Bombardier reports its third quarter 2021 results, demonstrates solid execution and strong cash flow performance MENA Pakistan Press Release October 28, 20210 Business aircraft revenues of $1.4 billion, up 17% year-over-year, mainly driven by an improved delivery mix and continued strong aftermarket recovery as overall fleet flight hours surpass 2019 levels. Adjusted EBITDA(1) of $142 million (9.8% adjusted EBITDA margin(1)), representing a year-over-year improvement of $58 million or 69% reflecting continued progress on the Global 7500 aircraft’s learning curve, cost structure improvements and an improved delivery mix. Reported EBIT from continuing operations for the quarter was $48 million. Strong free cash flow(1) generation of $100 million from continuing operations, representing an improvement of $747 million year-over-year. Reported cash flows from operating activities – continuing operations for the quarter was $156 million and net additions to PP&E and intangible assets – continuing operations for the quarter were $56 million. Third quarter unit book-to-bill(2) of ~1.7 and increased backlog by ~$500 million to $11.2 billion on account of continued strong order momentum. Major milestone in deleveraging plan achieved with the redemption of debt maturities to December 2024, representing a total debt reduction of ~$3 billion since the beginning of 2021. Pro-forma liquidity(3) remains strong at $1.9 billion. All amounts in this press release are in U.S. dollars unless otherwise indicated. Amounts in tables are in millions, unless otherwise indicated.MONTREAL, Oct. 28, 2021 (GLOBE NEWSWIRE) — Bombardier (TSX: BBD.B) announced today its financial results for the third quarter of 2021. The company is pleased with continued execution on its strategic initiatives, cash flow generation and order momentum driving the financial results of the quarter. Bombardier also highlighted that during the third quarter, the company redeemed debt maturities through December 2024, a major milestone in its deleveraging plan.“The Bombardier team once again delivered a solid quarter, a confirmation that this year is shaping up to be significantly better than the last,” said Éric Martel, President and Chief Executive Officer, Bombardier. “Our unit book-to-bill ratio remains very healthy, contributing to a significant increase to our backlog. This momentum has also translated to a solid increase in profitability, with adjusted EBITDA margin approaching 10% this quarter.”“We are delivering consistently on what we set out to do, especially when it comes to deleveraging the balance sheet. Thanks to the hard work of our outstanding team, we cleared the debt maturity runway on plan,” added Martel. “As a fantastic finale to the quarter and at a great moment in time for our industry, we launched our new Challenger 3500 jet last month. The extremely positive reception and strong first orders for the new aircraft are clear evidence that we were able to bring significant value to customers through measured and disciplined investments.”Third Quarter 2021 Financial PerformanceBusiness jet revenues of $1.4 billion are up 17% year-over-year, propelled mainly by an improved delivery mix, with higher deliveries of large aircraft. The company has also seen an increase of revenues by $76 million from business aircraft services. This is mainly due to increased fleet flight hours having now surpassed 2019 levels, a clear signal that the industry is on a strong recovery path from the global shock caused by the COVID-19 pandemic. Confidence levels within the industry are at a new all-time high, indicative of the rising vaccination levels and eased travel restrictions. In the U.S., business jet utilization increased by 42.5%, year-over-year for the first eight months of the year. In Europe, business jet utilization increased by 27.1% year-over-year in the first nine months of the year.Bombardier reported an adjusted EBITDA of $142 million, representing a year-over-year improvement of $58 million or 69%. The company attributes this to an improved aircraft mix, continued progress on Global 7500 aircraft learning curve, and cost structure improvements. Reported EBIT from continuing operations for the quarter was $48 million.For the second consecutive quarter, the company is seeing an improved free cash flow (FCF) generation. FCF of $100 million from continuing operations represents an improvement of $747 million year-over-year. The positive result is mainly due to stronger order intake and better payment terms on new orders. Reported cash flows from operating activities – continuing operations for the quarter was $156 million, and net additions to PP&E and intangible assets – continuing operations for the quarter were $56 million.Major Milestone Achieved with the Clearing of Debt Maturities Through December 2024The Corporation reported a total debt reduction of approximately $3 billion since the beginning of 2021, and cleared, through redemption or refinancing, debt maturities through December 2024. This represents a major milestone in one of Bombardier’s key priorities this year, as it creates a runway to focus on its operations and stabilizes the need for liquidity. Pro-forma liquidity remains strong at $1.9 billion.Successful launch of the Challenger 3500As the third quarter wrapped up, the company introduced a major update to its bestselling Challenger 350 platform, the Challenger 3500. The new aircraft represents a culmination of a period of important product development that saw Bombardier introduce innovative technologies and industry-leading new products and services.With a redesigned interior that includes Bombardier’s patented Nuage seat as part of the aircraft’s standard configuration and the industry’s first voice-controlled cabin, the new Challenger 3500 further elevates the cabin experience to meet the increasing customer expectations. The enthusiastic welcome that the mock-up of the aircraft received at the first post-pandemic National Business Aviation Association event earlier this month is a first confirmation of this, as is a 20 aircraft firm order announced in the third quarter.Flight testing and certification activities for the Challenger 3500 is progressing on schedule for an expected entry into service in the second half of 2022.SELECTED RESULTSResults of the Quarter Three-month periods ended September 3020212020Variancerestated(4) Revenues(5)$1,449$1,4053%Adjusted EBITDA(5)$142$8469%Adjusted EBITDA margin(5)9.8%6.0%380 bpsAdjusted EBIT(1)(5)$49$(11)nmfAdjusted EBIT margin(1) (5)3.4%(0.8)%420 bpsEBIT(5)$48$(29)nmfEBIT margin(5)3.3%(2.1)%540 bpsNet loss from continuing operations$(376)$(24)(1,467)%Net income (loss) from discontinued operations$(1)$216nmfNet income (loss)$(377)$192nmfDiluted EPS from continuing operations (in dollars)$(0.16)$(0.01)$(0.15)Diluted EPS from discontinued operations (in dollars)$—$0.06$(0.06)$(0.16)$0.05$(0.21)Adjusted net loss(1) (5)$(95)$(210)55%Adjusted EPS (in dollars) (1) (5)$(0.04)$(0.09)$0.05Cash flows from operating activitiesContinuing operations$156$(611)nmfDiscontinued operations$—$(33)100%$156$(644)nmfNet additions to PP&E and intangible assetsContinuing operations$56$3656%Discontinued operations$—$26(100)%$56$62(10)%Free cash flow (usage)Continuing operations$100$(647)nmfDiscontinued operations$—$(59)100%$100$(706)nmfAs at September 30, 2021 December 31, 2020VarianceCash and cash equivalents excluding Transportation$1,380$1,779(22)%Cash and cash equivalents from Transportation$—$671(100)%$1,380$2,450(44)%Available short-term capital resources(6)$1,380$3,203(57)%Aviation order backlog (in billions of dollars) Business aircraft(7)$11.2$10.75%About Bombardier Bombardier is a global leader in aviation, creating innovative and game-changing planes. Our products and services provide world-class experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.Headquartered in Montréal, Canada, Bombardier is present in more than 12 countries including its production/engineering sites and its customer support network. The Corporation supports a worldwide fleet of over 4,900 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments and private individuals.News and information is available at bombardier.com or follow us on Twitter @Bombardier.Visit the Bombardier Business Aircraft website for more information on our industry-leading products and services.Bombardier, Global, Global 7500, Challenger, Challenger 350 and Challenger 3500 are trademarks of Bombardier Inc. or its subsidiaries.For InformationFrancis Richer de La FlècheAnna CristofaroVice President, Financial Planning and Investor RelationsManager, CommunicationsBombardierBombardier+1 514 855 5001 x13228+1 514 855 8678The Management’s Discussion and Analysis and the Interim Consolidated Financial Statements are available at ir.bombardier.com.bps: basis pointsnmf: information not meaningful(1)Non-GAAP financial measures. Refer to the Non-GAAP financial measures section in Overview for definitions of these metrics and to the Analysis of consolidated results section and Liquidity and capital resources section in Overview for reconciliations to the most comparable IFRS measures.(2)Defined as net new aircraft orders in units over aircraft deliveries in units.(3)Non-GAAP measures. Pro-forma liquidity is defined as cash and cash equivalents as at September 30, 2021 of $1.4 billion plus $0.5 billion of short-term restricted cash as collateral for bank guarantees.(4)Restated for the sale of Transportation, refer to Note 17 – Disposal of business to our Interim consolidated financial statements for more details.(5)Includes continuing operations only.(6)Defined as cash and cash equivalents as at September 30, 2021; defined as cash and cash equivalents including cash and cash equivalents from Transportation plus the undrawn amounts under Transportation’s revolving credit facility and our senior secured term loan as at December 31, 2020.(7)Includes order backlog for both manufacturing and services.CAUTION REGARDING NON-GAAP FINANCIAL MEASURESThis press release is based on reported earnings in accordance with IFRS and on the following non-GAAP financial measures:Non-GAAP financial measuresAdjusted EBITEBIT excluding special items. Special items comprise items which do not reflect the Corporation’s core performance or where their separate presentation will assist users of the consolidated financial statements in understanding the Corporation’s results for the period. Such items include, among others, the impact of restructuring charges, impact of business disposals and significant impairment charges and reversals.Adjusted EBITDAAdjusted EBIT plus amortization and impairment charges on PP&E and intangible assets.Adjusted net income (loss)Net income (loss) excluding special items, accretion on net retirement benefit obligations, certain net gains and losses arising from changes in measurement of provisions and of financial instruments carried at FVTP&L and the related tax impacts of these items.Adjusted EPSEPS calculated based on adjusted net income attributable to equity holders of Bombardier Inc., using the treasury stock method, giving effect to the exercise of all dilutive elements.Free cash flow (usage)Cash flows from operating activities less net additions to PP&E and intangible assets.Non-GAAP financial measures are mainly derived from the consolidated financial statements but do not have standardized meanings prescribed by IFRS. The exclusion of certain items from non-GAAP performance measures does not imply that these items are necessarily non-recurring. Other entities in our industry may define the above measures differently than we do. In those cases, it may be difficult to compare the performance of those entities to ours based on these similarly-named non-GAAP measures.Adjusted EBIT, adjusted EBITDA, adjusted net income (loss) and adjusted EPSManagement uses adjusted EBIT, adjusted EBITDA, adjusted net income (loss) and adjusted EPS for purposes of evaluating underlying business performance. Management believes these non-GAAP earnings measures in addition to IFRS measures provide users of our Financial Report with enhanced understanding of our results and related trends and increases the transparency and clarity of the core results of our business. Adjusted EBIT, adjusted EBITDA, adjusted net income (loss) and adjusted EPS exclude items that do not reflect our core performance or where their exclusion will assist users in understanding our results for the period. For these reasons, a significant number of users of the MD&A analyze our results based on these financial measures. Management believes these measures help users of MD&A to better analyze results, enabling better comparability of our results from one period to another and with peers.Free cash flow (usage) Free cash flow is defined as cash flows from operating activities less net additions to PP&E and intangible assets. Management believes that this non-GAAP cash flow measure provides investors with an important perspective on the Corporation’s generation of cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long-term value creation. This non-GAAP cash flow measure does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity generation.Reconciliations of non-GAAP financial measures to the most comparable IFRS financial measures are provided in the table hereafter, except for the following reconciliations: adjusted EBIT to EBIT – see the Consolidated results of operations section; and free cash flow usage to cash flows from operating activities – see the Free cash flow usage table in the Liquidity and capital resources section.Reconciliation of adjusted EBITDA to EBIT(1)Three-month periods ended September 30 Nine-month periods ended September 30 2021 20202021 2020EBIT$48$(29)$103$479Amortization9395298247Impairment charges on PP&E(2)—6325Special items excluding impairment charges on PP&E(2)1124(550)Adjusted EBITDA$142$84$408$201(1)Includes continuing operations only.(2)Refer to the Consolidated results of operations section for details regarding special items.FORWARD-LOOKING STATEMENTSThis press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to our objectives, anticipations and outlook or guidance in respect of various financial and global metrics and sources of contribution thereto, targets, goals, priorities, market and strategies, financial position, financial performance, market position, capabilities, competitive strengths, credit ratings, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; customer value; expected demand for products and services; growth strategy; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications and execution of orders in general; competitive position; expectations regarding revenue and backlog mix; the expected impact of the legislative and regulatory environment and legal proceedings; strength of capital profile and balance sheet, creditworthiness, available liquidities and capital resources, expected financial requirements, and ongoing review of strategic and financial alternatives; the introduction of, productivity enhancements, operational efficiencies, cost reduction and restructuring initiatives, and anticipated costs, intended benefits and timing thereof; the anticipated business transition to growth cycle and cash generation; expectations, objectives and strategies regarding debt repayment, refinancing of maturities and interest cost reduction; expectations regarding availability of government assistance programs, compliance with restrictive debt covenants; expectations regarding the declaration and payment of dividends on our preferred shares; intentions and objectives for our programs, assets and operations; and the impact of the COVID-19 pandemic on the foregoing and the effectiveness of plans and measures we have implemented in response thereto; and expectations regarding the strength of the market and economic recovery in the aftermath of the COVID-19 pandemic. As it relates to the sale of the Transportation business to Alstom, this press release also contains forward-looking statements with respect to the benefits of such transaction, the use of the proceeds derived from the transaction and its impact on our outlook, guidance and targets, operations, infrastructure, opportunities, financial condition, business plan and overall strategy.Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “shall”, “can”, “expect”, “estimate”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or “align”, the negative of these terms, variations of them or similar terminology. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of our current objectives, strategic priorities, expectations, outlook and plans, and in obtaining a better understanding of our business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. By their nature, forward-looking statements require management to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecast results set forth in forward-looking statements. While management considers these assumptions to be reasonable and appropriate based on information currently available, there is risk that they may not be accurate. The assumptions underlying the forward-looking statements made in this press release include the following material assumptions: the deployment of the proceeds from the sale of the Transportation business to Alstom on terms allowing the Corporation, when combined with other financing sources and free cash flow generation, to repay or otherwise manage its financial obligations for the next three years; growth of the business aviation market and increase of the Corporation’s share of such market; proper identification of recurring cost savings and executing on our cost reduction plan; optimization of our real estate portfolio, including through the sale or other transaction in respect of real estate assets on favorable terms; and access to working capital facilities on market terms. For additional information, including with respect to other assumptions underlying the forward-looking statements made in this press release, refer to the Forward-looking statements — Assumptions section in the MD&A of our financial report for the fiscal year ended December 31, 2020. Given the impact of the changing circumstances surrounding the COVID-19 pandemic and the related response from the Corporation, governments (federal, provincial and municipal), regulatory authorities, businesses, suppliers, customers, counterparties and third-party service providers, there is inherently more uncertainty associated with the Corporation’s assumptions as compared to prior years.Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, risks associated with general economic conditions, risks associated with our business environment (such as risks associated with the financial condition of business aircraft customers; trade policy; increased competition; political instability and force majeure events or global climate change), operational risks (such as risks related to developing new products and services; development of new business ; order backlog; the transition to a pure-play business aviation company; the certification of products and services; the execution of orders; pressures on cash flows and capital expenditures based on seasonality and cyclicality; execution of our strategy, productivity enhancements, operational efficiencies, restructuring and cost reduction initiatives; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; environmental, health and safety risks; dependence on certain customers, contracts and suppliers; supply chain risks; human resources; reliance on information systems; reliance on and protection of intellectual property rights; reputation risks; risk management; tax matters; and adequacy of insurance coverage), financing risks (such as risks related to liquidity and access to capital markets; retirement benefit plan risk; exposure to credit risk; substantial debt and interest payment requirements; restrictive debt covenants; reliance on debt management and interest cost reduction strategies; and reliance on government support), market risks (such as foreign currency fluctuations; changing interest rates; increases in commodity prices; and inflation rate fluctuations). For more details, see the Risks and uncertainties section in Other in the MD&A of our financial report for the fiscal year ended December 31, 2020. Any one or more of the foregoing factors may be exacerbated by the ongoing COVID-19 outbreak and may have a significantly more severe impact on the Corporation’s business, results of operations and financial condition than in the absence of such outbreak. As a result of the current COVID-19 pandemic, additional factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to: risks related to the impact and effects of the COVID-19 pandemic on economic conditions and financial markets and the resulting impact on our business, operations, capital resources, liquidity, financial condition, margins, prospects and results; uncertainty regarding the magnitude and length of economic disruption as a result of the COVID-19 outbreak and the resulting effects on the demand environment for our products and services; uncertainty regarding market and economic recovery in the aftermath of the COVID-19 pandemic; emergency measures and restrictions imposed by public health authorities or governments, fiscal and monetary policy responses by governments and financial institutions; disruptions to global supply chain, customers, workforce, counterparties and third-party service providers; further disruptions to operations, orders and deliveries; technology, privacy, cyber security and reputational risks; and other unforeseen adverse events.Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. Other risks and uncertainties not presently known to us or that we presently believe are not material could also cause actual results or events to differ materially from those expressed or implied in our forward-looking statements. The forward-looking statements set forth herein reflect management’s expectations as at the date of this report and are subject to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any intention, and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.