We are a leading manufacturer of both planes and trains, operating under two reportable segments: Aviation and Transportation. We provide efficient, sustainable and enjoyable transportation solutions. Our products, services, and most of all, our 60,000 dedicated and highly skilled employees are what makes us a global leader in mobility and innovation. As at the date of this report, we have over 70 production and engineering sites in over 25 countries and a worldwide network of service centres. AVIATION Revenues(1) Designs, develops, manufactures, markets and provides aftermarket support for three $7.5 billion class-leading families of business jets - Learjet, Challenger and Global, in addition Order backlog(2) to outfitting various aircraft platforms for specialized use. $16.3 billion Employees(3) 24,350 TRANSPORTATION Revenues(1) Offers a wide-ranging portfolio of innovative and efficient solutions in the rail industry. $8.3 billion Covers the full spectrum of rail solutions, ranging from global mobility solutions to a Order backlog(2) variety of trains and sub-systems, services, system integration and signalling to meet billion the market’s needs and expectations. $35.8 Employees(3) 36,050 All amounts in this financial report are in US dollars unless otherwise indicated. (1) For fiscal year 2019. (2) As at December 31, 2019. Order backlog for Aviation includes $14.4 billion for business aircraft and $1.9 billion for other aviation. (3) As at December 31, 2019, including contractual and 1,700 inactive employees. Approximately 200 Corporate office employees are not allocated to a reportable segment. SETTING A PATH TO COMPLETE THE TURNAROUND Bombardier has come a long way since launching its turnaround plan. We have addressed our underperforming aerospace assets, completed our heavy investment cycle, and put the company on a solid path toward organic growth and margin expansion, while prudently managing our liquidity and heavy debt. We enter 2020, focused on initiating the final phase of our turnaround plan, deleveraging our balance sheet and addressing our capital structure to provide Bombardier with the financial flexibility necessary to compete and win in the future. Dear Shareholders, jobs and attracting major OEM’s (Airbus and MHI) to Montréal’s aerospace cluster. While 2019 was challenging from a financial performance standpoint, the actions taken by In 2019, we also successfully completed a the team throughout the year moved us much number of important structural actions to closer to achieving our turnaround goals. Of streamline our operations and reduce costs course, this progress would not have been across the portfolio. These actions included: possible without the dedication and hard work of (i) the consolidation of all our aerospace assets our more than 60,000 employees around the and engineering capabilities into a single world, who have demonstrated exceptional Bombardier Aviation business unit; and (ii) the talent in making our turnaround possible. On acquisition and successful integration of the behalf of all our shareholders, I thank our Global 7500 wing program from Triumph to employees for their many contributions, for secure our growth. embracing change and for making Bombardier a truly amazing company. There were many notable accomplishments at Bombardier Aviation in 2019, including the Since we launched our turnaround plan and production ramp-up of our new Global 7500 given our high debt load, a fundamental business jet, which continues to lead the objective was to protect shareholder value by industry setting records for speed, distance, having sufficient liquidity to manage all possible efficiency and cabin comfort. In addition, we scenarios, contingencies and market conditions. significantly strengthened our portfolio with the In 2019, we took the right actions to ensure we successful completion and entry-into-service of maintained a minimum of $2.5 billion to the Global 5500 and Global 6500 aircraft; on- $3.0 billion cash-on-hand. We successfully time, on-budget, and with better than promised raised $2 billion of debt, mainly used to push out performance capabilities. Aviation’s aftermarket maturities from 2020-21 to 2027; and we nearly growth also remains on plan, delivering double- doubled the size of our revolver credit facility at digit organic growth in 2019 and successfully Transportation. executing on major expansion projects around the world, including new facilities in Singapore, Over the past two years, we also announced London and Miami. M&A transactions, including the sale of the CRJ program and our Aerostructures business in At Transportation, the focus in 2019 was on 2019, which will collectively generate $2 billion completing the transformation and reshaping of of gross proceeds and eliminate nearly $1 billion the business. While steady progress was made of net liabilities.(1) toward this goal, production ramp-up challenges and delays in achieving certain technical The significance of the CRJ and Aerostructures milestones and software certifications resulted in transactions should not be overlooked. They the company incurring additional costs and represent major steps in Bombardier’s exit from delayed cash flow, negatively impacting the commercial aircraft business, a business Bombardier’s financial performance. that lost approximately $400 million in 2016. While not reflected in the financial performance, Among the actions taken to ensure improved Bombardier’s exit from commercial aerospace execution and operating performance at has been widely recognized by all stakeholders, Transportation was strengthening and customers, employees, partners and reorganizing the Leadership team. This included governments for the responsible manner in naming a new President, a new Chief which it was done and for the positive impact it Commercial Officer, a new Chief Engineer and will have on the aerospace sector in Québec new regional Presidents, all of whom bring the and Canada, including preserving thousands of strong technical, operational and customer focus BOMBARDIER INC. / 2019 FINANCIAL REPORT 1 necessary for Transportation to deliver world- Research Info Source, Inc. In their annual class project execution and sustained financial ranking of Canada’s Innovation Leaders, performance. Bombardier was named the leading corporate R&D investor for the seventh consecutive year. These actions resulted in a positive impact, most notably in the improved backlog and the major Since the launch of our turnaround plan, every project wins, such as the Cairo Monorail, as well action taken has been with an eye towards the as progress made addressing the challenges ultimate goals, de-leveraging of the balance associated with our legacy projects. sheet, addressing our capital structure and providing Bombardier with the financial flexibility Transportation’s 2019 backlog growth and to compete and win. In 2019, we proactively margin improvement were impressive. Total launched a comprehensive process to evaluate order intake exceeded $10 billion, a record level. a range of alternatives that would allow the Almost 70% of these orders came from service company to accelerate its deleveraging and contracts, signalling projects, high reuse position the business for long-term success. platforms and/or options on existing rolling stock contracts, which carry much lower execution Successfully concluding our strategic review and risk. any resulting actions, while simultaneously driving improved operational and financial Project execution in 2019 also improved as performance across the organization, are the evidenced by the successful completion of key objectives for 2020.(1) several large legacy projects in New York City, London and Toronto. Significant progress was Consistent with these goals, in February 2020, made - and continues to be made - on the we announced an agreement to transfer our remaining legacy projects, including London remaining interests in the Airbus Canada Limited Overground's LoTrain project and the Swiss Partnership to Airbus and Investissement Federal Railways (SBB) trains. These remaining Québec. This transaction further strengthens projects are expected to be largely completed liquidity with approximately $600 million of cash along with final commercial resolutions by the proceeds and the elimination of capital end of 2020. At that time, Transportation’s full requirements over the next two years. earnings and cash generation ability will become clear as we reap the benefits of our refreshed In closing, we are confident that we are taking product portfolio, higher-margin backlog and the right actions to place Bombardier in the best solid growth fundamentals. position for sustainable long-term growth and success and the entire leadership is very excited In 2019, Bombardier reaffirmed its commitment about the tremendous opportunities ahead. We to supporting the communities where it operates. look forward to updating shareholders on our In Canada, for example, we launched a progress throughout the coming year. refreshed internship program that included a commitment to providing more than 1,000 paid internship positions over the coming academic year. We also supported the education of the next generation of aerospace technicians with the recently announced donations of a CRJ regional jet and Global 7500 Flight-Test Vehicle to Centennial College in Toronto, ensuring students will receive valuable hands-on-training Alain Bellemare before entering the workforce. Bombardier’s President and Chief Executive