Palo Alto, Calif., October 3, 2006–Frost & Sullivan selected Cubic Transportation Systems, Inc., one of two major business segments of Cubic Corporation (Amex:CUB), as the recipient of the 2006 Industry Innovation & Advancement of the Year Award in the smart card mass transit market in recognition of its inventive strategies for the advancement of smart card technology.

Cubic Transportation Systems (Cubic) is a turnkey solution provider for the automated fare collection system used in public transit systems including bus, rail, ferry, and even ticketing for parking applications. Its ability to translate customer requirements into innovative and reliable solutions that are both convenient and state-of-the-art has translated into a large customer base of operators who count on Cubic to provide regular technology upgrades that keep their mass transit systems operating in the most efficient manner.

The transit segment is one of the fastest growing segments in the smart cards market; in the United States alone there are five additional cities that are in the procurement process for new smart card enabled transit ticketing systems. Internationally, more than a dozen major projects are underway, and a dozen more are fully operational. The growth potential in this market is immense and with the complete array of solutions being offered by Cubic, the company has the competitive advantage to continue to maintain its leadership position.

“Interoperability is one of the key challenges in the smart card mass transit industry and Cubic has met this issue with Nextfare™, a system that spans over multiple operators and modes of transport while simultaneously facilitating integration into one regional system,” says Frost & Sullivan Research Analyst George Paul. “Besides increased security, Cubic systems incorporate multiple applications and multiple card platforms on the same fare collection system.”

Cubic has recently incorporated into its platform low-cost smart tickets to provide a complete smart card-based payment solution. Prior to the introduction of limited-use smart tickets, most mass transit systems that upgraded to smart card technology continued to accept legacy magnetic tickets for infrequent commuters who could not justify the cost of a smart card. Cubic has also introduced a complete line of contactless card-enabled parking equipment for integration with its regional systems.

Another differentiating factor for Cubic is that it provides a host of additional services–call center support, card production and distribution, financial clearing and settlement–to maintain and run installed systems. Advances in networking technology now enable the company to offer automated customer support, automated fare product distribution, electronic benefits administration, and links to vehicle tracking, vehicle management, and applications management systems.

“Cubic was instrumental in helping the American Public Transportation Association (APTA) publish standards for proximity smart cards in transit applications,” notes Paul. “The latest innovation is the integration of an explosives detection capability into the transit ticketing system infrastructure, which is significant considering the latest terrorist attacks are targeting public transit systems.”

Out of the 14 major transit smart card projects in the United States, nine are complete Cubic solutions with a tenth containing major Cubic components. The company has installed more than 400 automatic fare collection systems worldwide and has been highly successful in terms of customer satisfaction, with repeat contracts and new clients as well. In recognition of its ongoing commitment to excellence in innovation and advancing customer value, Frost & Sullivan is proud to present Cubic Transportation Systems Inc. with its 2006 Industry Innovation & Advancement of the Year Award.

Each year Frost & Sullivan presents this award to a company that has proven to be a leader in the industry and that, through its pioneering technology, sound business strategy, and research efforts, has been successful in moving the state of the industry forward. Its excellence in the field has extended beyond its technical advancements and encompasses a comprehensive view of market participants resulting in an ongoing improvement in the industry over time. The award recognizes the company for its broader, more comprehensive participation in the industry and for its contributions to the advancement of the market.

Frost & Sullivan Best Practices Awards recognize companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research in order to identify best practices in the industry.

About Cubic Transportation Systems, Inc.

Cubic Transportation Systems, Inc. is the world’s leading full-service systems provider of automated fare collection systems for public transport including bus, bus rapid transit, light rail, commuter rail, heavy rail, ferry and parking. Cubic’s solutions and services include system design, back office computer systems, support equipment, equipment design and manufacturing, device-level software, integration, test, installation, warranty, maintenance, computer hosting services, call center services, card management and distribution services, financial clearing and settlement, multi-application support and outsourcing services. Every year, nearly 10 billion rides are taken worldwide using Cubic fare collection systems. Cubic has delivered over 400 projects in 40 major markets on five continents. Active projects include London, New York / New Jersey region, Washington, D.C. / Baltimore / Virginia region, Los Angeles region, San Diego region, San Francisco, Minneapolis/St. Paul, Chicago, Atlanta, Vancouver and Edmonton, Canada, Brisbane, Australia, Singapore, Bangkok, Thailand, China and Scandinavia. Visit Cubic on the Web at http://www.cubic.com.

About Frost & Sullivan

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company’s industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com.