Bombardier Announces Financial Results for the Third Quarter Ended September 30, 2013

31-Oct-2013

Revenues of $4.1 billion, compared to $4.2 billion last fiscal year
EBIT of $210 million, or 5.2% of revenues, compared to $240 million, or 5.7%, last fiscal year
Adjusted net income(1) of $165 million (adjusted EPS of $0.09), compared to $173 million (adjusted EPS of $0.09) for the same period last fiscal year
Net income of $147 million (diluted EPS of $0.08), compared to $172 million (diluted EPS of $0.09) for the same period last fiscal year
Free cash flow usage(1) of $522 million, compared to a usage of $187 million last fiscal year
Available short-term capital resources of $4.0 billion, including cash and cash equivalents of $2.6 billion as at September 30, 2013, the same levels as compared to December 31, 2012
Backlog of $65.5 billion as at September 30, 2013, compared to $64.9 billion as at December 31, 2012
(1) See Caution regarding non-GAAP measures at the end of this press release.

Bombardier today reported its financial results for the third quarter ended September 30, 2013. Revenues totalled $4.1 billion for the quarter, compared to $4.2 billion for the same period last fiscal year.

For the third quarter ended September 30, 2013, earnings before financing expense, financing income and income taxes (EBIT) totalled $210 million, or 5.2% of revenues, compared to $240 million, or 5.7%, for the same period last year.

On an adjusted basis, net income amounted to $165 million, or earnings per share (EPS) of $0.09, for the third quarter ended September 30, 2013, compared to $173 million, or EPS of $0.09, for the same period the previous year.

For the three-month period ended September 30, 2013, free cash flow usage (cash flows from operating activities less net additions to property, plant and equipment and intangible assets) amounted to $522 million, compared to a usage of $187 million for the same period last year. As at September 30, 2013, available short-term capital resources of $4.0 billion included cash and cash equivalents of $2.6 billion, the same levels as compared to December 31, 2012. The overall backlog reached $65.5 billion as at September 30, 2013, compared to $64.9 billion as at December 31, 2012.

"In Aerospace, results were in line with our guidance, but the low order intake and overall market conditions were a disappointment," said Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc. "And in September, the CSeries had its first flight thus starting the extensive flight test program."

"Our revenues in Transportation have increased and free cash flow has also slightly improved. The overall market remains resilient and as illustrated by some order wins during the quarter, our penetration of new regions continues to be strong."

"Our significant ongoing investments in the development of new products, combined with our $65.5 billion backlog, represent the core elements for our strong growth story to take shape," concluded Mr. Beaudoin.

Bombardier Inc. also announced the appointment of Mr. Patrick Pichette to its Board of Directors. Mr. Pichette is Chief Financial Officer at Google Inc. He was at Bell Canada from 2001 to 2008, during which time he held various executive positions including Chief Financial Officer. Prior to joining Bell Canada, Mr. Pichette was a partner at McKinsey & Company. He earned a bachelor's degree in business administration from Université du Québec à Montréal. He also holds a master's degree in philosophy, politics and economics from Oxford University, where he attended as a Rhodes Scholar.

Bombardier Aerospace

Bombardier Aerospace's revenues amounted to $2.0 billion for the three-month period ended September 30, 2013, compared to $2.3 billion for the same period last fiscal year. EBIT totalled $86 million or 4.3% of revenues for the third quarter ended September 30, 2013, compared to $118 million, or 5.2%, last fiscal year.

Free cash flow usage amounted to $406 million (including net additions to property, plant and equipment (PP&E) and intangible assets of $585 million) for the third quarter ended September 30, 2013, compared to a usage of $68 million (including net additions to PP&E and intangible assets of $543 million) for the same period last fiscal year.

Bombardier Aerospace delivered a total of 45 aircraft during the third quarter ended September 30, 2013, compared to 57 for the same period last fiscal year, and received 26 net orders during the third quarter, compared to 83 for the same period last fiscal year.

In Commercial Aircraft, a memorandum of understanding was signed with Rosteckhnologii (Rostec), a state corporation controlled by the Russian Federation, to validate the opportunity to set up a Q400 NextGen final assembly line in Russia. In parallel, a letter of intent (LOI) was signed with Rostec for the sale of 50 Q400 NextGen turboprop aircraft. A LOI has also been signed with Ilyushin Finance Co. for the sale of 50 Q400 NextGen turboprop aircraft. Based on list price, the LOIs for 100 Q400 NextGen turboprop aircraft are valued at $3.4 billion.

During the third quarter, Bombardier signed an agreement for the sale of Flexjet's activities to a newly-created company, Flexjet, LLC, owned by a group led by Directional Aviation Capital. The purchase price is $185 million and the transaction, subject to regulatory approvals and the usual closing conditions, is expected to close before the end of the year.

In connection with this transaction, Flexjet, LLC placed conditional orders for 85 aircraft of the Learjet family and 30 aircraft of the Challenger family, with options for 150 additional business aircraft. Based on list prices, the value of the conditional orders is $2.4 billion, excluding the options.

Subsequent to the end of the quarter, Bombardier Aerospace announced that CDB Leasing Co., Ltd. of China, is the previously undisclosed customer that signed a conditional purchase agreement for 5 CS100 and 10 CS300 aircraft. This agreement also includes options for an additional 5 CS100 and 10 CS300 aircraft for a total of up to 30 CSeries aircraft. Based on list prices, the conditional order is valued at approximately $1 billion and could increase to $2.1 billion should all 15 options be exercised. This brings the total orders and commitments for the CSeries program to 403 aircraft with 15 customers and operators.

Bombardier Aerospace's backlog totalled $32.9 billion as at September 30, 2013, the same level as at December 31, 2012.

Bombardier Transportation

Bombardier Transportation's revenues amounted to $2.1 billion for the three-month period ended September 30, 2013, compared to $1.9 billion for the same period last year. EBIT totalled $124 million, or 6.0% of revenues, compared to $122 million, or 6.3%, for the same quarter the previous year. Free cash flow usage totalled $5 million for the quarter ended September 30, 2013, compared to a usage of $58 million for the same period last fiscal year.

New orders reached $1.7 billion (book-to-bill ratio of 0.8), compared to $2.2 billion for the same quarter last fiscal year. The order backlog totalled $32.6 billion as at September 30, 2013, compared to $32.0 billion as at December 31, 2012.

During the third quarter, Bombardier Transportation won several orders across all divisions and geographies, including, as a member of the ArRiyadh New Mobility Consortium, a contract to deliver technology for the new line 3 in Riyadh, Kingdom of Saudi Arabia. The contract includes system interface management, project management and design, as well as the delivery of 47 two-car driverless INNOVIA Metro 300 trains equipped with the MITRAC propulsion technology. Bombardier Transportation's share of the contract is valued at approximately $383 million.

Bombardier Transportation also received orders from Deutsche Bahn AG, Germany, for 18 TWINDEXX electric double-deck trains, valued at $289 million as well as from Southern Railway, U.K., for 116 ELECTROSTAR cars, valued at $274 million, including a spares supply agreement.

Refer to full documentation in attachments box, located at the top left, below the headline.