Bombardier Announces Financial Results for the First Quarter Ended April 30, 2002.

Business Editors

MONTREAL--(BUSINESS WIRE)--May 21, 2002

BOMBARDIER (TSE:BBD.A.) (TSE:BBD.B.)

-- Q1 revenues of $192.0 million

-- Income before income taxes of $20.6 million

Bombardier Inc. today reported consolidated revenues of $5.5 billion for the three months ended April 30, 2002, an increase of 37% over revenues of $4.0 billion for the first quarter of 2001. Net income for the first quarter reached $219.2 million, compared with net income of $241.0 million for the preceeding year, for a decrease of 9%. Earnings per share reached $0.15, compared with $0.17 for the same quarter of the previous year.

Bombardier's order backlog at April 30, 2002 totalled $44.9 billion, which represents an increase of 38% from a backlog of $32.6 billion at April 30 last year, mainly related to the addition of the backlog of Adtranz.

"A higher level of activites in the transportation sector as well as the addition of the accounts of Adtranz, combined with new outboard engines activities are reflected in our significant increase in revenues," said Robert E. Brown, President and Chief Executive Officer.

"On the other hand," he explained, "the three-week strike at Bombardier Aerospace's Montreal area plants, and the inherent delays in ramping up production had a negative impact on the Corporation's overall income. This impact is reflected in the results of the first quarter and will also be reflected in our second quarter results."

"Nevertheless," added Mr. Brown, "given our efforts to catch up on lost time in aerospace, and given the good results in the transportation, recreational products and financial services sectors, we are confident that we can reach our goal of 10% growth in earnings per share by the end of the fiscal year. Our $1.5 billion target of free cash flow remains unchanged."

During the quarter, Bombardier closed a preferred shares offering generating gross proceeds of $235.0 million, as well as a notes offering in the United States, generating gross proceeds of $550.0 million US. Since the end of the quarter, two other notes offerings for Bombardier Capital were made in Europe generating gross proceeds of 500.0 million euros and pounds sterling 300.0 million respectively.

In February 2002, Bombardier announced that it would file a $1.4 billion claim against DaimlerChrysler AG for damages under the arbitration process governed by the rules of the International Chamber of Commerce, as set forth in the Sale and Purchase Agreement for the acquisition of Adtranz.

Bombardier Aerospace 

-- Q1 revenues of $192.0 million

-- Income before income taxes of $20.6 million

For the three months ended April 30, 2002, Bombardier Aerospace had revenues of $2.6 billion, the same amount as in the year-earlier period. Aerospace income before income taxes was $190.7 million, compared with $310.2 million for the year-earlier quarter. Aircraft deliveries totalled 65, compared with 83 in the first quarter of the previous fiscal year. This number includes deliveries of 28 business aircraft and 37 regional aircraft.

Since the beginning of the fiscal year, Bombardier Aerospace received firm orders for a total of six regional aircraft. Among them were orders for one Bombardier CRJ200(a) from Japan Airlines, two CRJ200 ER(a) from Malev Hungarian Airlines and three CRJ200 from Atlantic Southeast Airlines.

On April 15, 2002, the unionized employees, members of Local 712 of the International Association of Machinists & Aerospace Workers (IAMAW) went on strike in the Montreal area plants. The employees returned to work on May 5, 2002, following the ratification of a four-year collective agreement.

Since the end of the quarter, a milestone delivery of the 200th Bombardier Learjet(a) 45 was made on May 6 to JM Aviation Holdings LLC.

Bombardier Transportation 

-- Q1 revenues of $192.0 million

-- Income before income taxes of $20.6 million

For the three months ended April 30, 2002, Bombardier Transportation had revenues of $2.3 billion, compared with $840.7 million in the year-earlier period. Transportation income before income taxes was $90.6 million, compared with $26.4 million for the year-earlier quarter.

Bombardier Transportation signed contracts for a total value of $3.3 billion. Major orders were to supply: 460 Electrostar electric cars and a 20-year material supply and technical support agreement for GOVIA of the United Kingdom, valued at $1.49 billion; 352 M-7 electrical multiple units for Long Island Rail Road of the United States valued at $941 million; and 127 diesel-electric multiple units and a maintenance agreement valued at $512 million for HSBC Rail UK Limited of the United Kingdom.

In early May, an important milestone was reached in the process of transferring to the private sector for 30 years, the renewal, modernization and maintenance of the London Underground's infrastructure. As a partner in the Metronet Consortium, Bombardier Transportation will receive, once financial close is finalized, contracts for the supply of rolling stock, signalling and project management. It is expected that the value of these contracts will be in excess of pounds sterling 3 billion ($6.9 billion).

Bombardier Recreational Products

-- Q1 revenues of $192.0 million

-- Income before income taxes of $20.6 million

For the three months ended April 30, 2002, Bombardier Recreational Products had revenues of $460.0 million, up 24% from $370.1 million in the year-earlier period. Recreational products income before income taxes was $26.7 million, compared with $19.0 million for the year-earlier quarter. Increased revenues are mainly attributable to the addition of the Evinrude(a) and Johnson(a) outboard engine activities.

To introduce newcomers to the ATV experience, Bombardier Recreational Products launched the new value-priced Bombardier Rally 200(a) ATV. It also introduced the Rotax(a) 800 2-TEC(a) SDI engine with lower hydrocarbon emissions and better fuel economy, to be offered in a number of 2003 Ski-Doo(a) snowmobile models.

Bombardier Capital

-- Q1 revenues of $192.0 million

-- Income before income taxes of $20.6 million

For the three months ended April 30, 2002, Bombardier Capital had revenues of $192.0 million, compared with $256.8 million in the year-earlier period. Bombardier Capital income before income taxes was $20.6 million, compared with $3.0 million for the year-earlier quarter. This performance was made possible following Bombardier Capital's withdrawal from the retail finance business, more specifically manufactured housing and consumer products.

Assets under management at April 30, 2002, totalled $11.7 billion compared with $11.9 billion as at January 31, 2002.

Financial Highlights are as follows:
(in millions of Canadian dollars, except per share amounts)

                                           Three months ended April 30

                                             2002              2001
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Revenues
  Aerospace                              $2,605.2          $2,621.3
  Transportation                          2,314.1             840.7
  Recreational Products                     460.0             370.1
  BC                                        192.0             256.8
  Intersegment eliminations                 (98.7)           (100.9)
----------------------------------------------------------------------
External revenues                        $5,472.6          $3,988.0
----------------------------------------------------------------------
Income before income taxes
  Aerospace                                $190.7            $310.2
  Transportation                             90.6              26.4
  Recreational Products                      26.7              19.0
  BC                                         20.6               3.0
----------------------------------------------------------------------
                                            328.6             358.6
----------------------------------------------------------------------
Income taxes                                109.4             117.6
----------------------------------------------------------------------
Net income                                 $219.2            $241.0
----------------------------------------------------------------------
Earnings per share
  Basic                                     $0.15             $0.17
  Diluted                                   $0.15             $0.17

Average number of common
 shares outstanding during the period
 (thousands)                            1,371,414         1,366,622
----------------------------------------------------------------------

Bombardier Inc., a diversified manufacturing and services company, is a world leading manufacturer of business jets, regional aircraft, rail transportation equipment and motorized recreational products. It also provides financial services and asset management in business areas aligned with its core expertise. Headquartered in Montreal, Canada, the Corporation has a workforce of approximately 80,000 people in 24 countries throughout the Americas, Europe and Asia-Pacific. Its revenues for the fiscal year ended Jan. 31, 2002 stood at $21.6 billion. Bombardier trades on the Toronto, Brussels and Frankfurt stock exchanges (BBD, BOM and BBDd.F).

FORWARD-LOOKING STATEMENTS

This press release includes "forward-looking statements" that are subject to risks and uncertainties. For information identifying legislative or regulatory, economic, climatic, currency, technological, competitive and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, see Bombardier's Annual Report under the heading Risks and Uncertainties in the Management's Discussion and Analysis section.

Detailed consolidated financial statements and notes for the first quarter and the three months ended April 30, 2002 are available on the Corporation's Web site at www.bombardier.com under the "What's New" section.

(a) Trademarks of Bombardier Inc.

www.bombardier.com