Bombardier Announces Financial Results for the Second Quarter Ended June 30, 2015

• Revenues of $4.6 billion, an increase of 2% excluding foreign exchange, compared to the same period last year
• EBIT of $226 million, or 4.9% of revenues
• Adjusted net income(1) of $145 million (adjusted EPS(1) of $0.06)
• Free cash flow usage(1) of $808 million, including a net investment of $439 million in PP&E and intangible assets
• Available short-term capital resources of $4.4 billion, including cash and cash equivalents of $3.1 billion as at June 30, 2015
• Backlog of $64.8 billion as at June 30, 2015
• Launch of the Bombardier transformation plan to improve cost and cash
• Leadership team strengthened with seven new senior executive appointments, including the appointment of John Di Bert as new Chief Financial Officer in July
• C Series aircraft on track for entry-into-service in the first half of 2016
• Global 7000 aircraft entry-into-service in the second half of 2018

(1) See Caution regarding non-GAAP measures at the end of this press release.

Bombardier today reported its financial results for the second quarter ended June 30, 2015. Revenues totalled $4.6 billion for the quarter, compared to $4.9 billion for the same period last fiscal year. Excluding foreign exchange impact, revenues are up 2%.

For the second quarter ended June 30, 2015, earnings before financing expense, financing income and income taxes (EBIT) totalled $226 million, or 4.9% of revenues, compared to $257 million, or 5.3%, for the same period last fiscal year.

Net income totalled $125 million, or earnings per share (EPS) of $0.06, compared to $155 million or $0.08 for the same period the previous year. On an adjusted basis, net income amounted to $145 million, or EPS of $0.06, for the second quarter ended June 30, 2015, compared to $192 million, or $0.10, for the same period the previous year.

For the three-month period ended June 30, 2015, free cash flow usage (cash flows from operating activities less net additions to property, plant and equipment (PP&E) and intangible assets) amounted to $808 million, compared to a usage of $424 million for the same period last year. As at June 30, 2015, available short-term capital resources of $4.4 billion included cash and cash equivalents of $3.1 billion, compared to $3.8 billion and $2.5 billion, respectively as at December 31, 2014. The overall backlog reached $64.8 billion as at June 30, 2015, compared to $69.1 billion as at December 31, 2014.

"Overall, the second quarter was in line with plan in terms of revenues, EBIT and deliveries, and our liquidity stands at $4.4 billion," said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. "After five months on the job, I have a better understanding of our challenges and opportunities. We are taking specific action, including the launch of our Bombardier transformation plan, a disciplined approach to cash management, and the strengthening of our leadership team to reshape the company and ensure our long-term success."

Management has largely completed detailed reviews of Bombardier's two major aerospace development programs. The C Series flight testing is progressing rapidly with over 2,000 hours completed and performance is exceeding targets(1). The aircraft is on track to enter into service in the first half of 2016. Meanwhile, the first Global 7000 flight test vehicle (FTV) is in final assembly and will deliver unmatched performance when the aircraft enters into service in the second half of 2018.

Bombardier Transportation boasts a strong $30.4 billion backlog and recorded a good level of orders in the quarter. One of its newly-established Chinese joint ventures was awarded its first contract to provide an INNOVIA APM 300 automated people mover to the Shanghai metro. This contract demonstrates Bombardier Transportation's leadership position in the rail industry, a position that will be further strengthened by the OneBT improvement initiative, which is starting to gain traction.

Concurrently, the Bombardier transformation plan is being implemented to drive performance across the entire organization. As a first step, the Corporation launched a systematic process to identify and quantify opportunities within each business segment. The main areas of opportunity identified are product cost reduction, better control of working capital and effective use of cash. The plan is now transitioning to the execution phase.

Subsequent to the quarter, Bombardier Inc. announced the appointment of John Di Bert as Senior Vice President and Chief Financial Officer, effective August 10, 2015. Recognized for his financial discipline, Mr. Di Bert is an accomplished executive who has driven multiple optimization initiatives both in periods of growth and consolidation throughout his career.

(1) Key performance targets under certain operating conditions when compared to aircraft currently in production for flights of 500 nautical miles. See the C Series family of aircraft program disclaimer at the end of the MD&A for the quarter ended June 30, 2015.

SEGMENTED RESULTS AND HIGHLIGHTS

Business Aircraft

Results of the quarter
Three-month periods ended June 30	2015			2014			Variance
Revenues	$	1,815		$	1,624		12	%
Aircraft deliveries (in units)		47			38		9
Net orders (in units)		8			30		(22	)
Book-to-bill ratio(1)		0.2			0.8		nmf
EBIT	$	119		$	122		(2	)%
EBIT margin		6.6	%		7.5	%	(90) bps
EBITDA(2)	$	161		$	154		5	%
EBITDA margin(2)		8.9	%		9.5	%	(60) bps
Net additions to PP&E and intangible assets	$	177		$	248		(29	)%
As at	June 30, 2015			December 31, 2014
Order backlog (in billions of dollars)	$	22.2		$	24.0		(8	)%

bps:	basis points; nmf: information not meaningful
(1)	Defined as net orders received over aircraft deliveries, in units.
(2)	See Caution regarding non-GAAP measures at the end of this press release.

• Current economic conditions and geopolitical issues in some regions, such as China, Latin America and Russia, have had an impact on industry-wide order intake. As a result, Business Aircraft announced on May 14, 2015 a reduction in the production rate for the Global 5000 and Global 6000 aircraft.
• Following the softness in demand, EBIT margin guidance is revised to a range of 5% to 6% for the year.(1)
• David M. Coleal was appointed as President, Bombardier Business Aircraft.
• The Global 7000 is a state-of-the-art aircraft with a wing that optimizes both short-field and long-range performance, coupled with a highly efficient engine, the largest cabin and most advanced cockpit. Developing such an aircraft presents challenges, which have impacted the program's schedule. Consequently, the aircraft will now enter into service in the second half of 2018.
• Meanwhile, the first FTV is in final assembly, three additional FTVs are in various stages of production and assembly, and the Integrated Systems Test and Certification Rig has been commissioned.

(1) See forward-looking statements at the end of this press release.

Commercial Aircraft

Results of the quarter
Three-month periods ended June 30	2015			2014			Variance
Revenues	$	598		$	754		(21	)%
Aircraft deliveries (in units)		19			24		(5	)
Net orders (in units)		3			18		(15	)
Book-to-bill ratio(1)		0.2			0.8		nmf
EBIT	$	(10	)	$	17		nmf
EBIT margin		(1.7	)%		2.3	%	(400) bps
EBITDA(2)	$	14		$	44		(68	)%
EBITDA margin(2)		2.3	%		5.8	%	(350) bps
Net additions to PP&E and intangible assets	$	239		$	253		(6	)%
As at	June 30, 2015			December 31, 2014
Order backlog (in billions of dollars)	$	12.1		$	12.5		(3	)%

bps:	basis points; nmf: information not meaningful
(1)	Defined as net orders received over aircraft deliveries, in units.
(2)	See Caution regarding non-GAAP measures at the end of this press release.

• Bombardier Commercial Aircraft and Swiss International Air Lines (SWISS) announced that SWISS will be the first customer to take delivery and operate the C Series when the CS100 aircraft enters into service in the first half of 2016. SWISS, alongside parent company Deutsche Lufthansa AG (Lufthansa), was previously announced as the launch customer of the C Series aircraft program when it signed a firm purchase agreement for 30 CS100 aircraft and options for an additional 30 C Series aircraft in March 2009. Subsequently, on June 15, 2015, SWISS converted 10 of its 30 firm-ordered CS100 aircraft to the larger CS300 aircraft.
• Based on flight test results, Bombardier Commercial Aircraft announced that the CS100 and CS300 aircraft are exceeding their original targets for fuel burn, payload, range and airfield performance. In addition, the C Series aircraft are on track to meet noise performance targets.(1)
• Fred Cromer was appointed as President, Bombardier Commercial Aircraft, and Colin Bole, Senior Vice President, Sales and Asset Management.
• Commercial Aircraft's EBIT is expected to be basically in line with guidance. However, there is some risk depending on the assumptions used with respect to the level of non-cash provisioning in relation to the dilutive impact of the C Series initial deliveries.(2)

(1)	Key performance targets under certain operating conditions when compared to aircraft currently in production for flights of 500 nautical miles. See the C Series family of aircraft program disclaimer at the end of the MD&A for the quarter ended June 30, 2015.
(2)	See forward-looking statements at the end of this press release.

Aerostructures and Engineering Services

Results of the quarter
Three-month periods ended June 30	2015			2014			Variance
Revenues	$	472		$	483		(2	)%
External order intake	$	131		$	150		(13	)%
External book-to-bill ratio(1)		1.1			1.1		nmf
EBIT	$	42		$	22		91	%
EBIT margin		8.9	%		4.6	%	430 bps
EBITDA(2)	$	55		$	36		53	%
EBITDA margin(2)		11.7	%		7.5	%	420 bps
Net additions to PP&E and intangible assets	$	6		$	8		(25	)%

bps:	basis points; nmf: information not meaningful
(1)	Defined as new external orders over external revenues.
(2)	See Caution regarding non-GAAP measures at the end of this press release.

• Bombardier Aerostructures and Engineering Services has an EBIT margin before special items of 8.8% for the first half of 2015, well ahead of its 4% EBIT guidance. EBIT margin is now expected to reach approximately 6% for the year.(1)

(1)	See forward-looking statements at the end of this press release.

Transportation

Results of the quarter
Three-month periods ended June 30	2015			2014			Variance
Revenues	$	2,091		$	2,380		(12	)%
Order intake (in billions of dollars)	$	2.0		$	1.7		18	%
Book-to-bill ratio(1)		1.0			0.7		nmf
EBIT	$	115		$	125		(8	)%
EBIT margin		5.5	%		5.3	%	20 bps
EBITDA(2)	$	139		$	155		(10	)%
EBITDA margin(2)		6.6	%		6.5	%	10 bps
Net additions to PP&E and intangible assets	$	21		$	16		31	%
As at	June 30, 2015			December 31, 2014
Order backlog (in billions of dollars)	$	30.4		$	32.5		(6	)%

bps:	basis points; nmf: information not meaningful
(1)	Defined as new orders over revenues.
(2)	See Caution regarding non-GAAP measures at the end of this press release.

• The Corporation announced that, following a proactive review of strategic options for its rail business, it is preparing for an initial public offering (IPO) of a minority stake in Bombardier Transportation. When completed, the IPO is expected to crystallize the full value of Bombardier Transportation and further strengthen the Corporation's financial position, while preserving flexibility should the Corporation wish to participate in future rail equipment industry consolidation. The Corporation intends to file the required documentation with applicable securities regulators during the fourth quarter of this year, subject to market conditions, with the primary listing venue likely to be Germany, where the business segment is headquartered. After the IPO, Bombardier Transportation will continue to be controlled by Bombardier Inc. and consolidated in its financial results.
• The V300ZEFIRO very high speed train, built in partnership with AnsaldoBreda, received homologation and successfully completed its maiden trip from Milan to Rome.
• Bombardier Transportation's newly-established Chinese joint venture, CSR Puzhen Bombardier Transportation Systems Ltd., won its first contract for an INNOVIA APM 300 automated people mover to be delivered to Shanghai Shentong Metro Co. Ltd., further emphasizing the business segment's strong position in the Chinese rail market.
• Bombardier Transportation was awarded a contract in Vienna to supply and maintain 119 FLEXITY trams for the Vienna transport authority Wiener Linien, valued at approximately $480 million. The order includes an option for an additional 37 trams and further maintenance support.
• Subsequent to the end of the second quarter, Bombardier Transportation signed rolling stock and maintenance contracts for Transport for London's LOTRAIN project in the U.K. to build and maintain 45 four-car electrical multiple units. The contracts are valued at approximately $558 million.
• For the first half of the year, Bombardier Transportation has reached a 5.6% EBIT margin and is on plan to slightly improve its EBIT margin for the year, as compared to 2014, as per original guidance.

Reconciliation of segment to consolidated results
		Three-month periods ended June 30						Six-month periods ended June 30
		2015			2014 (1)			2015			2014 (1)
Revenues
	Business Aircraft	$	1,815		$	1,624		$	3,352		$	3,098
	Commercial Aircraft		598			754			1,271			1,233
	Aerostructures and Engineering Services		472			483			943			953
	Transportation		2,091			2,380			4,132			4,647
	Corporate and eliminations		(356	)		(350	)		(681	)		(686	)
		$	4,620		$	4,891		$	9,017		$	9,245
EBIT before special items(2)
	Business Aircraft	$	119		$	122		$	226		$	222
	Commercial Aircraft		(10	)		17			(20	)		20
	Aerostructures and Engineering Services		42			22			83			42
	Transportation		115			125			233			253
	Corporate and eliminations		(40	)		(29	)		(59	)		(61	)
		$	226		$	257		$	463		$	476
Special Items
	Business Aircraft	$	-		$	-		$	11		$	10
	Commercial Aircraft		-			-			(1	)		(2	)
	Aerostructures and Engineering Services		-			-			(1	)		4
		$	-		$	-		$	9		$	12
EBIT
	Business Aircraft	$	119		$	122		$	215		$	212
	Commercial Aircraft		(10	)		17			(19	)		22
	Aerostructures and Engineering Services		42			22			84			38
	Transportation		115			125			233			253
	Corporate and eliminations		(40	)		(29	)		(59	)		(61	)
		$	226		$	257		$	454		$	464
Supplemental information(2)
	Adjusted net income	$	145		$	192		$	315		$	343
	Adjusted EPS	$	0.06		$	0.10		$	0.15		$	0.19
	Free cash flow usage	$	(808	)	$	(424	)	$	(1,553	)	$	(1,339	)

(1)	Financial results for the three- and six-month periods ended June 30, 2014 have been reclassified to conform with current period presentation. See the MD&A for the quarter ended June 30, 2015 for further information.
(2)	See Caution regarding non-GAAP measures at the end of this press release.