CAE Inc.
TSX : CAE
NYSE : CGT

CAE Inc.

June 21, 2009 10:00 ET

With the participation of the Quebec government, CAE to invest up to C$274 million in R&D in three new growth areas

- Quebec shares R&D cost of up to C$100 million

MONTREAL, QUEBEC--(Marketwire - June 21, 2009) - (NYSE:CGT)(TSX:CAE) - CAE and the Quebec government announced today an investment of up to C$274 million in a new research and development (R&D) program extending over seven years. The Quebec government will participate through a repayable investment which could reach C$100 million and CAE's share of the program is C$174 million. The aim is to leverage CAE's modelling, simulation and training services expertise into the promising sectors of healthcare, heavy equipment, mining and energy. Investissement Quebec will handle the funding and the follow-up for the Quebec government contribution.

"CAE is a world leader in modelling and simulation for aerospace and defence. We intend to leverage our expertise into fields that have similar challenges. Fields where safety is imperative and there is little margin for error, where task complexity and costs of training on real equipment are very high," said Robert E. Brown, CAE's President and Chief Executive Officer. "In addition, this new development axis will enable us to continue diversifying our activities.".

"Research and development is at the core of CAE's global success as a world leader in modelling, simulation and training in the aerospace sector," declared Mr. Raymond Bachand, Minister of Finance, Economic Development, Innovation and Export Trade in the Quebec government. "The Quebec government is therefore proud to support CAE's efforts to develop its capacities in sectors outside aerospace and defence, which will boost its growth in the years to come."

Some of the funds will be used to develop innovative education, technology and service solutions for healthcare professionals in order to improve the safety and efficiency of the healthcare industry. CAE has already signed contracts and alliances in simulation-based healthcare training, with the Michener Institute for Applied Health Sciences in Toronto, with Universite de Montreal and with the Winnipeg Health Authority. CAE estimates the global market for simulation-based healthcare training will be in excess of $1.5 billion by 2012.

CAE will also invest in R&D in the mining and heavy equipment sector. As in aviation, safety is a key factor in mining operations, where the very high costs of the machinery and equipment entail that they are used to the maximum. This means only limited access to the machines to train operators and drivers.

CAE will also invest in simulation and modelling tools aimed at optimizing the management of production, distribution networks and commercialisation in the energy sector.

This new R&D program is in addition to Project Falcon announced on March 31, 2009. Falcon's objective is to develop new technologies in CAE's two core markets, aerospace and defence.

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. With annual revenues exceeding C$1.6 billion, CAE employs more than 6,500 people at more than 75 sites and training locations in 20 countries. We have the largest installed base of civil and military full-flight simulators and training devices. Through our global network of 29 civil aviation and military training centres, we train more than 75,000 crewmembers yearly. We also offer modelling and simulation software to various market segments and, through CAE's professional services division, we assist customers with a wide range of simulation-based needs. www.cae.com

High resolution photos of the press conference will be available on www.cae.com/photos

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