BUILDING A WORLD-CLASS SUSTAINABLE BUSINESS

2018 Activity Report BUILDING A WORLD-CLASS SUSTAINABLE BUSINESS

$16.2B $53.1B 68,000 CONTENTS REVENUES1 BACKLOG2 EMPLOYEES2 2 President's Message 16 Operational Efficiency 4 About Bombardier 18 Responsible Business 6 Performance 20 Talent 8 Strategy 22 HSE Preventive Culture 10 Product Innovation 26 Corporate Citizenship 14 Customer Experience 28 Notes

Corporate Profile With over 68,000 employees across four business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety. Headquartered in Montréal, Canada, Bombardier has production and engineering sites in 28 countries across its and Transportation business segments. The company is recognized on the 2019 Global 100 Most Sustainable Corporations in the World Index.

Cover INNOVIA Automated People Mover system, Global 7500 , CRJ700 Inside Cover Global 6500 aircraft

1. For fiscal year 2018. 2. As at December 31, 2018. All financial figures in this report are in U.S. dollars unless otherwise stated.

BOMBARDIER INC. 2018 ACTIVITY REPORT 1 PRESIDENT'S MESSAGE

A CLEAR AND BRIGHT VISION FOR ▼ BOMBARDIER’S FUTURE – REGAINING OUR Phase 1 DE-RISK Liquidity and Programs Proactive Balance Sheet Management POSITION AS A GLOBAL INDUSTRIAL CHAMPION

Three years after the launch of our turnaround plan, Bombardier is a much Phase 2 BUILD THROUGH TRANSFORMATION Earnings and Cash Flow stronger company. We are on a clear path to regaining our position as a global industrial champion; a company that can deliver sustainable value for our shareholders, support our customers’ success and provide rewarding Phase 3 DE-LEVERAGE Balance Sheet career opportunities for our employees. Bombardier has a very bright and exciting future and will continue to set new standards in the rail and ▲ business aviation industries.

2015 2016 2017 2018 2019 2020

Bombardier is truly a remarkable Another key accomplishment was Of course, it is our tremendously talented In 2018, we… With a refreshed portfolio of products, Together, the people of Bombardier have company. In more than 100 countries the completion of our value-creating employees and their willingness to including the new Global 5500 and made tremendous progress executing around the world, our products bring partnership with . With an order embrace change that has fueled our Completed our value-creating Global 6500 aircraft launched last year, our turnaround, and we remain confident people together, support economic book of more than 500 aircraft, the progress so far. And, it is their passion partnership with Airbus Bombardier Aviation is also poised for in our ability to successfully complete the development and make cities more A220 has firmly established itself as the and commitment that will allow us growth. At the same time, Bombardier journey. Bombardier is a great company, sustainable. In the years ahead, we will leading aircraft in its class. The global to successfully complete our turnaround Celebrated the successful continues to be a leader in sustainability. with amazing people, a global customer continue to help move the world forward scale, strong customer relationships plan and propel us to new heights. entry-into-service of the Our new Global 7500 is expected to base and a bright, sustainable future. by designing, building and servicing the and operational expertise Airbus brings be the first business jet to receive a Bombardier’s future will be anchored most innovative and eco-efficient trains to the partnership will allow our share­ Global 7500 business jet third-party certified Environmental by two large and strong growth pillars, and planes, improving the way people holders to realize the full potential of Product Declaration and we continue to Bombardier Aviation, focused on commute and connect with each other. past investments and allow more people Launched our new TALENT 3 play a leading role in the adoption of business aircraft; and Bombardier And, we will do it the right way; around the world to enjoy the benefits battery-powered train sustainable alternative jet fuels, part of Transportation, a global rail leader. responsibly, ethically and profitably. of this remarkable aircraft. our commitment to preserving the skies Bombardier Transportation is well Launched our new Global 5500 we have the privilege of flying through. 2018 was another year of progress for In our rail business, we also continue Alain Bellemare positioned for growth, driven by some and Global 6500 programs Bombardier as we continue to execute to make tremendous progress. Since Bombardier was also recognized by President and Chief Executive Officer very powerful mega-trends, including our turnaround plan. On the launching our turnaround, we have Corporate Knights as one of the world’s urbanization, growing demands for better Refreshed Transportation’s side of our business, we are tracking strengthened our order book, refreshed most sustainable companies, placing public transportation and increasing right on our plan. With the successful our product portfolio, streamlined our product portfolio 22nd in its annual rankings. This award calls for more environmentally-friendly certification and entry-into-service of manufacturing footprint and we are reflects our investments in innovation, transportation solutions, such as our the Global 7500 – an aircraft that resets currently focused on optimizing our Reached a consolidated our high safety standards and our new emissions-free, energy-efficient and benchmarks for speed, range, comfort operations. While production ramp-up backlog of $53.1 billion1 portfolio of eco-efficient products. It also low noise TALENT 3 battery-powered and cabin size – we achieved a critical challenges have temporarily slowed reinforces our belief that sustainability train launched last year. milestone; the completion of our heavy our progress, we are confident that we is fundamental to our long-term business investment cycle and the transition into will make the right adjustments and success, which is why we again reaffirm a strong growth phase. quickly get back on track, delivering in this report our engagement towards the high-level performance that our the United Nations Global Compact. customers and shareholders rightly expect from Bombardier.

1. As at December 31, 2018.

2 BOMBARDIER INC. 2018 ACTIVITY REPORT BOMBARDIER INC. 2018 ACTIVITY REPORT 3 ABOUT BOMBARDIER

GLOBAL LEADERSHIP IN SUSTAINABLE TRANSPORTATION

Based in Montréal, Canada, Bombardier is one of the world’s leading manufacturers of both planes and trains, with 75 production and engineering sites in 28 countries and a global network of service centres. Our portfolio is composed of two strong pillars: Bombardier Transportation and Bombardier Aviation. Every day, our trains and planes move millions of people around the globe – quickly, safely and efficiently.

70,000+ 100,000+ 6,000+ kilometres of track equipped rail vehicles worldwide aircraft in service with our signalling solutions

Headquarters Production and/or Engineering Sites

Transportation Aviation We lead the way with the rail industry’s broadest portfolio. We design, develop and manufacture innovative business It offers the full spectrum of rail solutions, ranging from jets, regional aircraft and specialized aircraft, as well 200+ 500 MILLION END-TO-END trains to sub-systems and signalling to complete turnkey as complex aerostructures solutions and systems. aircraft serviced daily rail passengers transported daily capabilities from design to assembly transport systems, e-mobility technology and data-driven We provide aftermarket services for all our aerospace maintenance services. products worldwide.

Revenues by Region1 Number of Employees by Region2 Number of Sites by Region3 TWO STRONG BUSINESSES WITH BEST-IN-CLASS PRODUCTS AND ■ Europe   ■ Europe  ■ Europe  ■ North America   ■ North America   ■ North America  FULLY INTEGRATED CAPABILITIES $16.2B ■ Asia-Pacific  68,120 ■ Asia-Pacific  75 ■ Asia-Pacific  TOTAL TOTAL TOTAL ■ Rest of World  ■ Rest of World  ■ Rest of World 

1. For fiscal year 2018. In millions of dollars. 2. As at December 31, 2018, including contractual and inactive employees. 3. As at December 31, 2018. Top: TWINDEXX Vario train, Challenger 350 aircraft, INTERFLO signalling for . Bottom: Service Center, FLEXITY tram, Global aircraft cockpits.

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OUR IMPACT MEASURING IN SOCIETY OUR PROGRESS

Our commercial success depends on creating safe, innovative, eco-efficient rail and aerospace solutions that As we reflect on our progress in 2018, we are proud of our accomplishments and the foundation we have bring value to passengers and further their mobility in society. By doing this, we will be able to grow our laid for sustainable growth. Notably, we improved our profitability, reduced health and safety incidents, business, address complex global issues, and provide benefits to our customers, employees, shareholders, and increased employee productivity. The following table1 provides a brief summary of the indicators we and society at large. track to measure our performance every year, covering financial, social and environmental information.

Financial 2018 20172 2016 $16.2B 13,000+ $5.5B $1.5B $6M $1.1B (in millions of dollars, unless otherwise indicated) (for fiscal years) PRODUCT VALUE SUPPLIERS EMPLOYEE TOTAL TAXES COMMUNITY R&D addressing global driving local BENEFITS1 borne and CONTRIBUTIONS INVESTMENTS Revenues 16,236 16,199 16,339 mobility needs economic sustaining collected2 supporting creating future EBIT margin 6.2% 1.8% (0.4%) development high-value job contributing social sustainable Cash flows from operating activities 597 531 137 opportunities to government development transport solutions Investments in product development3 1,235 1,486 revenues 1,136 Available short-term capital resources4 4,373 4,225 4,477

Social

Incident rate5 1.1 1.3 1.6 Fatalities (employees) 2 0 1 Our activities and actions to meet global mobility needs are contributing to the 17 United Nations Sustainable Development Goals Employees covered by collective bargaining agreements (%) 57 56 56 – most specifically goals 8, 9, 11, 12, 13 and 17 – which set common ambitions to create a better and more sustainable future for all. Total turnover rate (%) 12 10.8 11.5 Employee productivity (in thousands of dollars) 239 233 246 Gender diversity (% women) 19 19 19

Environmental

Energy intensity (GJ per million of dollars of revenue) 283 271 270

GHG emission intensity (tCO2e per million of dollars of revenue) 17 17 17 Renewable electricity (thousands of GJ) 663 701 719 Valorized waste (% total waste generated, hazardous and non hazardous) 84 81 78 Supporting Leading Improving Embedding Contributing to Driving impact the economy innovative quality of life sustainability a low-carbon through industry by investing in technology through into product resource collaboration transportation solutions advanced design and efficient world on sustainable skills mobility sourcing transportation Recognition

> Listed in the top 25 and as top transportation company of the 2019 INNOVIA Automated People Mover 200 system, Global 100 Most Sustainable Companies in the World Index Sky Harbor International Airport, Phoenix, United States > Listed on the 2018 Clean 200 Index > Listed on the 2018 Best 50 Corporate Citizens in Canada Index

1. Refer to Our Performance section on our website for more detailed information. 3. R&D expense and program tooling before amortization. 1. Includes costs capitalized as part of the cost of inventories and other self constructed assets. 2. 2017 figures have been restated due to the adoption of IFRS 15, Revenue from contracts with customers. Refer to the Accounting and 4. Defined as cash or cash equivalents plus the amount available under revolving credit facilities. 2. For significant locations only (Canada, United states, United Kingdom, Germany, France, Mexico). Includes income taxes, payroll taxes and social charges, transaction and sales taxes, property, business and other taxes. reporting developments section in Other of our 2018 Financial Report for details regarding restatements of comparative period figures. 5. Number of recordable cases, expressed per 200,000 hours worked.

6 BOMBARDIER INC. 2018 ACTIVITY REPORT Photo: Franz A. Koeck BOMBARDIER INC. 2018 ACTIVITY REPORT 7 STRATEGY

RISK MANAGEMENT BUILDING A WORLD-CLASS SUSTAINABLE BUSINESS AND OPPORTUNITIES

Taking a holistic and balanced view forms an integral part of our risk management approach. Our business transformation is guided by a clear strategic direction, while dealing with major trends shaping our operating 1 environment. By understanding how financial, environmental, social and governance risks impact our business , DELIVERING CREATING we are furthering our ambition to create a stronger more resilient business. PRODUCT VALUE FOR INNOVATION CUSTOMERS

Developing New Products and Services deliver superior financial performance. Minimizing Adverse Health, Safety LEADING Changing trends and risks such as climate Our executive team oversees all our critical and Environmental Impacts ACHIEVING DEVELOPING WITH ETHICS change, volatile fuel prices, carbon projects to ensure operational excellence. Embedding a health, safety and environ­ OPERATIONAL TALENTED AND pricing, digital technologies, urbanization See Operational Efficiency. ment (HSE) preventive culture into all EXCELLENCE LEADERS INTEGRITY and demographic factors influence aspects of our business activities is a customer demand in our markets. To Complying with Laws and Regulations core value and integral to our business remain competitive and meet customer Given our global footprint, we are approach. Our products and manufacturing needs, we continuously develop and attentive to the numerous risks related service activities are subject to laws and design new products, improve existing to current and future regulations. regulations in each of the jurisdictions DEEPENING SUPPORTING products and services, and invest in new Our compliance with applicable laws where we operate, governing among OUR HSE COMMUNITY technologies, including digital applica­ and regulations, including anti-bribery, other things, human health and safety, PREVENTIVE DEVELOPMENT tions that protect us against cyber threats is critical for our reputation, our stake­ product performance or material content, CULTURE and improve supply chain security. holder relationships and our financial energy and carbon emissions, air, water, See Product Innovation. position. We continue to proactively noise pollution and hazardous materials. strengthen our compliance management See HSE Preventive Culture. Replenishing and Developing Business and culture and increase awareness on Our business is dependent on obtaining our ethics and compliance expectations. Engaging in the Communities new orders and growing our services See Responsible Business. Where We Operate with customers in a highly competitive We have a broad global reach and environment. We are taking proactive Developing a Skilled Talent Pool presence in many diverse geographic actions to provide products and services We face the constant challenge of markets. The prosperity of these tailored to our customers' needs, deliver ensuring continued alignment between economies and the quality of life of their on our commitments and develop a rapidly evolving business environment communities is critical to our success closer more long-term partnerships with and the qualifications, capabilities and and social license to operate. In addition them through our aftermarket services. talent of our workforce. We are improving to building strong part­ner­ships in See Customer Experience. our talent and succession planning, these economies and establishing roots standardizing learning and development in new markets, we contribute to non- Reducing Costs and opportunities, working with industry profit organizations through strategic Improving Working Capital partners and developing strategic partner­ support and employee time. The key focus of our transformation ships with academic institutions to See Community Development. plan is to improve cash generation, ensure we have the right people with the reduce costs and drive performance. right capabilities and experience in a The successful execution of our plan and continuously changing business context. its initiatives is critical to ensure we See Talent. REGINA Electric Multiple Unit

1. Refer to our 2018 Financial Report for complete description of risks and uncertainties.

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Delivering Mobility Solutions that Leveraging Digitalization and Developing the Safest, Most Reliable TRANSPORTATION Minimize Environmental Impacts New Technologies Transportation Solutions The new TALENT 3 battery electric We are actively increasing programming We led the development of the world’s TOGETHER WE MOVE multiple unit (BEMU) is a technological and automation technologies to ensure first homologated Obstacle Detection response to challenges such as air we continue satisfying the ever-growing Assistance System (ODAS) for trams pollution, smog and climate change. It is needs of mass transportation. In 2018, and light rail vehicles, to support drivers At Transportation, we never stop moving, keeping people and goods in motion in a world of urban growth the first modernbattery–powered train we completed the world-first European in critical situations. It detects pedes­ to enter passenger service in Europe with Rail Traffic Management System( ERTMS) trians, cars and other potential risks, and digital change. significant carbon reduction, increased tests in Sweden for our INTERFLO 450 analyzes time to collision, improving recyclability and 100% regenerative rail signalling solution. This solution is set safety for the tram driver, passengers Combining technology and state-of-the-art digital innovations, we are working with our customers to create electric breaking to charge batteries. to safely increase speeds, reliability, and and other road users by alerting the holistic, high-quality mobility solutions that are reliable, safe, and more sustainable for passengers, operators capacity as well as integration within driver of potentially dangerous situations. In 2018, we also successfully demonstrated Europe. In 2018, we also inaugurated a and infrastructure planners. Together, our performance helps cities grow, develop economies and anticipate our new silicon (SiC)-equipped MITRAC new high-tech laboratory in Mannheim, future mobility challenges. Our innovations are built on three fundamentals: environmental sustainability, TC1500 traction converter which shows Germany. This new innovation hub is energy reductions of up to 35% and lowers digitalization and safety. enabling us to develop and test pioneering noise emissions by 19 dB. electronics systems for train control, Over the past year, we continued to offer and deliver a broad portfolio of innovative products and services signalling and control systems. that are setting new standards in sustainable mobility. Leveraging our ecosystem philosophy, we are finding innovative ways to offer customers a complete value chain of solutions, from components, rolling stock and signalling, to system integration, operation and maintenance.

Our new emission-free, energy-efficient and low noise TALENT 3 battery-powered train is setting new standards for sustainable mobility.

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Redefining the Customer Experience Developing the Most Efficient Setting the Standard for Environmental AVIATION Toward Comfort and Elegance and Cost-Effective Products Performance and Transparency Setting the new benchmark for in–flight Thanks to redesigned wings and Through our leading eco-design approach, REACHING NEW HEIGHTS experience, our Global 7500 aircraft is brand-new, purpose-built Rolls-Royce we are optimizing the environmental the largest and longest business jet, and Pearl engines, the Global 5500 and performance of our aircraft at every stage the only business jet to offer four distinct Global 6500 aircraft launched in 2018 of the life cycle and communicating their We continue to lead the civil aviation industry with new technologies and innovative solutions to living spaces and an unprecedented are up to 13% more efficient than their environmental impacts in a transparent smooth ride thanks to its advanced predecessors. These aircraft have and verifiable way. TheGlobal 7500 meet the continuously evolving needs of our customers. We are at the forefront of class-leading transonic wing design. The Global 7500 highly competitive operating costs aircraft is the first business jet conceived technological advancements, designing and manufacturing industry-leading aircraft, and advanced aircraft, which entered service at the versus smaller competing aircraft and using this approach, and the aircraft is composite aircraft structures to support the transition to a cleaner more sustainable future. Our end of 2018, boasts an unmatched range also deliver a range increase of up to planned to receive its third-party certified of 7,700 nautical miles, a full 300 nautical 1,300 nautical miles when operating Environ­mental Product Declaration (EPD) innovations are built on three guiding principles: passenger comfort, efficiency and cost improvement, miles further than initial commitments out of hot-weather and high-altitude in 2019. Bombardier remains the only and environmental sustainability. and has also exceeded takeoff and conditions, thanks to increased thrust aircraft manufacturer to disclose the full landing performance commitments. and improved fuel efficiency. environ­mental impact of its products 1 Aircraft today are over 80% more fuel efficient than the first commercial jet aircraft – and we, as an In early 2019, the Global 7500 completed through EPDs, having previously developed industry, continue to further reduce our environmental impact. With the implementation of global the longest non-stop mission ever this expertise for the C Series (now A220) market-based measures through the International Civil Aviation Organization on the horizon, we have flown by a purpose-built business jet, aircraft family. covering 8,152 nautical miles. The aircraft continued our focus on delivering products to support industry objectives on emission reductions also set new records for speed on and enabling our customers to meet their commitments, all while making zero compromise on New York to London and Los Angeles passenger experience and safety. to New York flights.

In collaboration with industry associations, we are working to increase the availability and adoption of sustainable alternative jet fuels, taking a leadership role in educating the overall aviation community, and planning and participating in pilot programs to demonstrate their viability to our customers.

The Global 7500 aircraft offers the ultimate combination of range, speed and field performance, connecting New York to Hong Kong and Singapore to San Francisco non-stop.

1. CO2 emissions reduction per seat km, Air Transport Action Group, Aviation Benefit Beyond Borders Report, 2018.

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DELIVERING VALUE TO OUR CUSTOMERS

As a global player operating in an extremely competitive industry, we are committed to ensuring our customers receive an exceptional experience in every interaction, at every site and across every team around the world. Our dedication to customers is fundamental to our success and growth ambitions. Building on our transformational changes executed in the past three years, we are focused on deepening the customer experience. Developing close relationships and helping them deliver value is what makes Global 6000 aircraft us compete successfully and win in our different business segments.

Our Customer-Centric Approach FOCUSING ON CUSTOMER NEEDS DEEPENING THE CUSTOMER EXPERIENCE With more than 100,000 rail cars, 4,800 We continue to ensure our products and Q&A: business jets, and 1,250 CRJ Series aircraft in services are tailored to our customers' needs. service around the globe, we see tremendous For instance, our new CRJ550 aircraft which Q: As part of your transformation plan, can you describe your move to a global Transportation oppor­tunities to continue to elevate our replaces the existing fleet of aging 50-seaters, product platform offering and benefit for customers? Rolling Stock customer offering. In addition to delivering offers an improved passenger experience Order Mix innovative eco-efficient products, we are by being the first triple-class 50-seat aircraft In Transportation, we are realigning our product portfolio and driving customer % ■ MOVIA metro working hard to optimize our aftermarket in the world and offering ample on-board value with integrated solutions based on a product platform of four categories: Re-use ■ Continued innovation operations by securing more long-term storage for carry-on bags and more passenger mainline, urban, equipment and signalling. This change enables us to apply inno­va­tions main­tenance contracts in our rail operations living space. across our products, reduce development and testing times and ensure efficient and opening new service centres in our maintenance, providing our customers with greater eco-efficiency, reliability, Also, as we bring more Global 7500 aircraft Aerospace business. speed to market and on-time deliveries. 99.5% into service in 2019, we plan to get real-time in-service reliability feedback and make the necessary adjustments DELIVERING ON PERFORMANCE by rail products to provide our customers with the highest Q: What type of initiatives did you invest in last year to create a more tailored Our success depends on our ability to quality of service reliability. customer experience? ~70% bring even more value to our customers by RE-USE delivering leading performance. In 2018, Over the past year, we continued to inject resources and talent in our local SUPPORTING LONG-TERM 200 the Global 7500 aircraft entered service, customer organizations to deliver services and systems integration to customers aircraft serviced STRATEGIC PARTNERSHIPS following a highly efficient and successful looking for a more tailored experience. For example, working closely with a daily by Our 2018 contract win to supply Singapore’s 2010–2015 2016–2018 flight test validation. customer in the UK, we were able to redesign part of our rolling stock to enhance Business Aircraft Land Transport Authority with 396 MOVIA the passenger experience, while introducing digital technologies to reduce In Transportation, we have hundreds of metro cars is a testament to our focus on maintenance time. These improvements are enabling the customer to use the same ongoing projects being executed worldwide, delivering performance, providing aftermarket Improving our rolling equipment to service 20% more routes with a better experience for passengers. CRJ550 with the vast majority of them tracking to our technical support, and improving local stock order mix has aircraft launched objectives. To date, our rail products have competencies to develop local and long-term enabled us to achieve achieved 99.5% reliability in service. We also partnerships with our customers. This new Q: Can you tell us more about how your integrated end-to-end solutions are economies of scale and increased by 20% the number of trains produced order is the continuation of a 25-year-long providing more services for customers? lower integration risk. This and in-service in 2018 compared to 2017. partnership enabling the City of Singapore change of approach Specifically, in business aviation, we are getting closer to our customers and to succeed with a significant modal shift from creates significant value expanding our capability with increased service offerings. Last year, we broke road to rail with daily passengers preferring for our customers. ground on our new Miami-Dade Opa Locka facility, more than doubling our customer to take rail transit 45% of the time, compared service footprint in Florida. We also announced a new line maintenance­ station in to less than 25% in 2002. Paris and added 7 new Mobile Response Team vehicles to our fleet, as well as a Frankfurt-based Challenger 300 aircraft to support operators in Europe. In early 2019, we announced the expansion of our Singapore service centre, which will be the largest OEM-owned business aviation maintenance facility in Asia. Our service network currently supports 200 aircraft daily and has helped drive a double digit aftermarket revenue growth between 2017 and 2018.

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ACHIEVING OPERATIONAL EXCELLENCE

We are positioning ourselves well to drive sustainable productivity and performance right into our day-to-day operations to reduce costs and deliver for our customers. We continue to make significant progress towards our transformation plan. We accelerated our efforts to improve productivity, operate Lean initiatives, reduce costs and deploy the most efficient tools and processes to leverage the scale of our company. Looking forward, we will continue to measure ourselves against industry benchmarks, as we strive for world-class standards.

Driving Productivity INDIRECT SPEND MANAGEMENT ENGAGING WITH OUR SUPPLIERS During the past year, we have defined four Based on a clear understanding of our indirect Q&A: initiatives to further improve our performance: spend on goods and services, we reorganized an enterprise-wide productivity system, a ourselves and identified further opportunities to Q: What foundations do you have in place to mitigate potential ESG risks Railsponsible strategic supply chain organization, our indirect reduce our procurement costs. Notably, we built in your supply chain? in numbers spend management and inventory and working a strong partnership with Accenture to leverage Sustainability Score (%) capital improvements. their source-to-pay operations, enabling us to As part of our focus on operational efficiency, we are actively engaging with our ■ Number of Respondents decrease our cost structure through more suppliers to mitigate business environmental, social and governance (ESG) risks, 53.4 ENTERPRISE-WIDE PRODUCTIVITY intelligent and efficient digital processes and improve sustainable product performance, and reduce inefficiencies in our operations.

Our new productivity system leverages our tools. We also reduced the number of suppliers We also expect our suppliers to abide by our Supplier Code of Conduct, which we 859 financial and human capital skills to effectively in our value chain, negotiating long-term use as a tool to promote a deep orientation towards first-class quality levels and the 48.6 deploy common processes and tools to agreements and partnering with integrators. importance of complying with high ethical, environmental and social standards. 48.5 Rear fuselage fabrication increase our productivity level and maximize We are currently deploying strategies across all 555 return on investment. We launched an Integrated indirect categories to further reduce our costs. 428 Q: How are you engaging within the industry to influence supplier Business Process across Transportation sites sustainability practices? to standardize planning and execution. Its INVENTORY AND WORKING % deployment will be expanded further in 2019. CAPITAL EFFICIENCIES Working through the industry initiative Railsponsible, we are helping empower 50 Ensuring we have the right level of working suppliers to report on their sustainability practices. In the 2017–2018 period, more increase in best cost Across our manufacturing operations, we are 2015–2016 2016–2017 2017–2018 capital will be a critical success factor in than 850 railway industry suppliers took the assessment, enabling best practice content for also incorporating standardized, integrated work Transportation our ability to grow efficiently and sustainably. sharing and capacity building among rail suppliers. Also, as a founding member to processes and are accelerating our trans­for­ products The ramp up in Aviation and the growth the International Aerospace Environmental Group, we contribute to the development mation to Lean manufacturing. For example, we Last year, three new in Transportation businesses has certainly of voluntary consensus standards around the environment and responsible sourcing. are bringing to scale Lean capabilities in certain members joined created challenges for our working capital Last year, we also directly engaged our suppliers to monitor regulated substances, locations to improve demand management, Railsponsible to engage LAUNCHED improvements. Nevertheless, in the first quarter obtain declarations of compliance on the use of controlled substances and identify synchronize with our customers and effectively their supply chain, enterprise-wide of 2019 we continued to accelerate our progress opportunities to replace certain substances in our products. manage production. helping the initiative get productivity system by deploying a common inventory reduction more traction among approach across our businesses. We formed SUPPLY CHAIN ORGANIZATION Q: How do you help drive supplier performance? the rail industry at large. teams of inventory and planning experts, IMPROVEMENTS TOP comprising IT, Lean and project management As part of our engagement with suppliers, we recognize suppliers working together aerospace suppliers With a significant portion of our cost structure experts to fully transform our sites. Teams with us to meet our objectives and exceed customer expectations. We awarded recognized driven by suppliers, we have been working hard will be deployed to transform and sustain three of our 2018 top performing aerospace suppliers with Diamond certification to reduce the cost of our products and goods, working capital performance. In 2019 and during our recent Aerospace Suppliers Symposium, recognizing their sustained standardize tools and processes in our supply 2020, we will further advance supply chain excellence in operational performance and competitiveness. In 2019, we plan to chain organization, and improve perfor­mance organizational and process improvements extend this certification to Transportation suppliers. for our customers. For example, in the last three to drive towards world-class levels. years, our ability to leverage the global scale of our Transportation business and its supply base has enabled us to increase by 50% the best cost content in our Transportation­ products compared to 2015. OMNEO (Regio 2N) Electric Multiple Unit production, Crespin, France

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REASSESS MATURITY OF OUR COMPLIANCE PROGRAM LEADING WITH Risk management is an essential element of our compliance management framework. We annually assess our compliance risks to proactively identify possible weaknesses as well ETHICS AND INTEGRITY as the appropriate controls and mitigating measures on our top risks. Strict compliance, high standards of ethical conduct and a strong values-based corporate culture In 2018, we welcomed our new Chief Ethics and Compliance define how we conduct ourselves in our work environment, business practices and relationships with Officer, reinforcing our commitment to achieving excellence external stakeholders. Our Code of Ethics and Business Conduct underpins how we do business and in compliance. As a first step, he undertook a detailed assess­ment of the maturity of our Ethics and Compliance interact with others, setting a clear direction for the company, our employees and for third parties program, which included a third party review and bench­mark working for or on our behalf. of our program against leading practices to identify ways to INNOVIA Automated People Mover 200 system, Sky Harbor International Airport, Phoenix, United States improve our compliance and control framework.

STRENGTHEN ETHICS AWARENESS Setting Clear Expectations Reinforcing strong ethical conduct remains a constant priority Elevating Our Compliance for us, which we embed across our business through ongoing 70 Anchored by our strong zero non-compliance We are subject to changing laws and Management System Ethics and Compliance culture, we do everything we can to maintain regulations and are committed to conducting training and communication. Last year, our senior leadership elevated their communications to our employees on the Ambassadors in the trust and respect of those with whom our business in a lawful, fair and honest way. In 2018, our compliance and control framework 35 countries importance of ethical conduct in our Ethics and Leadership we interact. We have a strong value of As a signatory to the UN Global Compact – maturity assessment enabled us to identify certain series. We also released Ethics in Action – an employee integrity, backed up by our Code of Ethics a voluntary global standard, we support gaps and weaknesses in our compliance processes, bulletin to communicate concrete examples on how to make and Busi­ness Conduct, solid compliance international commitments on human rights, and helped us focus our improvement actions on the right decisions, including actions on gifts and entertain­ UNGC processes, training and communications labour, the environment and anti-corruption. the most strategic areas. Based on the assessment principles integrated focused on core risks to help our employees Last year, we continued to strengthened ment, fair competition, and legal compliance, among others. into our business results, we defined a four-year roadmap and started make the right decisions and protect the our compliance processes and reporting, and to implement several key initiatives to take our EXPAND OUR AMBASSADOR NETWORK company from financial damages and threats put in place several initiatives to take our compliance management system to the next level, Our Ethics and Compliance Ambassadors continue to play to its reputation. compliance management framework to the with the overall objective to ensure the sustainability an integral role in embedding our strong compliance culture next level. of all our compliance-related measures and at our sites. In addition to being a liaison between our activities. Many actions included in the roadmap local sites and Corporate Ethics & Compliance Office, our have already been initiated in 2018, including: ambassadors act as on-site resources for employees whenever they have questions, concerns or need training > COMPLIANCE GOVERNANCE: We formalized on specific topics related to ethics and compliance. In 2018, our reporting structure to the Corporate General we expanded the network to 70 ambassadors in 35 countries, Counsel Office and quarterly reporting to the compared to 55 ambassadors in 30 countries in 2017. Audit Committee of the Board of Directors and we engaged senior management on key ENSURE ETHICAL POLITICAL ENGAGEMENT improvement initiatives. We continue to foster an open dialogue between govern­ ments, the public and the business community, as we believe > STANDARDIZED REQUIREMENTS: We initiated this contributes to informed government decisions and actions to strengthen all our internal policies benefits the communities we are part of. Bombardier is and procedures and started the update our Code non-partisan and our political contributions solely reflect of Ethics and Conduct to be launched in 2019. our responsible citizenship, as well as the best interest > TRAINING: We provided risk-based training of the company. Lobbying activities follow strict processes, sessions for targeted employees dealing with and meet registration and reporting requirements to the specific potential risks. For example in 2018, respective authorities. we held in-classroom and e-learning training on gifts and entertainment for management, as well as for employees in our sales, procure­ment, and legal functions. We also provided an anti-corruption e-learning training for all our employees.

CRJ Series

18 BOMBARDIER INC. 2018 ACTIVITY REPORT BOMBARDIER INC. 2018 ACTIVITY REPORT 19 TALENT

DEVELOPING WORLD-CLASS TALENTED LEADERS

The future of our business depends on our ability to create a high-performance culture to deliver on our transformation plan. As we build a talented workforce, we need our people to develop their skills and be highly motivated, engaged and resilient. In recent years, we made significant changes to streamline our business, reduce costs, and reallocate resources. We are conscious of the effect restructuring can have on employees, and remain committed to offering support in line with local requirements.

Shaping the Future of Work In 2018, we announced the launch of the ATTRACTING TALENT IN A CHANGING ENVIRONMENT Last year, we shifted our focus and revisited Bombardier Academy of learning, which will Q&A: our human resources (HR) strategy, which bring our learning and development programs is all about leading with foresight and focus, under one umbrella for all our employees Q: How is Bombardier’s workforce evolving given the We also committed a multi-million dollar contribution stan­dardizing our operations and developing around the world. The new Academy current business context? to the Downsview Aerospace Innovation and Research high performance experiences for our employees. will progressively include leadership and Consortium (DAIR) – an important aerospace hub in Employee, self-development learning solutions and will Since 2015, our focus on building a resilient and sustain­ and announced our third collaboration agreement Mexico facility CONSISTENT APPROACH encompass different Bombardier Faculties able business model has remained steadfast. With tough in Thailand with Mahidol University for graduate education Last year, we made a deliberate decision to focused on functional skills development in productivity measures in place, this has translated into and research in rail transportation. implement global initiatives to move towards specific areas (i.e., Procurement, Achieving further reductions in our workforce, which we announced a cohesive HR organizational model to allow Excellence System, Ethics & Compliance). in November of 2018 and expect to roll-out in 2019 far greater consistency and synergies across and 2020. Although hiring is limited, we need to make Q: How are you ensuring diversity and inclusion in NEW For example, 32 courses were introduced our company. So far, we made changes in the sure we remain well-positioned and competitive to your workforce? Bombardier Academy in 2018 under the Procurement Faculty of learning HR leadership team to align with our vision, attract top talent as market conditions improve, and as helping employees heighten their skills, for Today, we are proud of our global workforce of and reorganized our HR Operations group we grow our business in the future. instance, in negotiation, contract drafting 68,000 employees worldwide, representing 141 nationalities. under the same leadership. and environmental­ regulations management. In Canada alone, our aerospace industry foresees a To continue our growth as a world-class organization, REINFORCED Progressing into 2019, we plan to continue Moving into 2019, we will also launch the shortage of 55,000 aircraft workers by 20251, including our ambition is to be recognized as an inclusive, accessible employees' and attractive employer. performance objectives consolidating our Centers of Expertise under Bombardier Leadership MasterClass, an maintenance, avionics and composite technicians and one leadership, and progressively reorganize advanced leadership development program engineers. These skills shortages coupled with an aging As part of our gender diversity focus, our ambition is our HR Business Partners Model to enable for our top Executives. workforce will result in a highly competitive labour to have at least 25% of management positions and 30% collaboration, efficiency and global alignment. market in the coming years. of Board positions held by women. We also continue to PERFORMANCE CULTURE work collaboratively within the transportation sector SIMPLIFIED PROCESSES We reinforced our performance-based Q: What strategies are you focusing on to develop to promote diversity. We have reached our goal for Board Although our productivity levels have improved culture through the revamp of our employee future skills? representation, but despite our best efforts, women have since we began our turnaround plan, we still performance management system. The remained under-represented in our workforce, an area have more to do to achieve our ambitions. To upgraded system provides our team with Our strategies are focused on the many partnerships we plan to improve. In 2018, we integrated diversity as a deliver this, we supported a number of initiatives new categories of performance objectives we have with local teaching and research organizations criteria in selecting sponsorship opportunities and we to standardize and simplify employee manage­ aligned with our corporate objectives, as across the world to develop the next generation of signed the UK Women in Aviation and Aerospace Charter ment processes throughout our organization. well as simplified performance review tools. talented professionals in our industry. In addition to to increase gender balance across the sector. Moving into We also added a new compensation module Starting in 2019, employees will build their providing hundreds of internships annually to students 2019, we will re-energize our global inclusion and diversity to provide our people with common goals, own annual objectives based on pre-defined across engineering and other disciplines, last year, we strategy by focusing on impactful targeted initiatives that metrics and processes across the organization, categories to ensure they contribute to our donated a CS100 flight test vehicle to the École nationale will contribute to a cultural shift. irrespective of geography. corporate priorities. d’aérotechnique (ENA) in Québec, supporting new training opportunities for students across the fields of A compensation module was also developed TALENT DEVELOPMENT avionics, maintenance and aerospace engineering. for managers to help them better evaluate their We want our employees to develop their skills, employees’ performance and build the right focus on achievement, and feel empowered structure to instill a high-performance culture. to expand their career opportunities with us. 1. Canadian Council for Aviation & Aerospace, 2018 Labour Market Information (LMI) Report.

20 BOMBARDIER INC. 2018 ACTIVITY REPORT BOMBARDIER INC. 2018 ACTIVITY REPORT 21 HSE PREVENTIVE CULTURE

RISK MANAGEMENT DEEPENING OUR We employ a risk-based HSE manage-­ ment system which allows us to allocate resources to the most significant exposures.­ HSE PREVENTIVE CULTURE Identifying, assessing and controlling risk is at the core of our management system. Our vision to be a leader in a health, safety and environment (HSE) preventive culture is an extension of our BEHAVIOURAL CHANGE core values and commitment to be a safe and environmentally responsible company. Last year, we worked We foster our HSE preventive culture hard to further deepen our preventive culture across the organization. We progressed in strengthening our by empowering everyone to take action disciplined approach to safety performance and furthering our ambition for zero harm. against risks and hazards. Promoting and reinforcing safe behaviours is celebrated and the deterrents to unsafe behaviour Employee, maintenance site, United Kingdom continue to evolve and expand. In 2018, the Aviation businesses strengthened critical control parameters to advance Living our HSE Values LEADERSHIP ENGAGEMENT workplace safety, while Transportation Focusing on Critical Risks 45% Through strong leadership and personal A successful HSE preventive culture starts at fostered key safety behaviours, conducting­ incident rate reduction responsibility, we have set expectations for the top and permeates into all aspects of our safety tours in our facilities. We have invested in making our people, equipment and processes safer since 2013 all our employees, aligned within our five work. Senior management takes a leadership and we have seen our overall incident rate decrease by 45% from 2.0 HSE long-term goals: leadership and account­ role in setting clear expectations to help LESSONS LEARNED in 2013 to 1.1 in 2018. We also continue to gain insights on trends, control ability; strong governance; preventive risk our people excel as leaders. Last year, we We monitor and assess our systems, measures and areas of improvement through regular internal and third NEW manage­ment; HSE practice sharing; and welcomed our new global Head of Health programs and practices and identify party compliance audits. global Head of continuous improvement. and Safety who leads and develops the improvement opportunities. In 2018, Health and Safety company’s strategic direction, and ensures Driving Performance Despite our best efforts, we regret two fatal we completed detailed mapping of all alignment across all divisions and sites. We focus on understanding the key activities and processes that could incidents in 2018. We thoroughly investigated our site activities to improve our ability lead to critical risks at our sites. This includes investigating both critical the causes and are using the information In 2018, HSE prevention was integrated as a to share learnings. When incidents occur, incidents and near misses, and working collaboratively with our sites in: to help prevent similar events as we work component of our employees’ annual Perfor­ we conduct comprehensive reporting towards eliminating all injuries. mance Management Plans (PMP). Starting in and investigation practices to learn from > ENGAGING OUR LEADERSHIP making critical safety risks a top 2019, employees with a PMP will be evaluated the underlying causes, and share with agenda item during the executive leadership quarterly HSE meetings. on their execution of personal HSE objectives. the rest of the organization to prevent similar incidents. > STANDARDIZING EXPECTATIONS AND REQUIREMENTS for critical risk processes. For example, our Transportation business developed Critical Risk Directives and our Aviation business focused on a critical risk management deployment process.

> PERFORMING INSPECTIONS through safety tours by management to assess critical risk processes.

Incident Rate1

2.0

1.7 1.6

1.3 1.1

2014 2015 2016 2017 2018

Employee, Querétaro facility, Mexico 1. Number of recordable cases, expressed per 200,000 hours worked.

22 BOMBARDIER INC. 2018 ACTIVITY REPORT BOMBARDIER INC. 2018 ACTIVITY REPORT 23 HSE PREVENTIVE CULTURE

REDUCING OUR ENVIRONMENTAL IMPACT

By reducing our environmental footprint and improving how we use our resources, we can increase our efficiency and do our part to protect the environment today and for the future. We recognize the important responsibility we have to minimize the adverse impact of our products and operations on the environment.

Global 6500 aircraft

Total Energy Consumption Environmental Management management system to regulate and optimize ADDRESSING CLIMATE CHANGE ■ Millions of GJ Today all our eligible sites are certified or in lighting, air conditioning and ventilation at Q&A: Revenue Intensity (GJ/million $ revenue) the process of obtaining their certification by our Morocco site. While our relative energy 283 external parties according to the ISO 14001 con­sumption remained stable, we met our 264 241 259 270 271 As a global leader of mobility solutions, we see the management of climate change risks and opportunities to Standard for Environmental Management. five-year target having reduced our absolute be an inherent part of our success as a business. We recognize the importance of transparently communicating 4.8 4.8 4.7 4.4 4.4 4.6 We successfully completed the adaptation energy consumption by 4%. on our approach. of our systems to the revised 2015 version of ISO 14001. WATER CONSUMPTION AND WASTE GENERATION Q: How is Bombardier providing oversight and Furthermore, regulatory risks could result in stricter Our teams have been working hard over the We also made progress on our water consump­ positioning in the industry on climate change? requirements on our products and manufacturing past five years to reduce the environmental activities, and we could face market risks from carbon

BASELINE tion and waste generation and achieved all impact of our operations and meet our five- From a governance standpoint, our Board of Directors’ 1 our targets. In 2018, we reduced our absolute pricing that increases costs for our customers. 2013 2014 2015 2016 2017 2018 year targets between 2014 and 2018: Finance and Risk Management Committee oversees water consumption by 8% when compared to our risks. It is supported by a strong senior leadership > reduce absolute energy consumption, 2013 – mainly due to the installation of new team who ensures our sustainable product innovations Q: How are you strategically positioned and taking GHG Emissions GHG emissions, water consumption and water meters and water leak repairs at our leadership to tackle climate change? Scope 1 & 2 and operational efficiency projects address evolving waste by 1%; sites. We also reduced our absolute waste ■ Thousands of tonnes of CO e risks and maximize the opportunities in alignment with 2 In a world of carbon-conscious travel and resource Revenue Intensity (tonnes of > reduce relative water consumption and generation by 5% compared to 2013. Notably, our transformation plan. CO e/million $ revenue) con­straints, we believe we can make the greatest contri­ 2 waste by 1% and energy consumption we successfully decreased hazardous waste 17 16 17 17 17 17 As a signatory to the unprecedented Aviation Industry bution by developing innovative, low-carbon sustainable and GHG emissions by 3% per 200,000 by 26% and exceeded our five-year target Commitment to Action for Climate Change, and as mobility solutions, and doing so in the cleanest, most 316 321 314 285 272 280 worked hours; and for waste valorization reaching an efficiency rate of 84% in 2018. an active leader of the General Aviation Manufacturers energy efficient way possible. Our rail innovations, such as > increase waste valorization by 3%. Association (GAMA) Environment Committee, we our new battery-powered TALENT 3 train, are specifically Tracking to our 2013 baseline, we made GHG EMISSIONS contribute­ to the industry’s progress to reduce the impact designed to help cities and communities move towards a progress and achieved an overall improvement, Furthermore, we have successfully reduced of air travel on climate change, which includes the low-carbon world. adoption of an international regulatory framework to BASELINE all through a thriving period of robust product GHG emissions generated from our operations. In aerospace, our product innovation strategies are reduce aviation’s emissions. 2013 2014 2015 2016 2017 2018 development and testing at Aviation and Relative GHG emissions per worked hours aligned with the business aviation sector goals to achieve increase in production at Transportation. decreased by 8% and absolute emissions an average 2% annual fuel efficiency improvement by 2020, decreased by 11% compared to 2013. In addition Q: How are climate-related risks identified achieve carbon neutral growth from 2020; and, reduce Waste ENERGY CONSUMPTION to our energy efficiency projects, we benefited and assessed? CO2 emissions by 50% by 2050, based on 2005 data. Hazardous and non-hazardous Majority of our direct energy consumption from renewable energy sources available at ■ Thousands of tonnes Last year, along with industry partners, we also continued Valorized waste is driven by production and changing demands some of our sites. In 2018, more than 35% of While highly uncertain, we recognize that physical (% of total waste) for heating or cooling. To reduce our impact, our energy requirements for electricity were risks – including changes in rainfall and storm to lead the charge for increased adoption of Sustainable 81 84 ( ) 76 77 76 78 our efforts have focused on improving energy supplied by renewable electricity sources. patterns, rising water levels, changing temperatures Alternative Jet Fuel SAJF in the business aviation efficiency, including through LED lighting and water shortages – could influence decisions to segment. In early 2019, as the result of our efforts, Van Nuys 56 54 51 47 52 54 As we increase production in major growth retrofits, compressor heat recovering and construct new facilities, create indirect financial risks in Airport became the first general aviation airport in the programs in 2019, we have fixed a one-year new inverter air conditioning units. In 2018, our supply chain and lead to process disruptions. United States to offer SAJF to operators on a trial basis. target aimed at sustaining 2018 results through we also installed a new building control this pivotal year.

BASELINE 1. Refer to our Financial Report 2018 for complete description of risks and uncertainties. 2013 2014 2015 2016 2017 2018

24 BOMBARDIER INC. 2018 ACTIVITY REPORT BOMBARDIER INC. 2018 ACTIVITY REPORT 25 CORPORATE CITIZENSHIP

SUPPORTING STRONGER COMMUNITIES

We are making a positive difference in our local communities through education, environmental sustainability, In 2018, we supported stakeholder engagement and social inclusion. These areas fit with our business and enable us to maximize 300+ organizations our investments, as well as the skills and expertise of our employees. In 2018, we supported more than in 20+ countries. 300 organizations worldwide directing more than $2.8 million to help our communities prosper and grow. We also fund our philanthropic arm, the J. Armand Bombardier Foundation. In 2018, the Foundation donated $4.2 million1 to organizations, helping fulfill our social responsibility in our home community of Canada.

Students of Robotics FIRST Québec Community activity, Sierra Gorda Showcasing our technology at a rail exhibition Experiencing flight at the J. Armand Bombardier Ingenuity Museum

Education Sustainable Development Stakeholder Engagement Social Inclusion Support education perseverance in Science, Technology, Support sustainable development projects that enhance quality Support opportunities to maintain and develop responsible Support organizations that foster innovation, capacity Engineering, and Mathematics (STEM), university collaboration of life, encourage environmental responsibility and practices, and business relationships with key industry stakeholders and building and human dignity in Canada through the J. Armand and entrepreneurship. drive collaborative industry action for sustainability. shine as an active member of the business community. Bombardier Foundation.

2018 HIGHLIGHTS 2018 HIGHLIGHTS 2018 HIGHLIGHTS 2018 HIGHLIGHTS

> Donated a 45 aircraft to the Exploration Place's > Contributed to protect and help flourish the Sierra Gorda > Became the Sustainability Partner of the Thai-Canadian > Donated $1 million1 to the Montreal Heart Institute to enable the Design, Build, Fly exhibit in Wichita, , where visitors Biosphere Reserve through its carbon credit program in Mexico. Chamber of Commerce to cooperate on clean technology, launch of a clinical study aimed at reducing heart attack and discover how airplanes are designed, built and flown. > Supported no.9's Imagining My Sustainable Community education, leadership and diversity in Thailand. stroke recurrences through a low cost plant-based medication. > Celebrated our 15-year support for Belfast Employer forums, program empowering youth to create solutions for more > Contributed to heighten aviation safety through active > Helped scale up Wapikoni Mobile's award-winning program to which helped more than 1,900 long-term unemployed citizens sustainable communities in , Canada. engagement and support at various industry events. combat isolation and suicide among First Nation youth through find jobs through education and skill improvement. > Led a workshop on eco-design and environmental sustainability > Encouraged networking and development for women cinema and music across Canada. > Helped advance student research on mobility and access to at the Movin'On World Summit on Sustainable Mobility. at the International Aviation Womens Association annual > Celebrated five years of coaching social leaders through our mass transit through the New York University's Rudin Center conference held in the United States. Philagora cohort on social innovation and the culture of change. for Transportation Policy and Management.

3,000+ 14,000+ 37% 50+ participants in the Québec No.9 students embracing sustainable of our total contribution targeting non-profit executives benefiting from FIRST Robotics Competitions in 2018 development since 2006 stakeholder engagement in 2018 Philagora program in five years

1. Canadian dollars.

26 BOMBARDIER INC. 2018 ACTIVITY REPORT Museum photo: Jean-Michel Naud BOMBARDIER INC. 2018 ACTIVITY REPORT 27 NOTES

ABOUT THIS REPORT

The 2018 Bombardier Activity Report is guided by the Global Reporting Initiative Standards and the International Integrated Reporting Council framework. This report is only a part of our ongoing dialogue with stakeholders and we welcome your feedback and questions at [email protected].

INNOVIA monorail

This report addresses Bombardier’s performance­ and backlog mix; the expected impact of the negative of these terms, variations of them or certification and homologation of products and pendency of the formation of Bombardier Aviation Unless otherwise required by applicable securities across all our facilities worldwide including our legislative and regulatory environment and legal similar terminology. Forward-looking statements services; fixed-price and fixed-term commitments on the market price of the Corporation’s shares laws, the Corporation expressly disclaims any joint ventures. We have included financial data for proceedings on the Corporation’s business and are presented for the purpose of assisting investors and production and project execution, including and on the financial performance of Bombardier. intention, and assumes no obligation to update or Bombardier Inc. and its subsidiaries as well as operations; strength of capital profile and balance and others in understanding certain key elements challenges associated with certain Transportation’s With respect to the pursuit of a divestiture of the revise any forward-looking statements, whether updates on the societal, environmental, governance­ sheet, creditworthiness, available liquidities and of the Corporation’s current objectives, strategic legacy projects and the release of working capital Corporation’s operations in Belfast and Morocco as a result of new information, future events or and economic issues that are most important­ to capital resources, expected financial requirements priorities, expectations and plans, and in obtaining therefrom; pressures on cash flows and capital discussed herein specifically, certain factors that otherwise. The forward-looking statements the company and our stakeholders. This report and ongoing review of strategic and financial a better understanding of our business and expenditures based on project-cycle fluctuations could cause actual results to differ materially from contained in this Activity Report are expressly includes quantitative data reflecting our perfor­ alternatives; the introduction of productivity anticipated operating environment. Readers are and seasonality; risks associated with our ability to those anticipated in the forward-looking statements qualified by this cautionary statement. mance for the year ended December 31, 2018. enhancements, operational efficiencies and cautioned that such information may not be successfully implement and execute our strategy, include, but are not limited to: the failure to identify This Activity Report is not intended to form the Most of the financial information in this report is restructuring­ initiatives and anticipated costs, appropriate for other purposes. transformation plan, productivity enhancements, and complete any divestiture or other transaction basis of any investment decision and there can be extracted from our 2018 Annual Financial Report. intended benefits and timing thereof; the expected By their nature, forward-looking statements operational efficiencies and restructuring initiatives, resulting therefrom within the expected time no assurance that any divestiture or other transaction All financial figures are in U.S. dollars unless objectives and financial targets underlying our require management to make assumptions and are including the formation of Bombardier Aviation; frame, on commercially satisfactory terms or at all; in respect of the Corporation’s operations in Belfast otherwise stated. For more detailed information transformation plan and the timing and progress subject to important known and unknown risks and doing business with partners; risks associated with all or part of the intended benefits therefrom not and Morocco will be undertaken in whole or in part regarding our financial disclosures for the in execution thereof, including the anticipated uncertainties, which may cause our actual results the Corporation’s partnership with Airbus and being realized within the anticipated timeframe, or of the timing or successful completion thereof, year ended December 31, 2018, please see our business transition to growth cycle and cash in future periods to differ materially from forecast investment in CSALP; risks associated with the or at all; and the incurrence of related costs and or the amount and use of proceeds therefrom, or 2018 Annual Financial Report. generation; expectations and objectives regarding results set forth in forward-looking statements. Corporation’s ability to continue with its funding expenses; and negative effects of the announcement that the anticipated benefits will be realized in their debt repayments, expectations and timing While management considers these assumptions to plan of CSALP and to fund, if required, the cash or pendency of any such divestiture or other entirety, in part or at all. Data Verification regarding an opportunistic redemption of Caisse be reasonable and appropriate based on informa- shortfalls; risks associated with our ability to transaction. With respect to the Pending The information provided for our environmental de dépôt et placement du Québec’s (CDPQ) invest- tion currently available, there is risk that they may successfully integrate our acquisition of Triumph’s Transaction discussed herein specifically, certain Global 5500, Global 6500, Global 8000 and indicators is partially verified by an external party. ment in Bombardier Transportation (Investment) not be accurate. The assumptions underlying the Global 7500 wing manufacturing operations and factors that could cause actual results to differ CRJ550 Aircraft Disclaimer Energy and GHG emissions data from our Belfast, UK Limited (BT Holdco); intentions and objectives forward-looking statements made in this Activity assets; inadequacy of cash planning and manage­ materially from those anticipated in the forward- The Global 5500, Global 6500, Global 8000 and U.K. site is verified by external parties under the EU for the Corporation’s programs, assets and Report in relation to the pursuit of a divestiture of ment and project funding; product performance looking statements include, but are not limited to: CRJ550 aircraft are currently under development, ETS, which includes BSi Assurance UK Ltd., located operations, including the focus on returning to the Corporation’s operations in Belfast and Morocco warranty and casualty claim losses; regulatory and the failure to receive or delay in receiving regulatory and as such are subject to changes in family at Kitemark Court, Davy Avenue, Knowlhill, Milton profitability and exploration of strategic options include the following material assumptions: the legal proceedings; environmental, health and approvals, or otherwise satisfy the conditions to strategy, branding, capacity, performance, design Keynes, MK5 8PP. Energy and GHG emissions for the CRJ Series program; the anticipated identification and successful completion of one or safety risks; dependence on certain customers, the completion of the transaction or delay in and/or systems. All specifications and data are data from some sites in Québec, Canada are also benefits of the formation of Bombardier Aviation more divestiture(s) or other transactions resulting contracts and suppliers; supply chain risks; human completing and uncertainty regarding the length approximate, may change without notice and are verified by external parties, which includes Saint- and the expected timing of completion thereof and therefrom on commercially satisfactory terms and resources; reliance on information systems; of time required to complete such transaction, and subject to certain operating rules, assump­tions and Laurent facility located at 1800 Marcel Laurin, estimated costs associated therewith; the pursuit the realization of the intended benefits therefrom reliance on and protection of intellectual property the funds and benefits thereof not being available other conditions. This document does not Saint-Laurent, Québec, H4R 1K2 and Challenger of a divestiture of the Corporation’s operations in within the anticipated timeframe. The assumptions rights; reputation risks; risk management; tax to Bombardier in the time frame anticipated or at constitute an offer, commitment, representation,­ facility located at 500 Côte-Vertu Ouest, Dorval, Belfast and Morocco, the anticipated benefits of any underlying the forward-looking statements made matters; and adequacy of insurance coverage), all; alternate sources of funding that would be guarantee or warranty of any kind. Québec, Canada H4S 1Y9. In addition, seven divestiture or other transaction resulting therefrom­ in this Activity Report in relation to the Pending financing risks (such as risks related to liquidity used to replace the anticipated proceeds and German sites, as well as our sites in Matranovak and their expected impact on the Corporation’s Transaction discussed herein include the following and access to capital markets; retirement benefit savings from such transaction, as the case may be, Trademarks (Hungary), and Vienna (Austria), receive annual operations, infrastructure, opportunities, financial material assumptions: the satisfaction of all plan risk; exposure to credit risk; substantial may not be available when needed, or on desirable Bombardier, Challenger 300, Challenger 350, external verification of all environmental data condition, business plan and overall strategy; the conditions of closing and the successful completion existing debt and interest payment requirements; terms. Accordingly, there can be no assurance CRJ Series, CRJ700, CRJ550, FLEXITY, Global, under the EMAS. funding and liquidity of C Series Aircraft Limited of such strategic actions and transaction within the certain restrictive debt covenants and minimum that any divestiture relating to the Corporation’s Global 5500, Global 6500, Global 7500, Partnership (CSALP); and the expected impact and anticipated timeframe, including receipt of regula­tory cash levels; financing support provided for the operations in Belfast and Morocco, or the Pending Global 8000, INNOVIA, INTERFLO, , Forward-looking Statements intended benefits of the Corporation’s partnership approvals. For additional information with respect benefit of certain customers; and reliance on Transaction will be undertaken or occur, or of the MITRAC, MOVIA, OMNEO, REGINA, TALENT and This Activity Report includes forward-looking with Airbus and investment in CSALP and the to the assumptions underlying the forward-looking government support), market risks (such as risks timing or successful completion thereof, or the TWINDEXX are trademarks of Bombardier Inc. statements, which may involve, but are not limited realization of intended benefits of the Corporation’s statements made in this Activity Report, refer to related to foreign currency fluctuations; changing amount and use of proceeds therefrom, or that the or its subsidiaries. to: statements with respect to the Corporation’s, acquisition of Inc. (Triumph)’s the Strategic Priorities and Guidance and forward- interest rates; decreases in residual values; increas- anticipated benefits will be realized in their entirety, anticipations and guidance in respect of various Global 7500 wing manufacturing operations and looking statements sections in Overview, Business es in commodity prices; and inflation rate in part or at all. There can also be no assurance financial and global metrics and sources of assets. As it relates to the sale of the Q Series Aircraft, Commercial Aircraft, Aerostructures and fluctuations). For more details, see the Risks and as to the completion, the form, or the timing of contribution thereto, targets, goals, priorities, aircraft program (the Pending Transaction), this Engineering Services and Transportation in the uncertainties section in Other in the MD&A of the any BT Holdco buy-back. For more details, see market and strategies, financial position, market Activity Report also contains forward-looking MD&A of the Corporation’s financial report for the Corporation’s financial report for the fiscal year the Risks and uncertainties section in Other in the position, capabilities, competitive strengths, credit statements with respect to: the expected terms, fiscal year ended December 31, 2018. ended December 31, 2018. With respect to the MD&A of the Corporation’s financial report for ratings, beliefs, prospects, plans, expectations, conditions, and timing for completion thereof; the formation of Bombardier Aviation discussed the fiscal year ended December 31, 2018. anticipations, estimates and intentions; general Certain factors that could cause actual results to respective anticipated proceeds and use thereof herein specifically, certain factors that could cause Readers are cautioned that the foregoing list of economic and business outlook, prospects and differ materially from those anticipated in the and/or consideration therefor, related costs and actual results to differ materially from those factors that may affect future growth, results trends of an industry; expected growth in demand forward-looking statements include, but are not expenses, as well as the anticipated benefits of anticipated in the forward-looking statements and performance is not exhaustive and undue for products and services; growth strategy, limited to, risks associated with general economic such actions and transactions and their expected include, but are not limited to: the expected reliance should not be placed on forward-looking including in the business aircraft aftermarket conditions, risks associated with our business impact on the Corporation’s guidance and targets; benefits, costs and timing of the formation of statements. Other risks and uncertainties not business; product development, including projected environment (such as risks associated with “Brexit”, Printed in Canada and the fact that closing of these transactions will be Bombardier Aviation, and the risk it will not be presently known to us or that we presently design, characteristics, capacity or performance; the financial condition of the airline industry, ISBN: 978-2-923797-46-5 conditioned on certain events occurring, including completed within the expected time frame, on the believe are not material could also cause actual expected or scheduled entry-into-service of business aircraft customers, and the rail industry; Legal deposit, Bibliothèque et Archives nationales du Québec the receipt of necessary regulatory approval. expected parameters, or at all; the realization of results or events to differ materially from those products and services, orders, deliveries, testing, trade policy; increased competition; political All rights reserved. Forward-looking statements can generally be synergies and opportunities for growth and expressed or implied in the Corporation’s lead times, certifications and project execution in instability and force majeure events or global identified by the use of forward-looking terminology innovation and incurrence of related costs and forward-looking statements. The forward-looking © May 2019 Bombardier Inc. or its subsidiaries. general; competitive position; expectations regarding climate change), operational risks (such as risks such as “may”, “will”, “shall”, “can”, “expect”, expenses; the Corporation’s ability to ensure it has statements set forth herein reflect management’s working capital recovery across Transportation related to developing new products and services; “estimate”, “intend”, “anticipate”, “plan”, “foresee”, the skills, technologies and capabilities to realize expectations as at the date of this Activity Report The printed version of this Activity Report legacy projects; expectations regarding revenue development of new business and awarding of new “believe”, “continue”, “maintain” or “align”, the the anticipated benefits of organizational changes; and are subject to change after such date. uses paper containing 30% post-consumer fibres. contracts; book-to-bill ratio and order backlog; the and negative effects of the announcement or

28 BOMBARDIER INC. 2018 ACTIVITY REPORT BOMBARDIER INC. 2018 ACTIVITY REPORT 29 bombardier.com