OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION

The Company elected to organize its operating segments principally on the basis of its customer markets. The Company manages its operations through its three segments. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

The Company has decided to disaggregate revenue from contracts with customers by segment, by products and services and by geographic location as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

Results by segment

The profitability measure employed by the Company for making decisions about allocating resources to segments and assessing segment performance is operating profit (hereinafter referred to as segment operating income). The accounting principles used to prepare the information by operating segments are the same as those used to prepare the Company’s consolidated financial statements. The method used for the allocation of assets jointly used by operating segments and costs and liabilities jointly incurred (mostly corporate costs) between operating segments is based on the level of utilization when determinable and measurable, otherwise the allocation is based on a proportion of each segment’s cost of sales and revenue.



	Civil Aviation						Defence
	Training Solutions						and Security					Healthcare										Total
	2019				2018		2019			2018		2019			2018			2019				2018
				Restated					Restated					Restated							Restated
External revenue	$	1,875.8			$	1,625.3	$	1,306.7		$	1,083.0	$	121.6		$	115.2		$	3,304.1			$	2,823.5
Depreciation and amortization
Property, plant and equipment	115.9				99.1		19.0			19.1		2.7			2.6			137.6				120.8
Intangible and other assets	41.3				37.5		27.5			30.8		10.8			10.5			79.6				78.8
Impairment of non-financial
assets – net (Note 21)	(4.9		)		—		—			—		—			—			(4.9		)		—
Write-downs of inventories – net	0.7				2.6		0.9			0.8		0.1			—			1.7				3.4
Write-downs (reversals of write-downs)
of accounts receivable – net	4.4				9.2		0.2			—		—			(0.1		)	4.6				9.1
After tax share in profit of
equity accounted investees	23.0				32.2		10.4			11.0		—			—			33.4				43.2
Segment operating income	344.3				330.1		131.5			123.9		4.8			8.8			480.6				462.8

Capital expenditures which consist of additions to non-current assets (other than financial instruments and deferred tax assets), by segment are as follows:



		2019		2018
Civil Aviation Training Solutions	$	260.1	$	162.0
Defence and Security		65.7		49.2
Healthcare		12.6		10.0
Total capital expenditures	$	338.4	$	221.2

Addition of assets through the monetization of royalties

In November 2018, the Company agreed to monetize its future royalty obligations under an Authorized Training Provider agreement with Bombardier and extend this agreement to 2038. In December, the Company concluded the monetization transaction which resulted in a cash outlay of $202.7 million. The monetization represents the discounted sum of expected royalties payable by CAE over the next 20 years. As a result of this transaction, $156.7 million (Note 7 ) of intangible assets and $46.0 million (Note 6) of property, plant and equipment were recognized in the Civil Aviation Training Solutions segment.

Assets and liabilities employed by segment

The Company uses assets employed and liabilities employed to assess resources allocated to each segment. Assets employed include accounts receivable, contract assets, inventories, prepayments, property, plant and equipment, intangible assets, investment in equity accounted investees, derivative financial assets and other assets. Liabilities employed include accounts payable and accrued liabilities, provisions, contract liabilities, deferred gains and other liabilities and derivative financial liabilities.

Assets and liabilities employed by segment are reconciled to total assets and liabilities as follows:



		2019		2018
				Restated
Assets employed
Civil Aviation Training Solutions	$	4,373.0	$	3,072.8
Defence and Security		1,627.2		1,414.0
Healthcare		271.6		253.5
Assets not included in assets employed		893.7		1,039.9
Total assets	$	7,165.5	$	5,780.2
Liabilities employed
Civil Aviation Training Solutions	$	1,098.3	$	1,031.0
Defence and Security		595.2		469.8
Healthcare		48.8		42.0
Liabilities not included in liabilities employed		3,013.2		1,939.9
Total liabilities	$	4,755.5	$	3,482.7

Products and services information

The Company's revenue from external customers for its products and services are as follows:



		2019		2018
				Restated
Revenue
Simulation products	$	1,473.8	$	1,278.2
Training and services		1,830.3		1,545.3
	$	3,304.1	$	2,823.5

Geographic information

The Company markets its products and services globally. Revenues are attributed to countries based on the location of customers. Non-current assets other than financial instruments and deferred tax assets are attributed to countries based on the location of the assets.



		2019		2018
				Restated
Revenues from external customers
Canada	$	253.3	$	265.5
United States		1,283.3		1,068.2
United Kingdom		210.4		231.4
Germany		118.9		95.7
Netherlands		79.7		95.7
Spain		114.5		76.0
Other European countries		367.7		250.9
United Arab Emirates		109.0		110.0
China		226.5		207.6
Other Asian countries		361.1		268.2
Australia		50.1		55.8
Other countries		129.6		98.5
	$	3,304.1	$	2,823.5

		2019		2018
				Restated
Non-current assets other than financial instruments and deferred tax assets
Canada	$	1,557.0	$	903.2
United States		1,580.7		945.7
Brazil		116.4		118.1
United Kingdom		285.2		250.3
Luxembourg		187.0		194.1
Netherlands		196.9		223.6
Other European countries		336.5		324.8
Malaysia		177.6		197.1
Other Asian countries		177.8		149.2
Other countries		176.4		82.1
	$	4,791.5	$	3,388.2