus on near-peer threats and a greater need for digital immersion-based synthetic solutions to maintain readiness. With governments on focus on defense, modernization, and improving readiness, we see this sector as being in the early stages of an extended upcycle. Of course, we continue to seize the ever-growing opportunities within the healthcare sector, and we're proactively addressing the increased demand for healthcare workers with a new suite of training solutions that we're leveraging in this sector, advanced technologies to build sophisticated digital capabilities to continue to win in the marketplace.
I take all that, and in summary, you know, I feel very privileged to lead this truly unique company, you know, whose cutting-edge training and critical operations, you know, our solutions empower pilots, crew members, defense forces, healthcare practitioners to perform at their very best every day, as we say, when the stakes are highest in those moments that matter. It sees more than 13,000 employees worldwide are driven by the values that underpin our mantra in this company as partner of choice to our customers, not satisfying our customers, delighting our customers, and we're unwavering in our commitment to preparing our customers again for those moments that matter. On behalf of CAE's management, you know, I, I want to thank our employees.
I want to thank our employees for their ingenuity, their dedication, their passion, and recognize their essential contribution in making our vision the reality. You know, I couldn't be more pleased with the progress that we've made last year and the first few months of this year, which expands further the opportunities that we see before us. You know, in that regard, we expect to continue making excellent progress in the year ahead of us and beyond. In closing, I'd really like to thank Alan MacGibbon, our Board Chair . Alan, your leadership and your commitment to our shared vision, to me, is a fantastic support to me and, you know, for this company, you know, we're truly lucky and feel valued.
I'd also like to take a moment to acknowledge the Honorable Sue Payton, who's retiring from CAE USA board this year. Sue has provided CAE and myself with invaluable guidance and direction that is for sure going to have a very lasting impact, and notably in, in recent months, as the head of the Government Security Committee, actually for the last few years, that where she's held that post.
The Honorable Michael Fortier, who served on CAE's board for 13 years, as you noted, will also be retiring. Few have excelled in both business and politics, but that is the case for Michael. We have been fortunate to benefit from his strong business acumen and his wealth of expertise as a former cabinet minister. In particular, he led the Human Resources Committee brilliantly, and Michael has definitely been pivotal in CAE's growth and success. I'm very happy to count him as a friend.
Thanking these two board members, we've already done it with Allan. Let's do it again to their contribution and their friendship over the, over the years. Finally, you know, leave it to me to thank members of our board, both our boards, for their advice and their counsel and their support, and of course, for you, our shareholders, for your trust. Thank you. Merci.
Thank you, Mark. Thank you, Constantino. Now, at this time, I invite shareholders of record and proxy holders to submit your questions online, if not done already. As noted earlier, you can select the messaging icon on the bottom of your screen and type your question or comment in the chat box at the bottom left of the screen. Samantha, do we have any questions from shareholders?
Thank you, Mr. Chair. We do have a question from a shareholder. His name is James William Evans, and the question reads as follows: "What concrete steps is management taking to improve the specific performance measures that will enable the reinstatement of dividends, dividend reinvestment plans, and optional cash share purchase plans?
Yeah.
Thank you, Mark.
Yeah, I could take that. Well, look, our focus, as, as we've said over, over the past few quarters, has been to continue the deleveraging of the company, and I think as you've seen in the, in the past results of this first quarter alone, we've continued quite nicely bringing our net debt EBITDA down to, down to level of 3.2. That's well in line with our expectations and, and the outlook that we've given to market.
As we said before, once we reach our, our deleveraging target of, you know, three approximately, which is very well, very much in sight, I think then at the time, we can have a conversation with our Board of Directors with regards to, you know, cash benefits to shareholders, such as, you know, as mentioned, dividends or share buybacks or things like that. I would say that it fits, that's our, you know, fits in our, in our capital allocation priorities. I'd just reiterate that we're still very focused on growth. There's lots of opportunities out there. Again, with deleveraging progress, I think, you know, we can entertain that, as we fully expect to do.
Thank you, Mark, and thank you, Mr. Evans, for your question. We have another questions online from a shareholder. The name is Tanya Cecilia Ayala, and the question is: "As CAE evolves beyond its legacy aviation business toward high technology, how is the company addressing the evolving nature of work, such as global remote work, stip for staff-level employees, or high-tech skill training to attract, retain, and grow critical talent for these tech endeavors in a highly competitive market?
I think that's yours again, Mark.
Yeah. Yeah. Thank you. I love that question because to me, that's all about, you know, it's... In any business, and certainly in our business and in technology-intensive business, it's all about attracting and retaining the best people. For that to be, it's, it's creating, creating environment, creating a culture where, you know, people want to be here. They wanna be at work, and work can be, you know, partly at home, and we do that, you know, through, the, the progress that we have. For us, it's all about reinforcing the great culture that we have at CAE, and, and, and making sure that people want to have a career here, come here, have their children come here, have their friends come here. You know what? We do that, and I'm quite happy.
That's very much uppermost in our mind, attracting, developing, and retaining the best talent across all demographic groups in our business that's gonna support us going forward.
Thank you, Mark, and Mr. Chair, I do not see any more questions on the platform at this time, so I think we can close the question period.
Thank you. Thank you for the questions, and thank you, shareholders, for the time that you spent with us over the past year as we engaged with you and your many questions. It was most helpful for us as directors and management of the organization. Before closing this meeting, I want to extend my congratulations to Marc Parent on the multiple accolades awarded to him this year. Marc was named a Knight of the Distinguished Ordre national du Québec, inducted into Quebec's Air and Space Hall of Fame, and received Aviation Week's Philip J. Klass Award for Lifetime Achievement. Marc sets the standard as an outstanding representative of CAE in both the community and the industry. We are most grateful. Marc, thank you.
I would also like to thank CAE employees for their dedication and commitment to the company's core values and strategy to ensure continued success going forward. To our shareholders, thank you for your ongoing support and confidence in our noble mission to make the world a safer place. The board values the input and insights of our investors. We appreciate the importance of engaging with our shareholders and better understanding their views, concerns, and priorities related to our business operations, our performance, executive compensation programs, and we do look forward to that continued dialogue. CAE's excellent reputation, strong technical capabilities, long-standing customer relationships, and global presence position us for continued success and value creation. This officially concludes the meeting. On behalf of CAE, thank you all for having participated. Until we meet again, we wish you good health to you, your families, and your communities.
This meeting is now terminated. Thank you. Merci.