CAE to Invest C$714 Million in Research and Development

MONTREAL, QUEBEC -- CAE announces that it will invest up to C$714 million in Project Falcon, a research and development (R&D) program that will span five years. The goal of Project Falcon is to expand CAE's current modelling and simulation technologies, develop new ones and increase its capabilities beyond training into other areas of the aerospace and defence market, such as analysis and operations.

The Government of Canada will participate in Project Falcon through a repayable investment of up to $250 million. This investment is being made through the Strategic Aerospace and Defence Initiative (SADI), which supports strategic industrial research and pre-competitive development projects in the aerospace, defence, space and security industries.

"Innovation is essential for CAE in order to sustain its leadership position in modelling, simulation and training. We will therefore, continue to invest in R&D, even in these challenging times," says Robert E. Brown, President and Chief Executive Officer of CAE. "This new Project Falcon will allow us to continue diversifying our revenue base by leveraging our core technologies into adjacent segments."

Project Falcon will focus on applying investments into six main technology thrusts. Among these will be the development of an augmented visionics system-a technology enabling a pilot to take off and land safely even when visibility outside the cockpit is restricted. CAE will expand its research and development initiatives in its traditional training markets, including simulation and modelling for new types of aircraft, unmanned vehicles and replacement models for current aircraft. CAE will also develop networking technologies to allow defense forces of many nations to participate simultaneously in real time training and mission rehearsal exercises.

Through the course of the program, approximately 1,000 jobs will be created or maintained. CAE will carry out Project Falcon in Canada, utilizing its R&D laboratories, and test and integration facilities in Montreal. CAE's workforce will continue to partner with universities and key research organizations in Canada, as well as innovative small and medium-sized suppliers across the country.

For more information visit www.cae.com.