Bombardier Announces Financial Results for the First Quarter Ended March 31, 2014

Revenues of $4.4 billion, compared to $4.3 billion for the same period last fiscal year
EBIT before special items(1) of $219 million, or 5.0% of revenues, compared to $240 million, or 5.5%, for the same period last fiscal year
Adjusted net income(1) of $151 million (adjusted EPS of $0.08), compared to $156 million (adjusted EPS of $0.08) for the same period last fiscal year
Free cash flow usage(1) of $915 million, compared to a usage of $590 million for the same period last fiscal year, including a net investment of $500 million in PP&E and intangible assets
Available short-term capital resources of $3.9 billion, including cash and cash equivalents of $2.5 billion as at March 31, 2014, compared to $4.8 billion and $3.4 billion, respectively, as at December 31, 2013
Record backlog of $76.9 billion as at March 31, 2014, compared to $69.7 billion as at December 31, 2013

Bombardier today reported its financial results for the first quarter ended March 31, 2014. Revenues totalled $4.4 billion for the quarter, compared to $4.3 billion for the same period last fiscal year.

For the first quarter ended March 31, 2014, earnings before financing expense, financing income and income taxes (EBIT) was $207 million, or 4.8% of revenues, compared to $240 million, or 5.5%, for the same period last fiscal year. EBIT before special items totalled $219 million, or 5.0% of revenues, compared to $240 million, or 5.5%, for the same period last fiscal year.

Net income totalled $115 million, or earnings per share (EPS) of $0.06, compared to $148 million or $0.08 for the same period the previous year. On an adjusted basis, net income amounted to $151 million, or EPS of $0.08, for the first quarter ended March 31, 2014, compared to $156 million, or $0.08, for the same period the previous fiscal year.

For the three-month period ended March 31, 2014, free cash flow usage (cash flows from operating activities less net additions to property, plant and equipment (PP&E) and intangible assets) amounted to $915 million, compared to a usage of $590 million for the same period last year. As at March 31, 2014, available short-term capital resources of $3.9 billion included cash and cash equivalents of $2.5 billion ($4.5 billion and $3.0 billion on a pro forma basis) (1), compared to $4.8 billion and $3.4 billion, respectively as at December 31, 2013. The overall backlog reached $76.9 billion as at March 31, 2014, compared to $69.7 billion as at December 31, 2013.

“We’re satisfied with our first quarter results and we’re on track to meet our full-year guidance for 2014,” said Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc. “We achieved important milestones such as the successful maiden flight of the Learjet 85 in April and we received a record $8 billion of new orders at Bombardier Transportation.”

“Our continued investment in a leading portfolio of products is paying off, as demonstrated by our record backlog of $76.9 billion which sets the stage for strong revenue growth over a five-year horizon,” concluded Mr. Beaudoin.

As part of a pro-active management of liquidity and maturities, in March 2014, Bombardier extended the availability periods of Bombardier Aerospace and Bombardier Transportation’s letter of credit facilities and its unsecured revolving credit facilities by one year each. In April 2014, Bombardier issued, an aggregate of $1.8 billion of unsecured Senior Notes, comprised of $600 million due April 2019 and $1.2 billion due October 2022. The net proceeds will be used to refinance approximately $1.3 billion of existing debt and for general corporate purposes.

As a result of this transaction, Bombardier has improved its financial flexibility by extending by approximately one year the weighted average maturity of its debt to 7.1 years and adding approximately $500 million to its available short-term capital resources.

(1) Gives effect to the April 2014 debt issuance.

Bombardier Aerospace

Bombardier Aerospace’s revenues amounted to $2.1 billion for the three-month period ended March 31, 2014, compared to $2.3 billion for the same period last fiscal year. EBIT totalled $93 million, or 4.5% of revenues for the first quarter, compared to $101 million, or 4.5%, last fiscal year. EBIT before special items totalled $105 million, or 5.0% of revenues, for the first quarter ended March 31, 2014, compared to $101 million, or 4.5%, last fiscal year. Free cash flow usage amounted to $545 million (including net additions to PP&E and intangible assets of $484 million) for the first quarter ended March 31, 2014, compared to a usage of $461 million (including net additions to PP&E and intangible assets of $503 million) for the same period last fiscal year.

Bombardier Aerospace delivered a total of 56 aircraft during the first quarter ended March 31, 2014, compared to 53 for the same period last fiscal year, and received 91 net orders, compared to 28 for the same period last fiscal year.

In Commercial Aircraft, Bombardier Aerospace received a total of 17 firm orders for Q400 NextGen turboprops from six customers, from North America, the Middle East and Asia-Pacific. It also signed a firm order with Al Qahtani Aviation Company from the Kingdom of Saudi Arabia for 16 CS300 aircraft, valued at $1.2 billion based on list price, with options for an additional 10. As of today, the group has signed firm orders and other agreements for a total of 447 CSeries aircraft with 18 customers and operators in 15 countries, including 203 firm orders.

The CSeries aircraft program continues to make solid progress. The results of testing thus far, including testing at the climatic chamber at Eglin Air Force Base in Florida, are in line with our expectations. We have expanded the flight envelope to the maximum operating altitude of 12,497 metres (41,000 feet) and the maximum operating speed of Mach 0.82 (871 km/h). In the coming weeks, the fourth CSeries flight test vehicle (FTV4) is expected to complete its first flight.

During the first quarter, Business Aircraft signed a firm order with an undisclosed customer for three Global 6000, two Global 7000 and three Global 8000 business jets, for a total value of $537 million based on list prices. On April 9, the maiden flight of the first Learjet 85 flight test vehicle was successfully completed. Additional flights have since occurred and proceeded as expected and no major issues were identified. An update on the entry-into-service date will be provided once the review of the flight test program timeline has been completed.

Bombardier Aerospace’s backlog reached a record level of $38.5 billion as at March 31, 2014, compared to $37.3 billion, as at December 31, 2013.