Company Profile

ABOUT CAE
Overview CAE is a world leader in providing simulation and modelling technologies and integrated training solutions for the civil aviation industry and defence forces around the globe. CAE employs more than 6,500 people at more than 90 sites and training locations in 20 countries. The company has the largest installed base of civil and military full-flight simulators and training devices. Through CAEs global network of 29 civil aviation and military training centres, the company trains more than 75,000 crewmembers yearly. CAE also offers modelling and simulation software to various market segments and has a professional services division assisting customers with a wide range of simulationbased needs. CAE was founded in 1947 and is headquartered in Canada. With clients in over 100 countries, CAE has the broadest global reach of any simulation and training equipment and services company on the market. Ninety per cent of CAEs C$1.6 billion annual revenues are derived from worldwide exports. CAEs shares are traded on the Toronto and New York stock exchanges (TSX: CAE; NYSE: CAE).

CAE is leveraging its experience in modelling and simulation to expand vertically within the aerospace and defence industry, and horizontally to pursue opportunities in emerging markets such as homeland defence and urban simulation. CAE is focusing on high growth markets such as Asia and the Middle East for civil business, and bolstering its presence in the U.S. military market. To ensure the company is positioned to respond to growth opportunities, CAE continually invests in new technologies. CAE is consistently ranked as one of the top 20 Canadian companies in research and development investments (Source: Research Infosource). In November 2005, CAE announced the launch of the companys largest ever research and development program, Project Phoenix, a C$630 million investment spanning six years. In May 2006, CAE established a company-wide group devoted to innovation. The goal of the group is to identify opportunities for CAE to leverage its expertise and leading-edge technologies into core and adjacent markets. CAEs revenues are balanced 50-50 between products and services and 50-50 between civil and military. The company has four primary business segments: Civil Training and Services Military Training and Services Civil Simulation Products Military Simulation Products The major priorities of Civil Training and Services are to increase revenue per simulator within the companys global network of training centres, and to deliver the most cost-effective and competitive training service in the marketplace. The main goals of Military Training and Services are to provide the defence market with technological excellence in modelling and simulation, increase the companys market share of the military training market, and explore opportunities in nontraditional areas of the defence market, including such areas as Homeland Security, as well as needs analysis and planning. A key focus of Simulation Products (Civil and Military) is to substantially reduce the costs associated with manufacturing simulation equipment intended both for sale to third parties as well as for installation in the companys own global network of training centres. This reduction is being accomplished by reducing the manufacturing cycle time and by modularizing the products.

June 2009

TRAINING AND SERVICES / CIVIL

With more than 140 full-flight simulators in over 24 aviation training centres serving over 3,500 airlines, aircraft operators and manufacturers globally, CAE is a world leader in aviation, maintenance and crew training services. CAE offers tailored training services ranging from integrated training programs to deployable ground school capabilities and e-Learning solutions. Partnerships CAE has teamed with airlines and original equipment manufacturers to offer better services to customers, and now offers training solutions for every segment on the market. EM relationships O CAE is the Airbus training provider of choice Joint venture with Embraer for light jet and very light jet training Exclusive entitlement training provider for the Dassault Falcon 7X Authorized training provider for Bombardier Global Express, Global Express XRS, Global 5000 and Challenger 300 aircraft platforms, as well as for Learjet 40/40 XR and Learjet 45/45 XR aircraft for European customers Technical training alliance with Honeywell oint ventures/alliances with major airlines J Iberia, China Southern, LanChile, Emirates, AirAsia Addressing the pilot shortage In July 2006, CAE introduced the CAE Global Academy, a new training alliance designed to address the global shortage of pilots. CAE Global Academy is a network of flight training organizations offering pilot candidates the training required for a commercial pilots license and a clear path, via the global CAE training network, to continue on to a specific type-rating and a career as an airline pilot. In addition, through its Pilot Provisioning program CAE has contracts with several airlines to help fast-track flight crew requirements, expediting candidates from ab-initio through type rating. Continual growth CAE is continually expanding its training network to ensure that customers enjoy maximum capacity and convenience. Over the past two years, CAE expanded commercial aviation training centres in Zhuhai, China, in Amsterdam, the Netherlands, and in Santiago, Chile. CAE started offering training at its first Indian training centre in Bangalore, which will train up to 1,000 pilots a year for airlines based in the region. CAE has four training centres dedicated to business aviation, located in Dallas, Texas, Dubai, UAE, Burgess Hill, U.K., and Morristown, New Jersey. CAE recently began a major expansion of its training centre in Morristown, New Jersey, to increase the number of simulator bays from six to 15.

June 2009

TRAINING AND SERVICES / MILITARY

CAE provides its military customers with turnkey training solutions as well as comprehensive portfolios of training support and simulation-based professional services from more than 60 locations worldwide. Services range from training of pilots, maintenance technicians and crew members to technical services, support training in engineering and maintenance, modelling and simulation consulting, and training centre design and operation. Comprehensive training facilities CAEs Medium Support Helicopter Aircrew Training Facility (MSHATF) at RAF Benson in the U.K. represents the companys full range of capabilities. Owned and operated by CAE, the centre offers a fully integrated training environment to train Royal Air Force and other operators of the Puma, Chinook and Merlin helicopters. CAE also operates a C-130 training centre in Tampa, Florida and has a long-term teaming agreement with Lockheed Martin Aeronautics Company to be the training provider of choice for the C-130J Hercules aircraft. In Italy, CAE partnered with AgustaWestland to form the Rotorsim consortium, a helicopter training centre in Sesto Calende that provides integrated training solutions for AgustaWestland helicopters. The centre began operations with two simulators, the A109 and AW139, both of which achieved industry-first Level D certifications. An industry consortium consisting of CAE, Eurocopter, Rheinmetall Defence Electronics, and Thales started offering NH90 helicopter training in Germany. CAE Professional Services CAE Professional Services applies technology and know-how developed for defence forces to emerging markets like homeland defence, urban security and emergency response. Virtual reality and simulation can be used to prepare and train for civilian emergencies like natural disasters, train derailments, biological and radiological attacks, or terrorism. Through modelling and simulation, different scenarios can be simulated with a number of different players to evaluate alternative responses and to be able to prepare faster and better for any situation. CAEs Professional Services division offers a range of services in project management, human factors, capability engineering, modelling and simulation and emergency management.

June 2009

SIMULATION PRODUCTS / CIVIL

CAE is the worlds leading supplier of civil full-flight simulators, with over 1,000 simulators and flight training devices sold to more than 130 airlines, aircraft manufacturers and training centres. CAE has simulated almost every modern airliner, regional jet, and business jet. CAE applies its leading-edge technology across the industrys broadest range of training solutions, from desktop trainers and three-dimensional training devices to CAE 5000 Series and CAE 7000 Series full-flight simulators. Leader in developing prototype simulators CAE has a wealth of experience in developing prototype simulators for new types of aircraft, including: Airbus: A380, A319, A321, A330-200, A340-600 Boeing: B777, B737NG, B767-400, B717, B757/B767, B747-400, MD-11, MD-87, MD-88, MD-90 Bombardier: CRJ200/700/900, Global Express, CL 604 Embraer: EMB170, EMB190, Phenom 100VLJ Dassault: Falcon 7X CAE 5000 Series In March 2007, CAE launched the CAE 5000 Series, a breakthrough new full-flight simulator family that expands and complements the worlds largest portfolio of simulation based solutions. The CAE 5000 Series addresses new training methods and markets. The first CAE 5000 Series full-flight simulator achieved Level D certification in April 2008.

June 2009

SIMULATION PRODUCTS / MILTARY

CAE is a market leader in the design of military training systems for air, land and sea applications, and enjoys preferred supplier status with manufacturers such as Lockheed Martin, EADS CASA and AgustaWestland. CAE has designed the widest range of helicopter simulators in the world, and more training systems for the C-130 Hercules than any other company. CAE is the global leader in rotary-wing and transport aircraft training solutions. In February 2009, the Government of Canada awarded CAE a C$ 329.5 million contract for a comprehensive C-130J aircrew training equipment and services solution. Simulation contracts in the U.S. The Company has contracts with all branches of the U.S. military and major prime contractors. CAEs experience covers a variety of aircraft platforms, including helicopters, such as the CH-47 Chinook and MH-60S/R Seahawk, and transports such as the C-130 Hercules. In 2006, CAE won a major contract with the U.S. Navy to design and manufacture its MH-60R helicopter simulators. The Navy will take delivery of more than 500 new MH-60S/R helicopters over the next decade, and CAE is developing a range of training systems to support the training of its helicopter crews. In 2007, the U.S. Armys 160th Special Operations Aviation Regiment Airborne put into service a new CAE-built MH-47G Chinook combat mission simulator. Boeing has tasked CAE with upgrades and new training devices for the U.S. Air Force C-130 Avionics Modernization Program (AMP), which will see several hundred C-130 aircraft upgraded with a glass cockpit. Boeing also recognized CAE with its Outstanding Supplier Award, citing the company for the quality of its work. Around the world CAE is part of the Merlin Capability Sustainment Program team in the U.K., and is responsible for upgrading the Royal Navys EH101 Merlin Training System. In 2006, CAE won a series of land training systems contracts, including the development of 36 Warrior Infantry Fighting Vehicle (IFV) Gunnery Turret Trainers for the British Army. In Germany, CAE won a new program to provide the German Navy with a comprehensive P-3C Orion training system and the German Armed Forces with virtual maintenance trainers for the NH90 helicopter program. Introducing Presagis In 2007, CAE unveiled Presagis, its new modelling and simulation software company. CAE combined its acquisitions of Engenuity Technologies, MultiGenParadigm and TERREX and an existing CAE commercial-off-the-shelf (COTS) software team to create an independent, industry-leading company specializing in COTS modelling and simulation software. As part of CAEs military simulation products business, Presagis solidifies CAEs position as a significant player in the COTS modelling and simulation market.

June 2009

LEADING-EDGE PRODUCTS
Full-flight and full-mission simulators: CAE is known for the realism, quality and reliability of its full-flight simulators and full-mission simulators. Pilots around the world regard CAEs simulators as the closest thing to the true experience of flight. They can take you anywhere you want to go, in any kind of weather, without ever leaving the ground. In a full-flight simulator, pilots can practice in complete safety maneuvers that are too dangerous or impossible to try in a real aircraft. CAE Tropos-6000: CAEs latest visual system for the civil aviation market, CAE Tropos-6000 uses satellite imagery of the whole planet as well as sophisticated lighting and weather effects to create realistic training scenarios. CAE Simfinity: Transforming the way that pilots and maintenance technicians learn while setting a new standard in aviation training, CAE Simfinity comprises a suite of products based on the same high-fidelity Level-D software used in CAEs full-flight simulators. Student pilots and maintenance technicians are able to immerse themselves in a virtual cockpit from their first day of training. Allowing for advanced training on procedure trainers in ground-school and on the web, the suite of products includes both two-dimensional and three-dimensional training devices. One example is the Integrated Procedure Trainer (IPT), a three-dimensional trainer that uses six to seven touch-sensitive screens to display a cockpit. It helps students learn critical motion skills, procedures, cockpit scanning flows, and crew interactions. The IPT is not dependent on aircraft-specific hardware and can be reconfigured to fit multiple aircraft types. CAE Medallion-6000: The latest member in CAEs powerful Medallion image generator family, CAE Medallion-6000 uses the power and capabilities of the latest commercial-off-the-shelf workstation graphics to provide a highly modular, scalable and portable visual solution designed to satisfy a full range of military training needs. GESI: A combat simulation system being used by a growing number of NATO allies in Europe, GESI effectively moves CAE beyond flight simulation into the simulation of land-based activities. Presagis: CAEs COTS modelling & simulation software company Presagis brings together best-in-class software for modelling, simulation and creation of embedded applications. Products include AI.implant, Creator, Lyra, STAGE, S-Mission, Terra Vista, VAPS and Vega Prime.

June 2009

CAE PRESENCE WORLDWIDE

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June 2009
OKINAWA

BOARD OF DIRECTORS AND OFFICERS

bOARD OF DIRECTORS
Lynton R. Wilson, O.C.
Chairman of the Board CAE Inc. Oakville, Ontario

OFFICERS
James F. Hankinson
President and Chief Executive Officer Ontario Power Generation Inc. Toronto, Ontario

Lynton R. Wilson
Chairman of the Board

Marc Parent
President and Chief Executive Officer

Marc Parent
President and Chief Executive Officer CAE Inc. Montral, Qubec

E. Randolph (Randy) Jayne II

Senior Partner Heidrick & Struggles International Inc. Webster Groves, Missouri

Martin Gagn
Group President, Military Products and Training & Services

brian E. barents
Corporate Director Andover, Kansas

Robert Lacroix, O.C., Ph.D

Corporate Director Montral, Qubec

Jeff Roberts
Group President Civil Simulation Products, Training and Services

John A. (Ian) Craig

Business Consultant and Director Ottawa Heart Institute Ottawa, Ontario

The Honourable John Manley

Legal Counsel McCarthy Ttrault Ottawa, Ontario

Alain Raquepas
Vice President, Finance and Chief Financial Officer

H. Garfield Emerson, Q.C., ICD.D

Principal, Emerson Advisory and Corporate Director Toronto, Ontario

Gen. Peter J. Schoomaker U.S.A (Ret.)

Corporate Director Tampa, Florida

Antoine Auclair
Vice President and Corporate Controller

Anthony S. Fell, O.C.

Chairman RBC Dominion Securities Inc. Toronto, Ontario

Katharine b. Stevenson
Corporate Director Toronto, Ontario

Jacques Ferraro
Treasurer

Hartland J. A. Paterson
Vice President, Legal General Counsel and Corporate Secretary

Lawrence N. Stevenson
Managing Director Callisto Capital Toronto, Ontario

Paul Gagn
Chairman Wajax Income Fund Montral, Qubec

June 2009

10

2009 FINANCIAL HIGHLIGHTS

(amounts in millions, except per share amounts) 2009 2008 2007

Operating results Continuing operations Revenue Earnings Net earnings Financial position Total assets Total long-term debt, net of cash Per share Earnings from continuing operations Net earnings (basic) Dividends Shareholders equity

1,662.2 200.5 199.4 2,676.1 285.1 0.79 0.78 0.12 4.73

1,423.6 164.8 152.7 2,253.2 124.1 0.65 0.60 0.04 3.74

1,250.7 129.1 127.4 1,956.2 133.0 0.51 0.51 0.04 3.30

Revenue by business segment

Simulation Products / Military Training and Services / Military Simulation Products / Civil Training and Services / Civil
29% 14% 29% 28%

Geographic distribution of revenue

Canada United States Germany United Kingdom Netherlands Other European countries China United Arab Emirates Other Asian countries Australia Other countries
6% 34% 12% 7% 5% 11% 5% 4% 7% 5% 4%

11

June 2009

Financial Overview

1,662.2

1,423.6

1,250.7

285.1

124.1

133.0

195.5

260.9

239.3

Non-cash working capital (in millions of dollars)

2009 2008 2007

2009

2008

2007

2009

2008

2007

2009

2008

2007

Revenue (in millions of dollars)

Net debt (in millions of dollars)

Net cash provided by continuing operating activities (in millions of dollars)

(60.4)

(138.1)

(118.1)

cae.com

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