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The Association of Business Executives
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Advanced Diploma
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12 INTERNATIONAL BUSINESS
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13 CASE STUDY
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15 Bombardier
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Afternoon 8 June 2010
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This is an open-book examination and you may consult any previously prepared
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21 Only answers that are written during the examination in the answerbook supplied by
the examination centre will be marked.
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CS0610 ABE 2010 D/500/3717
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Notes:

As in real life, anomalies may be found in this Case Study. Please simply state
your assumptions where necessary when answering questions. The ABE is not in
a position to answer queries on Case data. Candidates are tested on their overall
understanding of the Case and its key issues, not on minor details. There are no catch
questions or hidden agendas.

After the publication of the Case Study subsequent developments may occur. The
examination is based on the published Case Study and students who do not mention
such developments will not be penalised. However, students may consider such
developments in their answers if they wish.

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 BLANK PAGE

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 Bombardier

Origins in the Snow

Bombardier grew out of a young mechanics inventive genius and entrepreneurial spirit. Born in
1907, Joseph-Armand Bombardier built his first snow vehicle at the relatively young age of 15. His
motivation was to help people travel across the snow-covered roads of rural Qubec.

In 1937, Joseph-Armand Bombardier achieved his first major commercial success with the
launch of the seven-passenger B7 snowmobile. He established a company called LAuto-Neige
Bombardier Limite to manufacture the 12-passenger B12 snowmobile. Soon after, a series of
other snow-going vehicles were launched for ambulance, freight transport, mail delivery and school
transportation services.

Joseph-Armand Bombardier never abandoned his dream of inventing the perfect personal
snowmobile. His persistent experimentation eventually spawned a brand-new industry:
snowmobiling. In 1959, he launched his world-famous Ski-Doo.

Joseph-Armand Bombardier only lived to see the first signs of the snowmobiles phenomenal
success. He died in 1964, leaving behind a healthy and financially sound company.

Moving into Mass Transport

The 1973 oil crisis forced Bombardier to halve its snowmobile production. Laurent Beaudoin,
the new CEO, and his management team, responded by redeploying the companys excess
manufacturing capacity. They acquired mass transit technologies and applied Bombardiers
manufacturing know-how to build rolling stock for railways.

In 1974, Bombardier won its first mass transit contract to manufacture 423 carriages for the city of
Montrals subway system.

Soon after, the company signed a breakthrough $1 billion US contract to supply 825 subway cars
to the New York City Transit Authority and became the North American leader in rail transit.

In 1986, Bombardier expanded into Europe, and became the worlds largest rail equipment
and services market, acquiring a 45% interest in the Belgian manufacturer, BN Constructions
Ferroviaires et Mtalliques S.A.

In the same year, the company diversified again, this time entering the aerospace industry. It
purchased Canadair, the leading Canadian aircraft manufacturer of Challenger widebody business
jets and the CL-215 amphibious firefighting aircraft.

Three years later, Bombardier launched the 50-seat Canadair Regional Jet (CRJ) programme and
revolutionised regional air travel. A 70-seat version followed in 1997 (CRJ700), an 86-seat version
in 2000 (CRJ900) and a 100-seat version in 2007 (CRJ1000). Today, the CRJ Series family of
aircraft is the worlds most successful regional aircraft.

In 1989, Bombardier acquired ANF-Industrie, Frances second largest manufacturer of railway

equipment.

The launch of the Sea-Doo watercraft boosted Bombardiers share of the recreational consumer
goods market.

Bombardier acquired Short Brothers plc, the pioneering aviation manufacturer based in Northern
Ireland. With this acquisition, Bombardier reinforced its aerospace capabilities and established a
European presence in the industry.

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The Nineties - major growth

In the 1990s, Bombardier made a series of acquisitions that further strengthened its geographic
and technological leadership in rail transportation.

In 1990, it entered the UK market for the first time, acquiring Procor Engineering Limited, a
manufacturer of body shells for locomotives and rail passenger cars.

In 1992, it ventured into Mexico, acquiring the rail rolling stock manufacturer Constructura Nacional
de Carros de Ferrocarril.

In 1995 and 1998 respectively, it acquired Waggonfabrik Talbot GmbH & Co. and Deutsche
Waggonbau AG (DWA), rail transportation equipment manufacturers in Germany. These
acquisitions expanded Bombardiers foothold in Europe.

The acquisition of Learjet Corporations assets gave Bombardier access to the American
aerospace industry and the most complete range of business jets on the market. Bombardier
promptly launched the Learjet 60 aircraft, the first midsize business jet, which would rank as the
top-selling aircraft in its class four years later.

In 1992, Bombardier acquired Boeings de Havilland division, based in Canada, manufacturer of

the Twin Otter aircraft and Dash turboprop airliner. De Havillands Dash 8 turboprop and the CRJ
Series established Bombardier as one of the world leaders in regional aircraft. Bombardier also
launched the worlds most advanced firefighting aircraft, the Bombardier 415 amphibian.

Four years later, Bombardier launched the Flexjet fractional ownership programme, an innovative
private business jet solution for individuals and companies. It also expanded its turboprop portfolio
by launching the 70-seat Dash 8 Series 400 turboprop, renamed Q400 in 1998. In the same year,
the company launched the ATV, a brand-new all-terrain vehicle designed for two riders.

In 1999, the Bombardier Continental Business Jet was launched. It was an all-new transcontinental
super midsize business jet which was renamed the Challenger 300 in 2002.

The 21st Century

In 2000, Bombardier acquired Skyjet.com, a pioneer in real-time online air charter reservations.
Bombardier expanded this service in 2005 with the launch of Skyjet International, giving travellers
unrestricted access to more than 900 business jets worldwide.

In 2002, Bombardier launched the Bombardier Global 5000 super-large business jet.

A year later, the company added the Global Express XRS ultra long-range business jet. This
aircraft combines superior transatlantic speed with the largest cabin in the super-large segment,
the pinnacle of achievement in the world of business jets.

The Challenger 605 intercontinental business jet and Learjet 60 XR midsize business jet were
launched in 2005. In the same year, Bombardier launched the Challenger 800 Series corporate
shuttles, the latest evolution of its flagship Challenger, undisputed champion of the large business
jet category.

In 2004, the Recreational Products Division was sold off.

In 2006, Bombardier built a manufacturing facility in Quretaro, Mexico, for its aerospace business.

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Bombardier acquired Germany-based DaimlerChrysler AGs subsidiary DaimlerChrysler Rail
Systems GmbH (Adtranz). The Adtranz acquisition gave Bombardier global leadership in the rail
equipment manufacturing and servicing industry.

A year later, Bombardier relocated its transportation headquarters from Montral, Canada, to
Berlin, Germany. This move strengthened its ability to serve Europe, the worlds largest rail market.

In 2001, the 9/11 tragedy had put the worlds airline industry into a tailspin. In the area of rail
transportation, several acquisitions had created a need for greater efciency and effectiveness.

Once again, Bombardier rose to the challenge by restructuring, narrowing its focus and selling
several assets. Bombardier divested its recreational products business segment to focus on core
business operations in aerospace and transportation.

Bombardier further strengthened its leadership in rail transportation with major orders for light rail
vehicles, commuter trains and intercity trains from Germany, France and South Africa respectively.

Also in 2006, Bombardier launched the ORBITA predictive maintenance system, SEKURFLO
security management system and MITRAC Train Control and Management System (TCMS).

Bombardier launched the CRJ1000 regional jet, the next major step in the evolution of the CRJ
Series, the worlds most successful regional aircraft programme.

Bombardier also introduced the next generation of regional jets, the CRJ NextGen family, which
featured improved operating costs, an all-new cabin and increased use of composite materials.

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Current Situation

Bombardier Aerospace (BA)

NOTE: Bombardier Aviation (BA) is not in any way directly affiliated to British Airways - also
known popularly as BA.

BA has two main business activities - Aircraft manufacture and Services. Within Aircraft
manufacture, there are the sectors of business aircraft such as the Learjet range and commercial
aircraft such as the CRJ Series operated by carriers worldwide.
Services include such activities as parts logistics, leasing style operations, training, and sales of
pre-owned (second hand) aircraft.

The BA segment is described by the company as follows:

BA is a world leader in the design and manufacture of innovative aviation products and is a
provider of related services. BAs aircraft portfolio includes a comprehensive line of business
aircraft, commercial aircraft including regional jets, turboprops and single-aisle mainline jets and
amphibious aircraft. BA also provides aftermarket services as well as fractional ownership and
ight entitlement programmes.

Bombardier Transportation (BT)

NOTE: Bombardier Transportation (BT) is not in any way connected with British Telecom -
also known as BT

BT derives revenues from three areas of business: Rolling stock, which includes light rail vehicles,
traditional trains including locomotive units; Services - eet maintenance, refurbishment and
overhaul; and Systems and signalling.

The BT segment is described by the company as follows:

BT is the global leader in rail equipment and system manufacturing and a provider of related
services, offering a full range of passenger railcars, locomotives, light rail vehicles and automated
people movers. It also provides bogies, electric propulsion, control equipment and maintenance
services, as well as complete rail transportation systems and rail control solutions.
See APPENDIX 1 for a breakdown of BT Divisions, Products and Market Segments.

Key Initiatives

The two areas in which Bombardier conducts business are both greatly affected by macro
(PESTLE) factors. It is also felt that the business focus has narrowed and is limiting the growth
of the organisation. As a global organisation, Bombardier is mindful of this, and as such has
implemented several key initiatives:

Risk Management - the organisation attempts to actively manage exposure to business risks.

Corporate Social Responsibility - the organisation is committed to enhancing its reputation in

this area.

Execution Discipline - the organisation aims to become number one in customer satisfaction
through enhanced execution discipline.

Global Talent Management - the organisation wants to further improve the development of this
resource.

Local Roots - the organisation aims to establish local roots in all its key markets.

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The following sections from the 2009 Bombardier Inc. Annual Report elaborate further:

Execution Discipline - Customer Satisfaction

The fact that the world is more connected than before has led to a need for increased mobility.
Customers rely on us to deliver on time, on quality and at a competitive price. We have great
products with distinct value propositions. We must now build on our competitive advantages
through flawless execution discipline to become the number one in customer satisfaction and open
up new horizons of profit and growth. While this has been our aspiration for some time, we have
yet to fully realise our potential in this crucial area. Companies that perform well do so because
of their strong execution. Customer satisfaction must therefore be embedded in all phases of our
business processes.

We will achieve best-in-class execution discipline in each step of the business processes along the
value chain to radically improve customer satisfaction. This involves flawlessly delivering on our
promises in everything that we do.

Strategic Aspects - Both BA and BT are developing a culture of enhanced execution discipline
to achieve best practices in all business processes. At BA, it is embedded in the Achieving
Excellence System as well as in innovation, lean and extended enterprise and customer orientation
strategies. At BT, efficient execution, increased focus and customer orientation strategies, as well
as operational excellence and project management initiatives, also target enhanced execution
discipline.

To achieve best-in-class practices, we will need to implement these strategies rigorously, and go
even further by strengthening our culture of accountability and teamwork, and by concentrating on
the following leading initiatives:

- Identify key execution issues and root causes along BAs and BTs value chains and develop
metrics based on key drivers; and

- Develop a comprehensive scorecard to manage flawless execution proactively and measure

achievements against goals.

Global Talent Management

Our people are an important driver of our success. Recent growth initiatives, such as BAs CSeries
family of aircraft programme and BTs new manufacturing facility in India, underscore the need
for effective talent planning and management. Global skill shortages, new demographic realities
and increased competition for the best people mean it is more difficult to find, attract and retain
high-quality talent worldwide. Improving the way we manage talent will enable us to address these
challenges and strengthen our position as a world-class employer. While several initiatives are
currently underway, we need to accelerate them and do an even better job to manage our most
valuable asset - our people.

For every employee at Bombardier, we will intensify our efforts as a world-class employer, investing
in the development of skilled, engaged and proud talent around the world.

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Strategic Aspects - Both BA and BT are attuned to the above challenges and have a strategy
focused on people. To achieve best-in-class practices, we will need to raise our game on global
talent management and execute these strategies. We need to clearly dene and communicate,
internally and externally, a people-rst philosophy. This calls for a coherent, company-wide
approach to talent management that employs the best internal and external practices and enables
us to meet our recruitment and growth objectives. We must assign our best people to our most
important business priorities and do a better job of supporting employee development. We need
to provide even more attractive career opportunities and facilitate mobility across divisions and
geographies. We must foster greater accountability and collaboration, and better link rewards to
performance. Our new talent roadmap is aligned with our world-class employer status. As part of
this roadmap, in scal year 2010, we will:

- Focus on cultivating people leadership and hold management accountable for their
employees development and engagement.

- Develop and deliver a consistent global employment value proposition to clarify the value we
bring to current and prospective employees and accelerate the recruitment process.

- Review our human resources policies, programmes and processes to ensure that they
support the best in talent management.

- Harmonise our senior leadership programmes with our high-potential employee identication
and succession planning processes.

Along with these objectives, focusing every employee on embracing and replicating our leadership
attributes - put people rst, work together, demonstrate a passion for winning and a drive for results
- will raise our global talent management performance to world-class standards.

Actively Manage our Exposure to Key Business Risks

Manufacturing planes and trains and developing new products and services in locations around
the world exposes us to a wide variety of risks and opportunities. Todays rapidly changing
environment accelerates the pace at which such risks can materialise. Our risk management
practices are already embedded in our activities. While we have proven our ability to successfully
take on challenges, we must become even more proactive in recognising and managing risks
through a more structured framework. Improving the risk management culture by further enlisting
all stakeholders engagement will increase shareholders value. We will actively manage our
exposure to key business risks, further embedding risk management in all key functions across
the organisation. The objective is to further develop our risk insight and transparency in the
management of key risks that drive value, while proactively mitigating, managing or transferring
risks that do not create value.

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Strategic Aspects - Over the years we have developed a set of governance and management
processes and policies. In May 2007, the Board of Directors created the Finance and Risk
Management Committee, making risk management a key focus of the organisation. Pursuant to
its mandate, this committee reviews our material risks, the steps that management take to monitor,
control and manage such risks, and the adequacy of policies, procedures and controls designed
by management. To further enhance active management of our exposure to key business risks, we
must now leverage our existing competencies and develop new ones by:

- Tightly linking our risk management practices into a framework. This will allow us to better
benchmark our performance against best practices in order to identify gaps or redundant
practices, while enhancing the efciency of our people.

- Clearly explaining the role of our governance and management processes. A shared
understanding of our risks and objectives will engage employees and make stakeholders
aware of the risk framework that connects our planning, management and operational
processes.

- Optimising our capital structure to reduce costs and improve our ability to seize strategic
opportunities. This will enable us to continuously invest in our products and services, while
ensuring sound risk management.

- Allocating appropriate resources earlier in our decision-making process. This will transform
risk management into a more proactive value-driven exercise.

Establish Local Roots in all our Key Markets

Our key markets are evolving. We expect that the economic growth in our traditional markets will be
moderate. The rise of emerging economies such as China, India and Russia presents numerous
opportunities, including new markets for our products and services, access to well-trained talent
pools and potential alliances with local players. At the same time, increasingly capable and well-
funded competitors in these emerging markets pose challenges, requiring us to be ever more
innovative and cost-effective.

Recent economic events have underscored the need to reposition ourselves to fully seize growth
opportunities in emerging markets while mitigating risks. While we have no inuence over the
global economy, we can control where we do business. We are already local in several key
markets, with BTs 50 production and engineering sites and 21 service centres in 24 countries, and
over 40 service centres operated at BTs customers premises across the world, as well as BAs
worldwide aftermarket network that supports customers in over 100 countries. Expanding local
roots in these markets will strengthen our global scale and leadership. Being local will allow us to
increase our overall bid success rate, lower costs through local deal sourcing, as well as improve
our public relations, government relations and other key activities.

We will develop an effective local roots organisational model targeting our key markets worldwide.
This will allow us to readily capture new business opportunities and deliver best-in-class value for
customers and overall protability.

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Strategic Aspects - Emerging markets are an important part of our expanded customer base.
Both BA and BT have invested in developing new manufacturing sites (for example, in China, India
and Mexico) and global supply chain partnerships through initiatives such as market leadership
(LEAD) and procurement optimisation (CODE 30+), in order to develop and strengthen their local
roots. In addition, we have already established a network of Chief Country Representatives (CCR)
in both core and emerging markets to align our efforts, engage with local business and political
leaders, assist sales teams, and lead and support specific business development activities. We
must now leverage this network of CCRs and adapt our structure and processes in emerging and
new markets.

The new structure envisions a revised local organisational model, which will vary depending on
local business requirements. The new structure will be built around a collaborative model between
local CCRs and the manufacturing segments and will be jointly supervised by senior management
from both BA and BT. The local organisations will be in charge of developing and implementing a
strategy by country or region, attracting and developing local talent and building a local brand and
reputation. In fiscal year 2010, we will begin rolling out our local roots initiatives.

Enhancing our Corporate Social Responsibility

Our world and our shareholders expectations are evolving quickly, as the world faces mounting
social and environmental challenges such as climate change and rapid urbanisation. Governments,
Non-Governmental Organisations (NGOs), public-sector entities, suppliers, customers and
consumers are committed to resolving these challenges. So is Bombardier. We contribute by
developing sustainable transportation solutions to todays mobility challenges. In fact, our products
provide us with a unique opportunity to outperform the competition and become a true green
champion. It is also our responsibility to contribute to the well-being and development of our
employees and of the communities where we operate. This is why a strong commitment and a
strategic approach to corporate social responsibility are an integral part of Our Way Forward.

We will enhance our commitment to corporate social responsibility by:

- Reducing the environmental footprint of our products and operations.

- Further promoting employee H&S (Health and Safety) in our daily decisions and actions.

- Actively contributing to the development of our communities.

Strategic Analysis - BA and BT are already focused on capturing green opportunities in their
products and operations. With the CSeries family of aircraft, Q-Series turboprops and CRJ
NextGen Series of aircraft, BA offers one of the industrys most energy-efficient product portfolios.
As the industry leader, BT recently built on its unique The climate is right for trains concept
by launching the EC04 suite of energy-saving technologies. Both groups are strengthening
their commitment to product lifecycle management, setting ambitious H&S and environmental
targets and engaging employees in meeting them. We also published our first Corporate Social
Responsibility report in December 2008, which presents our approach to sustainability, our
achievements and the areas needing improvements. We have also been selected as part of the
Dow Jones Sustainability North American Index and Dow Jones Sustainability World Index in the
past two years.

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To sustain our efforts and further enhance our commitment to corporate responsibility, in fiscal year
2010, we will:

- Improve our H&S monitoring and set more stringent targets.

- Embark on a long-term programme to further reduce the environmental footprint of our

manufacturing operations.

- Strengthen our corporate social responsibility governance structure to better align our efforts
across the organisation.

- Continue expanding external communications with stakeholder engagement meetings.

- Review our human rights-related policies and monitoring mechanisms.

- Increase the number of suppliers adhering to our supplier code of conduct.

- Review our community investment philosophy and our donations and sponsorship policy to
better support the economic, environmental and social well-being of our communities.

Our Way Forward is, therefore, our vision for success in the years to come. It leverages what
we currently do, but goes much further so that we can reach our ambitious aspirations. Only
companies with the best strategy, execution, products and customer orientation will stay at the top.
We have great DNA and the right business priorities to realise our full potential. Now that we are
in a better overall position, we must aim even higher. Transforming this potential into reality means
that every employee has to contribute with commitment and passion.

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Business Environment

The fiscal year 2009 (See APPENDICES 2, 3 and 4) has been marked by worsening business
conditions, starting with a tightening of credit that has evolved into a severe recession affecting
most economies worldwide. These negative trends have continued in fiscal year 2010, and
we anticipate them to continue in the short term. Governments around the world have taken
unprecedented actions to limit the impact of these events, but it is still difficult to assess the
severity and duration of the recession.

Over the past few years, we have taken significant steps to strengthen our operations and financial
position, better positioning us to face the challenges ahead. As some of the impacts from the
recession are significant, both groups, BA and BT, are looking for ways to reduce overall costs in
their operations and improve their working capital. We have also taken measures to maximise cash
retention. These measures should benefit Bombardier in the long run, once we emerge from this
recession.

As a result of significant reductions in aircraft orders, as well as cancellations and deferrals

of existing orders, BA announced that subsequent to 31 January 2009 it would reduce its
production rates for all business aircraft and regional jets, leading to a reduction of its workforce by
approximately 4,400 employees.

For the rail industry, the fundamentals remain strong, and the recession is not expected to have
a major impact. If governments stimulus plans and infrastructure funding programmes come
through, the rail industry could even benefit from increased demand. BT is confident that they are
well placed to benefit from the growing railway and associated markets and that they have the right
products to supply the demand for environmentally friendly transportation and can deliver on the
order backlog and future orders. BT has tried to take the initiative by publishing Think Economy,
Think Rail, an article that promotes investment in rail as a sustainable solution to congestion.
(See APPENDIX 5.)

BTs future prospects in the short term remain strong, with many large rolling stock replacement
orders being planned worldwide by current customers. (APPENDIX 6 describes a major project
in the UK.) It is anticipated that the rate of increase will not be as high as recent levels. A large
number of significant tenders have been announced for 2009 to 2011. BT is confident that it will
be awarded a significant number of contracts as a result of tendering. Notably, BT is involved with
many tenders worldwide, some of which are listed below:

China High Speed trains 3,000 cars (carriages)

UK Commuter/Regional trains 1,300 cars
France Very High Speed trains 1,200 cars
Germany Intercity trains 1,100 cars
India Metro cars 550 cars
France Regional trains 550 cars
Russia Commuter trains 50 cars
Italy Locomotives 100 trains

Major competitors of similar capability to BT are Alstom (France), Brush Traction (UK), Hitachi
(Japan), and Siemens (Germany). It is likely that new entrants may emerge onto the global market
from both China and India as these economies develop further and domestic demand falls back.

There is a distinct lack of presence in Africa and potential growth markets such as Indonesia, and
BT is actively looking at options including strategic alliances to enter these markets.

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With regard to BA, there is a wide variation in success in key markets, with notable success in the
US and European markets but with notable gaps in other parts of the world similar to BT. Boeing
and Airbus Industrie dominate the commercial market as major airlines seek to reduce their cost
bases by focusing on operating aircraft from single manufacturers. Apart from Boeing and Airbus,
there are two other competitors to BA who are of a similar size and capability. These are BAE
Systems (UK and US based) whose aircraft are operated by 65 customers in 33 countries, and
Embraer (Brazil based) whose aircraft are operated by 37 customers in 24 countries. BA has
85 operators in over 40 countries. Both BAE Systems and Embraer are part of larger organisations
that have signicant military and defence systems aviation business. The market for commercial
aircraft is likely to remain uncertain both in the short and medium terms. (See APPENDIX 7.)

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 APPENDIX 1

BOMBARDIER TRANSPORTATION - DIVISIONS, MARKET SEGMENTS, PRODUCTS and

REGIONS

PASSENGER DIVISION A diverse range of rail vehicles for multiple applications

Light Rail Vehicles Efficient transit dense urban areas FLEXITY Europe

Metro Cars High Capacity - inner city transit MOVIA Europe - Asia

SPACIUM
Commuter and Suburban and regional rail transport -
TALENT Europe
Regional Trains urban centres and suburbs
ELECTROSTAR

Intercity and High REGINA

Medium and long distance operations Europe - China
Speed Trains ZEFIRO

LOCOMOTIVES and EQUIPMENT DIVISION

Intercity, regional - passenger and
Locomotives TRAXX Worldwide
freight
Propulsion and Propulsion, train control and
MITRAC Worldwide
Controls management systems
Bogies Complete bogies/wheels solutions FLEXX Worldwide

NORTH AMERICA DIVISION

Urban, Suburban, Regional and
Mass Transit FLEXITY North America
Intercity Transit
Fleet maintenance operations,
Services - North America
equipment overhaul

SERVICES DIVISION

Fleet Maintenance Third Party services for rail operators ORBITA Europe
Refurbishment and Modernisation, re-engineering and
- Europe
Overhaul overhaul of rolling stock
Supply chain maintenance - parts and
Material Solutions - Europe
technical support services

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 SYSTEMS DIVISION
Automated People Development and delivery of urban/ CX-100
Worldwide
Movers APM airport transit systems INNOVIA
Mass Transit Fully automated rapid transit, light rail,
- Worldwide
Systems and related products/services
Operations and Operations and maintenance transit
- Worldwide
Maintenance systems

RAIL CONTROL SOLUTIONS DIVISION

Rail network control and signalling
Mass Transit CITYFLO Worldwide
solutions - metro, light rail

EBI CAB
Mainline Intercity and regional mainline transit EBI LOCK Worldwide
INTERFLO

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 APPENDIX 2

BOMBARDIER INC. - BALANCE SHEET AS AT 31 JANUARY (IN US$ MILLIONS)

2009 2008 2007 2006

Cash and Equivalents 3470 3602 2648 2917

Debtors - receivables 1981 1998 1789 1684

Aircraft Financing 418 626 1042 1457

Total Inventory 5522 5092 5275 4715

Prepaid Expenses 407 387 370 235

Other Current Assets 1576 2028 1954 982

Total Current Assets 13374 13733 13078 11990

Property, Plant and Equipment 1568 1732 1602 1616

Goodwill - net 2010 2533 2286 2142

Intangible Assets - net 1399 1451 1492 1505

Long-Term Investments 260 255 228 222

Other Long-Term Assets 1810 1581 1303 923

Total Assets 21306 22120 19891 18398

Accounts Payable 2243 2079 1904 1804

Accrued Expenses 2040 2317 1107 877

Advances on Projects - BT 2072 2791 1882 1640

Advances on Aerospace Business 2991 2926 1875 1467

Other Current Liabilities 4270 4220 5250 5373

Total Current Liabilities 13616 14333 12018 11161

Total Long-Term Debt 5146 4669 5093 4761

Other Liabilities 7 51

Total Shareholder Equity 2544 3118 2773 2425

Total Liabilities 21306 22120 19891 18398

Note: Not all totals correspond exactly with the sub-entries but students should not consider this
significant.

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 APPENDIX 3

BOMBARDIER AEROSPACE - PROFIT AND LOSS (IN US$ MILLIONS)

Fourth Quarters ended

Fiscal Years ended Jan 31
Jan 31
2009 2008 2009 2008

Manufacturing revenues:

Business aircraft 1363 1453 5203 4673

Commercial aircraft 790 759 2271 2503

Other 192 140 642 438

Total manufacturing revenues 2345 2352 8116 7614

Services 354 415 1588 1542

Other 78 126 261 557

Total revenues 2777 2893 9965 9713

Cost of sales 2220 2425 7876 8099

Margin 557 468 2089 1614

Selling, general and administrative 180 199 715 669

Research and development 13 13 51 37

Other income (16) (39) (4) (58)

EBITDA 380 295 1327 966

Amortisation 109 99 431 403

EBIT 271 196 896 563

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 APPENDIX 4

BOMBARDIER TRANSPORTATION - Profit and Loss (in US$ millions)

Fourth Quarters ended Fiscal Years ended

Jan 31 Jan 31
2009 2008 2009 2008

Revenues:

Rolling stock 1922 1545 6663 4894

Services 365 389 1529 1474

Systems and signalling 365 443 1564 1425

Total revenues 2652 2377 9756 7793

Cost of sales 2193 2004 8173 6508

Margin 459 373 1583 1285

Selling. General and administrative 207 210 843 739

Research and development 37 28 120 102

Other expense (income) 21 (2) (19) (4)

EBITDA before special item 194 137 639 448

Amortisation 30 28 124 109

EBIT before special item 164 109 515 339

Special item* - - - 162

EBIT 164 109 515 177

* Special item is the write-off of the investment in Metronet - a consortium that was intended to
manage the infrastructure of London Underground. It failed because of contract performance
issues.

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 APPENDIX 5

BOMBARDIER REPORT ON THE FUTURE OF RAIL TRANSPORTATION

Think Economy, Think Rail

For the past century, transportation has fuelled the worlds economy. In recent decades, road
and air have dominated many nations transportation investments to the detriment of the most
sustainable solution to mass transit - rail. For the planets economic and environmental health, it is
time to restore the balance between road, air and rail.

Transform Crisis into Opportunity

Nations are facing the worst economic and financial crisis since World War II. Ironically, this crisis
offers the best opportunity to shift societies towards sustainable transportation. Investing in rail
stimulates economies while reducing CO2 emissions and urban congestion.

In Europe alone, rail projects in excess of 27 billion euros currently await funding. It is time to
earmark todays economic stimulus packages to make long overdue investments in rail technology,
infrastructure and vehicles.

Invest in Rail, the Economy and the Environment

Many countries will step up their investment in rail over the next two to five years. Rapidly
expanding and increasingly congested countries such as China and India are already investing
heavily in high-tech rail projects. Building intercity rail lines is the highest priority of Chinas
US$585 billion stimulus package. For the first time, the United States is giving rail a significant
share of its stimulus package.

But we can and must do more.

Rail Makes Economic Sense

Urban congestion wastes energy, time and money. Rail relieves this congestion. The numbers
speak for themselves:
l The average congestion cost per peak traveller increased from US$129 in 1982 to US$708 in
2005.
l In the US alone, congestion translated into costs of $78 billion in delays and fuel in 2005.
l In Europe, the cost of congestion in terms of delay and wasted fuel negatively impacts the
GDP by 3%.
l A two-adult household using public transportation saves $6,251 per year compared to those
with no access to transit.
l External costs associated with passenger car travel are, on average, three times more than
an equivalent trip by rail.
l The fuel saved by public transit increased from 151 million gallons in 1982 to 340 million
gallons in 2005.
l Rail transit expenditures equal about 5% of total automobile facility costs (roads and
parking).
l For every $1 billion in federal investment in public transportation, 47,500 jobs are created.

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Cost of Delaying Climate Action

Investment in rail is also necessary to achieve the planets sustainability goals. Rising transport
emissions could put the EUs ability to meet its 20% greenhouse gas emission reduction target by
2020 at stake. Shifting from road to rail will significantly reduce this effect.

A United Nations study suggests that delayed climate action will cost at least a continuous 5%
of the worlds GDP. Achieving the needed CO2 emission reduction by 2050 would cost only 1.1%
of the worlds GDP. By acting now, we can stimulate the economy and fight global warming. The
climate is right for change and trains.

Rail is the Answer

Rail is the only sustainable transportation solution to many of todays environmental, social and
economic challenges.

Challenge Rail solution

Global warming Most environmentally friendly mode of
transportation
Volatile fuel costs Lower energy consumption*
Urbanisation Reduced congestion*
Less land usage*
Ageing population Accessible and comfortable for all ages
Infrastructure renewal and maintenance costs 20 times lower per ton-kilometre*
*Compared to road transportation

Working Together for Sustainable Mobility

Governments, local authorities, operators and manufacturers must collaborate to make sustainable
transportation more attractive. Manufacturers are doing their part by constantly innovating.
Ultra-modern light rail systems, metros and commuter trains help to reduce air pollution in cities.
Comfortable regional trains offer attractive inter-regional and region-to-city connections. Intercity
and high speed trains link urban centres - rapidly, economically and sustainably.

Bombardier offers the rail industrys broadest product and service portfolio. Bombardiers solutions
play a pivotal role in shaping the future of sustainable mobility. They compete with road and air in
speed, comfort and reliability without the dramatic environmental impact.

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 APPENDIX 6

MAJOR UPGRADE TO KEY RAIL ROUTES ANNOUNCED IN UK

The Great Western railway route from London to Swansea (Wales) is to be electrified over the next
eight years at a cost of 1billion.

The UK government is also spending 100m on electrifying lines between the main population
centres of the north (Liverpool and Manchester), with the work taking four years.

The UK Prime Minister, Gordon Brown, said: This is the future. It is green, it is faster and its more
reliable. This is about making the railways fit for the 21st century.

When asked if the government could afford such a scheme in the current economic climate
Mr. Brown replied: We have set aside money for this. Its an important priority for us.

Only about one third of the UK rail network is electrified at the moment, with the Great Western
route the last of the major routes to be still predominantly using diesel trains.

The electrification will include the lines to Oxford and to Newbury in Berkshire and will also make
the direct replacement of the ageing InterCity diesel 125 fleet by electric Super Express trains
possible.

Electrification will shorten the London to Swansea journey time - currently just over three hours -
by about 20 minutes. The plans will involve installing hundreds of miles of electric cables as well as
alterations to tunnels, bridges and stations on one of Britains oldest rail routes.

The UK transport secretary, Lord Adonis, said: We are electrifying 300 miles of track and we are
also looking to extend electrification to other lines. There will be some disruptions while the work
is going on but Network Rail plans to keep disruption to a minimum, with much of the work being
done overnight.

Lord Adonis went on: Electrification will mean faster, quieter and more efficient trains, which break
down far less often.

Mark Hopwood, managing director of First Great Western, said: We are really delighted with this
news. Its going to transform our route and provide cleaner and more environmentally friendly
travel. (Electric locomotives are lighter than diesel alternatives by virtue of the fact that they do not
have to carry fuel.)

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 APPENDIX 7

OAG (Official Airline Guide) Releases its 10 Year Commercial Aircraft Fleet and Utilisation
Forecast.

Monday 30 March 2009

l Projected 4% drop in global aircraft utilisation in 2009

l North America worst affected with 7% decrease

l Asian operators market share of global utilisation to increase 3% by 2018

l Aircraft retirements to peak in 2016-2017

In 2009, the average aircraft utilisation for the worlds commercial fleet is expected to drop by
4% compared to 2008, according to the latest Commercial Aircraft Fleet and Utilisation Forecast
from OAG (www.oagaviation.com), the worlds leading aviation data business. This is revealed in
OAGs most recent study of the global MRO (maintenance, repair and overhaul) service demand
projection for the next decade, developed in partnership with AeroStrategy. The utilisation forecast,
which drives MRO demand, takes into consideration the significant global downsizing in schedules,
frequency and capacity that have been filed with OAG in the past six months. Global aircraft
utilisation typically grows at an average of 3.4% per year.

John Weber, Managing Director, OAG Aviation, said: Scheduled airline frequency and capacity
cutbacks made over the past six months will have a significant impact on planned aircraft
utilisation, with a corresponding short-term downturn in demand for MRO services. We are
projecting a worldwide drop of -4% in average aircraft utilisation in 2009 compared to 2008, with
only modest recovery in 2010. Normal levels of aircraft utilisation growth are not expected to return
until 2011.

The regions worst affected this year by a reduction in aircraft utilisation will be North America (-7%)
and Western Europe (-5%). Least affected will be China, Eastern Europe, Africa, India and Latin
America. North American and European operators accounted for 61% of global aircraft utilisation
in 2008. The forecast trend indicates a gradual shift of this market dominance to other regions.
By 2018, Asia is projected to increase its share of the worlds global aircraft utilisation by 2.8% to
25.4%, driving up demand for MRO services in that region.

Over the next 10 years, OAG forecasts that aircraft retirements will peak in 2016-2017 at double
the average retirement rates of 2009-2013. The global installed base of active aircraft will grow
38% by 2018 compared with 2008.

OAGs Commercial Aircraft Fleet and Utilisation Forecast is a 47-page in-depth report tracking
10 year future trends. It is one of six reports produced by OAG on the Commercial Aviation
MRO (CAMRO) sectors, covering airframe, engine, components, modifications and line/field
maintenance.

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