HispanicBusiness

Use of Non-GAAP Financial Information

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we use Adjusted EBITDA which represents net income attributable to Cubic before interest, taxes, non-operating income, depreciation and amortization. We believe that the presentation of Adjusted EBITDA provides useful information to investors with which to analyze our operating trends and performance and ability to service and incur debt. Also, Adjusted EBITDA is a factor we use in measuring our performance and compensating certain of our executives. Further, we believe Adjusted EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation and the age and book depreciation of property, plant and equipment (affecting relative depreciation expense), and non-operating expenses which may vary for different companies for reasons unrelated to operating performance. In addition, we believe that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an Adjusted EBITDA measure when reporting their results. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income as a measure of performance. In addition, other companies may define Adjusted EBITDA differently and, as a result, our measure of Adjusted EBITDA may not be directly comparable to Adjusted EBITDA of other companies. Furthermore, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP.

Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. You are cautioned not to place undue reliance on Adjusted EBITDA.

The following table reconciles Adjusted EBITDA to net income attributable to Cubic, which we consider to be the most directly comparable GAAP financial measure to Adjusted EBITDA.

                                                        Three Months Ended                                                           December 31,                                                          2012       2011                                                       ---------  ---------                                                          (in thousands)Reconciliation:Net income attributable to Cubic                       $  12,446  $  20,694Add:  Provision for income taxes                               5,400      8,353  Interest expense (income), net                             425       (415)  Other income, net                                         (102)      (923)  Noncontrolling interest in income of VIE                    73         45  Depreciation and amortization                            4,718      5,832                                                       ---------  ---------    ADJUSTED EBITDA                                    $  22,960  $  33,586                                                       =========  =========                             CUBIC CORPORATION          CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)               (amounts in thousands, except per share data)                                                        Three Months Ended                                                           December 31,                                                          2012       2011                                                       ---------  ---------Net sales:  Products                                             $ 135,701  $ 153,310  Services                                               177,670    163,456                                                       ---------  ---------                                                         313,371    316,766Costs and expenses:  Products                                               100,895    113,449  Services                                               143,851    131,408  Selling, general and administrative                     40,997     35,220  Research and development                                 5,822      4,896  Amortization of purchased intangibles                    3,564      4,039                                                       ---------  ---------                                                         295,129    289,012                                                       ---------  ---------Operating income                                          18,242     27,754Other income (expense):  Interest and dividend income                               437        762  Interest expense                                          (862)      (347)  Other income (expense) - net                               102        923                                                       ---------  ---------Income before income taxes                                17,919     29,092Income taxes                                               5,400      8,353                                                       ---------  ---------Net income                                                12,519     20,739Less noncontrolling interest in income of VIE                 73         45                                                       ---------  ---------Net income attributable to Cubic                       $  12,446  $  20,694                                                       =========  =========Basic and diluted net income per common share          $    0.47  $    0.77                                                       =========  =========Average number of common shares outstanding               26,736     26,736                                                       =========  =========                             CUBIC CORPORATION                   CONDENSED CONSOLIDATED BALANCE SHEETS                               (in thousands)                                                              September 30,                                                December 31,       2012                                                    2012        (See note                                                (Unaudited)       below)                                               -------------  -------------ASSETSCurrent assets:  Cash and cash equivalents                    $     174,116  $     212,267  Restricted cash                                     68,829         68,749  Accounts receivable - net                          359,301        350,697  Recoverable income taxes                             4,817          7,083  Inventories - net                                   53,095         52,366  Deferred income taxes and other current   assets                                             24,243         21,564                                               -------------  -------------Total current assets                                 684,401        712,726                                               -------------  -------------Long-term contract receivables                        21,460         22,070Long-term capitalized contract costs                  40,146         26,875Property, plant and equipment - net                   55,434         55,327Goodwill                                             173,734        146,933Purchased intangibles - net                           54,188         39,374Other assets                                          21,390         23,012                                               -------------  -------------                                               $   1,050,753  $   1,026,317                                               =============  =============LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:  Short-term borrowings                        $      25,000  $           -  Trade accounts payable                              29,001         47,917  Customer advances                                  107,913        100,764  Accrued compensation and other current   liabilities                                       122,316        108,668  Income taxes payable                                 8,715         20,733  Current portion of long-term debt                    4,563          4,561                                               -------------  -------------Total current liabilities                            297,508        282,643                                               -------------  -------------Long-term debt                                         2,814          6,942Other long-term liabilities                           65,533         66,390Shareholders' equity:  Common stock                                        12,574         12,574  Retained earnings                                  727,489        715,043  Accumulated other comprehensive loss               (19,111)       (21,148)  Treasury stock at cost                             (36,078)       (36,078)                                               -------------  -------------Shareholders' equity related to Cubic                684,874        670,391  Noncontrolling interest in variable interest   entity                                                 24            (49)                                               -------------  -------------Total shareholders' equity                           684,898        670,342                                               -------------  -------------                                               $   1,050,753  $   1,026,317                                               =============  =============Note: The Balance Sheet at September 30, 2012 has been derived from the audited financial statements at that date.                             CUBIC CORPORATION         CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)                               (in thousands)                                                        Three Months Ended                                                           December 31,                                                          2012       2011                                                       ---------  ---------Operating Activities:  Net income                                           $  12,519  $  20,739  Adjustments to reconcile net income to net cash used   in operating activities:    Depreciation and amortization                          4,718      5,832    Changes in operating assets and liabilities          (43,353)   (64,948)                                                       ---------  ---------NET CASH USED IN OPERATING ACTIVITIES                    (26,116)   (38,377)                                                       ---------  ---------Investing Activities:  Acquisition of businesses, net of cash acquired        (33,095)         -  Purchases of property, plant and equipment              (1,423)    (5,249)  Proceeds from sales or maturities of short-term   investments                                                 -      6,957                                                       ---------  ---------NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES      (34,518)     1,708                                                       ---------  ---------Financing Activities:  Proceeds from short-term borrowings                     25,000          -  Principal payments on long-term debt                    (4,140)    (4,136)  Net change in restricted cash                              229          -                                                       ---------  ---------NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES       21,089     (4,136)                                                       ---------  ---------Effect of exchange rates on cash                           1,394        798                                                       ---------  ---------NET DECREASE IN CASH AND CASH EQUIVALENTS                (38,151)   (40,007)Cash and cash equivalents at the beginning of the period                                                  212,267    329,148                                                       ---------  ---------CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD     $ 174,116  $ 289,141                                                       =========  =========Supplemental disclosure of non-cash operating and investing activities:  Liability incurred to acquire NEK                    $  20,130  $       -