Bombardier Announces Financial Results for the Second Quarter Ended June 30, 2014

Bombardier Inc. / Bombardier Announces Financial Results for the Second Quarter Ended June 30, 2014 . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

MONTRÉAL, QUÉBEC--(Marketwired - July 31, 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 $4.4 billion for the same period last fiscal year
• EBIT before special items⁽¹⁾ of $257 million, or 5.3% of revenues, compared to $257 million, or 5.8%, for the same period last fiscal year
• Adjusted net income⁽¹⁾ of $192 million (adjusted EPS⁽¹⁾ of $0.10), compared to $158 million (adjusted EPS of $0.09) for the same period last fiscal year
• Free cash flow usage⁽¹⁾ of $424 million, compared to a usage of $566 million for the same period last fiscal year, including a net investment of $525 million in PP&E and intangible assets
• Available short-term capital resources of $3.9 billion, including cash and cash equivalents of $2.5 billion as at June 30, 2014, compared to $4.8 billion and $3.4 billion, respectively, as at December 31, 2013
• Backlog of $75.7 billion as at June 30, 2014, compared to $69.7 billion as at December 31, 2013
• Subsequent to quarter-end, announcement of a new organizational structure

(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, 2014. Revenues totalled $4.9 billion for the quarter, compared to $4.4 billion for the same period last fiscal year, which represents an increase of 8.9%, excluding currency impacts.

For the second quarter ended June 30, 2014, earnings before financing expense, financing income and income taxes (EBIT) totalled $257 million, or 5.3% of revenues, compared to EBIT before special items of $257 million, or 5.8%, and EBIT of $288 million, or 6.5%, for the same period last fiscal year.

On an adjusted basis, net income amounted to $192 million, or earnings per share (EPS) of $0.10, for the second quarter ended June 30, 2014, compared to $158 million, or $0.09, for the same period the previous year. Net income totalled $155 million, or EPS of $0.08, compared to $180 million or $0.10 for the same period the previous year.

For the three-month period ended June 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 $424 million, compared to a usage of $566 million for the same period last year. As at June 30, 2014, available short-term capital resources of $3.9 billion included cash and cash equivalents of $2.5 billion, compared to $4.8 billion and $3.4 billion, respectively as at December 31, 2013. The overall backlog reached $75.7 billion as at June 30, 2014, compared to $69.7 billion as at December 31, 2013.

On July 23, 2014, Bombardier announced a new organizational structure comprised of four business segments: Bombardier Transportation, Bombardier Business Aircraft, Bombardier Commercial Aircraft and Bombardier Aerostructures and Engineering Services, the heads of which will report directly to Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc. The creation of the Aerostructures and Engineering Services business segment aims at further marketing the company's expertise in this field to the aerospace industry, thus generating new revenues. A detailed implementation plan will be developed within the next few months, and the new structure will be in place January 1, 2015. The restructuring will result in a reduction of approximately 1,800 indirect positions in Aerospace.

"Overall results for the second quarter were in line with our expectations. Both groups saw an increase in their revenues and a high level of activity for their products," said Pierre Beaudoin. "Bombardier Transportation continued to win a good level of new orders, bringing its total amount to $9.7 billion for the first six months of the year. And further cost reduction measures are being implemented as part of its reorganization initiative to increase profitability over time."

"In Aerospace, the new organizational structure recently announced will make us more agile and flexible in addressing customer needs, while reducing costs and increasing our ability to focus on growth areas. Our strong backlog, combined with this new lighter structure, will allow us to realize the full potential of our investments in new products," concluded Mr. Beaudoin.

Bombardier Aerospace

Bombardier Aerospace's revenues amounted to $2.5 billion for the three-month period ended June 30, 2014, compared to $2.3 billion for the same period last fiscal year. EBIT totalled $141 million, or 5.6% of revenues, for the second quarter ended June 30, 2014, compared to EBIT before special items of $107 million, or 4.7%, and EBIT of $138 million, or 6.1%, for the same period last fiscal year. Free cash flow usage amounted to $363 million (including net additions to PP&E and intangible assets of $509 million) for the second quarter ended June 30, 2014, compared to a usage of $459 million (including net additions to PP&E and intangible assets of $534 million) for the same period last fiscal year.

Bombardier Aerospace delivered a total of 62 aircraft during the second quarter ended June 30, 2014, compared to 57 for the same period last fiscal year, and received 48 net orders, compared to 82 for the same period last fiscal year.

On May 29, 2014, an engine-related incident occurred on the first CS100 Flight Test Vehicle (FTV1) during stationary ground maintenance testing. Bombardier and Pratt & Whitney have worked on a solution and flight tests are expected to resume in the coming weeks. The targeted entry-into-service dates of the CS100 and CS300 aircraft programs remain unchanged.

In June, Bombardier Commercial Aircraft signed a firm order with an undisclosed customer for 16 CRJ900 NextGen aircraft, valued at $727 million based on list price, with options for an additional eight.

Subsequent to quarter-end, at the Farnborough Airshow, Bombardier Aerospace concluded firm orders, conditional purchase agreements and letters of intent for a total of 74 aircraft, valued at more than $4.25 billion. This includes letters of intent and a conditional purchase agreement for a total of 66 CSeries aircraft with five customers, bringing the total CSeries firm orders and other agreements to 513, with 20 customers in 17 countries, including 203 firm orders.

In April, the maiden flight of the first Learjet 85 Flight Test Vehicle was successfully completed. Additional flights have since occurred. The flights are proceeding as expected.

Bombardier Aerospace's backlog reached a level of $38.1 billion as at June 30, 2014, compared to $37.3 billion, as at December 31, 2013.

Bombardier Transportation

Bombardier Transportation's revenues amounted to $2.4 billion for the three-month period ended June 30, 2014, compared to $2.2 billion for the same period last year, an increase of 6.3% excluding currency impacts. EBIT totalled $116 million, or 4.9% of revenues, compared to $150 million, or 6.9%, for the same quarter the previous year. Free cash flow usage totalled $47 million for the quarter ended June 30, 2014, compared to a usage of $21 million for the same period last fiscal year.

New orders reached $1.7 billion (book-to-bill ratio of 0.7), bringing the total orders to $9.7 billion for the first six months of the year (book-to-bill ratio of 2.1). This translates into an order backlog of $37.6 billion as at June 30, 2014, compared to $32.4 billion as at December 31, 2013.

During the second quarter, Bombardier Transportation won several small and medium orders across various regions and product segments, including a contract for rolling stock from an undisclosed customer for a value of $338 million. It also signed a framework agreement with Railpool GmbH to provide 65 TRAXX locomotives, with a first call-off of 35 locomotives valued at $184 million. Also, Virgin Trains signed a contract to extend the provision of maintenance of its Super Voyager fleet operating on the UK's West Coast main line to March 2019, valued at approximately $175 million.

FINANCIAL HIGHLIGHTS
(in millions of U.S. dollars, except per share amounts)
For the three-month periods ended June 30								2014						2013
		BA			BT			Total			BA			BT			Total
Results of operations
Revenues	$	2,512		$	2,379		$	4,891		$	2,255		$	2,175		$	4,430
Cost of sales		2,156			2,077			4,233			1,922			1,836			3,758
Gross margin		356			302			658			333			339			672
SG&A		171			183			354			189			193			382
R&D		47			32			79			45			30			75
Share of income of joint ventures and associates		-			(28	)		(28	)		-			(34	)		(34	)
Other income		(3	)		(1	)		(4	)		(8	)		-			(8	)
EBIT before special items(1)		141			116			257			107			150			257
Special items(2)		-			-			-			(31	)		-			(31	)
EBIT	$	141		$	116			257		$	138		$	150			288
Financing expense								90									83
Financing income								(49	)								(47	)
EBT								216									252
Income taxes								61									72
Net income							$	155								$	180
EPS (basic and diluted; in dollars)							$	0.08								$	0.10
Supplemental information
EBIT before special items(1)	$	141		$	116		$	257		$	107		$	150		$	257
Amortization		74			29			103			71			31			102
EBITDA before special items(1)	$	215		$	145		$	360		$	178		$	181		$	359
On an adjusted basis
Adjusted net income(1)							$	192								$	158
Adjusted EPS (in dollars)(1)							$	0.10								$	0.09
Cash flows from operating activities	$	146		$	(31	)				$	75		$	(5	)
Net additions to PP&E and intangible assets		(509	)		(16	)					(534	)		(16	)
Segmented free cash flow usage(1)	$	(363	)	$	(47	)	$	(410	)	$	(459	)	$	(21	)	$	(480	)
Net income taxes and net interest paid								(14	)								(86	)
Free cash flow usage(1)							$	(424	)							$	(566	)

BA: Bombardier Aerospace; BT: Bombardier Transportation
(1)	Non-GAAP financial measures. Refer to the Non-GAAP financial measures and Liquidity and capital resources sections in Overview of the Corporation's MD&A for definitions of these metrics and reconciliation to the most comparable IFRS measures.
(2)	The special item for the three-month period ended June 30, 2013, related to a gain following the successful resolution of a litigation in connection with Part IV of the Quebec Income Tax Act, the Tax on Capital.

For the six-month periods ended June 30								2014						2013
		BA			BT			Total			BA			BT			Total
Results of operations
Revenues	$	4,601		$	4,644		$	9,245		$	4,513		$	4,256		$	8,769
Cost of sales		3,958			4,036			7,994			3,873			3,608			7,481
Gross margin		643			608			1,251			640			648			1,288
SG&A		328			364			692			347			379			726
R&D		87			68			155			87			58			145
Share of income of joint ventures and associates		-			(50	)		(50	)		-			(78	)		(78	)
Other income		(18	)		(4	)		(22	)		(2	)		-			(2	)
EBIT before special items(1)		246			230			476			208			289			497
Special items(2)		12			-			12			(31	)		-			(31	)
EBIT	$	234		$	230			464		$	239		$	289			528
Financing expense								136									151
Financing income								(61	)								(80	)
EBT								389									457
Income taxes								119									129
Net income							$	270								$	328
EPS (basic and diluted; in dollars)							$	0.14								$	0.18
Supplemental information
EBIT before special items(1)	$	246		$	230		$	476		$	208		$	289		$	497
Amortization		137			59			196			132			61			193
EBITDA before special items(1)	$	383		$	289		$	672		$	340		$	350		$	690
On an adjusted basis
Adjusted net income(1)							$	343								$	314
Adjusted EPS (in dollars)(1)							$	0.19								$	0.17
Cash flows from operating activities	$	85		$	(271	)				$	117		$	(67	)
Net additions to PP&E and intangible assets		(993	)		(32	)					(1,037	)		(27	)
Segmented free cash flow usage(1)	$	(908	)	$	(303	)	$	(1,211	)	$	(920	)	$	(94	)	$	(1,014	)
Net income taxes and net interest paid								(128	)								(142	)
Free cash flow usage(1)							$	(1,339	)							$	(1,156	)

BA: Bombardier Aerospace; BT: Bombardier Transportation
(1)	Non-GAAP financial measures. Refer to the Non-GAAP financial measures and Liquidity and capital resources sections in Overview of the Corporation's MD&A for definitions of these metrics and reconciliation to the most comparable IFRS measures.
(2)	The special items for the six-month period ended June 30, 2014 relate to a $22-million expense for the previously announced workforce reduction of approximately 1,700 positions, located mostly in Canada and the U.S., and a $10-million gain following the successful resolution of a litigation in connection with Part IV of the Quebec Income Tax Act, the Tax on Capital. The special item for the three- and six-month periods ended June 30, 2013 relates to a gain following the successful resolution of a litigation in connection with Part IV of the Quebec Income Tax Act, the Tax on Capital.

SELECTED FINANCIAL INFORMATION
Bombardier Aerospace

Total aircraft deliveries
	Three-month periods ended June 30		Six-month periods ended June 30
(in units)	2014	2013	2014	2013
Business aircraft	38	45	81	84
Commercial aircraft	23	12	36	25
Amphibious aircraft	1	-	1	1
	62	57	118	110

Total aircraft net orders
		June 30, 2014				June 30, 2013
(in units)	Gross orders	Cancellations		Net orders	Gross orders	Cancellations		Net orders
Three-month periods ended
Business aircraft	41	(11	)	30	65	(18	)	47
Commercial aircraft	18	-		18	43	(8	)	35
	59	(11	)	48	108	(26	)	82
Six-month periods ended
Business aircraft	96	(20	)	76	101	(27	)	74
Commercial aircraft	62	(1	)	61	47	(11	)	36
Amphibious aircraft	2	-		2	-	-		-
	160	(21	)	139	148	(38	)	110

Book-to-bill ratio(1)
	Three-month periods ended June 30		Six-month periods ended June 30
	2014	2013	2014	2013
Business aircraft	0.8	1.0	0.9	0.9
Commercial aircraft	0.8	2.9	1.7	1.4
	0.8	1.4	1.2	1.0

(1)	Defined as net orders received over aircraft deliveries, in units.

Order backlog
				As at
(in billions of dollars)	June 30, 2014		December 31, 2013
Aircraft programs	$	34.8	$	33.9
Long-term maintenance and spares support agreements		2.9		2.9
Military Aviation Training		0.4		0.5
	$	38.1	$	37.3

Bombardier Transportation

Revenues by geographic region
Three-month periods ended June 30									Six-month periods ended June 30
		2014				2013			2014				2013
Europe(1)	$	1,601	67	%	$	1,446	67	%	$	3,122	67	%	$	2,845	67	%
North America		402	17	%		394	18	%		824	18	%		765	18	%
Asia-Pacific(1)		244	10	%		196	9	%		424	9	%		408	9	%
Rest of world(1) (2)		132	6	%		139	6	%		274	6	%		238	6	%
	$	2,379	100	%	$	2,175	100	%	$	4,644	100	%	$	4,256	100	%

(1)	The increases in Europe reflect positive currency impacts of $95 million and $150 million, respectively, for the three- and six-month periods ended June 30, 2014, while the increases in Asia-Pacific reflect negative currency impacts of $18 million and $26 million respectively, and the variances in the Rest of world region reflect negative currency impacts of $10 million and $16 million respectively.
(2)	The Rest of world region includes South America, Central America, Africa, the Middle East and the CIS.

Order intake and book-to-bill ratio
	Three-month periods ended June 30				Six-month periods ended June 30
Order intake (in billions of dollars)		2014		2013		2014		2013
Rolling stock	$	0.7	$	2.2	$	5.7	$	3.3
Services		0.6		0.7		3.2		1.3
System and signalling		0.4		0.3		0.8		0.6
	$	1.7	$	3.2	$	9.7	$	5.2
Book-to-bill ratio(1)		0.7		1.5		2.1		1.2

(1)	Ratio of new orders over revenues.

Order backlog
			As at
(in billions of dollars)	June 30, 2014		December 31, 2013
Rolling stock	$	23.6	$	21.1
Services		9.9		7.4
System and signalling		4.1		3.9
	$	37.6	$	32.4

DIVIDENDS ON COMMON SHARES

Class A and Class B Shares

A quarterly dividend of $0.025 Cdn per share on Class A Shares (Multiple Voting) and of $0.025 Cdn per share on Class B Shares (Subordinate Voting) is payable on September 30, 2014 to the shareholders of record at the close of business on September 12, 2014.

Holders of Class B Shares (Subordinate Voting) of record at the close of business on September 12, 2014 also have a right to a priority quarterly dividend of $0.000390625 Cdn per share.

DIVIDENDS ON PREFERRED SHARES

Series 2 Preferred Shares

A monthly dividend of $0.0625 Cdn per share on Series 2 Preferred Shares has been paid on May 15, June 15 and July 15, 2014.

Series 3 Preferred Shares

A quarterly dividend of $0.195875 Cdn per share on Series 3 Preferred Shares is payable on October 31, 2014 to the shareholders of record at the close of business on October 17, 2014.

Series 4 Preferred Shares

A quarterly dividend of $0.390625 Cdn per share on Series 4 Preferred Shares is payable on October 31, 2014 to the shareholders of record at the close of business on October 17, 2014.

About Bombardier

Bombardier is the world's only manufacturer of both planes and trains. Looking far ahead while delivering today, Bombardier is evolving mobility worldwide by answering the call for more efficient, sustainable and enjoyable transportation everywhere. Our vehicles, services and, most of all, our employees are what make us a global leader in transportation.

Bombardier is headquartered in Montréal, Canada. Our shares are traded on the Toronto Stock Exchange (BBD) and we are listed on the Dow Jones Sustainability World and North America indexes. In the fiscal year ended December 31, 2013, we posted revenues of $18.2 billion. News and information are available at www.bombardier.com or follow us on Twitter @Bombardier.

Bombardier, CRJ900, CS100, CS300, CSeries, Learjet, Learjet 85, NextGen, TRAXX, and The Evolution of Mobility are trademarks of Bombardier Inc. or its subsidiaries.

The Management's Discussion and Analysis and the interim consolidated financial statements are available at www.ir.bombardier.com.

FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to our objectives, guidance, targets, goals, priorities, our market and strategies, financial position, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected growth in demand for products and services; 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 project execution in general; our competitive position; and the expected impact of the legislative and regulatory environment and legal proceedings on our business and operations. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe", "continue", "maintain" or "align", the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require us 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 forecasted results. While we consider our assumptions to be reasonable and appropriate based on information currently available, there is a risk that they may not be accurate. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release refer to the respective Guidance and forward-looking statements sections in Overview, Bombardier Aerospace and Bombardier Transportation sections in the Management's Discussion and Analysis ("MD&A") in the Corporation's financial report for the fiscal year ended December 31, 2013.

Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include risks associated with general economic conditions, risks associated with our business environment (such as risks associated with the financial condition of the airline industry and rail industry, political instability and force majeure), operational risks (such as risks related to developing new products and services; fixed-price commitments and production and project execution; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; the environment; dependence on certain customers and suppliers; human resources), financing risks (such as risks related to liquidity and access to capital markets, retirement benefit plan risk, exposure to credit risk, certain restrictive debt covenants, financing support provided for the benefit of certain customers and reliance on government support) and market risks (such as risks related to foreign currency fluctuations, changing interest rates, decreases in residual values and increases in commodity prices). For more details, see the Risks and uncertainties section in Other in the MD&A of the Corporation's financial report for the fiscal year ended December 31, 2013. 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. The forward-looking statements set forth herein reflect our expectations as at the date of this press release 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 statement, 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.

CAUTION REGARDING NON-GAAP MEASURES

This press release is based on reported earnings in accordance with International Financial Reporting Standards (IFRS). Reference to generally accepted accounting principles (GAAP) means IFRS, unless indicated otherwise. This press release is also based on non-GAAP financial measures including EBITDA, EBIT and EBITDA before special items, adjusted net income, adjusted earnings per share and free cash flow. These non-GAAP measures are mainly derived from the interim consolidated financial statements, but do not have a standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently. Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of our financial reports with enhanced understanding of our results and related trends and increases transparency and clarity into the core results of our business. Refer to the Non-GAAP financial measures and Liquidity and capital resources sections in Overview and Analysis of results sections in Aerospace and Transportation in the Corporation's MD&A for definitions of these metrics and reconciliations to the most comparable IFRS measures.

Contact

Isabelle Rondeau
Director, Communications
Bombardier Inc.
[phone]

Shirley Chenier
Senior Director, Investor Relations
Bombardier Inc.
[phone]

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Source: Bombardier Inc. via Globenewswire

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Bombardier Inc.
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