Annual Report for the Year Ended March 31, 2013 Fiscal Yearendedmarch 31, 2013 ANNUAL REPORT

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Annual Report for the Year Ended March 31, 2013 Fiscal Yearendedmarch 31, 2013 ANNUAL REPORT cae.com CAE Annual Report for the year ended March 31, 2013 Fiscal ANNUAL year ended REPORT March 31, 2013 CYAN MAGENTA YELLOW BLACK CAE L09163 CAE is a global leader in modeling, simulation and training for civil aviation and defence. The company employs approximately 8,000 people at more than 100 sites and training locations in approximately 30 countries. CAE offers civil aviation, military and helicopter training services in more than 45 locations CAE L09163 worldwide and trains approximately 100,000 crew members yearly. In addition, the CAE Oxford Aviation BLACK Academy offers training to aspiring pilot cadets in 11 CAE-operated flight schools. CAE’s business is YELLOW diversified, ranging from the sale of simulation products Corporate Profile to providing comprehensive services such as training MAGENTA and aviation services, integrated enterprise solutions, CYAN in-service support and crew sourcing. The company applies simulation expertise and operational experience to help customers enhance safety, improve efficiency, maintain readiness and solve challenging problems. CAE is now leveraging its simulation capabilities in new markets such as healthcare and mining. www.cae.com Follow us on Twitter @CAE_Inc Financial Highlights 1 Global Reach 2 Chairman’s Message 4 Message to Shareholders 5 Partner of Choice 8 Service + Commitment 10 Global Presence 12 Innovation + Technology Leadership 14 People + Experience 16 Reputation + Brand 18 30% As an eTree member, CAE Inc. is committed to meeting shareholder needs while Contains FSC® certified post-consumer and 70% virgin fibre Financial Review 20 being environmentally friendly. For each shareholder that receives electronic Certified EcoLogo and FSC® Mix copies of shareholder communications, CAE will plant a tree through Tree Canada, the leader in Canadian urban reforestation. Manufactured using biogas energy Financial Highlights (amounts in millions, except per share amounts) 2013 2012 Operating results Revenue 2,104.5 1,821.2 Net income 142.4 182.0 Backlog 4,091.9 3,724.2 Financial position Net cash provided by operating activities 204.1 233.9 Capital expenditures 155.8 165.7 Total assets 3,878.7 3,183.7 Total long term debt, net of cash 916.8 534.3 Per share Basic earnings attributable to equity holders of the Company 0.54 0.70 Dividends 0.19 0.16 Equity 4.38 4.05 Revenue Distribution Fiscal 2013 5% New Core Markets 5% New Core Markets United States of America 30% Asia Australia 40% 55% 46% 49% 39% Canada Central and 31% South America Middle East Europe Defence Civil Simulation Training & products services CAE Annual Report 2013 | 1 ANCHORAGE COLD LAKE CANADA VANCOUVER MONTREAL BAGOTVILLE MOOSE JAW FAIRCHILD FREDERICTON REDMOND MIRABEL GAGETOWN MCCHORD SUDBURY MINNEAPOLIS PETAWAWA PEASE HALIFAX MILWAUKEE TORONTO OTTAWA GREENWOOD 3,940 TRENTON BOSTON MCCONNELL GRISSOM employees DENVER MORRISTOWN SAN FRANCISCO WICHITA SCOTT FORT KNOX DURHAM SAN JOSE OKLAHOMA CITY SHERWOOD USA MARCH PHOENIX ALTUS DOBBINS SEYMOUR JOHNSON RICHARDSON • CHARLOTTE SAN DIEGO LITTLE ROCK DALLAS FORT BENNING DAVIS-MONTHAN KEESLER COLUMBUS HOLLOMAN TAMPA ORLANDO MACDILL SARASOTA MIAMI 1,570 ZACATECAS employees TOLUCA HICKAM AFB MEDELLÍN BOGOTA LATIN AMERICA 100 GLOBAL LIMA employees BELO HORIZONTE REACH SÃO PAULO SANTIAGO LEGEND NORTH AMERICA SOUTH AMERICA n Miami n Civil Aviation Training CANADA UNITED STATES BRAZIL s Bagotville l Altus l Milwaukee u Belo Horizonte n Civil Aviation Services ls Cold Lake n Anchorage l Minneapolis n u São Paulo s Fredericton s Boston n l Morristown CAE Oxford Aviation CHILE Academy l Gagetown n Charlotte n Oklahoma City l l Columbus n s Orlando n u Santiago l Greenwood Defence Training n n l Dallas l Pease s Halifax COLUMBIA l l Davis-Monthan n Phoenix Defence Services l Mirabel n Bogota n n s u u Montreal u Denver u Redmond s Defence Operations u Medellín l Moose Jaw l Dobbins s Richardson and offices l n s Ottawa s Durham San Diego PERU l n u CAE Healthcare l Petawawa* Fairchild San Francisco n u Lima l Fort Benning s San Jose u CAE Mining u Sudbury l Fort Knox u n n su Toronto Sarasota * Expansion l Grissom l Scott AFRICA l Trenton l Hickam l Seymour Johnson n n u Vancouver CAMEROON l Holloman l Sherwood l l Keesler ls Tampa Douala n l Little Rock MEXICO SOUTH AFRICA l MacDill n u n n Toluca Johannesburg l March u Zacatecas l McChord l McConnell 2 | CAE Annual Report 2013 OSLO STOCKHOLM BENSON STAVANGER MANCHESTER DUBLIN ABERDEEN BRIZE NORTON MILDENHALL JAGEL COPENHAGEN ANGLESEY AMSTERDAM EUROPE INDIA CHINA SWINDON HOLZDORF WELLS KIEL YEOVILTON LAAGE OXFORD NORDHOLZ CULDROSE BURGESS HILL WEST SUSSEX WITTMUND BRUSSELS WUNSTORF FASSBERG 1,280 320 120 PARIS BUECKEBURG employees employees employees NOERVENICH VÉLIZY BUECHEL MAINZ PRAGUE STOLBERG GEILENKIRCHEN NEUBURG SOUTHEAST ASIA LECHFELD FUERSTENFELDBRUCK BORDEAUX BUDAPEST KARAGANADA SESTO CALENDE VESZPRÉM MILAN MADRID 160 PISA EVORA BARCELONA employees BEIJING SEOUL PALMA DE MALLORCA VITERBO TOKYO ROME IWAKUNI ATSUGI AMBALA SHANGHAI CAIRO NEW DELHI HINDON JAISALMER PALAM GORAKHPUR KADENA DUBAI JODHPUR OKINAWA FUTENMA RAE BARELI ABU DHABI BHUJ HONG KONG JEDDAH GONDIA NASIK ZHUHAI MIDDLE EAST MUMBAI AHMEDNAGAR VISAKHAPATNAM LONAVALA HYDERABAD MANILA GOA BIDAR CHENNAI BENGALURU 150 KOCHI employees RIMBA DOUALA KUALA LUMPUR AFRICA SINGAPORE 30 JAKARTA employees AUSTRALIA TOWNSVILLE BRISBANE OAKEY 225 AMBERLEY JOHANNESBURG employees PERTH RICHMOND SYDNEY ADELAIDE CANBERRA NOWRA MELBOURNE EUROPE ASIA OCEANIA BELGIUM HUNGARY UNITED KINGDOM BRUNEI INDONESIA AUSTRALIA n l l Brussels s Budapest n Aberdeen n l l Rimba* n Jakarta l Adelaide u Veszprém l Anglesey l l Amberley CZECH REPUBLIC CHINA JAPAN l l Benson s uu Brisbane n Prague IRELAND n n Beijing l Atsugi n s Burgess Hill s Canberra n Dublin n Hong Kong l Futenma DENMARK l Brize Norton n n s Melbourne n n Shanghai l Kadena n Copenhagen ITALY l Culdrose l Nowra n Zhuhai l Iwakuni s Milan n Manchester l Oakey FRANCE l Okinawa l Pisa l Mildenhall INDIA u Perth n Bordeaux n n Tokyo* n Rome Oxford l Ahmednagar l l Richmond n Paris n l Sesto Calende s Swindon l Ambala KAZAKHSTAN n n s Sydney s Vélizy l Viterbo u Wells n lsu Bengaluru u Karaganda l Townsville* GERMANY u l Bhuj NETHERLANDS West Sussex l MALAYSIA Buechel l Yeovilton l Bidar n l l Amsterdam n n Kuala Lumpur l l Bueckeburg l Chennai l l Fassberg NORWAY l Goa PHILIPPINES l Fuerstenfeldbruck MIDDLE EAST n Oslo Gondia n Manila l Geilenkirchen n Stavanger l Gorakhpur EGYPT SINGAPORE l l Holzdorf l l Hindon l SPAIN Cairo n l su Singapore Jagel l Hyderabad l n Barcelona Kiel UNITED ARAB EMIRATES l Jaisalmer SOUTH KOREA l Laage n Madrid n Abu Dhabi l Jodhpur n Seoul l Lechfeld n Palma De Mallorca s n n Dubai l Kochi u Mainz SWEDEN l Lonavala l Neuburg SAUDI ARABIA n Stockholm l Mumbai l Noervenich l Jeddah l Nasik l Nordholz u n New Delhi* s Stolberg l Palam l Wittmund CAE Annual Report 2013 | 3 Rae Bareli l Wunstorf l Visakhapatnam Chairman’s Message It has been an honour and a privilege for me to serve as your chairman of the board for the past 14 years. I have witnessed CAE’s transformation from a supplier of flight simulators to the civil aviation industry into a position of global leadership in crew training for both civil and defence markets worldwide. CAE is in very capable hands, under the leadership of Marc Parent, President and Chief Executive Officer, and his executive team. Revenue last year exceeded two billion dollars for the first time, with a good balance between markets and geographies. With a record order backlog, CAE is well-positioned to create long-term value for its stakeholders. Governance changes introduced this year have brought the age limit for directors to 72, and a term limit of 12 years. As a result of these new guidelines, my fellow directors John A. (Ian) Craig, H. Garfield Emerson, E. Randolph Jayne II, Dr. Robert Lacroix, Lawrence N. Stevenson and I will not be standing for re- election. The dedication of my Board colleagues to CAE has been exemplary, and I wish to thank them sincerely for their years of service. Management and shareholders will continue to benefit from the support and oversight of a seasoned Board of Directors, and an award-winning governance structure. The continuing board members, as well as Andrew J. Stevens and Kathleen E. Walsh, who joined our Board this calendar year, have nearly five decades of combined experience with CAE. During my 16 years on the Board, CAE has undergone many changes, responding to both challenges and opportunities, and the company’s progress has been tangible. Regardless of market conditions, we have always been well-served by the commitment of CAE employees to their company and its customers. I hasten to salute all of the women and men of CAE all over the world for their dedication to making CAE the partner of choice in its markets, and wish the company continued success. Lynton R. Wilson Chairman of the Board 4 | CAE Annual Report 2013 Message to Shareholders CAE achieved operational and strategic milestones in fiscal year 2013 that position the company well for the year ahead and for the long-term. We maintained our leadership position in our markets and our order backlog exceeded $4 billion for the first time in our history, with a high proportion of recurring services. Consolidated results Consolidated revenue reached $2.1 billion, an increase of 16% compared to fiscal year 2012. Revenue growth was driven mainly by our Civil segments which more than offset lower Defence activity. Net income attributable to equity holders was $139.4 million, or $0.54 per share, compared to $180.3 million, or $0.70 per share, last year.
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