Bombardier Announces Major C Series Order and Reports Financial Results for the First Quarter of 201

Bombardier Inc. (TSX:BBD.A)(TSX:BBD.B)(OTCQX:BDRBF)

• Delta orders up to 125 C Series aircraft - Largest C Series order yet
• Revenues of $3.9 billion; backlog of $58.9 billion
• EBIT of $56 million; EBIT before special items(1) of $130 million
• Recorded $112 million special charge for workforce optimization
• Free cash flow usage of $750 million driven by cash outflows from operating activities of $456 million
• Strong pro forma liquidity at $5.4 billion(2)

(1)	See Caution regarding non-GAAP measures at the end of this press release.
(2)	Pro forma liquidity reflects the revisions to the Corporation's revolving credit facilities effective in April 2016 and the expected gross proceeds of the investment from the Government of Québec in the C Series aircraft program.

(All amounts in this press release are in U.S. dollars unless otherwise indicated. Amounts in tables are in millions except per share amounts, unless otherwise indicated. EBIT is defined as earnings (loss) before financing expense, financing income and income taxes. EPS is defined as earnings (loss) per share attributable to equity holders of Bombardier Inc. 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.)

Bombardier today reported its financial results for the first quarter ended March 31, 2016.

"Our turnaround plan is gaining traction. We delivered on our commitments for the first quarter and we remain on track to achieve both our 2016 guidance and 2020 goals. Our decisive actions to improve our operations and business model across all our businesses are starting to pay off," said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc.

Bombardier also announced today that Atlanta-based Delta Air Lines, Inc. (Delta) has placed a firm order for 75 CS100 aircraft with options for an additional 50 CS100 aircraft. Based on the list price, the firm order is valued at approximately $5.6 billion. Deliveries of the state-of-the-art aircraft to Delta are scheduled to begin in 2018. As a result of this order, the program is expected to enter into service with a backlog of more than 300 aircraft or up to 800 aircraft including all options and commitments.(1)

(1)	The other agreements consist of conditional orders, letters of intent, options and purchase rights.

"We are very proud to welcome Delta as a C Series customer and to expand our partnership with such a prestigious airline. Given Delta's position as one of the world's largest and most respected airlines, this deal is a strong endorsement of the C Series as the best performing aircraft in the 100-150 passenger class. The addition of Delta to our marquee C Series customer list gives us tremendous momentum as we approach entry-into-service this summer," concluded Mr. Bellemare.

Selected results

Three-month periods ended March 31	2016			2015
Revenues	$	3,914		$	4,397
EBIT margin		1.4	%		5.2	%
EBIT margin before special items(1)		3.3	%		5.4	%
EBITDA margin before special items(1)		5.6	%		7.8	%
Diluted EPS (in dollars)	$	(0.07	)	$	0.05
Adjusted EPS (in dollars)(1)	$	(0.03	)	$	0.09
Cash flows from operating activities	$	(456	)	$	(366	)
Free cash flow usage(1)	$	(750	)	$	(745	)
As at		March 31, 2016			December 31, 2015
Available short-term capital resources(2)	$	4,675		$	4,014

(1)	See Caution regarding non-GAAP measures at the end of this press release.
(2)	Defined as cash and cash equivalents plus the amount available under the revolving credit facilities.

SEGMENTED RESULTS AND HIGHLIGHTS

Business Aircraft

Results of the quarter
Three-month periods ended March 31	2016			2015			Variance
Revenues	$	1,303		$	1,537		(15	)%
Aircraft deliveries (in units)		31			45		(31	)%
Net orders (in units)		40			19		111	%
Book-to-bill ratio(1)		1.3			0.4		0.9
EBIT	$	82		$	96		(15	)%
EBIT margin		6.3	%		6.2	%	10 bps
EBIT before special items(2)	$	87		$	107		(19	)%
EBIT margin before special items(2)		6.7	%		7.0	%	(30) bps
EBITDA before special items(2)	$	112		$	149		(25	)%
EBITDA margin before special items(2)		8.6	%		9.7	%	(110) bps
Net additions to PP&E and intangible assets	$	153		$	159		(4	)%
As at		March 31, 2016			December 31, 2015
Order backlog (in billions of dollars)	$	17.3		$	17.2		1	%

bps:	basis points
(1)	Ratio of net orders received over aircraft deliveries, in units.
(2)	See Caution regarding non-GAAP measures at the end of this press release.

• Performance on revenues and deliveries was as anticipated for the first quarter of 2016, reflecting the proactive decision to reduce production rates.
• Strong sales activity during the period yielded net orders for 40 aircraft, with a book-to-bill ratio of 1.3. This includes a firm order for 20 Challenger 350 aircraft from an undisclosed customer, valued at $534 million at list price.
• EBIT margin before special items was essentially preserved compared to the same period last year, despite lower volumes, reflecting the positive impact of Bombardier's business model enhancements and transformation activities. Special items related to restructuring charges and decreased by $6 million compared to the same period last year.
• In March 2016, the Challenger 650 aircraft received full type certification from the European Aviation Safety Agency. The aircraft received type certification from Transport Canada and the Federal Aviation Administration in November 2015 and entered into service in the fourth quarter of 2015.

Commercial Aircraft

Results of the quarter
Three-month periods ended March 31	2016			2015			Variance
Revenues	$	616		$	673		(8	)%
Aircraft deliveries (in units)		20			23		(13	)%
Net orders (in units)		2			25		(92	)%
Book-to-bill ratio(1)		0.1			1.1		(1.0	)
EBIT	$	(66	)	$	(9	)	(633	)%
EBIT margin		(10.7	)%		(1.3	)%	(940) bps
EBIT before special items(2)	$	(66	)	$	(10	)	(560	)%
EBIT margin before special items(2)		(10.7	)%		(1.5	)%	(920) bps
EBITDA before special items(2)	$	(40	)	$	18		nmf
EBITDA margin before special items(2)		(6.5	)%		2.7	%	nmf
Net additions to PP&E and intangible assets	$	113		$	194		(42	)%
As at		March 31, 2016			December 31, 2015
Order backlog (in billions of dollars)	$	11.1		$	11.5		(3	)%

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

• Production for the C Series aircraft program is accelerating, diluting the EBIT margin as planned.
• During the first quarter of 2016, free cash flow usage related to the C Series aircraft program amounted to approximately $200 million and remains in line with our target of $1.0 billion free cash flow usage for the program in 2016.
• Recent significant agreements solidified the C Series aircraft program in the 100- to 150-seat category.
  • Subsequent to the quarter, in April 2016, Bombardier signed a firm order with Delta for 75 CS100 aircraft with options for an additional 50 CS100 aircraft. Based on list price, the firm order is valued at approximately $5.6 billion.
  • In February 2016, the Corporation signed a Letter of Intent with Air Canada and in the second quarter of 2016, Bombardier expects to sign a firm purchase agreement for 45 CS300 aircraft with options for an additional 30 CS300 aircraft, including conversion rights to the CS100 aircraft. Based on list price of the CS300 aircraft, the firm order is valued at $3.8 billion.
  • Subsequent to the quarter, Air Baltic Corporation AS converted its remaining seven options to firm orders for the CS300 aircraft. Based on list price, the firm order is valued at $506 million.
• These anticipated 127 firm orders are valued at $9.9 billion, based on list prices. They build confidence and reinforce Bombardier's five-year plan for the C Series aircraft program. In conjunction with the closing of these firm purchase agreements, Bombardier will record an onerous contract provision of approximately $500 million as a special item in the second quarter of 2016. As a result of these orders, the program is expected to enter into service with a firm order backlog of more than 300 aircraft and up to 800 aircraft including options and other agreements.(1) The Corporation remains on target to invest $2.0 billion and achieve a break-even free cash flow for the program by 2020.
• Bombardier continues to prepare for the EIS of the CS100 aircraft, with the first aircraft to be delivered to Swiss International Air Lines in June 2016.
• Subsequent to the end of the first quarter, Chorus Aviation Inc. signed a firm purchase agreement for five CRJ900 aircraft. The order also includes purchase rights for an additional five CRJ900 aircraft. Based on the list price of the CRJ900 aircraft, the firm order is valued at $229 million.

(1)	The other agreements consist of conditional orders, letters of intent, options and purchase rights.

Aerostructures and Engineering Services

Results of the quarter
Three-month periods ended March 31	2016			2015			Variance
Revenues	$	468		$	471		(1	)%
External order intake	$	99		$	130		(24	)%
External book-to-bill ratio(1)		0.9			0.9		-
EBIT	$	15		$	42		(64	)%
EBIT margin		3.2	%		8.9	%	(570) bps
EBIT before special items(2)	$	35		$	41		(15	)%
EBIT margin before special items(2)		7.5	%		8.7	%	(120) bps
EBITDA before special items(2)	$	49		$	53		(8	)%
EBITDA margin before special items(2)		10.5	%		11.3	%	(80) bps
Net additions to PP&E and intangible assets	$	4		$	14		(71	)%
As at		March 31, 2016			December 31, 2015
External order backlog	$	64		$	80		(20	)%

bps:	basis points
(1)	Ratio of new external orders over external revenues.
(2)	See Caution regarding non-GAAP measures at the end of this press release.

• The level of intersegment activity is increasing, as the C Series aircraft program ramps-up towards full production. Aerostructures and Engineering Services manufactures cockpits and all-composite wings for the CS100 and CS300 aircraft.

Transportation

Results of the quarter
Three-month periods ended March 31	2016			2015			Variance
Revenues	$	1,880		$	2,041		(8	)%
Order intake (in billions of dollars)	$	1.2		$	1.2		-
Book-to-bill ratio(1)		0.7			0.6		0.1
EBIT	$	23		$	118		(81	)%
EBIT margin		1.2	%		5.8	%	(460) bps
EBIT before special items(2)		115		$	118		(3	)%
EBIT margin before special items(2)		6.1	%		5.8	%	30 bps
EBITDA before special items(2)	$	139		$	144		(3	)%
EBITDA margin before special items(2)		7.4	%		7.1	%	30 bps
Net additions to PP&E and intangible assets	$	23		$	12		92	%
As at		March 31, 2016			December 31, 2015
Order backlog (in billions of dollars)	$	30.4		$	30.4		-

bps:	basis points
(1)	Ratio of new orders over revenues.
(2)	See Caution regarding non-GAAP measures at the end of this press release.

• EBIT margin before special items increased to 6.1% in the first quarter. From an operational perspective, continued improvements in working capital management are positively impacting free cash flow generation, and delaying recognition of certain costs and therefore delaying revenue recognition under long-term contract accounting. Special items represent restructuring charges of $87 million related to the workforce optimization announced in February 2016 and a foreign exchange loss of $5 million related to the reorganization of Transportation under one holding entity necessary to facilitate the placement of a minority stake in Transportation.
• The Corporation closed the sale to the CDPQ of a $1.5-billion investment in convertible shares representing a 30% stake in Bombardier Transportation (Investment) UK LTD (BT Holdco), which following the completion of a corporate reorganization, owns essentially all of the assets and liabilities of Bombardier's Transportation business segment. BT Holdco will continue to be controlled by Bombardier Inc. and consolidated in its results.
• On February 12, 2016, as part of TransEd Partners consortium, Bombardier signed a contract for the Valley Line LRT in Edmonton, Canada. The Corporation's scope is valued at $280 million.

Reconciliation of segment to consolidated results
		Three-month periods ended March 31
		2016			2015
Revenues
	Business Aircraft	$	1,303		$	1,537
	Commercial Aircraft		616			673
	Aerostructures and Engineering Services		468			471
	Transportation		1,880			2,041
	Corporate and eliminations		(353	)		(325	)
		$	3,914		$	4,397
EBIT before special items(1)
	Business Aircraft	$	87		$	107
	Commercial Aircraft		(66	)		(10	)
	Aerostructures and Engineering Services		35			41
	Transportation		115			118
	Corporate and eliminations		(41	)		(19	)
		$	130		$	237
Special Items
	Business Aircraft	$	5		$	11
	Commercial Aircraft		-			(1	)
	Aerostructures and Engineering Services		20			(1	)
	Transportation		92			-
	Corporate and eliminations		(43	)		-
		$	74		$	9
EBIT
	Business Aircraft	$	82		$	96
	Commercial Aircraft		(66	)		(9	)
	Aerostructures and Engineering Services		15			42
	Transportation		23			118
	Corporate and eliminations		2			(19	)
		$	56		$	228
Supplemental information(1)
	Adjusted net income (loss)	$	(34	)	$	170
	Adjusted EPS	$	(0.03	)	$	0.09
	Free cash flow usage	$	(750	)	$	(745	)

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