Bombardier Announces Financial Results for the Third Quarter Ended September 30, 2014

MONTRÉAL, QUÉBEC—(Marketwired – Oct. 30, 2014) – Bombardier Inc. (TSX:BBD.A)(TSX:BBD.B)(OTCQX:BDRBF)

(All amounts in this press release are in U.S. dollars unless otherwise indicated. This press release contains both IFRS and non-GAAP measures. Non-GAAP measures are defined and reconciled to the most comparable IFRS measures in the Corporation’s MD&A. See Caution regarding non-GAAP measures at the end of this press release.)

Revenues of $4.9 billion, compared to $4.1 billion for the same period last fiscal year
EBIT before special items(1) of $291 million, or 5.9% of revenues, compared to $210 million, or 5.2%, for the same period last fiscal year
Adjusted net income(1) of $222 million (adjusted EPS of $0.12), compared to $165 million (adjusted EPS of $0.09) for the same period last fiscal year
Free cash flow usage(1) of $368 million, compared to a usage of $522 million for the same period last fiscal year, including a net investment of $444 million in PP&E and intangible assets
Available short-term capital resources of $3.3 billion, including cash and cash equivalents of $1.9 billion as at September 30, 2014, compared to $4.8 billion and $3.4 billion, respectively, as at December 31, 2013
Backlog of $72.4 billion as at September 30, 2014, compared to $69.7 billion as at December 31, 2013
Bombardier today reported its financial results for the third quarter ended September 30, 2014. Revenues totalled $4.9 billion for the quarter, compared to $4.1 billion for the same period last fiscal year, an increase of 20% excluding currency impacts.

For the third quarter ended September 30, 2014, earnings before financing expense, financing income and income taxes (EBIT) totalled $171 million, or 3.5% of revenues, compared to $210 million or 5.2% for the same period last fiscal year. EBIT before special items totalled $291 million, or 5.9% of revenues, compared to $210 million or 5.2% for the same period last fiscal year.

Net income totalled $74 million, or earnings per share (EPS) of $0.03, compared to $147 million or $0.08 for the same period the previous year. On an adjusted basis, net income amounted to $222 million, or EPS of $0.12, for the third quarter ended September 30, 2014, compared to $165 million, or $0.09, for the same period the previous year.

For the three-month period ended September 30, 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 $368 million, compared to a usage of $522 million for the same period last year. As at September 30, 2014, available short-term capital resources of $3.3 billion included cash and cash equivalents of $1.9 billion, compared to $4.8 billion and $3.4 billion, respectively as at December 31, 2013. The overall backlog reached $72.4 billion as at September 30, 2014, compared to $69.7 billion as at December 31, 2013.

“During the third quarter, we saw good momentum at Aerospace with improvement on all fronts. The CSeries flight test program resumed in September and is progressing well. Transportation also had good results in the quarter. Its backlog continued to increase with several small and medium orders won across various regions and product segments, thus maintaining its leading position in the rail industry,” said Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc.

“The major restructuring plan announced in July was deployed at Aerospace, while Transportation continued to execute on OneBT, setting the right conditions to continue on our path to profitable growth. Our new lighter structure will result in a more nimble organization with the added benefit of reduced costs. This, in combination with our investments in new products, will ensure our market leadership and improved execution on our strong order backlog of $72.4 billion,” concluded Mr. Beaudoin.

Bombardier also announced the resignation of Mr. Thierry Desmarest from its Board of Directors. Following the recent death of Christophe de Margerie, Chairman and Chief Executive Officer of French energy company Total S.A., Mr. Desmarest was appointed the company’s Chairman of the Board. As a result, Mr. Desmarest was required to reduce the number of his board memberships in order to respect the French Corporate Governance Code of Listed Corporations. The Board of Directors of Bombardier accepted Mr. Desmarest’s resignation with regret.

Bombardier Aerospace

Bombardier Aerospace’s revenues increased by 29% to reach $2.6 billion for the three-month period ended September 30, 2014, compared to $2.0 billion for the same period last fiscal year. EBIT totalled $74 million, or 2.9% of revenues, for the third quarter, compared to $86 million, or 4.3%, for the same period last fiscal year. EBIT before special items totalled $137 million, or 5.3% of revenues, compared to $86 million, or 4.3%, for the same period last fiscal year. Free cash flow usage amounted to $180 million (including net investments to PP&E and intangible assets of $415 million) for the third quarter ended September 30, 2014, compared to a usage of $406 million (including net investments to PP&E and intangible assets of $585 million) for the same period last fiscal year.

Bombardier Aerospace delivered a total of 71 aircraft during the third quarter ended September 30, 2014, compared to 45 for the same period last fiscal year, and received 76 net orders, compared to 26 for the same period last fiscal year. Bombardier Aerospace’s backlog reached a level of $37.9 billion as at September 30, 2014, compared to $37.3 billion as at December 31, 2013.

In September, the CSeries aircraft resumed flight testing and the program is progressing well. More than 120 hours of flight were recorded since then by two Flight Test Vehicles (FTV), bringing the total number of flight hours to 450. FTV2 is now operating its fly-by-wire in normal mode and flight testing continues as planned. The entry-into-service (EIS) for the CS100 aircraft is targeted for the second half of 2015 and the CS300 aircraft’s EIS will follow approximately six months afterwards.

Commercial aircraft received a firm order for 40 CS300 aircraft with options for an additional 10 CS300 aircraft from a wholly owned affiliate of Macquarie AirFinance. The firm order is valued at $3.1 billion based on list price. This order brings the total CSeries firm orders and other commitments to 563, with 21 customers in 18 countries, including 243 firm orders.

As part of the new organizational structure announced on July 23, 2014, a workforce reduction took place over the past weeks and a restructuring charge of $63 million was recorded as a special item. This workforce reduction is expected to generate approximately $200 million in annual cost savings.

Subsequent to the end of the quarter, Bombardier Aerospace launched the new Challenger 650 aircraft, the evolution of the Challenger 605 aircraft. The Challenger 650 aircraft will offer increased performance capabilities from enhanced engines, an entirely new interior and the Bombardier Vision flight deck technology. Its EIS is scheduled for 2015.