Consolidated Statements of Cash Flows

Years ended March 31

(amounts in millions of Canadian dollars) Operating Activities Net earnings (loss) Results of discontinued operations (Note 4) Earnings (loss) from continuing operations Adjustments to reconcile earnings to cash flows from operating activities: Impairment of goodwill, tangible and intangible assets (Note 5) Depreciation Amortization of deferred financing costs Amortization and write down of intangible and other assets Future income taxes Investment tax credits Stock-based compensation plans (Note 17) Employee future benefit net Other Changes in non-cash working capital (Note 19) Net cash provided by continuing operating activities Net cash provided by discontinued operating activities Net cash provided by operating activities Investing Activities Business acquisitions (net of cash and cash equivalents acquired) (Note 2) Proceeds from disposal of discontinued operations (net of cash and cash equivalents disposed) (Note 4, 19) Capital expenditures Proceeds from sale and leaseback of assets Deferred development costs Deferred pre-operating costs Other Net cash (used in) provided by continuing investing activities Net cash used in discontinued investing activities Net cash (used in) provided by investing activities Financing Activities Net borrowing under revolving unsecured credit facilities (Note 12) Proceeds from long-term debt (Note 12) Reimbursement of long-term debt (Note 12) Dividends paid Common stock issuance (Note 15) Other Net cash provided by (used in) continuing financing activities Net cash provided by discontinued financing activities Net cash provided by (used in) financing activities Effect of foreign exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Cash and cash equivalents related to: Continuing operations Discontinued operations (Note 4) 2007 2006 Restated (Note 1) $ 63.6 6.0 69.6 52.5 2.2 22.9 5.1 (11.8 ) 12.2 (2.0 ) (3.9 ) 79.1 225.9 2.1 228.0 2.6 (4.9 ) (130.1 ) (1.8 ) (0.7 ) ( 9.9 ) (144.8 ) (2.3 ) (147.1 ) (30.7 ) 32.1 (65.7 ) (9.7 ) 8.0 11.6 (54.4 ) 1.2 (53.2 ) (8.1 ) 19.6 61.5 81.1 81.1 81.1 2005 Restated (Note 1) $ (199.6 ) (104.8 ) (304.4 ) 443.3 55.1 7.2 19.7 (114.1 ) (29.2 ) 5.5 0.9 11.2 84.2 179.4 21.6 201.0 (13.8 ) 239.4 (118.0 ) 43.8 (9.9 ) (1.7 ) 4.2 144.0 (5.8 ) 138.2 (273.7 ) 3.4 (50.5 ) (24.0 ) 3.6 0.7 (340.5 ) 3.2 (337.3 ) (2.3 ) (0.4 ) 61.9 61.5 57.1 4.4 61.5

127.4 1.7 129.1 55.0 0.8 15.8 (14.2) 19.3 24.6 (0.9) (10.4) 20.2 239.3 239.3 (4.4) (3.8) (158.1) (3.0) (5.9) (2.9) (178.1) (178.1) (0.6) 45.8 (39.8) (9.8) 10.0 (2.1) 3.5 3.5 4.4 69.1 81.1 150.2 150.2 150.2

$ $ $

$ $ $

$ $ $

Supplementary Cash Flows Information (Note 19) The accompanying notes form an integral part of these Consolidated Financial Statements.

CAE ANNUAL REPORT 2007 | 79