Minneapolis / St. Paul’s Metro Transit has chosen Philips’ MIFARE technology to improve transit ticketing in the nation’s first seamless, contactless smart card technology system

Royal Philips Electronics (NYSE: PHG, AEX: PHI) today announced that its world leading MIFARE® contactless smart card technology has been selected by Metro Transit in Minneapolis / St. Paul, Minnesota as the card to be used (according to ISO 14443A) in opening the nation’s first seamless, contactless automatic fare collection system provided by system integrator Cubic Transportation Systems, Inc., a subsidiary of Cubic Corporation (AMEX:CUB).

The Cubic system will be the nation’s first regional ticketing system that accepts smart cards for fare payment for light rail, city bus and future bus rapid transit system. The barrier-free solution includes computers, software, communications, ticket vending machines, platform and on-board smart card validators, hand held read/write devices, and will be equipped with the patented Cubic Tri-Reader® architecture. This new technology will provide users in the Minneapolis / St. Paul metro area with a contactless system replacing most magstripe cards, thus making payment for public transportation faster and easier.

Metro Transit, an operating agency of the Metropolitan Council, is the largest transit agency in Minnesota and the 11th largest in North America and is managing the development of a new fare collection system on behalf of all transit operators in the Minneapolis / St. Paul region. Metro Transit serves a quarter of a million customers each business day with services on nearly 130 routes and more than 900 buses operating on fixed-route services.

“We believe Philips’ broad portfolio of MIFARE® smart card chip solutions will provide our bus and rail customers with a new level of convenience and reliability that will enhance the transit-riding experience,” said Jim Alexander, Metro Transit project manager. “In addition, we will achieve faster customer boarding speeds, enhanced fleet productivity and reduced fare collection costs.”

“Philips has shipped close to 300 million MIFARE® chips for use in contactless smart card applications making us the leader in the field.” said Reinhard Kalla, Vice President and General Manager of Identification at Philips Semiconductors. “We are proud to provide Minneapolis / St. Paul with contactless MIFARE® technology for smart cards and readers to cover both sophisticated frequent rider schemes and low cost ticketing.”

“Cubic is pleased to provide the region with this open architecture solution utilizing our patented Tri-Reader® technology now either installed or scheduled for delivery in 15 cities globally,” said David deKozan, VP Market Planning & Support from Cubic. “Our solution allows our customers to take advantage of a variety of card technologies, including MIFARE®, which has an established history of successful performance in transit.”

The initial roll out, which is planned to be by the end of this year following a 30-day operational field test, will provide an automated smart card-based ticketing system for the Minneapolis / St. Paul population, eventually replacing most magstripe tickets with contactless smart cards on the Twin Cities’ bus network. Primary focus will be placed on integrating Metropass–an employer-based scheme–into the contactless ticketing project. Metropass, which has more than 60 businesses enrolled, enables companies to subsidise travel for its employees. The new ticketing system will then be expanded to cover the city’s first light rail line, currently being built to link downtown Minneapolis with the Minneapolis / St. Paul International Airport and the Mall of America, one of the largest shopping malls in the world with more than 500 stores and some 40 million visitors annually. This line is scheduled for partial opening in April 2004 and is expected to be fully operational using contactless smart cards by December 2004.

Metro Transit’s implementation will cover the introduction of contactless smart cards using Philips’ MIFARE® Standard ICs. Metro Transit is considering chip-based paper tickets based on Philips MIFARE® UltraLight ICs during the second phase of the project. These smart paper tickets can be easily integrated into existing ISO-standard compliant transportation infrastructures, significantly reducing time to market and related installation costs. MIFARE® chip solutions for smart cards and paper tickets function at a distance of up to 10cm (4 inches) with true anti-collision properties; allowing multiple cards to be read at the same time and without the need for a battery, they facilitate the development of complete electronic, contactless payment systems.

The smart cards and smart paper tickets will electronically store travel details and will enable passengers to gain quick access to the transport network. Customers will pass their MIFARE®-based card past card readers situated at the entry of the bus. The cards can be reloaded at retail sales outlets or ticket vending machines. As the system uses radio frequency technology, passenger throughput can be increased and congestion reduced at peak travel periods. In addition, Philips’ smart card ICs contain security features which will help ensure that the cards are virtually impossible to replicate, cutting down also on the level of fraud.

About Philips’ MIFARE® technology

With a substantial market share according to Derrick Robinson at IMS Research, Philips’ MIFARE® portfolio is the established industry benchmark for contactless and dual interface smart card schemes. Operating at 13.56Mhz and in full accordance with ISO14443A–the international standard for contactless smart cards and readers–the MIFARE® platform consists of chip solutions for pure contactless and dual interface smart cards and reader devices. The diversity of the MIFARE® product portfolio covers low- and high-end chip solutions providing a smart identification technology suitable for use in a wide array of design scenarios.

About Metro Transit of Minneapolis / St. Paul

Customers boarded Metro Transit buses nearly 70 million times last year. It will operate Minnesota’s first light-rail line. The $675 million project is 70 percent complete and is both on time and on budget. For more information, please visit http://www.metrotransit.org.

About Cubic

Cubic Transportation Systems, Inc. is the world’s largest supplier and system integrator of integrated electronic fare collection systems for public transit systems in North America, Europe and Asia. These systems include all forms of ticket media including smart cards and magnetics. Cubic’s patented Tri-Reader® and Ticket Transport provide truly open architecture, accepting all cards meeting international standards. Every year, nearly 10 billion rides are taken worldwide using Cubic-designed systems in more than 40 major markets in cities on five continents, including London, Washington, D.C., Hong Kong, Chicago, New York, Guangzhou, Shanghai, Atlanta, San Francisco, Singapore and Miami. For more information about Cubic, see the company’s Website at http://www.cubic.com.

About Philips

Royal Philips Electronics of the Netherlands is one of the world’s biggest electronics companies and Europe’s largest, with sales of EUR 31.8 billion in 2002. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 170,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at http://www.semiconductors.philips.com.