Bombardier Pauses its Learjet 85 Program and Revises its 2014 Guidance

ID: 1330463
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(Thomson Reuters ONE) -
Bombardier Inc. /
Bombardier Pauses its Learjet 85 Program and Revises its 2014 Guidance
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MONTREAL, QUEBEC--(Marketwired - Jan 15, 2015) - 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. See Caution regarding non-GAAP measures at the end of this
press release.)

--  Decision to pause the program due to weak market demand
--  Pause will result in a pre-tax special charge of approximately $1.4
    billion in the fourth quarter of 2014 and a workforce reduction of
    approximately 1,000 employees in 2015
--  Revision of previously announced financial guidance for 2014
--  Aircraft delivery guidance exceeded

Bombardier Inc. announced today the pause of its Learjet 85 business aircraft
program. The pause is due to weak demand for the Learjet 85 aircraft and follows
a downward revision of Bombardier''s business aircraft market forecast. This
reflects the continued weakness of the Light aircraft category since the
economic downturn. As a result, the Company will record a pre-tax special charge
in the fourth quarter of 2014 of approximately $1.4 billion mainly related to
the impairment of the Learjet 85 development costs. Additionally, Bombardier
will reduce its workforce by approximately 1,000 employees at its sites in
Queretaro, Mexico, and Wichita, United States. A severance provision of
approximately $25 million will be recorded as a special item during the first
quarter of 2015.

"Bombardier constantly monitors its product strategy and development
priorities," said Pierre Beaudoin, President and Chief Executive Officer,
Bombardier Inc. "Given the weakness of the market, we made the difficult

decision to pause the Learjet 85 program at this time. We will focus our
resources on our two other clean-sheet aircraft programs under development,
CSeries and Global 7000/8000, for which we see tremendous market potential. Both
programs are progressing well."

Bombardier''s Wichita and Queretaro sites remain critical facilities in key
markets. Wichita is a multifaceted facility and is the location of final
assembly activities for the Learjet 70 and Learjet 75 aircraft, the Bombardier
Flight Test Center as well as a Service Center. In addition to contributing to
many of Bombardier''s aircraft programs, the Queretaro site recently completed
its Global 7000/8000 aft fuselage manufacturing building.

Furthermore, following a review of preliminary results compiled by Bombardier
for the fiscal year ended December 31, 2014, it has become clear that certain
financial guidance previously provided will not be met. Based on these
preliminary results, Bombardier is updating its guidance for 2014.

Earnings before financing expenses, financing income and income taxes (EBIT)
before special items(1) at Aerospace (BA) is expected to be approximately 4%
compared with a previous guidance of 5%. The variation is mainly due to
increased provisions for credit and residual value guarantees, pricing pressure
on new aircraft sold, as well as a decrease in fair value of used aircraft. EBIT
before special items(1) at Transportation (BT) is expected to be approximately
5% compared to a previous guidance of 6%. This variation is mainly due to
revised escalation assumptions for some contracts which impacted estimated
future revenues.

Cash flow from operating activities at Aerospace is expected to be approximately
$800 million while net additions to property, plant and equipment (PP&E) and
intangible assets are expected to be approximately $1.8 billion, compared with a
previous guidance for cash flow from operating activities between $1.2 billion
and $1.6 billion and net additions to PP&E and intangible assets between $1.6
billion and $1.9 billion. The variation in Aerospace''s cash flow from operating
activities is mainly due to a lower level of customer advances, a lower EBIT and
an increase in used aircraft inventory. Free cash flow(1) for Transportation is
expected to be slightly positive compared with a previous guidance of free cash
flow generally in line with EBIT. This variation is mainly due to a different
cash flow profile in some contracts and a lower level of advances on options in
relation to framework contract agreements. As of December 31, 2014, available
short-term capital resources were approximately $3.8 billion, including cash and
cash equivalents of approximately $2.4 billion.

Aerospace exceeded its delivery targets with a total of approximately 290
aircraft (204 business, 84 commercial and two amphibious aircraft), compared
with a guidance of 200 business and 80 commercial aircraft deliveries. This
represents a 22% increase compared with the deliveries of 238 aircraft for the
previous year (180 business, 55 commercial and three amphibious aircraft).

Transportation revenues (excluding currency impacts) are expected to increase by
approximately 9% in 2014, compared with a guidance of revenue growth in the mid-
single digits, with a book-to-bill ratio of approximately 1.3 compared with a
guidance in excess of 1.0.

Summary of Guidance for 2014

    Group   Original Guidance   Expected Results((2))
Profitability BA EBIT margin of EBIT margin before
approximately 5% special items((1))of
    approximately 4%
BT EBIT margin of EBIT margin before
approximately 6% special items((1))of
      approximately 5%
Liquidity BA Cash flow from operating Cash flow from
activities between $1.2 operating activities
billion and $1.6 of approximately $800
billion, and net million, and net
additions to PP&E and additions to PP&E and
intangible assets intangible assets of
between $1.6 billion and approximately $1.8
  $1.9 billion   billion
BT Free cash Free cash
flow((1)) generally in flow((1)) expected to
  line with EBIT   be slightly positive
Available short-term capital resources were approximately
$3.8 billion as at December 31, 2014, including cash and
  cash equivalents of approximately $2.4 billion
Deliveries BA Deliveries of Deliveries of 204
approximately 200 business aircraft and
business aircraft and 84 commercial aircraft
    80 commercial aircraft
Growth and Order BT Revenue growth in the Revenue growth of
Intake mid-single digits approximately 9%
(excluding currency (excluding currency
impacts) and a book-to- impacts) and a book-
bill ratio in excess of to-bill ratio of
    1.0   approximately 1.3
(1) Non-GAAP financial measure. See Caution regarding non-GAAP measures at the
end of this press release.

(2) Final results for the fourth quarter and fiscal year ended December
31, 2014 will be disclosed on February 12, 2015 at which time Bombardier
will provide its guidance for 2015.

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

Bombardier, CSeries, Global, Global 7000, Global 8000, Learjet, Learjet 70,
Learjet 75, Learjet 85, and The Evolution of Mobility are trademarks of
Bombardier Inc. or its subsidiaries.

Note to editors

A conference call intended for investors and financial analysts will be held
today at 10:00 a.m., Montreal time, with Pierre Beaudoin, President and Chief
Executive Officer, Bombardier Inc. and Pierre Alary, Senior Vice President and
Chief Financial Officer, Bombardier Inc. to discuss the above.

DATE:       Thursday, January 15, 2015

TIME:       10:00 a.m., Montreal time

A question period intended for the media will take place at the end of this same
conference call. To participate, media representatives need simply identify
themselves when they register for the call.

This conference call will be broadcast live on the Internet at the following

Media representatives wishing to listen in on the call will be able to do so by
dialing one of the following conference call numbers:

Integral version: +514 394 9320 or

(without translation) +1 866 240 8954 (toll-free in North America)

  +800 6578 9888 (overseas calls)

In English: +514 394 9318 or

  +866 211 9107 (toll-free in North America)

  +800 3207 7500 (overseas calls)

In French: +514 394 9316 or

  +1 888 791 1368 (toll-free in North America)

  +800 4994 7180 (overseas calls)


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, Aerospace and
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 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


This press release contains figures prepared in accordance with International
Financial Reporting Standards (IFRS) as well as non-GAAP financial measures.
Reference to generally accepted accounting principles (GAAP) means IFRS, unless
indicated otherwise. Non-GAAP financial measures are mainly derived from the
consolidated financial statements, but do not have a standardized meaning
prescribed by IFRS; therefore, others using similarly-named financial measures
may calculate them differently. Management believes that providing these non-
GAAP financial 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.
Reconciliations of these non-GAAP financial measures to the most comparable IFRS
measures will be included in the Management''s Discussion and Analysis for the
fiscal year ended December 31, 2014, to be released on February 12, 2015.

Contact Information

Isabelle Rondeau
Director, Communications
Bombardier Inc.
+514 861 9481

Shirley Chenier
Senior Director, Investor Relations
Bombardier Inc.
+514 861 9481

This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Bombardier Inc. via GlobeNewswire

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Date: 01/15/2015 - 09:10
Language: English
News-ID 1330463
Character count: 0
Firma: Bombardier Inc.
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Stadt: West Montreal, QC


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