Q3 2022-2023 Quarterly Financial Report

Condensed Interim Financial Statements (Unaudited)

December 31, 2022

Condensed Interim Statement of Financial Position
(Unaudited)

(In thousands of Canadian dollars) December 31, 2022 March 31, 2022
Assets
Current assets
Cash  $                37,694  $                  7,581
Trade and other receivables (note 4)                  120,224                  100,670
Inventories (note 5)                    10,585                    11,406
Prepaids                     4,144                     6,835
Derivative financial assets (note 15)                        599                          34
                 173,246                  126,526
Non-current assets
Property and equipment (note 6)                  373,504                  392,726
Intangible assets (note 7)                    13,377                    14,745
Right-of-use assets (note 8)                    14,055                    16,569
Employee benefits asset (note 9)                    64,198                    56,950
Derivative financial assets (note 15) -                            6
                 465,134                  480,996
Total assets  $              638,380  $              607,522
Liabilities and Equity
Current liabilities
Trade and other payables   $              159,431  $              106,748
Holdbacks                      1,781                     1,637
Provisions (note 10) -                        200
Lease liabilities (note 11)                     1,727                     3,129
Deferred government funding related to operating expenses (note 12)                    14,729                    18,241
                 177,668                  129,955
Non-current liabilities
Lease liabilities (note 11)                    12,973                    14,107
Deferred government funding related to capital expenditures (note 12)                  385,944                  406,579
Employee benefits liability (note 9)                    16,725                    19,107
Derivative financial liabilities (note 15)                          56 -
                 415,698                  439,793
Equity
Accumulated surplus                    45,014                    37,774
Total liabilities and equity  $              638,380  $              607,522

Contingencies (note 10) and contractual arrangements (note 16)

The accompanying notes are an integral part of these condensed interim financial statements.

Condensed Interim Statement of Comprehensive Income
(Unaudited)

(In thousands of Canadian dollars) Three Months Ended
December 31		 Nine Months Ended
December 31
2022 2021 2022 2021
Expenses
Pre-Board Screening   $  138,732  $  103,961  $  402,385  $  287,214
Hold Baggage Screening       37,763       40,596      112,401      119,963
Non-Passenger Screening       34,412       33,839      105,782      115,799
Restricted Area Identity Card Program         1,191            936         3,361         2,378
Corporate services       12,246       11,957       37,877       35,795
Total expenses (note 13)      224,344      191,289      661,806      561,149
Other expenses (income)
Net loss (gain) on fair value of derivative financial instruments            970           (498)           (503)        (1,194)
Finance costs              67              55            206            131
Foreign exchange (gain) loss           (447)            140           (462)            876
Write-off of property and equipment and intangible assets -              67              16            107
Impairment of property and equipment (note 6) - - -         1,940
Total other expenses (income)            590           (236)           (743)         1,860
Financial performance before revenue and government funding      224,934      191,053      661,063      563,009
Revenue
Finance income            731              57         1,471            184
Miscellaneous income              32 -              32 -
Screening services - other - -              70 -
Total revenue            763              57         1,573            184
Government funding
Parliamentary appropriations for operating expenses (note 12)      211,569      170,751      624,048      499,319
Amortization of deferred government funding related to capital expenditures (note 12)       10,230       19,247       30,421       60,050
Parliamentary appropriations for lease payments (note 14)            859            801         2,878         2,812
Total government funding      222,658      190,799      657,347      562,181
Financial performance  $    (1,513)  $       (197)  $    (2,143)  $       (644)
Other comprehensive income (loss)
Item that will not be reclassified to financial performance
Remeasurement of defined benefit plans (note 9)         4,999      (14,002)         9,383        (7,238)
Total comprehensive income   $     3,486  $   (14,199)  $     7,240  $    (7,882)

The accompanying notes are an integral part of these condensed interim financial statements.

Condensed Interim Statement of Changes in Equity
(Unaudited)

For the three months ended December 31:

(In thousands of Canadian dollars) Accumulated surplus
Balance, September 30, 2022  $                  41,528
Financial performance                      (1,513)
Item that will not be reclassified to financial performance
Remeasurement of defined benefit plans (note 9)                       4,999
Balance, December 31, 2022  $                  45,014
Balance, September 30, 2021  $                  19,823
Financial performance                         (197)
Item that will not be reclassified to financial performance
Remeasurement of defined benefit plans (note 9)                    (14,002)
Balance, December 31, 2021  $                    5,624

For the nine months ended December 31:

(In thousands of Canadian dollars) Accumulated surplus
Balance, March 31, 2022  $                  37,774
Financial performance                      (2,143)
Item that will not be reclassified to financial performance
Remeasurement of defined benefit plans (note 9)                       9,383
Balance, December 31, 2022  $                  45,014
Balance, March 31, 2021  $                  13,506
Financial performance                         (644)
Item that will not be reclassified to financial performance
Remeasurement of defined benefit plans (note 9)                      (7,238)
Balance, December 31, 2021  $                    5,624

The accompanying notes are an integral part of these condensed interim financial statements.

Condensed Interim Statement of Cash Flows
(Unaudited)

(In thousands of Canadian dollars)  Three Months Ended
December 31 		 Nine Months Ended
December 31
2022 2021 2022 2021
Cash flows provided by (used in)
Operating activities
Financial performance  $           (1,513)  $              (197)  $           (2,143)  $              (644)
Items not involving cash
Depreciation and amortization (note 13)              11,120              20,143              33,162              60,872
Change in fair value of financial instruments at fair value through profit and loss                    970                  (498)                  (503)               (1,194)
Amortization of deferred government funding related to capital expenditures (note 12)             (10,230)             (19,247)             (30,421)             (60,050)
Change in net employee benefits asset/liability                   (291)                  (334)                  (247)               (1,430)
Write-off of property and equipment and intangible assets -                     67                     16                   107
Other non-cash transactions  -                     40                   163                1,440
Impairment of property and equipment (note 6) - - -                1,940
Net change in working capital balances (note 18)             (14,986)              13,001              31,698              21,458
            (14,930)              12,975              31,725              22,499
 Investing activities 
Parliamentary appropriations received for capital funding (note 14)                4,141                2,199                7,057              15,281
Purchase of property and equipment                  (811)               (7,188)               (5,763)             (27,178)
Purchase of intangible assets                   (103)                  (408)                  (230)                  (484)
               3,227               (5,397)                1,064             (12,381)
 Financing activities 
Lease principal payments                  (794)                  (890)               (2,676)               (2,827)
                 (794)                  (890)               (2,676)               (2,827)
 (Decrease) increase in cash              (12,497)                6,688              30,113                7,291
 Cash, beginning of period               50,191              14,689                7,581              14,086
 Cash, end of period   $           37,694  $           21,377  $           37,694  $           21,377

Interest expense paid and interest income received approximate finance costs and finance income, respectively, in the Condensed Interim Statement of Comprehensive Income.
Supplementary cash flow information (note 18)
The accompanying notes are an integral part of these condensed interim financial statements.

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