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<SEC-DOCUMENT>0001173382-03-000007.txt : 20030527
<SEC-HEADER>0001173382-03-000007.hdr.sgml : 20030526
<ACCEPTANCE-DATETIME>20030527154022
ACCESSION NUMBER:		0001173382-03-000007
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20030331
FILED AS OF DATE:		20030527

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAE INC
		CENTRAL INDEX KEY:			0001173382
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31402
		FILM NUMBER:		03719940

	BUSINESS ADDRESS:	
		STREET 1:		ROYAL BANK PLAZA
		STREET 2:		SUITE 3060
		CITY:			TORONTO ONTARIO
		STATE:			A6
		ZIP:			00000
		BUSINESS PHONE:		4168650070

	MAIL ADDRESS:	
		STREET 1:		8585 COTE DE LIESSE, CP 1800
		STREET 2:		DEPT. 04
		CITY:			ST-LAURENT, QUEBEC
		STATE:			A6
		ZIP:			00000
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>f6kq4fs.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<html>

<body leftmargin="30" rightmargin="30">

<b>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="3">SECURITIES AND EXCHANGE COMMISSION</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">Washington, DC 20549</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="3">Form 6-K</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</b>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">Report of Foreign Issuer</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">Pursuant to Rule 13a-16 or 15d-16 of</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">the Securities Exchange Act of 1934</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="JUSTIFY"><font size="2" face="Arial">For the month of: May, 2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Commission File Number: 1-31402</font></p>
<b>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="3">CAE Inc.</font></p>
</b>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">(Name of Registrant)</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<b>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">Royal Bank Plaza</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">South Tower, Suite 3060</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">Toronto, Ontario</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">Canada M5J 2J1</font></p>
</b>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">(Address of Principal Executive Offices)<br>
Telephone: (416) 866-6967</font></p>
<p ALIGN="CENTER" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p><font size="2" face="Arial">Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:</font></p>
<p><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Form 20-F [&nbsp;&nbsp; ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Form 40-F [ X ]</font></p>
<p>&nbsp;</p>
<p><font size="2" face="Arial">Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:</font></p>
<p><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Yes [&nbsp;&nbsp; ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No [ X ]</font></p>
<p>&nbsp;</p>
<p><font size="2" face="Arial">If &quot;Yes&quot; is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): N/A</font></p>
<p><font size="2" face="Arial">&nbsp;</font></p>
<hr>
<b>
<p>&nbsp;</p>
<p ALIGN="CENTER"><font face="Arial" size="3">SIGNATURES</font></p>
</b>
<p><font size="2" face="Arial">Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.</font></p>
<b>
<p><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CAE Inc.</font></p>
</b>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">&nbsp;Date:
May 26, 2003&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
By:<u> /s/ Aline
Belanger&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Name:
Aline Belanger</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:
Corporate Controller and Assistant Secretary</font></p>

<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>

<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>

<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>

<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>

<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="center"><font face="Arial" size="3"><b>EXHIBIT
INDEX</b></font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="center">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="center">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="left">&nbsp;&nbsp;&nbsp;
<font size="2" face="Arial"><b><u>Exhibit</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Description of Exhibit</u></b></font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="left">&nbsp;</p>
<blockquote>
  <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="left"><font size="2" face="Arial">99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Fourth Quarter Report</font></p>
</blockquote>

</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>q4fs.htm
<DESCRIPTION>FOURTH QUARTER REPORT
<TEXT>
<html>

<head>
<title>Consolidated Balance Sheets</title>
</head>

<body leftmargin="75" right margin="75">

<b><font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY">&nbsp;</p>
</font>
<ul>
  <li><font size="4" color="#0000ff" face="Arial">Fourth Quarter Report</font></li>
  <li><font face="Arial" SIZE="4" COLOR="#0000ff">
Interim Financial Report
</font></li>
</b>
  <li>
    <p style="margin-top: 0"><font color="#0000ff" face="Arial" size="4"><b>for the
    fourth quarter and year ended March 31, 2003</b></font></li>
</ul>

<b><font FACE="Arial" SIZE="4" COLOR="#0000ff">
<hr>
<font FACE="Times">
<p style="margin-top: 0">&nbsp;</p>
<p style="margin-top: 0">Table of Contents</p>
</font>
</font></b>
<p><font face="Arial" size="2"><b>01&nbsp;&nbsp;&nbsp;&nbsp;</b> Report to Shareholders</font></p>
<p><font face="Arial" size="2"><b>03&nbsp;</b>&nbsp;&nbsp;&nbsp; Management's Discussion and Analysis:
Fourth Quarter and Year Ending March 31, 2003</font></p>
<p><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>04&nbsp;&nbsp;</b>&nbsp;&nbsp;
Summary of Consolidated Results</font></p>
<p><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b> 06</b>&nbsp;&nbsp;&nbsp;&nbsp;
Civil Simulation and Training</font></p>
<p><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>08&nbsp;</b>&nbsp;&nbsp;&nbsp;
Military Simulation and Training</font></p>
<p><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>09&nbsp;</b>&nbsp;&nbsp;&nbsp;
Marine Controls</font></p>
<p><font face="Arial" size="2"><b>11</b>&nbsp;&nbsp;&nbsp;&nbsp; Consolidated Balance Sheets</font></p>
<p><font face="Arial" size="2"><b>12</b>&nbsp;&nbsp;&nbsp;&nbsp; Consolidated Statements of Earnings</font></p>
<p><font face="Arial" size="2"><b>12</b>&nbsp;&nbsp;&nbsp;&nbsp; Consolidated Statements of Retained Earnings</font></p>
<p><font face="Arial" size="2"><b>13&nbsp;</b>&nbsp;&nbsp;&nbsp; Consolidated Statements of Cash Flow</font></p>
<p><font face="Arial" size="2"><b>14</b>&nbsp;&nbsp;&nbsp;&nbsp; Notes to the Consolidated Financial Statements</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.01</font></p>
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<font FACE="Times">
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">Report to Shareholders</p>
<p>&nbsp;</p>
</font></font>
<p><font face="Arial"><font size="4" color="#0000ff">Fourth </font></font>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
Quarter Results</font></b></p>
<p align="justify"><font face="Arial" size="2">CAE generated earnings from continuing operations
of 18 cents per share in the fourth quarter to end fiscal</font> <font face="Arial" size="2">year
2003 with earnings from continuing operations of 60 cents per share and healthy
20% overall margins. Our earnings and margins both met the publicly-stated
targets outlined last October. We view our profitability and productivity levels
as solid achievements in the light of unprecedented instability in the aerospace
market throughout the year.</font></p>
<p align="justify"><font face="Arial" size="2">A key strategic goal of CAE has been to develop a
more balanced business and market mix. Revenues in</font> <font face="Arial" size="2">2003
were generated almost equally from commercial and military businesses, while
training revenues in all three business units grew to 40% of the total base. The
trend towards greater training revenue and earnings should continue into the
future.</font></p>
<p align="justify"><font face="Arial" size="2">Our ability to achieve our targets was due in
part to an increased contribution from our Military and Marine units and our
growing aviation training business within the Civil division. However, the 50%
decline in</font> <font face="Arial" size="2">Civil's full flight simulator
sales caused earnings per share to decline from last year's record levels.</font></p>
<p align="justify"><font face="Arial" size="2">Military generated a noteworthy increase in its
Q4 operating margins despite a reduced revenue performance. This reflects
improved productivity, cost containment and a large percentage of maturing
programs. There are signs recently that some delayed major programs will begin
to move forward in 2004. We believe Military is well-positioned to win its fair
share. Military is also focused on new product development in the field of
simulation-based testing and modeling.</font></p>
<p align="justify"><font face="Arial" size="2">Our smallest division - Marine - was a primary
source of growth for the Company, finishing the fiscal yearwith operating
earnings up 35% and revenues up 40% compared to last year. A noteworthy event
was the selection of Marine under the US Navy's Joint Operation and Control
Electrical Network (JOCELN) program to supply the next generation electrical
control system on the newest U.S. aircraft carrier, the George H. W. Bush. We
believe this contract positions Marine well to retrofit other ships in the
American fleet.</font></p>
<p align="justify"><font face="Arial" size="2">Civil's Q4 and full year results are not
surprising in light of the turmoil in the aerospace market, particularly among
major North American airlines - many of which were long-standing simulator
customers. Civil ended the year with essentially a 50-50 split in its revenue
base between equipment and training. During the quarter, Civil added 14 more
simulators to end the year with an installed training base of 89 simulators in
20 facilities on four continents.</font></p>
<p align="justify"><font face="Arial" size="2">We believe CAE possesses two key competitive
advantages in the global training marketplace: the convenient location of our
training facilities around the world; and our on-line leadership through our
PC-based product, CAE Simfinity&#153. Simfinity levers our entry into content or
"wet" training (evidenced by its integration into the Airbus curriculum
worldwide), opens up additional outsourcing opportunities with the major
airlines and allows us to increase the scope of our offering beyond pilot
training into the field of aircraft maintenance.</font></p>
<hr>
<p align="justify"><font face="Arial" size="2">The way ahead still remains unclear, with the
downturn in the aerospace sector far from over. What isclear is that the
ultimate level of demand for our goods and services throughout 2004 will depend
on thepace and timing of economic recovery in the leading industrialized
nations; more specifically, the emergence of reorganized North American
airlines; and the timetable of new military programs.</font></p>
<p align="justify"><font face="Arial" size="2">CAE incurred substantial debt last year to
finance our transformation into the provision of integrated training services.
We were able to reduce net debt at year-end below $800 million through strong
cash flow and sale and leaseback transactions - this despite the cost of a 50%
expansion in our global training network. An attempt to reduce debt further
through the issuance of convertible debentures was unsuccessful. A top priority
in fiscal 2004 is to strengthen our balance sheet further through consistent and
strong financial performance.</font></p>
<p align="justify"><font face="Arial" size="2">We intend to focus on those things we can control
so we achieve supply side excellence, exceed the expectation of customers,
minimize costs, optimize our productivity and profitability and position
ourselves to realize our full potential as recovery takes hold and demand is
restored.</font></p>
<p align="justify">&nbsp;</p>
<p align="justify"><font face="Arial" color="#0000ff" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
[Graph Signature]</font></p>
<p align="justify"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
D.H. Burney</font></p>
<p align="justify"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
President and Chief Executive Officer</font></p>
<p align="justify">&nbsp;</p>
<hr>
<p align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.03</font></p>
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
</font>
</b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<b>
<p align="JUSTIFY">&nbsp;</p>
<p align="JUSTIFY">Management's Discussion and Analysis</p>
</b>
</font><font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p align="JUSTIFY">Fourth
Quarter and Year Ending March 31, 2003</p>
<p align="JUSTIFY">&nbsp;</p>
</font>
<p align="JUSTIFY"><font face="Arial" size="2" color="#000000">Management's
Discussion and Analysis (MD&amp;A) of the fourth quarter of fiscal 2003
financial results focuses on the core businesses of CAE Inc. (CAE): Civil
Simulation and Training (Civil), Military Simulation and Training (Military) and
Marine Controls (Marine). The growing size of Marine, which was grouped with
Military in the prior year and reported as Military Simulation and Marine
Controls, means it is now reported separately as a business segment. The
MD&amp;A includes a review of the operations and financial condition of each
segment and should be read in conjunction with the unaudited financial
statements contained on pages 11 to 20, as well as with the MD&amp;A and the
Consolidated Financial Statements and Notes included in CAE's annual report for
the year ended March 31, 2002, which is available at www.cae.com
or from CAE directly. All dollar amounts referred to herein are Canadian
dollars.</font></p>
<p align="JUSTIFY"><font face="Arial" size="2" color="#000000">This MD&amp;A is
intended to assist in the understanding and assessment of significant changes
and trends, as well as risks and uncertainties, related to the results of
operations and the financial condition of CAE. It contains forward-looking
statements with respect to CAE and its subsidiaries based on assumptions, which
CAE considers reasonable at the time they were prepared. These forward-looking
statements, by their nature, necessarily involve risks and uncertainties that
could cause actual results to differ materially from those contemplated by the
forward-looking statements. CAE cautions the reader that the assumptions
regarding future events, many of which are beyond the control of CAE and its
subsidiaries, may ultimately prove to be incorrect.</font></p>
<p align="justify"><font face="Arial" size="2" color="#000000">Numerous factors could cause our
results to differ materially from those in the forward-looking statements,
including: the purchase and timing of delivery of new aircraft and vessels by
and to civil, military and marine customers; reduced defense spending by
governments; rising costs, especially in connection with fixed-price contracts;
the effectiveness of our research and development program and our ability to
develop new products and features in a timely manner; a lack of success in
bidding for competed contracts; changes in regulatory requirements; difficulties
in executing our business strategy; the inability to successfully integrate our
acquired businesses; and general political, economic and financial conditions in
the markets in which we operate.</font></p>
<hr>
<p>&nbsp;</p>
<p><font face="Arial" size="2" color="#0000FF"><b>Summary of Consolidated
Results</b></font></p>
<p><font face="Arial" size="2" color="#0000FF"><b>Continuing Operations</b></font></p>
<p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#0000FF">Earnings
from Continuing Operations</font></p>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin: 0">Consolidated earnings from continuing operations for the
quarter ended March 31, 2003, were $39.0 million or 18 cents per share compared
to $41.2 million or 19 cents per share reported in the fourth quarter of fiscal
2002. The decrease is mainly attributable to a lower contribution from the Civil
segment partially offset by increases in the operating earnings of Marine and
Military of 9% and 8% respectively. Civil's operating earnings were impacted
by the weak demand for full flight simulator (FFS) equipment and the accounting
for sale and leaseback financing. Year-to-date earnings from continuing
operations were $131.0 million or 60 cents per share, compared to $148.4 million
or 68 cents per share for the same period last year.</p>
<p ALIGN="justify">Operating margins were 19% in the quarter against last year's 20%.
Year-to-date operating margins of 20% were in line with CAE's stated full year
expectations. The decrease is attributable to a change in business mix, more
Military and Marine and less Civil, and to the lower operating margins reported
by Civil for the reasons previously noted. This was partially offset by
increased operating margin levels in Military.</font>&nbsp;</p>
<p ALIGN="justify">
<font FACE="Arial" SIZE="2">
During the year, CAE changed its pension assumptions for the
return on plan assets for its defined pension plans to 6.5% from 9.0%. As a
result, the Company's pension expense in the quarter increased by $2.6 million
and by $5.4 million for the year.</p>
<p ALIGN="JUSTIFY">At the beginning of this fiscal year, the amortization period
for Civil simulation equipment was changed from 20 to 25 years. This change,
which is a better approximation of the useful life of the simulators , is
consistent with industry practices as well as the long-term financing
arrangements completed to date for such assets. The change in estimated useful
life reduced the amortization expense by approximately $0.9 million in quarter
and $3.7 million on a year-to-date basis.</p>
<p ALIGN="justify">Interest expense for the quarter amounted to $4.6 million compared to $10.4
million last year. The lower interest expense in the fourth quarter resulted
from strong cash flow, lower interest rates and the full year benefit of
interest on the note receivable issued last year on the sale of certain Cleaning
Technology businesses and the amortization of a gain on a currency swap.
Year-to-date interest expense was $30.4 million versus $22.7 million in fiscal
2002. This increase in interest expense resulted from a higher debt level
following the strategic investments made last year and the further expansion of
the installed base of civil simulators delivering training.&nbsp;</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="2" color="#0000FF">Revenue</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="justify"><font FACE="Arial" SIZE="2">Consolidated
revenue for the fourth quarter of $312.2 million was 11% lower than the $349.2
million generated in the prior year. Marine revenue climbed 49%, while Civil and
Military revenue decreased by 16% and 18% respectively. Year-to-date
consolidated revenue reached $1,130.5 million, flat compared to last year, with
an increase of 40% in Marine, while Military and Civil slightly contracted, by
3% and 5% respectively.</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.05</font></p>
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font FACE="Arial" SIZE="2" COLOR="#0000ff">Discontinued
Operations</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="justify"><font FACE="Arial" SIZE="2">CAE
reported a loss from discontinued operations of $13.8 million for the fourth
quarter and the fiscal year compared to a $3.9 million loss in the fourth quarter of
2002 and a gain of $1.1 million in fiscal 2002. Approximately one-half of the
amount relates to post-closing adjustments from three divestments: the Pulp and
Paper division of the Forestry Systems Group that was the subject of a
publicly-offered Income Trust; and the sale of CAE Ransohoff and CAE Ultrasonics,
both of which occurred in the fourth quarter of fiscal 2002. The balance of the
loss is based on the divestitures of the remaining Cleaning Technology and
Forestry Systems businesses, particularly the reduced value of the Vancouver,
British Columbia-located Oriented Strand Board Forestry Systems business, due to
market deterioration.</font>
</p>
<p align="justify"><font face="Arial" size="2">As at March 31, 2002, CAE had five businesses yet
to divest - two in forestry and three in cleaning. During fiscal 2003, CAE
completed the sale of its U.K. cleaning technology operations (June 28, 2002)
and the sale of the sawmill business (August 16, 2002) within its Forestry
Group. Subsequent to year-end 2003, CAE completed the sale of its remaining
Oriented Strand Board Forestry Systems business to TD Capital on May 6, 2003;
and the sale of its German cleaning operations on May 7, 2003 to a German
financial buyer. Under the Oriented Strand Board agreement, CAE could receive
further proceeds dependent on the performance of the business over the next 29
months to which CAE has ascribed no value. The Company is also in exclusive
negotiations to sell the remaining Cleaning Technology business, Alpheus,
located in Rancho Cucamonga, California. It is expected that this transaction
will be completed during the first quarter of fiscal 2004.</font></p>
<p style="word-spacing: 0; margin: 0" align="justify"><font face="Arial" size="2" color="#0000FF">Net
Earnings</font></p>
<p style="word-spacing: 0; margin: 0" align="justify"><font face="Arial" size="2">Consolidated
net earnings of $25.2 million for the quarter and $117.2 million year-to-date
reflected 13.8 million of losses from discontinued operations. In fiscal 2002,
the latter showed a loss of $3.9 million in the fourth quarter and contributed
$1.1 million year-to-date.</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="2" color="#0000FF">Cash
Flow</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="justify"><font FACE="Arial" SIZE="2">CAE
had very strong cash flow in the fourth quarter resulting in a reduction of
long-term debt of $178.8 million. This reduction was achieved by cash flow
generated from operations including a reduction of non-cash working capital of
$67.4 million, proceeds of $34.8 million from the sale and leaseback of two full
flight simulators and a reduction of cash and short term investments of $57.5
million. Capital expenditures for the quarter and the year were $56.0 million
and $238.9 million respectively, the majority of which was used to support the
expansion of CAE's Civil training network. As at March 31, 2003, CAE's net
debt (long-term debt less cash and short term investments) amounted to $791.7
million compared to $913.0 million at December 31, 2002 and $816.4 million at
March 31, 2002.</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="2" color="#0000FF">Backlog</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="justify"><font FACE="Arial" SIZE="2">CAE's
order backlog at March 31, 2003, was $2.3 billion, down slightly from the
previous quarter end.</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="2" color="#0000FF">Capital
Resources and Liquidity</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="justify"><font FACE="Arial" SIZE="2">The
Company's financing needs are met through internally generated cash flow,
availability under credit facilities and direct access to capital markets for
additional long-term capital resources of debt and equity. The Company considers
that its present capital resources and credit facilities will enable it to meet
all its current and expected financial requirements for the foreseeable future.
</font>
</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<hr>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY">CAE maintains committed bank lines at floating rates, each
provided by a syndicate of lenders. These credit facilities permit CAE and
certain designated subsidiaries to borrow funds directly for operating, general
and corporate purposes. The total available amount is $872.8 million, of which
52% ($ 451.9 million) was utilized at March 31, 2003. Of this amount, $51.4
million was drawn from a revolving credit facility maturing in June 2003. CAE
has adequate resources under its other credit facilities to repay this amount
and as a result it is not classified as a current obligation. The Company is in
full compliance with all bank covenants at the end of the fourth quarter, and
has the ability to draw under non-committed operating lines $93.2 million, of
which $45.2 million is utilized.</p>
<p ALIGN="JUSTIFY">Financial instruments are used from time to time to manage
short-term interest rate fluctuations on underlying credit facilities
borrowings. Long-term obligations are generally structured with fixed rates and
maturities that will reduce its refinancing risk.</p>
</font>
<p><font face="Arial" size="2" color="#0000FF"><b>Civil Simulation and Training</b></font></p>
<p align="justify"><font FACE="Arial" SIZE="2">CAE's Civil Simulation and Training business is a
world leader in the design and production of commercial flight simulators,
visual systems and a world-leading supplier of integrated aviation training
solutions. As at March 31, 2003 CAE has an installed base of 89 FFS (59 FFS as
at March 31, 2002) at 20 locations on four continents, making it the second
largest independent training company in the world in each segment - business
aircraft, regional jets and wide body aircraft. CAE also remains the leader in
selling FFS.</font></p>
<p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#0000FF">Review
of Operations</font></p>
<p style="word-spacing: 0; margin: 0" align="justify"><font face="Arial" size="2">During the fourth quarter, CAE sold three
Airbus A320 FFS - one to Air France, a second FFS to Shanghaibased China
Eastern Airlines, and a third to South African Airways for $52 million.&nbsp;</font></p>
<p align="justify"><font face="Arial" size="2">CAE received a contract for a Boeing B737NG FFS
from the U.S. Federal Aviation Administration. Lufthansa Flight Training also
selected CAE for the provision of an enhanced version of an Airbus A330- 300 FFS.
These two contracts are valued at approximately $35 million.</font></p>
<p align="justify"><font face="Arial" size="2">CAE received its first FAA flight training device
(FTD) Level 4 qualification for a CAE Simfinity&#153 Integrated Procedures Trainer
(IPT). The IPT was qualified as a Bombardier CRJ200 FTD as part of Atlantic
Coast Airlines aviation training program.</font></p>
<p align="justify"><font face="Arial" size="2">CAE and Emirates signed new training agreements
worth approximately $3 million with Kuwait Airways, Oman Air and Jet Aviation of
Switzerland for the recently inaugurated Emirates-CAE Flight Training facility
in Dubai.</font></p>
<p align="justify"><font face="Arial" size="2">CAE and Airbus signed a three-year agreement for
training services with JetBlue Airways, who will acquire three CAE-supplied FTDs.
The total value of the contracts, including training within the CAE-Airbus
cooperation network, is estimated at $28 million.</font></p>
<p align="justify"><font face="Arial" size="2">CAE signed a $30 million agreement with Airbus
for the purchase of 20 CAE Simfinity&#153 Maintenance/ Flight Training Devices (M/FTDs)
to be integrated into the Airbus aviation training program. Airbus will also
procure annual update services from CAE for these M/FTDs.</font></p>
<p align="justify"><font face="Arial" size="2">CAE and China Southern Airlines, through the
joint venture Zhuhai Xiang Yi Aviation Technology Co. Ltd., which is 49% owned
by CAE, formally opened its training facilities at China Southern's Zhuhai
flight base in Guangdong, China. The joint venture will initially offer training
for carriers operating Boeing 737NG, 737-300, 777 and 757-200, along with Airbus
A320 aircraft.</font></p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.07</font></p>
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p align="justify"><font face="Arial" size="2">CAE's new aviation training facility in Mesa, a
suburb of Phoenix, Arizona, is now operational. The new</font> <font face="Arial" size="2">US$20
million facility is ready for training pilots from Mesa Air Group and other
customers, with two regional jet FFS: an Embraer ERJ-145 FFS and a Bombardier
CRJ200/700/900 convertible simulator.</font></p>
<p><b><font face="Arial" COLOR="#0000ff" size="2">
Financial Results</font>
</b>
</p>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="625">
    <tr>
      <td width="196" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" COLOR="#0000ff">
      (amounts in millions, except operating margins)</font></td>
      <td width="24" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      <b>
      Q4-2003</b></font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q3-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q2-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q1-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q4-2002</font></td>
    </tr>
    <tr>
      <td width="196"><font face="Arial" size="2">
      Revenue</font></td>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="19"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="19"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">137.7</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="19">
      <p ALIGN="RIGHT"><font face="Arial" size="2">139.6</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="19">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      104.4</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="19">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      135.5</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="19">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      164.9</font></td>
    </tr>
    <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2">
      Operating earnings</font></td>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">29.5</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">29.2</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      19.9</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      37.7</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      42.4</font></td>
    </tr>
    <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2">
      Operating margins</font></td>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      %</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">21.4</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">20.9</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      19.1</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      27.8</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      25.7</font></td>
    </tr>
    <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2">Backlog</font></td>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      418.0</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      416.1</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      424.8</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      489.3</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      641.2</font></td>
    </tr>
  </table>
  </center>
</div>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY">Revenue for the quarter of $137.7 million was $27.2 million
or 16% below last year. This decrease was attributable to the weak market for
equipment sales partially offset by increased training revenue. Year-to-date
revenue of $517.2 million was 5% below last year's level.</p>
<p ALIGN="JUSTIFY">Operating earnings for the quarter of $29.5 million were
$12.9 million or 30% below last year while year-to-date operating earnings of
$116.2 million were $35.6 million or 23% below last year. These decreases are
primarily due to lower FFS sales and the accounting for sale and
leaseback financing, partially offset by the growing aviation training network.</p>
<p ALIGN="justify">The backlog at the end of March increased to $418.0 million from $416.1
million in December. The lower backlog levels compared to earlier prior periods also
reflects the fact that much of the training services business is not covered by
long-term contracts and thus has no backlog amount associated with it.</p>
<p style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2" COLOR="#0000ff">Outlook</font></p>
<p style="word-spacing: 0; margin: 0" align="justify">CAE expects significant growth in its Civil training
business, having increased its installed base by 50% during fiscal 2003 from 59
FFS to 89 FFS. Revenue from training in fiscal 2003 represented approximately
50% of Civil's total revenue. Today CAE is the only integrated provider of a
complete training solution including lower level training devices, courseware
and curriculum, web-based training solutions and the most sophisticated FFS.</p>
<p style="word-spacing: 0; margin: 0" align="justify">&nbsp;</p>
<p style="word-spacing: 0; margin: 0" align="justify">CAE expects to maintain its commanding leadership position
for competed sales of civil simulation and visual systems due to its focus on
customer relationships, its commitment to innovation and technology, product
quality, reliability and efficiency, and its continuing efforts to shorten
delivery cycles through process improvements. CAE anticipates increasing its
advantage in lead-time, cost, quality and reputation for performance through
operational improvements and research and development (R&amp;D) programs.</p>
<p align="JUSTIFY">The biggest challenge facing CAE is market uncertainty. The
events of September 11, the war on Iraq and now SARS have had an extremely
negative impact on commercial airlines, on aircraft manufacturers and, by
extension, on CAE, which to some degree is dependent on the health and success
of those industries. In particular, the sale of equipment has been impacted as
airline customers delay delivery of new aircraft and thus simulators. Equipment
orders were one-half of what they were in fiscal 2002, which in turn were below
the prior year. We expect the total sales in fiscal 2004 to be consistent with
that of fiscal 2003.</p>
<hr>
</font>
<p ALIGN="JUSTIFY"><b><font face="Arial" size="2" COLOR="#0000ff">Military Simulation and Training</font></b></p>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY">CAE's Military business is a premier designer and
manufacturer of military flight and land-based simulation and training systems.
Simulation equipment and training is developed for a variety of military
aircraft, including helicopters, transport planes and fighter jets. CAE has an
extensive product range covering many American and European weapon systems. The
customer base is extensive as well, CAE having made sales to over 30 countries
globally.</p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font FACE="Arial" SIZE="2" COLOR="#0000ff">Review of
operations</font></p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">The
CAE/Lockheed Martin Aeronautics Company team was awarded a $20 million contract
to design and build a C-130J Fuselage Trainer for the US Air Force. The Fuselage
Trainer will be delivered to Little Rock Air Force Base (AFB) and will be ready
for training in May 2005. This contract further strengthens the strategic
importance of the C-130J Maintenance and Aircrew Training System (MATS). Under
the C-130J MATS, CAE was also awarded contracts of $33 million during the third
quarter of fiscal 2003.</p>
<p ALIGN="justify">CAE will be upgrading the Royal Australian Navy's S-70B-2 Seahawk Mission
Simulator with the CAE Medallion-S&#153 visual system. The current visual system
will be upgraded under CAE's existing contract to support the Seahawk
simulator on-site at the Naval Air Station Nowra on the New South Wales coast,
near Sydney. The upgraded system is scheduled to be ready for training early in
2004. This marked another significant step in the acceptance of CAE Medallion-S&#153
as the premier visual system for military forces worldwide, for both new and
upgrade applications</p>
</font>
<b>
<p ALIGN="JUSTIFY"><font face="Arial" size="2" COLOR="#0000ff">Financial Results
</font>
</p>
<table border="0" cellpadding="0" cellspacing="0" width="625">
  <tr>
    <td width="196" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" COLOR="#0000ff">
      (amounts in millions, except operating margins)</font></td>
    <td width="24" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      <b>
      Q4-2003</b></font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q3-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q2-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q1-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q4-2002</font></td>
  </tr>
  <tr>
    <td width="196"><font face="Arial" size="2">
      Revenue</font></td>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="19"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      123.8</font></b></td>
  </b>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      107.4</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      108.6</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      106.0</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      150.2</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2" color="#000000">
      Operating earnings</font></td>
<b>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">22.1</font></b></td>
  </b>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      16.7</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      16.2</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      18.7</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      20.5</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2" color="#000000">
      Operating margins</font></td>
<b>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      %</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      17.9</font></b></td>
  </b>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      15.5</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      15.0</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      17.6</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      13.6</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2" color="#000000">Backlog</font></td>
<b>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      1,235.3</font></b></td>
  </b>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      1,347.5</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      1,310.9</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      1,334.0</font></td>
    <td WIDTH="13%" VALIGN="MIDDLE" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      1,378.3</font></td>
  </tr>
</table>
<p ALIGN="JUSTIFY"><font face="Arial" size="2">Revenue of $123.8 million for the
quarter was $26.4 million or 18% below last year.
Year-to-date revenue of $445.7 million was similar to last year's level. Revenue
growth has been affected by delays in the award of several programs.&nbsp;</font>
</p>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY">Operating earnings of $22.1 million this quarter were $1.6
million or 8% above last year. Year-to-date operating earnings, however, at
$73.6 million, were 12% or $8.0 million above last year representing further
margin improvements through productivity gains, and benefits from integration at
the Tampa, U.S. location. Through the integration of the Tampa operation CAE has
reduced the cost to complete certain programs from their initial estimates at
the time of acquisition by $8.0 million, which favourably impacted operating
margins this year and for the quarter where approximately one half of that
benefit was realized.</p>
<p ALIGN="justify">Backlog at $1.2 billion is slightly below the prior quarter due to delays in
program awards.</p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.0</font></font><font size="1" face="Arial">9</font></p>
<font FACE="Arial" SIZE="2">
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p style="word-spacing: 0; margin: 0">&nbsp;</p>
<p style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2" COLOR="#0000ff">Outlook</font></p>
<p style="word-spacing: 0; margin: 0" align="justify">The military simulation and training
market is driven by the introduction of new aircraft platforms, upgrades and
life extensions to existing aircraft and a shift to greater use of simulation in
pilot training programs due to the high degree of realism and the significantly
lower cost compared to live training. CAE expects to increase its advantage in
lead-time, cost, quality and reputation for performance through continued
operational improvements and research and development programs.</p>
<p align="JUSTIFY">The near term growth will be dependent on the Company's
success on major programs - the U.S. Army's Flight School XXI (12 year
program valued in excess of $1 billion), the Canadian CF-18 upgrade, U.K.
Armored Vehicle training program ($1.5 billion over 30 years) and involvement
with the NH-90 helicopter program in Europe.</p>
<p align="JUSTIFY">In addition to these major programs, Military will continue
to expand its training services business and capitalize on the increase in
defense and security spending particularly in the U.S.</p>
</font>
<b><font FACE="Arial" SIZE="2" COLOR="#0000ff">
</font></b>
<b><p ALIGN="JUSTIFY"><font face="Arial" size="2" COLOR="#0000ff">
Marine Controls</font></b></p>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY">CAE's Marine Controls business is a world leader in the
supply of automation and controls system for the naval and commercial market,
having been selected for the provision of controls for more than 130 warships in
18 navies. The system monitors and controls the propulsion, electrical steering,
ancillary, auxiliary and damage control systems of naval ships. The business has moved beyond
the supply of marine controls into the provision of naval training services
through participation in the 30-year U.K. Royal Navy Astute Class Submarine
Training program awarded in fiscal 2002 and submarine training in Canada. The
business also designs and manufactures power plant training simulators.</p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; text-indent: 0; margin: 0"><font FACE="Arial" SIZE="2" COLOR="#0000ff">Review
of operations</font></p>
<p ALIGN="justify" style="word-spacing: 0; text-indent: 0; margin: 0">CAE was
selected by the ARGE K130 consortium to provide Integrated Monitoring and
Control Systems for the German Navy's new K130 Corvettes. The approximate
value of the contract is $23 million. The ARGE K130 Consortium which comprises
three German shipyards: Blohm+Voss, Fr. L&#252rssen Werft, and Thyssen Nordseewerke,
was contracted by the Federal German Office for Defence Technology and
Procurement (BWB) to supply the first batch of five corvettes in a planned total
of 15 ships.</p>
<p ALIGN="justify">CAE was awarded a $6.0M contract by Northrop Grumman - Newport News
Shipbuilding for the integration of the hardware and software for the US Navy's
Joint Operational &amp; Control Electrical Network (JOCELN) program. Over the
past five years, CAE has been awarded three such separate contracts. JOCELN is a
multi-phased program for a next generation Electrical Control System on-board
the US Navy's CVN 77 Aircraft Carrier. The electrical plant control system is a
sub-system of CAE's Integrated Platform Management System, which has been
installed on several classes of US Navy Ships.</p>
</font>
<hr>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<div align="justify">
<pre ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" COLOR="#0000ff" size="2">
<b>Financial Results</b></font></pre>
</div>
<div align="justify">
<pre ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</pre>
</div>
<div align="justify">
<table border="0" cellpadding="0" cellspacing="0" width="625">
  <tr>
    <td width="196" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" COLOR="#0000ff">
      (amounts in millions, except operating margins)</font></td>
<b>
    <td width="24" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      <b>
      Q4-2003</b></font></td>
    </b>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q3-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q2-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q1-2003</font></td>
    <td WIDTH="13%" VALIGN="bottom" HEIGHT="33" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2" COLOR="#0000ff">
      Q4-2002</font></td>
  </tr>
  <tr>
    <td width="196"><font face="Arial" size="2">
      Revenue</font></td>
<b>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="19"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">50.7</font></b></td>
    </b>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">43.3</font></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16"><p ALIGN="RIGHT"><font face="Arial" size="2">39.3</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      34.3</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      34.1</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2">
      Operating earnings</font></td>
<b>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">8.9</font></b></td>
    </b>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">9.3</font></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      7.2</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      6.4</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      8.2</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="18">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2">
      Operating margins</font></td>
<b>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="18"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      %</font></b></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">17.6</font></b></td>
    </b>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      21.5</font></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      18.3</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      18.7</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      24.0</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="JUSTIFY"><font face="Arial" size="2">Backlog</font></td>
<b>
    <td WIDTH="4%" VALIGN="MIDDLE" HEIGHT="17" style="border-bottom-style: solid; border-bottom-width: 1"><b>
      <p ALIGN="CENTER"><font face="Arial" size="2">
      $</font></b></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1"><b>
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      628.5</font></b></td>
    </b>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      677.0</font></td>
    <td WIDTH="12%" VALIGN="TOP" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      685.5</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      694.8</font></td>
    <td WIDTH="13%" VALIGN="TOP" HEIGHT="16" style="border-bottom-style: solid; border-bottom-width: 1">
      <p ALIGN="RIGHT"><font face="Arial" size="2">
      676.3</font></td>
  </tr>
</table>
<pre ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</pre>
</div>

<font FACE="Times">
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY">Revenue for the quarter at $50.7 million was 49% higher than
last year and year-to-date revenue at $167.6 million reflected a 40% improvement
over last year. These increases were attributable to the organic growth of the
naval controls business, the contribution from both the United Kingdom's
Astute submarine training project and the Royal Malaysian Navy patrol vessel
projects.</p>
<p ALIGN="JUSTIFY">Operating earnings for the quarter of $8.9 million were 9%
ahead of last year, with year-to-date operating earnings of $31.8 million
representing a 35% increase.</p>
<p ALIGN="JUSTIFY">Backlog reached $628.5 million, a 7% decrease from the prior
quarter.</p>
</font>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2" COLOR="#0000ff">Outlook</font></p>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin: 0">With its significant installed base, the long term training
contract for the U.K. Astute Submarine and the possibilities of further options
to build additional ships on several of its programs, the business is well
positioned to continue its growth in both the Naval and Commercial market.</p>
<p>&nbsp;</p>
</font><font FACE="Arial" SIZE="2">
<hr>
</font>
</font>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.11</font></p>
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p>&nbsp;</p>
  <table border="0" width="625" cellpadding="0" cellspacing="0" height="514">
    <tr>
      <td colspan="5" width="598" height="21">
<b><font color="#0000ff" face="Arial" size="3">Consolidated Balance Sheets</font></b>

      </td>
    </tr>
    <tr>
      <td width="590" valign="bottom" align="left" height="7" colspan="5"></td>
    </tr>
    <tr>
      <td width="368" valign="bottom" align="left" height="66"><font size="2" face="Arial" color="#000000">(amounts
        in millions of Canadian dollars)</font></td>
      <td width="114" colspan="2" valign="bottom" align="right" height="66">
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>as
        at</b></font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;March
        31</b></font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>2003&nbsp;</b></font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
      <td width="108" colspan="2" valign="bottom" align="right" height="66">
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">as
        at</font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;March
        31&nbsp;</font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">2002&nbsp;</font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2">(restated)</font></td>
    </tr>
    <tr>
      <td width="590" colspan="5" style="border-top-style: solid; border-top-width: 1" height="17">
<font FACE="Arial" SIZE="2" color="#000000"><b>Assets</b></font>

      </td>
    </tr>
    <tr>
      <td width="590" colspan="5" height="18"><font face="Arial" size="2" color="#000000">Current
        Assets</font></td>
    </tr>
    <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;
        &nbsp;&nbsp; Cash and cash equivalents</font></td>
      <td width="38" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
      <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>17.1</b></font></td>
      <td width="42" align="right" height="21"><font face="Arial" size="2" color="#000000">$</font></td>
      <td width="66" align="right" height="21"><font size="2" face="Arial" color="#000000">88.8</font></td>
    </tr>
    <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Short-term investments</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>2.6</b></font></td>
      <td width="42" height="21"></td>
      <td width="66" align="right" height="21"><font size="2" face="Arial" color="#000000">21.3</font></td>
    </tr>
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Accounts receivable</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>373.1</b></font></td>
      <td width="42" height="21"></td>
      <td width="66" align="right" height="21"><font size="2" face="Arial" color="#000000">378.2</font></td>
    </tr>
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Inventories&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>136.3</b></font></td>
      <td width="42" height="21"></td>
      <td width="66" align="right" height="21"><font size="2" face="Arial" color="#000000">130.9</font></td>
    </tr>
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Prepaid expenses</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>14.0</b></font></td>
      <td width="42" height="21"></td>
      <td width="66" align="right" height="21"><font size="2" face="Arial" color="#000000">9.9</font></td>
    </tr>
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Income taxes recoverable</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>25.7</b></font></td>
      <td width="42" height="21"></td>
      <td width="66" align="right" height="21"><font size="2" face="Arial" color="#000000">15.8</font></td>
    </tr>
    <tr>
      <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Future income taxes</font></td>
      <td width="38" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
    <td width="76" height="21" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      <p align="right"><font size="2" face="Arial" color="#000000"><b>3.5</b></font></td>
    <td width="42" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="66" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000">28.9</font></td>
    </tr>
    <tr>
      <td width="368" height="21"></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>572.3</b></font></td>
      <td width="42" height="21"></td>
    <td width="66" height="21">
      <p align="right"><font size="2" face="Arial" color="#000000">673.8</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font face="Arial" size="2">Restricted cash</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2"><b>14.4</b></font></td>
    <td width="42" height="21"></td>
    <td width="66" height="21" align="right"><font color="#000000" size="2" face="Arial">15.6</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">Assets of discontinued operations
      (note 3)</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>50.0</b></font></td>
    <td width="42" height="21"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">123.8</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">Property, plant and equipment, net</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>930.4</b></font></td>
    <td width="42" height="21"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">838.5</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">Future income taxes</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>85.7</b></font></td>
    <td width="42" height="21"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">74.1</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">Intangible assets</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>171.7</b></font></td>
    <td width="42" height="21"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">163.4</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">Goodwill</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>366.8</b></font></td>
    <td width="42" height="21"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">375.5</font></td>
  </tr>
  <tr>
    <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Arial" SIZE="2" color="#000000">Other assets</font></td>
    <td width="38" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
    <td width="76" height="21" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font size="2" face="Arial" color="#000000"><b>&nbsp;165.2</b></font></td>
    <td width="42" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000">113.7</font></td>
  </tr>
  <tr>
    <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="38" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>&nbsp;2,356.5</b></font></td>
    <td width="42" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">$&nbsp;</font></td>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">2,378.4</font></td>
  </tr>
  <tr>
    <td width="368" height="21"></td>
    <td width="38" height="21"></td>
    <td width="76" height="21"></td>
    <td width="42" height="21"></td>
    <td width="66" height="21"></td>
  </tr>
  <tr>
    <td width="590" height="21" colspan="5"><font FACE="Arial" SIZE="2" color="#000000"><b>Liabilities and shareholders' equity</b></font>

    </td>
  </tr>
  <tr>
    <td width="590" height="21" colspan="5"><font FACE="Arial" SIZE="2" color="#000000">Current liabilities</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Accounts payable and accrued liabilities</font></td>
    <td width="38" height="21" align="right"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>413.3</b></font></td>
    <td width="42" height="21" align="right"><font size="2" face="Arial" color="#000000">$</font></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">420.5</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Deposits on contracts</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>101.2</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">189.1</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Long-term debt due within one year</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>13.4</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">37.5</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Future
      income taxes</font></td>
    <td width="38" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000"><b>&nbsp;42.4</b></font></td>
    <td width="42" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000">50.4</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>570.3</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">697.5</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">Liabilities of discontinued operations
      (note 3)</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>17.9</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">40.5</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">Long-term debt</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>798.0</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">889.0</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">Long-term liabilities</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>139.6</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">73.7</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">
      Future income taxes</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>80.5</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">65.6</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>
    <td width="38" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>
    <td width="76" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>&nbsp;1,606.3</b></font></td>
    <td width="42" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>
    <td width="66" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">1,766.3</font></td>
  </tr>
  <tr>
    <td width="590" height="21" nowrap colspan="5"><font FACE="Arial" SIZE="2" color="#000000"><b>Shareholders' equity</b></font>

    </td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">Capital stock</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>190.5</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font face="Arial" size="2" color="#000000">186.8</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">Retained earnings</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font face="Arial" size="2" color="#000000"><b>531.2</b></font></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">440.4</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap><font size="2" face="Arial" color="#000000">Currency
      Translation adjustment</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font size="2" face="Arial" color="#000000"><b>&nbsp;28.5</b></font></td>
    <td width="42" height="21" align="right"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>
    <td width="66" height="21" align="right"><font size="2" face="Arial" color="#000000">(15.1)</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>
    <td width="38" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>
    <td width="76" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000"><b>&nbsp;750.2</b></font></td>
    <td width="42" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>
    <td width="66" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial" color="#000000">612.1</font></td>
  </tr>
  <tr>
    <td width="368" height="21" nowrap style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="38" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>&nbsp;2,356.5</b></font></td>
    <td width="42" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">$</font></td>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">2,378.4</font></td>
  </tr>
  </table>
<font FACE="Times">
<p>&nbsp;</p>
<hr>
<p align="left" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="left" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
  <table border="0" cellpadding="0" cellspacing="0" width="625" height="524">
    <tr>
<b><font FACE="Arial" COLOR="#0000ff">
      <td colspan="9" width="667" height="21"><b><font FACE="Arial" COLOR="#0000ff">Consolidated Statements of Earnings</font></b>

      </td>
</font></b>

    </tr>
    <tr>
<b><font FACE="Arial" COLOR="#0000ff">
      <td colspan="9" width="667" height="20"></td>
</font></b>

    </tr>
    <tr>
<b><font FACE="Arial" COLOR="#0000ff">
      <td width="281" height="50"></td>
</font></b>

  <td width="156" colspan="4" height="50">
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>three
    months ended&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="44" height="50"></td>
</font></b>

  <td width="150" colspan="3" height="50">
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>twelve
    months ended</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  </tr>
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" nowrap height="17">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">(amounts
      in millions of Canadian dollars,&nbsp;</font></p>
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"> except per share amounts)</font></p>
    </td>
<td width="16" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>
    <td width="50" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17">
      <p align="right"><font size="2" face="Arial" color="#000000"><b>2003</b></font></td>
    <td width="47" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>

  <td width="43" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17">
    <p align="right"><font size="2" face="Arial" color="#000000">2002 </font><font face="Arial" color="#000000" size="1">(</font></font><font face="Arial" color="#000000" size="1">r</font><font FACE="Times"><font face="Arial" color="#000000" size="1">estated</font><font size="2" face="Arial" color="#000000">)</font></font></td>
<td width="44" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>
<td width="49" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17">
  <p align="right"><font size="2" face="Arial" color="#000000"><b>2003</b></font></td>
<td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>

<td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17">
  <p align="right"><font size="2" face="Arial" color="#000000">2002 </font><font face="Arial" color="#000000" size="1">(</font><font face="Arial" color="#000000" size="1">r</font><font FACE="Times"><font face="Arial" color="#000000" size="1">estated)</font>&nbsp;</p>
  </font>
    </td>
  </tr>
  <tr>
    <td width="281" height="21"><font face="Arial" size="2" color="#000000">Revenue</font></td>
    <td width="16" align="right" height="21"></td>
    <td width="50" align="right" height="21"></td>
    <td width="47" align="right" height="21"></td>
    <td width="43" align="right" height="21"></td>
    <td width="44" align="right" height="21"></td>
    <td width="49" align="right" height="21"></td>
    <td width="53" align="right" height="21"></td>
    <td width="48" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="281" height="18"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp; Civil Simulation and Training</font></td>
    <td width="16" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>$</b>
</font></td>
    <td width="50" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>137.7</b></font></td>
    <td width="47" align="right" height="18"><font face="Arial" size="2" color="#000000">
$
</font></td>
    <td width="43" align="right" height="18"><font face="Arial" size="2" color="#000000">164.9</font></td>
    <td width="44" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>$</b>
</font></td>
    <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>517.2</b></font></td>
    <td width="53" align="right" height="18"><font face="Arial" size="2" color="#000000">
$
</font></td>
    <td width="48" align="right" height="18"><font face="Arial" size="2" color="#000000">545.2</font></td>
  </tr>
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp; Military Simulation and Training</font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="16" align="right" height="21"></td>
</b>

</font>
    <td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>123.8</b></font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" height="21"></td>
</font></b>

    <td width="43" align="right" height="21"><font face="Arial" size="2" color="#000000">150.2</font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="44" align="right" height="21"></td>
</b>

</font>
    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>445.7</b></font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" height="21"></td>
</font></b>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">461.8</font></td>
  </tr>
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp; Marine Controls</font></td>
<td width="16" align="right" height="21"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>

    <td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>50.7</b></font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="47" align="right" height="21"></td>
</b>

</font>
    <td width="43" align="right" height="21"><font face="Arial" size="2" color="#000000">34.1</font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="44" align="right" height="21"></td>
</font></b>

    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>167.6</b></font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="53" align="right" height="21"></td>
</b>

</font>
    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">119.5</font></td>
  </tr>
<tr>
  <td width="281" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" color="#000000" size="2">&nbsp;</font></td>

<td width="16" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
<td width="50" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000"><b>312.2</b></font></td>
<td width="47" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000">$</font></td>
<td width="43" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000">349.2</font></td>
<td width="44" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
<td width="49" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000"><b>1,130.5</b></font></td>
<td width="53" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000">$</font></td>
<td width="48" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000">1,126.5</font></td>
  </tr>
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">
      Operating earnings</font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="16" align="right" height="21"></td>
<td width="50" align="right" height="21"></td>
<td width="47" align="right" height="21"></td>
<td width="43" align="right" height="21"></td>
<td width="44" align="right" height="21"></td>
<td width="49" align="right" height="21"></td>
<td width="53" align="right" height="21"></td>
<td width="48" align="right" height="21"></td>
</font></b>

</tr>

  <tr>
    <td width="281" height="18"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp; Civil Simulation and Training</font></td>
<td width="16" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>
$</b>
</font></td>

<td width="50" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>29.5</b></font></td>

    <td width="47" align="right" height="18"><font face="Arial" size="2" color="#000000">
$
</font></td>
    <td width="43" align="right" height="18"><font size="2" face="Arial" color="#000000">42.4</font></td>
<td width="44" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>
$</b>
</font></td>

<td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>116.2</b></font></td>

    <td width="53" align="right" height="18"><font face="Arial" size="2" color="#000000">
$
</font></td>
    <td width="48" align="right" height="18"><font size="2" face="Arial" color="#000000">151.8</font></td>
  </tr>
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp; Military Simulation and Training</font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="16" align="right" height="21"></td>
</font>
    </b>

<td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>22.1</b></font></td>
<b>
<font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" height="21"></td>
</font></b>

    <td width="43" align="right" height="21"><font size="2" face="Arial" color="#000000">20.5</font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="44" align="right" height="21"></td>
</font>
    </b>

<td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>73.6</b></font></td>
<b>
<font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" height="21"></td>
</font></b>

    <td width="48" align="right" height="21"><font size="2" face="Arial" color="#000000">65.6</font></td>
  </tr>
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
      Marine Controls</font></td>
<td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font size="2" FACE="Arial" color="#000000"><b>&nbsp;</b></font></td>

<td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>8.9</b></font></td>

    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font size="2" face="Arial" color="#000000">8.2</font></td>
<td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>
&nbsp;</b></font>
</td>

<td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>31.8</b></font></td>

    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font size="2" face="Arial" color="#000000">23.6</font></td>
  </tr>
  <tr>
    <td width="281" height="34">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">Earnings from continuing operations&nbsp;</font></p>
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
      before interest and taxes</font></p>
    </td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="16" align="right" valign="bottom" height="34"></td>
</font></b>

    <td width="50" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000"><b>60.5</b></font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="47" align="right" valign="bottom" height="34"></td>
</b>

</font>
    <td width="43" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000">71.1</font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="44" align="right" valign="bottom" height="34"></td>
</font></b>

    <td width="49" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000"><b>221.6</b></font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="53" align="right" valign="bottom" height="34"></td>
</b>

</font>
    <td width="48" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000">241.0</font></td>
  </tr>
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">
      Interest expense</font>

      </font>

    <font face="Arial" size="2" color="#000000"> (income)</font><font FACE="Times"><font face="Arial" size="2" color="#000000">, net</font></font></td>
    <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
    <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>4.6</b></font></td>
    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">10.4</font></td>
    <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
    <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>30.4</b></font></td>
    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">22.7</font></td>
  </tr>
  <tr>
    <td width="281" height="34">
      <p style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2" color="#000000">Earnings from continuing operations&nbsp;
      </font></p>
      <p style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
      before income taxes
      </font></p>
    </td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="16" align="right" valign="bottom" height="34"></td>
</b>

</font>
    <td width="50" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000"><b>55.9</b></font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" valign="bottom" height="34"></td>
</font></b>

    <td width="43" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000">60.7</font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="44" align="right" valign="bottom" height="34"></td>
</b>

</font>
    <td width="49" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000"><b>191.2</b></font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" valign="bottom" height="34"></td>
</font></b>

    <td width="48" align="right" valign="bottom" height="34"><font face="Arial" size="2" color="#000000">218.3</font></td>
  </tr>
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">
Income taxes</font></td>
    <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="19"><font face="Arial" size="2" color="#000000"><b>
&nbsp;</b></font></td>
    <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>16.9</b></font></td>
    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="19"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">19.5</font></td>
    <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>
&nbsp;</b></font></td>
    <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>60.2</b></font></td>
    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">69.9</font></td>
  </tr>
<tr>
  <td width="281" height="18"><font FACE="Arial" SIZE="2" color="#000000">
      Earnings from continuing operations</font></td>
  <td width="16" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
<b>
$</b>

</font>

</td>

  <td width="50" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
<b>39.0</b></font>

</td>

  <td width="47" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="43" align="right" height="18">
  <font face="Arial" size="2" color="#000000">41.2</font></td>
  <td width="44" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
  <td width="49" align="right" height="18">
  <font face="Arial" size="2" color="#000000"><b>131.0</b></font></td>
  <td width="53" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="48" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
148.4</font></td>
</tr>
<tr>
  <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font FACE="Arial" SIZE="2" color="#000000">Results of discontinued operations</font></td>
  <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000"><b>
&nbsp;</b></font>

</td>

  <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000"><b>(13.8)</b></font>

</td>

  <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000">
&nbsp;

</font>

  </td>
  <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000">(3.9)</font></td>
  <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000">
<b>&nbsp;</b>

</font>

  </td>
  <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000"><b>(13.8)</b></font>

  </td>
  <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000">
&nbsp;</font>

</td>

  <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000">1.1</font></td>
</tr>
<tr>
  <td width="281" style="border-bottom-style: solid; border-bottom-width: 2" height="18"><font FACE="Arial" SIZE="2" color="#000000">Net earnings</font></td>
  <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
<b>
$</b>

</font>

</td>

  <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000"><b>25.2</b></font></td>

  <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">37.3</font></td>
  <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
  <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18"><font size="2" face="Arial" color="#000000"><b>117.2</b></font></td>
  <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
149.5</font></td>
</tr>
<tr>
  <td width="281" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
    <p style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2" color="#000000">Earnings and diluted earnings per
      share&nbsp;
      </font></p>
    <p style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
    from continuing operations
      </font></p>
  </td>
  <td width="16" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
<b>
$</b>

</font>

</td>

  <td width="50" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
<b>0.18</b></font></td>

  <td width="47" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="43" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
0.19</font></td>
  <td width="44" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
  <td width="49" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
<b>0.60</b></font></td>
  <td width="53" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="48" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" height="34">
  <font face="Arial" size="2" color="#000000">
0.68</font></td>
</tr>
<tr>
  <td width="281" style="border-bottom-style: solid; border-bottom-width: 2" height="18"><font FACE="Arial" SIZE="2" color="#000000">Net earnings and diluted net earnings per share</font></td>
  <td width="16" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
<b>
$</b>

</font>

</td>

  <td width="50" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18"><font size="2" face="Arial" color="#000000"><b>0.11</b></font></td>

  <td width="47" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="43" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
0.17</font></td>
  <td width="44" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
  <td width="49" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
<b>0.53</b></font></td>
  <td width="53" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
  <td width="48" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
  <font face="Arial" size="2" color="#000000">
0.69</font></td>
</tr>
<tr>
  <td width="281" style="border-bottom-style: solid; border-bottom-width: 2" height="18"><font FACE="Arial" SIZE="2" color="#000000">Average number of shares outstanding</font></td>
  <td width="16" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
<b>
&nbsp;</b>

</font>

</td>

  <td width="50" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
<b>
219.4</b></font></td>

  <td width="47" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
&nbsp;

</font>

  </td>
  <td width="43" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
217.6</font></td>
  <td width="44" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
<b>&nbsp;</b>

</font>

  </td>
  <td width="49" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
<b>219.4</b></font></td>
  <td width="53" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
&nbsp;

</font>

  </td>
  <td width="48" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
217.6</font></td>
</tr>
</table>
<p align="left" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p>&nbsp;</p>
  <table border="0" cellpadding="0" cellspacing="0" width="625" height="250">
    <tr>
<b>
  <font FACE="Arial" COLOR="#0000ff">
      <td colspan="9" width="667" height="21"><b><font FACE="Arial" COLOR="#0000ff">Consolidated Statements of&nbsp;
        Retained Earnings</font></b>

      </td>

</font>

</b>

    </tr>
    <tr>
<b>
  <font FACE="Arial" COLOR="#0000ff">
      <td colspan="9" width="667" height="20"></td>

</font>

</b>

    </tr>
    <tr>
<b>
  <font FACE="Arial" COLOR="#0000ff">
      <td width="281" height="50"></td>

</font>

  <td width="156" colspan="4" height="50">
    <p align="center" style="word-spacing: 0; margin: 0"><b><font face="Arial" size="2" color="#000000">three
    months ended&nbsp;</font></b></p>
    <p align="center" style="word-spacing: 0; margin: 0"><b><font face="Arial" size="2" color="#000000">March
    31&nbsp;</font></b></p>
    <p align="center" style="word-spacing: 0; margin: 0"><b><font face="Arial" size="2" color="#000000">(unaudited)</font></b></td>
  <font FACE="Arial" COLOR="#0000ff">
<font FACE="Times">
<td width="45" height="50"></td>

</font>

</font>

  <td width="149" colspan="3" height="50">
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><b><font face="Arial" size="2" color="#000000">twelve
    months ended</font></b></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><b><font face="Arial" size="2" color="#000000">March
    31</font></b></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><b><font face="Arial" size="2" color="#000000">(unaudited)</font></b></td>
</b>

  </tr>
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" nowrap height="17" valign="bottom"><font face="Arial" size="2" color="#000000">(amounts
      in millions)</font></td>
<b>
<font FACE="Times">
  <font FACE="Arial" COLOR="#0000ff">
<td width="16" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font size="2" face="Arial">&nbsp;</font></td>

</font>

    <td width="50" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
      <p align="right"><font size="2" face="Arial"><b>2003</b></font></td>
    <td width="47" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font size="2" face="Arial">&nbsp;</font></td>

    </font>
</b>

<font FACE="Times">

  <td width="43" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
    <p align="right"><font size="2" face="Arial">2002 </font><font face="Arial" size="1">(</font></font><font face="Arial" size="1">r</font><font FACE="Times"><font face="Arial" size="1">estated)</font></font></td>
<td width="45" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font size="2" face="Arial">&nbsp;</font></td>

<td width="48" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
  <p align="right"><font size="2" face="Arial"><b>2003</b></font></td>
<b>
<td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial">&nbsp;</font></td>
</b>

<td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial">2002
  </font><font face="Arial" size="1">(</font><font face="Arial" size="1">r</font><font FACE="Times"><font face="Arial" size="1">estated)</font></font></td>
  </tr>
  <tr>
    <td width="281" height="21">
  <font face="Arial" size="2">
Retained earnings at beginning of period

</font>

    </td>
    <td width="16" align="right" height="21"><font size="2" face="Arial"><b>$</b></font></td>
    <td width="50" align="right" height="21"><font size="2" face="Arial"><b>512.7</b></font></td>
    <td width="47" align="right" height="21"><font size="2" face="Arial">$</font></td>
    <td width="43" align="right" height="21"><font size="2" face="Arial">409.7</font></td>
    <td width="45" align="right" height="21"><font size="2" face="Arial"><b>$</b></font></td>
    <td width="48" align="right" height="21"><font size="2" face="Arial"><b>446.8</b></font></td>
    <td width="53" align="right" height="21"><font size="2" face="Arial">$</font></td>
    <td width="48" align="right" height="21"><font size="2" face="Arial">321.2</font></td>
  </tr>
  <tr>
    <td width="281" height="18">
      <p style="word-spacing: 0; margin: 0"><font size="2" FACE="Arial">Adjustments
      for changes in</font></p>
      <p style="word-spacing: 0; margin: 0"><font size="2" FACE="Arial">&nbsp;&nbsp;&nbsp;
      accounting policies&nbsp;</font><font size="2" face="Arial">(note
      1)</font></p>
    </td>
<font FACE="Times">
<b>
  <font FACE="Arial" COLOR="#0000ff">
    <td width="16" align="right" height="18" valign="bottom"></td>

</font>

</b>

    <td width="50" align="right" height="18" valign="bottom"><font size="2" face="Arial"><b>-</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
    <td width="47" align="right" height="18" valign="bottom"></td>

</font>

</b>

    <td width="43" align="right" height="18" valign="bottom"><font size="2" face="Arial">-</font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
    <td width="45" align="right" height="18" valign="bottom"></td>

</font>

</b>

    <td width="48" align="right" height="18" valign="bottom"><font size="2" FACE="Arial"><b>(6.4)</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
    <td width="53" align="right" height="18" valign="bottom"></td>

</font>

</b>

    <td width="48" align="right" height="18" valign="bottom"><font size="2" FACE="Arial">(5.3)</font></td>
  </tr>
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2">Net Earnings&nbsp;&nbsp;</font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="16" align="right" height="21"></td>

</font>

</b>

    <td width="50" align="right" height="21"><font size="2" face="Arial"><b>25.2</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" height="21"></td>

</font>

</b>

    <td width="43" align="right" height="21"><font size="2" face="Arial">37.3</font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="45" align="right" height="21"></td>

</font>

</b>

    <td width="48" align="right" height="21"><font size="2" FACE="Arial"><b>117.2</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" height="21"></td>

</font>

</b>

    <td width="48" align="right" height="21"><font size="2" FACE="Arial">149.5</font></td>
  </tr>
  <tr>
    <td width="281" height="21"><font size="2" FACE="Arial">Dividends</font></td>
<td width="16" align="right" height="21"><font size="2" face="Arial"><b>&nbsp;</b></font></td>

    <td width="50" align="right" height="21"><font size="2" face="Arial"><b>(6.7)</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" height="21"></td>

</font>

</b>

    <td width="43" align="right" height="21"><font size="2" FACE="Arial">(6.6)</font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="45" align="right" height="21"></td>

</font>

</b>

    <td width="48" align="right" height="21"><font face="Arial" size="2"><b>(26.4)</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" height="21"></td>

</font>

</b>

    <td width="48" align="right" height="21"><font size="2" FACE="Arial">(25.0)</font></td>
  </tr>
<tr>
  <td width="281" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" size="2">Retained
    earnings at end of period&nbsp;</font></td>

<td width="16" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial"><b>$</b></font></td>
<td width="50" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial"><b>531.2</b></font></td>
<td width="47" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial">$</font></td>
<td width="43" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial">440.4</font></td>
<td width="45" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial"><b>$</b></font></td>
<td width="48" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial"><b>531.2</b></font></td>
<td width="53" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial">$</font></td>
<td width="48" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial">440.4</font></td>
  </tr>
</table>
</font>
<p align="right" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="right" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.13</font></p>
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p align="left" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p align="left" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
  <table border="0" cellpadding="0" cellspacing="0" width="634" height="520">
    <tr>
  <font FACE="Arial" COLOR="#0000ff">
<b>
      <td colspan="9" width="667" height="21"><b><font FACE="Arial" COLOR="#0000ff">Consolidated Statements of
        Cash Flow</font></b>

      </td>

</b>

</font>

    </tr>
    <tr>
  <font FACE="Arial" COLOR="#0000ff">
<b>
      <td colspan="9" width="667" height="20"></td>

</b>

</font>

    </tr>
    <tr>
  <font FACE="Arial" COLOR="#0000ff">
<b>
      <td width="299" height="50"></td>

</b>

</font>

  <td width="149" colspan="4" height="50">
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>three
    months ended&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="42" height="50"></td>

</b>

</font>

  <td width="150" colspan="3" height="50">
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>twelve
    months ended</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  </tr>
  <tr>
    <td width="299" style="border-bottom-style: solid; border-bottom-width: 1" nowrap height="17" valign="bottom"><font face="Arial" size="2" color="#000000">(amounts
      in millions of Canadian dollars)</font></td>
<td width="7" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="50" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
      <p align="right"><font face="Arial" size="2" color="#000000"><b>2003</b></font></td>
    <td width="47" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>

  <td width="45" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
    <p align="right"><font face="Arial" size="2" color="#000000">2002 (</font><font face="Arial" size="1">restated)</font></td>
<td width="42" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
<td width="49" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
  <p align="right"><font face="Arial" size="2" color="#000000"><b>2003</b></font></td>
<td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>

<td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font face="Arial" size="2" color="#000000">2002
  </font><font face="Arial" size="1">(restated)</font></td>
  </tr>

  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000"><b>Operating
      activities</b></font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
    <td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21"></td>
    <td width="47" align="right" height="21"></td>
    <td width="45" align="right" height="21"></td>
    <td width="42" align="right" height="21"></td>
    <td width="49" align="right" height="21"></td>
    <td width="53" align="right" height="21"></td>
    <td width="48" align="right" height="21"></td>

</b>

</font>

  </tr>

  <tr>
    <td width="299" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
      Earnings from continuing operations</font></td>
    <td width="7" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <td width="50" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>39.0</b></font></td>
    <td width="47" align="right" height="18"><font face="Arial" size="2" color="#000000">
$</font></td>
    <td width="45" align="right" height="18"><font face="Arial" size="2" color="#000000">41.2</font></td>
    <td width="42" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>131.0</b></font></td>
    <td width="53" align="right" height="18"><font face="Arial" size="2" color="#000000">
$</font></td>
    <td width="48" align="right" height="18"><font face="Arial" size="2" color="#000000">148.4</font></td>
  </tr>
  <tr>
    <td width="299" height="21">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
      Adjustments to reconcile earnings to</font></p>
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      cash flow from operating activities:</font></td>
<td width="7" align="right" height="21" valign="bottom"></td>
    <td width="50" align="right" height="21" valign="bottom"></td>
<td width="47" align="right" height="21" valign="bottom"></td>

    <td width="45" align="right" height="21" valign="bottom"></td>
<td width="42" align="right" height="21" valign="bottom"></td>
    <td width="49" align="right" height="21" valign="bottom"></td>
<td width="53" align="right" height="21" valign="bottom"></td>

    <td width="48" align="right" height="21" valign="bottom"></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Amortization</font></td>
<td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>20.0</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">17.6</font></td>
<td width="42" align="right" height="21"></td>
    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>70.6</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">43.1</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Future income taxes</font></td>
<td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>8.9</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">(6.7)</font></td>
<td width="42" align="right" height="21"></td>
    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>18.8</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">7.1</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Investment tax credit</font></td>
<td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(4.0)</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">(4.7)</font></td>
<td width="42" align="right" height="21"></td>
    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(18.6)</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">(19.0)</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Other</font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="7" align="right" height="21"></td>

</font>

</b>

    <td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(8.9)</b></font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="47" align="right" height="21"></td>

</b>

</font>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">2.4</font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="42" align="right" height="21"></td>

</font>

</b>

    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(18.7)</b></font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="53" align="right" height="21"></td>

</b>

</font>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">1.1</font></td>
  </tr>
  <tr>
    <td width="299" height="21">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Increase (decrease) in non-cash</font></p>
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      working capital (note 4)</font></p>
    </td>
<td width="7" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;</b></font></td>

    <td width="50" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000"><b>67.4</b></font></td>
<td width="47" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="45" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000">54.3</font></td>
<td width="42" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>

    <td width="49" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000"><b>(38.5)</b></font></td>
<td width="53" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="48" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000">(7.6)</font></td>
  </tr>
<tr>
  <td width="299" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22">
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Net
    cash provided by continuing&nbsp;</b></font></p>
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    operating activities</b></font></p>
  </td>

<td width="7" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
<td width="50" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000"><b>122.4</b></font></td>
<td width="47" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
<td width="45" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000">104.1</font></td>
<td width="42" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
<td width="49" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000"><b>144.6</b></font></td>
<td width="53" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
<td width="48" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22" valign="bottom"><font face="Arial" size="2" color="#000000">173.1</font></td>
  </tr>
  <tr>
    <td width="299" height="21"></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="7" align="right" height="21"></td>
<td width="50" align="right" height="21"></td>
<td width="47" align="right" height="21"></td>
<td width="45" align="right" height="21"></td>
<td width="42" align="right" height="21"></td>
<td width="49" align="right" height="21"></td>
<td width="53" align="right" height="21"></td>
<td width="48" align="right" height="21"></td>

</font>

</b>

</tr>

  <tr>
    <td width="299" height="18"><font face="Arial" size="2" color="#000000"><b>Investing
      activities</b></font></td>
<td width="7" align="right" height="18"></td>
<td width="50" align="right" height="18"></td>

    <td width="47" align="right" height="18"></td>
    <td width="45" align="right" height="18"></td>
<td width="42" align="right" height="18"></td>
<td width="49" align="right" height="18"></td>

    <td width="53" align="right" height="18"></td>
    <td width="48" align="right" height="18"></td>
  </tr>

  <tr>
    <td width="299" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Purchase of businesses (note 2)</font></td>
<td width="7" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
<td width="50" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>(2.8)</b></font></td>

    <td width="47" align="right" height="18"></td>
    <td width="45" align="right" height="18"><font face="Arial" size="2" color="#000000">-</font></td>
<td width="42" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
<td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>(2.8)</b></font></td>

    <td width="53" align="right" height="18"></td>
    <td width="48" align="right" height="18"><font face="Arial" size="2" color="#000000">(757.6)</font></td>
  </tr>
  <tr>
    <td width="299" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Proceeds from disposition of businesses</font></td>
<td width="7" align="right" height="18"></td>
<td width="50" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>-</b></font></td>
<td width="47" align="right" height="18"></td>

    <td width="45" align="right" height="18"><font face="Arial" size="2" color="#000000">176.7</font></td>
<td width="42" align="right" height="18"></td>
<td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>25.0</b></font></td>
<td width="53" align="right" height="18"></td>

    <td width="48" align="right" height="18"><font face="Arial" size="2" color="#000000">187.1</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Short-term investments</font></td>
<td width="7" align="right" height="21"></td>
<td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>5.7</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">(21.3)</font></td>
<td width="42" align="right" height="21"></td>
<td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>18.8</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">101.5</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Capital expenditures</font></td>
<td width="7" align="right" height="21"></td>
<td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(56.0)</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">(62.6)</font></td>
<td width="42" align="right" height="21"></td>
<td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(238.9)</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">(249.6)</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Proceeds from sale and leaseback of
      assets</font></td>
<td width="7" align="right" height="21"></td>
<td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>34.8</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">-</font></td>
<td width="42" align="right" height="21"></td>
<td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>127.0</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">42.6</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Development costs</font></td>
<td width="7" align="right" height="21"></td>
<td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>2.2</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">(5.0)</font></td>
<td width="42" align="right" height="21"></td>
<td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(13.3)</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">(31.1)</font></td>
  </tr>
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Deferred pre-operating costs</font></td>
<td width="7" align="right" height="21"></td>
<td width="50" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(2.8)</b></font></td>
<td width="47" align="right" height="21"></td>

    <td width="45" align="right" height="21"><font face="Arial" size="2" color="#000000">(3.9)</font></td>
<td width="42" align="right" height="21"></td>
<td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>(10.7)</b></font></td>
<td width="53" align="right" height="21"></td>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">(15.1)</font></td>
  </tr>
  <tr>
    <td width="299" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Other assets</font></td>
<td width="7" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
<td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>(12.2)</b></font></td>

    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="45" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">(14.4)</font></td>
<td width="42" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
<td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>(27.5)</b></font></td>

    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">(33.0)</font></td>
  </tr>
  <tr>
    <td width="299" height="34" style="border-bottom-style: solid; border-bottom-width: 1">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Net
      cash provided by (used in)</b></font></p>
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;&nbsp;
      continuing investing activities</b></font></p>
    </td>
<td width="7" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1">
  <font face="Arial" size="2" color="#000000"><b>
&nbsp;</b></font>

    </td>

    <td width="50" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000"><b>(31.1)</b></font></td>
<td width="47" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1">
  <font face="Arial" size="2" color="#000000">
&nbsp;</font>

    </td>
    <td width="45" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">69.5</font></td>
<td width="42" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1">
  <font face="Arial" size="2" color="#000000"><b>
&nbsp;</b></font>

    </td>

    <td width="49" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000"><b>(122.4)</b></font></td>
<td width="53" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1">
  <font face="Arial" size="2" color="#000000">
&nbsp;</font>

    </td>
    <td width="48" align="right" valign="bottom" height="34" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">(755.2)</font></td>
  </tr>
  <tr>
    <td width="299" height="20"><font face="Arial" size="2" color="#000000"><b>Financing activities</b></font></td>
    <td width="7" align="right" height="20"></td>
    <td width="50" align="right" height="20"></td>
    <td width="47" align="right" height="20"></td>
    <td width="45" align="right" height="20"></td>
    <td width="42" align="right" height="20"></td>
    <td width="49" align="right" height="20"></td>
    <td width="53" align="right" height="20"></td>
    <td width="48" align="right" height="20"></td>
  </tr>
  <tr>
    <td width="299" height="20"><font size="2" face="Arial" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Proceeds of long term debt</font></td>
    <td width="7" align="right" height="20"></td>
    <td width="50" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>19.6</b></font></td>
    <td width="47" align="right" height="20"></td>
    <td width="45" align="right" height="20"><font face="Arial" size="2" color="#000000">69.6</font></td>
    <td width="42" align="right" height="20"></td>
    <td width="49" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>270.0</b></font></td>
    <td width="53" align="right" height="20"></td>
    <td width="48" align="right" height="20"><font face="Arial" size="2" color="#000000">755.8</font></td>
  </tr>
  <tr>
    <td width="299" height="20"><font size="2" face="Arial" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Repayments of long term debt</font></td>
    <td width="7" align="right" height="20"></td>
    <td width="50" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>(147.7)</b></font></td>
    <td width="47" align="right" height="20"></td>
    <td width="45" align="right" height="20"><font face="Arial" size="2" color="#000000">(193.6)</font></td>
    <td width="42" align="right" height="20"></td>
    <td width="49" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>(326.3)</b></font></td>
    <td width="53" align="right" height="20"></td>
    <td width="48" align="right" height="20"><font face="Arial" size="2" color="#000000">(195.6)</font></td>
  </tr>
  <tr>
    <td width="299" height="20"><font size="2" face="Arial" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Dividends paid</font></td>
    <td width="7" align="right" height="20"></td>
    <td width="50" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>(6.5)</b></font></td>
    <td width="47" align="right" height="20"></td>
    <td width="45" align="right" height="20"><font face="Arial" size="2" color="#000000">(6.4)</font></td>
    <td width="42" align="right" height="20"></td>
    <td width="49" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>(26.1)</b></font></td>
    <td width="53" align="right" height="20"></td>
    <td width="48" align="right" height="20"><font face="Arial" size="2" color="#000000">(24.8)</font></td>
  </tr>
  <tr>
    <td width="299" height="20"><font size="2" face="Arial" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Common stock issuance</font></td>
    <td width="7" align="right" height="20"></td>
    <td width="50" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>0.2</b></font></td>
    <td width="47" align="right" height="20"></td>
    <td width="45" align="right" height="20"><font face="Arial" size="2" color="#000000">2.7</font></td>
    <td width="42" align="right" height="20"></td>
    <td width="49" align="right" height="20"><font face="Arial" size="2" color="#000000"><b>4.0</b></font></td>
    <td width="53" align="right" height="20"></td>
    <td width="48" align="right" height="20"><font face="Arial" size="2" color="#000000">6.1</font></td>
  </tr>
  <tr>
    <td width="299" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font size="2" face="Arial" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Other</font></td>
    <td width="7" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
    <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>(4.6)</b></font></td>
    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="45" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">0.1</font></td>
    <td width="42" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
    <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>(14.1)</b></font></td>
    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">(2.3)</font></td>
  </tr>
  <tr>
    <td width="299" height="33">
      <p style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Net
      cash provided by (used in)</b></font></p>
      <p style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;&nbsp;
      continuing financing activities</b></font></p>
    </td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="7" align="right" valign="bottom" height="33"></td>

</b>

</font>

    <td width="50" align="right" valign="bottom" height="33"><font face="Arial" size="2" color="#000000"><b>(139.0)</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" valign="bottom" height="33"></td>

</font>

</b>

    <td width="45" align="right" valign="bottom" height="33"><font face="Arial" size="2" color="#000000">(127.6)</font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="42" align="right" valign="bottom" height="33"></td>

</b>

</font>

    <td width="49" align="right" valign="bottom" height="33"><font face="Arial" size="2" color="#000000"><b>(92.5)</b></font></td>
<b>
  <font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" valign="bottom" height="33"></td>

</font>

</b>

    <td width="48" align="right" valign="bottom" height="33"><font face="Arial" size="2" color="#000000">539.2</font></td>
  </tr>
  <tr>
    <td width="299" valign="bottom" height="19">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Net
      cash used in
      discontinued&nbsp;</b></font>
      </p>
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;
      activities&nbsp;(note
      3)</b></font>
      </p>
    </td>
    <td width="7" align="right" height="19"></td>
    <td width="50" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>(11.4)</b></font></td>
    <td width="47" align="right" height="19"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="45" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">(13.7)</font></td>
    <td width="42" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">
<b>
&nbsp;</b></font></td>
    <td width="49" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>(3.6)</b></font></td>
    <td width="53" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">
&nbsp;</font></td>
    <td width="48" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">(24.5)</font></td>
  </tr>
<tr>
  <td width="299" height="18" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Effect
    of foreign exchange rate changes</b></font></p>
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;&nbsp;
    on&nbsp;cash and cash
    equivalents</b></font></p>
  </td>
  <td width="7" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1">
  <font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;</b></font>

</td>
  <td width="50" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
  <font face="Arial" size="2" color="#000000"><b>7.3</b></font>

</td>

  <td width="47" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">

  <font face="Arial" size="2" color="#000000">

  &nbsp;</font>

  </td>
  <td width="45" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
  <font face="Arial" size="2" color="#000000">3.0</font></td>
  <td width="42" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">

  <font face="Arial" size="2" color="#000000"><b>

  &nbsp;</b></font>

  </td>
  <td width="49" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
  <font face="Arial" size="2" color="#000000"><b>2.2</b></font></td>
  <td width="53" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">

  <font face="Arial" size="2" color="#000000">

  &nbsp;</font>

  </td>
  <td width="48" align="right" height="18" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
  <font face="Arial" size="2" color="#000000">(0.6)</font></td>
</tr>
<tr>
  <td width="299" height="20">
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Net increase
    (decrease) in cash</b></font></p>
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;&nbsp;
    and cash equivalents</b></font></p>
  </td>
  <td width="7" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
<b>
&nbsp;</b></font>

</td>
  <td width="50" align="right" height="20" valign="bottom">
  <font face="Arial" size="2" color="#000000"><b>(51.8)</b></font>

</td>

  <td width="47" align="right" height="20" valign="bottom">
  <font face="Arial" size="2" color="#000000">
&nbsp;</font>

  </td>
  <td width="45" align="right" height="20" valign="bottom">
  <font face="Arial" size="2" color="#000000">35.3</font></td>
  <td width="42" align="right" height="20" valign="bottom">
  <font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font>

  </td>
  <td width="49" align="right" height="20" valign="bottom">
  <font face="Arial" size="2" color="#000000"><b>(71.7)</b></font>

  </td>
  <td width="53" align="right" height="20" valign="bottom">
  <font face="Arial" size="2" color="#000000">
&nbsp;</font>

</td>

  <td width="48" align="right" height="20" valign="bottom">
  <font face="Arial" size="2" color="#000000">(68.0)</font></td>
</tr>
<tr>
  <td width="299" style="border-bottom-style: solid; border-bottom-width: 1" height="18">
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Cash
    and cash equivalents&nbsp;</b></font></p>
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;&nbsp;&nbsp;
    at beginning of period</b></font></p>
  </td>
  <td width="7" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18">

<font face="Arial" size="2" color="#000000"><b>

&nbsp;</b></font>

</td>
  <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18" valign="bottom">
  <font face="Arial" size="2" color="#000000"><b>68.9</b></font></td>

  <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18" valign="bottom">

  <font face="Arial" size="2" color="#000000">

  &nbsp;</font>

  </td>
  <td width="45" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18" valign="bottom">
  <font face="Arial" size="2" color="#000000">53.3</font></td>
  <td width="42" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18" valign="bottom">

  <font face="Arial" size="2" color="#000000"><b>

  &nbsp;</b></font>

  </td>
  <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18" valign="bottom"><font face="Arial" size="2" color="#000000"><b>88.8</b></font></td>
  <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18" valign="bottom">

  <font face="Arial" size="2" color="#000000">

  &nbsp;</font>

  </td>
  <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="18" valign="bottom">
  <font face="Arial" size="2" color="#000000">156.8</font></td>
</tr>
<tr>
  <td width="299" style="border-bottom-style: solid; border-bottom-width: 2" height="18">
    <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>Cash
    and cash equivalents at end period</b></font></p>
  </td>
  <td width="7" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000"><b>$&nbsp;</b></font>

  </p>

</td>
  <td width="50" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000"><b>17.1</b></font></p>
  </td>

  <td width="47" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000">
&nbsp;$</font>

  </p>

  </td>
  <td width="45" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000">88.8</font></p>
  </td>
  <td width="42" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000"><b>&nbsp;$</b></font>

  </p>

  </td>
  <td width="49" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000"><b>17.1</b></font></p>
  </td>
  <td width="53" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000">$&nbsp;</font>

  </p>

  </td>
  <td width="48" style="border-bottom-style: solid; border-bottom-width: 2" align="right" height="18">
  <p style="word-spacing: 0; margin: 0">
  <font face="Arial" size="2" color="#000000">88.8</font></p>
  </td>
</tr>
</table>
<p align="left" style="word-spacing: 0; margin: 0">&nbsp;</p>
<font FACE="Arial" SIZE="2"></font>
<p align="right" style="word-spacing: 0; margin: 0">&nbsp;</p>
    <hr>
<p align="right" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<font FACE="Arial" COLOR="#0000ff">
<b>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">Notes to the Consolidated Financial Statements&nbsp;
</b>
</font></p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font FACE="Arial" SIZE="2"><b>
<font color="#0000FF">Note 1: Significant Accounting Policies</font></p>
</b>
<p ALIGN="JUSTIFY">These interim consolidated financial statements have been
prepared in accordance with Canadian generally accepted accounting principles on
a consistent basis with the Company's annual consolidated financial statements
for the year ended March 31, 2002, except as noted below. For a full description
of accounting policies, refer to the CAE Annual Report for the year ended March
31, 2002. Certain comparative figures have been reclassified to conform to the
current presentation. These financial statements do not include all of the
disclosure required by generally accepted accounting principles applicable to
annual financial statements.</p>
<p ALIGN="JUSTIFY">Effective April 1, 2002, CAE retroactively adopted the
amendments to the Canadian Institute of Chartered Accountants (CICA) Handbook
Section 1650, <i>Foreign Currency Translation</i>. The Company no longer
amortizes the exchange gains or losses arising on the translation of long-term
foreign currency denominated items. Exchange gains or losses arising on
translation are included in earnings as incurred. At March 31, 2002, the
unamortized exchange loss relating to the existing long-term foreign currency
denominated items amounted to $6.4 million (2001 - $5.3 million) net of taxes of
$2.8 million (2001 - $2.3 million). Consequently, prior years' financial
statements were restated through a charge to fiscal 2002 opening retained
earning of $5.3 million, net of $2.3 million of taxes. The effect of the
amendments on the fiscal year ended March 31, 2003 is a foreign exchange gain of
$6.9 million (2002 - a foreign exchange loss of $1.1 million) net of taxes
expense of $3.2 million (2002 - tax recovery of $0.5 million). The effect of the
amendments on the three month period ending March 31, 2003 is a foreign exchange
gain of $3.1 million (2002 - a foreign exchange gain of $0.3 million) net of
taxes expense of $1.4 million (2002 - a tax expense of $0.1 million).</p>
<p ALIGN="JUSTIFY">Effective April 1, 2002, CAE prospectively adopted the new
recommendations of CICA Section 3870, <i>Stock-based Compensation and Other
Stock-based Payments</i>. The standard encourages, but does not require, that
the fair value method for valuing stock options be used for transactions with
employees. When an enterprise does not use the fair value-based method of
accounting, it must disclose pro forma net earnings and pro forma earnings per
share, as if the fair value based accounting method had been used to account for
stock-based compensation cost. The Company will continue to account for employee
stock options by measuring compensation cost for options as the excess, if any,
of the quoted market price of the Company's common shares at the date of grant
over the amount an employee must pay to acquire the common shares. CAE's
practice is to issue options in May of each fiscal year, whereby these options
vest gradually over 4 years. During the twelve-month period ended March 31,
2003, the Company granted 1,767,000 options to purchase Common Shares. The
weighted average grant date fair value of options granted during this period
amounted to $5.84 per option. The following outlines the impact and the
assumptions used if the compensation costs for CAE's stock options was
determined under the fair value based method of accounting for awards granted
after April 1, 2002:</p>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="625">
    <tr>
      <td width="342" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
      <td width="129" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
        <p align="center"><font color="#000000" size="2" face="Arial"><b>three
        months ended March 31, 2003</b></font></td>
      <td width="144" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
        <p align="center"><font color="#000000" size="2" face="Arial"><b>twelve
        months ended March 31, 2003</b></font></td>
    </tr>
    <tr>
      <td width="342"><font FACE="Arial" SIZE="2" color="#000000">Net earnings, as reported</font></td>
</font>
    <td width="10" align="right"><font color="#000000" face="Arial" SIZE="2">$</font></td>
    <font FACE="Arial" SIZE="2">
    <td width="119" align="center"><font color="#000000" size="2" face="Arial">25.2</font></td>
    <td width="36" align="right"><font color="#000000" size="2" face="Arial">$</font></td>
    <td width="108" align="center"><font color="#000000" size="2" face="Arial">117.2</font></td>
    </tr>
    <tr>
      <td width="342" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Arial" SIZE="2" color="#000000">Pro forma impact</font></td>
      <td width="10" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font color="#000000" size="2" face="Arial">$</font></td>
      <td width="119" style="border-bottom-style: solid; border-bottom-width: 1" align="center"><font color="#000000" size="2" face="Arial">(0.5)</font></td>
      <td width="36" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font color="#000000" size="2" face="Arial">$</font></td>
      <td width="108" style="border-bottom-style: solid; border-bottom-width: 1" align="center"><font color="#000000" size="2" face="Arial">(2.5)</font></td>
    </tr>
    <tr>
      <td width="342" style="border-bottom-style: solid; border-bottom-width: 2"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
        Pro forma net earnings</font></td>
      <td width="10" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font color="#000000">&nbsp;</font></td>
      <td width="119" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;</font></td>
      <td width="36" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font color="#000000">&nbsp;</font></td>
      <td width="108" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;</font></td>
    </tr>
    <tr>
      <td width="342"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp; Pro forma basic and diluted net earnings per share</font></td>
      <td width="10" align="right"><font color="#000000" size="2" face="Arial">$</font></td>
      <td width="119" align="center"><font color="#000000" size="2" face="Arial">24.7</font></td>
      <td width="36" align="right"><font color="#000000" size="2" face="Arial">$</font></td>
      <td width="108" align="center"><font color="#000000" size="2" face="Arial">114.7</font></td>
    </tr>
    <tr>
      <td width="342" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;</font></td>
      <td width="10" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font color="#000000" size="2" face="Arial">$</font></td>
      <td width="119" style="border-bottom-style: solid; border-bottom-width: 2" align="center"><font color="#000000" size="2" face="Arial">0.11</font></td>
      <td width="36" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font color="#000000" size="2" face="Arial">$</font></td>
      <td width="108" style="border-bottom-style: solid; border-bottom-width: 2" align="center"><font color="#000000" size="2" face="Arial">0.52</font></td>
    </tr>
    <tr>
      <td width="342"><font FACE="Arial" SIZE="2" color="#000000">Assumptions used in Black-Scholes options pricing model:</font></td>
      <td width="10"></td>
      <td width="119"></td>
      <td width="36"></td>
      <td width="108"></td>
    </tr>
    <tr>
    <td WIDTH="338" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p><font color="#000000">&nbsp;&nbsp;&nbsp; Dividend yield</font></font></td>
      <td width="10"></td>
      <td width="119" align="center"><font color="#000000" size="2" face="Arial">1.058%</font></td>
      <td width="36" align="center"></td>
      <td width="108" align="center"><font color="#000000" size="2" face="Arial">1.058%</font></td>
    </tr>
    <tr>
    <td WIDTH="338" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p><font color="#000000">&nbsp;&nbsp;&nbsp; Expected volatility</font></font></td>
      <td width="10"></td>
      <td width="119" align="center"><font color="#000000" size="2" face="Arial">46.5%</font></td>
      <td width="36" align="center"></td>
      <td width="108" align="center"><font color="#000000" size="2" face="Arial">46.5%</font></td>
    </tr>
    <tr>
    <td WIDTH="338" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p><font color="#000000">&nbsp;&nbsp;&nbsp; Risk-free interest rate</font></font></td>
      <td width="10"></td>
      <td width="119" align="center"><font color="#000000" size="2" face="Arial">5.26%</font></td>
      <td width="36" align="center"></td>
      <td width="108" align="center"><font color="#000000" size="2" face="Arial">5.26%</font></td>
    </tr>
    <tr>
    <td WIDTH="338" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2"><font FACE="Arial" SIZE="2">
      <p><font color="#000000">&nbsp;&nbsp;&nbsp; Expected life (years)</font></font></td>
      <td width="10" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;</font></td>
      <td width="119" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">6</font></td>
      <td width="36" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;</font></td>
      <td width="108" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">6</font></td>
    </tr>
  </table>
  </center>
</div>
</font>
<font FACE="Arial" SIZE="2">
<p ALIGN="right" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="right" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="right" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.1</font></font><font size="1" face="Arial">5</font></p>
<font FACE="Arial" SIZE="2">
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p ALIGN="left" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
<font FACE="Arial" SIZE="2">During the first quarter of fiscal 2002, the Company
adopted CICA Handbook Section 1581, <i>Business Combinations</i>, which requires
all business combinations to be accounted for using the purchase method. In
addition, any goodwill and intangible assets with indefinite useful lives
acquired in a business combination are to be accounted for under CICA Handbook
Section 3062<i>, Goodwill and Other Intangible Assets</i>. This section requires
that goodwill and intangible assets with indefinite useful lives not be
amortized. Their fair value is to be assessed annually and, if necessary,
written down for any impairment. Intangible assets are recorded at their
allocated cost at the date of acquisition of the related operating companies.
Amortization is provided, where required, on a straightline basis over their
estimated useful lives.</font></p>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY"><b><font color="#000000">Note 2: Business Acquisitions</font></b></p>
<p ALIGN="JUSTIFY">On March 31, 2003, the Company completed a technology
investment in the marine navigation business by acquiring all of the issued and
outstanding shares of the Norway-based Hitec Marine Automation ASA, for cash
consideration of NOK13.7 million for the purchase of the shares. The business
provides marine navigation products and capabilities for both naval and
commercial marine markets. This technology investment complements the Company's
existing marine products and capabilities.</p>
<p ALIGN="JUSTIFY">During fiscal 2002, CAE completed four strategic
acquisitions, two of which accelerated CAE's move into aviation training, one
which significantly improved the Company's access to the US defense market and
one which provided immediate entry into the commercial marine control systems
market. A summary description of each acquisition is as follows:</p>
<p ALIGN="JUSTIFY">On April 2, 2001, the Company acquired all of the issued and
outstanding shares of BAE Systems Flight Simulation and Training Inc. (BAE
Systems) located in Tampa, Florida, for total cash consideration of US$76
million. The business has a well-established position in the US defense market
for the manufacture of transport and helicopter simulation equipment and has
significant training and support service activities for both civil and military
markets.</p>
<p ALIGN="JUSTIFY">On August 1, 2001, the Company acquired all of the issued and
outstanding shares of Valmarine AS of Norway, for cash consideration of NOK238.6
million and a CAE share issuance of NOK125.4 million, based on the average
closing price of CAE's shares for the 10 days prior to August 1<sup>st</sup>.
Valmarine is the global leader for marine control systems for the commercial
market. The purchase price is subject to adjustment based on the future
performance of the business. Contingent consideration up to a maximum of NOK58
million may be recognized as an additional cost of the purchase when the
contingency is resolved.</p>
<p ALIGN="JUSTIFY">On August 24, 2001, the Company acquired all of the issued
and outstanding shares of the Netherland- based Schreiner Aviation Training B.V.
(Schreiner) for total cash consideration of Euro 193.4 million. The business
provides simulator and ground-school civil aviation training.</p>
<p ALIGN="JUSTIFY">On December 31, 2001, the Company acquired all of the issued
and outstanding shares of SimuFlite Training International Inc. (SimuFlite),
based in Dallas, Texas, for a total cash consideration of US$210.9 million. In
addition, property, plant and equipment in the amount of US$54 million were sold
to the vendor and leased back. SimuFlite is the world's second largest
provider of business aviation training.</p>
<p ALIGN="justify">These acquisitions were accounted for under the purchase method and their
operating results have been included from the respective acquisition dates.</p>
</font>
  <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<font FACE="Arial" SIZE="2">
<hr>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font color="#000000" size="2" face="Arial">The net assets acquired are summarized as follows:</font></p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
<table border="0" cellpadding="0" cellspacing="0" width="625" height="380">
  <tr>
    <td width="132" height="20" valign="bottom" align="left" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="1">(amounts
      in millions)</font></td>
    <td width="7" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="1">&nbsp;</font></td>
    <td width="55" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center"><font face="Arial" size="1">BAE
      Systems</font></p>
    </td>
    <td width="20" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="1">&nbsp;</font></td>
    <td width="61" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center"><font face="Arial" size="1">Valmarine
      AS</font></p>
    </td>
    <td width="23" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="1">&nbsp;</font></td>
    <td width="57" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center"><font face="Arial" size="1">Schreiner</font></p>
    </td>
    <td width="22" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="1">&nbsp;</font></td>
    <td width="54" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center"><font face="Arial" size="1">Simuflite</font></p>
    </td>
    <td width="23" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="1">&nbsp;</font></td>
    <td width="54" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center"><font face="Arial" size="1"><font color="#000000">HiTec</font>
      <font color="#000000">Marine Automation</font></font></p>
    </td>
<font FACE="Arial" SIZE="2">
<td width="12" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
</font>
    <td width="51" height="20" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center"><font face="Arial" size="1">Total</font></p>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap><font FACE="Arial" SIZE="2">
      <p><font color="#000000">Current assets</font></font></td>
  <td width="7" height="20"><b><font color="#000000">$</font></b></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">36.2</font></b></td>
  <td width="20" height="20">
    <p align="right">
<font FACE="Arial" SIZE="2" color="#000000">
<b>$</b>
</font>
  </td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">16.5</font></b></td>
  <td width="23" height="20">
    <p align="right">
<font FACE="Arial" SIZE="2" color="#000000">
<b>$</b>
</font>
  </td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">15.3</font></b></td>
  <td width="22" height="20">
    <p align="right">
<font FACE="Arial" SIZE="2" color="#000000">
<b>$</b>
</font>
  </td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">20.3</font></b></td>
  <td width="23" height="20">
    <p align="right">
<font FACE="Arial" SIZE="2" color="#000000">
<b>$</b>
</font>
  </td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">5.6</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1">
<font FACE="Arial" SIZE="2" color="#000000">
<b>$</b>
</font>
  </td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">93.9</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap><font FACE="Arial" SIZE="2">
      <p><font color="#000000">Current liabilities</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(65.8)</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(8.7)</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(37.1)</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(14.2)</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(10.5)</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(136.3)</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap><font FACE="Arial" SIZE="2">
      <p><font color="#000000">Property, plant and equipment</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">59.0</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">0.5</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">167.9</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">265.2</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">0.1</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">492.7</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap><font FACE="Arial" SIZE="2">
      <p><font color="#000000">Intangible assets</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"></td>
</tr>
<tr>
    <td width="179" VALIGN="bottom" BGCOLOR="#ffffff" HEIGHT="14" nowrap>
              <font FACE="Arial" SIZE="2">
        <p><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade names</font>
             </font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">3.6</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">37.1</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">40.7</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="bottom" BGCOLOR="#ffffff" HEIGHT="14" " nowrap>
        <font FACE="Arial" SIZE="2">
        <p><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></font>
        <font face="Arial" color="#000000" size="2">Customer
        Relations</font>
<font FACE="Arial" SIZE="2">
        </font>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">6.0</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">66.0</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">29.2</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">101.2</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="bottom" BGCOLOR="#ffffff" HEIGHT="18" nowrap>
       <font face="Arial" SIZE="2">
       <p style="text-indent: 0; word-spacing: 0; margin: 0" align="left"><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
       Customer contractual</font></p>
        <p style="text-indent: 0; word-spacing: 0; margin: 0" align="left"><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        agreements</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="20" height="20" valign="bottom"></td>
  <td width="61" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">1.5</font></b></td>
  <td width="23" height="20" valign="bottom"></td>
  <td width="57" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">2.2</font></b></td>
  <td width="22" height="20" valign="bottom"></td>
  <td width="54" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">3.6</font></b></td>
  <td width="23" height="20" valign="bottom"></td>
  <td width="54" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="12" height="20" valign="bottom" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">7.3</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="bottom" BGCOLOR="#ffffff" HEIGHT="14" nowrap>
        <font FACE="Arial" SIZE="2">
        <p><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other intangibles</font>
        </font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">2.5</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">14.5</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">7.0</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">1.2</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">25.2</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap><font FACE="Arial" SIZE="2">
      <p><font color="#000000">Goodwill</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">104.2</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">37.3</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">91.2</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">108.2</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">1.6</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">342.5</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap><font FACE="Arial" SIZE="2">
      <p><font color="#000000">Future income taxes</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">36.6</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(8.2)</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(36.4)</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">15.1</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">4.8</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">11.9</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap><font FACE="Arial" SIZE="2">
      <p><font color="#000000">Long-term debt</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(17.3)</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(9.2)</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(55.7)</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">(82.2)</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="19" style="border-bottom-style: solid; border-bottom-width: 1" nowrap><font FACE="Arial" SIZE="2" color="#000000">Long-term liabilities</font></td>
  <td width="7" height="20" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  <td width="55" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">(36.1)</font></b></td>
  <td width="20" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="61" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="23" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="57" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="22" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="54" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="23" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="54" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;&nbsp;</b></font></td>
  <td width="51" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">(36.1)</font></b></td>
</tr>
<tr>
      <td width="179" nowrap></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center"><b><font color="#000000" size="2" face="Arial">119.3</font></b></td>
  <td width="20" height="20"></td>
  <td width="61" height="20" align="center"><b><font color="#000000" size="2" face="Arial">63.0</font></b></td>
  <td width="23" height="20"></td>
  <td width="57" height="20" align="center"><b><font color="#000000" size="2" face="Arial">259.9</font></b></td>
  <td width="22" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">415.8</font></b></td>
  <td width="23" height="20"></td>
  <td width="54" height="20" align="center"><b><font color="#000000" size="2" face="Arial">2.8</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center"><b><font color="#000000" size="2" face="Arial">860.8</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap>
          <font FACE="Arial" SIZE="2">
          <p style="text-indent: 0; word-spacing: 0; margin: 0" align="left"><font color="#000000">Less: - Sale and leaseback</font></p>
        <p style="text-indent: 0; word-spacing: 0; margin: 0" align="left"><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        of assets</font></font></td>
  <td width="7" height="20"></td>
  <td width="55" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="20" height="20" valign="bottom"></td>
  <td width="61" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="23" height="20" valign="bottom"></td>
  <td width="57" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="22" height="20" valign="bottom"></td>
  <td width="54" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">(86.2)</font></b></td>
  <td width="23" height="20" valign="bottom"></td>
  <td width="54" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="12" height="20" valign="bottom" style="border-left-style: solid; border-left-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="51" height="20" align="center" valign="bottom"><b><font color="#000000" size="2" face="Arial">(86.2)</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="18" nowrap style="border-bottom-style: solid; border-bottom-width: 1">
          <font FACE="Arial" SIZE="2">
          <p><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - Shares issued&nbsp;</font>
      </font></td>
  <td width="7" height="20" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
  <td width="55" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="20" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="61" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">(21.1)</font></b></td>
  <td width="23" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="57" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="22" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="54" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="23" height="20" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;</b></font></td>
  <td width="54" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">-</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font color="#000000"><b>&nbsp;&nbsp;</b></font></td>
  <td width="51" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><b><font color="#000000" size="2" face="Arial">(21.1)</font></b></td>
</tr>
<tr>
    <td width="179" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="18" style="border-bottom-style: solid; border-bottom-width: 2" nowrap><font FACE="Arial" SIZE="2" color="#000000">Total cash consideration:</font></td>
  <td width="7" height="20" style="border-bottom-style: solid; border-bottom-width: 2">
<font FACE="Arial" SIZE="2">
<b>$</b>
</font>
  </td>
  <td width="55" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><b><font color="#000000" size="2" face="Arial">119.3</font></b></td>
  <td width="20" height="20" style="border-bottom-style: solid; border-bottom-width: 2">
    <p align="right"><font FACE="Arial" SIZE="2" color="#000000"><b>$</b>
</font>
  </td>
  <td width="61" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><b><font color="#000000" size="2" face="Arial">41.9</font></b></td>
  <td width="23" height="20" style="border-bottom-style: solid; border-bottom-width: 2">
    <p align="right"><font FACE="Arial" SIZE="2" color="#000000"><b>$</b>
</font>
  </td>
  <td width="57" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><b><font color="#000000" size="2" face="Arial">259.9</font></b></td>
  <td width="22" height="20" style="border-bottom-style: solid; border-bottom-width: 2">
    <p align="right"><font FACE="Arial" SIZE="2" color="#000000"><b>$</b>
</font>
  </td>
  <td width="54" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><b><font color="#000000" size="2" face="Arial">329.6</font></b></td>
  <td width="23" height="20" style="border-bottom-style: solid; border-bottom-width: 2">
    <p align="right"><font FACE="Arial" SIZE="2" color="#000000"><b>$</b>
</font>
  </td>
  <td width="54" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><b><font color="#000000" size="2" face="Arial">2.8</font></b></td>
  <td width="12" height="20" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <p align="right"><font FACE="Arial" SIZE="2" color="#000000"><b>$</b>
</font>
  </td>
  <td width="51" height="20" align="center" style="border-bottom-style: solid; border-bottom-width: 2"><b><font color="#000000" size="2" face="Arial">753.5</font></b></td>
</tr>
  </table>
  <p>&nbsp;The net assets of Schreiner, SimuFlite and approximately 10%
of the net assets of BAE Systems are included in the Civil Simulation and
Training Segment. The balance of the net assets of BAE Systems is included in
the Military Simulation and Training; Valmarine and Hitec Marine Automation are included in
the Marine Controls Segment.</p>
<p ALIGN="JUSTIFY">The goodwill on the SimuFlite acquisition is the sole
deductible goodwill for tax purposes.</p>
</font>
<p ALIGN="justify"><font face="Arial" size="2">Further to the Company's finalization of the
allocation of the purchase prices, there were certain adjustments to the assets
and liabilities recorded in fiscal 2003 for three of the businesses acquired in
fiscal 2002. For Valmarine, the adjustment related to the final evaluation of
other intangible assets. With Schreiner, the adjustment pertained to the
accounting for simulators that were being built at the time the acquisition was
completed. For the acquisition of SimuFlite, the adjustment resulted from a
purchase price arbitration settlement which occurred in 2003.</font></p>
<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY"><b><font color="#000000">Note 3: Discontinued Operations</font></b>
</p>
</font>
<p align="justify"><font face="Arial" size="2">On February 2, 2000, the Board of Directors
approved a plan to divest the Cleaning Technologies business segment. On
December 18, 2001, the Board also approved a plan to divest the Forestry Systems
business segment. As a result, the results of operations for Forestry Systems
and its financial position have been reported separately together with the
Cleaning Technologies business segment (together the &quot;Discontinued
Operations&quot;) in the consolidated statements of earnings and the
consolidated balance sheets. Previously reported financial statements have been
restated and interest expense has been allocated to the Discontinued Operations
based on their share of the Company's net assets.</font></p>
<p>&nbsp;</p>
<font FACE="Arial" SIZE="2">
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.1</font></font><font size="1" face="Arial">7</font></p>
<font FACE="Arial" SIZE="2">
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p align="justify">On February 28, 2002, the Company completed the sale of two of CAE's five
Cleaning Technologies operations. The Company sold the shares of CAE Ransohoff
Inc., of Cincinnati, Ohio and CAE Ultrasonics Inc., of Jamestown, New York to
the management of these operations. The total consideration was initially
US$21.4 million, comprised of US$9.2 million cash and a holdback of US$1.6
million payable 120 days from closing with the balance in the form of a long
term subordinated note receivable. The total consideration was subject to
adjustment based on an audit of the closing statement of financial position. In
fiscal 2003, the audit was completed resulting in an adjustment to previously
recorded consideration of $3.3 million with a corresponding reduction in the
holdback and a reduction in the long-term subordinated note.</p>
<p align="JUSTIFY">On March 28, 2002, CAE completed the sale of its fiber
screening business to the Advanced Fiber Income Fund (AFT) for cash proceeds of
$162.0 million. Following the closing of this transaction, certain issues arose
in connection with the income tax planning with respect to the foreign
operations of AFT, and the partial termination of its defined benefit pension
plan for the transferred employees. CAE recorded in its Loss for Discontinued
Operations in fiscal 2003 an after tax cost of $3.2 million for these
adjustments.</p>
<p align="JUSTIFY">On June 28, 2002, CAE sold the shares of CAE Cleaning
Technologies Plc to the management of these operations for a note receivable of
$1.2 million.</p>
<p align="JUSTIFY">On August 16, 2002, CAE sold substantially all the assets of
the sawmill division of its Forestry Systems segment for a cash consideration of
$25.0 million and a further estimated payment at $10.0 million based on the
operating performance of the company in the three year period from closing. This
amount is included in the current assets of the Discontinued Operations.</p>
<p align="JUSTIFY">Subsequent to March 31, 2003, CAE completed the sale of its
remaining Forestry Systems segment and the sale of its German Cleaning
Technologies operations (May 6 and May 7 respectively). In addition, CAE is in
exclusive negotiations for the sale of its one remaining Cleaning Technologies
business. CAE has adjusted the carrying value of its Discontinued Operations to
reflect these agreements.</p>
<p align="justify">Summarized financial information for the discontinued operations is as
follows:</p>
<p ALIGN="JUSTIFY">&nbsp;</p>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="625" height="250">
    <tr>
  <font FACE="Arial" COLOR="#0000ff">
<b>
      <td width="299" height="50"></td>

</b>

</font>

  <td width="149" colspan="4" height="50">
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>three
    months ended&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="42" height="50"></td>

</b>

</font>

  <td width="150" colspan="3" height="50">
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>twelve
    months ended</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  </tr>
  <tr>
    <td width="299" style="border-bottom-style: solid; border-bottom-width: 1" nowrap height="17" valign="bottom"><font face="Arial" size="2" color="#000000">(amounts
      in millions)</font></td>
<td width="7" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="50" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
      <p align="right"><font face="Arial" size="2" color="#000000"><b>2003</b></font></td>
    <td width="47" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>

  </center>

  <td width="45" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom" nowrap>
    <p align="right"><font face="Arial" size="2" color="#000000">2002 (restated)</font></td>
  <center>
<td width="42" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
<td width="49" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
  <p align="right"><font face="Arial" size="2" color="#000000"><b>2003</b></font></td>
<td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>

<td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17" nowrap><font face="Arial" size="2" color="#000000">2002
  (restated)&nbsp;</font></td>
  </tr>

  <tr>
    <td width="299" height="21"><font color="#000000" size="2" face="Arial">Revenue</font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
    <td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21"></td>
    <td width="47" align="right" height="21"></td>
    <td width="45" align="right" height="21"></td>
    <td width="42" align="right" height="21"></td>
    <td width="49" align="right" height="21"></td>
    <td width="53" align="right" height="21"></td>
    <td width="48" align="right" height="21"></td>

</b>

</font>

  </tr>

  <tr>
    <td width="299" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
      Cleaning Technologies</font></td>
    <td width="7" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <td width="50" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>13.4</b></font></td>
    <td width="47" align="right" height="18"><font face="Arial" size="2" color="#000000">
$</font></td>
    <td width="45" align="right" height="18"><font face="Arial" size="2" color="#000000">19.7</font></td>
    <td width="42" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>72.0</b></font></td>
</font>
    <td width="53" align="right" height="18"><font face="Arial" size="2" color="#000000">
$</font></td>
    <td width="48" align="right" height="18"><font face="Arial" size="2" color="#000000">86.5</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="299" height="21" style="border-bottom-style: solid; border-bottom-width: 1">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Forestry Systems:</font></p>
    </td>
<td width="7" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial"><b>&nbsp;</b></font></td>
</font>
    <td width="50" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" SIZE="2" color="#000000">
<b>2.3</b>
</font>
</td>
<td width="47" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" SIZE="2" color="#000000">
&nbsp;
</font>
</td>

    <td width="45" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" SIZE="2" color="#000000">
43.3</font>
</td>
<td width="42" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" SIZE="2" color="#000000">
<b>&nbsp;</b>
</font>
</td>
    <td width="49" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" SIZE="2" color="#000000">
<b>20.8</b></font>
</td>
<td width="53" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" SIZE="2" color="#000000">
&nbsp;
</font>
</td>

    <td width="48" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" SIZE="2" color="#000000">
193.5</font>
</td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="299" height="21"><font face="Arial" size="2" color="#000000">&nbsp;Net
      earnings (loss) from Forestry Systems prior&nbsp;</font>
      <p style="word-spacing: 0; margin: 0"><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
      </font></font><font color="#000000" face="Arial" SIZE="2">measurement date, net of tax
      (recovery)</font></p>
    <p style="word-spacing: 0; margin: 0"><font color="#000000" size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2002-YTD $4.0;QTR
    -($8.2)</font></p>
    </td>
<font FACE="Arial" SIZE="2">
<td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21" valign="bottom"><font color="#000000" size="2" face="Arial"><b>-</b></font></td>
<td width="47" align="right" height="21" valign="bottom"></td>

    <td width="45" align="right" height="21" valign="bottom"><font color="#000000" size="2" face="Arial">(0.4)</font></td>
<td width="42" align="right" height="21" valign="bottom"></td>
    <td width="49" align="right" height="21" valign="bottom"><font color="#000000" size="2" face="Arial"><b>-</b></font></td>
<td width="53" align="right" height="21" valign="bottom"></td>

</font>

    <td width="48" align="right" height="21" valign="bottom">
<font face="Arial" SIZE="2" color="#000000">
8.5
</font>
</td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="299" height="21">
<font FACE="Arial" SIZE="2">
<p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">Net
earnings (loss) from Forestry Systems after</font></p>
<p style="word-spacing: 0; margin: 0"><font color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
measurement date, net of tax</font></p>
<p style="word-spacing: 0; margin: 0"><font color="#000000" size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;
(YTD- 2003 - $3.0; 2002 -$15.2;</font></p>
<p style="word-spacing: 0; margin: 0"><font color="#000000" size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;
(QTR - 2003 - $3.0; 2002 -$15.2)</font></p>
</font>
    </td>
<td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000"><b>(7.2)</b></font></td>
<td width="47" align="right" height="21" valign="bottom"></td>

    <td width="45" align="right" height="21" valign="bottom"><font color="#000000" size="2" face="Arial">17.7</font></td>
<td width="42" align="right" height="21" valign="bottom"></td>
    <td width="49" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000"><b>(7.2)</b></font></td>
<td width="53" align="right" height="21" valign="bottom"></td>

</font>

    <td width="48" align="right" height="21" valign="bottom">
<font face="Arial" SIZE="2" color="#000000">
17.7
</font>
</td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="299" height="21">
<p style="word-spacing: 0; margin: 0">
<font FACE="Arial" SIZE="2">
<font face="Arial" size="2" color="#000000">Net earnings (loss) from Cleaning technologies&nbsp;</font>
</font>
<p style="word-spacing: 0; margin: 0"><font FACE="Arial" SIZE="2">
<font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp; after</font><font color="#000000">
measurement date, net of tax recovery&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
<p style="word-spacing: 0; margin: 0"><font color="#000000" size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;
(YTD- 2003 - $7.7; 2002 -$7.3;</font></p>
<p style="word-spacing: 0; margin: 0"><font color="#000000" size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;
(QTR - 2003 - $7.7; 2002 -$7.3)</font></p>
</font>
    </td>
<td width="7" align="right" height="21"></td>
    <td width="50" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000"><b>(6.6)</b></font></td>
<td width="47" align="right" height="21" valign="bottom"></td>

    <td width="45" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000">(21.2)</font></td>
<td width="42" align="right" height="21" valign="bottom"></td>
    <td width="49" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000"><b>(6.6)</b></font></td>
<td width="53" align="right" height="21" valign="bottom"></td>

</font>

    <td width="48" align="right" height="21" valign="bottom"><font face="Arial" size="2" color="#000000">(25.1)</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="299" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">Results
      from discontinued operations</font></td>
  </font>
<b>
<td width="7" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;$</font></td>

</b>

<font FACE="Arial" SIZE="2">

    <td width="50" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000"><b>(13.8)</b></font></td>
<td width="47" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">$</font></td>

    <td width="45" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">(3.9)</font></td>
<td width="42" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>&nbsp;$</b></font></td>

    <td width="49" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000"><b>(13.8)</b></font></td>
</font>
<td width="53" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
<font face="Arial" SIZE="2" color="#000000">
$
</font>
</td>

    <td width="48" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
<font face="Arial" SIZE="2" color="#000000">
1.1
</font>
</td>
  </tr>
</table>
  </center>
</div>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<div align="center">
  <center>
<table BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="634">
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </td>
    <td WIDTH="181" VALIGN="BOTTOM" COLSPAN="5" BGCOLOR="#ffffff" HEIGHT="20">
      <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </td>
    <td WIDTH="189" VALIGN="BOTTOM" COLSPAN="5" BGCOLOR="#ffffff" HEIGHT="20">
      <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </td>
    <td WIDTH="181" VALIGN="BOTTOM" COLSPAN="5" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><b>as
      at March 31,&nbsp;2003</b></font></td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </td>
    <td WIDTH="189" VALIGN="BOTTOM" COLSPAN="5" BGCOLOR="#ffffff" HEIGHT="20">
      <p ALIGN="RIGHT" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font face="Arial" size="2">as
      at March 31,2002</font></td>
  </tr>
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="181" VALIGN="BOTTOM" COLSPAN="5" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>(unaudited)</b></font></td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="189" VALIGN="BOTTOM" COLSPAN="5" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">(audited)</font></td>
  </tr>
  <tr>
    <td WIDTH="243" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Arial" SIZE="2">
      (amounts in millions)</font></td>
    <td WIDTH="25" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font FACE="Arial" SIZE="2"><b>Forestry Systems</b></font></td>
    <td WIDTH="12" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="96" VALIGN="middle" COLSPAN="2" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font FACE="Arial" SIZE="2"><b>Cleaning Technologies</b></font></td>
    <td WIDTH="8" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font FACE="Arial" SIZE="2">Forestry Systems</font></td>
    <td WIDTH="19" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="83" VALIGN="middle" COLSPAN="2" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font face="Arial" size="2">Cleaning
      Technologies</font></td>
  </tr>
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p>Current assets</font></td>
    <td WIDTH="23" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>$</b></font></td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>11.5</b></font></td>
    <td WIDTH="10" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>$</b></font></td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>7.9</b></font></td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">$</font></td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">40.8</font></td>
    <td WIDTH="17" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="31" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">$</font></td>
    <td WIDTH="48" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">20.8</font></td>
  </tr>
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p>Property, plant and equipment, net</font></td>
    <td WIDTH="23" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>2.7</b></font></td>
    <td WIDTH="10" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>3.7</b></font></td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">15.7</font></td>
    <td WIDTH="17" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="31" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="48" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">5.4</font></td>
  </tr>
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p>Goodwill</font></td>
    <td WIDTH="23" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>16.0</b></font></td>
    <td WIDTH="10" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>4.8</b></font></td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">30.2</font></td>
    <td WIDTH="17" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="31" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="48" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">9.2</font></td>
  </tr>
  <tr>
    <td WIDTH="243" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Arial" SIZE="2">
      Other assets</font></td>
    <td WIDTH="25" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="right"><font face="Arial" size="2"><b>0.8</b></font></p>
    </td>
    <td WIDTH="12" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font FACE="Arial" SIZE="2"><b>2.6</b></font></td>
    <td WIDTH="8" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font size="2" face="Arial">&nbsp;0.6</font></td>
    <td WIDTH="19" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="33" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right">
      &nbsp;
    </td>
    <td WIDTH="50" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1" align="right"><font size="2" face="Arial">1.1</font></td>
  </tr>
  <tr>
    <td WIDTH="243" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="25" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial"><b>31.0</b></font></td>
    <td WIDTH="12" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial"><b>19.0</b></font></td>
    <td WIDTH="8" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial">87.3</font></td>
    <td WIDTH="19" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="33" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="50" VALIGN="middle" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial">36.5</font></td>
  </tr>
  <tr>
    <td WIDTH="243" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2"><font FACE="Arial" SIZE="2">
      Assets of discontinued operations</font></td>
    <td WIDTH="25" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">
      &nbsp;
    </td>
    <td WIDTH="12" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">
      &nbsp;
    </td>
  </center>
    <td WIDTH="44" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">
      <p align="right"><font FACE="Arial" SIZE="2">
      <b>$</b></font></p>
    </td>
  <center>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font size="2" face="Arial"><b>&nbsp;50.0</b></font></td>
    <td WIDTH="8" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">
      &nbsp;
    </td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">
      &nbsp;
    </td>
    <td WIDTH="19" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">
      &nbsp;
    </td>
    <td WIDTH="33" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">
      <font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">$</font>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font size="2" face="Arial">123.8</font></td>
  </tr>
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p>Current liabilities</font></td>
    <td WIDTH="23" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p ALIGN="RIGHT"><font face="Arial" size="2"><b>12.8</b></font></td>
    <td WIDTH="10" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>0.1</b></font></td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">26.4</font></td>
    <td WIDTH="17" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="31" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="48" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">13.7</font></td>
  </tr>
  <tr>
    <td WIDTH="241" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p>Other liabilities</font></td>
    <td WIDTH="23" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p align="right"><b><font face="Arial" size="2">0.9</font></b></p>
    </td>
    <td WIDTH="10" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT"><b>4.1</b></font></td>
    <td WIDTH="6" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="42" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">0.4</font></td>
    <td WIDTH="17" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="31" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20">
      <p>&nbsp;</p>
    </td>
    <td WIDTH="48" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20"><font FACE="Arial" SIZE="2">
      <p ALIGN="RIGHT">-</font></td>
  </tr>
  <tr>
    <td WIDTH="243" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="25" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2">
      <b>
      $</b></font></td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial"><b>13.7</b></font></td>
    <td WIDTH="12" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2">
      <b>
      $</b></font></td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial"><b>4.2</b></font></td>
    <td WIDTH="8" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2">
      $</font></td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial">26.8</font></td>
    <td WIDTH="19" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      &nbsp;
    </td>
    <td WIDTH="33" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2">
      $</font></td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><font size="2" face="Arial">13.7</font></td>
  </tr>
  <tr>
    <td WIDTH="243" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">
      <font FACE="Arial" SIZE="2">
      Liabilities of discontinued operations</font>
    </td>
    <td WIDTH="25" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="12" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2">
      <p align="right"><font face="Arial" size="2">
      <b>
      $</b></font></p>
    </td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font size="2" face="Arial"><b>&nbsp;
      17.9</b></font></td>
    <td WIDTH="8" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">
      &nbsp;
    </td>
    <td WIDTH="44" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">&nbsp;</td>
    <td WIDTH="52" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">&nbsp;</td>
    <td WIDTH="19" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right">
      &nbsp;
    </td>
    <td WIDTH="33" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font face="Arial" size="2">
      $</font></td>
    <td WIDTH="50" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT="20" style="border-bottom-style: solid; border-bottom-width: 2" align="right"><font size="2" face="Arial">&nbsp;40.5</font></td>
  </tr>
</table>
  </center>
</div>
<font FACE="Arial" SIZE="2">
<p ALIGN="right">&nbsp;</p>
<b>
<p ALIGN="JUSTIFY"><font color="#000000">Note 4: Supplementary Information</font></p>
</b>
<p><font color="#000000">Cash provided by (used in) non-cash working capital:</font></p>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="625" height="250">
    <tr>
  <font FACE="Arial" COLOR="#0000ff">
<b>
      <td width="297" height="50"></td>

</b>

</font>

  <td width="151" colspan="4" height="50">
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>three
    months ended&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="42" height="50"></td>

</b>

</font>

  <td width="150" colspan="3" height="50">
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>twelve
    months ended</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  </tr>
  <tr>
    <td width="297" style="border-bottom-style: solid; border-bottom-width: 1" nowrap height="17" valign="bottom"><font face="Arial" size="2" color="#000000">(amounts
      in millions)</font></td>
<td width="9" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="50" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
      <p align="right"><font face="Arial" size="2" color="#000000"><b>2003</b></font></td>
    <td width="47" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>

  <td width="45" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
    <p align="right"><font face="Arial" size="2" color="#000000">2002</font></td>
<td width="42" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
<td width="49" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17" valign="bottom">
  <p align="right"><font face="Arial" size="2" color="#000000"><b>2003</b></font></td>
<td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>

<td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font face="Arial" size="2" color="#000000">2002&nbsp;</font></td>
  </tr>

  <tr>
    <td width="297" height="21"><font color="#000000" size="2" face="Arial">Accounts
      receivable</font></td>
    </center>

</font>

    <td width="9" align="right" height="21">
      <p align="right"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>

  <center>
    <td width="50" align="right" height="21">
<font face="Arial" color="#000000" size="2">
<b>
5.4</b></font>

    </td>

    <td width="47" align="right" height="21"><font color="#000000" face="Arial" size="2">$</font></td>

    <td width="45" align="right" height="21"><font color="#000000" face="Arial" size="2">(11.4)</font></td>
<b>
    <td width="42" align="right" height="21"><b><font face="Arial" size="2" color="#000000">$</font></b></td>

</b>

    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>22.3</b></font></td>

    <td width="53" align="right" height="21"><font color="#000000" face="Arial" size="2">$</font></td>
    <td width="48" align="right" height="21"><font color="#000000" face="Arial" size="2">(50.4)</font></td>

  </tr>

<font FACE="Arial" SIZE="2">

  <tr>
    <td width="297" height="18"><font color="#000000" size="2" face="Arial">Inventories</font></td>
    <td width="9" align="right" height="18"></td>
</font>

    <td width="50" align="right" height="18"><b>
<font face="Arial" color="#000000" size="2">
9.5</font>

      </b></td>
<font FACE="Arial" SIZE="2">
    <td width="47" align="right" height="18"></td>
</font>

    <td width="45" align="right" height="18"><font color="#000000" face="Arial" size="2">(4.2)</font></td>
<font FACE="Arial" SIZE="2">
    <td width="42" align="right" height="18"></td>
    <td width="49" align="right" height="18"><font color="#000000" size="2" face="Arial"><b>(1.4)</b></font></td>
    <td width="53" align="right" height="18"></td>
</font>

    <td width="48" align="right" height="18"><font color="#000000" face="Arial" size="2">(23.8)</font></td>
  </tr>

<font FACE="Arial" SIZE="2">

  <tr>
    <td width="297" height="18"><font color="#000000" size="2" face="Arial">Prepaid
      expenses</font></td>
    <td width="9" align="right" height="18"></td>
</font>

    <td width="50" align="right" height="18"><b>
<font face="Arial" color="#000000" size="2">
(6.1)</font>

      </b></td>
<font FACE="Arial" SIZE="2">
    <td width="47" align="right" height="18"></td>
</font>

    <td width="45" align="right" height="18"><font color="#000000" face="Arial" size="2">(4.7)</font></td>
<font FACE="Arial" SIZE="2">
    <td width="42" align="right" height="18"></td>
    <td width="49" align="right" height="18"><font color="#000000" size="2" face="Arial"><b>(6.0)</b></font></td>
    <td width="53" align="right" height="18"></td>
</font>

    <td width="48" align="right" height="18"><font color="#000000" face="Arial" size="2">1.9</font></td>
  </tr>

<font FACE="Arial" SIZE="2">

  <tr>
    <td width="297" height="18"><font color="#000000" size="2" face="Arial">accounts
      payable and accrued liabilities</font></td>
    <td width="9" align="right" height="18"></td>
</font>

    <td width="50" align="right" height="18"><b>
<font face="Arial" color="#000000" size="2">
74.9</font>

      </b></td>
<font FACE="Arial" SIZE="2">
    <td width="47" align="right" height="18"></td>
</font>

    <td width="45" align="right" height="18"><font color="#000000" face="Arial" size="2">61.8</font></td>
<font FACE="Arial" SIZE="2">
    <td width="42" align="right" height="18"></td>
    <td width="49" align="right" height="18"><font color="#000000" size="2" face="Arial"><b>14.8</b></font></td>
    <td width="53" align="right" height="18"></td>
</font>

    <td width="48" align="right" height="18"><font color="#000000" face="Arial" size="2">27.9</font></td>
  </tr>

  <tr>
    <td width="297" height="18"><font color="#000000" face="Arial" SIZE="2">Deposits
      on contracts</font></td>
<font FACE="Arial" SIZE="2">
    <td width="9" align="right" height="18"></td>
</font>
    <td width="50" align="right" height="18"><b><font face="Arial" color="#000000" size="2">(10.7)</font></b></td>
<font FACE="Arial" SIZE="2">
    <td width="47" align="right" height="18"></td>
</font>
    <td width="45" align="right" height="18"><font color="#000000" face="Arial" size="2">(8.8)</font></td>
<font FACE="Arial" SIZE="2">
    <td width="42" align="right" height="18"></td>
    <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>(91.3)</b></font></td>
    <td width="53" align="right" height="18"></td>
</font>
    <td width="48" align="right" height="18"><font color="#000000" face="Arial" size="2">(0.1)</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="297" height="21" style="border-bottom-style: solid; border-bottom-width: 1">
      <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">Income
      taxes recoverable</font></p>
    </td>
</font>
    </center>
<td width="9" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
  <p align="left"><font color="#000000" SIZE="2" face="Arial"><b>&nbsp;&nbsp;&nbsp;</b></font></p>
    </td>
  <center>
    <td width="50" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><b><font face="Arial" color="#000000" size="2">(5.6)</font></b></td>
<font FACE="Arial" SIZE="2">
<td width="47" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000">&nbsp;&nbsp;</font></td>

</font>

    <td width="45" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" face="Arial" size="2">&nbsp;&nbsp;21.6</font></td>
<font FACE="Arial" SIZE="2">
<td width="42" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial"><b>&nbsp;</b></font></td>
    <td width="49" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial"><b>23.1&nbsp;</b></font></td>
<td width="53" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial">&nbsp;</font></td>

</font>

    <td width="48" align="right" height="21" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" face="Arial" size="2">&nbsp;36.9</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="297" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">Increase
      (decrease) in non cash working capital</font>
    </td>
</font>
    </center>
<td width="9" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2">
  <p align="right"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <center>
    <td width="50" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><b><font face="Arial" color="#000000" size="2">67.4</font></b></td>
<font FACE="Arial" SIZE="2">
<td width="47" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;$&nbsp;</font></td>

</font>

    <td width="45" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">54.3</font></td>
<font FACE="Arial" SIZE="2">
<td width="42" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>&nbsp;$&nbsp;</b></font></td>
    <td width="49" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000"><b>(38.5)</b></font></td>
<td width="53" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">&nbsp;$&nbsp;</font></td>

</font>

    <td width="48" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">(7.6)</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="297" height="21" style="border-bottom-style: solid; border-bottom-width: 2">
<font color="#000000">&nbsp;&nbsp;&nbsp;</font>
    </td>
</font>
<td width="9" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" SIZE="2" face="Arial"><b>&nbsp;&nbsp;&nbsp;</b></font></td>
    <td width="50" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><b><font face="Arial" color="#000000" size="2">&nbsp;&nbsp;&nbsp;</font></b></td>
<font FACE="Arial" SIZE="2">
<td width="47" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;&nbsp;</font></td>

</font>

    <td width="45" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">&nbsp;&nbsp;</font></td>
<font FACE="Arial" SIZE="2">
<td width="42" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>&nbsp;&nbsp;</b></font></td>
    <td width="49" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>&nbsp;&nbsp;</b></font></td>
<td width="53" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">&nbsp;&nbsp;</font></td>

</font>

    <td width="48" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">&nbsp;&nbsp;</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="297" height="21" style="border-bottom-style: solid; border-bottom-width: 2">
<font color="#000000" size="2" face="Arial">Interest Paid</font>
    </td>
</font>
    </center>
<td width="9" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2">
  <p align="right"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <center>
    <td width="50" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><b>
<font face="Arial" color="#000000" size="2">
    15.1</font>
      </b></td>
<font FACE="Arial" SIZE="2">
<td width="47" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">
$</font></td>

</font>

    <td width="45" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">4.2</font></td>
<font FACE="Arial" SIZE="2">
<td width="42" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font FACE="Arial" SIZE="2" color="#000000"><b>&nbsp;$</b>
</font>
    </td>
    <td width="49" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>38.8</b></font></td>
<td width="53" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">
$</font></td>

</font>

    <td width="48" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">25.3</font></td>
  </tr>
  <tr>
    <td width="297" height="21">
<font color="#000000" face="Arial" size="2">Income taxes paid (recovered)</font>
    </td>
<td width="9" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <td width="50" align="right" height="21"><b>
<font face="Arial" color="#000000" size="2">
&nbsp;4.3</font>
      </b></td>
<font FACE="Arial" SIZE="2">
<td width="47" align="right" height="21"><font face="Arial" size="2" color="#000000">
$</font></td>

</font>

    <td width="45" align="right" height="21"><font color="#000000" face="Arial" size="2">&nbsp;(1.3)</font></td>
<font FACE="Arial" SIZE="2">
<td width="42" align="right" height="21"><font FACE="Arial" SIZE="2" color="#000000"><b>&nbsp;$</b>
</font>
    </td>
    <td width="49" align="right" height="21"><font color="#000000" size="2" face="Arial"><b>&nbsp;3.5</b></font></td>
<td width="53" align="right" height="21"><font face="Arial" size="2" color="#000000">
$</font></td>

</font>

    <td width="48" align="right" height="21"><font color="#000000" face="Arial" size="2">&nbsp;8.2</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="297" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2">
<font color="#000000">&nbsp;</font>
    </td>
</font>
<td width="9" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" SIZE="2" face="Arial"><b>&nbsp;&nbsp;</b></font></td>
    <td width="50" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><b><font face="Arial" color="#000000" size="2">&nbsp;</font></b></td>
<font FACE="Arial" SIZE="2">
<td width="47" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000">&nbsp;</font></td>

</font>

    <td width="45" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">&nbsp;</font></td>
<font FACE="Arial" SIZE="2">
<td width="42" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>&nbsp;</b></font></td>
    <td width="49" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>&nbsp;</b></font></td>
<td width="53" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">&nbsp;</font></td>

</font>

    <td width="48" align="right" height="21" style="border-top-style: solid; border-top-width: 2; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">&nbsp;</font></td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="297" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">Foreign
      exchange gain (loss)</font></td>

</font>

<td width="9" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" SIZE="2" face="Arial"><b>&nbsp;&nbsp;$</b></font></td>

    <td width="50" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><b><font face="Arial" color="#000000" size="2">(1.8)</font></b></td>
<td width="47" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">&nbsp;$</font></td>

    <td width="45" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">1.2</font></td>

<font FACE="Arial" SIZE="2">

<td width="42" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>$</b></font></td>

    <td width="49" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>6.1</b></font></td>
<td width="53" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">
$&nbsp;</font></td>

</font>

    <td width="48" align="right" height="21" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" face="Arial" size="2">(1.2)</font></td>
  </tr>
</table>
  </center>
</div>

<font FACE="Arial" SIZE="2">
<p ALIGN="JUSTIFY"><b><font color="#000000">Note 5: Business and Geographic Segments</font></b></p>
<p ALIGN="JUSTIFY">The Company's significant business segments include:</p>
<blockquote>
  <p style="word-spacing: 0; margin: 0">(i)&nbsp; Civil Simulation and Training
  - a world-leading supplier of civil flight simulators
  and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; visual&nbsp; systems, and provider of
  business and civil aviation training.</p>
  <p style="word-spacing: 0; margin: 0">(ii) Military Simulation - a premier
  supplier of military flight and land-based simulators, visual systems and
  training systems.</p>
  <p style="word-spacing: 0; margin: 0">(iii) Marine Controls - a world leader
  in the supply of automation and control systems for the naval and commercial
  markets. The business also provides naval training systems and designs and
  manufactures power plant training simulators and systems.</p>
</blockquote>
<p ALIGN="JUSTIFY">Each operating segment is led by a senior executive, offers
different products and uses different technology and marketing strategies. The
Company evaluates performance based on operating earnings before interest and
income taxes and uses capital employed to assess resources allocated to each</p>
<hr>
<p style="word-spacing: 0; margin-top: 0; margin-bottom: 0" align="right"><font size="1" face="Arial">CAE&nbsp;
/&nbsp; 4th quarter report 2003&nbsp; /&nbsp; page.1</font></font><font size="1" face="Arial">9</font></p>

<font FACE="Arial" SIZE="2">
<b>
<font FACE="Arial" SIZE="4" COLOR="#0000ff">
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
</font>
</b>
<p ALIGN="JUSTIFY">segment. Capital employed includes accounts receivable, inventories, prepaid
expenses, property, plant and equipment, goodwill, intangible assets and other
assets less accounts payable and accrued liabilities, deposits on contracts and
contingent consideration due on acquisitions included in other long-term
liabilities.</p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0"><font color="#000000">Financial information on the Company's operating segments is
shown in the following table:</font></p>
<p ALIGN="JUSTIFY" style="word-spacing: 0; margin-top: 0; margin-bottom: 0">&nbsp;</p>
  <div align="center">
    <center>
  <table border="0" width="625" cellpadding="0" cellspacing="0" height="514">
    <tr>
      <td width="368" valign="baseline" align="left" height="66"><font size="2" face="Arial" color="#000000"><b>Business
        Segments</b></font></td>
      <td width="114" colspan="2" valign="bottom" align="right" height="66">
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>as
        at</b></font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>&nbsp;March
        31</b></font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>2003&nbsp;</b></font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
      <td width="108" colspan="2" valign="bottom" align="right" height="66">
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">as
        at</font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">&nbsp;March
        31&nbsp;</font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">2002&nbsp;</font></p>
        <p style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000">(restated)</font></td>
    </tr>
    <tr>
      <td width="590" colspan="5" height="18"><font face="Arial" size="2" color="#000000">Capital
        employed</font></td>
    </tr>
    <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;
        &nbsp;&nbsp; Civil Simulation and Training</font></td>
      <td width="38" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
      <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>1,156.9</b></font></td>
      <td width="42" align="right" height="21"><font face="Arial" size="2" color="#000000">$</font></td>
    </font>
      <td width="66" align="right" height="21"><font face="Arial" size="2">1,057.3</font></td>
    </tr>
<font FACE="Arial" SIZE="2">
    <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Military Simulation and Training</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>247.7</b></font></td>
      <td width="42" height="21"></td>
</font>
      <td width="66" align="right" height="21"><font face="Arial" size="2">187.3</font></td>
    </tr>
<font FACE="Arial" SIZE="2">
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Marine Controls</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>122.9</b></font></td>
      <td width="42" height="21"></td>
</font>
      <td width="66" align="right" height="21"><font face="Arial" size="2">86.0</font></td>
    </tr>
<font FACE="Arial" SIZE="2">
    <tr>
      <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Other&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="38" height="21" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;&nbsp;</td>
      <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial"><b>&nbsp;(9.7)</b></font></td>
      <td width="42" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000">&nbsp;&nbsp;</font></td>
</font>
      <td width="66" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2">&nbsp;11.8</font></td>
    </tr>
<font FACE="Arial" SIZE="2">
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">Total
        capital employed</font></td>
    </center>
      <td width="38" height="21">
        <p align="right"><font face="Arial" size="2" color="#000000"><b>$</b></font></td>
    <center>
      <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>1,517.8</b></font></td>
    </center>
      <td width="42" height="21">
<font FACE="Arial" SIZE="2">
<p align="right"><font face="Arial" size="2" color="#000000">$</font></p>
        </font></td>
  </font>
    <center>
      <td width="66" align="right" height="21"><font face="Arial" size="2">1,342.4</font></td>
    </tr>
<font FACE="Arial" SIZE="2">
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Cash</font></td>
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>17.1</b></font></td>
      <td width="42" height="21"></td>
</font>
      <td width="66" align="right" height="21"><font face="Arial" size="2">88.8</font></td>
    </tr>
<font FACE="Arial" SIZE="2">
    <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Short-term investments</font></td>
      <td width="38" height="21"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font></td>
    <td width="76" height="21" align="right">
      <font color="#000000" size="2" face="Arial"><b>2.6</b></font>
      </td>
    <td width="42" height="21"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
</font>
    <td width="66" align="right" height="21"><font face="Arial" size="2">21.3</font></td>
    </tr>
<font FACE="Arial" SIZE="2">
    <tr>
      <td width="368" height="21">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font face="Arial" size="2" color="#000000">Income
        taxes recoverable</font></font></td>
<font FACE="Arial" SIZE="2">
      <td width="38" height="21"></td>
      <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>25.7</b></font></td>
      <td width="42" height="21"></td>
</font>
    </center>
    <td width="66" height="21">
  <p align="right"><font face="Arial" size="2">15.8</font>
  </td>
  </tr>
    <center>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21"><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Accounts payable and accrued liabilities</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>413.3</b></font></td>
    <td width="42" height="21"></td>
  </font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
  420.5</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Deposits on contract</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>101.2</b></font></td>
    <td width="42" height="21"></td>
  </font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
  189.1</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Future income taxes - short term</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>3.5</b></font></td>
    <td width="42" height="21"></td>
  </font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
  28.9</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Future income taxes - long term</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>85.7</b></font></td>
    <td width="42" height="21"></td>
  </font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
  74.1</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Long-term liabilities</font></td>
    <td width="38" height="21"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>139.6</b></font></td>
    <td width="42" height="21"></td>
  </font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
  73.7</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Assets of discontinued operations</font></td>
    <td width="38" height="21" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;&nbsp;</td>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial"><b>&nbsp;50.0</b></font></td>
    <td width="42" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000">&nbsp;&nbsp;</font></td>
  </font>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" size="2">
  &nbsp;123.8</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">&nbsp;Total
      assets</font></td>
    <td width="38" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>&nbsp;2,356.5</b></font></td>
    <td width="42" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">$&nbsp;</font></td>
  </font>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
<font face="Arial" size="2">
  &nbsp;2,378.4</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21"></td>
    <td width="38" height="21"></td>
    <td width="76" height="21"></td>
    <td width="42" height="21"></td>
    <td width="66" height="21"></td>
  </tr>
  <tr>
    <td width="590" height="21" colspan="5"><font FACE="Arial" SIZE="2" color="#000000">Total
      assets by segment</font>

    </td>
  </tr>
  <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;
        &nbsp;&nbsp; Civil Simulation and Training</font></td>
    <td width="38" height="21" align="right"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>1,474.3</b></font></td>
    <td width="42" height="21" align="right"><font size="2" face="Arial" color="#000000">$</font></td>
  </font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
  1,380.9</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Military Simulation and Training</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>442.6</b></font></td>
    <td width="42" height="21" align="right"></td>
  </font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
  444.6</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
      <td width="368" height="21">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font face="Arial" size="2" color="#000000">Marine Controls</font></font>
    </td>
<font FACE="Arial" SIZE="2">
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>214.8</b></font></td>
    <td width="42" height="21" align="right">
      </td>
</font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
    165.1
</font>
  </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
      <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Other</font></td>
    <td width="38" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial"><b>224.8</b></font></td>
    <td width="42" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
<font color="#000000" size="2" face="Arial">&nbsp;</font></td>
</font>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
<font face="Arial" size="2">
    &nbsp;387.8
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21" nowrap></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>2,356.5</b></font></td>
    <td width="42" height="21" align="right"></td>
</font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
    2,378.4
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21" nowrap><font FACE="Arial" SIZE="2" color="#000000">Additions
      and adjustments to goodwill</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"></td>
    <td width="42" height="21" align="right"></td>
    <td width="66" height="21" align="right"></td>
  </tr>
  <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;
        &nbsp;&nbsp; Civil Simulation and Training</font></td>
    <td width="38" height="21" align="right"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>(4.9)</b></font></td>
    <td width="42" height="21" align="right"><font color="#000000">$</font></td>
</font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
    217.8
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Military Simulation and Training</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>(7.1)</b></font></td>
    <td width="42" height="21" align="right"></td>
</font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
    96.1
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
      <td width="368" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Marine Controls</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>3.3</b></font></td>
    <td width="42" height="21" align="right"></td>
</font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
    43.1
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21" nowrap style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="38" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    </center>
    <td width="76" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
      <p align="right"><font color="#000000"><b>(8.7)</b></font></p>
  </td>
    <center>
    <td width="42" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><font color="#000000" size="2" face="Arial">$</font></td>
</font>
    <td width="66" height="21" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
<font face="Arial" size="2">
    &nbsp;357.0
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="590" height="21" nowrap colspan="5"><font FACE="Arial" SIZE="2" color="#000000">Additions
      and adjustments to intangible assets</font>

    </td>
  </tr>
  <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;
        &nbsp;&nbsp; Civil Simulation and Training</font></td>
    <td width="38" height="21" align="right"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>6.2</b></font></td>
    <td width="42" height="21" align="right"><font color="#000000">$</font></td>
</font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
    144.2
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
      <td width="368" nowrap height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Military Simulation and Training</font></td>
    <td width="38" height="21" align="right"></td>
    <td width="76" height="21" align="right"><font color="#000000" size="2" face="Arial"><b>(0.2)</b></font></td>
    <td width="42" height="21" align="right"></td>
</font>
    <td width="66" height="21" align="right">
<font face="Arial" size="2">
    2.5
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
      <td width="368" height="21" style="border-bottom-style: solid; border-bottom-width: 1"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Marine Controls</font></td>
    <td width="38" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial"><b>&nbsp;12.0</b></font></td>
    <td width="42" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font color="#000000" size="2" face="Arial">&nbsp;</font></td>
</font>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
<font face="Arial" size="2">
    &nbsp;19.7
</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td width="368" height="21" nowrap style="border-bottom-style: solid; border-bottom-width: 2"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="38" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
</font>
    <td width="76" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><b><font color="#000000" face="Arial" size="2">18.0</font></b></td>
<font FACE="Arial" SIZE="2">
    <td width="42" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2"><font size="2" face="Arial" color="#000000">$</font></td>
</font>
    <td width="66" height="21" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
<font face="Arial" size="2">
    166.4
</font>
    </td>
  </tr>
  </table>
    </center>
  </div>
<font FACE="Arial" SIZE="2">
</font><font FACE="Times">
<p>&nbsp;</p>
<hr>
<p ALIGN="left" style="margin-top: 0">&nbsp;</p>
<p ALIGN="left" style="margin-top: 0">&nbsp;</p>
</font>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="625" height="524">
    <tr>
<b>
      <td width="281" height="50"><font face="Arial" size="2" color="#000000">Business
        Segments (continued)</font></td>
</b>

<font FACE="Times">

  <td width="156" colspan="4" height="50">
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>three
    months ended&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31&nbsp;</b></font></p>
    <p align="center" style="word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
<b><font FACE="Arial" COLOR="#0000ff">
<td width="44" height="50"></td>
</font></b>

  <td width="150" colspan="3" height="50">
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>twelve
    months ended</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>March
    31</b></font></p>
    <p align="center" style="text-indent: 0; word-spacing: 0; margin: 0"><font face="Arial" size="2" color="#000000"><b>(unaudited)</b></font></td>
  </tr>
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" nowrap height="17">&nbsp;</td>
<td width="16" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>
    <td width="50" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17">
      <p align="right"><font size="2" face="Arial" color="#000000"><b>2003</b></font></td>
    <td width="47" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>

  <td width="43" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17">
    <p align="right"><font size="2" face="Arial" color="#000000">2002</font></td>
<td width="44" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>
<td width="49" align="center" style="border-bottom-style: solid; border-bottom-width: 1" height="17">
  <p align="right"><font size="2" face="Arial" color="#000000"><b>2003</b></font></td>
<td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000">&nbsp;</font></td>

<td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="17"><font size="2" face="Arial" color="#000000">2002</font></td>
  </tr>
</font>
  <tr>
    <td width="281" height="21"><font face="Arial" size="2" color="#000000">Capital
      expenditures</font></td>
    <font FACE="Times">
    <td width="16" align="right" height="21"></td>
    <td width="50" align="right" height="21"></td>
    <td width="47" align="right" height="21"></td>
    <td width="43" align="right" height="21"></td>
    <td width="44" align="right" height="21"></td>
    <td width="49" align="right" height="21"></td>
    <td width="53" align="right" height="21"></td>
    <td width="48" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="281" height="18"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</font>
    <font face="Arial" size="2" color="#000000"> </font>
    <font FACE="Times">
    <font FACE="Arial" SIZE="2" color="#000000">Civil Simulation and Training</font></font></td>
    <td width="16" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>$</b>
</font></td>
    <td width="50" align="right" height="18"><font face="Arial" size="2"><b>47.4</b></font></td>
    <font FACE="Times">
    <td width="47" align="right" height="18"><font face="Arial" size="2" color="#000000">
$
</font></td>
</font>
    <td width="43" align="right" height="18"><font face="Arial" size="2" color="#000000">54.6</font></td>
    <font FACE="Times">
    <td width="44" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>$</b>
</font></td>
</font>
    <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>207.0</b></font></td>
    <td width="53" align="right" height="18"><font face="Arial" size="2" color="#000000">
$</font></td>
    <td width="48" align="right" height="18"><font face="Arial" size="2" color="#000000">216.7</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</font>
    <font face="Arial" size="2" color="#000000"> </font>
    <font FACE="Times">
  <font FACE="Arial" SIZE="2" color="#000000">Military Simulation and Training</font></font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="16" align="right" height="21"></td>
</b>

</font>
    <td width="50" align="right" height="21"><font face="Arial" size="2"><b>7.5</b></font></td>
    <font FACE="Times">
<b><font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" height="21"></td>
</font></b>

</font>

    <td width="43" align="right" height="21"><font face="Arial" size="2" color="#000000">4.3</font></td>
    <font FACE="Times">
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="44" align="right" height="21"></td>
</b>

</font>
</font>
    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>12.1</b></font></td>
    <font FACE="Times">
<b><font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" height="21"></td>
</font></b>

</font>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">14.1</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>

</font>

    <font face="Arial" size="2" color="#000000"> </font>
    <font FACE="Times">
  <font FACE="Arial" SIZE="2" color="#000000">Marine Controls</font></font></td>
<td width="16" align="right" height="21"><font size="2" face="Arial" color="#000000"><b>&nbsp;</b></font></td>

    <td width="50" align="right" height="21"><font face="Arial" size="2"><b>1.1</b></font></td>
    <font FACE="Times">
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="47" align="right" height="21"></td>
</b>

</font>
</font>
    <td width="43" align="right" height="21"><font face="Arial" size="2" color="#000000">3.7</font></td>
    <font FACE="Times">
<b><font FACE="Arial" COLOR="#0000ff">
<td width="44" align="right" height="21"></td>
</font></b>

</font>

    <td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>19.8</b></font></td>
    <font FACE="Arial" COLOR="#0000ff">
<b>
<td width="53" align="right" height="21"></td>
</b>

</font>
    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">18.8</font></td>
  </tr>
    <font FACE="Times">
<tr>
  <td width="281" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" color="#000000" size="2">&nbsp;</font></td>

<td width="16" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
</font>
<td width="50" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" size="2"><b>&nbsp;56.0</b></font></td>
    <font FACE="Times">
<td width="47" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000">$</font></td>
</font>
<td width="43" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" size="2" color="#000000">&nbsp;62.6</font></td>
    <font FACE="Times">
<td width="44" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font size="2" face="Arial" color="#000000"><b>$</b></font></td>
</font>
<td width="49" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" size="2" color="#000000"><b>&nbsp;238.9</b></font></td>
<td width="53" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" size="2" color="#000000">$</font></td>
<td width="48" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="22"><font face="Arial" size="2" color="#000000">&nbsp;249.6</font></td>
  </tr>
  <tr>
    <td width="281" height="21"><font face="Arial" size="2" color="#000000">Amortization
      of property, plant and equipment</font></td>
    <font FACE="Times">
<b><font FACE="Arial" COLOR="#0000ff">
<td width="16" align="right" height="21"></td>
<td width="50" align="right" height="21"></td>
<td width="47" align="right" height="21"></td>
<td width="43" align="right" height="21"></td>
<td width="44" align="right" height="21"></td>
<td width="49" align="right" height="21"></td>
<td width="53" align="right" height="21"></td>
<td width="48" align="right" height="21"></td>
</font></b>

</tr>

  <tr>
    <td width="281" height="18"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</font>

</font>

    <font face="Arial" size="2" color="#000000">&nbsp;</font>
    <font FACE="Times">
<font FACE="Arial" SIZE="2" color="#000000"> Civil Simulation and Training</font></font></td>
<td width="16" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>
$</b>
</font></td>

<td width="50" align="right" height="18"><font face="Arial" size="2"><b>11.5</b></font></td>

    <font FACE="Times">

    <td width="47" align="right" height="18"><font face="Arial" size="2" color="#000000">
$
</font></td>
</font>
    <td width="43" align="right" height="18"><font face="Arial" size="2" color="#000000">10.5</font></td>
    <font FACE="Times">
<td width="44" align="right" height="18"><font face="Arial" size="2" color="#000000">
<b>
$</b>
</font></td>

</font>

<td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>37.8</b></font></td>

    <td width="53" align="right" height="18"><font face="Arial" size="2" color="#000000">
$</font></td>
    <td width="48" align="right" height="18"><font face="Arial" size="2" color="#000000">24.4</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;</font>
</font>
    <font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp; </font>
    <font FACE="Times">
<font FACE="Arial" SIZE="2" color="#000000">Military Simulation and Training</font></font></td>
<td width="16" align="right" height="21"></td>

<td width="50" align="right" height="21"><b><font face="Arial" size="2">2.7</font></b></td>
    <font FACE="Times">
<td width="47" align="right" height="21"></td>
</font>

    <td width="43" align="right" height="21"><font face="Arial" size="2" color="#000000">2.2</font></td>
    <font FACE="Times">
<td width="44" align="right" height="21"></td>
</font>

<td width="49" align="right" height="21"><b><font face="Arial" size="2" color="#000000">11.0</font></b></td>
    <font FACE="Times">
<td width="53" align="right" height="21"></td>
</font>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">10.9</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="Arial" size="2" color="#000000">&nbsp;
    </font><font face="Arial"><font size="2" color="#000000">Marine Controls</font></font></td>
    <font FACE="Times">
<b><font FACE="Arial" COLOR="#0000ff">
<td width="16" align="right" height="21"></td>
</font>
    </b>

</font>

<td width="50" align="right" height="21"><font face="Arial" size="2"><b>0.8</b></font></td>
    <font FACE="Times">
<b>
<font FACE="Arial" COLOR="#0000ff">
<td width="47" align="right" height="21"></td>
</font></b>

</font>

    <td width="43" align="right" height="21"><font face="Arial" size="2" color="#000000">0.6</font></td>
    <font FACE="Times">
<b><font FACE="Arial" COLOR="#0000ff">
<td width="44" align="right" height="21"></td>
</font>
    </b>

</font>

<td width="49" align="right" height="21"><font face="Arial" size="2" color="#000000"><b>3.0</b></font></td>
    <font FACE="Times">
<b>
<font FACE="Arial" COLOR="#0000ff">
<td width="53" align="right" height="21"></td>
</font></b>

</font>

    <td width="48" align="right" height="21"><font face="Arial" size="2" color="#000000">1.6</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font>
</font>
    <font face="Arial" size="2" color="#000000"> Other</font></td>
    <font FACE="Times">
<td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><b><font size="2" FACE="Arial" color="#000000">&nbsp;</font></b>
</font>
    <b><font size="2" face="Arial" color="#000000">&nbsp;</font></b></td>

<td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2"><b>&nbsp;0.3</b></font></td>

    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;0.1</font></td>
<td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;</b></font>
</td>

<td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000"><b>&nbsp;0.3</b></font></td>

    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font face="Arial" size="2" color="#000000">&nbsp;0.1</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 2" height="20">&nbsp;</td>
  <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000"><b>
$</b>

</font>

</td>

</font>

  <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">

<font face="Arial" size="2"><b>

&nbsp;15.3</b></font>

</td>

    <font FACE="Times">

  <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
</font>
  <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
    <font face="Arial" size="2" color="#000000">
    &nbsp;13.4</font>
    </td>
    <font FACE="Times">
  <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
</font>
  <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">

  <font face="Arial" size="2" color="#000000"><b>

  &nbsp;52.1</b></font>

  </td>
  <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
$</font>

</td>

  <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
    <font face="Arial" size="2" color="#000000">
    &nbsp;37.0</font>
    </td>
  </tr>
  <tr>
    <td width="281" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">Amortization
      of intangible assets</font></td>
    <font FACE="Times">
    <td width="16" align="right" height="19"></td>
    <td width="50" align="right" valign="bottom" height="19"></td>
    <td width="47" align="right" height="19"></td>
    <td width="43" align="right" valign="bottom" height="19"></td>
    <td width="44" align="right" valign="bottom" height="19"></td>
    <td width="49" align="right" valign="bottom" height="19"></td>
    <td width="53" align="right" valign="bottom" height="19"></td>
    <td width="48" align="right" valign="bottom" height="19"></td>
  </tr>
  <tr>
    <td width="281" height="18"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>

</font>

    <font face="Arial" size="2" color="#000000"> </font>
    <font FACE="Times">
    <font FACE="Arial" SIZE="2" color="#000000">Civil Simulation and Training</font></font></td>
  <td width="16" align="right" height="20">
  <font face="Arial" size="2" color="#000000"><b>
$</b>

</font>

</td>

  <td width="50" align="right" height="20">

<font face="Arial" size="2"><b>1.8</b></font>

</td>

    <font FACE="Times">

  <td width="47" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
</font>
  <td width="43" align="right" height="20">
    <font face="Arial" size="2" color="#000000">2.7</font>
    </td>
    <font FACE="Times">
  <td width="44" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
</font>
  <td width="49" align="right" height="20">

  <font face="Arial" size="2" color="#000000"><b>7.5</b></font>

  </td>
  <td width="53" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
$</font>

</td>

  <td width="48" align="right" height="20">
    <font face="Arial" size="2" color="#000000">2.7</font>
    </td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</font>
    <font face="Arial" size="2" color="#000000"> </font>
    <font FACE="Times">
  <font FACE="Arial" SIZE="2" color="#000000">Military Simulation and Training</font></font></td>
    <td width="16" align="right" height="19"></td>
    <td width="50" align="right" valign="bottom" height="19"><font face="Arial" size="2"><b>0.2</b></font></td>
    <font FACE="Times">
    <td width="47" align="right" height="19"></td>
</font>
    <td width="43" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">-</font></td>
    <font FACE="Times">
    <td width="44" align="right" valign="bottom" height="19"></td>
</font>
    <td width="49" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>0.2</b></font></td>
    <font FACE="Times">
    <td width="53" align="right" valign="bottom" height="19"></td>
</font>
    <td width="48" align="right" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">-</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</font>
    <font face="Arial" size="2" color="#000000"> </font>
    <font FACE="Times">
  <font FACE="Arial" SIZE="2" color="#000000">Marine Controls</font></font></td>
    <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="19">&nbsp;&nbsp;</td>
    <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2"><b>0.4</b></font></td>
    <font FACE="Times">
    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="19">&nbsp;</td>
</font>
    <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">&nbsp;0.3</font></td>
    <font FACE="Times">
    <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19">&nbsp;</td>
</font>
    <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>&nbsp;2.0</b></font></td>
    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">&nbsp;</font></td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">&nbsp;0.3</font></td>
  </tr>
    <font FACE="Times">
  <tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19">&nbsp;&nbsp;</td>
    </center>
    <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="19">
      <p align="right">
  <font face="Arial" size="2" color="#000000">
<b>
$</b></font></p>
    </td>
</font>
    <center>
    <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2"><b>&nbsp;2.4</b></font></td>
    </center>
    <font FACE="Times">
    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="19">
      <p align="right"><font face="Arial" size="2" color="#000000">
$&nbsp;</font></p>
    </td>
</font>
    <center>
    <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">&nbsp;3.0</font></td>
    <font FACE="Times">
    <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19">
  <font face="Arial" size="2" color="#000000">
<b>
$</b>

</font>

    </td>
</font>
    <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000"><b>&nbsp;9.7</b></font></td>
    <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">
$</font>

    </td>
    <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">&nbsp;3.0</font></td>
  </tr>
    <font FACE="Times">
<tr>
    <td width="281" valign="bottom" height="19"><font face="Arial" size="2" color="#000000">Amortization
      of other </font>
</font>
    <font face="Arial" size="2" color="#000000">assets</font></td>
    <font FACE="Times">
  <td width="16" align="right" height="18">

</td>

  <td width="50" align="right" height="18">

</td>

  <td width="47" align="right" height="18">

  </td>
  <td width="43" align="right" height="18">
  </td>
  <td width="44" align="right" height="18">

  </td>
  <td width="49" align="right" height="18">
  </td>
  <td width="53" align="right" height="18">

  </td>
  <td width="48" align="right" height="18">
  </td>
</tr>
<tr>
    <td width="281" height="18"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>

</font>

    <font face="Arial" size="2" color="#000000"> </font>
    <font FACE="Times">
  <font FACE="Arial" SIZE="2" color="#000000">Civil Simulation and Training</font></font></td>
  <td width="16" align="right" height="20">
  <font face="Arial" size="2" color="#000000"><b>
$</b>

</font>

</td>

  <td width="50" align="right" height="20">

<font face="Arial" size="2"><b>-</b></font>

</td>

    <font FACE="Times">

  <td width="47" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
</font>
  <td width="43" align="right" height="20">
  <font face="Arial" size="2" color="#000000">2.5</font>
  </td>
    <font FACE="Times">
  <td width="44" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
</font>
  <td width="49" align="right" height="20">

  <font face="Arial" size="2" color="#000000"><b>5.3</b></font>

  </td>
  <td width="53" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
$</font>

</td>

  <td width="48" align="right" height="20">
  <font face="Arial" size="2" color="#000000">2.5</font>
  </td>
</tr>
<tr>
    <td width="281" height="21"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font>
    <font FACE="Times">
    <font FACE="Arial" SIZE="2" color="#000000">Military Simulation and Training</font></font></td>
  <td width="16" align="right" height="20">

</td>

  <td width="50" align="right" height="20">

<font face="Arial" size="2"><b>0.4</b></font>

</td>

    <font FACE="Times">

  <td width="47" align="right" height="20">

  </td>
    </font>
  <td width="43" align="right" height="20">
  <font face="Arial" size="2" color="#000000">0.6</font>
  </td>
    <font FACE="Times">
  <td width="44" align="right" height="20">

  </td>
    </font>
  <td width="49" align="right" height="20">

  <font face="Arial" size="2" color="#000000"><b>1.6</b></font>

  </td>
    <font FACE="Times">
  <td width="53" align="right" height="20">

</td>

    </font>

  <td width="48" align="right" height="20">
  <font face="Arial" size="2" color="#000000">0.6</font>
  </td>
</tr>
    <font FACE="Times">
<tr>
    <td width="281" height="21"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="Arial" size="2" color="#000000">
    <font FACE="Times">
M</font></font><font face="Arial" size="2" color="#000000">arine</font></td>
    <font FACE="Times">
  <td width="16" align="right" height="20">

</td>

</font>

  <td width="50" align="right" height="20">

<font face="Arial" size="2"><b>-</b></font>

</td>

    <font FACE="Times">

  <td width="47" align="right" height="20">

  </td>
</font>
  <td width="43" align="right" height="20">
  <font face="Arial" size="2" color="#000000">-</font>
  </td>
    <font FACE="Times">
  <td width="44" align="right" height="20">

  </td>
</font>
  <td width="49" align="right" height="20">

  <font face="Arial" size="2" color="#000000"><b>-</b></font>

  </td>
    <font FACE="Times">
  <td width="53" align="right" height="20">

</td>

</font>

  <td width="48" align="right" height="20">
  <font face="Arial" size="2" color="#000000">-</font>
  </td>
</tr>
    <font FACE="Times">
<tr>
    <td width="281" style="border-bottom-style: solid; border-bottom-width: 1" height="20"><font FACE="Arial" SIZE="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;
      </font>
</font>
    <font face="Arial" size="2" color="#000000"> Other</font></td>
    <font FACE="Times">
  <td width="16" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">

&nbsp;

</td>

</font>

  <td width="50" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">

<font face="Arial" size="2"><b>

&nbsp;1.9</b></font>

</td>

    <font FACE="Times">

  <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">

  &nbsp;

  </td>
</font>
  <td width="43" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000">
  &nbsp;-</font>
  </td>
    <font FACE="Times">
  <td width="44" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">

  &nbsp;

  </td>
</font>
  <td width="49" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">

  <font face="Arial" size="2" color="#000000"><b>

  &nbsp;1.9</b></font>

  </td>
  <td width="53" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">

<font face="Arial" size="2" color="#000000">

&nbsp;</font>

</td>

  <td width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1" height="20">
  <font face="Arial" size="2" color="#000000">
  &nbsp;-</font>
  </td>
</tr>
  <font FACE="Times">
<tr>
  <td width="281" style="border-bottom-style: solid; border-bottom-width: 2" height="20">&nbsp;&nbsp;</td>
  <td width="16" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
<b>
$</b>

</font>

</td>

</font>

  <td width="50" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20"><font face="Arial" size="2"><b>2.3</b></font></td>

  <font FACE="Times">

  <td width="47" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
</font>
  <td width="43" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
  &nbsp;3.1</font>
  </td>
  <font FACE="Times">
  <td width="44" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
</font>
  <td width="49" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000"><b>
  &nbsp;8.8</b></font>
  </td>
  <td width="53" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
$</font>

  </td>
  <td width="48" valign="bottom" align="right" style="border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
  &nbsp;3.1</font>
  </td>
</tr>
<tr>
  <td width="631" height="19" nowrap colspan="9"><font face="Arial" size="2" color="#000000">Revenue
    form external customers based on their location</font></td>
</tr>
<tr>
  <td width="281" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Canada</font></td>
  <font FACE="Times">
  <td width="16" align="right" height="20">
  <font face="Arial" size="2" color="#000000"><b>
$</b>

</font>

</td>

</font>

  <td width="50" align="right" height="20">

<font face="Arial" size="2"><b>24.9</b></font>

</td>

  <font FACE="Times">

  <td width="47" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
</font>
  <td width="43" align="right" height="20">
<font face="Arial" size="2" color="#000000">21.0</font>
</td>
  <font FACE="Times">
  <td width="44" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
</font>
  <td width="49" align="right" height="20">

  <font face="Arial" size="2" color="#000000"><b>89.0</b></font>

  </td>
  <td width="53" align="right" height="20">
  <font face="Arial" size="2" color="#000000">
$</font>

</td>

  <td width="48" align="right" height="20">
<font face="Arial" size="2" color="#000000">102.7</font>
</td>
</tr>
<tr>
  <td width="281" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    United States</font></td>
  <font FACE="Times">
  <td width="16" align="right" height="18">

</td>

</font>

  <td width="50" align="right" height="18">
<font face="Arial" size="2"><b>79.6</b></font>
</td>

  <font FACE="Times">

  <td width="47" align="right" height="18">

  </td>
</font>
  <td width="43" align="right" height="18">
<font face="Arial" size="2" color="#000000">107.0</font>
</td>
  <font FACE="Times">
  <td width="44" align="right" height="18">

  </td>
</font>
  <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>329.5</b></font></td>
  <font FACE="Times">
  <td width="53" align="right" height="18">

  </td>
</font>
  <td width="48" align="right" height="18">
<font face="Arial" size="2" color="#000000">347.0</font>
</td>
</tr>
<tr>
  <td width="281" height="17"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    United Kingdom&nbsp;</font></td>
  <font FACE="Times">
  <td width="16" align="right" height="17">

</td>

</font>

  <td width="50" align="right" height="17">
<font face="Arial" size="2"><b>32.7</b></font>
</td>

  <font FACE="Times">

  <td width="47" align="right" height="17">

  </td>
</font>
  <td width="43" align="right" height="17">
<font face="Arial" size="2" color="#000000">35.4</font>
</td>
  <font FACE="Times">
  <td width="44" align="right" height="17">

  </td>
</font>
  <td width="49" align="right" height="17"><font face="Arial" size="2" color="#000000"><b>149.7</b></font></td>
  <font FACE="Times">
  <td width="53" align="right" height="17">

  </td>
</font>
  <td width="48" align="right" height="17">
<font face="Arial" size="2" color="#000000">127.4</font>
</td>
</tr>
<tr>
  <td width="281" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Germany</font></td>
  <font FACE="Times">
  <td width="16" align="right" height="18">

</td>

</font>

  <td width="50" align="right" height="18">
<font face="Arial" size="2"><b>42.8</b></font>
</td>

  <font FACE="Times">

  <td width="47" align="right" height="18">

  </td>
</font>
  <td width="43" align="right" height="18">
<font face="Arial" size="2" color="#000000">22.5</font>
</td>
  <font FACE="Times">
  <td width="44" align="right" height="18">

  </td>
</font>
  <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>119.1</b></font></td>
  <font FACE="Times">
  <td width="53" align="right" height="18">

  </td>
</font>
  <td width="48" align="right" height="18">
<font face="Arial" size="2" color="#000000">91.2</font>
</td>
</tr>
<tr>
  <td width="281" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Other European countries</font></td>
  <font FACE="Times">
  <td width="16" align="right" height="18">

</td>

</font>

  <td width="50" align="right" height="18">
<font face="Arial" size="2"><b>44.9</b></font>
</td>

  <font FACE="Times">

  <td width="47" align="right" height="18">

  </td>
</font>
  <td width="43" align="right" height="18">
<font face="Arial" size="2" color="#000000">49.8</font>
</td>
  <font FACE="Times">
  <td width="44" align="right" height="18">

  </td>
</font>
  <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>156.2</b></font></td>
  <font FACE="Times">
  <td width="53" align="right" height="18">

  </td>
</font>
  <td width="48" align="right" height="18">
<font face="Arial" size="2" color="#000000">173.8</font>
</td>
</tr>
<tr>
  <td width="281" height="18"><font face="Arial" size="2" color="#000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Other countries</font></td>
  <td width="16" align="right" height="18">

</td>

  <td width="50" align="right" height="18">
  <font face="Arial" size="2"><b>87.3</b></font>
  </td>

  <font FACE="Times">

  <td width="47" align="right" height="18">

  </td>
</font>
  <td width="43" align="right" height="18">
  <font face="Arial" size="2" color="#000000">113.6</font>
  </td>

  <font FACE="Times">

  <td width="44" align="right" height="18">

  </td>
</font>
  <td width="49" align="right" height="18"><font face="Arial" size="2" color="#000000"><b>287.0</b></font></td>

  <font FACE="Times">

  <td width="53" align="right" height="18">

  </td>
</font>
  <td width="48" align="right" height="18">
  <font face="Arial" size="2" color="#000000">
  &nbsp;284.4</font>
  </td>
</tr>

  <font FACE="Times">

<tr>
  <td width="281" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">&nbsp;&nbsp;</td>
  <td width="16" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
<b>
$</b>

</font>

</td>

</font>

  <td width="50" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20"><font face="Arial" size="2"><b>&nbsp;312.2</b></font></td>

  <font FACE="Times">

  <td width="47" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
$

</font>

  </td>
</font>
  <td width="43" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
  &nbsp;349.2</font>
  </td>

  <font FACE="Times">

  <td width="44" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
<b>$</b>

</font>

  </td>
</font>
  <td width="49" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000"><b>
  &nbsp;1,130.5</b></font>
  </td>

  <td width="53" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
$</font>

  </td>
  <td width="48" valign="bottom" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" height="20">
  <font face="Arial" size="2" color="#000000">
  &nbsp;1,126.5</font>
  </td>
</tr>
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