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Press release from Marketwire

Bombardier Announces Financial Results for the First Quarter Ended March 31, 2013

Thursday, May 09, 2013

Bombardier Announces Financial Results for the First Quarter Ended March 31, 2013

06:00 EDT Thursday, May 09, 2013

MONTRÉAL, QUÉBEC--(Marketwired - May 9, 2013) - (TSX:BBD.A)(TSX:BBD.B) (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. Comparative figures have been restated. See Accounting and reporting developments in the Corporation's MD&A.)

  • Revenues of $4.3 billion, compared to $3.5 billion last fiscal year
  • EBIT before special items (1) of $240 million, or 5.5% of revenues, compared to $188 million, or 5.4%, last fiscal year
  • EBIT of $240 million, or 5.5% of revenues, compared to $211 million, or 6.1%, last fiscal year
  • Adjusted net income (1) of $156 million, compared to $150 million last fiscal year
  • Adjusted earnings per share (1) of $0.08, same as last fiscal year
  • Free cash flow usage (1) of $590 million, compared to a usage of $695 million last fiscal year
  • Available short-term capital resources of $5.1 billion including cash and cash equivalents of $3.7 billion as at March 31, 2013, compared to $4.0 billion and $2.6 billion respectively, as at December 31, 2012
  • Backlog of $63.0 billion as at March 31, 2013, compared to $64.9 billion as at December 31, 2012
  • Issuance of $2 billion of unsecured Senior Notes
(1) 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, 2013. Revenues totalled $4.3 billion for the first quarter ended March 31, 2013, compared to $3.5 billion for the same period last fiscal year.

For the first quarter ended March 31, 2013, earnings before financing expense, financing income and income taxes (EBIT) before special items totalled $240 million, or 5.5% of revenues, compared to $188 million, or 5.4%, for the same period last year.

On an adjusted basis, net income amounted to $156 million, or earnings per share (EPS) of $0.08, for the first quarter ended March 31, 2013, compared to $150 million, or EPS of $0.08, for the same period the previous year.

For the three-month period ended March 31, 2013, free cash flow usage (cash flows from operating activities less net additions to property, plant and equipment and intangible assets) totalled $590 million, compared to a usage of $695 million for the same period the previous year. Available short-term capital resources of $5.1 billion include cash and cash equivalents of $3.7 billion as at March 31, 2013, compared to $4.0 billion and $2.6 billion respectively as at December 31, 2012. The overall backlog reached $63.0 billion as at March 31, 2013, compared to $64.9 billion as at December 31, 2012.

"We had a good first quarter, with an overall increase in revenues of 25%," said Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc. "Aerospace is showing increased deliveries, revenues and EBIT, and the CSeries tests are progressing well with first flight next month."

"Transportation also saw an increase in revenues and EBIT, and received a good level of new orders across all divisions and key markets, totalling $2 billion. We expect an increase in revenues over the course of the year, while making good progress towards the group's EBIT target of 8% by 2014. With our strong overall backlog of $63 billion and state-of-the-art products coming into service in the next few years, we're very well positioned for solid future growth," concluded Mr. Beaudoin.

Bombardier Aerospace

Bombardier Aerospace's revenues amounted to $2.3 billion for the three-month period ended March 31, 2013, compared to $1.5 billion for the same period last fiscal year. EBIT before special items totalled $101 million or 4.5% of revenues for the first quarter ended March 31, 2013, compared to $66 million, or 4.4%, last fiscal year.

Free cash flow usage totalled $461 million (including net additions to property, plant and equipment (PP&E) and intangible assets of $503 million) for the first quarter ended March 31, 2013, compared to a usage of $572 million (including net additions to PP&E and intangible assets of $372 million) for the same period last fiscal year.

A total of 53 aircraft were delivered during the first quarter ended March 31, 2013, compared to 37 for the same period last fiscal year, including 39 business aircraft, compared to 29 for the same quarter last fiscal year.

Bombardier Aerospace signed a purchase agreement with Russia's Ilyushin Finance Co. (IFC) to acquire 32 CS300 aircraft, with options for an additional 10. This agreement is subject to approval by the company's shareholders and follows a letter of intent signed in 2011. Based on the list price, the conditional order for 32 aircraft is valued at $2.6 billion. Additionally, Danish lessor Nordic Aviation Capital purchased four Q400 NextGen aircraft, bringing its Q400 aircraft fleet to 43.

Subsequent to quarter-end, in April 2013 Porter Airlines was identified as the previously unidentified Americas-based CSeries aircraft customer when it announced the conversion of its letter of intent to a conditional agreement for up to 30 CS100 aircraft. This $2.08 billion-commitment, based on list price, makes Porter Airlines the Canadian CSeries aircraft launch customer. As at March 31, 2013, commitments for the CSeries totalled 388, including 145 firm orders from nine customers in eight countries.

Bombardier Aerospace's backlog totalled $32 billion as at March 31, 2013, compared to $32.9 billion as at December 31, 2012.

Bombardier Transportation

Bombardier Transportation's revenues amounted to $2.1 billion for the three-month period ended March 31, 2013, compared to $2.0 billion for the same period last year. EBIT totalled $139 million, or 6.7% of revenues, compared to $122 million, or 6.2%, for the same quarter the previous year. Free cash flow usage totalled $73 million for the quarter ended March 31, 2013, compared to a usage of $85 million for the same period last fiscal year.

New orders reached $2.0 billion (book-to-bill ratio of 0.9), compared to $1.2 billion for the same quarter last fiscal year. The order backlog totalled $31.0 billion as at March 31, 2013, compared to $32.0 billion as at December 31, 2012 (comparative numbers have been restated to exclude Bombardier Transportation's proportionate share of joint ventures' backlog). The $1 billion or 3% decrease in order backlog is mainly due to the weakening of some foreign currencies versus the U.S. dollar as at March 31, 2013 compared to December 31, 2012, mainly the euro and pound sterling.

The group's new orders included a variation order for 170 additional cars under a framework agreement with Siemens AG to develop and supply important components for the next ICx high speed trains for Deutsche Bahn, valued at $440 million.

In January and April 2013, Bombardier Transportation's partner, CSR Nanjing Puzhen Rolling Stock Co. Ltd from China, won orders for 18 low-floor trams and 15 catenary-free low-floor trams, which will be built based on the group's FLEXITY 2 technology. The vehicles will be equipped with the innovative FLEXX urban 3000 bogies and MITRAC 500 propulsion and control system. Bombardier Transportation will support the projects under a technology license agreement signed in 2012. The latter is the first order worldwide for a catenary-free tram equipped with the new light and long-life Bombardier PRIMOVE battery.

After quarter-end, Bombardier Transportation signed agreements with Russian rail manufacturer Uralvagonzavod (UVZ) establishing a partnership for joint development of metros for the market in Russia and the CIS.

FINANCIAL HIGHLIGHTS
(In millions of U.S. dollars, except per share amounts)
For the three-month periods ended March 31 2013 2012
BA BT Total BA BT Total
restated (1)
Results of operations
Revenues $ 2,258 $ 2,081 $ 4,339 $ 1,499 $ 1,982 $ 3,481
Cost of sales 1,951 1,772 3,723 1,261 1,645 2,906
Gross margin 307 309 616 238 337 575
SG&A 158 186 344 162 202 364
R&D 42 28 70 31 34 65
Share of income of joint ventures and associates - (44 ) (44 ) - (19 ) (19 )
Other expense (income) 6 - 6 (21 ) (2 ) (23 )
EBIT before special items (2) 101 139 240 66 122 188
Special items - - - (23 ) - (23 )
EBIT $ 101 $ 139 240 $ 89 $ 122 211
Financing expense 75 82
Financing income (40 ) (45 )
EBT 205 174
Income taxes 57 19
Net income $ 148 $ 155
EPS (basic and diluted; in dollars) $ 0.08 $ 0.08
Supplemental information
EBIT before special items(2) $ 101 $ 139 $ 240 $ 66 $ 122 $ 188
Amortization 61 30 91 50 31 81
EBITDA before special items(2) $ 162 $ 169 $ 331 $ 116 $ 153 $ 269
On an adjusted basis
Adjusted net income(2) $ 156 $ 150
Adjusted EPS (in dollars)(2) $ 0.08 $ 0.08
Cash flows from operating activities $ 42 $ (62 ) $ (200 ) $ (74 )
Net additions to PP&E and intangible assets (503 ) (11 ) (372 ) (11 )
Segmented free cash flow(2) $ (461 ) $ (73 ) $ (534 ) $ (572 ) $ (85 ) $ (657 )
Net income taxes and net interest paid (56 ) (38 )
Free cash flow (2) $ (590 ) $ (695 )

BA: Bombardier Aerospace; BT: Bombardier Transportation

(1) Certain comparative figures have been restated as a result of our adoption of the amended IAS 19, Employee benefits, and IFRS 11, Joint arrangements. The joint arrangement restatements relate to the requirement to account for our investments in joint ventures using the equity method under IFRS 11, instead of proportionate consolidation. The employee benefit restatements mainly relate to the requirement under amended IAS 19 to calculate interest expense and interest income components on a net basis using the post-employment benefit obligation discount rate. Comparative figures have also been restated due to the change in methods of measurement of certain financial assets, as described in the Accounting and reporting developments section of the Corporation's MD&A.
(2) Non-GAAP financial measure. Refer to the Non-GAAP financial measures and Liquidity and capital resources sections of the Corporation's MD&A for definitions of these metrics and reconciliation to the most comparable IFRS measures.

SELECTED FINANCIAL INFORMATION

Bombardier Aerospace

Total aircraft deliveries
Three-month periods ended March 31
(in units) 2013 2012
Business aircraft
Excluding those of the Flexjet fractional ownership program 38 28
Flexjet fractional ownership program(1) 1 1
39 29
Commercial aircraft 13 7
Amphibious aircraft 1 1
53 37
(1) An aircraft delivery is included in the above table when the equivalent of 100% of the fractional shares of an aircraft model has been sold to external customers through Flexjet, or when a whole aircraft has been sold to external customers through the Flexjet One program.
Total aircraft net orders
Three-month periods ended March 31, 2013 March 31, 2012
(in units) Gross
orders
Cancellations Net
orders
Gross
orders
Cancellations Net
orders
Business aircraft (including those of the Flexjet fractional ownership program) 36 (9) 27 49 (9) 40
Commercial aircraft 4 (3) 1 28 - 28
40 (12) 28 77 (9) 68
Book-to-bill ratio (1)
Three-month periods ended March 31
2013 2012
Business aircraft 0.7 1.4
Commercial aircraft 0.1 4.0
Total 0.5 1.8
(1) Defined as net orders received over aircraft deliveries, in units.
Order backlog
As at
(in billions of dollars) March 31, 2013 December 31, 2012
Aircraft programs $ 28.7 $ 29.5
Long-term maintenance and spares support agreements 2.8 2.8
Military Aviation Training 0.5 0.6
$ 32.0 $ 32.9

Bombardier Transportation

Revenues by geographic region
Three-month periods ended March 31
2013 2012
restated
Europe $ 1,399 67 % $ 1,349 68 %
North America 371 18 % 388 20 %
Asia-Pacific 212 10 % 69 3 %
Rest of world(1) 99 5 % 176 9 %
$ 2,081 100 % $ 1,982 100 %
(1) 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 March 31
Order intake (in billions of dollars)(1) 2013 2012
Rolling stock $ 1.1 $ 0.6
Services 0.6 0.3
System and signalling 0.3 0.3
$ 2.0 $ 1.2
Book-to-bill ratio(2) 0.9 0.6
(1) Including any new orders between BT and its joint ventures, but excluding the order intake of our joint ventures.
(2) Ratio of new orders over revenues.
Order backlog (1)
As at
(in billions of dollars) March 31, 2013 December 31, 2012
restated
Rolling stock $ 19.9 $ 20.7
Services 6.9 7.0
System and signalling 4.2 4.3
$ 31.0 $ 32.0
(1) Including the order backlog for contracts between BT and its joint ventures, but excluding our share of joint ventures' backlog, which was $2.1 billion as at March 31, 2013 ($2.2 billion as at December 31, 2012).

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 June 30, 2013 to the shareholders of record at the close of business on June 14, 2013.

Holders of Class B Shares (Subordinate Voting) of record at the close of business on June 14, 2013 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 March 15 and April 15, 2013.

Series 3 Preferred Shares

A quarterly dividend of $0.195875 Cdn per share on Series 3 Preferred Shares is payable on July 31, 2013 to the shareholders of record at the close of business on July 12, 2013.

Series 4 Preferred Shares

A quarterly dividend of $0.390625 Cdn per share on Series 4 Preferred Shares is payable on July 31, 2013 to the shareholders of record at the close of business on July 12, 2013.

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, 2012, we posted revenues of $16.8 billion. News and information are available at bombardier.com or follow us on Twitter: @Bombardier.

CS100, CS300, CSeries, FLEXITY, FLEXX, MITRAC, NextGen, PRIMOVE, Q400, 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 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 annual report for the fiscal year ended December 31, 2012.

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 major rail operators), operational risks (such as risks related to developing new products and services; 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; fixed-price commitments and production and project execution), financing risks (such as risks related to liquidity and access to capital markets, 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 annual report for the fiscal year ended December 31, 2012. 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 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 before special items, EBIT margin 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 interim consolidated financial statements 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 the Corporation's MD&A for definitions of these metrics and reconciliations to the most comparable IFRS measures.

FOR FURTHER INFORMATION PLEASE CONTACT:

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


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

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