We are the world’s leading manufacturer of both planes and trains, operating under four reportable segments: Business Aircraft, Commercial Aircraft, Aerostructures and Engineering Services and Transportation. We are providing efficient, sustainable and enjoyable transportation solutions. Our products, services, and most of all, our 68,000 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 75 production and engineering sites in 28 countries and a worldwide network of service centers. BUSINESS AIRCRAFT Revenues(1) Designs, develops, manufactures, markets and provides aftermarket support for three $5.0 billion class-leading families of business jets - Learjet, Challenger and Global. Order backlog(2) $14.3 billion Employees(3) 11,400 COMMERCIAL AIRCRAFT Revenues(1) Designs, develops and manufactures a billion broad portfolio of commercial aircraft in the $1.8 50- to 100-seat segment, including the CRJ550, CRJ700, CRJ900 and CRJ1000 Order backlog, regional jets and the Q400 turboprop, and in units(2) participates in a partnership with Airbus on the A220 family aircraft. Commercial Aircraft 97 provides aftermarket services and support for its large installed base. Employees(3) 2,770 AEROSTRUCTURES AND ENGINEERING SERVICES (1) Designs, develops and manufactures Revenues complex metallic and advanced composite aircraft structural components for original $2.0 billion equipment manufacturers, including fuselages, wings and engine nacelles. It also provides aftermarket component repair Employees(3) and overhaul, as well as other engineering services for both internal and external customers. 9,190 TRANSPORTATION Revenues(1) Offers a wide-ranging portfolio of innovative and efficient solutions in the rail industry. $8.9 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. $34.5 Employees(3) 40,650 All amounts in this financial report are in US dollars unless otherwise indicated. (1) For fiscal year 2018. (2) As at December 31, 2018. (3) As at December 31, 2018, including contractual and inactive employees. Some 3,900 Product Development Engineering, Corporate office and other employees are not allocated to a reportable segment. DRIVING EFFICIENCY THROUGH THE GROWTH CYCLE Three years after the launch of our turnaround plan, Bombardier is a much stronger company. We have a clear path to achieve our 2020 objectives and we see tremendous opportunities beyond that. Together, we are building a company capable of delivering superior financial performance for shareholders, unmatched value for customers and rewarding opportunities for employees. Dear Shareholders, continue to drive our transformation and efficiencies through the growth cycle.(1) 2018 was another year of great progress for These efficiencies will come from our newly Bombardier as we continue to execute our launched enterprise-wide productivity program; turnaround plan. When we began the year, we the right-sizing of our engineering organization had three key priorities: certifying and placing to reflect the completion of our heavy investment the Global 7500 aircraft into service; cycle; and new initiatives targeting product cost, accelerating key rail project deliveries; and indirect goods and services and inventory finalizing our partnership with Airbus. An reduction. Collectively, these efforts will allow us aggressive agenda, which we have largely to further lean-out and simplify our operations. delivered. A key objective of our turnaround plan is to With the successful certification and entry-into- position the business to generate strong and service of our Global 7500 aircraft, we achieved sustainable free cash flow(2) and we continue to a critical milestone – the completion of our make solid progress in this area, and we are heavy investment cycle and the transition into a confident to reach our objective of $750 million strong growth and cash generation phase. This to $1.0 billion of free cash flow(2) in 2020. We is a major inflection point for Bombardier. With also begin the year in a strong cash position with this progress, we are well positioned to achieve $3.2 billion of liquidity, which positions us well to our 2020 objectives and to re-claim our place as begin the deleveraging phase of our plan.(1) a leading industrial company.(1) Across the company, there were many notable I am very proud of what our team has accomplishments in 2018. Among them was the accomplished. We have managed to stay the completion of our value-creating partnership with course in the face of numerous unforeseen Airbus ahead of schedule. The partnership is challenges and are closely tracking with the plan now fully operational. And, with an order book of we launched three years ago. This success more than 500 aircraft, the A220 has firmly reflects the commitment of the entire established itself as the leading aircraft in its Bombardier team. Around the world, our 68,000 class. The global scale, strong customer employees have demonstrated exceptional relationships and operational experience Airbus talent in making our vision possible and, on brings to the partnership will allow us to realize behalf of all our shareholders, I wish to thank the full potential of this remarkable aircraft.(1) them for their dedication. In addition to our Airbus partnership, we see Because of this great work, we have created a tremendous value creation opportunities across very strong foundation for growth. A foundation our portfolio. We have strong franchises that are that includes a refreshed portfolio of best-in- well positioned in growth markets. Bombardier’s class products, industry leading backlogs, and a consolidated backlog reached $53.1 billion at more streamlined cost structure. the end of 2018. Book-to-bill ratios at our largest From a financial performance perspective, we segments, Business Aircraft and Transportation, continue to deliver improving results. Year-over- both equaled 1.1, demonstrating strong market year earnings before special items(2) grew by demand for our products and services. (3) 42% in 2018 to over $1.0 billion , a five-year Growth in our global rail business continues to (2) high. Margins before special items grew be driven by very strong megatrends: (3) 180 bps year-over-year to 6.3% . Since 2015, urbanization and the increasing demand for (1) EBIT margins before special items have more efficient and environmentally friendly expanded by 330 bps and we have a clear path public transportation systems. We are well to reaching our 2020 objective of greater than positioned to capture this demand with a (2) 8% EBIT margin before special items as we refreshed portfolio of rolling stock, signaling and services solutions. In 2018, Bombardier BOMBARDIER INC. / 2018 FINANCIAL REPORT 1 Transportation increased its output by 20%, In closing, 2018 was a year of solid grew its backlog to $34.5 billion and improved its performance, delivered with a complete mix of service and signaling contracts. Despite commitment to the highest ethical, some timing issues affecting deliveries on a environmental and safety standards. As we limited number of projects, Bombardier begin the fourth year of our five-year turnaround Transportation has strong growth fundamentals plan, we can reaffirm with increased confidence in place and remains on track to become a our commitment to deliver on our 2020 $10 billion business by 2020.(1) objectives. These objectives include growing revenues by approximately $4 billion, to over The on-schedule entry-into-service of the $20 billion; reaching EBIT margins before Global 7500 aircraft was a major special items(1) above 8%; and generating accomplishment in 2018. With its unmatched sustainable free cash flows(2) between $750 range, speed, comfort and cabin size, the million and $1.0 billion a year.(1) Global 7500 is setting a new standard in the large business aircraft segment. The aircraft’s We recognize that there is still much more work extended 7,700 nautical mile range – 300 more ahead of us to achieve our goals. This includes than our original commitment – is a testament to addressing our working capital and execution the tremendous skill of our employees, and its issues at Transportation, as well as navigating multi-year backlog demonstrates the strong an aggressive production ramp-up at Business market demand. Aircraft. In addition, we need to continue to reduce costs, fully engage our employees, Beyond the Global 7500, we also strengthened remain disciplined in our allocation of capital and our Business Aircraft franchise with the launch of further leverage our scale. the Global 5500 and Global 6500 aircraft. These aircraft, along with our Challenger and Learjet Our strong performance over the past three families, give Bombardier the best portfolio in years gives us confidence that we have the right the industry. We also continued to expand our team and the right strategy to successfully aftermarket network in 2018 with the complete our turnaround plan. We are equally announcement of a new state-of-the art confident in our ability to realize our long-term customer service center in southern Florida and vision for Bombardier; to build the most the expansion of our worldwide mobile response advanced planes and trains in the world; to services. With refreshed product portfolio and create unmatched value for our customers; to be renewed aftermarket focus, our Business Aircraft the market leader in each of our business segment is well positioned to achieve its segments; and to deliver superior value to our $8.5 billion revenue objective for 2020.(1) shareholders in any market environment. The entire Bombardier team remains very Also poised for growth is our Aerostructures and excited about the opportunities ahead of us and Engineering Services business segment, with its fully committed to unleashing the full value of the position as a key supplier for the A220, the A320 Bombardier portfolio.