Bombardier is a global leader in aviation, focused on designing, manufacturing and servicing the world's
most exceptional business jets and specialized mission platforms.
A VISIONARY INDUSTRY LEADER
Headquartered in Greater Montréal,
Québec, Bombardier is powered by a proud
heritage and visionary innovation in the
design, manufacture and support of
world-class business aircraft. Its Challenger
and Global aircraft families are renowned for
their cutting-edge cabin design, performance
and reliability. Bombardier is recognized for
its leadership in sustainability, including its
pledge to cover the totality of its flight
operations with Sustainable Aviation Fuel
(SAF) using the Book-and-Claim system.
Revenues(1)
$8.0 billion
Order backlog(2)
$14.2 billion
Employees(3)
18,100
Bombardier has a worldwide fleet of more than 5,000 aircraft in service, with a wide variety of multinational
corporations, charter and fractional ownership providers, governments and private individuals.
Bombardier is also steadily growing its defense portfolio through Bombardier Defense, which designs, develops
and delivers a diverse portfolio of proven and versatile specialized aircraft platforms to operators around the
world.
Bombardier boasts an extensive global network of aftermarket and support facilities, where it services the
Global, Challenger and Learjet(4) families of aircraft. These facilities include service centers in the U.S., Europe
and Asia-Pacific, as well as mobile response teams and dedicated aircraft parts availability sustained by parts
facilities, including depots, hubs and repair facilities.
All amounts in this financial report are in U.S. dollars unless otherwise indicated.
For fiscal year 2023.
(1)
(2) As at December 31, 2023.
(3) As at December 31, 2023, including contractual and inactive employees.
(4) Bombardier delivered its last Learjet aircraft in the first quarter of 2022.
Setting our sights higher and delivering on our commitments
Bombardier’s excellent financial performance throughout 2023 clearly demonstrates the success of its
refocused identity. The company showed consistent strength as it executed on its strategy, increasing
profitability while decreasing debt. Bombardier’s leadership in product development was evident as
sales remained strong across its portfolio of aircraft, and its aftermarket revenue reached new heights.
Also in 2023, Bombardier grew its workforce beyond 18,100 employees and solidified its position as a
business aviation industry leader in innovation and sustainability.
Dear Shareholders,
I’m extremely pleased to begin 2024 with
Bombardier in such a strong position. Our leadership
in the business aviation industry was a consistent
theme throughout 2023, from excellent financial
performance to product innovation to our efforts to
build a greener future for business aviation. I credit
our team members all over the world for
Bombardier’s ongoing success.
Bombardier turned in a strong financial performance
in 2023, successfully building on our momentum
from the two previous years. Thanks to the solid
execution of our strategy, we achieved a step
change in profitability while continuing to reduce our
debt. We met our full-year delivery guidance despite
a challenging supply chain environment. The
financial community took notice of our progress, as
both Moody’s and S&P announced ratings upgrades
for Bombardier in 2023. In the fall, Bombardier was
included in the 2023 TSX30 ranking presented by
the Toronto Stock Exchange (TSX). This ranking
recognized Bombardier for its outstanding stock
performance over the three-year period ended on
June 30, 2023.
Of course, none of this happened by accident. While
business aviation as a whole benefited from
increased demand as a result of the pandemic,
Bombardier’s strategic positioning was designed to
not only capitalize on higher demand but to perform
consistently and predictably when demand
stabilizes, as expected and as we began to see in
2023.
Bombardier’s refreshed portfolio sold well all year.
Our focus on medium and large business jets was
aligned with market demand, and our aircraft set
themselves apart from the competition. Our
Challenger platform was extremely popular – the
Challenger 3500 aircraft, which entered service in
2022 with a fully redesigned cabin, was a big winner
in 2023. Our large-cabin Global platform also shone
bright as customers sought their outstanding range
and smooth ride.
The industry flagship Global 7500 aircraft flew past
its milestone 150th delivery in 2023 with an excellent
record of in-service performance. The Global 7500’s
proven reliability speaks volumes as competitors
attempt to enter this market segment created by
Bombardier. Meanwhile, our Global 8000
development program progressed smoothly in 2023;
this new industry flagship will offer everything the
Global 7500 has and more when it enters service in
2025 as the only business jet certified to fly at Mach
0.94(1).
Another pillar of Bombardier’s 2023 performance
was our newly expanded service center network. If
2022 was the year of celebrating the openings and
expansions of facilities in Melbourne, Singapore,
Miami and London, then 2023 was the year of
integrating these centers into the Bombardier family,
allowing us to serve more customers than ever, to be
closer to them than ever. The revenues from our
services business in 2023 had an unprecedented
benefit to our bottom line, playing a key role in
Bombardier’s overall profitability. The realization of
our expanded service network is a key
accomplishment that will provide a predictable and
consistent source of revenue that is an integral part
of our strategic plan.
Bombardier Defense was a key element of our
growth in the last year. Officially launched in 2022,
our defense business is built on decades of
experience. The most important strategic win for
Bombardier Defense in 2023 took place at the end of
the year, when the United States Army chose the
Global 6500 aircraft to serve as the prototype for the
High Accuracy Detection and Exploitation System
(HADES). This will be the first time the U.S. Army
uses a large business jet for Intelligence,
Surveillance and Reconnaissance (ISR) missions.
This latest vote of confidence from the United
States, where Global aircraft already support the
U.S. Air Force, shows how well-suited our products
are for surveillance missions, and positions
Bombardier for future success. Meanwhile, we
continue to progress work on aircraft for Germany at
our Bombardier Defense headquarters in Wichita.
Forward-looking governments around the world are
turning to Bombardier as they redefine their airborne
capabilities.
The business aviation industry faced some
headwinds in 2023, and I’m proud to say that
Bombardier’s leadership again set us apart. Case in
point: supply chain complexity persisted throughout
the year, and Bombardier successfully met its
full-year delivery commitments. Quarter after quarter,
our success in this area has been marked by
focusing on what we control. In some cases that
meant sending our team members deeper within our
BOMBARDIER INC. / 2023 FINANCIAL REPORT 1
supplier network or simply integrating components
back to Bombardier where it made sense. For
example, in 2023 we made the decision to retain
electrical harness activities in our Mexico operations.
We smoothly reacquired the business from
Latécoère and welcomed the team members to
Bombardier.
In another example of our industry leadership,
Bombardier in 2023 was at the forefront of
innovation and thought leadership when it comes to
sustainability. Faced with misconceptions from those
outside our industry about our determination to build
a greener future, Bombardier was front and center
on this issue. We promoted the use of Sustainable
Aviation Fuel (SAF) by covering all our flight
operations with SAF via a book-and-claim system.
We talked to students, media and anyone interested
in innovation about our EcoJet research project,
which is a blended-wing-body concept with the
potential to dramatically reduce emissions. We took
part in panels, roundtables and debates in order to
better educate the public about our industry’s goal to
reach net zero, and about how Bombardier is
channeling our amazing research and development
talent toward building greener aircraft.
I’m sure you’ll agree that Bombardier delivered an
impressive performance last year. Thanks to our
solid foundation and our world-class team of 18,100
employees, I’m looking to the years ahead with
optimism and confidence.
Sincerely,
Eric Martel
President and Chief Executive Officer
(1) See the forward-looking statements disclaimer in the overview section of Bombardier’s Management Discussion and Analysis for the fiscal
year-ended 2023.
2 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Table of Contents
MANAGEMENT’S
DISCUSSION
AND ANALYSIS
CONSOLIDATED
FINANCIAL
STATEMENTS
For the fiscal year ended
December 31, 2023
For the fiscal years ended
December 31, 2023 and 2022
4
91
BOMBARDIER INC. / 2023 FINANCIAL REPORT 3
BOMBARDIER INC.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
For the fiscal year ended
December 31, 2023
All amounts in this report are expressed in U.S. dollars, and all amounts in the tables are in millions of U.S. dollars, unless
otherwise indicated.
This MD&A is the responsibility of management and has been reviewed and approved by the Board of Directors of
Bombardier Inc. (the “Corporation” or “Bombardier” or “our” or “we”). This MD&A has been prepared in accordance with the
requirements of the Canadian Securities Administrators. The Board of Directors is responsible for ensuring that we fulfill our
responsibilities for financial reporting and is ultimately responsible for reviewing and approving the MD&A. The Board of
Directors carries out this responsibility principally through its Audit Committee. The Audit Committee is appointed by the
Board of Directors and is comprised entirely of independent and financially literate directors. The Audit Committee reports its
findings to the Board of Directors for its consideration when it approves the MD&A and financial statements for issuance to
shareholders.
The data presented in this MD&A is structured under one reportable segment: Bombardier, which is reflective of our
organizational structure.
IFRS and non-GAAP and other financial measures
This MD&A contains both IFRS and non-GAAP and other financial measures. Non-GAAP and other financial measures are
defined and reconciled to the most comparable IFRS measure (see the Non-GAAP and other financial measures section).
Materiality for disclosures
We determine whether information is material based on whether we believe a reasonable investor’s decision to buy, sell or
hold securities of the Corporation would likely be influenced or changed if the information was omitted or misstated.
Certain totals, subtotals and percentages may not agree due to rounding.
The Financial Report for fiscal year 2023 comprises the message from our President and Chief Executive Officer to
shareholders, this MD&A and our consolidated financial statements.
4 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
The following table shows the abbreviations used in the MD&A and the consolidated financial statements.
Term
ACLP
bps
CCTD
CGU
DB
DC
DDHR
DSU
EBIT
Description
Airbus Canada Limited Partnership
Basis points
Cumulative currency translation difference
Cash generating unit
Defined benefit
Defined contribution
Derivative designated in a hedge relationship
Deferred share unit
Earnings (loss) before financing expense,
financing income and income taxes
EBITDA Earnings (loss) before financing expense,
financing income, income taxes, amortization and
impairment charges on PP&E and intangible
assets
Earnings (loss) before income taxes
Entry-into-service
Earnings (loss) per share attributable to equity
holders of Bombardier Inc.
EBT
EIS
EPS
Fair value through other comprehensive income
FVOCI
FVTP&L Fair value through profit and loss
GAAP
Generally accepted accounting principles
Term
GDP
IAS
IASB
IFRS
MD&A
MHI
n/a
NCI
nmf
OCI
PP&E
PSU
R&D
RSU
SG&A
SOFR
U.A.E.
U.K.
U.S.
Description
Gross domestic product
International Accounting Standard(s)
International Accounting Standards Board
International Financial Reporting Standard(s)
Management’s discussion and analysis
Mitsubishi Heavy Industries, Ltd
Not applicable
Non-controlling interests
Information not meaningful
Other comprehensive income (loss)
Property, plant and equipment
Performance share unit
Research and development
Restricted share unit
Selling, general and administrative
Secured Overnight Financing Rate
United Arab Emirates
United Kingdom
United States of America
BOMBARDIER INC. / 2023 FINANCIAL REPORT 5
OVERVIEW
Table of Contents
HIGHLIGHTS
OF THE
YEAR
STRATEGIC
PRIORITIES
KEY
PERFORMANCE
MEASURES
AND METRICS
GUIDANCE
AND
FORWARD-
LOOKING
STATEMENTS
PROFILE INDUSTRY AND
ECONOMIC
ENVIRONMENT
CONSOLIDATED
RESULTS OF
OPERATIONS
7
10
11
14
19
24
28
CONSOLIDATED
FINANCIAL
POSITION
LIQUIDITY AND
CAPITAL
RESOURCES
CAPITAL
STRUCTURE
RETIREMENT
BENEFITS
RISK
MANAGEMENT
NON-GAAP AND
OTHER
FINANCIAL
MEASURES
34
35
41
43
48
52
6 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
HIGHLIGHTS OF THE YEAR
Bombardier 2023 Results Set New Highs on Earnings and Revenues, 2024
Guidance Reflects Further Growth
RESULTS
For the fiscal years ended December 31
Revenues
Adjusted EBITDA(1)
Adjusted EBITDA margin(2)
Adjusted EBIT(1)(3)
Adjusted EBIT margin(2)
EBIT
EBIT margin(4)
Net income (loss) from continuing operations
Net income (loss) from discontinued operations(5)
Net income (loss)
Diluted EPS from continuing operations (in dollars)
Diluted EPS from discontinued operations (in dollars)(5)
Adjusted net income(1)(3)
Adjusted EPS (in dollars)(2)(3)
Cash flows from operating activities(6)
Net additions to PP&E and intangible assets(6)
Free cash flow(1)(6)
As at December 31
Cash and cash equivalents
Available liquidity(1)
Order backlog (in billions of dollars)(7)
2023
$ 8,046
$ 1,230
15.3 %
799
9.9 %
793
9.9 %
490
(45)
445
4.70
(0.46)
4.24
416
3.94
623
366
257
$
$
$
$
$
$
$
$
$
$
$
$
$
2023
$ 1,594
$ 1,845
14.2
$
2022
$ 6,913
930
$
13.5 %
515
7.4 %
538
7.8 %
$
$
(128)
$
(20)
$
(148)
$
(1.67)
$
(0.21)
$
(1.88)
$
$
104
$ 0.77
$ 1,072
337
$
735
$
2022
$ 1,291
$ 1,499
$ 14.8
Variance
16 %
32 %
180 bps
55 %
250 bps
47 %
210 bps
618
(25)
593
6.37
(0.25)
6.12
312
3.17
(449)
29
(478)
$
$
$
$
$
$
$
$
$
$
$
Variance
23 %
$
346
(4) %
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(2) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used to
prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-GAAP
and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(3) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(4) Supplementary financial measure. Refer to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics.
(5) Discontinued operations are related to the sale of the Transportation business. The expenses recorded in discontinued operations for fiscal
years 2023 and 2022 principally relate to change in estimates of a provision for professional fees.
(6) Only from continuing operations.
(7) Represents order backlog for both manufacturing and services.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 7
KEY HIGHLIGHTS AND EVENTS
•
•
•
•
•
•
•
2023 revenues of $8.0 billion, up 16% year-over-year, driven by higher deliveries and record-setting business
jet aftermarket revenues of $1.75 billion, up 16% year-over-year.
2023 adjusted EBITDA(1) reflects significant 32% year-over-year jump to $1.23 billion. Full-year reported EBIT
reached $793 million.
Adjusted EPS(2) up 412% year-over-year from $0.77 to $3.94. Diluted EPS from continuing operations reached
$4.70. Net income from continuing operations and adjusted net income(1) were $490 million and $416 million
respectively.
Free cash flow(1) generation from continuing operations met 2023 guidance at $257 million, while cash flows
from operating activities and net additions to PP&E and intangible assets were at $623 million and $366 million
respectively.
Full-year unit book-to-bill(3) of 1.0 follows year-over-year delivery growth curve, reflects strong demand.
Backlog(4) stood healthy at $14.2 billion.
Rapid and meaningful improvement in adjusted net debt to adjusted EBITDA ratio(2), seeing 28% year-over-
year reduction from 4.6x to 3.3x. Available liquidity(1) remained strong at $1.8 billion; cash and cash equivalents
were $1.6 billion as at December 31, 2023.
After meeting or exceeding its 2023 guidance, the company is again guiding for growth in 2024(5).
Investor Day 2023
On March 23, 2023, during its Investor Day, Bombardier unveiled enhanced 2025 objectives. The Corporation
updated its strategies and financial objectives following the strong execution over 2021 and 2022. It also
introduced the Bombardier Defense business, targeting revenues of more than $1 billion by the second half of the
decade(5), and showcased the potential of its new Certified Pre-owned aircraft business aimed at expanding market
share within the pre-owned aircraft market. These initiatives reflect Bombardier's commitment to strategic growth
and revenue diversification.
Continued focus on deleveraging and improving credit rating
In 2023, Bombardier reduced its debt by $0.4 billion, resulting in a total debt reduction of $4.5 billion since
December 31, 2020. The adjusted net debt to adjusted EBITDA ratio(2) decreased from 41.5 at the end of 2020 to
3.3 by December 31, 2023, marking a 92% reduction. Adjusted net debt(1) stands at $4.0 billion as at
December 31, 2023 and Bombardier has no debt maturities up to June 2026. On April 5, 2023, Moody’s upgraded
Bombardier’s rating to B2 from B3, on the back of continued progress in reducing debt, continued improvement in
financial performance, improved earnings, margins and positive free cash flows. On May 2, 2023, S&P Global
Ratings also upgraded Bombardier’s rating from B- to B, citing solid execution, successful deleveraging efforts,
backlog stability and effective management of supply chain risks as contributing factors.
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(2) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used to
prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-GAAP
and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(3) Defined as net new aircraft orders in units over aircraft deliveries in units.
(4) Represents order backlog for both manufacturing and services.
(5) See the forward-looking statements disclaimer in the Overview section of this MD&A.
8 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Aftermarket expansion
In 2023, Bombardier continued enhancements to its worldwide customer service network, including the ramping up
and operationalization of its global service centers. Bombardier’s aftermarket services achieved an impressive
compounded annual growth rate (CAGR) of over 20% in revenues between 2020 and 2023, highlighting the
strength of its expansion strategy. On October 3, 2023 Bombardier announced the expansion of its
industry-defining cost-per-flight-hour offerings with the introduction of Smart Services Elite. This new Smart
Services program complements Bombardier’s existing Smart Services portfolio, providing business aircraft
customers with the most comprehensive, peace-of-mind cost-per-flight-hour program that brings budget
predictability for essential aircraft parts and maintenance costs.
Bombardier delivered 150th Global 7500
On October 16, 2023, Bombardier delivered its 150th Global 7500 aircraft, which marked another significant
milestone for Bombardier’s industry-defining business jet. The Global 7500 fleet has surpassed 100,000 flight
hours and boasts a fleet dispatch reliability of more than 99,8%, underscoring its status as the most reliable,
productive business jet in service today. At the same time, the Global 7500 successor, the Global 8000 aircraft,
development and testing is ongoing and progressing to plan, with an expected entry into service in 2025(1). Since
its introduction in May 2022, the Global 8000 has been gathering positive customer interest.
Bombardier continues growing its Defense business
On October 23, 2023, Bombardier Defense delivered the seventh Global 6000 aircraft to the U.S. Air Force for the
Battlefield Airborne Communications Node (BACN) program, Bombardier’s multi-year contract with the Air Force.
The aircraft supports a unique and reliable airborne communications platform essential for critical missions around
the world. On November 12, 2023, Bombardier Defense delivered the seventh Global aircraft to defense and
security company Saab, ready to be transformed into Saab’s Airborne Early Warning and Control (AEW&C)
solution known as GlobalEye. The 7 aircraft delivered by Bombardier to the GlobalEye program highlight a
successful collaboration and echo Bombardier’s thriving, long-standing reputation in manufacturing specialized
aircraft for the defense industry. Global business jets have become the go-to platforms for special missions around
the world, thanks to their speed, payload capacity, reduced cost of maintenance, fuel efficiency, reliability, and
endurance.
Milestones in sustainable aviation
On May 2, 2023, Bombardier published the Global 5500 and Global 6500 Environmental Product Declarations
(EPDs®), which provide detailed information about the aircraft’s life cycle environmental footprint. The two aircraft
join Bombardier’s Global 7500 and Challenger 3500 aircraft, the only other EPD® designated jets in business
aviation at this time. On May 21, 2023, Bombardier presented the progress made on its initial flight-testing phase
on its EcoJet research project, which aims to develop technologies with the goal of reducing aircraft emissions by
up to 50% through a combination of advanced aerodynamics and propulsion enhancements(1). On October 16,
2023, Bombardier ramped up the testing with a second test phase of the project with a larger, 18-foot-wide
prototype, contributing to the advancement of this pivotal project. On November 13, 2023, Bombardier reaffirmed
its commitment to cover all its operational flights with sustainable aviation fuel (SAF), utilizing the Book-and-Claim
system. One year after announcing its landmark agreement with Signature Aviation, Bombardier continues to
demonstrate its firm engagement to drive lasting industry change by promoting the industry-wide adoption of SAF.
(1) See the forward-looking statements disclaimer in the Overview section of this MD&A.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 9
STRATEGIC PRIORITIES(1)
During its March 2023 Investor Day, Bombardier updated its strategic priorities and financial targets following the
strong execution since it first released its strategic plan in March 2021, and the Corporation raised its key financial
targets at the same time. These initiatives include maintaining a leadership position in the medium and large
business aircraft categories, materially growing the Defense business, continuing to expand our aftermarket
services and Certified Pre-owned aircraft program, and to finish repairing our balance sheet, all the while
capturing the value associated with the Global 7500 program and delivering on the productivity and profitability
initiatives. These strategic priorities support the Corporation's goals to generate sustainable cash flow, improve
flexibility in capital allocation, and progress towards investment-grade metrics.
Maintain leadership position
Bombardier aims to maintain its leadership position in the medium and large business aircraft categories by
leveraging its established fleet of more than 5,000 aircraft and relying on the expertise of its worldwide workforce.
The Corporation’s continued commitment to innovation in its product portfolio, as demonstrated in recent years
with the entry into service of the Challenger 3500 and announcement of the Global 8000, the diligent
management of its intellectual property, and the improvement of its financial situation, are meaningful enablers to
positioning it for sustained market leadership.
Bombardier Defense
In 2022, Bombardier announced the designation of its Wichita, Kansas site as the home to the newly renamed
Bombardier Defense division, reflecting the company’s strategic expansion of its existing specialized aircraft
division. Since then, Bombardier has been preparing its infrastructures, leveraging its longstanding and well-
recognized expertise in specialized aircraft, the unique advantages of its Challenger and Global platforms, as well
as its technical capabilities, world-class flight test center, and engineering know-how to enhance its participation in
the segment, in an effort to compete and win defense specific campaigns. Bombardier anticipates tripling its
revenues from defense sales and services to more than $1 billion in the second half of the decade(1).
Aftermarket expansion and Certified Pre-owned business
With respect to its aftermarket growth strategy, the Corporation completed the openings of all the previously
announced service centers. In addition, Bombardier is ramping up and operationalizing its Certified Pre-owned
program launched back in 2021. The program’s objective is to capture opportunities in the pre-owned aircraft
market by actively participating in the secondary market and providing an OEM-enhanced option in this space.
These initiatives are expected to play an important role in the diversification of the company’s revenues.
Deleveraging balance sheet
Bombardier has set out to substantially deleverage its balance sheet by 2025, by targeting an adjusted net debt to
adjusted EBITDA ratio(2) range of ~2x to 2.5x as well as reducing annualized cash interest expense by more than
$250 million(1) compared to the annualized interest cost for long-term debt as at December 31, 2020. Since
December 2020, the Corporation reduced its long-term debt by approximately $4.5 billion resulting in a gross debt
of approximately $5.6 billion as of December 31, 2023, which is expected to reduce its annualized interest
charges by close to $330 million(1) compared to 2020. The Corporation intends to continue to opportunistically
refinance or deploy excess liquidity towards debt pay down and continues to evaluate the most efficient debt
reduction strategies, which for example could include redemptions, tenders or open market repurchases.
Maturing Global 7500 contribution and improving profitability
The Corporation will continue to work on unlocking the full potential of its flagship Global 7500 aircraft as the
program transitions to Global 8000 aircraft. Development and testing is ongoing and progressing to plan, with an
expected entry into service in 2025(1). In terms of profitability, the Corporation successfully completed its cost
reduction plan launched in 2021 and is now focused on enhancing efficiency to deliver stronger financial
performance. This involves improvements in labor productivity, reductions in corporate costs and indirect
spending, and optimizing the manufacturing footprint.
(1) See the forward-looking statements disclaimer in the Overview section of this MD&A.
(2) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
10 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
KEY PERFORMANCE MEASURES AND METRICS
The table below summarizes key performance measures and associated metrics evaluated.
KEY PERFORMANCE MEASURES AND ASSOCIATED METRICS
GROWTH AND
COMPETITIVE
POSITIONING
• Order backlog(1), as a measure of future revenues.
• Revenues and delivery units, as measures of growth.
• Market share (in terms of revenues and units delivered), as measure of our competitive positioning.
PROFITABILITY
• EBIT, EBIT margin(2), adjusted EBIT(3), adjusted EBIT margin(4), adjusted EBITDA(3), adjusted
EBITDA margin(4), diluted EPS and adjusted EPS(4), as measures of performance.
LIQUIDITY
• Free cash flow(3), as a measure of liquidity generation.
• Cash and cash equivalents, adjusted liquidity(3)(5), available liquidity(3)(5) and adjusted available
liquidity(3)(5), as measures of liquidity adequacy.
CAPITAL
STRUCTURE
• Adjusted net debt(3)(5).
• Adjusted net debt to adjusted EBITDA ratio(4)(5).
CUSTOMER
SATISFACTION
• On-time aircraft deliveries, as a measure of meeting our commitment to customers.
• Fleet dispatch reliability, as a measure of our products’ reliability.
• Regional availability of parts and technical expertise to support customer requests in a timely
manner, as a measure of meeting customer needs for the entire life of the aircraft.
• On-time return to service and high-quality workmanship at Bombardier-owned maintenance
facilities, as a measures of efficiency.
EXECUTION
• Achievement of program development milestones, as a measure of flawless execution.
(1) Represents order backlog for both manufacturing and services.
(2) Supplementary financial measure. Refer to the Non-GAAP and other financial measures section of this MD&A for definitions of these
metrics.
(3) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(4) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(5) Refer to Capital structure section of this MD&A for information on adjusted net debt and adjusted net debt to adjusted EBITDA ratio; refer to
Liquidity and capital resources section of this MD&A for information on adjusted liquidity, available liquidity and adjusted available liquidity.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 11
For the fiscal years ended December 31
Profitability
Revenues(1)
Adjusted EBITDA(1)(2)(4)
Adjusted EBITDA margin(1)(3)(4)
Adjusted EBIT(1)(2)(4)
Adjusted EBIT margin(1)(3)(4)
EBIT(1)
EBIT margin(1)(5)
Net income (loss) from continuing
operations
Net income (loss) from discontinued
operations(6)
Net income (loss)
Diluted EPS (in dollars)
Adjusted net income (loss)(1)(2)(4)
Adjusted EPS (in dollars)(1)(3)(4)
$
$
$
$
$
$
$
$
FIVE-YEAR SUMMARY
2023
2022
2021
2020
2019
$ 8,046
$ 1,230
15.3 %
799
9.9 %
793
9.9 %
$ 6,913
930
$
13.5 %
515
7.4 %
538
7.8 %
$
$
$ 6,085
639
$
10.5 %
222
3.6 %
241
4.0 %
$
$
$ 6,487
197
$
3.0 %
$
$
(214)
(3.3) %
912
14.1 %
$ 7,488
684
$
9.1 %
401
5.4 %
$
$
(520)
(6.9) %
490
$
(128)
$
(249)
$
(170)
$ (1,541)
(45)
445
4.24
416
3.94
$
$
$
$
$
(20)
$ 5,319
(148)
(1.88)
104
0.77
$ 5,070
$ 50.54
$
$
(327)
(3.67)
$
$
$
(568)
(9.19)
$ (1,118)
$ (11.79)
$ (1,607)
$ 19.05
$
$
(405)
(4.47)
(398)
$
(66)
(1) Only from continuing operations.
(2) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(3) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(4) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(5) Supplementary financial measure. Refer to the Non-GAAP and other financial measures section of this MD&A for definitions of these
metrics.
(6) Discontinued operations are related to the sale of the Transportation business. The expenses recorded in discontinued operations for fiscal
years 2023 and 2022 principally relate to change in estimates of a provision for professional fees.
12 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
For the fiscal years ended and as at
December 31
Liquidity
Cash flows from operating activities
Continuing operations
Discontinued operations
Net additions to PP&E and intangible
assets
Continuing operations
Discontinued operations
Free cash flow (usage)(1)
Continuing operations
Discontinued operations
Cash and cash equivalents(2)
Current portion of long-term debt
Long-term debt
FIVE-YEAR SUMMARY
2023
2022
2021
2020
2019
$
$
$
$
$
$
$
$
$
$
$
$
623
—
623
366
—
366
257
—
257
1,594
—
5,607
$ 1,072
—
$
$ 1,072
$
$
$
337
—
337
735
$
—
$
$
735
$ 1,291
$
—
$ 5,980
$
$
$
$
$
$
332
(621)
(289)
232
—
232
100
$
(621)
$
$
(521)
$ 1,675
$
—
$ 7,047
$ (1,672)
$ (1,149)
$ (2,821)
$
$
$
221
133
354
$ (1,893)
$ (1,282)
$ (3,175)
$ 2,450
$ 1,882
$ 8,193
$
$
$
$
$
$
(253)
(427)
(680)
366
157
523
(619)
$
$
(584)
$ (1,203)
$ 2,629
$
8
$ 9,325
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(2) Includes cash and cash equivalents from Transportation of $671 million presented under Assets held for sale as of December 31, 2020, and
$51 million from the aerostructures businesses as of December 31, 2019, respectively.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 13
GUIDANCE AND FORWARD-LOOKING STATEMENTS
2023 Guidance and Results
Continuing operations only
2023 guidance provided in our 2022
Financial Report(1)
Aircraft deliveries (in units)
Revenues
Adjusted EBITDA(2)
Adjusted EBIT(2)
EBIT
Free cash flow(2)
Cash flows from
operating activities
Net additions to PP&E
and intangible assets
> 138
> $7.6 billion
> $1,125 million
> $695 million
n/a
> $250 million
n/a
n/a
2023 results
138
$8.0 billion
$1,230 million
$799 million
$793 million
$257 million
$623 million
$366 million
Revenues for the full year of $8.0 billion were above guidance mainly due to aircraft mix, improved pricing, and
strong aftermarket performance.
Full year adjusted EBITDA(2) and adjusted EBIT(2) were $1,230 million and $799 million respectively, and above
guidance as a result of margin conversion on higher revenues than guidance and execution of the Corporation’s
strategic priorities.
Full year free cash flow(2) generation from continuing operations was in line with guidance at $257 million for 2023,
including residual value guarantees payments of $124 million, driven by higher earnings generation, partly offset by
working capital usage.
(1) Refer to our 2022 Financial Report for further details.
(2) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
14 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
2024 Guidance(1)
Aircraft deliveries (in units)
Revenues
Adjusted EBITDA(2)
Adjusted EBIT(2)
Free cash flow(2)
2024 Guidance
150 - 155
$8.4 billion - $8.6 billion
$1.30 billion - $1.35 billion
$850 million - $900 million
$100 million - $400 million
Aircraft deliveries in 2024 are expected to be between 150 and 155 aircraft compared to the 138 deliveries in 2023,
with growth coming from the Challenger aircraft platform.
Revenues are expected to increase to between $8.4 billion and $8.6 billion from 2023, based on higher aircraft
deliveries, improved pricing, as well as continued growth in our aftermarket business as new service facilities
continue to ramp-up their activities.
Adjusted EBITDA(2) is expected to be between $1.30 billion and $1.35 billion in 2024. This growth is driven by
margin conversion on increased revenues, net favorable pricing over inflation on new aircraft sales partly offset by
certain strategic investments supporting our growth initiatives in Defense and Certified Pre-owned, as well as R&D
and system implementation costs. Adjusted EBIT(2) is expected to be between $850 and $900 million.
Free cash flow(2) in 2024 is expected to be between $100 and $400 million, including working-capital usage to
support anticipated growth in deliveries in 2024 and 2025, as well as to support continued aftermarket growth.
Expected net additions to PP&E and intangible assets are expected to be less than $300 million.
(1) See the forward-looking statements disclaimer.
(2) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 15
Forward-looking Statements Disclaimer
This MD&A includes forward-looking statements, which may involve, but are not limited to: statements with respect
to our objectives, anticipations and outlook or guidance in respect of various financial and global metrics and
sources of contribution thereto, targets, goals, priorities, market and strategies, financial position, financial
performance, market position, capabilities, competitive strengths, credit ratings, beliefs, prospects, plans,
expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and
trends of an industry; customer value; expected demand for products and services; growth strategy; product
development, including projected design, characteristics, capacity or performance; expected or scheduled entry-
into-service of products and services, orders, deliveries, testing, lead times, certifications and execution of orders
in general; competitive position; expectations regarding revenue and backlog mix; the expected impact of the
legislative and regulatory environment and legal proceedings; strength of capital profile and balance sheet,
creditworthiness, available liquidities and capital resources, expected financial requirements, and ongoing review
of strategic and financial alternatives; the introduction of productivity enhancements, operational efficiencies, cost
reduction and restructuring initiatives, and anticipated costs, intended benefits and timing thereof; the ability to
continue business growth and cash generation; expectations, objectives and strategies regarding debt repayment,
refinancing of maturities and interest cost reduction; compliance with restrictive debt covenants; expectations
regarding the declaration and payment of dividends on our preferred shares; intentions and objectives for our
programs, assets and operations; expectations regarding the availability of government assistance programs; the
impact of new, or exacerbation of existing global health, geopolitical or military events on the foregoing and the
effectiveness of our plans and measures in response thereto; and expectations regarding the strength of markets,
economic downturns or recession, and inflationary and supply chain pressures.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based on information available to us as of the date of this MD&A. While we believe
that information provides a reasonable basis for these statements, that information may be limited or incomplete.
Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of all
relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on
these statements.
Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”,
“will”, “shall”, “can”, “expect”, “estimate”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or
“align”, the negative of these terms, variations of them or similar terminology. Forward-looking statements are
presented for the purpose of assisting investors and others in understanding certain key elements of our current
objectives, strategic priorities, expectations, guidance, outlook and plans, and in obtaining a better understanding
of our business and anticipated operating environment. Readers are cautioned that such information may not be
appropriate for other purposes.
By their nature, forward-looking statements require management to make assumptions and are subject to
important known and unknown risks and uncertainties, which may cause our actual results in future periods to
differ materially from forecast results set forth in forward-looking statements. While management considers these
assumptions to be reasonable and appropriate based on information currently available, there is risk that they may
not be accurate. The assumptions underlying the forward-looking statements made in this MD&A include the
following material assumptions: growth of the business aviation market and the Corporation’s share of such
market; proper identification and continued management of recurring cost saving; optimization of our real estate
portfolio; and access to working capital facilities on market terms. For additional information, including with respect
to other assumptions underlying the forward-looking statements made in this MD&A, refer to the Forward-looking
statements - Assumptions section hereinafter. Given the impact of the changing circumstances surrounding new or
continuing global health, geopolitical and military events, and the related response from the Corporation,
governments (federal, provincial and municipal, both domestic, foreign and multinational inter-governmental
organizations), regulatory authorities, businesses, suppliers, customers, counterparties and third-party service
providers, there is an inherently higher degree of uncertainty associated with the Corporation’s assumptions.
Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking
statements include, but are not limited to: operational risks (such as risks related to business development and
16 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
growth; order backlog; deployment and execution of our strategy, including cost reductions and working capital
improvements and manufacturing and productivity enhancement initiatives; developing new products and services,
including technological innovation and disruption; the certification of products and services; pressures on cash
flows and capital expenditures, including due to seasonality and cyclicality; doing business with partners; product
performance warranty and casualty claim losses; environmental, health and safety concerns and regulations;
dependence on limited number of contracts, customers and suppliers, including supply chain risks; human
resources including the global availability of a skilled workforce; reliance on information systems (including
technology vulnerabilities, cybersecurity threats and privacy breaches); reliance on and protection of intellectual
property rights; reputation risks; scrutiny and perception gaps regarding environmental, social and governance
matters; adequacy of insurance coverage; risk management; and tax matters); financing risks (such as risks
related to liquidity and access to capital markets; substantial debt and interest payment requirements, including
execution of debt management and interest cost reduction strategies; restrictive and financial debt covenants;
retirement benefit plan risk; exposure to credit risk; and availability of government support); risks related to
regulatory and legal proceedings; risks associated with general economic conditions and disruptions, both
regionally and globally, that may impact our sales and operations; business environment risks (such as risks
associated with the financial condition of business aircraft customers; trade policy; increased competition; political
instability and geopolitical tensions; financial and economic sanctions and export control limitations; global climate
change; and force majeure events); market risks (such as foreign currency fluctuations; changing interest rates;
increases in commodity prices; and inflation rate fluctuations); and other unforeseen adverse events. For more
details, see the Risks and uncertainties section in Other in this MD&A. Any one or more of the foregoing factors
may be exacerbated by new or continuing global health, geopolitical or military events, which may have a
significantly more severe impact on the Corporation’s business, results of operations and financial condition than in
the absence of such events.
Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is
not exhaustive and undue reliance should not be placed on forward-looking statements. Other risks and
uncertainties not presently known to us or that we presently believe are not material could also cause actual results
or events to differ materially from those expressed or implied in our forward-looking statements. The forward-
looking statements set forth herein reflect management’s expectations as at the date of this report and are subject
to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any
intention, and assume no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The forward-looking statements contained in this MD&A are expressly
qualified by this cautionary statement.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 17
Forward-looking statements — Assumptions
Forward-looking statements(1) in this MD&A are based on and subject to, without limitation, the following material
assumptions:
• normal execution and delivery of current backlog;
• the alignment of production rates to market demand, including the ability of the supply base to support
product development and planned production rates on commercially acceptable terms in a timely manner;
• continuing to mature margin contribution on the Global 7500 and executing the ongoing development of the
Global 8000 on target;
• continued deployment and execution of growth strategies, and continued growth of the aftermarket, Certified
Pre-owned and Defense businesses;
• the ability to invest in our product portfolio;
• the accuracy of the analyses and assumptions underlying our business case including estimated cash flows
and revenues over the expected life of our programs and thereafter;
• the accuracy of our estimates and judgments regarding the duration, scope and impacts of new or continuing
global health, geopolitical or military events, on the economy and financial markets, and on our business,
operations, revenues, liquidity, financial condition, margins, cash flows, prospects and results in future
periods;
• the accuracy of our assessment of anticipated growth drivers and sector trends;
• the accuracy of our assessment of pricing, supply chain and inflation trends;
• new program aircraft prices, unit costs and ramp-up;
• the ability to understand customer needs and portfolio of products and services to drive market demand and
secure new orders and maintain the backlog level;
• continued deployment and execution of leading initiatives to improve revenue conversion into higher
earnings and free cash flow(2), through improved procurement cost, controlled spending and labour
efficiency;
• delivering on our cost reduction plan, through restructurings and other initiatives addressing the direct and
indirect cost structure, continued focusing on sustained cost reductions and operational improvements,
while reducing working capital consumption;
• the effectiveness of disciplined capital deployment measures in new programs and products to drive revenue
growth;
• our ability to effectively transition manufacturing operations to our new Toronto Pearson Airport
manufacturing facility within projected timeframes and budget;
• the ability to recruit and retain highly skilled resources;
• the stability of the competitive global environment, global economic conditions and financial markets in the
face of new or continuing global health, geopolitical or military events;
• the stability of foreign exchange rates at current levels;
• the ability to access the capital markets, on acceptable terms, as needed or opportunistically;
• the ability to have sufficient liquidity to execute the strategic plan and to pay down long-term debt or
refinance maturities; and
• the ability to successfully defend ourselves against ongoing and future legal and regulatory proceedings.
For a discussion of the material risk factors associated with the forward-looking information, refer to the Risks
and uncertainties section in Other.
(1) Also refer to the Guidance and forward-looking statements section for the forward-looking statements disclaimer.
(2) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers.
Refer to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the
most comparable IFRS measures.
18 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
PROFILE
Best-selling jet portfolio fueling growing aftermarket service and Defense
businesses
We skillfully design, develop, manufacture and market two class-leading families of business jets, Global and
Challenger. Besides our strongly positioned portfolio of industry-leading large and medium business jets, we are
outfitting various aircraft platforms for specialized use through Bombardier Defense. Bombardier also boasts an
extensive aftermarket facilities network that services more than 5,000 Global, Challenger and Learjet(1) aircraft
across the U.S., Europe, Asia-Pacific and the Middle East, currently in service worldwide. After a significant
expansion in 2022 that saw the opening of several new or newly expanded service centers around the world,
Bombardier’s customers have been benefiting from these facilities becoming fully operational in 2023, with more
skilled workforce joining their teams. Additional support is provided thanks to world-class depots, hubs, repair
facilities and mobile response teams with available aircraft parts worldwide, ensuring a rapid and effective support
to our customers wherever and whenever they need it.
(1) Bombardier delivered its last Learjet aircraft in the first quarter of 2022 but continues to provide aftermarket support for the Learjet family of
aircraft.
MARKET SEGMENT: BUSINESS AIRCRAFT
All products specifications and data hereafter are approximate, may change without notice and are subject to certain operating
rules, assumptions and other conditions.
LARGE BUSINESS JETS
Models: Global 8000(1), Global 7500, Global 6500, Global
6000, Global 5500 and Global 5000
Market category: Large business jets
Key highlights: Expertly designed to leave a lasting
impression, the flagship Global aircraft family covers the
large jet category with six aircraft models. In 2022,
Bombardier unveiled its newest member, the Global 8000
aircraft. The jet, set to enter service in 2025, stands alone
as the world’s fastest and longest-range purpose-built
business jet, innovatively crafted with the industry’s
smoothest ride, healthiest cabin and lowest cabin altitude.
With a top speed of Mach 0.94, the Global 8000 is the
fastest business jet in the skies.
Global 8000 aircraft
Since its entry into service in 2018, the segment-defining
Global 7500 aircraft has proven to be the highest
performing business aircraft in service today, boasting a
fleet dispatch reliability of more than 99.8%. It is also the
first business jet to receive an Environmental Product
Declaration EPD®(2). As the only ultra-long range business
jet on the market, it can link virtually any key city pair
worldwide, non-stop. Its four-zone cabin includes a full
crew-rest area and provides an unprecedented array of
floor plans and furnishing options.
Featuring a revolutionary wing design and efficient Rolls
Royce Pearl engines, the Global 5500 and Global 6500
jets boast farthest-in-class ranges, offering unrivalled
performance and unsurpassed passenger comfort, all at
exceptional operating costs. In 2023, both aircraft received
their EPD®.
All Global aircraft are specially engineered to deliver the
industry’s ultimate combination of speed and range,
thanks in large part to the Smooth Flĕx Wing, engineered
to provide the smoothest ride and uncompromising
all-weather performance. The Global aircraft also come
equipped with Bombardier’s Pũr Air system, with an
advanced HEPA filter that captures up to 99.99% of
allergens, bacteria and viruses while completely replacing
the cabin air with 100% fresh air in as little as 90 seconds.
In addition, the industry’s fastest in-flight internet
connectivity, combined with comprehensive cabin
management systems, keeps passengers entertained and
connected at all times, while the revolutionary Nuage
seating provides the optimal seating and resting positions.
(1) The Global 8000 aircraft is in development, with testing and certifications proceeding on schedule towards the planned EIS in 2025. See the
Global 8000 aircraft disclaimer at the end of this MD&A.
(2) The International EPD® System is an environmental declaration program based in Sweden. It discloses fully transparent environmental
information about the product’s life cycle, such as CO2 emissions, noise, water consumption and other key environmental impact indicators.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 19
MEDIUM BUSINESS JETS
Models: Challenger 3500 and Challenger 650
Market category: Medium business jets
Key highlights: A masterful expression of high-end
craftsmanship and functionality, the Challenger aircraft
feature productivity-enhancing business tools, with the
most comfortable cabins in its category. All Challenger
aircraft offer low operating costs, high reliability, and the
ultimate in-flight experience with industry-leading
connectivity with available Ka-band and 4G ATG internet,
immersive sound system and a cabin management system
that effortlessly brings it all together.
Challenger 3500 aircraft
The super-midsize Challenger 3500 aircraft, an update to
Bombardier’s bestselling Challenger 350 platform, has
proven to be the right answer to the customers evolving
needs and continues the platform’s 9-year streak as the
most delivered super mid-size aircraft. The aircraft,
introduced in 2021, represents the ultimate combination of
sustainability, performance and reliability. It features the
most technologically advanced cabin in its class that
introduces productivity enhancing features such as the
industry’s first voice-controlled cabin, as well as superior
connectivity with global coverage. Bombardier’s
revolutionary Nuage seat adds to the in-flight comfort. The
elegant and intuitively designed Challenger 3500 cabin
received the 2022 Red Dot: “Best of the Best” Award:
Product Design.
The Challenger 3500 is the most sustainably designed jet
in its class. It is the first super mid-size jet with an EPD®
and the first business jet to achieve a carbon neutral flight
test program. It also offers high-quality, sustainable cabin
material options and introduces technology in the cockpit
to help operators fly more efficiently and reduce carbon
emissions.
The luxurious, award-winning cabin of a Challenger 3500
aircraft
The larger aircraft in Bombardier’s Challenger family, the
Challenger 650, continues to be a popular choice with
customers, particularly corporations and fleet operators. Its
winning combination of peak reliability, worldwide reach,
widest-in-class cabin and lowest direct operating costs has
made it the best-selling platform in its category, with over
1,000 deliveries and counting. Customers appreciate its
4,000 nautical mile range and ability to operate even in
challenging airports such as Aspen or London City. Its
spacious, productivity-minded cabin offers available
seating for up to 12 passengers.
Challenger 650 aircraft are famous for their spacious and
elegant cabins.
The Challenger 600 series has been the most delivered
business jet platform in its segment for the last decade.
The platform is also in high demand for specialized
missions: there are more specialized Challenger 600
series aircraft in operation than all direct competitors
combined.
20 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
BOMBARDIER DEFENSE
Models: Challenger and Global business jets
Market category: Special-mission aircraft
Key highlights: Bombardier Defense (previously
Bombardier Specialized Aircraft) designs, develops and
delivers a range of capabilities to operators around the
world. More than 500 special-mission Learjet, Challenger
and Global aircraft are currently in service with more than
160 operators in over 50 countries.
Decades of experience working with special mission
operators and its diverse fleet of business aircraft
platforms make Bombardier the ideal provider of solutions
for government missions, from surveillance and
reconnaissance to urgent humanitarian assistance,
medical evacuations and VIP transport. Solutions range
from turnkey packages of complete design, building,
testing and certification to specialized engineering support
and technical oversight of customer projects.
BOMBARDIER’S CERTIFIED PRE-OWNED
AIRCRAFT PROGRAM
Models: Learjet, Challenger and Global business jets
Market category: Pre-owned aircraft
Key highlights(1): Launched in 2021, Bombardier’s
Certified Pre-owned (CPO) aircraft program provides a
premium class of pre-owned aircraft, harnessing
Bombardier’s product knowledge, as well as its
world-renowned refurbishment capabilities and valuation
know-how. For buyers seeking a “like-new” experience,
Bombardier’s CPO aircraft program delivers aircraft
equipped with the latest safety and cabin enhancements,
all while providing the new aircraft delivery experience
customers are looking for. Each available aircraft is
meticulously selected, inspected and updated to adhere to
Bombardier's highest quality and safety standards. A fresh
coat of Matterhorn white provides an immaculate canvas
for customers to apply their signature livery.
Bombardier has most notably successfully delivered
platforms of choice in the intelligence, surveillance, and
reconnaissance (ISR) platform sphere and is becoming
the service provider of choice for multiple armed forces
and foreign allies.
Every CPO aircraft is backed by an exclusive
manufacturer one-year warranty(2) which extends to
operational support during the first year, just like with any
new Bombardier aircraft.
(1) Excludes trade-in and resale sales.
(2) One-year warranty on the airframe. Certain conditions apply.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 21
MARKET SEGMENT: CUSTOMER SERVICES
MAINTENANCE: ADDING VALUE THROUGHOUT THE LIFECYCLE
Services portfolio: Extensive, worldwide capabilities to maximize scheduled maintenance as well as value-added packages,
including refurbishment and modification of business aircraft, and component repair and overhaul services. Through Original
Equipment Manufacturer (OEM) expertise, a wide variety of services can be performed in house, as well as by dispatching
mobile response teams to customers’ aircraft.
Key highlights: Bombardier offers worldwide service and support through its service centers, line maintenance stations,
Mobile Response Teams (MRT), network of authorized service facilities and aircraft worldwide to support customers through
aircraft-on-ground (AOG) resolutions. In 2023, Bombardier and its customers have been benefiting from the considerable
expansion and upgrades to its service center network in the previous year.
SERVICES: OFFERING PEACE OF MIND THROUGH PARTS AND SMART SERVICES
Services portfolio: Bombardier provides manufacturer-approved parts backed by an industry leading two-year warranty, as
well as repairs to customer owned parts. A growing portfolio of innovative cost-per-flight-hour parts and maintenance plans are
also available for Learjet, Challenger and Global aircraft. Options include the Smart Services offering, which can be tailored to
include landing gear overhaul and unscheduled maintenance coverage, among other selections. In 2023, Bombardier
introduced Smart Services Elite, a new program that complements Bombardier’s existing Smart Services portfolio. Smart
Services Elite is the only cost-per-fight-hour program that covers cabin system components, landing gear overhaul, scheduled
and unscheduled maintenance and MRT support.
Key highlights: Bombardier offers 24/7 parts support with parts facilities worldwide anchored by two major hubs in Chicago
and Frankfurt, as well as five regional depots. A sophisticated inventory management system ensures worldwide parts
availability throughout the depot and hub network, as well as the wholly-owned service centers. Repair facilities in North
America and Europe provide repair services on customer-owned parts. A network of aircraft is available to shuttle parts in
support of AOG requirements. From coverage on exchanges and repairs of airframe components, including flight deck
avionics, Smart Services provides budget predictability and worldwide parts availability.
CUSTOMER SUPPORT: 24/7 ASSISTANCE
Services portfolio: Bombardier’s comprehensive portfolio of business aircraft customer support includes 24-hour customer
response centers, enhanced online service tools, customer services engineering, MRT trucks, structural repair, technical
publications and EIS support.
Key highlights: Providing operators with a single point of contact, 24 hours a day, 365 days a year, for all critical and AOG
requests and supporting all customer requirements from EIS throughout ownership of the aircraft by leveraging a global
support network of strategically located teams. In 2022, Bombardier significantly enhanced its customer support footprint
around the world with the inauguration of expanded service centers in Singapore and London - Biggin Hill, and the opening of
new facilities in Miami - Opa Locka and Melbourne, Australia. In December 2022, Bombardier broke ground on a new service
center in the U.A.E, which will become an important hub for Bombardier's customers in the region(1). This service support
transformation underscores Bombardier’s ongoing commitment to providing the most comprehensive onsite, mobile and AOG
resolution services in the industry.
(1) See the forward-looking statements disclaimer in the Overview section of this MD&A.
22 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Information on this page reflects Bombardier’s worldwide presence at the end of Q4 2023.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 23
INDUSTRY AND ECONOMIC ENVIRONMENT
Performant and resilient industry driven by strong activity despite
worsened economic conditions and uncertainty
In 2023, business aviation indicators normalized following the impressive recovery of the global pandemic,
inventory level of aircraft in the pre-owned market grew but remained significantly below historical levels, flight
activity for the industry remained comparable to 2022 and the industry continued to maintain a healthy backlog.
Overall, business aviation remained favorable and resilient throughout 2023 despite a context of high inflation,
high interest rates, economic and geopolitical uncertainty. On October 10, 2023, the International Monetary Fund
shared its latest global economic outlook, projecting a global real GDP growth of 3.0% for 2023, down from 3.5%
in 2022 and even lower growth for advanced economies, 1.5% for 2023 down from 2.6% in 2022(1). This outlook is
a result of central bank’s policy rates reaching decade highs in an effort to slow down inflation across the globe.
The effect of tight monetary policy is expected to drag down world demand for goods and services in 2024.
Despite this economic slowdown in 2023, the industry backlog has remained healthy throughout 2023, aircraft
activity remains high and higher inventory in the pre-owned market could encourage activity to ramp up in 2024.
The pre-owned market and its stakeholders were affected by poorer economic conditions in the market. At the
end of 2023, the total number of pre-owned aircraft available for sale, expressed as a percentage of the total
in-service fleet, was estimated at 6.5% compared to 4.8% at the same period in 2022(2). While inventory increased
gradually throughout the year by approximately two percentage points, the overall level remains well below the
historical averages between 11-14%. Furthermore, inventory fell in December 2023 after peaking at 6.8% in
November 2023(2). Industry confidence, measured by the Barclays Business Jet Indicator, settled at 38 points in its
last survey of 2023(3). The survey results and commentary highlighted degrading economic conditions and
uncertainty in the market as prime factors in lower transaction levels as many buyers remained on the fence(3).
Industry business jet flight hours in 2023 decreased year-over-year by roughly 4% compared to 2022. Most of the
decrease was driven by a fall in flight hours for aircraft departing the Americas but also for aircraft departing
Europe, Middle East and Africa. On the other hand, flight hours of aircraft departing Asia Pacific increased by
24%, year-over-year. However, when compared to 2019, before the global pandemic, flight hours in 2023
increased by 21% overall, 22% for aircraft departing the Americas, 14% for aircraft departing Europe, Middle East
and Africa and 38% for aircraft departing Asia Pacific(4).
Finally, the industry delivered an estimated total of 538 units in 2023, up 2.3% year-over-year(5). For reference, in
the last 10 years the industry delivered 545 aircraft on average, indicating potential for delivery growth in the
short-term.
The following key indicators are used to monitor the health of the business aviation market in the short-term:
INDICATOR
CURRENT SITUATION
STATUS
INDUSTRY
CONFIDENCE
In 2023, the Barclays Business Jet Indicator was below the 50-point threshold of market
stability. As of Q4 2023, the index was at 38 points(3).
CORPORATE
PROFITS
PRE-OWNED
BUSINESS JETS
INVENTORY
LEVELS
AIRCRAFT
UTILIZATION
RATES
Forecasted U.S. corporate profits are expected to remain strong for the remainder of 2023,
with Q3 profits increasing to $3.3 trillion for 2023, compared to $3.2 trillion at the end of
2022(6).
The total number of pre-owned aircraft available for sale as a percentage of the total
worldwide fleet has increased gradually throughout 2023, it remains below the industry
historical average, now at 6.5%(2). December data suggests it peaked in November.
Business jet flight hours departing the Americas decreased by 5%, departing Europe, Middle
East and Africa decreased by 6% and departing Asia Pacific increased by 24% in 2023
compared to 2022(4). Compared to 2019, flight hours increased for all departure regions by
about 21% on average.
AIRCRAFT
SHIPMENTS AND
BILLINGS
In the business aircraft market categories in which we compete, we estimate that business
aircraft deliveries and revenues in 2023 increased by 2.3% and 1.3%, respectively, compared
to 2022(5).
▼
▲
►
▲
▲
▲ ►▼ Identifies a favorable, neutral or negative status, respectively, in the market categories in which we compete, based on the current
environment.
24 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
(1) According to the International Monetary Fund publication dated October 10, 2023.
(2) According to JETNET and Ascend (by Cirium).
(3) According to the Barclays Business Jet Survey dated December 11, 2023.
(4) According to WingX data, excludes very light jets and large corporate airliners, as of January 8, 2024.
(5) Based on our estimates, public disclosure records of certain competitors, the General Aviation Manufacturers Association (GAMA) shipment
reports, Ascend (by Cirium) and B&CA Magazine list prices, as of January 31, 2024, excludes very light jets and large corporate airliners.
(6) According to the U.S. Bureau of Economic Analysis News Release dated December 21, 2023.
Source: Barclays.
* The Business Jet Indicator is a measure of market confidence
from industry professionals, gathered through regular surveys of
brokers, dealers, manufacturers, fractional providers, financiers
and others.
Methodologies used in the calculation of the Business Jet
Indicator may differ following a change in the source of the data.
Sources: JETNET and Ascend (by Cirium).
* As a percentage of total business jet fleet, excluding very light
jets.
Shaded area indicates what we consider to be the
historically normal range of total pre-owned business jet
inventory available for sale, i.e. between 11% and 14%.
Source: WingX, excludes very light jets and large corporate
airliners, as of January 8, 2024.
Source: WingX, excludes very light jets and large corporate
airliners, as of January 8, 2024.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 25
BUSINESS JET INDICATOR*(for calendar quarters; average on a 100-point scale)648283837463545542394338IndexStability threshold = 50Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023FLIGHT HOURS FOR AIRCRAFT DEPARTING THE AMERICAS(for calendar years)3,6582,7494,1214,7124,475Thousands of flight hours for all business jets20192020202120222023PRE-OWNED BUSINESS JET INVENTORY* (for calendar years)6.5%6.8%6.0%6.5%LightMediumLargeTotal20142015201620172018201920202021202220230%2%4%6%8%10%12%14%FLIGHT HOURS FOR AIRCRAFT DEPARTING EUROPE, MIDDLE EAST AND AFRICA(for calendar years)9877361,0691,1991,127Thousands of flight hours for all business jets20192020202120222023 Short-term outlook
As per the latest data available, global GDP growth is expected to fall short at 2.7% in 2023 and 2.3% in 2024(1).
Market expectations are that central banks have stopped increasing interest rates in the short-term as inflation
has begun to cool worldwide. Many policy makers have warned that more time will take to reach 2% inflation
targets, as such economic conditions will continue to shift in anticipation to the first reductions in policy rates from
the Federal Reserve and European Central Bank. If interest rates remain higher for longer this will likely continue
to weigh down on expectations for global output. Conversely, an early interest rate cut would drive market
expectation upwards. Nevertheless, continued geopolitical risks from the military conflicts in Ukraine and in the
Middle East will likely continue to feed economic uncertainty. The U.S. labor market remained resilient despite
significantly higher interest rates, increasing the likelihood of a “soft-landing” for the U.S. economy. While pre-
owned inventory levels have risen in 2023, they are unlikely to reach pre-pandemic levels in the short-term.
Higher levels of inventory could also put downward pressure on pricing favoring activity in the pre-owned market.
This coupled to a strong and balanced aircraft backlog for the industry will continue to support moderate growth.
Continued high levels of flight activity will sustain growth in aftermarket services and demand for aircraft from fleet
operators. Industry revenues are expected to continue to grow driven by the increasing contribution of large
aircraft in the overall industry delivery mix.
(1) According to Oxford Economics Databank dated January 25, 2024.
Long-term outlook
In the longer term, all demand drivers are well-oriented. Wealth creation and the continued emergence of
developing countries are expected to grow our customer base. The retirement of older models combined with the
introduction of new models will help meet the needs of new customers. The evolution of new ownership models,
such as fractional and charter businesses, will make business aviation even more accessible. Business aviation is
poised for growth and with the industry’s most comprehensive product portfolio, we believe we are well
positioned.
Customer services
In 2023, as a result of its expansion of the service center network that allows customers to “bring their jet home,
wherever home is”, Bombardier won the prestigious Mercure Award in the category of "International Market
Development - Large Companies". Its Singapore Service Centre won two awards: Top Asia-MRO (Airframe) and
OEM Service Provider of the Year. Bombardier also hosted industry events this year, such as maintenance and
operations conferences in Budapest, Hungary and in Wichita, U.S., the Safety Standdown and the new Flight
Attendant Safety Standdown launched this year. Bombardier continued to roll-out its Certified Pre-owned Program
where used aircraft are refurbished and sold again to customers with the promise of value. The program has
continued to gain attention from the industry. These initiatives and recognitions throughout 2023 are consistent
and a positive indication of Bombardier’s success in continuously improving its customers satisfaction. Through its
expansions, Bombardier is ensuring consistent and reliable access to aftermarket services for current and future
customers across the globe. Demand for service and support is driven by the size of the fleet of Bombardier
business aircraft, by the number of hours flown by said fleet and the average age of the fleet.
Market indicators
INDICATOR
INSTALLED BASE
YEARLY TOTAL
FLIGHT HOURS
AVERAGE AGE OF
FLEET
CURRENT SITUATION
STATUS
The installed base for Bombardier business aircraft increased by approximately
0.9% (or by 2.4% and 6.8% for medium and large categories, respectively) to 5,104
aircraft in 2023 when compared to 2022(1).
Based on our estimates, Bombardier business aircraft fleet total flight hours decreased
by approximately 2% in 2023 compared to 2022 but increased by about 18% compared
to 2019(2). Yearly average flight hours per aircraft also decreased by about 4% in 2023
compared to 2022.
Typically, aircraft direct maintenance costs increase as an aircraft age. Therefore, the
average age of the fleet of Bombardier aircraft will impact the size of the maintenance
market. The average age of the Bombardier business aircraft fleet increased by 1.1% in
2023(1) compared to 2022.
►
▲
▲
▲ ►▼ Identifies a favorable, neutral or negative status, respectively, in the market categories in which we compete, based on the current
environment.
(1) Based on data obtained from fleet database Ascend (by Cirium).
(2) Based on yearly data from internal Bombardier FRACAS database, as of January 8, 2024.
26 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Short-term outlook
Flight activity in 2023 is above pre-pandemic levels and roughly similar to activity seen in 2022. Strong flight
activity will likely drive demand for aftermarket services and from fleet operators in the short-term. With the
expansions and new builds accomplished in 2022 and the continued development of our customer centric
approach throughout 2023, we will undoubtedly continue to improve access and reach of our services to our
customers across the globe. We will also continue to actively evaluate strategic locations for additional
expansions in order to continue the growth of the aftermarket service market share, move closer to customers to
further improve response times and build stronger relationships around the globe.
Long-term outlook
The continued growth of the installed base is expected to stimulate demand for customer services. While
traditional markets such as North America continue to dominate in terms of market size, the business aircraft fleet
growth in non-traditional markets should create new opportunities for aftermarket services.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 27
CONSOLIDATED RESULTS OF OPERATIONS
Results of operations
Revenues
Business aircraft
Manufacturing and Other(1)
Services(2)
Others(3)
Total revenues
Cost of sales
Gross margin
SG&A
R&D
Other expense (income)(4)
Restructuring charges(4)(5)
Loss (gain) related to disposal of business(4)(6)
Impairment and program termination(4)(7)
EBIT
Financing expense
Financing income
EBT
Income taxes expense (recovery)
Net income (loss) from continuing operations
Net income (loss) from discontinued operations(8)
Net income (loss)
EPS (in dollars)
Basic
Diluted
EPS from continuing operations (in dollars)
Basic
Diluted
As a percentage of total revenues
Gross margin(9)
EBIT margin(9)
Fourth quarters ended
December 31
2022
2023
Fiscal years ended
December 31
2022
2023
$
$
$
$
$
$
$
2,571
482
9
3,062
2,480
582
137
158
12
1
(19)
82
211
159
(170)
222
7
215
—
215
2.15
2.11
2.15
2.11
$ 2,226
416
13
2,655
2,195
460
122
127
(1)
7
2
(4)
207
146
(59)
120
(121)
241
—
241
$
$
$ 6,261
1,748
37
8,046
6,415
1,631
447
373
15
1
(81)
83
793
594
(202)
401
(89)
490
(45)
445
$
$
$
$
$
$
2.48
2.40
2.48
2.40
$
$
$
$
4.34
4.24
4.81
4.70
$
$
$
$
$
$
$
5,345
1,508
60
6,913
5,656
1,257
395
360
(13)
8
(22)
(9)
538
817
(33)
(246)
(118)
(128)
(20)
(148)
(1.88)
(1.88)
(1.67)
(1.67)
19.0 %
6.9 %
17.3 %
7.8 %
20.3 %
9.9 %
18.2 %
7.8 %
(1) Includes revenues from sale of new aircraft, specialized aircraft solutions and pre-owned aircraft.
(2) Includes revenues from aftermarket services including parts, Smart Services, service centers, training and technical publications.
(3) Includes revenues from sale of components related to commercial aircraft programs.
(4) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(5) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(6) Includes changes in provisions related to past divestitures.
(7) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
(8) Discontinued operations are related to the sale of the Transportation business. The expenses recorded in discontinued operations for fiscal
years 2023 and 2022 principally relate to change in estimates of a provision for professional fees.
(9) Supplementary financial measure. Refer to the Non-GAAP and other financial measures section of this MD&A for definitions of these
metrics.
28 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Computation of diluted EPS(1)
Net income (loss)
Preferred share dividends, including taxes
Net income (loss) attributable to common equity
holders of Bombardier Inc.
Weighted-average diluted number of common shares
(in thousands of shares)
Diluted EPS (in dollars)
(1) Only from continuing operations.
$
$
$
Fourth quarters ended
December 31
2023
215
(8)
$
2022
241
(7)
$
Fiscal years ended
December 31
2023
490
(31)
$
2022
(128)
(29)
207
$
234
$
459
$
(157)
98,409
2.11
97,423
2.40
$
97,721
4.70
$
94,496
(1.67)
$
Other non-GAAP financial measures, non-GAAP financial ratios and closest IFRS measures
Fourth quarters ended
December 31
Fiscal years ended
December 31
$
$
EBIT
Adjusted EBIT(1)(2)
Adjusted EBIT margin(3)
Adjusted EBITDA(1)
Adjusted EBITDA margin(3)
Net income (loss) from continuing operations
Adjusted net income(1)(2)(4)
Diluted EPS from continuing operations (in dollars)
Adjusted EPS(2)(3)(4) (in dollars)
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2023
793
799
9.9 %
1,230
15.3 %
490
416
4.70
3.94
2023
211
278
9.1 %
458
15.0 %
215
143
2.11
1.37
2022
207
212
8.0 %
352
13.3 %
241
212
2.40
2.10
2022
538
515
7.4 %
930
13.5 %
(128)
104
(1.67)
0.77
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(2) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(3) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(4) Only from continuing operations.
Revenues
Analysis of consolidated results
Revenues for the three-month period ended December 31, 2023 increased by $407 million year-over-year mainly
due to:
• Manufacturing and other revenues increased by $345 million year-over-year mainly due to higher aircraft
•
deliveries and higher selling prices; and
Services revenues increased by $66 million year-over-year mainly due to increased volume and
continuing deployment of the expansion strategy.
Revenues for the fiscal year ended December 31, 2023 increased by $1,133 million year-over-year mainly due to:
• Manufacturing and other revenues increased by $916 million year-over-year mainly due to higher aircraft
•
deliveries and higher selling prices; and
Services revenues increased by $240 million year-over-year mainly due to increased volume and
continuing deployment of the expansion strategy.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 29
Gross margin(1)
Gross margin(1) as a percentage of revenues for the fourth quarter and fiscal year ended December 31, 2023
increased year-over-year by 1.7 percentage points and 2.1 percentage points respectively, mainly as a result of
incremental Global 7500 margins as well as favorable margin performance across the majority of other aircraft,
and higher contributions from aftermarket.
EBIT margin(1) and adjusted EBIT margin(2)
Adjusted EBIT margin(2) for the fourth quarter increased by 1.1 percentage points, mainly as a result of
incremental Global 7500 margins as well as favorable margin performance on certain aircraft; and
higher contributions from aftermarket.
•
•
Partially offset by:
•
higher R&D expense which includes amortization of aerospace program tooling and higher SG&A
expenses.
EBIT margin(1) decreased by 0.9 percentage point compared to the same period last year. EBIT includes certain
amounts not included in adjusted EBIT(3) such as statement of income line items; gain related to disposal of
business, impairment and program termination, restructuring charges and pension related items in other (income)
expense(4).
Adjusted EBIT margin(2) for the fiscal year 2023 increased by 2.5 percentage points, mainly as a result of:
incremental Global 7500 margins as well as favorable margin performance on certain aircraft; and
higher contributions from aftermarket.
•
•
Partially offset by:
•
higher SG&A expenses and system implementation related costs.
EBIT margin(1) increased by 2.1 percentage points compared to the same period last year. EBIT includes certain
amounts not included in adjusted EBIT(3) such as statement of income line items; gain related to disposal of
business, impairment and program termination, restructuring charges and pension related items in other (income)
expense(4).
(1) Supplementary financial measure. Refer to the Non-GAAP and other financial measures section of this MD&A for definitions of these
metrics.
(2) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(3) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(4) Includes the loss related to the purchase of pension annuities. See Note 21 - Retirement benefits, to our Consolidated financial statements,
for more information.
30 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Net financing (income) expense
Net financing (income) expense amounted to $(11) million and $392 million, respectively, for the fourth quarter
and fiscal year ended December 31, 2023, compared to $87 million and $784 million for the corresponding
periods last fiscal year.
The $98 million decrease for the fourth quarter is mainly due to:
•
net change on certain financial instruments classified as FVTP&L, mainly due to a non-cash change in fair
value of embedded derivatives related to call options on long-term debt ($118 million).
Partially offset by:
•
losses related to the full repayment and/or partial repayment of certain Senior Notes ($13 million).
The $392 million decrease for the fiscal year is mainly due to:
•
net change on certain financial instruments classified as FVTP&L, mainly due to a non-cash change in fair
value of embedded derivatives related to call options on long-term debt ($388 million);
lower interest on long-term debt, after the effect of hedges ($68 million); and
higher interest earned on cash and cash equivalents ($17 million).
losses related to the full repayment and/or partial repayment of certain Senior Notes ($55 million).
•
•
Partially offset by:
•
Income taxes
The effective income tax rate for the fourth quarter and fiscal year ended December 31, 2023 is lower than the
statutory income tax rate in Canada of 26.5%. In the three-month period, the effective income tax rate is due to
the positive impact of the permanent differences and the net recognition of previously unrecognized tax losses
and temporary differences. For the fiscal year ended December 31, 2023, the effective income tax recovery rate is
due to the positive impact of the net recognition of previously unrecognized tax losses and temporary differences
and the permanent differences partially offset by the negative impact of the write-down of deferred income tax
assets.
The effective income tax rate for the fourth quarter and fiscal year ended December 31, 2022 is lower than the
statutory income tax rate in Canada of 26.5%. In the three-month period and for the fiscal year ended
December 31, 2022, the effective income tax rate is due to the positive impact of the net recognition of previously
unrecognized tax losses and temporary differences partially offset by the negative impact of the permanent
differences and the write-down of deferred income tax assets.
Investment in product development
Product development
Additions to aerospace program tooling(1)
R&D expense(2)
As a percentage of revenues
Fourth quarters ended
December 31
Fiscal years ended
December 31
$
$
2023
33
9
42
1.4 %
$
$
2022
34
9
43
1.6 %
2023
$ 113
43
$ 156
$
2022
92
31
$ 123
1.9 %
1.8 %
(1) Represents the net amount capitalized in aerospace program tooling, as well as the amount that was paid to suppliers based on reception of
parts for acquired development costs carried out by them.
(2) Excludes amortization of aerospace program tooling of $149 million and $330 million, respectively, for the fourth quarter and fiscal year
ended December 31, 2023 ($118 million and $329 million, respectively, for the fourth quarter and fiscal year ended December 31, 2022), as
the related investments are already included in aerospace program tooling.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 31
The testing and certification of the company’s next flagship, the Global 8000, remained on track in 2023 for EIS in
2025(1). Announced in 2022, the Global 8000 aircraft will have a range of 8,000 nautical mile and, with a top speed
of Mach 0.94(2), the fastest in the industry.
Bombardier also celebrated this year the delivery of its 150th Global 7500 aircraft. The industry-defining business
jet has surpassed 100,000 flight hours, underscoring its status as business aviation’s most reliable and productive
business jet. The aircraft has also flown 20 speed record missions in 2023.
Bombardier continued to prove its industry leadership in environmental accountability and sustainability. In May,
the company published the Environmental Product Declarations® (EPD) for its Global 5500 and Global 6500
aircraft. They join the Global 7500 and Challenger 3500 aircraft as the world’s only business jets with a published
EPD®. The company also continued industry-defining work on its EcoJet research platform, a test vehicle
designed as a Blended Wing Body (BWB) aircraft. In 2023, Bombardier revealed it has completed the second
phase of testing on a larger, 18-foot-wide test vehicle, gaining important new insights and data that allow
Bombardier’s engineering team to perfect their knowledge of new aviation control laws that are adapted to the
radically different BWB geometry, bound to be applied to more sustainable, future business aircraft.
Throughout 2023, Bombardier continued to innovate and upgrade the systems and services it provides for its
in-service aircraft.
In April, Transport Canada, European Union Aviation Safety Agency and Federal Aviation Administration issued
approvals for the installation of Bombardier’s Smart Link Plus system to all in-service Challenger 300, Challenger
350, Challenger 3500, Challenger 605 and Challenger 650, as well as Global 5000, Global 6000, Global Express
and Global Express XRS aircraft. The Smart Link Plus connected aircraft system is an advanced health
monitoring system that collects crucial aircraft data in-flight and enables flight and maintenance crews to
proactively troubleshoot essential in-flight alerts, increasing an aircraft’s operational efficiency. It was first
introduced on the Bombardier flagship Global 7500 aircraft, and a strong majority of Global 7500 customers are
now enrolled in the program. The Smart Link Plus system will also be installed on the Global 8000 aircraft as a
standard feature.
With the introduction of Smart Services Elite announced in October, Bombardier expanded its industry-defining
cost-per-flight-hour offerings. Smart Services Elite is the only cost-per-flight-hour program that covers cabin
system components, landing gear overhaul, scheduled and unscheduled maintenance, and Mobile Response
Team support. More than 1,600 Bombardier aircraft are currently enrolled in Smart Services programs,
representing more than 10 million flight hours – and counting.
In May, Bombardier launched Iridium Certus® services on its Challenger 3500 jets, allowing its customers to
benefit from a truly global, pole-to-pole baseline connectivity with higher data speed and optimal efficiency for a
seamless in-flight experience.
Bombardier also introduced its new Advanced Avionics Upgrade (AAU) for the Bombardier Vision flight deck, a
new avionics software and hardware enhancement that improves situational awareness and offers advanced
visualization features. Powered by Collins Aerospace and available for in-service Global 5000, Global 5500,
Global 6000 and Global 6500 aircraft equipped with the Bombardier Vision flight deck, the AAU is designed to
take in-service Global aircraft to the next level by providing avionics features currently available on in-production
Global 5500 and Global 6500 aircraft.
(1) See the forward-looking statements disclaimer in the Overview section of this MD&A.
(2) Under certain operating conditions, when compared to aircraft currently in service.
32 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Aircraft deliveries and order backlog
Aircraft deliveries
(in units)
Business aircraft
Light(1)
Medium
Large
(1) Bombardier delivered its last Learjet aircraft in the first quarter of 2022.
Order backlog
(in billions of dollars)
Order backlog(1)
(1) Represents order backlog for both manufacturing and services.
Fourth quarters ended
December 31
2022
2023
Fiscal years ended
December 31
2022
2023
—
24
32
56
—
20
29
49
—
63
75
138
3
50
70
123
December 31, 2023
14.2
$
As at
December 31, 2022
14.8
$
The order backlog decreased since the end of 2022. We finished the year with a strong order backlog at
$14.2 billion. Management continuously monitors backlog length and production rates to balance with sales
activities, market demand and aircraft lead time.
Total number of employees
Workforce
December 31, 2023
Regular(1)
17,100
1,000
Contractual
18,100
47 %
Percentage of regular employees covered by collective agreements
(1) Including inactive employees as at December 31, 2023 and as at December 31, 2022.
As at
December 31, 2022
15,200
700
15,900
47 %
The workforce as at December 31, 2023 increased by 2,200 employees, or 14%, when compared to the previous
year. The increase is mainly in support of our production ramp-up, aftermarket growth and the acquisition of
Latécoère’s Querétaro based Electrical Wiring Interconnection System (EWIS) during 2023.
Our incentive-based compensation plan for employees across our sites rewards the collective efforts of our
employees in achieving our objectives using performance indicator targets. A total of approximately 10,400
employees worldwide, or 61% of regular employees, participate in the program. In 2023, as part of this program,
incentive-based compensation is linked to the achievement of targeted results, based on adjusted EBITDA(1) and
free cash flow(1).
Approximately 65% of the workforce as of December 31, 2023, or 11,700 employees, are located in Canada.
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 33
CONSOLIDATED FINANCIAL POSITION
The $134 million increase in assets for the fiscal
year is mainly explained by:
•
a $446 million increase in inventories primarily
due to an increase to support higher deliveries;
a $303 million increase in cash and cash
equivalents. See the Free cash flow and the
variation in cash and cash equivalents from
continuing operations tables for details; and
a $161 million increase in PP&E mainly due to
additions to the new Global aircraft
manufacturing center at the Toronto Pearson
Airport.
•
•
Partially offset by:
•
a $334 million decrease in other financial
assets(1) principally due to reduction in restricted
cash and the sale of investments in securities,
partially offset by net change in fair value of
embedded derivatives related to call options on
long-term debt; and
a $307 million decrease in aerospace program
tooling as a result of amortization.
•
•
The $134 million increase in total liabilities and
deficit for the year ended is mainly explained by a
$358 million increase in equity(2) partially offset by a
$224 million decrease in liabilities, due to the below:
a $534 million increase in trade and other
•
payables mainly due to timing as well as
production rate increase; and
a $205 million increase in retirement benefit
liability mainly due to remeasurement of defined
benefits plans.
Partially offset by:
•
a $373 million decrease in long-term debt(3)
obligations due to the partial and full repayment
of certain Senior Notes partially offset by
issuance of long-term debt; and
a $247 million decrease in other financial
liabilities(1).
•
(1) For the purpose of the consolidated financial position, explanations included in this section do not include the back-to-back agreements the
Corporation has with ACLP related to certain government refundable advances and has with MHI related to certain assets and liabilities.
Refer to Note 17 – Other financial assets and Note 24 – Other financial liabilities in our consolidated financial statements for more
information.
(2) Refer to the consolidated statements of changes in equity in our consolidated financial statements for more information.
(3) Refer to Note 26 – Long-term debt in our consolidated financial statements for more information.
34 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
CONSOLIDATED ASSETS(as at December 31; in millions of dollars)12,32412,4585,5855,9346,7396,524Current assetsNon-current assets20222023CONSOLIDATED LIABILITIES AND DEFICIT(as at December 31; in millions of dollars)12,32412,4585,4375,9386,8876,520Current liabilitiesNon-current liabilities and deficit20222023 LIQUIDITY AND CAPITAL RESOURCES
Free cash flow from continuing operations(1)
Free cash flow(1)
Fourth quarters ended
December 31
Fiscal years ended
December 31
Net income (loss) from continuing operations
Non-cash items
Amortization
Impairment charges on intangible assets
Deferred income taxes (recovery)
Loss (gain) on disposals of PP&E and intangibles
Share-based expense
Loss (gain) on repayment of long-term debt
Net change in non-cash balances
Cash flows from operating activities - continuing
operations
Net additions to PP&E and intangible assets
Free cash flow from continuing operations(1)
$
2023
215
2022
241
$
2023
490
$
$
$
180
70
(4)
1
8
16
254
740
(94)
646
$
140
1
(121)
1
7
3
39
311
(142)
169
$
431
73
(105)
1
24
54
(345)
623
(366)
257
$
2022
(128)
415
3
(123)
(1)
18
(1)
889
1,072
(337)
735
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
Cash flows from operating activities - continuing operations
The $429 million increase in cash flows from operating activities for the fourth quarter is mainly due to:
•
•
a positive period-over-period variation in net change in non-cash balances ($215 million) (see explanations
below); and
higher net income before non-cash items ($214 million).
The $449 million decrease in cash flows from operating activities for the fiscal year is mainly due to:
•
a negative period-over-period variation in net change in non-cash balances ($1,234 million) (see
explanations below).
Partially offset by:
•
higher net income before non-cash items ($785 million).
Net change in non-cash balances
For the fourth quarter ended December 31, 2023, the $254 million inflow is mainly due to:
a decrease in inventories mainly due to higher aircraft deliveries.
a decrease in contract liabilities mainly due to aircraft deliveries; and
an increase in net other financial assets and liabilities mainly due to a non cash change in fair value of
embedded derivatives related to call options on long term debt.
For the fourth quarter ended December 31, 2022, the $39 million inflow was mainly due to:
a decrease in inventories mainly due to higher aircraft deliveries.
a decrease in contract liabilities mainly due to aircraft deliveries; and
a decrease in trade and other payables.
•
Partially offset by:
•
•
•
Partially offset by:
•
•
BOMBARDIER INC. / 2023 FINANCIAL REPORT 35
For the fiscal year ended December 31, 2023, the $345 million outflow is mainly due to:
•
•
an increase in inventories mainly to support higher deliveries; and
a change in net other financial assets and liabilities partly due to residual value guarantee payments
related to past business divestitures.
Partially offset by:
•
an increase in trade and other payables mainly due to timing as well as production rate increase.
For the fiscal year ended December 31, 2022, the $889 million inflow was mainly due to:
•
•
•
an increase in contract liabilities mainly due to customer progress payments as a result of order intake;
a decrease in other financial assets mainly due to a non-cash change in fair value of embedded derivatives
related to call options on long-term debt; and
an increase in trade and other payables.
Partially offset by:
•
•
an increase in inventories mainly due to increase of production of aircraft; and
a decrease in provisions.
Net additions to PP&E and intangible assets(1)
Additions to PP&E and intangible assets(1)
Proceeds from disposals of PP&E
and intangible assets(1)
Net additions to PP&E and intangible assets(1)
$
$
(1) Only from continuing operations.
Fourth quarter ended
December 31
2022
(144)
2023
(94)
$
$
Fiscal years ended
December 31
2022
(355)
2023
(366)
$
—
2
—
18
(94)
$
(142)
$
(366)
$
(337)
For the fourth quarter ended December 31, 2023, net additions to PP&E and intangible assets decreased by
$48 million.
For the fiscal year ended December 31, 2023, net additions to PP&E and intangible assets were higher than 2022
by $29 million, principally as a result of additions to the new Toronto Pearson Airport manufacturing facility.
36 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Available liquidity(1)
We continuously monitor our level of liquidity, including cash and cash equivalents and expected cash flows from
operations, to meet expected requirements, including working capital needs, the support of product development
initiatives and to ensure financial flexibility. In evaluating our liquidity requirements, we take into consideration
historic volatility and seasonal needs, the maturity profile of long-term debt, the funding of product development
programs, the level of customer advances, working capital requirements, the economic environment and access
to capital markets. We use scenario analyses to evaluate cash flow projections.
Variation in cash and cash equivalents from continuing operations
Balance at the beginning of period/fiscal year
Free cash flow from continuing operations(1)
Changes to restricted cash(2)
Sale of investments in securities
Net proceeds from issuance of long-term debt
Repayments of long-term debt
Payment of lease liabilities
Dividends paid - Preferred shares
Repurchase of Class B shares
Issuance of Class B shares
Purchase of Class B shares held in trust under the PSU and
RSU plans
Effect of exchange rates on cash and cash equivalents
Other
Balance at the end of period/fiscal year
Available liquidity and adjusted available liquidity(1)
$
$
Fourth quarters ended
December 31
2022
1,345
169
—
—
—
(209)
(5)
(5)
—
8
2023
987
646
(2)
3
739
(740)
(11)
(5)
—
2
(14)
—
(11)
1,594
$
—
1
(13)
1,291
$
Cash and cash equivalents
Undrawn amounts under available revolving credit facility(3)
Available liquidity
Certain restricted cash supporting various bank guarantees
Adjusted available liquidity(1)
$
$
$
December 31, 2023
1,594
251
1,845
—
1,845
$
Fiscal years ended
December 31
2022
1,675
735
43
—
—
(1,058)
(24)
(20)
(2)
10
2023
1,291
257
390
133
1,478
(1,903)
(36)
(22)
(4)
69
(20)
—
(39)
1,594
$
(38)
1
(31)
1,291
As at
December 31, 2022
1,291
208
1,499
391
1,890
$
$
$
$
$
As at December 31, 2023, the Corporation’s available liquidity(1) remains strong at approximately $1.8 billion,
which includes cash and cash equivalents of $1.6 billion and $251 million under a committed secured revolving
credit facility. This facility of $300 million which matures in 2027 is available for cash drawings for the ongoing
working capital needs of the Corporation and for issuance of performance letters of credit. This facility was
undrawn as at December 31, 2023 and the availability as at such date was $251 million based on the collateral,
which may vary from time to time.
On January 29, 2023, the two bank guarantees, in an aggregate amount of €350 million, which were issued in
connection with the sale of Transportation to Alstom, expired without being drawn. Consequently, part of the
restricted cash, namely an amount of approximately $400 million, which collateralized such bank guarantees, was
released to the Corporation.
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(2) Includes cash collateral supporting various bank guarantees.
(3) Based on collateral.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 37
Future liquidity requirements
Our business operations require capital to develop industry-leading products and to seize strategic opportunities
to increase competitiveness and execute growth strategies. On an on-going basis, we manage our liabilities by
taking into consideration expected free cash flow, debt repayments and other material cash outlays expected to
occur in the future. We take advantage of favorable capital market conditions when they materialize to extend
debt maturity, reduce cost of funds and increase diversity of capital resources.
Bombardier has reduced its long-term debt by approximately $4.5 billion since December 31, 2020 and has
successfully repaid and refinanced its near term debt maturities, creating a runway to focus on its operations and
stabilizing the Corporation’s need for liquidity.
During the year ended December, 31 2023, the Corporation repaid certain Senior Notes using its cash and cash
equivalents as follows:
Repayments during the year
Repayment quarter
First quarter
Fourth quarter
Due date of Senior Notes
2024 and 2025
2025, 2026 and 2027
(1) Represents the notional amount of the long-term debt repaid during the year.
Amount(1)
$
$
$
1,155
738
1,893
In January 2023, the Corporation completed the closing of its offering of $750 million aggregate principal amount
of Senior Notes due 2029. The Senior Notes carry a coupon of 7.50% per annum and were sold at par. The
Corporation used the net proceeds together with its cash and cash equivalents to finance repayment of the
following Senior Notes. In February 2023, the Corporation completed the full repayment of Senior Notes due 2024
for an aggregate amount of $396 million, and the partial repayment of Senior Notes due 2025 for an aggregate
amount of $259 million. In March 2023, the Corporation completed the partial repayment of Senior Notes due
2025 for an aggregate amount of $500 million.
In November 2023, the Corporation completed the closing of its offering of $750 million aggregate principal
amount of Senior Notes due 2030. The Senior Notes carry a coupon of 8.750% per annum and were sold at par.
The Corporation used the net proceeds to finance the partial repayment of $199 million of Senior Notes due 2026,
$159 million of Senior Notes due 2027 and in December 2023, the Corporation completed the full repayment of
Senior Notes due 2025 for an aggregate amount of $380 million.
The weighted-average long-term debt maturity was 4.6 years as at December 31, 2023. See Note 26 – Long-term
debt, to the Consolidated financial statements, for more details.
* Excludes other long-term debt amounting to $18 million as at December 31, 2023. See Note 26 – Long-term debt, to the Consolidated
financial statements, for more information.
38 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
DEBT MATURITY PROFILE* (NOTIONAL AMOUNT)(as at December 31, 2023; in millions of dollars)1,1131,7327507507505102024-2025202620272028202920302031-20332034
We believe our available liquidity(1) of $1.8 billion is sufficient to execute our plan in the short-term. We currently
anticipate that these resources will enable the development and upgrade of products and investments in PP&E to
enhance our competitiveness and support our growth; will enable us to meet currently anticipated financial
requirements in the foreseeable future; and will allow the payment of dividends on preferred shares, if and when
declared by the Board of Directors(2). The Corporation intends to continue to opportunistically refinance or deploy
excess liquidity towards debt pay down and continues to evaluate the most efficient debt reduction strategies,
which for example could include redemptions, tenders or open market repurchases. The amounts involved may
be material.
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(2) See the forward-looking statements disclaimer in the Overview section of this MD&A.
Expected timing of future liquidity requirements(1)
Long-term debt(1)
Interest payments
Purchase obligations(2)
Trade and other payables
Other financial liabilities(3)
Derivative financial liabilities
Total
5,625
1,968
5,029
1,820
795
8
15,245
$
$
$
Less than
1 year
—
422
3,708
1,820
85
8
6,043
$
December 31, 2023
1 to 3 years
3 to 5 years
Thereafter
$
$
1,132
805
1,264
—
106
—
3,307
$
$
2,483
410
57
—
148
—
3,098
$
$
2,010
331
—
—
456
—
2,797
(1) Includes principal repayments only.
(2) Purchase obligations represent contractual agreements to purchase goods or services in the normal course of business that are legally
binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, variable or indexed price
provisions; and the appropriate timing of the transaction. These agreements are generally cancellable with a substantial penalty. Purchase
obligations are generally matched with revenues over the normal course of operations.
(3) The carrying amount of other financial liabilities excludes derivative financial instruments, lease liabilities, and credit and residual value
guarantees payable related to MHI.
The table above presents the expected timing of contractual liquidity requirements. Other financial liabilities
include government refundable advances. Under the respective agreements, the Corporation is required to pay
amounts to governments at the time of the delivery of aircraft. Due to uncertainty about the number of aircraft to
be delivered and the timing of delivery of aircraft, the amounts shown in the table above may vary. Required
pension contributions have not been reflected in this table as such contributions depend on periodic actuarial
valuations for funding purposes. See the Retirement benefits section of this MD&A for more details on
contributions to retirement benefit plans. The amounts presented in the table represent the undiscounted
payments and do not give effect to the related hedging instruments, if applicable.
The Corporation leases buildings, equipment and land. The maturity analysis of undiscounted lease liabilities, was
as follows:
Within 1 year
Between 1 to 5 years
More than 5 years
As at December 31, 2023
65
199
722
986
$
$
BOMBARDIER INC. / 2023 FINANCIAL REPORT 39
In April 2023, Moody’s Investors Service, Inc. upgraded Bombardier’s issuer rating from B3 to B2. In May 2023,
S&P Global Ratings upgraded Bombardier’s issuer rating from B- to B.
Creditworthiness
Credit Ratings
Moody’s Investors Service, Inc.
S&P Global Ratings
Bombardier Inc.’s issuer rating
December 31, 2023
B2
B
Over the long-term, the Corporation believes that it will be in a good position to continue improving its credit
ratings and thereby approach a credit profile nearing investment-grade as it expects to continue to reduce debt
while delivering positive free cash flow(1) generation and improved profitability(2).
(1) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(2) See the forward-looking statements disclaimer in the Overview section of this MD&A.
40 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
CAPITAL STRUCTURE
The Corporation analyzes its capital structure using established metrics, which are based on a broad economic
view of the Corporation, in order to assess the creditworthiness of the Corporation. The Corporation has
emphasized its plan to make deleveraging one of its key priorities and will execute on its plan through a phased
approach.
As the Corporation progressively reshapes its business and reaps the benefit from its various initiatives, it aims to
lower adjusted net debt to adjusted EBITDA ratio(1) to approximately 2x - 2.5x by 2025(2). The Corporation’s
objective is to achieve this by continuing to grow its adjusted EBITDA(3) towards its 2025 objective of greater than
$1.625 billion and allocate excess available liquidity towards debt repayment(2).
The Corporation aims at maintaining an adequate debt maturity runway by opportunistically refinancing or
deploying excess liquidity towards debt pay down thereby building manageable and flexible debt maturity stacks
while focusing on reducing its interest expense.
(1) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(2) See the forward-looking statements disclaimer in the Overview section of this MD&A.
(3) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
Global metrics – The following global metrics do not represent the ratios required for any covenants.
Interest paid on long-term debt (1)
Long-term debt
Less: Cash and cash equivalents
Certain restricted cash supporting various bank guarantees
Adjusted net debt(2)
EBIT
Amortization
Restructuring charges(3)(4)
Gain related to disposal of business(3)(5)
Impairment and program termination(3)(6)
Pension related items(3)(7)
Adjusted EBITDA(2)
Adjusted net debt to adjusted EBITDA ratio(8)
$
$
$
$
$
2023
425 $
5,607 $
1,594
—
4,013 $
793 $
431
1
(81)
83
3
1,230 $
3.3
2022
492
5,980
1,291
391
4,298
538
415
8
(22)
(9)
—
930
4.6
(1) Supplementary financial measure. Refer to the Non-GAAP and other financial measures section of this MD&A for definitions of these
metrics.
(2) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(3) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(4) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(5) Includes changes in provisions related to past divestitures.
(6) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
(7) Includes the loss related to the purchase of pension annuities. See Note 21 - Retirement benefits, to our Consolidated financial statements,
for more information.
(8) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 41
Bombardier continues to evaluate various options to address other debt maturities in an opportunistic manner and
to improve its capital structure and credit quality so as to support its operations and the future development of its
business.
Over the longer term, the Corporation’s capital allocation strategy will focus on deploying, in a disciplined manner,
the excess cash generated from the business towards investments in the Corporation’s products and services,
and to additional debt reduction. In order to adjust its capital structure, the Corporation may opportunistically issue
or reduce long-term debt, make discretionary contributions to pension funds, repurchase or issue share capital, or
vary the amount of dividends paid to shareholders.
In addition, the Corporation separately monitors its net retirement benefit liability which amounted to $0.7 billion as
at December 31, 2023 ($0.4 billion as at December 31, 2022). The measurement of this liability is dependent on
numerous key long-term financial and actuarial assumptions such as discount rates, future compensation
increases, inflation rates and mortality rates. In recent years, this liability has been particularly volatile due to
changes in discount rates. Such volatility is exacerbated by the long-term nature of the obligation. The
Corporation closely monitors the impact of the net retirement benefit liability on its future cash flows and has
introduced significant risk mitigation initiatives in recent years in this respect such as buying out annuities on
behalf of pensioners. Refer to Note 21 – Retirement benefits, to our Consolidated financial statements, for more
details.
42 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
RETIREMENT BENEFITS
Bombardier sponsors several Canadian and foreign retirement benefit plans consisting of funded and unfunded
defined benefit pension plans, as well as other unfunded defined benefit plans. Funded plans are plans for which
segregated plan assets are invested in trusts. Unfunded plans are plans for which there are no segregated plan
assets, as the establishment of segregated plan assets is generally not permitted or not in line with local practice.
Pension plans are categorized as Defined benefit (DB) or Defined contribution (DC). DB plans specify the amount
of benefits an employee is to receive at retirement, while DC plans specify how contributions are determined. As a
result, there is no deficit or surplus for DC plans. Hybrid plans are a combination of DB and DC plans.
In Canada and the U.S., since September 1, 2013, all new non-unionized employees join DC plans (joining DB or
hybrid plans is no longer an option). Employees who are members of a DB or hybrid plan closed to new members
continue to accrue service in their original plan.
Variation in net retirement benefit liability(1)
Balance as at December 31, 2022
Changes in discount rates and other financial assumptions
Employer contributions
Changes in foreign exchange rates
Actuarial gains on pension plan assets
Current service cost
Accretion on net retirement benefit obligations
Settlement(3)
Other
Balance as at December 31, 2023
$
$
418 (2)
325
(81)
9
(151)
58
25
3
54
660 (2)
(1) Supplementary financial measure. Refer to the Non-GAAP and other financial measures section for definitions of these metrics.
(2) Includes retirement benefit assets of $143 million as at December 31, 2023 ($180 million as at December 31, 2022).
(3) Includes the loss related to the purchase of pension annuities. See note 21 – Retirement benefits to our Consolidated financial statements
for more information.
Evolution of weighted-average discount rate
Canada
U.S.
2023
4.60%
5.10%
2022
5.30%
5.40%
2021
3.20%
2.90%
2020
2.70%
2.60%
2019
3.19%
3.32%
The value of plan assets is highly dependent on the pension funds’ asset performance and on the level of
contributions. The performance of the financial markets is a key driver in determining the funds’ asset
performance as assets in the plans are composed mostly of publicly traded equity and fixed income securities.
IFRS requires that the excess (deficit) of actual return on plan assets compared to the estimated return be
reported as an actuarial gain or loss in OCI. The estimated return on plan assets must be calculated using the
discount rate that is used to measure the net retirement benefit liability, which is derived using high-quality
corporate bond yields. During 2023, the actual gain on plan assets were $151 million and the net actuarial loss
recognized in OCI was $217 million which is mainly due to changes in discount rates.
Evolution of funding ratio of funded plans
Funded
2023
89%
2022
94%
2021
87%
2020
78%
2019(1)
86%
(1) Includes Transportation.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 43
Net retirement benefit liability
Funded(1)
Unfunded
Other Plans
Total Net retirement benefit liability
2023
419 $
83
158
660 $
2022
205 $
72
141
418 $
2021(2)
646 $
101
201
948 $
2020(3)
1,176 $
112
243
1,531 $
2019
1,191
788
273
2,252
$
$
(1) Includes liability arising from minimum funding requirement and impact of asset ceiling test, if any.
(2) Excludes net retirement benefit liability amounting to $414 million related to the aerostructures businesses reclassified as liabilities directly
associated with assets held for sale.
(3) Excludes net retirement benefit liability amounting to $1,136 million related to Transportation reclassified as liabilities directly associated with
assets held for sale.
Retirement benefit contribution
2024(1)
(Forecast)
2023
2022
2021
2020(2)
2019(2)
DB
DC
Other
Total retirement benefit contribution
$
$
114 $
39
10
163 $
71 $
39
10
120 $
83 $
28
13
124 $
108 $
26
11
145 $
112 $
30
187
329 $
147
34
191
372
(1) See the forward-looking statements disclaimer in the Overview section of this MD&A.
(2) Includes DB other and Aerostructures and Transportation contributions. See Note 21 – Retirement benefits to our Consolidated financial
statements for more information.
The future level of contributions will be impacted by the evolution of market interest rates and the actual return on
plan assets.
Investment policy and de-risking strategies
The investment policies are established to achieve a long-term investment return so that, in conjunction with
contributions, the plans have sufficient assets to pay for the promised benefits while maintaining a level of risk that
is acceptable given the tolerance of plan stakeholders. See below for more information about risk management
initiatives.
The target asset allocation is determined based on expected economic and market conditions, the maturity profile
of the plans’ liabilities, the funded status of the respective plans and the plan stakeholders’ tolerance to risk.
The plans’ investment strategy is to invest broadly in fixed income and equity securities and to have a smaller
portion of the funds’ assets invested in real return asset securities (global infrastructure and real estate listed
securities).
As at December 31, 2023, the asset allocation was as follows:
• Canadian plans: 52% in fixed income securities, 41% in equity securities and cash, and 7% in real
return assets securities; and
• U.S. plans: 31% in fixed income securities, 56% in equity securities and cash, 3% in real return
assets securities and 10% in others which include derivatives and private assets.
In addition, a customized liability driven investment strategy (the “LDI strategy”) has been implemented for the
U.S. plans to reduce the sensitivity of the plan financial position to variation of interest rates.
The plan administrators have also established dynamic risk management strategies. As a result, asset allocation
will likely become more conservative in the future as plan funding status and market conditions continue to
improve and the plans become more mature. Under certain pension legislation, and subject to compliance with
certain conditions, the buy-out of annuities with insurance companies would discharge the Corporation and
administrators of their respective obligations. Accordingly, in 2018, 2019 and 2023, annuities were purchased for
some pensioners, beneficiaries and deferred vested members of the Bombardier pension plans registered in
Ontario. In 2022, annuities were purchased for some pensioners, beneficiaries and alternate payees of the
44 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Bombardier pension plan registered in the U.S. The buy-out of annuities payable to pensioners of other pension
plans will be contemplated in the coming years when these plans become fully funded on a buy-out basis.
The Corporation monitors the de-risking triggers on an ongoing basis to ensure timely and efficient
implementation of these strategies.
Risk management initiatives
The Corporation’s pension plans are exposed to various risks, including equity, interest rate, inflation, foreign
exchange, liquidity and longevity risks. Several risk management strategies and policies have been put in place to
mitigate the impact these risks could have on the funded status of DB plans and on the future level of
contributions by the Corporation. The following is a description of key risks together with the mitigation measures
in place to address them.
Equity risk
Equity risk results from fluctuations in equity prices. This risk is managed by maintaining diversification of
portfolios across geographies, industry sectors and investment strategies.
Interest rate risk
Interest rate risk results from fluctuations in the fair value of plan assets and liabilities due to movements in
interest rates. This risk is managed by reducing the mismatch between the duration of plan assets and the
duration of pension obligation. This is accomplished by having a portion of the portfolio invested in long-term fixed
income securities and by implementing LDI strategies.
Inflation risk
Inflation risk is the risk that benefits indexed to inflation increase as a result of changes in inflation rates. To
manage this risk, the benefit indexation has been capped in certain plans and a portion of plan assets has been
invested in real return asset securities.
Foreign exchange risk
Currency risk exposure arises from fluctuations in the fair value of plan assets denominated in a currency other
than the currency of the plan liabilities. Currency risk is managed with foreign currency hedging strategies as per
plan investment policies.
Liquidity risk
Liquidity risk stems from holding assets which cannot be readily converted to cash when needed for the payment
of benefits or to rebalance the portfolios. Liquidity risk is managed through investments in treasury bills,
government bonds and equity futures and by limiting investments in private placements or hedge funds.
Longevity risk
Longevity risk is the risk that increasing life expectancy results in longer-than-expected benefit payments. This
risk is mitigated by using the most recent mortality and mortality improvement tables to set the level of
contributions. The buy-out of annuities with insurance companies transfers all of the risks listed above to insurers
for the annuities purchased.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 45
DB plans
DC plans
Total retirement benefit cost
Related to
Funded DB plans
Unfunded DB plans
DC plans
Recorded as follows
EBIT expense or capitalized cost
Financing expense
DB plans
DC plans
Total retirement benefit cost
Related to
Funded DB plans
Unfunded DB plans
DC plans
Recorded as follows
EBIT expense or capitalized cost
Financing expense
Retirement benefit cost
Pension
benefits
Other
benefits
$
$
$
$
$
$
$
$
$
$
$
$
79
39
118
71
8
39
100
18
$
$
9
—
9
n/a
9
n/a
2
7
Pension
benefits
114
28
142
$
$
$
Other
benefits
9
—
9
$
$
$
$
$
$
$
$
110
4
28
$
117
25
$
$
n/a
9
n/a
3
6
2023
Total
88
39
127
71
17
39
102
25
2022
Total
123
28
151
110
13
28
120
31
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
46 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Sensitivity analysis
The net retirement benefit liability is highly dependent on discount rates, expected inflation rates, expected rates
of compensation increase, life expectancy assumptions and actual return on plan assets. The discount rates
represent the market rate for high-quality corporate fixed-income investments at the end of the reporting period
consistent with the currency and estimated term of the benefit obligations. As a result, discount rates change
based on market conditions.
A 0.25 percentage point increase in one of the following weighted-average actuarial assumptions would have the
following effects, all other actuarial assumptions remaining unchanged:
Increase (decrease)
Discount rate
Inflation rate
Rate of compensation increase
Retirement benefit cost for fiscal
year 2024
(Forecast)
Total(1)
(9)
—
1
$
$
$
(1) Net retirement benefit liability as
at December 31, 2023
Total
(137)
1
13
$
$
$
A one year increase in life expectancy for all DB plan beneficiaries would impact plans in major countries as
follows:
Increase
Canada
U.S.
Retirement benefit cost for fiscal
year 2024
(Forecast)
5
1
$
$
(1) Net retirement benefit liability as
at December 31, 2023
$
$
81
18
Details regarding assumptions used are provided in Note 21 – Retirement benefits to our Consolidated financial
statements.
(1) See the forward-looking statements disclaimer in the Overview section of this MD&A.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 47
RISK MANAGEMENT
Active risk management has been one of our priorities for many years and is a key component of our corporate
strategy framework. To achieve our risk management objectives, we have embedded risk management activities
in the operational responsibilities of management and made these activities an integral part of the overall
governance, planning, decision making, organizational and accountability structure.
For each risk or category of risks, the risk management process includes activities performed in a continuous
cycle. Risk assessment, including risk identification, analysis and evaluation, ensures that each risk is analyzed to
identify the consequence and likelihood of the risk occurring and the adequacy of existing controls. Each function
is responsible for implementing the appropriate structures, processes and tools to allow proper identification of
risks. Once the risks have been identified, analyzed and evaluated, risk mitigation identifies the actions to be
implemented by management. Each function has implemented risk management processes that are embedded in
governance and activities to achieve the objectives of our Corporate Risk Management Policy.
In addition, every year, the Internal Audit team assesses our major risks. Senior management reviews this risk
assessment and develops action plans to address the identified risks.
The Board of Directors(1) is ultimately responsible for
reviewing the overall risks faced by the Corporation.
The Board exercises this duty principally through the
Audit Committee, consisting of independent
directors, which reviews material business risks and
the measures that management takes to monitor,
control and manage such risks, including the
adequacy of policies, procedures and controls
designed by management to assess and manage
these risks.
A primary area of focus is product development,
where our biggest opportunities to create value
reside, and also our most significant risks.
Recognizing the long-term nature of product
development activities and the significant human
and financial resources required, we follow a
rigorous gated product development process,
designed to ensure early identification and efficient
mitigation of potential risks. At the heart of this
process is our Bombardier Engineering System,
followed for all programs throughout the product
development cycle. This process is regularly refined
to integrate the lessons learned from our own
programs and from the industry. Specific milestones
must be met before a product can move from one
stage of development to another. The gates consist
of exit reviews with different levels of management
and leading experts to demonstrate technical
feasibility, customer acceptance and financial return.
(1) Refer to the Investor information section following the Notes to
the consolidated financial statements for more information on
Board members and Board Committees.
Source: International Organization for Standardization
(ISO) 31000:2009
48 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
We continuously apply what we learn on one program to the other programs, by sharing ideas and learning in our
various functional committees and through regular peer reviews, bringing together the expertise across all
platforms to drive alignment and common approaches, establish best practices and leverage the knowledge and
experience of our people. This review confirms the availability of human and financial resources, the maturity and
manufacturing readiness of new technologies and the overall strength of the business case.
We have also designed disclosure controls and procedures to provide reasonable assurance that material
information relating to the Corporation is properly communicated and that information required to be disclosed in
public filings is recorded, processed, summarized and reported within the time periods specified in securities
legislation. Refer to the Controls and procedures section in Other for more details.
Key exposures to financing and market risks
and related mitigation strategies
Our operations are exposed to various financing and market risks. The following is a description of our key
exposures to those risks together with the strategies in place to mitigate them. Market risks associated with
pension plans are discussed in the Retirement benefits section.
Exposure to foreign exchange risk
Our main exposures to foreign currencies are managed in accordance with the Foreign Exchange Risk
Management Policy in order to mitigate the impact of foreign exchange rate movements. This policy requires
management to identify all actual and potential foreign currency exposures arising from their operations. This
information is communicated to the central treasury function, which has the responsibility to execute hedging
transactions in accordance with policy requirements. In addition, the central treasury function manages balance
sheet exposures to foreign currency movements by matching asset and liability positions. This program consists
mainly in matching long-term debt in a foreign currency with assets denominated in the same currency.
Foreign exchange management
Hedged exposures
Hedging policy(1)
Risk-mitigation strategies
Forecast cash outflows denominated in
a currency other than the functional
currency of the entity incurring the cash
flows, mainly in Canadian dollars.
Interest cash outflows in currencies
other than the U.S. dollar, i.e. the
Canadian dollar.
Hedge 85% of the identified exposures
for the first three months, 75% for the
next 15 months and, 50% for the
following six months. Additionally,
optional hedges can be placed for up to
50% of the exposures identified further
in the future.
Hedge 100% of the identified exposure
unless the exposure is recognized as an
economic hedge of an exposure arising
from the translation of financial
statements in foreign currencies to the
U.S. dollar.
Use of foreign exchange derivatives
contracts, mainly to sell U.S. dollars and
buy Canadian dollars.
Use of foreign exchange derivatives
contracts, mainly to sell U.S. dollars and
buy Canadian dollars.
Balance sheet exposures.
Hedge 100% of the identified exposures
affecting the Corporation’s net income.
Asset/liability management techniques
as well as foreign exchange derivatives
contracts.
(1) Deviations from the policy are allowed, subject to pre-authorization and maximum pre-determined risk limits as well as market conditions.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 49
As at December 31, 2023, the hedged portion of our significant foreign currency denominated costs for the fiscal
years ending December 31, 2024 and 2025 was as follows:
For fiscal years
Expected costs denominated in foreign currency (in billions of dollars)
Hedged portion of expected costs denominated in foreign currency
Weighted-average hedge rates – foreign currency/USD
2024
$2.3
77 %
0.7468
Canadian dollars
2025
$2.3
61 %
0.7419
Sensitivity analysis
A U.S. one-percent change in the value of the Canadian dollar compared to the U.S. dollar would impact the
expected costs for the year ending December 31, 2024 by approximately $18 million, before giving effect to
forward foreign exchange contracts (approximately $4 million, after giving effect to such contracts).
Exposure to credit risk
The effective monitoring and controlling of credit risk is a key component of our risk management activities. Credit
risk is monitored on an ongoing basis using different systems and methodologies depending on the underlying
exposure.
50 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
EVOLUTION OF FOREIGN EXCHANGE RATES(as at December 31)0.770.780.780.740.76CAD / USD20192020202120222023
Credit risk management
Key risks
Risk mitigation measures initiated by management
Through normal treasury
activities, we are exposed to
credit risk through derivative
financial instruments and
investing instruments.
We are exposed to credit risk
through trade receivables
arising from normal
commercial activities.
Credit risks arising from treasury activities are managed by a central treasury function in
accordance with the Corporate Foreign Exchange Risk Management Policy and the
Corporate Investment Policy. The objective of these policies is to minimize exposure to
credit risk from treasury activities by ensuring that we transact strictly with investment-grade
financial institutions and money market funds, based on pre-established consolidated
counterparty risk limits per financial institution and fund.
Credit risks are arising from normal commercial activities. Customer credit ratings and
credit limits are analyzed and established by internal credit specialists, based on inputs
from external rating agencies, recognized rating methods and our experience with the
customers. The credit risk and credit limits are dynamically reviewed based on fluctuations
in the customers’ financial results and payment behavior. These customer credit ratings
and credit limits are critical inputs in determining the conditions under which credit or
financing is extended to customers, including obtaining collateral to reduce exposure to
losses. Specific governance is in place to ensure that credit risk arising from large
transactions is analyzed and approved by the appropriate level of management before
financing or credit support is offered to the customer.
Exposure to liquidity risk
The management of consolidated liquidity requires a constant monitoring of expected cash inflows and outflows,
which is achieved through a detailed forecast of the Corporation’s liquidity position, as well as long-term operating
and strategic plans, to ensure adequacy and efficient use of cash resources. The Corporation uses scenario
analyses to stress-test cash flow projections. Liquidity adequacy is continually monitored which involves the
application of judgment, taking into consideration historical volatility and seasonal needs, stress-test results, the
maturity profile of indebtedness, access to capital markets, the level of customer advances, availability of letter of
credit and similar facilities, working capital requirements, the availability of working capital financing initiatives and
the funding of product development and other financial commitments.
The Corporation monitors any financing opportunities to optimize its capital structure and maintain appropriate
financial flexibility. The Corporation also routinely reviews its debt profile with a view to managing or extending
maturities and/or negotiating more favorable terms and conditions with respect to its bank facilities. The
Corporation also routinely reviews the terms and conditions of its financing arrangements. These amendments
are subject to prevailing market and other conditions that are beyond its control and there can be no assurance
that the Corporation will be able to successfully negotiate such amendments on commercially reasonable terms,
or at all.
For more details, refer to Note 32 - Financial Risk Management, to our Consolidated financial statements. We
continually monitor any financing opportunities to optimize our capital structure and maintain appropriate financial
flexibility.
Exposure to interest rate risk
The Corporation is exposed to gains and losses arising from changes in interest rates, which includes
marketability risks, through its financial instruments carried at fair value. These financial instruments include
certain derivative financial instruments.
Sensitivity analysis
The interest rate risk primarily relates to financial instruments carried at fair value. Assuming a 100-basis point
increase in interest rates impacting the measurement of these financial instruments, excluding derivative financial
instruments in a hedge relationship, as at December 31, 2023, the impact on EBT would have been a negative
adjustment of $83 million as at December 31, 2023.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 51
NON-GAAP AND OTHER FINANCIAL MEASURES
This MD&A is based on reported earnings in accordance with IFRS and on the following non-GAAP and other
financial measures:
Non-GAAP and other financial measures
Non-GAAP Financial Measures
Adjusted EBIT
EBIT excluding certain items which do not reflect the Corporations core performance or where
their separate presentation will assist users of the consolidated financial statements in
understanding the Corporation’s results for the period. Such items include restructuring charges,
(gain) loss related to disposal of business, impairment and program termination, certain one-time
pension related items included in other (income) expense such as (gain) loss on pension annuity
purchases, and non-commercial legal claims.
Adjusted EBITDA
Adjusted EBIT plus amortization charges on PP&E and intangible assets.
Adjusted net income
(loss)
Net income (loss) from continuing operations excluding restructuring charges, (gain) loss related
to disposal of business, impairment and program termination, certain one-time pension related
items included in other (income) expense such as (gain) loss on pension annuity purchases, non-
commercial legal claims, certain net gains and losses arising from changes in measurement of
provisions and of financial instruments carried at FVTP&L, accretion on net retirement benefit
obligation, losses (gains) on repayment of long-term debt, changes in discount rates of provisions
and the related tax impacts of these items.
Free cash flow (usage)
Cash flows from operating activities - continued operations less net additions to PP&E and
intangible assets.
Available liquidity
Cash and cash equivalents, plus undrawn amounts under credit facilities.
Adjusted liquidity
Cash and cash equivalents, plus certain restricted cash supporting various bank guarantees.
Adjusted available
liquidity
Adjusted net debt
Cash and cash equivalents, plus certain restricted cash supporting various bank guarantees and
undrawn amounts under credit facilities.
Long-term debt less cash and cash equivalents less certain restricted cash supporting various
bank guarantees.
Non-GAAP Financial Ratios
Adjusted EPS
EPS calculated based on adjusted net income attributable to equity holders of Bombardier Inc.,
using the treasury stock method, giving effect to the exercise of all dilutive elements.
Adjusted EBIT margin
Adjusted EBIT, as a percentage of total revenues.
Adjusted EBITDA margin Adjusted EBITDA, as a percentage of total revenues.
Adjusted net debt to
adjusted EBITDA ratio
Adjusted net debt divided by adjusted EBITDA.
Supplementary Financial Measures
Interest paid on long-
term debt
Interest paid comprises interest on long-term debt after the effect of hedges, if any, excluding up-
front costs paid related to the negotiation of debts or credit facilities.
EBIT margin
Gross margin
percentage
Net retirement benefit
liability
EBIT, as a percentage of total revenues.
Gross margin, as a percentage of total revenues.
Retirement benefit liability less retirement benefit assets.
Non-GAAP and other financial measures are measures mainly derived from the consolidated financial statements
but are not standardized financial measures under the financial reporting framework used to prepare our financial
statements. Therefore, these might not be comparable to similar non-GAAP and other financial measures used by
other issuers. The exclusion of certain items from non-GAAP or other financial measures does not imply that
these items are necessarily non-recurring.
52 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Adjusted EBIT
Adjusted EBIT is defined as the EBIT excluding certain items which do not reflect the Corporations core
performance or where their separate presentation will assist users of the consolidated financial statements in
understanding the Corporation’s results for the period. Such items include restructuring charges(1)(2), (gain) loss
related to disposal of business(1)(3), impairment and program termination(1)(4), certain one-time pension related items
included in other (income) expense such as (gain) loss on pension annuity purchases(1), and non-commercial legal
claims(1). Management uses adjusted EBIT for purposes of evaluating underlying business performance.
Management believes presentation of this non-GAAP operating earnings measure in addition to IFRS measures
provides users of our Financial Report with enhanced understanding of our results and related trends and
increases the transparency and clarity of the core results of our business. For these reasons, a significant number
of users of the MD&A analyze our results based on this financial measure. Management believes this measure
helps users of the MD&A to better analyze results, enabling better comparability of our results from one period to
another and with peers.
Adjusted EBITDA
Adjusted EBITDA is defined as the EBIT excluding restructuring charges(1)(2), (gain) loss related to disposal of
business(1)(3), impairment and program termination(1)(4), certain one-time pension related items included in other
(income) expense such as (gain) loss on pension annuity purchases(1), and non-commercial legal claims(1),
amortization charges on PP&E and intangible assets. Management uses adjusted EBITDA for purposes of
evaluating underlying business performance. Management believes this non-GAAP operating earnings measure
in addition to IFRS measures provides users of our Financial Report with enhanced understanding of our results
and related trends and increases the transparency and clarity of the core results of our business, since it excludes
the effects of items that are usually associated with investing or financing activities and items that do not reflect
our core performance or where their exclusion will assist users in understanding our results for the period. For
these reasons, a significant number of users of the MD&A analyze our results based on this financial measure.
Management believes this measure helps users of the MD&A to better analyze results, enabling better
comparability of our results from one period to another and with peers.
Adjusted net income (loss)
Adjusted net income (loss) is defined as the net income (loss) from continuing operations adjusted for certain
specific items that are significant but are not, based on management’s judgment, reflective of the Corporation’s
underlying operations. These include adjustments related to restructuring charges(1)(2), (gain) loss related to
disposal of business(1)(3), impairment and program termination(1)(4), certain one-time pension related items included
in other (income) expense such as (gain) loss on pension annuity purchases(1), non-commercial legal claims(1),
certain net gains and losses arising from changes in measurement of provisions and of financial instruments
carried at FVTP&L, accretion on net retirement benefit obligation, losses (gains) on repayment of long-term debt,
changes in discount rates of provisions and the related tax impacts of these items. Management uses adjusted
net income (loss) for purposes of evaluating underlying business performance. Management believes this non-
GAAP earnings measure in addition to IFRS measures provides users of our Financial Report with enhanced
understanding of our results and related trends and increase the transparency and clarity of the core results of our
business. Adjusted net income (loss) excludes items that do not reflect our core performance or where their
exclusion will assist users in understanding our results for the period. For these reasons, a significant number of
users of the MD&A analyze our results based on this financial measure. Management believes this measure helps
users of the MD&A to better analyze results, enabling better comparability of our results from one period to
another and with peers.
(1) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(2) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(3) Includes changes in provisions related to past divestitures.
(4) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 53
Adjusted EPS
Adjusted EPS is defined as the adjusted net income (loss) attributable to equity shareholders of Bombardier
Inc.,divided by the weighted-average diluted number of common shares for the period. Management uses
adjusted EPS for purposes of evaluating underlying business performance. Management believes this non-GAAP
financial ratio in addition to IFRS measures provides users of our Financial Report with enhanced understanding
of our results and related trends and increases the transparency and clarity of the core results of our business.
Adjusted EPS excludes items that do not reflect our core performance or where their exclusion will assist users in
understanding our results for the period. For these reasons, a significant number of users of the MD&A analyze
our results based on this financial measure. Management believes this measure helps users of the MD&A to
better analyze results, enabling better comparability of our results from one period to another and with peers.
Adjusted EBIT margin
Adjusted EBIT margin is defined as the adjusted EBIT expressed as a percentage of total revenues. Management
uses adjusted EBIT margin for purposes of evaluating underlying business performance. Management believes
this non-GAAP financial ratio in addition to IFRS measures provides users of our Financial Report with enhanced
understanding of our results and related trends and increase the transparency and clarity of the core results of our
business. Adjusted EBIT margin excludes items that do not reflect our core performance or where their exclusion
will assist users in understanding our results for the period. For these reasons, a significant number of users of
the MD&A analyze our results based on this financial measure. Management believes this measure helps users of
the MD&A to better analyze results, enabling better comparability of our results from one period to another and
with peers.
Adjusted EBITDA margin
Adjusted EBITDA margin is defined as the adjusted EBITDA expressed as a percentage of total revenues.
Management uses adjusted EBITDA margin for purposes of evaluating underlying business performance.
Management believes this non-GAAP financial ratio in addition to IFRS measures provides users of our Financial
Report with enhanced understanding of our results and related trends and increase the transparency and clarity of
the core results of our business. Adjusted EBITDA margin excludes items that do not reflect our core performance
or where their exclusion will assist users in understanding our results for the period. For these reasons, a
significant number of users of the MD&A analyze our results based on this financial measure. Management
believes this measure helps users of the MD&A to better analyze results, enabling better comparability of our
results from one period to another and with peers.
Reconciliation of adjusted EBIT to EBIT and computation of adjusted EBIT margin(1)
EBIT
Restructuring charges(2)(3)
Loss (gain) related to disposal of business(2)(4)
Impairment and program termination(2)(5)
Pension related items(2)(6)
Adjusted EBIT
Total revenues
Adjusted EBIT margin
$
$
Fourth quarters ended
December 31
2022
207
7
2
(4)
—
$
212
$ 2,655
2023
211
1
(19)
82
3
$
278
$ 3,062
$
$
Fiscal years ended
December 31
2022
538
8
(22)
(9)
—
$
515
$ 6,913
2023
793
1
(81)
83
3
$
799
$ 8,046
9.1 %
8.0 %
9.9 %
7.4 %
(1) Only from continuing operations.
(2) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(3) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(4) Includes changes in provisions related to past divestitures.
(5) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
(6) Includes the loss related to the purchase of pension annuities. See Note 21 - Retirement benefits, to our Consolidated financial statements,
for more information.
54 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Reconciliation of adjusted EBITDA to EBIT and computation of adjusted EBITDA margin(1)
EBIT
Amortization
Restructuring charges(2)(3)
Loss (gain) related to disposal of business(2)(4)
Impairment and program termination(2)(5)
Pension related items(2)(6)
Adjusted EBITDA
Total revenues
Adjusted EBITDA margin
$
$
Fourth quarters ended
December 31
2022
207
140
7
2
(4)
—
$
352
$ 2,655
13.3 %
2023
211
180
1
(19)
82
3
$
458
$ 3,062
15.0 %
$
$
Fiscal years ended
December 31
2022
538
415
8
(22)
(9)
—
$
930
$ 6,913
13.5 %
2023
793
431
1
(81)
83
3
$ 1,230
$ 8,046
15.3 %
Reconciliation of adjusted net income to net income and computation of adjusted EPS(1)
Net income from continuing operations
Adjustments to EBIT related to:
Restructuring charges(2)(3)
Loss (gain) related to disposal of business(2)(4)
Impairment and program termination(2)(5)
Pension related items(2)(6)
Adjustments to net financing expense related to:
Net gain on certain financial instruments
Accretion on net retirement benefit obligations
Losses on repayment of long-term debt
Changes in discount rates of provisions
Tax impact of adjusting items
Adjusted net income
Preferred share dividends, including taxes
Adjusted net income attributable to equity holders of
Bombardier Inc.
Weighted-average adjusted diluted number of common shares
(in thousands)
Adjusted EPS (in dollars)
Fourth quarters ended December 31
2022
(per share)
2023
(per share)
$
215
$
241
0.01
(0.19)
0.83
0.03
(1.65)
0.06
0.16
0.01
—
1
(19)
82
3
(162)
6
16
1
—
143
(8)
0.07
0.02
(0.04)
—
(0.45)
0.08
0.03
—
(0.01)
7
2
(4)
—
(44)
8
3
—
(1)
212
(7)
$
135
98,409
1.37
$
$
205
97,423
2.10
$
(1) Only from continuing operations.
(2) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(3) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(4) Includes changes in provisions related to past divestitures.
(5) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
(6) Includes the loss related to the purchase of pension annuities. See Note 21 - Retirement benefits, to our Consolidated financial statements,
for more information.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 55
Reconciliation of adjusted EPS to diluted EPS (in dollars)(1)
Diluted EPS from continuing operations
Impact of adjustment to EBIT related to:
Restructuring charges(2)(3)
Loss (gain) related to disposal of business(2)(4)
Impairment and program termination(2)(5)
Pension related items(2)(6)
Adjustments to net financing expense related to:
Net gain on certain financial instruments
Accretion on net retirement benefit obligations
Losses on repayment of long-term debt
Changes in discount rates of provisions
Tax impact of adjusting items
Adjusted EPS
Fourth quarters ended December 31
2022
2.40
2023
2.11
$
$
0.01
(0.19)
0.83
0.03
(1.65)
0.06
0.16
0.01
—
1.37
$
0.07
0.02
(0.04)
—
(0.45)
0.08
0.03
—
(0.01)
2.10
$
Reconciliation of adjusted net income (loss) to net income (loss) and computation of adjusted EPS(1)
Net income (loss) from continuing operations
Adjustments to EBIT related to:
Restructuring charges(2)(3)
Gain related to disposal of business(2)(4)
Impairment and program termination(2)(5)
Pension related items(2)(6)
Adjustments to net financing expense related to:
Net loss (gain) on certain financial instruments
Accretion on net retirement benefit obligations
Losses (gains) on repayment of long-term debt
Changes in discount rates of provisions
Effect of dilution
Tax impact of adjusting items
Adjusted net income
Preferred share dividends, including taxes
Adjusted net income attributable to equity holders of
Bombardier Inc.
Weighted-average adjusted diluted number of common shares
(in thousands)
Adjusted EPS (in dollars)
Fiscal years ended December 31
2022
2023
(per share)
(per share)
$
490
$
(128)
0.01
(0.83)
0.85
0.03
(1.64)
0.26
0.55
0.01
—
—
1
(81)
83
3
(160)
25
54
1
—
—
416
(31)
0.08
(0.23)
(0.09)
—
2.34
0.32
(0.01)
(0.02)
0.06
(0.01)
8
(22)
(9)
—
228
31
(1)
(2)
—
(1)
104
(29)
$
385
97,721
3.94
$
$
75
97,642
0.77
$
(1) Only from continuing operations.
(2) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(3) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(4) Includes changes in provisions related to past divestitures.
(5) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
(6) Includes the loss related to the purchase of pension annuities. See Note 21 - Retirement benefits, to our Consolidated financial statements,
for more information.
56 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Reconciliation of adjusted EPS to diluted EPS (in dollars)(1)
Diluted EPS from continuing operations
Impact of adjustment to EBIT related to:
Restructuring charges(2)(3)
Gain related to disposal of business(2)(4)
Impairment and program termination(2)(5)
Pension related items(2)(6)
Adjustments to net financing expense related to:
Net loss (gain) on certain financial instruments
Accretion on net retirement benefit obligations
Losses (gains) on repayment of long-term debt
Changes in discount rates of provisions
Effect of dilution
Tax impact of adjusting items
Adjusted EPS
Fiscal years ended December 31
2022
2023
(1.67)
4.70
$
$
0.01
(0.83)
0.85
0.03
(1.64)
0.26
0.55
0.01
—
—
3.94
$
0.08
(0.23)
(0.09)
—
2.34
0.32
(0.01)
(0.02)
0.06
(0.01)
0.77
$
(1) Only from continuing operations.
(2) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(3) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(4) Includes changes in provisions related to past divestitures.
(5) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
(6) Includes the loss related to the purchase of pension annuities. See Note 21 - Retirement benefits, to our Consolidated financial statements,
for more information.
Free cash flow (usage)
Free cash flow (usage) is defined as cash flows from operating activities - continued operations less net additions
to PP&E and intangible assets. Management believes that this non-GAAP cash flow measure provides investors
with an important perspective on the Corporation’s generation of cash available for shareholders, debt repayment,
and acquisitions after making the capital investments required to support ongoing business operations and long-
term value creation. This non-GAAP cash flow measure does not represent the residual cash flow available for
discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt.
Management uses free cash flow (usage) as a measure to assess both business performance and overall liquidity
generation.
Reconciliation of free cash flow to cash flows from operating activities(1)
Cash flows from operating activities - continuing operations $
Net additions to PP&E and intangible assets
Free cash flow from continuing operations
$
Fourth quarters ended
December 31
2022
311
(142)
169
2023
740
(94)
646
$
$
Fiscal years ended
December 31
2022
$ 1,072
(337)
735
2023
623
(366)
257
$
$
$
(1) Only from continuing operations.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 57
Available liquidity
This measure was previously referred to as available short-term capital resources from continuing operations.
Available liquidity is defined as cash and cash equivalents plus undrawn amounts under credit facilities.
Management believes that this non-GAAP financial measure provides investors with an important perspective on
the Corporation’s ability to meet expected liquidity requirements, including the support of product development
initiatives and to ensure financial flexibility. This measure does not have any standardized meaning prescribed by
IFRS and therefore, may not be comparable to similar measures presented by other companies.
Reconciliation of available liquidity to cash and cash equivalents
As at
Cash and cash equivalents
Undrawn amounts under available revolving credit facility(1)
Available liquidity
$
$
December 31, 2023
1,594
251
1,845
December 31, 2022
1,291
208
1,499
$
$
Adjusted liquidity
Adjusted liquidity is defined as cash and cash equivalents, plus certain restricted cash supporting various bank
guarantees. Management believes that this non-GAAP financial measure is a useful measure because it includes
items in its results that management believes is a better reflection of the Corporation’s liquidity. This measure
does not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to similar
measures presented by other companies.
Reconciliation of adjusted liquidity to cash and cash equivalents
As at
Cash and cash equivalents
Certain restricted cash supporting various bank guarantees
Adjusted liquidity
$
$
December 31, 2023
1,594
—
1,594
December 31, 2022
1,291
391
1,682
$
$
Adjusted available liquidity
Adjusted available liquidity is defined as cash and cash equivalents, plus certain restricted cash supporting
various bank guarantees and undrawn amounts under credit facilities. Management believes that this non-GAAP
financial measure is a useful measure because it includes items in its results that management believes is a
better reflection of the Corporation’s liquidity. This measure does not have any standardized meaning prescribed
by IFRS and therefore, may not be comparable to similar measures presented by other companies.
Reconciliation of adjusted available liquidity to cash and cash equivalents
As at
Cash and cash equivalents
Undrawn amounts under available revolving credit facility(1)
Certain restricted cash supporting various bank guarantees
Adjusted available liquidity
$
$
December 31, 2023
1,594
251
—
1,845
December 31, 2022
1,291
208
391
1,890
$
$
(1) A committed secured revolving credit facility of $300 million which matures in 2027 and is available for cash drawings for the ongoing
working capital needs of the Corporation and for issuance of performance letters of credit. This facility was undrawn as at December 31,
2023 and the availability as at such date was $251 million based on the collateral, which may vary from time to time.
Adjusted net debt
Adjusted net debt is defined as long-term debt less cash and cash equivalents less certain restricted cash
supporting various bank guarantees. Management believes that this non-GAAP financial measure is a useful
measure because it reflects the Corporations ability to service its debt and other long term obligations. This
measure does not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to
similar measures presented by other companies.
58 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Adjusted net debt to adjusted EBITDA ratio
Management uses adjusted net debt to adjusted EBITDA ratio as a useful credit measure for purposes of
measuring the Corporation’s ability to service its debt and other long-term obligations. This non-GAAP financial
ratio does not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to
similar measures presented by other companies.
Reconciliation of adjusted net debt to long-term debt and computation of adjusted net debt to adjusted
EBITDA ratio
Long-term debt
Less: Cash and cash equivalents
Certain restricted cash supporting various bank guarantees
Adjusted net debt
Adjusted EBITDA
Adjusted net debt to adjusted EBITDA ratio
Fiscal years ended December 31
2022
2023
$ 5,980
$ 5,607
1,291
1,594
391
—
$ 4,298
$ 4,013
930
$ 1,230
$
4.6
3.3
BOMBARDIER INC. / 2023 FINANCIAL REPORT 59
OTHER
Table of Contents
OFF-BALANCE
SHEET
ARRANGEMENTS
RISKS AND
UNCERTAINTIES
FINANCIAL
INSTRUMENTS
RELATED
PARTY
TRANSACTIONS
CRITICAL
JUDGMENTS
AND
ACCOUNTING
ESTIMATES
CONTROLS
AND
PROCEDURES
61
62
79
80
81
83
OTHER
FOREIGN
EXCHANGE
RATES
SHAREHOLDER
INFORMATION
SELECTED
FINANCIAL
INFORMATION
QUARTERLY
DATA
(UNAUDITED)
HISTORICAL
FINANCIAL
SUMMARY
84
85
86
87
88
89
60 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
OFF-BALANCE SHEET ARRANGEMENTS
Credit and residual value guarantees
For more details, refer to Note 36 – Commitments and contingencies, to the consolidated financial statements.
Financing structures related to the sale of commercial aircraft
For more details, refer to Note 35 – Unconsolidated structured entities, to the consolidated financial statements.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 61
RISKS AND UNCERTAINTIES
We operate in an industry segment which presents a variety of risk factors and uncertainties. The risks and
uncertainties described below are those that we currently believe could materially affect our business activities,
financial condition, cash flows, results of operations and reputation, but are not necessarily the only risks and
uncertainties that we face. If any of these risks, or any additional risks and uncertainties presently unknown to us
or that we currently consider as being not material, actually occur or become material risks, our business
activities, financial condition, cash flows, results of operations and reputation could be materially adversely
affected.
Operational risk is the risk of potential loss due to the nature of our operations. Sources of operational
risk include development of new business and awarding of new contracts, order backlog, development
of new products and services, and the complexity of obtaining certification of products and services.
Furthermore, our cash flows are subject to pressures based on seasonality and cyclicality, and our
business is capital intensive, which require that we regularly incur significant capital expenditures and
investment over multi-year periods prior to realizing cash flows. Other sources of operational risk
include our ability to successfully implement our strategy, manufacturing and productivity
enhancements and operational efficiencies, and actions of business partners, product performance
warranty and casualty claim losses, the use of estimates and judgments in accounting, regulatory and
legal conditions, environmental, health and safety issues, as well as dependence on a limited number
of customers and contracts, suppliers (including supply chain management) and human resources. We
are also subject to risks related to reliance on information systems, reliance on and protection of
intellectual property rights, reputation risks, our environmental, social and governance (“ESG”) strategy
and disclosures, risks of impairments and asset write-downs, risk management, tax matters and
adequacy of insurance coverage.
Financing risk is the risk of potential loss due to the liquidity of our financial assets including
counterparty credit risk, access to capital markets, having substantial debt and interest payments (and
being able to properly manage those), restrictive debt covenants, obligations under retirement benefit
plans, financing support provided for the benefit of certain customers and government support.
Regulatory and legal risk is the risk of potential loss due to legal claims, lawsuits and investigations in
connection with our business operations and contractual arrangements. It includes the risk of material
losses which may be incurred following adverse judgements or findings against us, the risk of
reputational harm which may put us at a disadvantage for future orders and the risk that certain
litigation could materially adversely affect our business, financial results and cash flows.
General economic risk is the risk of potential loss due to unfavourable economic conditions. These
factors include, but are not limited to, unfavourable political conditions, potential economic slowdowns
or recession, and declining business confidence, which can result in slowdowns to our business, and
those of our suppliers, customers and other counterparties.
Business environment risk is the risk of potential loss due to external risk factors. These factors may
include the financial condition of the business aircraft customers, trade policy, as well as increased
competition from other businesses including new entrants in market segments in which we compete. In
addition, political instability, geopolitical tensions and force majeure events, such as acts of terrorism,
global climate change, global health risks, or the outbreak of military conflict or continued hostilities in
certain regions of the world, could result in lower orders or the rescheduling or cancellation of part of
the existing order backlog for some of our products, or prohibitions or impediments to expanding our
business in certain regions of the world.
OPERATIONAL
RISK
FINANCING RISK
REGULATORY
AND LEGAL RISK
GENERAL
ECONOMIC RISK
BUSINESS
ENVIRONMENT
RISK
MARKET RISK
Market risk is the risk of potential loss due to adverse movements in market factors including foreign
currency fluctuations, changing interest rates, increases in commodity prices and inflation rate
fluctuations.
62 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Business development
Operational risk
Our business is dependent on obtaining new orders and customers, thus continuously replenishing our order
backlog. Our results may also be negatively impacted if we are unable to effectively execute strategies to capture
growth. Although we have developed and continue to develop our presence in many geographic markets, access
to certain markets can prove to be difficult to secure.
In addition, fluctuating demand cycles are common in the industry in which we operate and can have a significant
impact on the volume of new aircraft orders. Our estimates of future performance depend on, among other
matters, whether and when we receive new orders.
Our order backlog may not be indicative of future revenues
Backlog represents management’s estimate of the aggregate amount of the revenues expected to be realized in
the future. The termination, modification, delay, or suspension of any one or more major contracts may have a
material and adverse effect on future revenues and profitability. We cannot guarantee that the revenues initially
anticipated in our new orders will be realized in full, in a timely manner, or at all, or that, even if realized, such
revenues will result in profits or cash generation as expected, and any shortfall may be significant. The
materialisation of any of the risks described above could have a material adverse effect on our business, financial
condition, cash flows and results of operations.
Deployment and execution of initiatives related to cost reductions and working capital
improvement
The Corporation has indicated that it was focusing on certain priorities, including improve cash generation, reduce
costs and drive performance. As with any large, company-wide initiatives, there are inherent risks in the timing of
the deployment and in the planned value to be achieved. The timing and magnitude of the specific initiatives and
associated benefits, if any, could be affected by a multitude of external and internal factors including, but not
limited to: the evolution of the demands and requirements of our business, variations in planned production
volumes and schedules, the outcome of negotiations with suppliers and unions, changing legislation, changes in
socio-economic conditions in the countries in which we operate, evolutions in the labour market for key talent, and
changes in the priorities of the business. There can be no assurance that these initiatives, or other initiatives, will
enable us to reach our objectives, or that any such measures will be implemented successfully or within the set
time frame. A failure to successfully implement our strategy and initiatives, including as regards debt management
and costs reduction, or if such measures prove insufficient, could have a material adverse impact on our business
activities, financial condition, profitability and outlook.
Executing our manufacturing strategy and productivity enhancement initiatives
One of the priorities of the strategic plan established by management consists of sustained efforts in the areas of
cost reduction and productivity enhancement / operational efficiencies. This priority aims in part at leveraging the
strength of our engineering and manufacturing centres of excellence. In addition, our cost reduction and
operational efficiencies / productivity enhancement efforts also focus on further implementing and leveraging our
standardized product and service platforms. We believe that flexible manufacturing is the key element to enable
improvements in our ability to respond to customers in a cost-effective manner. Our success in implementing this
priority of our strategic plan is dependent on the involvement of management, production employees and
suppliers. Any failure to achieve cost reduction and operational efficiencies / productivity enhancement priorities
(including the anticipated levels of productivity and operational efficiencies) in our manufacturing facilities, could
have a material adverse impact on our business activities, financial condition, profitability and outlook.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 63
Developing new products and services
Changes resulting from global trends such as climate change, volatile fuel prices, the growth of developing
markets, population growth and demographic factors influence customer demands. To remain competitive and
meet customers’ needs, we are required to anticipate these changes and must continuously develop and design
new products and services, improve existing products and services and invest in and develop new technologies.
Introducing new products, services or technologies, or expanding existing service offerings, requires a significant
commitment to R&D, capital and other investment, including maintaining a significant level of highly skilled
employees.
Furthermore, our investments in new products, services or technologies, or expanding existing service offerings,
may or may not be successful. Our results may be impacted if we invest in products or services that are not
accepted in the marketplace, if customer demand or preferences change, if new products are not approved by
regulatory authorities (or if we fail to design or obtain certification or accreditation for new products or
technologies), are not brought to market in a timely manner, in particular, as compared to our competitors, or if our
products become obsolete. We may incur cost overruns in developing new products and there is the risk that our
products will not meet performance specifications to which we have committed to customers.
Our results could also be negatively impacted if we fail to design or obtain accreditation for new technologies and
platforms on budget and in a timely manner. Further, our long-term growth, competitiveness and continued
profitability are dependent on our ability to anticipate and adapt to changes in markets and to reduce the costs of
producing high-quality, new and existing products, to continue to develop our product mix and to align our global
presence with worldwide market opportunities.
In a highly competitive environment, we are and will remain exposed to the risk that more innovative or more
competitive products, services or technologies are developed by competitors or introduced on the market more
quickly or that the products we develop or services we offer are not accepted by the market.
Certification process
We are subject to stringent certification and approval requirements, as well as to the ability of regulatory bodies to
perform these assessments on a timely basis, which vary by country and can delay the certification of our
products. Non-compliance with current or future regulatory requirements imposed by Transport Canada (TC), the
U.S. Federal Aviation Administration (FAA), the European Aviation Safety Agency (EASA), the Transport Safety
Institute in the U.S. or other regulatory authorities could result in service interruption of our products, fewer sales
or slower deliveries, an unplanned build-up of inventories, reduction in inventory values or impairment of assets.
Cash flows and capital expenditures
Our business is cyclical and highly capital intensive due to its nature. In the ordinary course of our business, the
structure and duration of our product development programs require us to invest significantly in engineering,
development and production for many years before deliveries are made and the product begins to generate cash
flow. In addition, we are regularly required to incur capital expenditures in order to, among other matters, maintain
equipment, increase operating efficiency, develop and design new products, improve existing products and
services, invest in and develop new technologies and maintain a significant level of highly skilled employees. Our
ability to negotiate and collect customer advances and progress payments is therefore an important element of
our cash flow and working capital management. Discrepancies between our disbursements and amounts received
on orders placed, or even any reduction in the overall number and size of orders placed have an automatic
adverse impact on the evolution in working capital requirements and results of operations. Similarly, delays in the
delivery and final transfer of possession to purchasers of our aircraft may have an adverse impact on our working
capital and results of operations.
64 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Seasonality and cyclicality of financial results
Our cash flows are subject to periodic fluctuations and we expect a disproportionate amount of our cash flows to
be received or paid by us during any given quarter. We expect this trend to continue. In particular, as a result of
fourth quarter cash receipts, at December 31 of each year, our cash and cash equivalents balances typically
reach their highest level (other than as a result of cash flows provided by or used in investing and financing
activities). Our interim and annual results can be affected by these periodic fluctuations, including as a result of
timing variations that could push cash flows from one quarter to another.
Business partners
The failure by a business partner to comply with applicable laws, rules or regulations, or contract requirements,
could negatively impact our business and could even result in fines, penalties, suspension or even debarment
being imposed on us, which could have a material adverse impact on our reputation, business, financial condition
and results of operations.
Product performance warranty and casualty claim losses
The products that we manufacture are highly complex and sophisticated and may contain defects that are difficult
to detect or correct. These products are subject to detailed specifications, which are listed in the individual
contracts with customers, as well as to stringent certification or approval requirements. Defects may be found in
products before and after they are delivered to the customer. When discovered, we may incur significant
additional costs to modify and/or retrofit our products and we may not be able to correct defects in a timely
manner or at all. The occurrence of defects and failures in our products could give rise to non-conformity costs,
including warranty and damage claims, negatively affect our reputation and profitability and result in the loss of
customers. Correcting such defects, if possible, could require significant investment.
In addition, due to the nature of our business, liability claims may arise from accidents, incidents or disasters
involving products and services that we have provided, including claims for serious personal injuries or death.
These accidents may be caused by climatic factors or human error. If any of our products is proven to have quality
issues, fails to meet the national or industrial standards or has potential risks to the safety of human and
properties, we may have to recall such products, be subject to penalties, have our operating licences or permits
revoked, suspend production and sale of our products, or be ordered to take corrective measures. A product recall
may also affect our reputation and brand name, result in a decreased demand for our products and lead to stricter
scrutiny by regulatory agencies over our operations.
We cannot be certain that current insurance coverage will be sufficient to cover one or more substantial claims.
Furthermore, there can be no assurance that we will be able to obtain or maintain insurance coverage at
acceptable levels and costs or terms in the future.
Environmental, health and safety risks
Our products, as well as our manufacturing and service activities, are subject to environmental laws and
regulations in each of the jurisdictions in which we operate, governing, among other things, product performance
or materials content, energy use and greenhouse gas emissions, air, water and noise pollution, the use, storage,
labelling, transportation and disposal or release of hazardous substances, human health and safety risks arising
from the exposure to hazardous or toxic materials or defective products and the remediation of soil and
groundwater contamination on or under our properties (whether or not caused by us), or on or under other
properties and caused by our current or past operations, including our disposal of hazardous wastes at third party
sites. These laws and regulations may cause us to incur costs, including fines, damages, criminal or civil
sanctions and remediation costs, or experience interruptions in our operations, and may negatively impact the
market for our products.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 65
Environmental, health and safety regulatory requirements, or enforcement thereof, may become more stringent in
the future and we may incur additional costs to be compliant with such future requirements or enforcement. In
addition, we may have contractual or other liabilities for environmental matters relating to business, products or
properties that we have in the past closed, sold or otherwise disposed of, or will close, sell or dispose of in the
future.
Dependence on limited number of contracts and customers
In any given period, a limited number of contracts, orders or customers may account for a significant portion of our
revenues and cash flows for some of our products. Although we constantly seek to expand our customer base, we
believe that revenues and results for any given period may continue to be significantly affected by a limited
number of contracts, orders or customers due to the nature of some of our products. Consequently, the loss of
such a customer or changes to their orders, or cancellation of all or a portion of their contract could result in fewer
sales and/or a lower market share, and may have a material adverse impact on our business, results, cash flows
and financial position.
Supply chain risks
Our manufacturing operations are dependent on a number of suppliers, located in numerous countries around the
world, for the delivery of raw materials (mainly aluminum, advanced aluminum alloy and titanium) and parts and
major systems (such as engines, wings, nacelles, hardware, landing gear, avionics, flight controls and fuselages).
Certain of our suppliers are specialized in what they deliver with limited options for alternative suppliers.
Recently, widening geopolitical fractures intensified global supply chain imbalances. Furthermore, conservative
and protective behaviors from businesses and governments, such as increasing demand and hoarding, as well as
increased competition for critical electrical components, products and commodities, and commodity-based
products, have also intensified.
Disruptions in our supply chain can impact our ability to deliver on schedule. Moreover, failure by one or more
suppliers to meet performance specifications, quality standards or delivery schedules could adversely affect our
ability to meet our commitments to customers, in particular if we are unable to purchase the key components and
parts from those suppliers upon agreed terms or in a cost-effective manner and if we cannot find alternative
suppliers on commercially acceptable terms in a timely manner. We may not be able to recover any costs or
liability we incur (including liability to our customers) as a result of any such failure from the applicable supplier,
which could have a material adverse effect on our financial condition, results of our operations and reputation.
Some of our suppliers participate in the development of products such as aircraft or platforms. The advancement
of many of our new product development programs also relies on the performance of these key suppliers and,
therefore, supplier delays which go unmitigated could result in delays to a program as a whole. These suppliers
subsequently deliver major components and own some of the intellectual property related to key components they
have developed. Our contracts with these suppliers are therefore on a long-term basis. The replacement of such
suppliers, if possible, could be costly and take a significant amount of time.
Our dependence on foreign suppliers and subcontractors and our global operations subjects us to a variety of
risks and uncertainties. All of our direct suppliers must comply with our Supplier Code of Conduct, which
formalizes our expectations with respect to suppliers’ business standards, and is designed to ensure that each of
our suppliers’ operations are conducted in a legal, ethical, and responsible manner. Our suppliers are also
required to flow down the requirements of the Supplier Code of Conduct to their supply chain. However, we do not
control our independent suppliers or those indirect suppliers and companies with whom they do business and
cannot guarantee their compliance with our Supplier Code of Conduct and with applicable laws and regulations or
that violations will be reported to us in a timely manner. Any violation of applicable laws and regulations or failure
to use ethical business practices by one or more third-party subcontractors or suppliers, including laws and
regulations related to, among other things, labour practices, health and safety, and environmental protection,
could also materially adversely affect our business and reputation and, in the case of government contracts, could
result in fines, penalties, suspension or even debarment being imposed on us.
66 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Human resources (including collective agreements)
Our senior executives have extensive experience in the industry in which we operate and with our business,
suppliers, products and customers. The loss of management knowledge, expertise and technical proficiency as a
result of the loss of one or more members of our core management team could result in a diversion of
management resources or a temporary executive gap, and negatively affect our ability to develop and pursue
other business strategies, which could materially adversely affect our business and financial results.
Employment market competition is fierce when it comes to hiring the highly qualified managers and specialists
needed to complete the work we require, particularly in certain emerging countries. In many of our business areas
we intend to expand our business activities, for which we will need highly skilled employees. The success of our
development plans depends, in part, on our ability to develop skills, to retain employees, and to recruit and
integrate additional managers and skilled employees. Human resource risk includes the risk of delays in the
recruitment of or inability to retain and motivate highly skilled employees, including those involved in R&D and
manufacturing activities that are essential to our success. There is no guarantee that we will be successful in
recruiting, integrating and retaining such employees as needed to accompany our business development, in
particular in emerging countries. Conversely, the measures to adapt headcount to evolution in demand may result
in pressures from our workforce and social risks, which may have an adverse impact on our expected costs
reductions and production capacities.
In addition, we are party to several collective agreements that are due to expire at various times in the future. An
inability to renew these collective agreements on mutually agreeable terms, as they become subject to
renegotiation from time to time, could result in work stoppages or other labour disturbances such as strikes,
walkouts or lock-outs, and/or increased costs of labour, which could adversely affect our ability to deliver products
and services in a timely manner and on budget and could adversely affect our financial condition and results.
Additionally, as a result of our continuing review of our business and processes to reduce costs, improve our
manufacturing platform, and better position ourselves in the marketplace, it may be necessary to curtail
production or permanently shut down facilities, leading to the transfer of employees to new production facilities
and processes or to the reduction of our workforce. This could materially adversely impact our relationship with
our employees, as well as result in asset write-downs at affected facilities.
Reliance on information systems
We rely on a number of technology and information systems to effectively manage all aspects of our business and
operations. Like those of other large multinational companies, our technology and information systems may be
vulnerable to a variety of sources of failure, interruption or misuse, including by reason of natural disasters, failure
to effectively implement or transition to new systems, cyberattacks and cybersecurity threats, network
communication failures, computer viruses and other security threats to the confidentiality, availability and integrity
of our systems. More specifically, cybersecurity incidents may take the form of system failures and non-availability,
software bugs or defects, cyber-attacks, cyber extortion (including ransomware), breaches of systems’ security,
electronic crime, malware, unauthorized attempts to gain access to our proprietary and sensitive information,
hacking, phishing, identity theft, theft of intellectual property and confidential information, denial-of-service attacks
aimed at causing network failures and services interruption, and other cybersecurity threats to our information
technology infrastructure and systems. Information security risks have increased in recent years due to the
proliferation of new technologies and the increased sophistication of perpetrators of cyberattacks, which are
further accentuated by increasing geopolitical tensions.
Information contained in our systems include proprietary or sensitive information on our customers, suppliers,
partners, employees, business information, research and development activities and our intellectual property.
Unauthorized third parties may be able to penetrate our network security and misappropriate or compromise our
confidential information, deploy viruses, worms and other malware or phishing that would exploit any security
vulnerabilities in our management information systems, create system disruptions or cause machinery or plant
shutdowns. Such attacks could potentially lead to the publication, manipulation or leakage of information,
including the information of our customers’, employees’, suppliers’, shareholders’ or business contacts’
proprietary, confidential or personal data information, improper use of our systems, defective products, production
BOMBARDIER INC. / 2023 FINANCIAL REPORT 67
downtimes, and supply shortages, and result in third-party claims against us, reputational harm, regulatory fines
or financial loss. Our partners and suppliers also face risks of unauthorized access to their information systems
which may contain our confidential information. If they are affected, it could also adversely affect Bombardier’s
business, financial condition, results of operations or reputation. The Cyber Security team, under the direction of
the Chief Information Security Officer, and reporting to the Audit Committee of the Board of Bombardier,
supervises and maintains technical and process controls, enforcement and comprehensive monitoring of systems
and networks designed to prevent, detect and respond to unauthorized activity in our systems. Considering the
complexity and evolving nature of the threats, as well as the unpredictability of the timing, nature and scope of
disruptions from such threats, we cannot ensure that the measures taken are or will be sufficient to counter any
such unauthorized access to information systems, nor that our assessment and mitigation measures are or will be
sufficient to avoid, or mitigate the impact of, a system failure.
The integrity, reliability and security of information in all forms are critical to our success. Inaccurate, incomplete or
unavailable information and/or inappropriate access to information could lead to incorrect financial and/or
operational reporting, poor decisions, delayed reaction times to the resolution of problems, privacy breaches and/
or inappropriate disclosure or leaking of sensitive information. Any system failure, excessive delays or disruptions
in implementing or transitioning to new systems, cyberattack or a breach of systems could result in disruption of
activities and operational delays, information losses, significant remediation costs, increased cyber security costs,
lost revenues due to a disruption of activities, diminished competitive advantage and/or litigation and reputational
harm affecting customer and investor confidence, which could materially adversely affect our business, financial
condition, and results of our operations. Material losses may be incurred related to the foregoing beyond the limits
or outside the coverage of current insurance and existing provisions for such losses may not be sufficient to cover
the ultimate loss or expenditure. We may also be unable to maintain insurance to cover these risks at acceptable
costs or terms, and may elect not to purchase insurance coverage against certain risks. Furthermore, media or
other reports of perceived security vulnerabilities of our systems, even if no breach has been attempted or had
occurred, could adversely impact our brand and reputation and materially impact our business and financial
results.
Reliance on and protection of intellectual property
We regularly apply for new patents and actively manage our intellectual property portfolio to secure our
technological position. However, our patents and other intellectual property may not prevent competitors from
independently developing, or obtaining through licensing, alternative technologies that are substantially equivalent
or superior to ours, and we cannot provide assurance that the measures we have taken will be sufficient to
prevent any misuse or misappropriation of our intellectual property. Furthermore, we cannot assure that all our
registration applications will be successful, or our registered intellectual property rights will not be subject to any
objection. We may be limited in our ability to acquire or enforce our intellectual property rights in some countries.
Litigation related to our intellectual property rights could be lengthy and costly and could negatively affect our
operations or financial results, whether or not we are successful in defending a claim. If the steps we have taken
and the protection afforded by law do not adequately safeguard our intellectual property rights, or we are not able
to register or defend our intellectual property rights, and our competitors exploit our intellectual property in the
manufacture and sale of competing products in the markets we operate, such events could materially and
adversely affect our business.
We could also face claims by others that we are improperly using intellectual property owned by them or
otherwise infringing their rights in intellectual property. Irrespective of the validity or the successful assertion of
such claims, we could incur costs in either defending or settling any intellectual property disputes alleging
infringement. Adverse rulings in any litigation or proceeding could result in the loss of our proprietary rights and
subject us to significant liabilities or even business disruption. Any potential intellectual property litigation against
us could also force us to, among other things, cease selling the challenged products, develop non-infringing
alternatives or obtain licences from the owner of the infringed intellectual property. We may not be successful in
developing such alternatives or in obtaining such licences on reasonable terms or at all, which could damage our
reputation and affect our financial condition and profitability.
68 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Reputation risks
Reputational risk may arise under many situations including, among others, quality or performance issues on our
projects, product safety issues, a poor health and safety record, failure to maintain ethically and socially
responsible operations, or alleged or proven non-compliance with laws or regulations by our employees, agents,
subcontractors, suppliers and/or partners. Any negative publicity about, or significant damage to, our image and
reputation could have an adverse impact on customer perception and confidence and may cause the cancellation
of current projects and influence our ability to obtain future projects, which could materially adversely affect our
business, results of operations and financial condition. Also, the pervasiveness and viral nature of social media
could perpetuate or exacerbate any negative publicity with respect to our business practices and products.
Furthermore, any unethical conduct by a supplier or subcontractor or any allegations, whether or not founded, of
unfair or illegal business practices by a supplier or subcontractor, including production methods, labour practices,
health and safety and environmental protection, could also reflect negatively on us and materially adversely affect
our image and reputation, which could in turn materially adversely affect our business and financial results.
Scrutiny and perception gaps regarding environmental, social and governance (“ESG”) matters
Evolving stakeholder expectations with respect to ESG matters may pose risks to our brand and reputation, ability
to attract and retain talent, financial outlook, cost of capital, global supply chain and business continuity, which
may impact our ability to achieve long-term business objectives. Increased public awareness and growing
concerns about climate change and the global transition to a low carbon economy result in a broad range of
impacts. We may fail to adequately monitor the emerging risks in a rapidly changing ecosystem and to sufficiently
address evolving expectations related to corporate culture, business conduct and ethics, responsible
management of our supply chain, transparency, respect for human rights, working and safety conditions, as well
as diversity and inclusion, among other factors, which could affect corporate profitability and reputation.
Additional ESG-related regulations, changes in reporting frameworks and guidance, emergence of
‘’greenwashing’’ legal actions by activist groups, increasing regulatory expectations, as well as continuing reforms
pertaining to mandatory disclosure create new and evolving compliance risks. Gaps in perception and
acceptability of how ESG factors into shareholder value also require increased vigilance when it comes to ESG
reporting and communication. As ESG performance is assessed by proxy advisory agencies, we could also face
governance issues if we do not meet their expectations.
Adequacy of insurance coverage for our business, products and properties
We maintain insurance policies in accordance with the needs of our business. However, we cannot guarantee that
our insurance policies will provide adequate coverage should we face extraordinary occurrences that result in
losses. We may not obtain certain insurance coverage, may experience difficulties in obtaining or maintaining the
insurance coverage we need at acceptable levels, costs or terms, and may elect not to purchase insurance
coverage against some risks, which could materially and adversely affect our business, financial condition and
results of operations.
Accidents or natural disasters may also result in significant property damage, disruption of our operations and
personal injuries or fatalities, and our insurance coverage may be inadequate to cover such losses. In the event of
an uninsured loss or a loss in excess of our insured limits, we could suffer damage to our reputation and/or lose
all or a portion of our production capacity as well as future revenues expected to be generated by the relevant
facilities. Any material loss not covered by our insurance could adversely affect our business, financial condition
and results of operations. Moreover, any accident, failure of, or defect in our products or services, even if fully
indemnified or insured, could significantly impact the cost and availability of adequate insurance in the future.
Risk management policies, procedures and strategies
We have devoted significant resources to develop our risk management policies, procedures and strategies and
expect to continue to do so in the future. Nonetheless, our policies, procedures and strategies may not be
sufficiently comprehensive. Many of our methods for identifying, analyzing and managing risk and exposures are
based upon risk management processes that are embedded in governance and our business activities, focusing
BOMBARDIER INC. / 2023 FINANCIAL REPORT 69
on all stages of the product development and manufacturing process. Risk management methods depend upon
the evaluation and/or reporting of information regarding product development, manufacturing and management,
industry outlooks, markets, customers, project execution, catastrophe occurrence or other matters publicly
available or otherwise accessible to us. This information may not always be accurate, complete, up-to-date or
properly evaluated or reported.
Tax matters and changes in tax laws
As a multinational company conducting operations through subsidiaries in multiple jurisdictions, we are subject to
income and other taxes, tax laws and fiscal policies in numerous jurisdictions. Our effective income tax rate in the
future could be adversely affected as a result of a number of factors, including changes in the mix of earnings in
countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes
in tax laws, treaties or regulations or their interpretation, and the outcome of income tax audits in various
jurisdictions around the world.
We regularly assess all of these matters to determine the adequacy of our tax liabilities. In determining our
provisions for income taxes and our accounting for tax-related matters in general, we are required to exercise
judgment. We regularly make estimates where the ultimate tax determination is uncertain. There can be no
assurance that the final determination of any tax audit, appeal of the decision of a taxing authority, tax litigation or
similar proceedings will not be materially different from that reflected in our historical financial statements. The
assessment of additional taxes, interest and penalties could be materially adverse to our current and future results
of operations and financial condition.
Our Canadian and foreign entities undertake certain operations with other currently existing or new subsidiaries in
different jurisdictions around the world. The tax laws of these jurisdictions, including Canada, have detailed
transfer pricing rules that require that all transactions with non-resident related parties be priced using arm’s
length pricing principles. The taxation authorities in the jurisdictions where we carry on business could challenge
our arm’s length related party transfer pricing policies. International transfer pricing is a subjective area of taxation
and generally involves a significant degree of judgment. If any of these taxation authorities were to successfully
challenge our transfer pricing policies, our income tax expense may be adversely affected, and we could also be
subjected to interest and penalties. Any such increase in our income tax expense and related interest and
penalties could have a material adverse effect on our business, results of operations or financial condition.
Liquidity and access to capital markets
Financing risk
Our business is cyclical and highly capital intensive. In the ordinary course of our business, we rely on cash and
cash equivalents, cash flows generated by operations, capital market resources such as debt and equity and
other financing arrangements, and certain working capital financing initiatives such as the sale of receivables,
arrangements for advances from third parties and the negotiation of extended payment terms with certain
suppliers to satisfy our financing needs. There can be no assurance that such working capital cash sources will be
available to us in the future on acceptable terms or at all.
Our ability to achieve our business and cash generation plans is based on a number of assumptions which involve
significant judgments and estimates of future performance, borrowing capacity and credit availability, which
cannot at all times be assured.
The Corporation also routinely reviews its debt profile with a view to managing or extending maturities and/or
negotiating more favorable terms and conditions with respect to its financing arrangements.
From time to time, we undertake various financing initiatives to solidify our liquidity position. We plan to continue
to explore various initiatives such as certain business activities’ potential participation in industry consolidation.
There are no assurances that we will be able to implement these or any other strategic options on favorable terms
and timing or at all, and, if implemented, that such actions would have the planned results.
70 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
There can be no assurance that our expected cash flows from operating activities, combined with available
liquidity will be sufficient to enable the development of new products to enhance competitiveness and support
growth and will enable us to meet all other expected financial requirements or plans in the foreseeable future.
If our cash flows and other capital resources are insufficient to fund the required work on our ongoing contracts,
programs and projects, as well as our capital expenditures and debt service obligations, we could be forced to
reduce or delay deliveries, investments and capital expenditures or to seek additional debt or equity capital. We
may not be able to obtain alternative capital resources, if necessary, on favourable terms or at all.
A decline in credit ratings, a significant reduction in the surety or financing market global capacity, widening credit
spreads, changes in our outlook or guidance, significant changes in market interest rates or general economic
conditions or an adverse perception by banks and capital markets of our financial condition or prospects could all
significantly increase our cost of financing or impede our ability to access financial markets. Our credit ratings may
be impacted by many factors, including factors outside of our control relating to our industry or countries and
regions in which we operate, and, accordingly, no assurance can be given that our credit ratings may not be
downgraded in the future. Actual or anticipated changes or downgrades in our credit ratings, including any
announcement that our ratings are under further review for a downgrade, may increase our cost of financing.
Our right to convert into cash certain deposits or investments, held in financing structures to guarantee our
obligations, may be subject to restrictions. Our right to access and use cash or other deposits, held in trust or in
escrow arrangements to guarantee certain obligations, may be challenged or subject to restrictions. Additionally,
in some countries, cash generated by operations may be subject to restrictions on the right to convert and/or
repatriate money and may thus not be available for immediate use.
Substantial debt and significant interest payment requirements
We currently have, and expect to continue to have, a substantial amount of debt, and significant interest payment
requirements. Our level of indebtedness could have significant consequences, including the following:
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it may be more difficult to satisfy our obligations with respect to our indebtedness;
our vulnerability to general adverse economic and industry conditions may be increased;
we may be required to dedicate a substantial portion of our cash flows from operations to interest and
principal repayments on our indebtedness, reducing the availability of cash flows to fund capital
expenditures, working capital, acquisitions, new business initiatives and other general corporate
purposes;
our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate
may be limited;
we may be placed at a disadvantage compared to our competitors that have less debt or greater financial
resources;
it may limit, along with other covenants to which we are subject, among other things, our ability to borrow
additional funds on commercially reasonable terms, or at all;
we may be required to monetize assets on terms that are unfavourable to us; and
we may be required to offer debt or equity securities on terms that are not favourable to us or our
shareholders.
We have various debt maturities ranging between 2026 and 2034, and we cannot provide assurance that this
indebtedness will be refinanced on favourable terms or at all.
For more information regarding our long-term debt, see Note 26 – Long-term debt, to our Consolidated financial
statements.
Restrictive and financial debt covenants
Restrictive covenants in certain agreements and instruments governing our indebtedness, including our
outstanding senior notes and certain credit facilities, may materially restrict our financial flexibility or may have
other material adverse effects on our business, results of operations, financial condition, liquidity, and cash flows.
We are, and may be increasingly in the future, party to certain credit facilities and other asset-based and asset-
backed financing arrangements which contain covenants that, among other things, restrict our and our
BOMBARDIER INC. / 2023 FINANCIAL REPORT 71
subsidiaries’ ability to: (i) dispose or acquire assets or enter into mergers; (ii) incur additional indebtedness; (iii)
incur guarantee obligations; (iv) declare dividends and distributions, prepay indebtedness, or amend certain
financing arrangements; (v) create liens; (vi) make certain investments, loans, advances or capital expenditures;
(vii) make changes to our business; and (viii) engage in certain transactions with affiliates. In addition, certain of
these agreements and instruments may from time to time also include financial covenants which may be required
to be met at all times or under specified circumstances. The breach of any of these restrictive covenants or
financial covenants could result in draw limitations or default under the relevant agreement, which could, in turn,
cause cross-acceleration or cross-defaults under our other financing arrangements. In such event, we may be
unable to borrow under our financing arrangements and may not be able to repay the amounts due under such
arrangements, which could have a material adverse effect on our business, results of operations, financial
condition, liquidity, and cash flows.
Our ability to comply with these covenants may also be affected by events beyond our control. A breach of any of
these agreements or our inability to comply with these covenants could result in a default under these financing
arrangements, which would permit our banks to request immediate defeasance or cash cover of all outstanding
letters of credit, and our bondholders and other lenders to declare amounts owed to them to be immediately
payable. If any of these financing arrangements is accelerated, or we are subject to significant cash cover
obligations, we may not be able to refinance such facilities on terms acceptable to us or at all. There can be no
assurance that we would be able to obtain waivers or amendments of any such breaches or defaults or be able to
cash cover or refinance such arrangements, on terms acceptable to us or at all.
Although the terms of our credit facilities and certain of our other debt instruments contain or may from time-to-
time contain restrictions on the incurrence of additional debt, including secured debt, or to enter into new senior
secured facilities, these restrictions are subject to a number of exceptions provided certain conditions are met. If
we incur additional debt in the future, we may be subject to additional or more restrictive covenants than those to
which we are subject now.
Retirement benefit plan risk
We are required to make contributions to a number of pension plans, some of which are presently in a deficit
position. Pension funding requirements are dependent on regulatory requirements and on the valuations of plan
assets and liabilities, which are subject to a number of factors, including expected returns on plan assets, long-
term interest rates, as well as applicable actuarial practices and various other assumptions. The potential
requirement to make additional contributions as a result of changes to regulations, actuarial assumptions or other
factors may reduce the amount of funds available for operating purposes, thus limiting our financial flexibility and
weakening our financial condition.
There is no assurance that retirement benefit plan assets will earn the expected rates of return. The ability of our
retirement benefit plan assets to earn these expected rates of return depends in large part on the performance of
capital markets. Market conditions also affect the discount rates used to calculate our net retirement benefit
liabilities and could also impact our retirement benefit costs, cash funding requirements and liquidity position.
The net retirement benefit liability is highly sensitive to variations to the underlying discount rate, which represents
the market rate for high-quality corporate fixed-income investments at the end of each reporting period consistent
with the currency and estimated term of the benefit obligations. As a result, the discount rates change is based on
market conditions.
Credit risk
We are exposed to credit risk through our derivative financial instruments and other investing activities carried out
as part of our normal treasury activities, as well as through our trade receivables arising from normal commercial
activities.
We also have exposure to banks in the form of periodically placed deposits and credit commitments. In the event
the banks with which we transact are unable to withstand regulatory or liquidity pressures, financing
arrangements, including letter of credit facilities, may become unavailable or we may not be able to extend such
arrangements upon their maturity.
72 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Government support
From time to time, we have or may receive various types of government financial support. The level of
government support reflects government policy and depends on fiscal spending levels and other political and
economic factors. We cannot predict if future government-sponsored support will be available. The loss of or any
substantial reduction in the availability of government support could negatively impact our assumptions related to
the development of aircraft products and services. In addition, any future government support received by our
competitors could have a negative impact on our competitiveness, sales and market share.
Regulatory and legal risk
We are subject to numerous risks relating to current and future regulations, as well as legal proceedings, both
present or that may arise in the future.
Given our size, and current and historical operations, including in respect of the Transportation business which
was divested on January 29, 2021, we are, and may become, in the normal course of business, party to lawsuits,
investigations and claims seeking damages and other relief, including those involving allegations of late deliveries
of goods or services, product liability, product defects, quality problems, intellectual property infringement, claims
arising from divestiture or acquisition transactions, obligations under our financing arrangements, obligations to
current or former employees, and general liability arising from applicable laws and regulations (see below for
more details). In addition, while clients and subcontractors may agree under various contractual arrangements to
indemnify us against certain liabilities, such third parties may refuse or be unable to pay. These matters may also
divert financial and management resources that would otherwise be used to benefit our operations, and the cost
to defend litigation or address investigations may be significant.
Due to the inherent uncertainties of litigation and investigations, it is not possible to (a) predict the final outcome of
these and other related proceedings generally or (b) determine the amount of potential losses, if any, that may be
incurred in connection with any final judgment or decision on these matters. In connection with the settlement of
litigations and investigations, a number of conditions may be imposed on Bombardier, and we may be required to
undergo certain changes to our business practices which could impose additional costs and adversely affect our
ability to pursue business opportunities.
While we maintain insurance coverage for various aspects of our business and operations, our insurance
programs have varying coverage limits and exceptions. Material losses may be incurred related to litigation
beyond the limits or outside the coverage of current insurance and existing provisions for litigation-related losses
may not be sufficient to cover the ultimate loss or expenditure. Moreover, legal proceedings resulting in judgments
or findings against us may harm our reputation and place us at a disadvantage for future orders or contract
awards. There may also be adverse publicity associated with litigation, including, without limitation, litigation
related to product safety, which could negatively affect our clients and our ability to attract new clients, the public
perception of our business or our reputation, regardless of whether the allegations are valid or whether we are
ultimately found liable. As a result, litigation could materially adversely affect our business and financial results.
In addition, as part of the regulatory and legal environments in which we operate, we are subject to and we face
risks relating to non-compliance with local and foreign laws, regulations, rules and other current, new or changing
legal requirements enforced by governments or other authorities, including with respect to export controls, tariffs,
embargoes, international sanctions and other trade restrictions, lobbying or similar activities, securities, antitrust,
data privacy, domestic and international taxes, environmental and labour relations, as well as laws related to
corruption, anti-competitive acts, bribery, and ethics-related issues, which could have a significant adverse impact
on our business. Notably, sales to customers are subject to such laws and regulations. Under some of these, a
company may be found liable for violations resulting not only from actions of certain of its employees, but also in
certain circumstances from actions of its contractors and third-party representatives or agents.
Our Code of Ethics and other corporate policies mandate compliance with laws and regulations regarding anti-
bribery and anti-corruption, insider trading and tipping, fraud, money-laundering, competition and anti-trust,
sanctions and export controls, lobbying and others, and we have implemented training programs, internal
monitoring and controls, and reviews and audits to ensure compliance with such laws. However, there can be no
BOMBARDIER INC. / 2023 FINANCIAL REPORT 73
assurance that our internal control policies and procedures will allow us to timely detect and protect us from
recklessness, fraudulent behaviour, dishonesty or other inappropriate behaviour on the part of our employees,
contractors, suppliers, affiliates, consultants, representatives, agents, and/or partners. Misconduct or failure by
our employees, contractors, suppliers, affiliates, consultants, representatives, agents, and/or partners to comply
with applicable laws and regulations, and notably anti-bribery and anti-corruption laws, could impact Bombardier
in various ways that include, but are not limited to, criminal, civil and administrative legal sanctions, debarment
from bidding for or performing government contracts, and negative publicity, and could have a significant negative
effect on our business, results of operations, profitability, share price, financial condition, the public perception of
our business, reputation, expansion efforts, and ability to attract and retain employees and clients. In recent years,
there has been a general increase in both the frequency of enforcement and the severity of penalties under such
laws, resulting in greater scrutiny of and punishment to companies convicted of violating anti-corruption and anti-
bribery laws. See also the subsection “Operational Risks—Supply chain risks” hereinabove.
Also refer to our Risk Factor on “Financing Risks” and our Note 36 – Commitments and contingencies, to our
consolidated financial statements.
General Economic Risk
The markets in which we operate may from time to time be affected by a number of local, regional and global
factors. Since our sales and operations are undertaken around the world, we may be directly or indirectly affected
by unfavorable political conditions or economic slowdowns occurring within these geographic zones and our
business may be exposed to a number of related risks.
Should the current uncertain global economic situation persist over time or deteriorate, should the economic
headwinds in certain countries, regions or key markets intensify or spread to other countries, or should the global
economic environment deteriorate or fall into recession, this could, in particular, result in potential buyers
postponing the purchase of our products or services, lower order intake, order cancellations or deferral of
deliveries, lower availability of customer financing, an increase in our involvement in customer financing,
downward pressure on selling prices, increased inventory levels, decreased level of customer advances, slower
collection of receivables, reduction in production activities, paused or discontinued production of certain products,
termination of employees or adverse impacts on suppliers.
Epidemics, Pandemics, Including COVID-19, and Other Global Health Crises
Effects and changes to the economy and markets since the COVID-19 pandemic continue to negatively impact
the global economy, disrupt global supply chains, significantly increase inflation, impact workforce availability and
demands, and create economic uncertainty and disruption of financial markets. While emergency measures that
were enacted by governments worldwide to contain the spread of the virus during earlier periods of the COVID-19
pandemic, including the implementation of travel bans, self-imposed quarantine periods, self-isolation, physical
and social distancing and the closure of non-essential businesses, have been lifted or eased, an increase in new
infections or the spread of new variants of COVID-19 could cause some governments to reinstate such measures.
In addition, any other significant outbreak, epidemic or pandemic of contagious diseases in any geographic area
in which we operate could result in a similar, or worse, public health and safety crisis that could significantly
disrupt global health, economic, market and labour conditions, and create varying degrees of slowdowns in the
global economy and recessions.
Any of the foregoing could bring about new or exacerbate existing disruptions to businesses in Canada and
globally, resulting in uncertainty and a challenging economic environment, which could in turn have a material
negative impact on the Corporation’s business activities, financial condition, cash flows, profitability, prospects and
results of operations in future periods. A global health crisis of a similar scale or scope as the COVID-19 pandemic
may also have the effect of heightening other risks and uncertainties disclosed and described below in this MD&A.
74 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Counterparty risks
Uncertainties in the global economy have an adverse affect on the economies and financial markets of many
countries, which increases the risk of defaults from our suppliers, customers and other counterparties, delays in
deliveries of goods or services or payments by such counterparties, and difficulties in enforcing our agreements
and collecting receivables. In such an economic environment, our suppliers, customers and other counterparties
may seek to terminate or to amend their agreements for the supply or purchase of products or services as a result
of distress on their operational or financial situation (including bankruptcy, operational shutdowns or failures, lack
of liquidity or funding, or other reasons).
If we or any of the third parties with whom we engage, including suppliers, service providers, customers and other
third parties with whom we conduct business, were to experience long-term effects such as prolonged or
permanent shutdowns or other business disruptions, our ability to conduct our business in the manner and on the
timelines presently planned could be materially and negatively impacted, including the impairment of our product
development activities for a period of time, which could also lead to loss of customers, as well as reputational,
competitive, or business harm.
Heightened impact of other risks
Several of the other risks and uncertainties disclosed in this Financial Report for the fiscal year ended December
31, 2023 could be particularly exacerbated by extraordinary externalities, including, but not limited to, risks
described under “Our order backlog may not be indicative of future revenues”, “Cash flows and capital
expenditures”, “Seasonality and cyclicality of financial results”, “Environmental, health and safety risks”,
“Dependence on limited number of contracts and customers”, “Supply chain risks”, “Liquidity and access to capital
markets”, “Credit risk”, “Substantial debt and significant interest payment requirements”, “General economic risk”,
“Business environment risk”, and “Market Risk”.
Mitigation measures
While we make efforts to manage and mitigate existing or reasonably foreseeable risks to the markets in which
we operate, the effectiveness of these efforts and the extent to which economic slowdowns or global health,
geopolitical or military events in various parts of the world affects the Corporation’s business will depend on
factors beyond our control. The Corporation may experience material adverse effects to its business, operations,
financial condition, cash flows, margins, prospects and results of operations as a result of prolonged or new
disruptions in the global economy and any resulting recession.
Financial condition of business aircraft customers
Business environment risk
The purchase of aviation products and services may represent a significant investment for a corporation, an
individual or a government. When economic or business conditions are unfavourable, potential buyers may delay
the purchase of our aviation products and services. The availability of financing is also an important factor and
credit scarcity can cause customers to either defer deliveries or cancel orders.
An increased supply of used aircraft as companies restructure, downsize or discontinue operations could also add
downward pressure on the selling price of new and used business and commercial aircraft. We could then be
faced with the challenge of finding ways to further reduce costs and improve productivity to sustain a favourable
market position at acceptable profit margins. The loss of any major fractional ownership or charter operator as a
customer or the termination of a contract could significantly impact our financial results.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 75
Trade policy
As a globally operating organization, our business is subject to government policies related to import and export
restrictions and business acquisitions, support for export sales, and world trade policies including specific regional
trade practices. As a result, we are exposed to risks associated with changing priorities by government and
supranational agencies.
In addition, protectionist trade policies and changes in the political and regulatory environment in the markets in
which we operate, such as foreign exchange import and export controls, tariffs and other trade barriers, price or
exchange controls as well as potential changes to free trade arrangements could affect our business in several
national markets, impact our sales and profitability and make the repatriation of profits difficult, and may expose
us to penalties, sanctions and reputational damage.
Increased competition from other businesses
We face intense competition in the markets and geographies in which we operate. We face competition from
strong competitors, some of which are larger and may have greater resources in a given business or region, as
well as competitors from emerging markets and new entrants, which may have a better cost structure. In the
markets and geographies in which we compete, competitors are developing numerous aircraft programs, with
entries-into-service expected throughout the next decade. We face the risk that market share may be eroded if
potential customers opt for competitors’ products. We may also be negatively impacted if we are not able to meet
product support expectations or provide an international presence for our diverse customer base.
Political instability and geopolitical tension
Political instability, which may result from various factors, including social or economic factors, in certain regions
of the world may be prolonged and unpredictable. Geopolitical tensions, including between nations in which we
operate, do business or seek to do business, or where our clients or potential clients reside, have been rising
globally and can arise suddenly and with limited foreseeability. In some parts of the world, political instability has
become more pronounced, protracted and unpredictable. Any new or increased geopolitical tensions, or
prolonged political instability, in regions or markets in which we participate could lead to delays or cancellation of
orders for our products or services, or prohibit or impede our ability to expand our business in such regions. It is
possible that in the markets we serve, unanticipated political instability could impact our operating results and
financial position.
Geopolitical and economic risks, including from existing or threatened military conflicts and volatility in the energy
markets, have raised concerns in international economies. Beyond any immediate impact, these developments
may also negatively affect the evolution of the global economy.
The Ukraine-Russia military conflict and financial and economic sanctions and export control
limitations
Following Russia’s February 2022 military invasion of Ukraine, Canada, the U.S., the United Kingdom, Europe
and various other countries around the world imposed broad financial and economic sanctions and export control
limitations against Russia and against certain persons and entities (collectively, “Sanctions and Export Control
Limitations”). As a result of the foregoing, Bombardier is abiding by all Sanctions and Export Control Limitations.
When such Sanctions and Export Control Limitations may be eased or lifted is not known at this time. As of
December 31, 2023, we have not been materially adversely impacted by the Ukraine-Russia military conflict and
the Sanctions and Export Control Limitations; however, we are continuously monitoring developments to assess
any potential future impact that may arise. If there is an escalation of the conflict, or if the sanctions and other
retaliatory measures imposed by the global community are expanded, we cannot provide assurance that this may
not adversely impact the Corporation’s overall business activities, financial condition, cash flows, profitability,
prospects and results of operations in future periods.
76 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Global climate change
Global climate change could exacerbate certain of the threats facing our business which can be categorized as
physical risks or transition risks.
•
•
Physical risks:
Physical risks include the increase in frequency and severity of weather-related events, which can disrupt
our operations, damage our infrastructure or properties, create financial risk to our business or otherwise
have a material adverse effect on our results of operations, financial position or liquidity. These may result
in substantial costs to respond during the event, to recover from the event and possibly to modify existing
or future infrastructure requirements to prevent recurrence. Climate changes could also disrupt our
operations by impacting the availability and cost of materials needed for manufacturing and could
increase insurance and other operating costs.
The potential physical impacts of climate change on our operations are highly uncertain, and could be
particular to the geographic circumstances in areas in which we operate and may include changes in
rainfall and storm patterns and intensities, water shortages, rising water levels and changing
temperatures. These factors may impact our decisions to construct new facilities or maintain existing
facilities in areas most prone to physical climate risks. We could also face indirect financial risks passed
through the supply chain and process disruptions due to physical climate changes could result in price
modifications for our products and the resources needed to produce them. These impacts may adversely
impact the cost, production, and financial performance of our operations.
Transition risks:
In addition, concerns about the environmental impacts of air travel and tendencies towards “green” travel
initiatives, and in particular social media movements drawing negative attention to business jet travel by
executives and celebrities, have contributed to higher levels of scrutiny with respect to emissions which
could have the effect of reducing demand for air travel and could materially adversely impact our business
and reputation. Global climate change also results in regulatory risks which vary according to the national
and local requirements implemented by each jurisdiction where we are present. Our products as well as
our manufacturing and services activities are subject to environmental regulations by federal, provincial
and local authorities in Canada as well as local regulatory authorities with jurisdiction over our operations
outside of Canada. There continues to be a lack of consistent climate legislation, which creates economic
and regulatory uncertainty. Most countries where we carry out manufacturing or services activities are at
various stages of developing emission allocations and trading schemes. During 2023, our regulatory risks
associated with climate change mainly fell under our obligations to the European Union Emission Trading
Scheme, the United Kingdom Climate Change Agreement, the United Kingdom's Carbon Reduction
Commitment energy efficiency scheme (launched in April 2010), the Energy Savings Opportunity Scheme
and the Québec-California trading scheme as part of the Western Climate Initiative. Increased public
awareness and concern regarding global climate change may result in more legislative and/or regulatory
requirements to reduce or mitigate the effects of greenhouse gas emissions. The impact to us and our
industry from legislation and increased regulation regarding climate change is likely to be adverse and
could be significant. We may be directly exposed to such measures, which could result in significant costs
on us, on our customers and on our suppliers, including costs related to increased energy requirements,
capital equipment, environmental monitoring and reporting, and other costs necessary to comply with
such regulations that could adversely affect our business, financial condition, operating performance, and
ability to compete. In addition, such regulatory changes could necessitate us to develop new
technologies, requiring significant investments of capital and resources.
Force majeure
Force majeure events are unpredictable and may have significant adverse results such as: personal injury or
fatality; damage to or destruction of ongoing projects, facilities or equipment; environmental damage; delays or
cancellations of orders and deliveries; delays in the receipt of materials from our suppliers; delays in projects; or
legal liability.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 77
Foreign exchange risk
Market risk
Our financial results are reported in U.S. dollars and a significant portion of our sales and operating costs are
transacted in currencies other than U.S. dollars, most often Canadian dollars, Mexican pesos and euros. We have
adopted a progressive hedging strategy to limit the effect of currency movements on our results. Such contracts
hedge foreign-currency denominated transactions and any change in the fair value of the contracts could be offset
by changes in the underlying value of the transactions being hedged. The use of forward foreign exchange
contracts also contains an inherent credit risk related to default on obligations by the counterparties to such
contracts. Although we aim to have foreign-exchange hedging contracts with respect to all currencies in which we
do business, there may be situations where we do not have hedging contracts or are not fully hedged for various
reasons including regulation and market availability and accessibility. As a result, there can be no assurance that
our approach to managing our exposure to foreign-exchange rate fluctuations will be effective in the future or that
we will be able to enter into foreign-exchange hedging contracts as deemed necessary on satisfactory terms. In
situations where we are not fully hedged, our results of operations are affected by movements in these currencies
against the U.S. dollar. Significant fluctuations in relative currency values against the U.S. dollar could thus have a
significant impact on our future profitability. Additionally, the settlement timing of foreign currency derivatives could
significantly impact our liquidity. Fluctuations in foreign currency exchange rates could also have a material
adverse effect on the relative competitive position of our products in markets where they face competition from
competitors who are less affected by such fluctuations in exchange rates.
Interest rate risk
We are exposed to gains and losses arising from changes in interest rates, which includes marketability risks,
through our financial instruments carried at fair value. These financial instruments include certain derivative
financial instruments.
Commodity price risk
We are exposed to commodity price risk relating principally to fluctuations in the cost of materials used in our
supply chain, such as aluminum, advanced aluminum alloy, titanium, steel and other materials that we use to
manufacture our products, and which represent a significant portion of our cost of sales. We do not maintain
significant inventories of raw materials and components and parts. The prices and availabilities of raw materials
and components and parts may vary significantly from period to period due to factors such as, without limitation,
consumer demand, supply, market conditions, geopolitical factors, climate change and costs of raw materials. In
particular, raw materials required for our operations, may be subject to pricing cyclicality and periodic shortages
from time to time. We cannot guarantee that corresponding variations in cost will be fully reflected in contract
prices, and we may be unable to recoup these raw material price increases, which could affect the profitability of
such contracts.
Inflation risk
Global economies in which we and our suppliers operate, and in which our customers reside, have experienced
broad significant inflationary pressures over the past two years, and future inflationary pressures remains fluid and
uncertain. Our business is exposed to inflation risk relating to fluctuations in costs and revenue for aircraft orders
received but for which the delivery of the aircraft will take place several years in the future. Revenues for these
orders are adjusted for price escalation clauses linked to inflation. Fluctuations in inflation rates could
nevertheless have a significant impact on our future profitability if the inflation rate assumption used varies from
the actual inflation rate, and this is a particularly acute risk in respect of large long-term contracts which may have
an impact on our results for several years. Our inability to recover, in whole or in part, the increase in costs from
inflationary pressures may have a material adverse impact on our business, financial condition and results of
operations.
78 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
FINANCIAL INSTRUMENTS
An important portion of the consolidated balance sheets is composed of financial instruments. Financial assets of
the Corporation include cash and cash equivalents, trade and other receivables, investments in securities,
receivable from MHI, receivable from ACLP, restricted cash and derivative financial instruments with a positive fair
value. Financial liabilities of the Corporation include trade and other payables, long-term debt, lease liabilities,
government refundable advances, credit and residual value guarantees payable, vendor non-recurring costs and
derivative financial instruments with a negative fair value. Derivative financial instruments are mainly used to
manage the Corporation’s exposure to foreign exchange market risks, generally through forward foreign
exchange contracts. Derivative financial instruments include derivatives that are embedded in financial or
non-financial contracts that are not closely related to the host contracts.
The use of financial instruments exposes us primarily to credit, liquidity and market risks, including foreign
exchange and interest rate risks. A description on how we manage these risks is included in the Risk
management section of Overview and in Note 32 – Financial risk management, to the consolidated financial
statements.
Fair value of financial instruments
Financial instruments are recognized in the consolidated statement of financial position when the Corporation
becomes a party to the contractual obligations of the instrument. On initial recognition, financial instruments are
recognized at their fair value plus, in the case of financial instruments not at FVTP&L, transaction costs that are
directly attributable to the acquisition or issuance of financial instruments. Subsequent to initial recognition,
financial instruments are measured according to the category to which they are classified, which are: a) financial
instruments classified as FVTP&L, b) financial instruments designated as FVTP&L, c) FVOCI financial assets, or
d) amortized cost. Financial instruments are subsequently measured at amortized cost, unless they are classified
as FVOCI or FVTP&L or designated as FVTP&L, in which case they are subsequently measured at fair value.
The classification of financial instruments as well as the revenues, expenses, gains and losses associated with
these instruments are provided in Note 2 – Summary of significant accounting policies and in Note 11 – Financial
instruments, to the consolidated financial statements.
Note 33 – Fair value of financial instruments, to the consolidated financial statements, provides a detailed
description of the methods and assumptions used to determine the fair values of financial instruments. These
values are point-in-time estimates that may change in subsequent reporting periods due to market conditions or
other factors. Fair value is determined by reference to quoted prices in the principal market for that instrument to
which we have immediate access. However, there is no active market for most of our financial instruments. In the
absence of an active market, we determine fair value based on internal or external valuation models, such as
discounted cash flow models. Fair value determined using valuation models requires the use of assumptions
concerning the amount and timing of estimated future cash flows, discount rates, the creditworthiness of the
borrower, default probability, generic industrial bond spreads and marketability risk. In determining these
assumptions, we use primarily external, readily observable market inputs, including factors such as interest rates,
credit ratings, credit spreads, default probabilities, currency rates, and price and rate volatilities, as applicable.
Assumptions or inputs that are not based on observable market data are used when external data are
unavailable. These calculations represent management’s best estimates. Since they are based on estimates, the
fair values may not be realized in an actual sale or immediate settlement of the instruments.
Note 33 – Fair value of financial instruments, to the consolidated financial statements, also provides a three-level
fair value hierarchy, categorizing financial instruments by the inputs used to measure their fair value. The fair
value hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1) and the lowest
priority to unobservable inputs (Level 3). In cases where the inputs used to measure fair value are categorized
within different levels of hierarchy, the fair value measurement is reported at the lowest level of the input that is
significant to the entire measurement. Assessing the significance of a particular input to the fair value
measurement in its entirety requires judgment, taking into account factors specific to the asset or liability. The fair
value hierarchy is not meant to provide insight on the liquidity characteristics of a particular asset or on the degree
of sensitivity of an asset or liability to other market inputs or factors.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 79
We consider gains and losses arising from certain changes in fair value of financial instruments incidental to our
core performance, such as those arising from changes in market yields, as our intention is to continue to hold
these instruments for the foreseeable future. These gains and losses are excluded from adjusted net income
(loss) and adjusted EPS to provide users of the financial statements a better understanding of the core results of
our business and enable better comparability of results from one period to another and with peers.
In connection with the sale of commercial aircraft, we hold financial assets and have incurred financial liabilities,
measured at fair value, some of which are reported as Level 3 financial instruments, including receivable from
ACLP and government refundable advance. The fair values of these financial instruments are determined using
various assumptions, with the assumption on marketability risk being the most likely to change the fair value
significantly from period to period. These assumptions, not derived from an observable market, are established by
management using estimates and judgments that can have a significant effect on revenues, expenses, assets
and liabilities.
Sensitivity analysis
Our main exposures to changes in fair value of financial instruments are related to changes in foreign exchange,
and interest rates. Note 32 – Financial risk management, to the consolidated financial statements, presents
sensitivity analyses assuming variations in foreign exchange and interest rates.
RELATED PARTY TRANSACTIONS
Related parties, as defined by IFRS, are our joint ventures, associates and key management personnel. A
description of our transactions with these related parties is included in Note 34 – Transactions with related parties,
to the consolidated financial statements.
80 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
CRITICAL JUDGMENTS AND ACCOUNTING ESTIMATES
Our material accounting policies and use of estimates and judgment are described in Note 2 – Summary of
material accounting policies and Note 3 – Use of estimates and judgment, to our Consolidated financial
statements. The preparation of financial statements in conformity with IFRS requires the use of estimates and
judgment. Critical accounting estimates, which are evaluated on a regular ongoing basis and can change from
period to period, are described in this section. Estimates and judgments are significant when:
•
•
the outcome is highly uncertain at the time the estimates and judgments are made; and
if different estimates or judgments could reasonably have been used that would have had a material
impact on the consolidated financial statements.
Management’s best estimates regarding the future are based on the facts and circumstances available at the time
estimates are made. Management uses historical experience, general economic conditions and trends, as well as
assumptions regarding probable future outcomes as the basis for determining estimates. Estimates and their
underlying assumptions are reviewed periodically and the effects of any changes are recognized immediately.
Actual results could differ from the estimates used, and such differences could be material.
Management’s budget and strategic plan cover a five-year period and are fundamental information used as a
basis for many estimates necessary to prepare financial information. Management prepares a budget and a
strategic plan covering a five-year period, on an annual basis, using a process whereby a detailed one-year
budget and four-year strategic plan are prepared and then consolidated. Cash flows and profitability included in
the budget and strategic plan are based on existing and future contracts and orders, general market conditions,
current cost structures, anticipated cost variations and in-force collective agreements. The budget and strategic
plan are subject to approval at various levels, including senior management and the Board of Directors.
Management uses the budget and strategic plan, as well as additional projections or assumptions, to derive the
expected results for periods thereafter. Management then tracks performance as compared to the budget and
strategic plan at various levels within the Corporation. Significant variances in actual performance are a key
trigger to assess whether certain estimates used in the preparation of financial information must be revised.
The following areas require management’s most critical estimates and judgments. The sensitivity analyses below
should be used with caution as the changes are hypothetical and the impact of changes in each key assumption
may not be linear.
Aerospace program tooling
The Corporation assesses at each reporting date whether there are any indicators that Aerospace program tooling
may be impaired. If any indicators of impairment exist, the Corporation estimates the recoverable amount of the
relevant CGU. The assessment of indicators of impairment, and the calculation of recoverable amounts, when
indicators exist, requires judgements, which are reviewed in detail as part of the budget and strategic plan
process during the fourth quarter of 2023. For purposes of impairment testing, management also exercises
judgment to identify independent cash inflows to identify CGUs by family of aircraft. In addition, estimation is
required in the determination of the amortization of the Aerospace program tooling.
Internal and external factors are considered in assessing whether indicators of impairment exist. If indicators of
impairment exist, the recoverable amounts of the relevant CGUs are determined on fair value less costs of
disposal, which are determined using forecasted future cash flows. The fair value measurements are categorized
within Level 3 of the fair value hierarchy since the inputs used in the discounted cash flow model are Level 3
inputs (inputs that are not based on observable market data). The estimated future cash flows for the first five
years are based on the budget and strategic plan. After the initial five years, long-range forecasts prepared by
management are used.
Internal and external factors are considered by management in exercising judgment in assessing whether
indicators of impairment are present that would necessitate a quantitative impairment test. Factors include
management’s best estimate of future sales under existing firm orders, expected future orders, timing of payments
based on expected delivery schedules, revenues from related aftermarket activities, procurement costs based on
existing contracts with suppliers, future labor costs, general market conditions, foreign exchange rates, costs to
BOMBARDIER INC. / 2023 FINANCIAL REPORT 81
complete the development activities, if any, potential upgrades and derivatives expected over the life of the
program based on past experience with previous programs, and applicable long-range forecast income tax rates
and a post-tax discount rate based on a weighted average cost of capital calculated using market-based inputs,
available directly from financial markets or based on a benchmark sampling of representative publicly-traded
companies in the aerospace sector. The same factors are used to determine the recoverable amount, when there
are indicators of impairment.
An impairment test was performed for the Global 7500 in the fourth quarter of 2023, and following this
assessment the Corporation concluded there was no impairment.
Sensitivity analysis
The following analyses are presented in isolation from one another, i.e. all other estimates left unchanged:
A 10% decrease, evenly distributed over future periods, in the expected future net cash inflows for the
Global 7500 aircraft program would not have resulted in an impairment charge in fiscal year 2023.
An increase of 100-basis points in the discount rate used to perform the impairment test would not have resulted
in an impairment charge in fiscal year 2023 for the Global 7500 aircraft program.
Valuation of deferred income tax assets
To determine the extent to which deferred income tax assets can be recognized, management estimates the
amount of probable future taxable profits that will be available against which deductible temporary differences and
unused tax losses can be utilized. Such estimates are made as part of the budget and strategic plan by tax
jurisdiction on an undiscounted basis and are reviewed on a quarterly basis. Management exercises judgment to
determine the extent to which realization of future taxable benefits is probable, considering factors such as the
number of years to include in the forecast period, the history of profits and availability of prudent tax planning
strategies. See Note 9 – Income taxes, to our Consolidated financial statements, for more details.
Tax contingencies
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the
amount and timing of future taxable income. Given the wide range of international business relationships and the
long-term nature and complexity of existing contractual agreements, differences arising between the actual results
and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax
expense or recovery already recorded. The Corporation establishes tax provisions for possible consequences of
audits by the tax authorities of each country in which it operates. The amount of such provisions is based on
various factors, such as experience from previous tax audits and differing interpretations of tax regulations by the
taxable entity and the relevant tax authority. Such differences in interpretation may arise for a wide variety of
issues depending on the conditions prevailing in the domicile of each legal entity.
Retirement and other long-term employee benefits
The actuarial valuation process used to measure pension and other post-employment benefit costs, assets and
obligations is dependent on assumptions such as discount rates, compensation and pre-retirement benefit
increases, inflation rates, health-care cost trends, as well as demographic factors such as employee turnover,
retirement and mortality rates. The impacts from changes in discount rates and, when significant, from key events
and other circumstances, are recorded quarterly.
Discount rates are used to determine the present value of the expected future benefit payments and represent the
market rates for high-quality corporate fixed-income investments consistent with the currency and the estimated
term of the retirement benefit liabilities.
82 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
As the Canadian high-quality corporate bond market, as defined under IFRS, includes relatively few medium-term
and long-term maturity bonds, the discount rate for the Corporation’s Canadian pension and other post-
employment plans is established by constructing a yield curve using three maturity ranges. The first maturity
range of the curve is based on observed market rates for AA-rated corporate bonds with maturities of less than
five years. In the longer maturity ranges, due to the smaller number of high-quality bonds available, the curve is
derived using market observations and extrapolated data. The extrapolated data points were created by adding a
term-based yield spread over long-term provincial bond yields. This
term-based spread is extrapolated between a base spread and a long spread. The base spread is based on the
observed spreads between AA-rated corporate bonds and AA-rated provincial bonds for the 4 to 10 years to
maturity range. The long spread is determined as the spread required at the point of average maturity of AA-rated
provincial bonds in the 11 to 30 years to maturity range such that the average AA-rated corporate bond spread
above AA-rated provincial bonds is equal to the extrapolated spread derived by applying the ratio of the observed
spreads between A-rated corporate bonds and AA-rated provincial bonds for the 11 to 30 years to maturity range
over the 4 to 10 years to maturity range, to the base spread. For maturities longer than the average maturity of
AA-rated provincial bonds in the 11 to 30 years to maturity range, the spread is assumed to remain constant at the
level of the long spread.
Expected rates of compensation increases are determined considering the current salary structure, as well as
historical and anticipated wage increases, in the context of current economic conditions.
See Note 21 – Retirement benefits, to the consolidated financial statements, for further details regarding
assumptions used and sensitivity analysis to changes in critical actuarial assumptions.
CONTROLS AND PROCEDURES
In compliance with the Canadian Securities Administrators’ Regulation 52-109, we have filed certificates signed by
the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) that, among other things, report on the
design and effectiveness of disclosure controls and procedures and the design and effectiveness of internal
controls over financial reporting.
Disclosure controls and procedures
The CEO and the CFO have designed disclosure controls and procedures, or have caused them to be designed
under their supervision, in order to provide reasonable assurance that:
• material information relating to the Corporation has been made known to them; and
• information required to be disclosed in the Corporation’s filings is recorded, processed, summarized and
reported within the time periods specified in securities legislation.
An evaluation was carried out, under the supervision of the CEO and the CFO, of the design and effectiveness of
our disclosure controls and procedures. Based on this evaluation, the CEO and the CFO concluded that the
disclosure controls and procedures are effective.
Internal controls over financial reporting
The CEO and the CFO have also designed internal controls over financial reporting, or have caused them to be
designed under their supervision, in order to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with IFRS.
An evaluation was carried out, under the supervision of the CEO and the CFO, of the design and effectiveness of
our internal controls over financial reporting. Based on this evaluation, the CEO and the CFO concluded that the
internal controls over financial reporting are effective, using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) on Internal Control – Integrated Framework (2013
Framework).
BOMBARDIER INC. / 2023 FINANCIAL REPORT 83
Changes in internal controls over financial reporting
No changes were made to our internal controls over financial reporting that occurred during the quarter and fiscal
year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our
internal controls over financial reporting.
OTHER
On May 18, 2023 the Corporation confirmed that it had received approval from the Toronto Stock Exchange for
its new normal course issuer bid (NCIB) to purchase, from May 23, 2023 to May 22, 2024, up to 600,000 Class B
shares (subordinate voting). Class B shares (subordinate voting) purchased under the NCIB will be cancelled if
purchased in order to mitigate the dilutive effect of granting stock options under the Corporation’s stock option
plan, or will be placed in trust and eventually be used to settle the Corporation’s obligations under certain of its
employee share-based incentive plans, including its PSU and RSU plans.
For more details, refer to Consolidated statements of changes in equity and Note 27 – Share capital, to our
Consolidated financial statements.
84 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
FOREIGN EXCHANGE RATES
We are subject to currency fluctuations from the translation of revenues, expenses, assets and liabilities of foreign
operations with non-U.S. dollar functional currencies, mainly the Euro, and from transactions denominated in
foreign currencies, mainly the Canadian dollar.
The foreign exchange rates used to translate assets and liabilities into U.S. dollars were as follows, as at:
Euro
Canadian dollar
December 31, 2023
December 31, 2022
1.1062
0.7559
1.0662
0.7381
Increase
4%
2%
The average foreign exchange rates used to translate revenues and expenses into U.S. dollars were as follows,
for the fourth quarters ended:
Euro
Canadian dollar
December 31, 2023
December 31, 2022
1.0759
0.7346
1.0204
0.7366
Increase
5%
—%
The average foreign exchange rates used to translate revenues and expenses into U.S. dollars were as follows,
for the fiscal years ended:
Euro
Canadian dollar
December 31, 2023
December 31, 2022
Increase (Decrease)
1.0813
0.7411
1.0544
0.7691
2%
(4%)
BOMBARDIER INC. / 2023 FINANCIAL REPORT 85
SHAREHOLDER INFORMATION
Authorized, issued and outstanding share data, as at February 6, 2024
Class A Shares (multiple voting)(1)
Class B Shares (subordinate voting)(2)
Series 2 Cumulative Redeemable Preferred Shares
Series 3 Cumulative Redeemable Preferred Shares
Series 4 Cumulative Redeemable Preferred Shares
Authorized
143,680,000
143,680,000
12,000,000
12,000,000
9,400,000
Issued and
outstanding
12,349,370
85,307,628 (3)
2,684,527
9,315,473
9,400,000
(1) Ten votes each, convertible at the option of the holder into one Class B Subordinate Voting Share.
(2) Convertible at the option of the holder into one Class A Share under certain conditions.
(3) Net of 1,993,445 Class B Subordinate Voting Shares purchased and held in trust in connection with the PSU and RSU plans.
Warrant, share option, PSU, DSU, RSU, data as at December 31, 2023
Warrants issued and outstanding
Options issued and outstanding under the share option plans
PSUs, DSUs and RSUs issued and outstanding under the PSU, DSU and RSU plans
Class B Subordinate Voting Shares held in trust to satisfy PSU and RSU obligations
—
1,325,668
1,811,608
1,993,445
Information
Bombardier Inc.
Investor Relations
400 Côte-Vertu Road West
Dorval, Québec, Canada H4S 1Y9
Telephone: +1 514 240-9649
Email: investors@bombardier.com
Additional information relating to the Corporation, including the financial report and annual information form, are
available on SEDAR+ at sedarplus.ca or on Bombardier’s dedicated investor relations website at
ir.bombardier.com.
The Global 8000 aircraft is currently under development and remains to be finalized and certified. It is expected to enter service in 2025(1). All
specifications and data are approximate, may change without notice and are subject to certain operating rules, assumptions and other
conditions.
Bombardier, Bombardier Pũr Air, Bombardier Vision Flight Deck, Chaise, Challenger, Challenger 300, Challenger 350, Challenger 3500,
Challenger 600, Challenger 601, Challenger 604, Challenger 605, Challenger 650, Exceptional by Design, Executive, Global, Global 5000,
Global 5500, Global 6000, Global 6500, Global 7500, Global 8000, Global Express, Global Express XRS, Global Vision, Global XRS, Learjet,
Learjet 40, Learjet 45, Learjet 70, Learjet 75, Learjet 75 Liberty, L’Opéra, Nuage, Nuage Cube, PrecisionPlus, Smart Parts, Smart Parts
Maintenance Plus, Smart Parts Plus, Smart Parts Preferred, Smart Services, Smart Services Elite, Smartfix, Smartfix Plus, Smartlink,
Smartlink Plus, Smooth Flĕx Wing, Soleil and Touch are trademarks of Bombardier Inc. or its subsidiaries.
The printed version of this financial report uses Rolland Opaque paper, containing 30% sustainable recycled fiber. Using this paper, instead of
virgin paper, saves the equivalent of 5 mature trees, 328 kg of CO2 emissions (equivalent to 1,307 kilometres driven) and 2,000 litres of water.
Bombardier Inc., 400 Côte-Vertu Road West, Dorval, Québec, Canada H4S 1Y9
Telephone: +1 514 855 5001; website: bombardier.com
Un exemplaire en français est disponible sur demande adressée auprès du service des Relations avec les investisseurs ou sur le site Internet
de la Société dédié aux relations avec les investisseurs, à l’adresse ri.bombardier.com.
(1) See the forward-looking statements disclaimer in the Overview section of this MD&A.
86 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
SELECTED FINANCIAL INFORMATION
The following selected financial information has been derived from, and should be read in conjunction with, the
consolidated financial statements for fiscal years ended December 31, 2023, 2022 and 2021.
The following table provides selected financial information for the last three fiscal years.
Fiscal years ended December 31
Revenues
Net income (loss) attributable to
equity holders of Bombardier Inc.
Continuing operations
Discontinued operations(1)
Total
EPS (in dollars)
Continuing operations - basic
Continuing operations - diluted
Discontinued operations - basic(1)
Discontinued operations - diluted(1)
Total basic
Total diluted
Cash dividends declared per share (in Canadian dollars)
Class A Shares (multiple voting)
Class B Shares (subordinate voting)
Series 2 Preferred Shares
Series 3 Preferred Shares
Series 4 Preferred Shares
As at December 31
Total assets
Non-current financial liabilities
2023
2022
2021
$
8,046
$
6,913
$
6,085
$
$
$
$
$
$
$
$
$
$
$
$
$
$
490
(45)
445
4.81
4.70
(0.47)
(0.46)
4.34
4.24
—
—
1.74
1.15
1.56
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(128)
(20)
(148)
(1.67)
(1.67)
(0.21)
(0.21)
(1.88)
(1.88)
—
—
1.03
1.07
1.56
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(249)
5,290
5,041
(2.87)
(2.87)
54.92
53.41
52.05
50.54
—
—
0.61
1.00
1.56
2023
2022
2021
$ 12,458
6,579
$
$ 12,324
7,187
$
$ 12,764
8,299
$
(1) Transportation business was classified as discontinued operations. On January 29, 2021, the Corporation closed the sale of the
Transportation business to Alstom.
The quarterly data table is shown hereafter.
This MD&A for the three- and twelve-month periods ended December 31, 2023 was authorized for
issuance by the Board of Directors on February 7, 2024.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 87
BOMBARDIER INC.
QUARTERLY DATA (UNAUDITED)
(the quarterly data has been prepared in accordance with IAS 34, Interim financial reporting, except market price ranges)
(in millions of U.S. dollars, except per share amounts)
Fiscal years
Revenues
EBIT
Financing expense(1)
Financing income(1)
EBT
Income taxes (recovery)
Net income (loss)
Continuing operations
Discontinued operations
Total
EPS (in dollars)(2)
Continuing operations - basic
Continuing operations - diluted
Discontinued operations - basic
Discontinued operations - diluted
Market price range of Class B Subordinate
Voting Shares (in Canadian dollars)
Total
$ 8,046
793
$
594
(202)
401
(89)
Third
Fourth
quarter
quarter
$ 3,062 $ 1,856
197
$
240
(4)
(39)
(2)
211 $
159
(170)
222
7
Second
quarter
$ 1,675
245
$
253
(9)
1
(9)
Total
2023
First
quarter
$ 1,453 $ 6,913
538
$
817
(33)
(246)
(118)
140 $
176
(253)
217
(85)
Fourth
quarter
$ 2,655
207
$
146
(59)
120
(121)
Third
quarter
$ 1,455
145
$
142
(25)
28
1
Second
quarter
$ 1,557
101
$
233
(25)
(107)
2
2022
First
quarter
$ 1,246
85
$
376
(4)
(287)
—
$
$
$
$
$
$
490
(45)
445
$
215 $
—
$
215 $
(37) $
—
(37) $
$
10
(45)
(35) $
302 $
(128) $
—
(20)
302 $
(148) $
241
—
241
$
$
27
—
27
$
(109) $
(20)
$
(129) $
(287)
—
(287)
$ 2.15 $ (0.47) $ 0.03
$ 2.11 $ (0.47) $ 0.03
4.81
4.70
(0.47) $ 0.00 $ 0.00
(0.46) $ 0.00 $ 0.00
$ 3.10 $
$ 2.98 $
$ (0.47) $ 0.00 $
$ (0.47) $ 0.00 $
(1.67) $ 2.48
(1.67) $ 2.40
(0.21) $ 0.00
(0.21) $ 0.00
$ 0.20
$ 0.20
$ 0.00
$ 0.00
(3.09)
$ (1.22) $
$ (1.22) $
(3.09)
$ (0.21) $ 0.00
$ (0.21) $ 0.00
High
Low
$ 74.43
$ 39.87
$ 53.95 $ 68.79
$ 39.87 $ 44.44
$ 74.43
$ 52.60
$ 73.87 $ 55.50
$ 51.40 $ 18.30
$ 55.50
$ 24.39
$ 35.09
$ 18.30
$ 37.25
$ 18.67
$ 46.00
$ 29.00
(1) The amounts presented on a yearly basis may not correspond to the sum of the four quarters as certain reclassifications to quarterly figures to or from financing income and financing expense
may be required on a cumulative basis.
(2) The amounts presented on a yearly basis may not correspond to the sum of the four quarters as certain share repurchases and dilutive potential shares on an interim basis may not be
applicable on an annual basis.
88 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
BOMBARDIER INC.
HISTORICAL FINANCIAL SUMMARY
(in millions of U.S. dollars, except per share amounts and number of common shares)
For the fiscal years ended December 31
Revenues
EBIT
Financing expense
Financing income
EBT
Income taxes (recovery)
Net income (loss) from continuing operations
Net income (loss) from discontinued operations(1)
Net income (loss)
Attributable to
2023
8,046
793
594
(202)
401
(89)
490
(45)
445
2022
6,913
538
817
(33)
(246)
(118)
(128)
(20)
(148)
$
$
$
$
$
$
Equity holders of Bombardier Inc.
NCI
Adjusted EBIT(2)(3)
Adjusted net income (loss) from continuing
operations(2)(3)
EPS (in dollars)
Continuing operations - basic
Continuing operations - diluted
Discontinued operations - basic(1)
Discontinued operations - diluted(1)
Continuing operations - adjusted(3)(4)
General information
Export revenues from Canada
Net additions to PP&E and intangible assets(6)
Amortization
Impairment charges (reversals) on PP&E
and intangible assets
Dividend per common share (in Canadian dollars)
Class A
Class B Subordinate Voting
Dividend per preferred share (in Canadian dollars)
Series 2
Series 3
Series 4
Market price ranges (in Canadian dollars)
Class A Shares
High
Low
Close
Class B Subordinate Voting Shares
High
Low
Close
As at December 31
Number of common shares (in millions)
Book value per common share (in dollars)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
445
—
799
416
4.81
4.70
(0.47)
(0.46)
3.94
6,160
366
431
73
0.00
0.00
1.74
1.15
1.56
74.99
40.44
53.43
74.43
39.87
53.21
98
(28.17)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(148)
—
515
104
(1.67)
(1.67)
(0.21)
(0.21)
0.77
5,256
337
415
3
0.00
0.00
1.03
1.07
1.56
56.03
21.46
52.92
55.50
18.30
52.27
94
(33.16)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2021
6,085
241
936
(324)
(371)
(122)
(249)
5,319
5,070
5,041
29
222
(327)
(2.87)
(2.87)
54.92
53.41
(3.67)
4,575
232
417
3
0.00
0.00
0.61
1.00
1.56
58.25
19.00
43.25
57.00
11.50
42.00
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2020 (1)
6,487
912
1,060
(27)
(121)
49
(170)
(398)
(568)
(868)
300
(214)
(1,118)
(1.95)
(1.95)
(7.24)
(7.24)
(11.79)
$
$
$
$
$
$
$
$
$
$
$
2019 (1)
7,488
(520)
996
(226)
(1,290)
251
(1,541)
(66)
(1,607)
(1,797)
190
401
(405)
(16.37)
(16.37)
(2.68)
(2.68)
(4.47)
5,182 (5) $
$
$
354
510
5,187 (5)
523
422
42
0.00
0.00
0.72
1.00
1.56
50.50
9.50
20.50
49.25
6.50
12.00
$
$
$
$
$
$
$
$
$
$
$
$
$
(4)
0.00
0.00
0.99
1.00
1.56
77.00
39.25
48.50
75.75
38.25
48.25
96
(87.14)
96
(36.09)
97
$ (100.68)
(1) Transportation was classified as discontinued operations as of December 31, 2020. As a result, the results of operations have been restated
for comparative periods. On January 29, 2021, the Corporation closed the sale of the Transportation business to Alstom.
(2) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting
framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer
to the Non-GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most
comparable IFRS measures.
(3) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification, to our Consolidated financial
statements, for more information.
(4) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used
to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-
GAAP and other financial measures section of this MD&A for definitions of these metrics and reconciliations to the most comparable IFRS
measures.
(5) Includes Transportation.
(6) As per the consolidated statement of cash flows of our Consolidated financial statements.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 89
BOMBARDIER INC.
HISTORICAL FINANCIAL SUMMARY (CONTINUED)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at December 31
Assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Other financial assets
Other assets
Assets held for sale
Current assets
PP&E
Aerospace program tooling
Goodwill
Deferred income taxes
Investments in joint ventures and
associates
Other financial assets
Other assets
Non-current assets
Liabilities
Trade and other payables
Provisions
Contract liabilities
Current portion of long-term debt
Other financial liabilities
Other liabilities
Liabilities directly associated with assets
held for sale
Current liabilities
Provisions
Contract liabilities
Long-term debt
Retirement benefits
Other financial liabilities
Other liabilities
Non-current liabilities
Equity (deficit)
Attributable to equity holders
of Bombardier Inc.
Attributable to NCI
2023
2022
2021
2020 (1)
2019 (1)
$
1,594
258
84
3,768
97
133
—
5,934
1,375
3,566
—
455
—
$
1,291
252
67
3,322
472
181
—
5,585
1,214
3,873
—
381
—
$
1,675
269
55
3,242
76
164
—
5,481
837
4,129
—
250
—
$
1,779
294
61
3,650
227
218
10,417
16,646
668
4,396
—
111
—
$
2,578
1,844
2,485
4,599
195
473
1,309
13,483
1,781
4,616
1,936
546
1,059
757
371
6,524
$ 12,458
899
372
6,739
$ 12,324
1,680
387
7,283
$ 12,764
912
357
6,444
$ 23,090
989
562
11,489
$ 24,972
$
1,820
78
3,455
—
148
437
—
5,938
90
1,209
5,607
803
972
243
8,924
14,862
$
1,286
82
3,290
—
345
434
—
5,437
152
1,444
5,980
598
1,207
268
9,649
15,086
$
1,164
101
2,853
—
216
434
—
4,768
229
1,156
7,047
1,100
1,252
301
11,085
15,853
$
1,611
146
2,356
1,882
239
447
10,146
16,827
289
1,219
8,193
1,606
1,225
388
12,920
29,747
$
4,682
1,060
5,739
8
617
1,441
1,768
15,315
311
1,417
9,325
2,445
1,605
465
15,568
30,883
(2,404)
(2,762)
(3,089)
(9,325)
(7,667)
—
(2,404)
$ 12,458
—
(2,762)
$ 12,324
—
(3,089)
$ 12,764
2,668
(6,657)
$ 23,090
1,756
(5,911)
$ 24,972
(1) Transportation was classified as discontinued operations as of December 31, 2020. As a result, the results of operations have been restated
for comparative periods. On January 29, 2021, the Corporation closed the sale of the Transportation business to Alstom.
90 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
BOMBARDIER INC.
CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal years ended
December 31, 2023 and 2022
BOMBARDIER INC. / 2023 FINANCIAL REPORT 91
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
The consolidated financial statements and MD&A of Bombardier Inc. and all other information in the financial
report are the responsibility of management and have been reviewed and approved by the Board of Directors.
The consolidated financial statements have been prepared by management in accordance with IFRS as issued by
the International Accounting Standards Board. The MD&A has been prepared in accordance with the
requirements of Canadian Securities Administrators. The financial statements and MD&A include items that are
based on best estimates and judgments of the expected effects of current events and transactions. Management
has determined such items on a reasonable basis in order to ensure that the financial statements and MD&A are
presented fairly in all material respects. Financial information presented in the MD&A is consistent with that in the
consolidated financial statements.
Bombardier Inc.’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO) have designed disclosure
controls and procedures and internal controls over financial reporting, or have caused them to be designed under
their supervision, to provide reasonable assurance that material information relating to Bombardier Inc. has been
made known to them; and information required to be disclosed in Bombardier Inc.’s filings is recorded, processed,
summarized and reported within the time periods specified in Canadian securities legislation.
Bombardier Inc.’s CEO and CFO have also evaluated the effectiveness of Bombardier Inc.’s disclosure controls
and procedures and internal controls over financial reporting as of the end of the fiscal year 2023. Based on this
evaluation, the CEO and the CFO concluded that the disclosure controls and procedures and internal controls
over financial reporting were effective as of that date, using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) on Internal Control – Integrated Framework (2013
framework). In addition, based on this assessment, they determined that there were no material weaknesses in
internal control over financial reporting as of the end of the fiscal year 2023. In compliance with the Canadian
Securities Administrators’ National Instrument 52-109, Bombardier Inc.’s CEO and CFO have provided a
certification related to Bombardier Inc.’s annual disclosure to the Canadian Securities Administrators, including the
consolidated financial statements and MD&A.
The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial
reporting and is ultimately responsible for reviewing and approving the consolidated financial statements and
MD&A. The Board of Directors carries out this responsibility principally through its Audit Committee.
The Audit Committee is appointed by the Board of Directors and is comprised entirely of independent and
financially literate directors. The Audit Committee meets periodically with management, as well as with the internal
and independent auditors, to review the consolidated financial statements, independent auditors’ report, MD&A,
auditing matters and financial reporting issues, to discuss internal controls over the financial reporting process,
and to satisfy itself that each party is properly discharging its responsibilities. In addition, the Audit Committee has
the duty to review the appropriateness of the accounting policies and significant estimates and judgments
underlying the consolidated financial statements as presented by management, to approve the fees of the
independent auditors and to review and make recommendations to the Board of Directors with respect to the
independence of the independent auditors. The Audit Committee reports its findings to the Board of Directors for
its consideration when it approves the consolidated financial statements and MD&A for issuance to shareholders.
The consolidated financial statements have been audited by Ernst & Young LLP, the independent auditors, in
accordance with Canadian generally accepted auditing standards on behalf of the shareholders. The independent
auditors have full and free access to the Audit Committee to discuss their audit and related matters.
Eric Martel
President and Chief Executive Officer
Bart Demosky
Executive Vice President and Chief Financial Officer
February 7, 2024
92 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF BOMBARDIER INC.
Opinion
We have audited the consolidated financial statements of Bombardier Inc. and its subsidiaries (the Group), which
comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the
consolidated statements of income, consolidated statements of comprehensive income, consolidated statements
of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the
consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial
performance and its consolidated cash flows for the years then ended in accordance with International Financial
Reporting Standards (IFRSs).
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated
financial statements section of our report. We are independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of
the consolidated financial statements of the current period. These matters were addressed in the context of the
audit of the consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do
not provide a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated
financial statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
consolidated financial statements. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial
statements.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 93
Key audit matter
How our audit addressed the key audit matter
Valuation of Global 7500 aircraft program
tooling
As at December 31, 2023, the net carrying value
of aerospace program tooling amounted to
$3,566 million, of which a significant portion
related to the Global 7500 CGU. As stated in Note
3 of the notes to the consolidated financial
statements, the recoverable amount of the Global
7500 CGU is based on its fair value less costs of
disposal. The fair value measurement is
categorized within Level 3 of the fair value
hierarchy and is determined using forecasted
future cash flows.
We believe that the determination of the
recoverable amount of the Global 7500 aircraft
program tooling is a key audit matter given
management’s estimates and judgments required
in estimating the fair value less costs of disposal
of the balances recorded in the consolidated
financial statements.
The key drivers of the forecasted future cash
flows are based on management’s best estimate
of future sales under existing firm orders,
expected future orders, timing of payments based
on expected delivery schedules, revenues from
related services, procurement costs based on
existing contracts with suppliers, future labour
costs, potential upgrades and post-tax discount
rate.
Other information
To evaluate the appropriateness of the valuation of the Global
7500 CGU, our audit procedures included the following, among
others:
•
•
•
•
•
•
Reviewed the impairment model prepared by management
and assessed key assumptions used with internally or
externally available evidence with the focus on future sales
under existing firm orders, expected future orders, timing of
payments based on expected delivery schedules, revenues
from related services, procurement costs based on existing
contracts with suppliers, future labour costs and potential
upgrades;
Evaluated the Group’s post-tax discount rate with the
assistance of our valuation specialists;
Agreed the underlying cash flows to the budget and
strategic plan approved by the Board of Directors;
Evaluated the changes in the above-mentioned key
assumptions, compared to the previous impairment
assessment, as well as evaluated the absence of such
changes;
Evaluated the historical accuracy of management's
estimates by comparing them to actual performance;
Evaluated the information presented in Note 3 of the notes
to the consolidated financial statements.
Management is responsible for the other information. The other information comprises:
• Management’s discussion and analysis
•
The information, other than the consolidated financial statements and our auditor’s report thereon, in the
Financial Report
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information, and in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
We obtained Management’s Discussion & Analysis and the Financial Report prior to the date of this auditor’s
report. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.
94 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRSs, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
•
Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 95
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Zahid Fazal.
(1)
Ernst & Young LLP
Montréal, Canada
February 7, 2024
(1) CPA auditor, public accountancy permit no. A122227
96 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
CONSOLIDATED FINANCIAL STATEMENTS
For fiscal years 2023 and 2022
(Tabular figures are in millions of U.S. dollars, unless otherwise indicated)
Consolidated financial statements
Notes to the consolidated financial statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
BASIS OF PREPARATION
SUMMARY OF MATERIAL ACCOUNTING POLICIES
USE OF ESTIMATES AND JUDGMENT
SEGMENT DISCLOSURE
RESEARCH AND DEVELOPMENT
OTHER EXPENSE (INCOME)
FINANCING EXPENSE AND FINANCING INCOME
EMPLOYEE BENEFITS COSTS
INCOME TAXES
EARNINGS PER SHARE
FINANCIAL INSTRUMENTS
CASH AND CASH EQUIVALENTS
TRADE AND OTHER RECEIVABLES
CONTRACT BALANCES
INVENTORIES
BACKLOG
OTHER FINANCIAL ASSETS
OTHER ASSETS
PROPERTY, PLANT AND EQUIPMENT
INTANGIBLE ASSETS
RETIREMENT BENEFITS
TRADE AND OTHER PAYABLES
PROVISIONS
OTHER FINANCIAL LIABILITIES
OTHER LIABILITIES
LONG-TERM DEBT
SHARE CAPITAL
SHARE-BASED PLANS
NET CHANGE IN NON-CASH BALANCES
CREDIT FACILITIES
CAPITAL MANAGEMENT
FINANCIAL RISK MANAGEMENT
FAIR VALUE OF FINANCIAL INSTRUMENTS
TRANSACTIONS WITH RELATED PARTIES
UNCONSOLIDATED STRUCTURED ENTITIES
COMMITMENTS AND CONTINGENCIES
RECLASSIFICATION
99
104
104
105
115
118
120
120
121
121
122
124
125
127
127
128
128
128
129
129
130
131
132
141
142
143
143
144
145
148
150
151
151
152
156
159
159
160
164
BOMBARDIER INC. / 2023 FINANCIAL REPORT 97
The following table shows the abbreviations used in the consolidated financial statements.
Term
ACLP
CCTD
CDPQ
CGU
DB
DC
DDHR
DSU
EBIT
EBITDA
EBT
EPS
Description
Airbus Canada Limited Partnership
Cumulative currency translation difference
Caisse de dépôt et placement du Québec
Cash generating unit
Defined benefit
Defined contribution
Derivative designated in a hedge relationship
Deferred share unit
Earnings (loss) before financing expense,
financing income and income taxes
Earnings (loss) before financing expense,
financing income, income taxes, amortization and
impairment charges on PP&E and intangible
assets
Earnings (loss) before income taxes
Earnings (loss) per share attributable to
equity holders of Bombardier Inc.
Description
Fair value through other comprehensive income
Term
FVOCI
FVTP&L Fair value through profit and loss
IAS
IASB
IFRS
MHI
n/a
OCI
PP&E
PSU
R&D
RSU
SG&A
SOFR
U.K.
U.S.
International Accounting Standard(s)
International Accounting Standards Board
International Financial Reporting Standard(s)
Mitsubishi Heavy Industries, Ltd
Not applicable
Other comprehensive income (loss)
Property, plant and equipment
Performance share unit
Research and development
Restricted share unit
Selling, general and administrative
Secured Overnight Financing Rate
United Kingdom
United States of America
98 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
BOMBARDIER INC.
CONSOLIDATED STATEMENTS OF INCOME
For the fiscal years ended December 31
(in millions of U.S. dollars, except per share amounts)
Revenues
Cost of sales
Gross margin
SG&A
R&D
Other expense (income)(1)
Restructuring charges(1)(2)
Gain related to disposal of business(1)(3)
Impairment and program termination(1)(4)
EBIT
Financing expense
Financing income
EBT
Income taxes (recovery)
Net income (loss) from continuing operations
Net income (loss) from discontinued operations(5)
Net income (loss)
EPS (in dollars)
Continuing operations - basic
Continuing operations - diluted
Discontinued operations - basic(5)
Discontinued operations - diluted(5)
Total basic
Total diluted
Notes
4
15
$
5
6
7
7
9
10
$
$
$
$
$
$
$
2023
8,046
6,415
1,631
447
373
15
1
(81)
83
793
594
(202)
401
(89)
490
(45)
445
4.81
4.70
(0.47)
(0.46)
4.34
4.24
$
$
$
$
$
$
$
$
2022
6,913
5,656
1,257
395
360
(13)
8
(22)
(9)
538
817
(33)
(246)
(118)
(128)
(20)
(148)
(1.67)
(1.67)
(0.21)
(0.21)
(1.88)
(1.88)
(1) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification for more information.
(2) Includes severance charges or related reversal as well as curtailment losses (gains), if any.
(3) Includes changes in provisions related to past divestitures.
(4) Includes impairment or reversal of impairment of PP&E and intangible assets, as well as provisions related to program termination or their
related reversal, if any. For fiscal year 2023, includes impairment of $85 million related to an aircraft product upgrade, started in 2018 and
paused in 2020.
(5) Discontinued operations are related to the sale of the Transportation business. The expenses recorded in discontinued operations for fiscal
years 2023 and 2022 principally relate to change in estimates of a provision for professional fees.
The notes are an integral part of these consolidated financial statements.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 99
BOMBARDIER INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the fiscal years ended December 31
(in millions of U.S. dollars)
Net income (loss)
OCI
Items that may be reclassified to net income
Net change in cash flow hedges
Net gain (loss) on derivative financial instruments
Reclassification to income or to the related non-financial asset(1)(2)
Income taxes recovery (expense)
FVOCI financial assets
Net unrealized gain (loss)
CCTD
Net investments in foreign operations
Items that are never reclassified to net income
FVOCI equity instruments
Net unrealized loss
Retirement benefits
Remeasurement of defined benefit plans
Total OCI
Total comprehensive income
Total comprehensive income (loss)
Continuing operations
Discontinued operations(3)
Notes
2023
445
$
2022
(148)
$
9
21
63
52
(31)
84
22
—
(4)
(227)
(125)
320
365
(45)
320
$
$
$
(93)
62
8
(23)
(19)
—
(7)
565
516
368
388
(20)
368
$
$
$
(1) Includes $44 million of gain reclassified to the related non-financial asset for fiscal year 2023 ($27 million of loss for fiscal year 2022).
(2) Includes $29 million of net deferred gain that is expected to be reclassified from OCI to the carrying amount of the related non-financial
asset or to expense during fiscal year 2024.
(3) Discontinued operations are related to the sale of the Transportation business. The expenses recorded in discontinued operations for fiscal
years 2023 and 2022 principally relate to change in estimates of a provision for professional fees.
The notes are an integral part of these consolidated financial statements.
100 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
BOMBARDIER INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
(in millions of U.S. dollars)
Assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Other financial assets
Other assets
Current assets
PP&E
Aerospace program tooling
Deferred income taxes
Other financial assets
Other assets
Non-current assets
Liabilities
Trade and other payables
Provisions
Contract liabilities
Other financial liabilities
Other liabilities
Current liabilities
Provisions
Contract liabilities
Long-term debt
Retirement benefits
Other financial liabilities
Other liabilities
Non-current liabilities
Equity (deficit)
Attributable to equity holders of Bombardier Inc.
Commitments and contingencies
The notes are an integral part of these consolidated financial statements.
On behalf of the Board of Directors
Pierre Beaudoin
Director
Diane Giard
Director
December 31 December 31
2022
2023
Notes
12
13
14
15
17
18
19
20
9
17
18
22
23
14
24
25
23
14
26
21
24
25
36
$
1,594
258
84
3,768
97
133
5,934
1,375
3,566
455
757
371
6,524
$ 12,458
$
1,291
252
67
3,322
472
181
5,585
1,214
3,873
381
899
372
6,739
$ 12,324
$
1,820
78
3,455
148
437
5,938
90
1,209
5,607
803
972
243
8,924
14,862
$
1,286
82
3,290
345
434
5,437
152
1,444
5,980
598
1,207
268
9,649
15,086
(2,404)
$ 12,458
(2,762)
$ 12,324
BOMBARDIER INC. / 2023 FINANCIAL REPORT 101
BOMBARDIER INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the fiscal years ended
(in millions of U.S. dollars)
As at January 1, 2022
Total comprehensive income (loss)
Net loss
OCI
Dividends - preferred shares, including taxes
Shares purchased - PSU/RSU plans(1)
Shares distributed - PSU plan
Cancellation of Class B shares
Options exercised
Share-based expense
As at December 31, 2022
Total comprehensive income (loss)
Net income
OCI
Dividends - preferred shares, including taxes
Shares purchased - PSU/RSU plans(1)
Shares distributed - RSU plan
Cancellation of Class B shares
Options exercised
Share-based expense
Expiration of warrants(2)
As at December 31, 2023
Attributable to equity holders of Bombardier Inc.
Share capital
Preferred
shares
Common
shares Warrants
Retained earnings
(deficit)
Other
retained
earnings
(deficit)
Remea-
surement
gains
(losses)
Accumulated OCI
Contributed
surplus
FVOCI
Cash
flow
hedges
CCTD
Total
equity
(deficit)
$
347 $ 2,643 $
11 $ (3,984) $
(2,557)
$
475 $
13 $
(22) $
(15) $ (3,089)
—
—
—
—
—
—
—
—
$
—
3
347
4
7
—
—
—
—
(38)
1
(5)
14
—
—
—
—
—
—
—
—
—
—
(148)
—
(148)
(29)
—
—
—
—
—
—
565
565
—
—
—
—
—
—
—
—
—
—
—
(1)
3
(4)
18
—
(26)
(26)
—
—
—
—
—
—
—
—
(23)
—
(23)
—
—
—
—
—
—
—
—
—
—
—
—
—
(148)
516
368
(29)
(38)
—
(2)
10
18
$ 2,615 $
11 $ (4,161) $
(1,992)
$
491 $
(13) $
(45) $
(15) $ (2,762)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(20)
12
(3)
103
—
—
—
—
—
—
—
—
—
—
—
(11)
445
—
445
(31)
—
—
—
—
—
—
—
(227)
(227)
—
—
—
—
—
—
—
—
—
—
—
—
(12)
(1)
(34)
24
11
—
18
18
—
—
—
—
—
—
—
—
84
84
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
445
(125)
320
(31)
(20)
—
(4)
69
24
—
$
347 $ 2,707 $
— $ (3,747) $
(2,219)
$
479 $
5 $
39 $
(15) $ (2,404)
(1) In fiscal year 2023, the Corporation purchased 0.5 million (1.6 million in fiscal year 2022) of Class B shares (subordinate voting) in order to satisfy future obligations under the Corporation’s
employee PSU and RSU plans. Refer to Note 27 – Share capital.
(2) In February 2023, 4 million of warrants held by CDPQ expired. Refer to Note 27 – Share capital.
The notes are an integral part of these consolidated financial statements.
102 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
BOMBARDIER INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal years ended December 31
(in millions of U.S. dollars)
Operating activities
Net income (loss) from continuing operations
Net income (loss) from discontinued operations(1)
Non-cash items
Amortization(2)
Impairment charges on intangible assets
Deferred income taxes (recovery)
Losses (gains) on disposals of PP&E and intangible assets
Share-based expense
Losses (gains) on repayment of long-term debt
Net change in non-cash balances
Cash flows from operating activities - total
Cash flows from operating activities - discontinued operations(1)
Cash flows from operating activities - continuing operations
Investing activities
Additions to PP&E and intangible assets
Proceeds from disposals of PP&E and intangible assets
Changes to restricted cash
Sale of investments in securities
Other
Cash flows from investing activities - total
Cash flows from investing activities - discontinued operations(1)
Cash flows from investing activities - continuing operations
Financing activities
Net proceeds from issuance of long-term debt
Repayments of long-term debt
Payment of lease liabilities(3)
Dividends paid - Preferred shares
Repurchase of Class B shares
Issuance of Class B shares
Purchase of Class B shares held in trust under the PSU and RSU plans
Cash flows from financing activities - total
Cash flows from financing activities - discontinued operations(1)
Cash flows from financing activities - continuing operations
Effect of exchange rates on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental information(4)(5)
Cash paid for
Interest
Income taxes
Cash received for
Interest
Income taxes
Notes
2023
2022
$
$
490
(45)
(128)
(20)
19,20
20
9
6
28
7
29
17
26
26
27
27
27,28
12
12
431
73
(105)
1
24
54
(300)
623
—
623
(366)
—
390
133
(39)
118
(38)
156
1,478
(1,903)
(36)
(22)
(4)
69
(20)
(438)
—
(438)
—
303
1,291
1,594
462
13
39
1
$
$
$
$
$
415
3
(123)
(1)
18
(1)
909
1,072
—
1,072
(355)
18
43
—
(31)
(325)
(21)
(304)
—
(1,058)
(24)
(20)
(2)
10
(38)
(1,132)
—
(1,132)
1
(384)
1,675
1,291
521
10
23
—
$
$
$
$
$
(1) Discontinued operations are related to the sale of the Transportation business. The expenses recorded in discontinued operations for fiscal
years 2023 and 2022 principally relate to change in estimates of a provision for professional fees.
(2) Includes $31 million of amortization charge related to right-of-use of assets for fiscal year 2023 ($28 million for fiscal year 2022).
(3) Lease payments related to the interest portion, short-term leases, low value assets and variable lease payments not included in lease
liabilities are classified as cash outflows from operating activities. The total cash outflows for fiscal year 2023 amounted to $76 million ($53
million for fiscal year 2022).
(4) Amounts paid or received for interest are reflected as cash flows from operating activities, except if they were capitalized in PP&E or
intangible assets, in which case they are reflected as cash flows from investing activities. Amounts paid or received for income taxes are
reflected as cash flows from operating activities.
(5) Interest paid comprises interest on long-term debt excluding up-front costs paid related to the negotiation of debts or credit facilities, interest
paid on lease liabilities and interest paid on extended payment terms for trade payables. Interest received comprises interest received
related to cash and cash equivalents and investments in securities.
The notes are an integral part of these consolidated financial statements.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 103
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
For the fiscal years ended December 31, 2023 and 2022
(Tabular figures are in millions of U.S. dollars, unless otherwise indicated)
1.
BASIS OF PREPARATION
Bombardier Inc. (“the Corporation” or “our” or “we”) is incorporated under the laws of Canada. The Corporation is
a manufacturer of business aircraft, as well as certain major aircraft structural components, and is a provider of
related services.
The Corporation’s consolidated financial statements for fiscal years 2023 and 2022 were authorized for issuance
by the Board of Directors on February 7, 2024.
Statement of compliance
The Corporation’s consolidated financial statements are expressed in U.S. dollars and have been prepared in
accordance with IFRS, as issued by the IASB.
104 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
2.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, unless otherwise stated.
Basis of consolidation
Subsidiaries – Subsidiaries are fully consolidated from the date of acquisition and continue to be consolidated
until the date control over the subsidiaries ceases.
The Corporation consolidates investees, including structured entities when, based on the evaluation of the
substance of the relationship with the Corporation, it concludes that it controls the investees. The Corporation
controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee.
The Corporation’s principal subsidiary, whose revenues or assets represent more than 10% of the revenues or
more than 10% of the assets, is Learjet Inc. (located in U.S.).
Revenues and assets of this subsidiary combined with those of Bombardier Inc. totaled 93% of consolidated
revenues and 93% of consolidated assets for fiscal year 2023 (92% and 90% for fiscal year 2022, respectively).
Joint ventures – Joint ventures are those entities over which the Corporation exercises joint control, requiring
unanimous consent of the parties sharing control of relevant activities such as strategic, financial and operating
decision making and where the parties have rights to the net assets of the arrangement. The Corporation
recognizes its interest in joint ventures using the equity method of accounting.
Associates – Associates are entities in which the Corporation has the ability to exercise significant influence over
the financial and operating policies. Investments in associates are accounted for using the equity method of
accounting.
Foreign currency translation
The consolidated financial statements are expressed in U.S. dollars, the functional currency of Bombardier Inc.
The functional currency is the currency of the primary economic environment in which an entity operates. The
functional currency of most foreign subsidiaries is mainly the U.S. dollar.
Foreign currency transactions – Transactions denominated in foreign currencies are initially recorded in the
functional currency of the related entity using the exchange rates in effect at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are translated using the closing exchange rates. Any
resulting exchange difference is recognized in income except for exchange differences related to retirement
benefits asset and liability, as well as financial liabilities designated as hedges of the Corporation’s net
investments in foreign operations, which are recognized in OCI. Non-monetary assets and liabilities denominated
in foreign currencies and measured at historical cost are translated using historical exchange rates, and those
measured at fair value are translated using the exchange rate in effect at the date the fair value is determined.
Revenues and expenses are translated using the average exchange rates for the period or the exchange rate at
the date of the transaction for significant items.
Foreign operations – Assets and liabilities of foreign operations whose functional currency is other than the U.S.
dollar are translated into U.S. dollars using closing exchange rates. Revenues and expenses, as well as cash
flows, are translated using the average exchange rates for the period. Translation gains or losses are recognized
in OCI and are reclassified in income on disposal or partial disposal of the investment in the related foreign
operation.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 105
The exchange rates for the major currencies used in the preparation of the consolidated financial statements were
as follows:
Euro
Canadian dollar
Exchange rates
as at
December 31
2022
1.0662
0.7381
December 31
2023
1.1062
0.7559
Average exchange rates
for fiscal years
2023
1.0813
0.7411
2022
1.0544
0.7691
Revenue recognition
Manufacturing and Other – Revenues from the sale of new aircraft are considered a single performance
obligation and are recognized at delivery, which is the point in time when the customer has obtained control of the
aircraft and the Corporation has satisfied its performance obligation. All costs incurred or to be incurred in
connection with the sale, including warranty costs and sales incentives, are charged to cost of sales or as a
deduction from revenues at the time revenue is recognized.
For the bill-and-hold arrangements in respect of new aircraft, if any, revenue is recognized when the customer has
obtained control of the aircraft and the customer has requested the arrangement, the aircraft is separately
identified as belonging to the customer, the aircraft is ready for physical transfer to the customer and the
Corporation does not have the ability to use the product or direct it to another customer.
The Corporation accounts for a significant financing component on orders where timing of cash receipts and
revenue recognition differ substantially. There are certain orders related to aircraft where advances were received
well before expected delivery and therefore a financing component has been accounted for separately. The result
is that interest expense is accrued during the advance period and the transaction price will be increased by a
corresponding amount.
Revenues from the sale of pre-owned aircraft are recognized at the point in time when the customer has obtained
control of the promised asset and the Corporation has satisfied the performance obligation.
Services – Aftermarket services are generally recorded over time. The measure of progress toward complete
satisfaction of the performance obligation is generally determined by comparing the actual costs incurred to the
total costs anticipated for the entire contract. The expected benefits to be received are generally limited to the
revenues from the associated contract. Spare parts are recognized at the point in time when the customer has
obtained control of the promised asset and the Corporation has satisfied the performance obligation.
Other – Revenues earned by the Corporation on the sale of components related to commercial aircraft programs
are recognized at delivery.
Contract balances
Contract related balances comprise of contract assets and contract liabilities presented separately in the
consolidated statements of financial position.
Contract assets – Are recognized when goods or services are transferred to customers before consideration is
received or before the Corporation has an unconditional right to payment for performance completed to date.
Contract assets are subsequently transferred to receivables when the right of payment becomes unconditional.
Contract assets comprise cost incurred and recorded margins in excess of progress billings on service contracts.
Contract liabilities – Are recognized when amounts are received from customers in advance of transfer of goods
or services. Contract liabilities are subsequently recognized in revenue as or when the Corporation performs
under contracts. Contract liabilities comprise advances on aerospace programs and other deferred revenues
related to operation and maintenance of systems.
A net position of contract asset or contract liability is determined for each contract. The cash flows in respect of
advances are classified as cash flows from operating activities.
106 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Government assistance and refundable advances
Government assistance, including wage subsidies and investment tax credits, is recognized when there is a
reasonable assurance that the assistance will be received and that the Corporation will comply with all relevant
conditions. Government assistance related to the acquisition of inventories, PP&E and intangible assets is
recorded as a reduction of the cost of the related asset. Government assistance related to incurred expenses is
recorded as a reduction of the related expenses. Wage subsidies are recorded as a reduction of inventories or
the related wage expenses.
Government refundable advances are recorded as a financial liability if there is reasonable assurance that the
amount will be repaid. Government refundable advances are adjusted if there is a change in the number of aircraft
to be delivered and the timing of delivery of aircraft. Government refundable advances provided to the Corporation
to finance research and development activities on a risk-sharing basis are considered part of the Corporation’s
operating activities and are therefore presented as cash flows from operating activities in the statement of cash
flows.
Income taxes
The Corporation applies the liability method of accounting for income taxes. Deferred income tax assets and
liabilities are recognized for the future income tax consequences of temporary differences between the carrying
amounts of assets and liabilities and their respective tax bases, and for tax losses carried forward. Deferred
income tax assets and liabilities are measured using the substantively enacted tax rates that will be in effect for
the year in which the differences are expected to reverse.
Deferred income tax assets are recognized to the extent that it is probable that future taxable income will be
available against which the deductible temporary differences and unused tax losses can be utilized. Deferred
income tax assets and liabilities are recognized directly in income, OCI or equity based on the classification of the
item to which they relate.
Earnings per share
Basic EPS is computed based on net income attributable to equity holders of Bombardier Inc. less dividends on
preferred shares, including taxes, divided by the weighted-average number of Class A Shares (multiple voting)
and Class B Shares (subordinate voting) outstanding during the fiscal year.
Diluted EPS is computed using the treasury stock method, giving effect to the exercise of all dilutive elements.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one party and a financial liability or
equity instrument of another party. Financial assets of the Corporation include cash and cash equivalents, trade
and other receivables, investments in securities, receivable from MHI, receivable from ACLP, restricted cash and
derivative financial instruments with a positive fair value. Financial liabilities of the Corporation include trade and
other payables, long-term debt, lease liabilities, government refundable advances, credit and residual value
guarantees payable, vendor non-recurring costs and derivative financial instruments with a negative fair value.
Financial instruments are recognized in the consolidated statement of financial position when the Corporation
becomes a party to the contractual obligations of the instrument. On initial recognition, financial instruments are
recognized at their fair value plus, in the case of financial instruments not at FVTP&L, transaction costs that are
directly attributable to the acquisition or issuance of financial instruments. Subsequent to initial recognition,
financial instruments are measured according to the category to which they are classified, which are: a) financial
instruments classified as FVTP&L, b) financial instruments designated as FVTP&L, c) FVOCI financial assets, or
d) amortized cost. Financial instruments are subsequently measured at amortized cost, unless they are classified
as FVOCI or FVTP&L or designated as FVTP&L, in which case they are subsequently measured at fair value.
A financial asset is derecognized when the rights to receive cash flows from the asset have expired, or the
Corporation has transferred its rights to receive cash flows from the asset and either: a) the Corporation has
transferred substantially all the risks and rewards of the asset, or b) the Corporation has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 107
For transactions where it is not obvious whether the Corporation has transferred or retained substantially all the
risks and rewards of ownership, the Corporation performs a quantitative analysis to compare its exposure to the
variability in asset cash flows before and after the transfer. Judgment is applied in determining a number of
reasonably possible scenarios that reflect the expected variability in the amount and timing of net cash flows, and
then in assigning each scenario a probability with greater weighting being given to those outcomes which are
considered more likely to occur.
When the transfer of a customer receivable results in the derecognition of the asset, the corresponding cash
proceeds are classified as cash flows from operating activities.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
When an existing liability is replaced by another from the same creditor on substantially different terms, or the
terms of the liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognized in the statement of income.
a) Financial instruments classified at amortized cost
Cash and cash equivalents – Cash and cash equivalents consist of cash and highly liquid investments
held with investment-grade financial institutions and money market funds, with maturities of three months
or less from the date of acquisition.
Other financial instruments – Trade and other receivables, restricted cash, receivable from MHI and
certain other financial assets are all financial assets measured at amortized cost using the effective
interest rate method less any impairment losses. Trade and other payables, long-term debt, certain
government refundable advances, lease liabilities, vendor non-recurring costs and certain other financial
liabilities are measured at amortized cost using the effective interest rate method.
Trade receivables as well as other financial assets are subject to impairment review. Trade receivables
and contract assets are reviewed for impairment based on the simplified approach which measures the
loss allowance at an amount equal to the lifetime expected credit losses. For other financial assets for
which the credit risk has not increased significantly since initial recognition, the loss allowance is
measured at an amount equal to 12-month expected credit losses. For other financial assets for which the
credit risk has increased significantly since initial recognition, the loss allowance is measured at an
amount equal to the lifetime expected credit losses.
b) Financial instruments designated as FVTP&L
Financial instruments may be designated on initial recognition as FVTP&L if either of the following criteria
are met: (i) the designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise from measuring the financial asset or liability or recognizing the
gains and losses on them on a different basis; or (ii) a group of financial liabilities or financial assets and
financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a
documented risk management or investment strategy. The Corporation has designated as FVTP&L,
trade-in commitments and certain government refundable advances.
Subsequent changes in fair value of such financial instruments are recorded in other expense (income),
except for the fair value changes arising from a change in interest rates which are recorded in financing
expense or financing income.
c) Financial instruments classified as FVTP&L
Receivable from ACLP is required to be classified as FVTP&L.
Subsequent changes in fair value of such financial instruments are recorded in other expense (income),
except for the fair value changes arising from a change in interest rates or when the instrument is held for
investing purposes which are recorded in financing expense or financing income.
108 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Derivative financial instruments – Derivative financial instruments are mainly used to manage the
Corporation’s exposure to foreign exchange market risks, generally through forward foreign exchange
contracts. Derivative financial instruments include derivatives that are embedded in financial or
non-financial contracts that are not closely related to the host contracts.
Derivative financial instruments are classified as FVTP&L, unless they are designated as hedging
instruments for which hedge accounting is applied (see below). Changes in the fair value of derivative
financial instruments not designated in a hedging relationship, excluding embedded derivatives, are
recognized in cost of sales or financing expense or financing income, based on the nature of the
exposure.
Embedded derivatives of the Corporation include call options. Call options that are not closely related to
the host contract are measured at fair value, with the initial value recognized as an increase of the related
long-term debt and amortized to net income using the effective interest method.
Upon initial recognition, the fair value of the foreign exchange instruments not designated in a hedge
relationship is recognized in cost of sales. Subsequent changes in fair value of embedded derivatives are
recorded in cost of sales, other expense (income) or financing expense or financing income, based on the
nature of the exposure.
d) FVOCI financial assets
Investments in securities are classified as FVOCI. Investments in securities, excluding equity instruments,
are accounted for at fair value with unrealized gains and losses included in OCI, except for impairment
gains or losses and foreign exchange gains and losses on monetary investments, such as fixed income
investments, which are recognized in income. Equity instruments, included in investments in securities,
were designated, on initial recognition, at FVOCI, where the subsequent changes in the fair value are
recognized in OCI with no recycling to net income. Dividend income is recognized in financing income.
Hedge accounting
Designation as a hedge is only allowed if, both at the inception of the hedge and throughout the hedge period, the
changes in the fair value of the derivative and non-derivative hedging financial instruments are expected to
substantially offset the changes in the fair value of the hedged item attributable to the underlying risk exposure.
The Corporation formally documents all relationships between the hedging instruments and hedged items, as well
as its risk management objectives and strategy for undertaking various hedge transactions. This process includes
linking all derivatives to forecasted cash flows or to a specific asset or liability. The Corporation also formally
documents and assesses, both at the hedge’s inception and on an ongoing basis, whether the hedging
instruments are effective in offsetting the changes in the fair value or cash flows of the hedged items. The
Corporation applies the below hedging strategies.
Cash flow hedges – The Corporation generally applies cash flow hedge accounting to forward foreign
exchange contracts entered into to hedge foreign exchange risks on forecasted transactions and recognized
assets and liabilities. In a cash flow hedge relationship, the portion of gains or losses on the hedging item that
is determined to be an effective hedge is recognized in OCI, while the ineffective portion is recorded in net
income. The amounts recognized in OCI are reclassified in net income as a reclassification adjustment when
the hedged item affects net income. However, when an anticipated transaction is subsequently recorded as a
non-financial asset, the amounts recognized in OCI are reclassified in the initial carrying amount of the related
asset.
The Corporation hedges its foreign currency exposure using foreign exchange contracts. There is an economic
relationship between the hedged items and the hedging instruments as the terms of the foreign exchange
contracts match the terms of the expected highly probable forecast transaction (i.e. notional amount and expected
payment date).
To test the hedge effectiveness, the Corporation uses the hypothetical derivative method and compares the
changes in the fair value of the hedging instruments against the changes in the fair value of the hedged items
BOMBARDIER INC. / 2023 FINANCIAL REPORT 109
attributable to the hedged risks. The hedge ineffectiveness can arise due to the time value of money, under a spot
designation, as the expected timing between the forecasted transaction and the forward contract are not aligned,
due to different indexes, and changes to the forecasted amount of cash flow of hedged items and hedging
instruments. The Corporation has established a hedge ratio of 1:1.
The portion of gains or losses on the hedging instrument that is determined to be an effective hedge is recorded
as an adjustment of the cost or revenue of the related hedged item. Gains and losses on derivatives not
designated in a hedge relationship and gains and losses on the ineffective portion of effective hedges are
recorded in cost of sales or financing expense or financing income for the interest component of the derivatives or
when the derivatives were entered into for interest rate management purposes.
Hedge accounting is discontinued prospectively when it is determined that the hedging instrument is no longer
effective as a hedge, the hedging instrument is terminated or sold, or upon the sale or early termination of the
hedged item.
Leases accounting
When the Corporation is the lessee – Leases are recognized as a right-of-use asset in PP&E and a
corresponding lease liability in other financial liabilities at the date at which the leased asset is available for use by
the Corporation. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentives
received. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a
straight-line basis. Right-of-use assets are subject to impairment testing.
The lease liability is measured at the present value of lease payments to be made over the lease term, discounted
using the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is
not readily available. Lease payments include fixed payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate and amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by
the Corporation and payment of penalties for termination of a lease when the lease term reflects the lessee
exercising a termination option. Each lease payment is allocated between the repayment of the principal portion of
lease liability and the interest portion. The interest expense is charged to profit or loss over the lease period so as
to produce a constant periodic rate of interest on the remaining balance of the liability for each period and is
recorded in financing expense. Payments associated with short-term leases and leases of low-value assets are
recognized on a straight-line basis as an expense in the consolidated statement of income.
The Corporation periodically enters into sale and leaseback transactions whereby the Corporation sells an asset
to a lessor and immediately leases it back. In a sale and leaseback transaction the transfer of an asset is
recognized as a sale when the customer has obtained control of the asset, otherwise the Corporation continues to
recognize the transferred asset on the statement of financial position and records a financial liability equal to the
proceeds transferred. When the transfer of an asset satisfies the Corporation’s revenue recognition policy to be
accounted for as a sale, a partial recognition of the profit from the sale is recorded in revenue immediately after
the sale, which is equivalent to the proportion of the asset not retained by the Corporation through the lease. The
proportion of the asset retained by the Corporation through the lease is recognized as a right-of-use asset and the
lease liability is generally measured as the present value of future lease payments. The portion of the proceeds
related to the retained interest is classified as cash flow related to financing activities whereas the remainder is
treated either as cash flow from operating activities or cash flow from investing activities depending on the nature
of the asset sold.
Inventory valuation
Aerospace program and finished products – Aerospace program work in progress, raw materials and finished
product inventories are valued at the lower of cost or net realizable value. Cost is generally determined using the
unit cost method, except for the cost of spare part inventory that is determined using the moving average method.
The cost of manufactured inventories comprises all costs that are directly attributable to the manufacturing
process, such as materials, direct labour, manufacturing overhead, and other costs incurred in bringing the
inventories to their present location and condition. Net realizable value is the estimated selling price in the
ordinary course of business less the estimated costs of completion and the estimated selling costs, except for raw
materials for which it is determined using replacement cost. The Corporation estimates the net realizable value
110 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
using both external and internal aircraft valuations, including information developed from the sale of similar aircraft
in the secondary market.
Impairment of inventories – Inventories are written down to net realizable value when the cost of inventories is
determined not to be recoverable. When the circumstances that previously caused inventories to be written down
no longer exist or when there is clear evidence of an increase in net realizable value because of changed
economic circumstances, the amount of the write-down is reversed.
Retirement and other long-term employee benefits
Retirement benefit plans are classified as either defined benefit plans or defined contribution plans.
Defined benefit plans
Retirement benefit liability or asset recognized on the consolidated statement of financial position is measured as
the difference between the present value of the defined benefit obligation and the fair value of plan asset at the
reporting date. When the Corporation has a surplus in a defined benefit plan, the value of any plan asset
recognized is restricted to the asset ceiling - i.e. the present value of economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan (“asset ceiling test”). A minimum liability is
recorded when legal minimum funding requirements for past services exceed economic benefits available in the
form of refunds from the plan or reductions in future contributions to the plan. A constructive obligation is recorded
as a defined benefit obligation when there is no realistic alternative but to pay employee benefits. Retirement
benefit liability or asset includes the effect of any asset ceiling, minimum liability and constructive obligation.
The cost of pension and other benefits earned by employees is actuarially determined for most of the plans using
the projected unit credit method, and management’s best estimate of assumptions such as salary escalation,
retirement ages, life expectancy, inflation, discount rates and health care costs, as applicable. Plan assets are
assets that are held by a long-term employee benefit fund or qualifying insurance policies. These assets are
measured at fair value at the end of the reporting period, which is based on published market mid-price
information in the case of quoted securities. The discount rates are determined at each reporting date by
reference to market yields at the end of the reporting period on high quality corporate fixed-income investments
consistent with the currency and the estimated terms of the related retirement benefit liability. Past service costs
(recoveries) are generally recognized in income at the latest of i) the date of the plan amendment or curtailment or
ii) the date that the Corporation recognized the restructuring costs. When plan amendments, curtailments and
settlements occur, the Corporation uses updated actuarial assumptions to determine current service cost and net
interest for the period after the plan amendment, curtailment or settlement.
The remeasurement gains and losses (including the foreign exchange impact) arising on the plan assets and
defined benefit obligation and the effect of any asset ceiling and minimum liability are recognized directly in OCI in
the period in which they occur and are never reclassified to net income. Past service costs (credits) are
recognized directly in income in the period in which they occur.
The accretion on net retirement benefit obligations is included in financing income or financing expense. The
remaining components of the benefit cost are either capitalized as part of labor costs and included in inventories
and in certain PP&E and intangible assets during their construction, or are recognized directly in income. The
benefit cost recorded in net income is allocated to labor costs based on the function of the employee accruing the
benefits.
Defined contribution plans
Contributions to defined contribution plans are either recognized in net income as incurred or are capitalized as
part of labor costs and included in inventories and in certain PP&E and intangible assets during their construction.
The benefit cost recorded in net income is allocated to labor costs based on the function of the employee accruing
the benefits.
Other long-term employee benefits – The accounting method is similar to the method used for defined benefit
plans, except that all actuarial gains and losses are recognized immediately in income. Other long-term employee
benefits are included in other liabilities.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 111
Property, plant and equipment
PP&E are carried at cost less accumulated amortization and impairment losses. The cost of an item of PP&E
includes its purchase price or manufacturing cost, borrowing costs as well as other costs incurred in bringing the
asset to its present location and condition. If the cost of certain components of an item of PP&E is significant in
relation to the total cost of the item, the total cost is allocated between the various components, which are then
separately depreciated over the estimated useful lives of each respective component. The amortization of PP&E
is computed on a straight-line basis over the following useful lives:
Buildings
Equipment
Other
5 to 40 years
2 to 20 years
3 to 20 years
The amortization method and useful lives are reviewed on a regular basis, at least annually, and changes are
accounted for prospectively. The amortization expense and impairments are recorded in cost of sales, SG&A or
R&D expenses based on the function of the underlying asset or in impairment and program termination.
Amortization of assets under construction begins when the asset is ready for its intended use.
When a significant part is replaced or a major inspection or overhaul is performed, its cost is recognized in the
carrying amount of the PP&E if the recognition criteria are satisfied, and the carrying amount of the replaced part
or previous inspection or overhaul is derecognized. All other repair and maintenance costs are charged to income
when incurred.
Intangible assets
Internally generated intangible assets include development costs (such as aircraft prototype design and testing
costs) and internally developed or modified application software. These costs are capitalized when certain criteria
such as proven technical feasibility are met. The costs of internally generated intangible assets include the cost of
materials, direct labour, manufacturing overheads and borrowing costs and exclude costs which were not
necessary to create the asset, such as identified inefficiencies.
Acquired intangible assets include the cost of development activities carried out by vendors for which the
Corporation controls the underlying output from the usage of the technology.
Intangible assets are recorded at cost less accumulated amortization and impairment losses and include
aerospace program tooling, as well as other intangible assets such as goodwill, software and courseware. Other
intangible assets are included in other assets.
Amortization of aerospace program tooling begins at the date of completion of the first aircraft of the program.
Amortization of other intangibles begins when the asset is ready for its intended use. Amortization expense is
recognized as follows:
Aerospace program tooling
Other intangible assets
Method
Unit of production
Straight-line
Estimated useful life
Expected number of aircraft to be produced(1)
3 to 5 years
(1) As at December 31, 2023, the remaining number of units to fully amortize the aerospace program tooling is expected to be produced over
the next 13 years.
The amortization methods and estimated useful lives are reviewed on a regular basis, at least annually, and
changes are accounted for prospectively. The amortization expense for aerospace program tooling is recorded in
R&D expense and for other intangible assets is recorded in cost of sales, SG&A or R&D expense based on the
function of the underlying asset.
The Corporation does not have indefinite-life intangible assets, other than goodwill. Goodwill represents the
excess of the purchase price over the fair value of the identifiable net assets acquired in a business acquisition.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
112 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Borrowing costs
Borrowing costs consist of interest on long-term debt and other costs that the Corporation incurs in connection
with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized as part of the cost of that asset and are deducted from the financing expense to
which they relate. The Corporation suspends the capitalization of borrowing costs during extended periods in
which it suspends active development of a qualifying asset. All other borrowing costs are expensed in the period
they occur.
Impairment of PP&E, right-of-use assets and intangible assets
The Corporation assesses at each reporting date whether there are indicators that an item of PP&E, right-of-use
asset or intangible asset may be impaired. If any indication exists based on internal and external factors, the
Corporation estimates the recoverable amount of the individual asset, when possible.
When the asset does not generate cash inflows that are largely independent of those from other assets or group
of assets, the asset is tested at the CGU level. Most of the Corporation’s non-financial assets are tested for
impairment at the CGU level. The recoverable amount of an asset or CGU is the higher of its fair value less costs
to sell and its value in use.
•
•
The fair value less costs to sell reflects the amount the Corporation could obtain from the asset’s disposal
in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of
disposal. If there is no binding sales agreement or active market for the asset, the fair value is assessed
by using appropriate valuation models dependent on the nature of the asset or CGU, such as discounted
cash flow models.
The value in use is calculated using estimated net cash flows, with detailed projections generally over a
five-year period and subsequent years being extrapolated using a growth assumption. The estimated net
cash flows are discounted to their present value using a discount rate before income taxes that reflects
current market assessments of the time value of money and the risk specific to the asset or CGU.
When the recoverable amount is less than the carrying value of the related asset or CGU, the related assets are
written down to their recoverable amount and an impairment loss is recognized in net income.
For PP&E and intangible assets other than goodwill, an assessment is made at each reporting date as to whether
there is any indication that previously recognized impairment losses may no longer exist or may have decreased.
If such indication exists, the Corporation estimates the recoverable amount of the asset or CGU. A previously
recognized impairment loss is reversed only if there has been a change in the estimates used to determine the
recoverable amount since the last impairment loss was recognized. A reversal of an impairment loss reflects an
increase in the estimated service potential of an asset. The reversal of impairment losses is limited to the amount
that would bring the carrying value of the asset or CGU to the amount that would have been recorded, net of
amortization, had no impairment loss been recognized for the asset or CGU in prior years. Such reversal is
recognized to income in the same line item where the original impairment was recognized.
Intangible assets not yet available for use and goodwill are reviewed for impairment at least annually or more
frequently if circumstances such as significant declines in expected sales, earnings or cash flows indicate that it is
more likely than not that the asset or CGU might be impaired. Impairment losses relating to goodwill are not
reversed in future periods.
Provisions
Provisions are recognized when the Corporation has a present legal or constructive obligation as a result of a past
event, it is probable that an outflow of resources will be required to settle the obligation and the cost can be
reliably estimated. These liabilities are presented as provisions when they are of uncertain timing or amount.
Provisions are measured at their present value.
Product warranties – A provision for assurance type warranties is recorded in cost of sales when the revenue for
the related product is recognized. The interest component associated with product warranties, when applicable, is
recorded in financing expense. The cost is estimated based on a number of factors, including the historical
warranty claims and cost experience, the type and duration of warranty coverage, the nature of products sold and
in service and counter-warranty coverage available from the Corporation’s suppliers. Claims for reimbursement
BOMBARDIER INC. / 2023 FINANCIAL REPORT 113
from third parties are recorded if their realization is virtually certain. Product warranties typically range from one to
five years.
Credit and residual value guarantees – Credit and residual value guarantees related to the sale of commercial
aircraft are recorded at the amount the Corporation expects to pay under these guarantees when the revenue for
the related product is recognized. Subsequent to initial recognition, changes in the value of these guarantees are
recorded in other expense (income), except for the changes in value arising from a change in interest rates, which
are recorded in financing expense or financing income. In connection with the sale of the CRJ business, credit
and residual value guarantees provisions are included in a back-to-back agreement with MHI.
Credit guarantees provide support through contractually limited payments to the guaranteed party to mitigate
default-related losses. Credit guarantees are triggered if customers do not perform during the term of the
financing.
Residual value guarantees provide protection, through contractually limited payments, to the guaranteed parties in
cases where the market value of the underlying asset falls below the guaranteed value. In most cases, these
guarantees are provided as part of a financing arrangement.
Restructuring provisions – Restructuring provisions are recognized only when the Corporation has an actual or
a constructive obligation. The Corporation has a constructive obligation when a detailed formal plan identifies the
business or part of the business concerned, the location and number of employees affected, a detailed estimate
of the associated costs and an appropriate timeline. Furthermore, the affected employees or worker councils must
have been notified of the plan’s main features.
Onerous contracts – If it is more likely than not that the unavoidable costs of meeting the obligations under a
firm contract exceed the economic benefits expected to be received under it, a provision for onerous contracts is
recorded in cost of sales, except for the interest component, which is recorded in financing expense. Unavoidable
costs include the costs that relate directly to the contract such as anticipated cost overruns, expected costs
associated with late delivery penalties and technological problems, as well as allocations of costs that relate
directly to the contract. Provisions for onerous contracts are measured at the lower of the expected cost of
fulfilling the contract and the expected cost of terminating the contract.
Termination benefits – Termination benefits are usually paid when employment is terminated before the normal
retirement date or when an employee accepts voluntary redundancy in exchange for these benefits. The
Corporation recognizes termination benefits when it is demonstrably committed, through a detailed formal plan
without possibility of withdrawal, to terminate the employment of current employees.
Environmental costs – A provision for environmental costs is recorded when environmental claims or remedial
efforts are probable and the costs can be reasonably estimated. Legal asset retirement obligations and
environmental costs of a capital nature that extend the life, increase the capacity or improve the safety of an asset
or that mitigate, or prevent environmental contamination that has yet to occur, are included in PP&E and are
generally amortized over the remaining useful life of the underlying asset. Costs that relate to an existing condition
caused by past operations and that do not contribute to future revenue generation are expensed and included in
cost of sales.
Litigation – A provision for litigation is recorded in case of legal actions, governmental investigations or
proceedings when it is probable that an outflow of resources will be required to settle the obligation and the cost
can be reliably estimated.
Non-current assets (or disposal group) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. The criteria for held for sale classification
is regarded as met only when the sale is highly probable, and the asset or disposal group is available for
immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that
significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be
committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the
classification.
114 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value
less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset or a
disposal group, excluding finance costs and income tax expense.
Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for
sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale
continue to be recognized.
The assets and liabilities of a disposal group classified as held for sale are presented separately as current items
in the statement of financial position.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale
and that represents a separate major line of business or geographical area of operations, is part of a single co-
ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively
with a view to resale. Discontinued operations are excluded from the results of continuing operations and are
presented as a single amount as net income (loss) after tax from discontinued operations in the consolidated
statements of income.
Share-based payments
Equity-settled share-based payment plans – Equity-settled share-based payments are measured at fair value
at the grant date. For the PSUs, DSUs and RSUs, the value of the compensation is measured based on the
closing price of a Class B Share (subordinate voting) of the Corporation on the Toronto Stock Exchange adjusted
to take into account the terms and conditions upon which the shares were granted, if any, and is based on the
PSUs, DSUs and RSUs that are expected to vest. For share option plans, the value of the compensation is
measured using a Black-Scholes option pricing model. The effect of any change in the number of options, PSUs,
DSUs and RSUs that are expected to vest is accounted for in the period in which the estimate is revised.
Compensation expense is recognized on a straight-line basis over the vesting period, with a corresponding
increase in contributed surplus. Any consideration paid by plan participants on the exercise of stock options is
credited to share capital.
Cash-settled share-based payments – Cash-settled share-based payments are measured at fair value at the
grant date with a corresponding liability. Until the liability is settled, the fair value of the liability is remeasured at
the end of each reporting period and at the date of settlement, with any changes in fair value recognized in
income. Limited PSUs, DSUs and RSUs are cash-settled share-based payments, for which the value of the
compensation is measured based on the closing price of a Class B Share (subordinate voting) of the Corporation
on the Toronto Stock Exchange adjusted to take into account the terms and conditions upon which the shares
were granted, if any, and is based on the PSUs, DSUs and RSUs that are expected to vest.
Employee share purchase plan – The Corporation’s contributions to the employee share purchase plan are
measured at cost and accounted for in the same manner as the related employee payroll costs. Compensation
expense is recorded at the time of the employee contribution.
3.
USE OF ESTIMATES AND JUDGMENT
The application of the Corporation’s accounting policies requires management to use estimates and judgments
that can have a significant effect on the revenues, expenses, comprehensive income, assets and liabilities
recognized and disclosures made in the consolidated financial statements. An accounting estimate and judgment
is considered critical if:
•
the estimate requires us to make assumptions about matters that are highly uncertain at the time the
estimate is made; and
• we could have reasonably used different estimates in the current period, or changes in the estimate are
reasonably likely to occur from period to period that would have a material impact on our financial
condition, our changes in financial condition or our results of operations.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 115
Management’s best estimates regarding the future are based on the facts and circumstances available at the time
estimates are made. Management uses historical experience, general economic conditions and trends, as well as
assumptions regarding probable future outcomes as the basis for determining estimates. Estimates and their
underlying assumptions are reviewed periodically and the effects of any changes are recognized immediately.
Actual results could differ from the estimates used, and such differences could be material.
Management’s budget and strategic plan cover a five-year period and are fundamental information used as a
basis for many estimates necessary to prepare financial information. Management prepares a budget and a
strategic plan covering a five-year period, on an annual basis, using a process whereby a detailed one-year
budget and four-year strategic plan are prepared and then consolidated. Cash flows and profitability included in
the budget and strategic plan are based on existing and future contracts and orders, general market conditions,
current cost structures, anticipated cost variations and in-force collective agreements. The budget and strategic
plan are subject to approval at various levels, including senior management and the Board of Directors.
Management uses the budget and strategic plan, as well as additional projections or assumptions, to derive the
expected results for periods thereafter. Management then tracks performance as compared to the budget and
strategic plan at various levels within the Corporation. Significant variances in actual performance are a key
trigger to assess whether certain estimates used in the preparation of financial information must be revised.
The following areas require management’s most critical estimates and judgments. The sensitivity analyses below
should be used with caution as the changes are hypothetical and the impact of changes in each key assumption
may not be linear.
Aerospace program tooling – The Corporation assesses at each reporting date whether there are any indicators
that Aerospace program tooling may be impaired. If any indicators of impairment exist, the Corporation estimates
the recoverable amount of the relevant CGU. The assessment of indicators of impairment, and the calculation of
recoverable amounts, when indicators exist, requires judgements, which are reviewed in detail as part of the
budget and strategic plan process during the fourth quarter of 2023. For purposes of impairment testing,
management also exercises judgment to identify independent cash inflows to identify CGUs by family of aircraft.
In addition, estimation is required in the determination of the amortization of the Aerospace program tooling.
Internal and external factors are considered in assessing whether indicators of impairment exist. If indicators of
impairment exist, the recoverable amounts of the relevant CGUs are determined on fair value less costs of
disposal, which are determined using forecasted future cash flows. The fair value measurements are categorized
within Level 3 of the fair value hierarchy since the inputs used in the discounted cash flow model are Level 3
inputs (inputs that are not based on observable market data). The estimated future cash flows for the first five
years are based on the budget and strategic plan. After the initial five years, long-range forecasts prepared by
management are used.
Internal and external factors are considered by management in exercising judgment in assessing whether
indicators of impairment are present that would necessitate a quantitative impairment test. Factors include
management’s best estimate of future sales under existing firm orders, expected future orders, timing of payments
based on expected delivery schedules, revenues from related aftermarket activities, procurement costs based on
existing contracts with suppliers, future labor costs, general market conditions, foreign exchange rates, costs to
complete the development activities, if any, potential upgrades and derivatives expected over the life of the
program based on past experience with previous programs, and applicable long-range forecast income tax rates
and a post-tax discount rate based on a weighted average cost of capital calculated using market-based inputs,
available directly from financial markets or based on a benchmark sampling of representative publicly-traded
companies in the aerospace sector. The same factors are used to determine the recoverable amount, when there
are indicators of impairment.
An impairment test was performed for the Global 7500 in the fourth quarter of 2023, and following this
assessment the Corporation concluded there was no impairment.
Sensitivity analysis
The following analyses are presented in isolation from one another, i.e. all other estimates left unchanged:
A 10% decrease, evenly distributed over future periods, in the expected future net cash inflows for the
Global 7500 aircraft program would not have resulted in an impairment charge in fiscal year 2023.
116 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
An increase of 100-basis points in the discount rate used to perform the impairment test would not have resulted
in an impairment charge in fiscal year 2023 for the Global 7500 aircraft program.
Valuation of deferred income tax assets – To determine the extent to which deferred income tax assets can be
recognized, management estimates the amount of probable future taxable profits that will be available against
which deductible temporary differences and unused tax losses can be utilized. Such estimates are made as part
of the budget and strategic plan by tax jurisdiction on an undiscounted basis and are reviewed on a quarterly
basis. Management exercises judgment to determine the extent to which realization of future taxable benefits is
probable, considering factors such as the number of years to include in the forecast period, the history of profits
and availability of prudent tax planning strategies. See Note 9 - Income taxes for more details.
Tax contingencies – Uncertainties exist with respect to the interpretation of complex tax regulations, changes in
tax laws, and the amount and timing of future taxable income. Given the wide range of international business
relationships and the long-term nature and complexity of existing contractual agreements, differences arising
between the actual results and the assumptions made, or future changes to such assumptions, could necessitate
future adjustments to tax expense or recovery already recorded. The Corporation establishes tax provisions for
possible consequences of audits by the tax authorities of each country in which it operates. The amount of such
provisions is based on various factors, such as experience from previous tax audits and differing interpretations of
tax regulations by the taxable entity and the relevant tax authority. Such differences in interpretation may arise for
a wide variety of issues depending on the conditions prevailing in the domicile of each legal entity.
Retirement and other long-term employee benefits – The actuarial valuation process used to measure pension
and other post-employment benefit costs, assets and obligations is dependent on assumptions such as discount
rates, compensation and pre-retirement benefit increases, inflation rates, health-care cost trends, as well as
demographic factors such as employee turnover, retirement and mortality rates. The impacts from changes in
discount rates and, when significant, from key events and other circumstances, are recorded quarterly.
Discount rates are used to determine the present value of the expected future benefit payments and represent the
market rates for high-quality corporate fixed-income investments consistent with the currency and the estimated
term of the retirement benefit liabilities. As the Canadian high-quality corporate bond market, as defined under
IFRS, includes relatively few medium-term and long-term maturity bonds, the discount rate for the Corporation’s
Canadian pension and other post-employment plans is established by constructing a yield curve using three
maturity ranges. The first maturity range of the curve is based on observed market rates for AA-rated corporate
bonds with maturities of less than five years. In the longer maturity ranges, due to the smaller number of high-
quality bonds available, the curve is derived using market observations and extrapolated data. The extrapolated
data points were created by adding a term-based yield spread over long-term provincial bond yields. This
term-based spread is extrapolated between a base spread and a long spread. The base spread is based on the
observed spreads between AA-rated corporate bonds and AA-rated provincial bonds for the 4 to 10 years to
maturity range. The long spread is determined as the spread required at the point of average maturity of AA-rated
provincial bonds in the 11 to 30 years to maturity range such that the average AA-rated corporate bond spread
above AA-rated provincial bonds is equal to the extrapolated spread derived by applying the ratio of the observed
spreads between A-rated corporate bonds and AA-rated provincial bonds for the 11 to 30 years to maturity range
over the 4 to 10 years to maturity range, to the base spread. For maturities longer than the average maturity of
AA-rated provincial bonds in the 11 to 30 years to maturity range, the spread is assumed to remain constant at the
level of the long spread.
Expected rates of compensation increases are determined considering the current salary structure, as well as
historical and anticipated wage increases, in the context of current economic conditions.
See Note 21 – Retirement benefits for further details regarding assumptions used and sensitivity analysis to
changes in critical actuarial assumptions.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 117
4.
SEGMENT DISCLOSURE
The Corporation is structured under one reportable segment that designs, develops, manufactures and markets
two families of business jets (Challenger and Global), spanning from the mid-size to large categories. The
Corporation also provides aftermarket support for both of these aircraft, as well as for the Learjet family of
aircraft(1). The Corporation has developed an aftermarket and support network of service facilities, including
wholly-owned service centers, mobile response teams, and provides dedicated aircraft parts availability sustained
by parts facilities, including depots, hubs and repair facilities worldwide.
The Corporation’s revenues by categories were as follows, for fiscal years:
Business Aircraft
Manufacturing and Other(2)
Services(3)
Others(4)
2023
6,261
1,748
37
8,046
$
$
2022
5,345
1,508
60
6,913
$
$
(1) The Corporation delivered its last Learjet aircraft in the first quarter of 2022.
(2) Includes revenues from sale of new aircraft, specialized aircraft solutions and pre-owned aircraft.
(3) Includes revenues from aftermarket services including parts, Smart Services, service centers, training and technical publications.
(4) Includes revenues from sale of components related to commercial aircraft programs.
118 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
The Corporation’s revenues are allocated to countries based on the location of the customer, as follows for fiscal
years:
North America
United States
Canada
Mexico
Europe
Isle of Man
Germany
United Kingdom
France
Sweden
Malta
Switzerland
Other
Asia-Pacific
Australia
India
China
Other
Other
Africa
Central America
Middle East
Other
Total
2023
2022
$
$
5,089
567
64
5,720
265
201
184
149
94
76
20
463
1,452
202
95
20
148
465
223
126
28
32
409
8,046
$
$
3,386
346
90
3,822
99
327
156
8
3
49
633
258
1,533
20
199
86
470
775
127
135
469
52
783
6,913
The Corporation’s PP&E, right-of-use assets and intangible assets are allocated(1) to countries, as follows:
North America
Canada
United States
Mexico
Europe
United Kingdom
Germany
Other
Asia-Pacific
Other
December 31 December 31
2022
2023
$
4,499
289
45
4,833
78
34
4
116
$
4,656
274
37
4,967
80
34
6
120
70
5,019
$
75
5,162
$
(1) PP&E, right-of-use assets and intangible assets, excluding goodwill, are attributed to countries based on the location of the assets. Goodwill
is attributed to countries based on the Corporation’s allocation of the related purchase price.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 119
5.
RESEARCH AND DEVELOPMENT
R&D expense, net of government assistance, was as follows, for fiscal years:
R&D expenditures
Less: development expenditures capitalized to aerospace program tooling
Add: amortization of aerospace program tooling
6.
OTHER EXPENSE (INCOME)
Other expense (income)(1) was as follows, for fiscal years:
System implementation related costs
Pension related items(2)
Losses (gains) on disposals of PP&E and intangible assets
Sale of assets
Other
2023
139
(96)
43
330
373
2023
20
3
1
—
(9)
15
$
$
$
$
$
$
$
$
2022
104
(73)
31
329
360
2022
—
—
(1)
(7)
(5)
(13)
(1) Special items and certain items of other expense (income) were mainly reclassified to gain related to disposal of business, impairment and
program termination, and restructuring charges, including comparative figures. See Note 37 - Reclassification for more information.
(2) Includes the loss related to the purchase of pension annuities. See Note 21 – Retirement benefits for more information.
120 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
7.
FINANCING EXPENSE AND FINANCING INCOME
Financing expense and financing income were as follows, for fiscal years:
Financing expense
Losses on repayments of long-term debt(1)
Interest expense on lease liabilities
Accretion on advances
Accretion on other financial liabilities
Accretion on net retirement benefit obligations
Accretion on provisions
Changes in discount rates of provisions
Net loss on certain financial instruments(2)
Other
Interest on long-term debt
Financing income
Net gain on certain financial instruments(2)
Changes in discount rates of provisions
Gains on repayment of long-term debt(1)
Other
2023
2022
$
$
$
$
54
40
32
26
25
2
1
—
19
199
395
594 (3) $
$
(160)
—
—
(2)
(162)
—
32
26
31
31
2
—
228
4
354
463
817 (3)
—
(2)
(1)
(9)
(12)
Interest on cash and cash equivalents
Income from investments in securities
(18)
(3)
(21)
(33) (4)
(1) Represents the losses related to the full repayment of the Senior Notes due 2024 and 2025 and the partial repayment of the Senior Notes
due 2026 and 2027 for fiscal year 2023 (the gains related to the partial repayment of the Senior Notes due 2024, 2025 and 2027 for fiscal
year 2022). Refer to Note 26 – Long-term debt for more information.
(35)
(5)
(40)
(202) (4) $
$
(2) Net losses (gains) on certain financial instruments classified as FVTP&L, which includes call options on long-term debt.
(3) Of which $421 million represents the interest expense calculated using the effective interest rate method for financial liabilities classified as
amortized cost for fiscal year 2023 ($494 million for fiscal year 2022).
(4) Of which $35 million represents the interest income calculated using the effective interest rate method for financial assets classified as
amortized cost and FVOCI for fiscal year 2023 ($18 million for fiscal year 2022).
Borrowing costs capitalized to PP&E and intangible assets totaled $37 million for fiscal year 2023, using an
average capitalization rate of 7.48% ($28 million and 7.52% for fiscal year 2022). Capitalized borrowing costs are
deducted from the related interest on long-term debt or accretion on other financial liabilities, if any.
8.
EMPLOYEE BENEFIT COSTS
Employee benefit costs(1) were as follows, for fiscal years:
Wages, salaries and other employee benefits
Retirement benefits(2)
Share-based expense
Notes
21
28
2023
1,539
127
24
1,690
$
$
2022
1,362
151
19
1,532
$
$
(1) Employee benefit costs include costs capitalized as part of the cost of inventories and other self-constructed assets and exclude the impact
of the wage subsidies.
(2) Includes defined benefit and defined contribution plans.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 121
9.
INCOME TAXES
Analysis of income tax expense (recovery)
Details of income tax expense (recovery) were as follows, for fiscal years:
Current income taxes
Deferred income taxes
2023
16
(105)
(89)
$
$
2022
5
(123)
(118)
$
$
The reconciliation of income taxes, computed at the Canadian statutory rates, to income tax recovery was as
follows, for fiscal years:
EBT
Canadian statutory tax rate
Income tax expense (recovery) at statutory rate
Increase (decrease) resulting from:
Recognition of previously unrecognized tax losses or temporary differences
Permanent differences
Write-down of deferred income tax assets
Non-recognition of tax benefits related to tax losses and temporary differences
Other
Income tax recovery
Effective tax rate
$
$
2023
401
26.5 %
106
(237)
(34)
62
7
7
(89)
(22.2) %
$
$
2022
(246)
26.5 %
(65)
(189)
117
11
10
(2)
(118)
48.0 %
The Corporation’s applicable Canadian statutory tax rate is the Federal and Provincial combined tax rate
applicable in the jurisdiction in which the Corporation operates.
Details of deferred income tax expense (recovery) were as follows, for fiscal years:
Recognition of previously unrecognized tax losses or temporary differences
Write-down of deferred income tax assets
Origination and reversal of temporary differences
Non-recognition of tax benefits related to tax losses and temporary differences
2023
(237)
62
63
7
(105)
$
$
2022
(189)
11
45
10
(123)
$
$
122 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Deferred income taxes
The significant components of the Corporation’s deferred income tax asset and liability were as follows, as at:
Operating tax losses carried forward
Inventories
Intangible assets
Retirement benefits
Provisions
Contract liabilities
Other financial liabilities and other liabilities
PP&E
Other financial assets and other assets
Other
Unrecognized deferred tax assets
$
$
$
December 31, 2023
Liability
—
—
—
—
—
—
—
—
—
—
—
—
—
Asset
2,253
591
270
155
123
80
13
8
(9)
16
3,500
(3,045)
455
$
The changes in the net deferred income tax asset were as follows, for the fiscal years:
Balance at beginning of year, net
In net income
In OCI
Cash flow hedges
Balance at end of year, net
$
December 31, 2022
Liability
—
—
—
—
—
—
—
—
—
—
—
—
—
Asset
2,325
581
212
97
135
37
33
10
12
38
3,480
(3,099)
381
$
2023
381
105
(31)
455
$
$
2022
250
123
8
381
$
$
$
$
The net operating losses carried forward and deductible temporary differences for which deferred tax assets have
not been recognized amounted to $11,614 million as at December 31, 2023, of which $565 million relates to
retirement benefits that will reverse through OCI ($11,623 million as at December 31, 2022 of which $342 million
relates to retirement benefits that will reverse through OCI). Of these amounts, approximately $3,098 million as at
December 31, 2023 has no expiration date ($3,519 million as at December 31, 2022) and approximately $151
million relates to the Corporation’s operations in U.K. where a minimum income tax is payable on 50% of taxable
income ($136 million as at December 31, 2022), $137 million relates to the Corporation’s operations in Germany
where a minimum income tax is payable on 40% of taxable income ($131 million as at December 31, 2022) and
$9 million relates to the Corporation’s operations in France where a minimum income tax is payable on 50% of
taxable income ($7 million as at December 31, 2022).
In addition, the Corporation has $1,072 million of unused investment tax credits which has not been recognized,
most of which can be carried forward for 20 years and $1,047 million of net capital losses carried forward for
which deferred tax assets have not been recognized ($1,076 million and $1,115 million as at December 31, 2022).
Net capital losses can be carried forward indefinitely and can only be used against future taxable capital gains.
Net deferred tax assets of $359 million were recognized as at December 31, 2023 ($356 million as at
December 31, 2022) in jurisdictions that incurred losses this fiscal year or the preceding fiscal year. Based upon
the level of historical income, projections for future income, and prudent tax planning strategies, management
believes it is probable the Corporation will realize the benefits of these deductible differences and operating tax
losses carried forward. See Note 3 – Use of estimates and judgment for more information on how the Corporation
determines the extent to which deferred income tax assets are recognized.
No deferred tax liabilities have been recognized on undistributed earnings of the Corporation’s foreign
subsidiaries, joint ventures and associates when they are considered to be indefinitely reinvested, as the
Corporation has control or joint control over the dividend policy, unless it is probable that these temporary
differences will reverse. Upon distribution of these earnings in the form of dividends or otherwise, the Corporation
may be subject to corporation and/or withholding taxes. Taxable temporary differences for which a deferred tax
BOMBARDIER INC. / 2023 FINANCIAL REPORT 123
liability was not recognized amount to approximately $10 million as at December 31, 2023 and as at December
31, 2022.
International Tax Reform - Pillar two model rules
In May 2023, the IASB amended IAS 12, Income taxes, for the International tax reform - Pillar two Model Rules.
The amendments to IAS 12 have been introduced in response to the Organization for Economic Co-operation and
Development’s BEPS Pillar Two rules and include a mandatory temporary exception to the recognition and
disclosure of deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules and
disclosure requirements for affected entities. The mandatory temporary exception and disclosure requirements
apply immediately for annual reporting periods beginning on or after January 1, 2023, which have been adopted
by the Corporation as at December 31, 2023. The adoption of this amendment, the enactment of the Pillar Two
legislation in the UK and the proposed Pillar Two legislation in certain jurisdictions the Corporation operates in is
not expected to have a significant impact on the consolidated financial statements of the Corporation.
10. EARNINGS PER SHARE
Basic and diluted EPS were computed as follows, for fiscal years:
(Number of shares, stock options, PSUs, DSUs, RSUs and warrants in thousands)
Net income (loss)
Continuing operations
Discontinued operations(1)
Preferred share dividends, including taxes
Net income (loss) attributable to common equity holders of Bombardier Inc.
Weighted-average number of common shares outstanding
Net effect of stock options, PSUs, DSUs, RSUs and warrants
Weighted-average diluted number of common shares
EPS (in dollars)
Continuing operations - basic
Continuing operations - diluted
Discontinued operations - basic(1)
Discontinued operations - diluted(1)
Total basic
Total diluted
2023
2022
$
$
$
$
$
$
$
$
490
(45)
(31)
414
95,531
2,190
97,721
4.81
4.70
(0.47)
(0.46)
4.34
4.24
$
$
$
$
$
$
$
$
(128)
(20)
(29)
(177)
94,496
—
94,496
(1.67)
(1.67)
(0.21)
(0.21)
(1.88)
(1.88)
(1) Discontinued operations are related to the sale of the Transportation business. The expenses recorded in discontinued operations for fiscal
years 2023 and 2022 principally relate to change in estimates of a provision for professional fees.
The effect of the exercise of stock options, PSUs, DSUs, RSUs and warrants was included in the calculation of
diluted EPS in the above table, except for 2,668,784 for fiscal year 2023 (12,056,358 for fiscal year 2022) since
the average market value of the underlying shares was lower than the exercise price, or because the
predetermined target market price thresholds of the Corporation’s Class B Shares (subordinate voting) or
predetermined financial performance targets had not been met or the effect of the exercise would be antidilutive.
124 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
11.
FINANCIAL INSTRUMENTS
Net gains (losses) on financial instruments recognized in income were as follows, for fiscal years:
Financial instruments measured at amortized cost
Financial assets - expected credit loss allowance (impairment charges)
Interest on cash and cash equivalents
Financial instruments measured at fair value
Required to be classified as FVTP&L
Embedded derivatives and other
2023
2022
$
$
(5)
35
$
$
(5)
18
$
160
$
(228)
Carrying amounts and fair value of financial instruments
The classification of financial instruments and their carrying amounts and fair value were as follows, as at:
December 31, 2023
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Long-term debt
Other financial liabilities
December 31, 2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Long-term debt
Other financial liabilities
FVTP&L
FVTP&L Designated
FVOCI(1)
Amortized
cost
Total
carrying
DDHR
value Fair value
$
$
$
$
$
$
$
$
—
—
575
575
—
—
1
1
—
—
606
606
—
—
1
1
$
$
$
$
$
$
$
$
—
—
—
—
—
—
359
359
—
—
—
—
—
—
547
547
$
$
$
$
—
—
109
109
n/a
n/a
n/a
n/a
—
—
235
235
n/a
n/a
n/a
n/a
$ 1,594
258
112
$ 1,964
$ 1,820
5,607
753
$ 8,180
$ —
—
58
58
$
$ —
—
7
7
$
$ 1,594
258
854
$ 2,706
$ 1,820
5,607
1,120
$ 8,547
$ 1,291
252
522
$ 2,065
$ 1,286
5,980
917
$ 8,183
$ —
—
8
8
$
$ —
—
87
87
$
$ 1,291
252
1,371
$ 2,914
$ 1,286
5,980
1,552
$ 8,818
$ 1,594
258
854
$ 2,706
$ 1,820
5,746
1,129
$ 8,695
$ 1,291
252
1,371
$ 2,914
$ 1,286
5,875
1,558
$ 8,719
(1) Includes investments in equity instruments designated at FVOCI.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 125
Offsetting financial assets and financial liabilities
The Corporation is subject to enforceable master netting agreements related mainly to its derivative financial
instruments and cash and cash equivalents which contain a right of set-off in case of default, insolvency or
bankruptcy. The amounts that are subject to the enforceable master netting agreements, but which do not meet
some or all of the offsetting criteria, are as follows as at:
Amount
recognized in the
financial
statements
Amounts subject
to master netting
agreements
Net amount not
subject to master
netting
agreements
Description of recognized financial assets
and liabilities
December 31, 2023
Derivative financial instruments - assets
Derivative financial instruments - liabilities
Cash and cash equivalents
December 31, 2022
Derivative financial instruments - assets
Derivative financial instruments - liabilities
Cash and cash equivalents
$
$
$
$
$
$
Derivatives and hedging activities
The carrying amounts of all derivative were as follows, as at:
274
(8)
1,594
69
(88)
1,291
$
$
$
$
$
$
(8)
8
—
(13)
43
(30)
$
$
$
$
$
$
266
—
1,594
56
(45)
1,261
December 31, 2023
Liabilities
Assets
December 31, 2022
Liabilities
Assets
Derivative financial instruments designated as cash flow
hedges(1)
Forward foreign exchange contracts
Derivative financial instruments classified as FVTP&L(2)
Forward foreign exchange contracts
Embedded derivative financial instruments
Call options on long-term debt
Total derivative financial instruments
$
$
58
$
12
204
216
274
$
7
1
—
1
8
$
$
8
5
56
61
69
$
$
87
1
—
1
88
(1) The maximum length of time of derivative financial instruments hedging the Corporation’s exposure to the variability in future cash flows for
anticipated transactions is 24 months as at December 31, 2023.
(2) Held as economic hedges, except for embedded derivative financial instruments.
The methods and assumptions used to measure the fair value of financial instruments are described in Note 33 –
Fair value of financial instruments.
126 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
12. CASH AND CASH EQUIVALENTS
Cash and cash equivalents were as follows, as at:
Cash
Cash equivalents
Money market funds
Term deposits
Cash and cash equivalents
13.
TRADE AND OTHER RECEIVABLES
Trade and other receivables were as follows, as at:
December 31, 2023
264
$
December 31, 2022
693
$
1,319
11
1,594
$
598
—
1,291
$
Total
Not past
due
Past due but not impaired
more than
less than
90 days
90 days
Impaired (2)
December 31, 2023(1)
Trade receivables, gross
Allowance for doubtful accounts
$
Other
Total
December 31, 2022(1)
Trade receivables, gross
Allowance for doubtful accounts
Other
Total
$
$
$
$
$
$
$
256
(5)
251
7
258
257
(12)
245
7
252
183
—
183
190
—
190
$
$
$
$
51
—
51
43
—
43
$
$
$
$
5
—
5
9
—
9
$
$
$
$
17
(5)
12
15
(12)
3
(1) Of which $21 million and $13 million are denominated in Euros and other foreign currencies, respectively, as at December 31, 2023
($14 million and $18 million, respectively, as at December 31, 2022).
(2) Of which a gross amount of $2 million of trade receivables are individually impaired as at December 31, 2023 ($10 million as at
December 31, 2022).
The factors that the Corporation considers to classify trade receivables as impaired are as follows: the customer
is in bankruptcy or under administration, payments are in dispute, or payments are in arrears. Further information
on financial risk is provided in Note 32 – Financial risk management.
Allowance for doubtful accounts – Changes in the allowance for doubtful accounts were as follows, for fiscal
years:
Balance at beginning of year
Provision for doubtful accounts
Amounts written-off
Recoveries
Balance at end of year
2023
(12)
(5)
10
2
(5)
$
$
2022
(22)
(5)
6
9
(12)
$
$
BOMBARDIER INC. / 2023 FINANCIAL REPORT 127
14. CONTRACT BALANCES
Contract assets represent cost incurred and recorded margins on service contracts in the amount of $84 million
and $67 million as at December 31, 2023 and December 31, 2022, respectively.
Contract liabilities were as follows, as at:
Advances on aerospace programs
Long-term service contracts deferred revenues
Other deferred revenues
Of which current
Of which non-current
Revenues recognized were as follows, for fiscal years:
Revenue recognized from:
Contract liability balance at the beginning of the year
Advances on aerospace programs
15.
INVENTORIES
Inventories were as follows, as at:
Aerospace programs
Finished products
$
December 31, 2023
4,225
277
162
4,664
3,455
1,209
4,664
$
$
$
December 31, 2022
4,306
$
265
163
4,734
3,290
1,444
4,734
$
$
$
2023
2022
$
$
3,138
3,138
$
$
2,467
2,467
$
December 31, 2023
3,159
609
3,768
$
December 31, 2022
2,826
$
496
3,322
$
The amount of inventories recognized as cost of sales totaled $5,644 million for fiscal year 2023 ($4,898 million
for fiscal year 2022). This amount includes $41 million of write-downs for fiscal year 2023 ($27 million for fiscal
year 2022) and $1 million of reversal of write-downs for fiscal year 2023 ($7 million for fiscal year 2022).
16. BACKLOG
The following table presents the aggregate amount of the revenues expected to be realized in the future from
partially or fully unsatisfied performance obligations as we perform under contracts at delivery or recognized over
time. The amounts disclosed below represent the value of firm orders only. Such orders may be subject to future
modifications that might impact the amount and/or timing of revenue recognition. The amounts disclosed below do
not include unexercised options or letters of intent.
Revenues from continuing operations expected to be recognized in:
(In billions of $)
Less than 24 months
Thereafter
Total
$
December 31, 2023
10.0
4.2
14.2
$
December 31, 2022
10.5
$
4.3
14.8
$
128 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
17. OTHER FINANCIAL ASSETS
Other financial assets were as follows, as at:
Receivable from ACLP(1)
Derivative financial instruments(2)
Investments in securities(3)
Restricted cash(4)
Receivable from MHI(5)
Investments in financing structures(6)
Other
Of which current
Of which non-current
$
December 31, 2023
359
274
109
77
29
—
6
854
97
757
854
$
$
$
$
December 31, 2022
341
69
235
478
26
204
18
1,371
472
899
1,371
$
$
$
(1) This receivable from ACLP represents a back-to-back agreement that the Corporation has with ACLP related to certain government
refundable advances. See Note 24 – Other financial liabilities for more information.
(2) See Note 11 – Financial instruments.
(3) Includes nil of equity instruments designated at FVOCI as at December 31, 2023 ($38 million as at December 31, 2022).
(4) Includes cash collateral supporting various bank guarantees. In January 2023, the bank guarantees issued in connection with the sale of
Transportation to Alstom expired without being drawn and the restricted cash collateralized against these guarantees was released to the
Corporation.
(5) This receivable represents a back-to-back agreement that the Corporation has with MHI on credit and residual value guarantees payable of
$29 million as at December 31, 2023 ($26 million as at December 31, 2022). See Note 24 – Other financial liabilities for more information.
(6) Following the sale of the CRJ business, the Corporation had previously retained a portion of these other financial assets and had a back-to-
back agreement with MHI. In fiscal year 2023, the Corporation has transferred the legal title of these assets and MHI has assumed the
related liabilities. See Note 24 – Other financial liabilities for more information.
18. OTHER ASSETS
Other assets were as follows, as at:
Prepaid expenses
Retirement benefits(1)
Sales tax and other taxes
Intangible assets other than aerospace program tooling(2)
Prepaid sales concessions and deferred contract costs
Other(3)
Of which current
Of which non-current
$
December 31, 2023
175
143
87
78
8
13
504
133
371
504
$
$
$
$
December 31, 2022
131
180
90
75
15
62
553
181
372
553
$
$
$
(1) See Note 21 – Retirement benefits.
(2) See Note 20 – Intangible assets.
(3) Includes $2 million of receivable from MHI that represents a back-to-back agreement that the Corporation has with MHI on credit and
residual value guarantees provisions as at December 31, 2023 ($1 million as at December 31, 2022). See Note 23 – Provisions.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 129
19. PROPERTY, PLANT AND EQUIPMENT
PP&E were as follows, as at:
Land Buildings Equipment
Construction
in progress
Other
Total
Right-of-
use
assets
Total
Cost
Balance as at
December 31, 2022
Additions
Disposals
Transfers
Effect of foreign currency
exchange rate changes —
$ 18 $
—
—
(2)
809 $
586 $
—
(1)
392
—
81
(130)
96
—
392 $
240
—
(486)
32
—
1
9 $ 1,814 $
353
(131)
1
545 $ 2,359
381
(142)
—
28
(11)
(1)
—
—
—
1
1
Balance as at
December 31, 2023
$ 16 $
1,200 $
633 $
146 $
42 $ 2,037 $
562 $ 2,599
Accumulated amortization and impairment
Balance as at
December 31, 2022
$ — $
—
—
—
(495) $
(24)
1
(3)
Amortization
Disposals
Transfers
Balance as at
December 31, 2023
Net carrying value
$ — $
$ 16 $
(521) $
679 $
(492) $
(36)
8
5
(515) $
118 $
(8) $ (995) $
(4)
— $
—
—
—
—
(2)
(64)
9
—
(150) $ (1,145)
(95)
16
—
(31)
7
—
— $
146 $
(14) $ (1,050) $
28 $ 987 $
(174) $ (1,224)
388 $ 1,375
Cost
Balance as at
January 1, 2022
Land
Buildings
Equipment
Construction
in progress
Other
Total
Right-of-
use
assets
Total
$ 13 $
798 $
589 $
180 $
9 $ 1,589 $
345 $ 1,934
Additions
Disposals
Transfers
Effect of foreign currency
exchange rate changes —
5
—
—
Balance as at
5
(24)
30
—
165
(179)
11
—
—
247
—
—
(35) —
422
(203)
6
214
(7)
(6)
636
(210)
—
—
—
—
(1)
(1)
December 31, 2022
$ 18 $
809 $
586 $
392 $
9 $ 1,814 $
545 $ 2,359
Accumulated amortization and impairment
Balance as at
January 1, 2022
Amortization
Disposals
Transfers
Balance as at
—
—
—
$ — $
(486) $
(474) $
— $
(8) $
(968) $
(129) $ (1,097)
(19)
12
(2)
(35)
18
(1)
—
—
—
—
—
—
(54)
30
(3)
(28)
4
3
(82)
34
—
December 31, 2022
Net carrying value
$ — $
$ 18 $
(495) $
314 $
(492) $
94 $
— $
392 $
(8) $
(995) $
1 $ 819 $
(150) $ (1,145)
395 $ 1,214
The net carrying value of right-of-use assets was as follows, as at:
Buildings
Land
Equipment
$
December 31, 2023 December 31, 2022
342
53
—
395
329
50
9
388
$
$
$
130 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Amortization expense and impairment of right-of-use assets were as follows, for fiscal years:
Buildings
Land
$
$
2023
26
5
31
$
$
2022
25
3
28
The expense related to short-term leases and low value leases amounted to $4 million for fiscal year 2023
($3 million for fiscal year 2022).
20.
INTANGIBLE ASSETS
Intangible assets were as follows, as at:
Aerospace program tooling
Other (1)(2)
Total
Cost
Balance as at December 31, 2022
Additions
Acquired
Internally
generated
Total
$ 1,632 $ 5,461 $ 7,093 $
11
85
96
Balance as at December 31, 2023
$ 1,643 $ 5,546 $ 7,189 $
Accumulated amortization and impairment
Balance as at December 31, 2022
$
(803) $ (2,417) $ (3,220) $
Amortization
Impairment
Balance as at December 31, 2023
Net carrying value
(77)
—
(253)
(73)
(330)
(73)
$
$
(880) $ (2,743) $ (3,623) $
763 $ 2,803 $ 3,566 $
262
9
271
(187)
(6)
—
(193)
78
$ 7,355
105
$ 7,460
$ (3,407)
(336)
(73)
$ (3,816)
$ 3,644
Aerospace program tooling
Other (1)(2)
Total
Acquired
Internally
generated
Total
Cost
Balance as at January 1, 2022
$ 1,762 $ 7,914 $ 9,676 $
Additions
Disposals
Effect of foreign currency exchange rate changes
—
(130)
—
73
(2,526)
—
73
(2,656)
—
Balance as at December 31, 2022
$ 1,632 $ 5,461 $ 7,093 $
Accumulated amortization and impairment
Balance as at January 1, 2022
$
(854) $ (4,693) $ (5,547) $
Amortization
Impairment
Disposals
Balance as at December 31, 2022
Net carrying value
$
$
(250)
—
2,526
(79)
—
130
(803) $ (2,417) $ (3,220) $
829 $ 3,044 $ 3,873 $
(329)
—
2,656
316
11
(64)
(1)
262
(244)
(4)
(3)
64
(187)
75
$ 9,992
84
(2,720)
(1)
$ 7,355
$ (5,791)
(333)
(3)
2,720
$ (3,407)
$ 3,948
(1) Presented in Note 18 – Other assets.
(2) Includes internally generated intangible assets with a cost and accumulated amortization of $180 million and $135 million, respectively, as at
December 31, 2023 ($180 million and $130 million, respectively, as at December 31, 2022).
BOMBARDIER INC. / 2023 FINANCIAL REPORT 131
21. RETIREMENT BENEFITS
The Corporation sponsors several funded and unfunded defined benefit pension plans as well as defined
contribution pension plans in Canada, U.S., and abroad, covering a majority of its employees. The Corporation
also provides other unfunded defined benefit plans, covering certain groups of employees mainly in Canada and
the U.S.
Pension plans are categorized as defined benefit (“DB”) or defined contribution (“DC”). DB plans specify the
amount of benefits an employee is to receive at retirement, while DC plans specify how contributions are
determined. As a result, there is no deficit or surplus for DC plans. Hybrid plans are a combination of DB and DC
plans.
Funded plans are plans for which segregated plan assets are invested in a trust. Unfunded plans are plans for
which there are no segregated plan assets, as the establishment of segregated plan assets is generally not
permitted or not in line with local practice.
FUNDED DB PLANS
The Corporation’s major DB plans reside in Canada and the U.S., therefore very significant portions of the DB
pension plan assets and benefit obligation are located in those countries. The following text focuses mainly on
plans registered in these two countries.
Governance
Under applicable pension legislation, the administrator of each plan is either the Corporation, in the case of U.S.
plans and Canadian plans registered outside of Québec, or a pension committee in the case of plans registered in
Québec.
Plan administrators are responsible for the management of plan assets and the establishment of investment
policies, which define, for each plan, investment objectives, target asset allocation, risk mitigation strategies, and
other elements required by pension legislation.
With respect to the plans registered in Québec, the pension committees have delegated the management of plan
assets to the Corporation. The Corporation has selected an outsourced investment management firm (the “OCIO
Provider”) for the management of the assets for each plan.
Assets of each plan are invested in common investment funds (the “CIF”) offered by the OCIO Provider. The CIF
are unitized multi-manager funds organized by asset class. This allows each plan to have its own target asset
allocation as determined by the plan administrators.
Daily administration of the plans is delegated to external pension administration service providers. The plan
administrators and the Corporation also rely on the expertise of external legal advisors, actuaries, and investment
consultants.
Benefit Policy
DB plan benefits are usually based on salary and years of service. In Canada and the U.S., since
September 1, 2013, all new non-unionized employees join DC plans (i.e. they no longer have the option of joining
DB or hybrid plans). Employees who are members of a DB or hybrid plan closed to new members continue to
accrue service in their original plan.
132 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Funding requirements
Actuarial valuations are conducted by independent firms hired by the Corporation or the administrators, as
required by pension legislation. The purpose of the valuations is to determine the plans’ financial position and the
annual contributions to be made by the Corporation to fund both benefits accruing in the year (normal cost) and
deficits accumulated over prior years. Minimum funding requirements are set out by applicable pension
legislation.
Pension plans in Canada are notably governed under the Supplemental Pension Plans Act in Québec, the
Pension Benefits Act in Ontario and the Income Tax Act in Canada. Actuarial valuations are required at least every
three years. Depending on the jurisdiction and the funded status of the plan, actuarial valuations may be required
annually. Contributions are determined by the appointed actuary and cover future service costs and deficits, as
prescribed by laws and actuarial practices.
For Québec pension plans, minimum contributions are required to amortize the going-concern deficits
(established under the assumption that the plan will continue to be in force) over a period up to 10 years. Funding
is based on going-concern valuation, including a stabilization provision. This provision is funded by special
amortization and current service contributions, and by actuarial gains.
For Ontario pension plans, minimum contributions are required to amortize the going-concern deficits (established
under the assumption that the plan will continue to be in force) over a period up to 10 years. Solvency deficiencies
up to 85% of solvency liabilities are required to be funded over a period of 5 years. An explicit margin called a
provision for adverse deviations is added to both the going concern liabilities and future service cost when
determining minimum contributions.
Pension plans in the U.S. are mainly governed under the Employee Retirement Income Security Act, the Internal
Revenue Code, the Pension Protection Act of 2006 and subsequent legislation including the American Rescue
Plan Act, which was passed in 2021. Actuarial valuations are required annually. Contributions are determined by
appointed actuaries and cover future service costs and deficits, as prescribed by law. Funding deficits are
generally amortized over a period of 15 years (funding deficits were amortized over 7 years before the American
Rescue Plan Act).
Investment Policy and de-risking strategies
The investment policies are established to achieve a long-term investment return so that, in conjunction with
contributions, the plans have sufficient assets to pay for the promised benefits while maintaining a level of risk that
is acceptable given the tolerance of plan stakeholders. See below for more information about risk management
initiatives.
The target asset allocation is determined based on expected economic and market conditions, the maturity profile
of the plans’ liabilities, the funded status of the respective plans and the plan stakeholders’ tolerance to risk.
The plans’ investment strategy is to invest broadly in fixed income and equity securities and to have a smaller
portion of the funds’ assets invested in real return asset securities (global infrastructure and real estate listed
securities).
As at December 31, 2023, the asset allocation was as follows:
- Canadian plans: 52% in fixed income securities, 41% in equity securities and cash, and 7% in real
return assets securities; and
- U.S. plans: 31% in fixed income securities, 56% in equity securities and cash, 3% in real return
assets securities and 10% in others which include derivatives and private assets.
In addition, a customized liability driven investment strategy (the “LDI strategy”) has been implemented for the
U.S. plans to reduce the sensitivity of the plan financial position to variation of interest rates.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 133
The plan administrators have also established dynamic risk management strategies. As a result, asset allocation
will likely become more conservative in the future as plan funding status and market conditions continue to
improve and the plans become more mature. Under certain pension legislation, and subject to compliance with
certain conditions, the buy-out of annuities with insurance companies would discharge the Corporation and
administrators of their respective obligations. Accordingly, in 2018, 2019 and 2023, annuities were purchased for
some pensioners, beneficiaries and deferred vested members of the Bombardier pension plans registered in
Ontario. In 2022, annuities were purchased for some pensioners, beneficiaries and alternate payees of the
Bombardier pension plan registered in the U.S. The buy-out of annuities payable to pensioners of other pension
plans will be contemplated in the coming years when these plans become fully funded on a buy-out basis.
Risk management initiatives
The Corporation’s pension plans are exposed to various risks, including equity, interest rate, inflation, foreign
exchange, liquidity and longevity risks. Several risk management strategies and policies have been put in place to
mitigate the impact these risks could have on the funded status of DB plans and on the future level of
contributions by the Corporation. The following is a description of key risks together with the mitigation measures
in place to address them.
Equity risk
Equity risk results from fluctuations in equity prices. This risk is managed by maintaining diversification of
portfolios across geographies, industry sectors and investment strategies.
Interest rate risk
Interest rate risk results from fluctuations in the fair value of plan assets and liabilities due to movements in
interest rates. This risk is managed by reducing the mismatch between the duration of plan assets and the
duration of pension obligation. This is accomplished by having a portion of the portfolio invested in long-term fixed
income securities and by implementing LDI strategies.
Inflation risk
Inflation risk is the risk that benefits indexed to inflation increase as a result of changes in inflation rates. To
manage this risk, the benefit indexation has been capped in certain plans and a portion of plan assets has been
invested in real return asset securities.
Foreign exchange risk
Currency risk exposure arises from fluctuations in the fair value of plan assets denominated in a currency other
than the currency of the plan liabilities. Currency risk is managed with foreign currency hedging strategies as per
plan investment policies.
Liquidity risk
Liquidity risk stems from holding assets which cannot be readily converted to cash when needed for the payment
of benefits or to rebalance the portfolios. Liquidity risk is managed through investments in treasury bills,
government bonds and equity futures and by limiting investments in private placements or hedge funds.
Longevity risk
Longevity risk is the risk that increasing life expectancy results in longer-than-expected benefit payments. This
risk is mitigated by using the most recent mortality and mortality improvement tables to set the level of
contributions. The buy-out of annuities with insurance companies transfers all of the risks listed above to insurers
for the annuities purchased.
UNFUNDED DB PLANS
Unfunded plans are located in countries where the establishment of funds for segregated plan assets is generally
not permitted or not in line with local practice.
134 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
DC PLANS
A growing proportion of employees are participating in DC plans. The largest DC plans are located in Canada and
in the U.S. The plan administrators and the investment committee oversee the management of DC plan assets.
OTHER PLANS
The Corporation also provides other unfunded defined benefit plans, consisting essentially of post-retirement
healthcare coverage, life insurance benefits and retirement allowances. The Corporation provides post-retirement
life insurance and post-retirement health care, with provisions that vary between groups of employees in Canada
and in the U.S. New non-unionized hires are generally no longer offered post-retirement health care.
RETIREMENT BENEFITS PLANS
The following table provides the components of the retirement benefit cost, for fiscal years:
Current service cost
Accretion expense
Past service costs
Settlement(1)
DB plans
DC plans
Total retirement benefit cost
Related to
Funded DB plans
Unfunded DB plans
DC plans
Recorded as follows
EBIT expense or capitalized cost
Financing expense
Pension
benefits
56
$
18
2
3
79
39
118
$
$
$
$
$
$
71
8
39
100
18
Other
benefits
2
7
—
—
9
—
9
$
$
n/a
9
n/a
2
7
$
$
$
2023
Total
Pension
benefits
82
25
7
—
114
28
142
58 $
25
2
3
88
39
127 $
71 $
17 $
39 $
110
4
28
102 $
25 $
117
25
$
$
$
$
$
$
$
Other
benefits
3
6
—
—
9
—
9
n/a
9
n/a
3
6
$
$
$
$
$
$
$
$
$
$
$
$
2022
Total
85
31
7
—
123
28
151
110
13
28
120
31
(1) Includes the loss related to the purchase of pension annuities presented in Note 6 - Other expense (income). Represents the non-cash loss
on the settlement of defined benefit pension plans resulting from the purchase of annuities with insurance companies.
Changes in the cumulative amount of remeasurements gains (losses) of defined benefit plans recognized in OCI,
and presented as a separate component of deficit, were as follows, for fiscal years:
Gains (losses)
Balance as at January 1, 2022
Actuarial gains, net
Effect of exchange rate changes
Income taxes
Balance as at December 31, 2022
Actuarial losses, net
Effect of exchange rate changes
Income taxes
Balance as at December 31, 2023
$
$
(2,557)
540
25
—
(1,992)
(217)
(10)
—
(2,219)
BOMBARDIER INC. / 2023 FINANCIAL REPORT 135
The following tables present the changes in the defined benefit obligation and fair value of pension plan assets,
for fiscal years:
Pension
benefits
Other
benefits
2023
Total
Pension
benefits
Other
benefits
2022
Total
Change in benefit obligation
Obligation at beginning of year
Accretion
Current service cost
Plan participants’ contributions
Past service cost
Actuarial (gains) losses - changes in
financial assumptions
Actuarial (gains) losses - changes in
experience adjustments
Actuarial (gains) losses - changes in
demographic assumptions
Benefits paid
Settlement
Other
Effect of exchange rate changes
Obligation at end of year
Obligation is attributable to
Active members
Deferred members
Retirees
Change in plan assets
Fair value at beginning of year
Employer contributions
Plan participants’ contributions
Interest income on plan assets
Actuarial gains (losses)
Benefits paid
Settlement
Administration costs
Other
Effect of exchange rate changes
Fair value at end of year
$ 3,656
196
56
12
2
311
43
—
(192)
(207) (1)
(1)
76
$ 3,952
$ 1,789
348
1,815
$ 3,952
$ 3,379
71
12
178
151
(192)
(210) (1)
(9)
(1)
71
$ 3,450
$
$
$
$
$
$
141
7
2
—
—
14
—
—
(10)
—
—
4
158
59
—
99
158
—
10
—
—
—
(10)
—
—
—
—
—
$
$ 3,797
203
58
12
2
$ 5,189
165
82
11
7
201
6
3
—
—
$ 5,390
171
85
11
7
(1,360)
(48)
(1,408)
325
43
5
—
(202)
(207)
(1)
80
$ 4,110
10
(200)
(35)
—
(218)
$ 3,656
$ 1,848
348
1,914
$ 4,110
$ 1,571
357
1,728
$ 3,656
$ 3,379
81
12
178
151
(202)
(210)
(9)
(1)
71
$ 3,450
$ 4,442
83
11
140
(852)
(200)
(35)
(10)
—
(200)
$ 3,379
$
$
$
$
$
1
—
(13)
—
—
(9)
141
56
—
85
141
—
13
—
—
—
(13)
—
—
—
—
—
6
10
(213)
(35)
—
(227)
$ 3,797
$ 1,627
357
1,813
$ 3,797
$ 4,442
96
11
140
(852)
(213)
(35)
(10)
—
(200)
$ 3,379
(1) Includes the loss related to the purchase of pension annuities presented in Note 6 - Other expense (income). Represents the non-cash loss
on the settlement of defined benefit pension plans resulting from the purchase of annuities with insurance companies.
The following table presents the reconciliation of plan assets and obligations to the amount recognized in the
consolidated statements of financial position, as at:
Present value of defined benefit obligation
Fair value of plan assets
Net amount recognized
Amounts included in:
Retirement benefit
Liability
Asset(1)
Net liability
(1) Presented in Note 18 – Other assets.
$
$
$
$
December 31, 2023
Other
benefits
158
—
158
Pension
benefits
3,952
(3,450)
502
$
$
645
(143)
502
$
$
158
—
158
December 31, 2022
Other
benefits
141
—
141
Pension
benefits
3,656
(3,379)
277
$
$
457
(180)
277
$
$
141
—
141
$
$
$
$
136 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
The following table presents the allocation of the net retirement benefit liability by major countries, as at:
Funded pension plans
Canada
U.S.
Unfunded pension plans
Canada
U.S.
Germany
Other
Net liability
December 31, 2023
Other
benefits
Pension
benefits
December 31, 2022
Other
benefits
Pension
benefits
$
$
234
185
419
20
26
28
9
83
502
$
$
—
—
—
154
4
—
—
158
158
$
$
52
153
205
19
25
24
4
72
277
$
$
—
—
—
136
5
—
—
141
141
The following table presents the allocation of benefit obligation and plan assets by major countries, as at:
Funded pension plans
Canada
U.S.
Unfunded pension plans
December 31, 2023
Plan
assets
Benefit
obligation
December 31, 2022
Benefit
obligation
Plan
assets
$
$
3,234
635
3,869
241
4,110
$
$
3,000
450
3,450
—
3,450
$
$
3,008
576
3,584
213
3,797
$
$
2,956
423
3,379
—
3,379
BOMBARDIER INC. / 2023 FINANCIAL REPORT 137
The fair value of plan assets by level of hierarchy was as follows, as at:
Cash and cash equivalents
Equity Funds
Canada
U.S.
Fixed-income Funds and securities
Canada
U.S.
Real return assets equity Funds
Canada
U.S.
Private Investment
Other
Cash and cash equivalents
Equity Funds
Canada
U.S.
Fixed-income Funds
Canada
U.S.
Real return assets equity Funds
Canada
U.S.
Other
Total
72
Level 1
—
$
$
$
1,091
189
1,280
1,516
137
1,653
193
14
207
11
227
3,450
Total
197
949
176
1,125
1,514
133
1,647
208
14
222
188
3,379
—
—
—
—
—
—
—
—
—
—
—
—
Level 1
—
—
—
—
—
—
—
—
—
—
—
—
$
$
$
$
$
$
$
$
$
December 31, 2023
Level 3
—
Level 2
72
$
1,091
189
1,280
1,516
137
1,653
193
14
207
—
227
3,439
$
—
—
—
—
—
—
—
—
—
11
—
11
December 31, 2022
Level 3
—
Level 2
197
$
949
176
1,125
1,514
133
1,647
208
14
222
188
3,379
$
—
—
—
—
—
—
—
—
—
—
—
Plan assets did not include any of the Corporation’s shares, nor any property occupied by the Corporation or other
assets used by the Corporation as at December 31, 2023, and December 31, 2022.
The following table presents the contributions made for fiscal years 2023 and 2022 as well as the estimated
contributions for fiscal year 2024:
Contributions to:
Funded pension plans
Unfunded pension plans
Other benefits
Total defined benefits plans
DC pension plans
Total contributions
2024
Estimated
2023
2022
$
$
111
3
10
124
39
163
$
$
67
4
10
81
39
120
$
$
80
3
13
96
28
124
138 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
The following table presents information about the maturity profile of the defined benefit obligation expected to be
paid, as at:
Benefits expected to be paid
Within 1 year
Between 1 and 5 years
Between 5 and 10 years
Between 10 and 15 years
Between 15 and 20 years
December 31, 2023
$
$
190
833
1,251
1,450
1,543
5,267
The following table provides the weighted-average duration of the defined benefit obligation related to pension
plans, as at:
Duration in years
Funded pension plans
Canada
U.S.
Unfunded pension plans
Germany
Mexico
U.S.
Canada
December 31, 2023
14.1
12.2
21.0
12.9
12.3
11.1
The following table provides the expected payments to be made under the unfunded plans, as at
December 31, 2023:
Benefits expected to be paid
Within 1 year
Between 1 and 5 years
Between 5 and 10 years
Between 10 and 15 years
Between 15 and 20 years
Canada
Other
Total
$
$
8
37
54
56
54
209
$
$
3
13
20
27
39
102
$
$
11
50
74
83
93
311
BOMBARDIER INC. / 2023 FINANCIAL REPORT 139
The significant actuarial assumptions reflect the economic situation of each country. The weighted-average
assumptions used to determine the benefit cost and obligation were as follows, as at:
(in percentage)
Benefit cost
Discount rate
Rate of compensation increase
Inflation rate
Ultimate health care cost trend rate
Benefit obligation
Discount rate
Rate of compensation increase
Inflation rate
Initial health care cost trend rate
Ultimate health care cost trend rate
December 31, 2023
Other
benefits
Pension
benefits
December 31, 2022
Other
benefits
Pension
benefits
5.31 %
3.10 %
2.13 %
n/a
4.68 %
3.09 %
2.13 %
n/a
n/a
5.30 %
3.00 %
n/a
5.02 %
4.61 %
3.00 %
n/a
5.09 %
5.03 %
3.14 %
3.04 %
2.08 %
n/a
5.31 %
3.10 %
2.13 %
n/a
n/a
3.19 %
3.00 %
n/a
5.03 %
5.30 %
3.00 %
n/a
5.12 %
5.02 %
The mortality tables and the average life expectancy in years of a member at age 45 or 65 is as follows, as at
December 31:
(in years)
Country
Canada
Mortality tables
2014 Private Sector Mortality Table ("CPM2014Priv")
projected generationally using CPM Improvement
Scale B ("CPM-B") with adjustment
U.S.
Pri-2012 mortality table projected generationally
using the MP-2021 improvement scale
Germany
Dr. K Heubeck 2018 G without any adjustment
Life expectancy over 65 for a male member currently
Aged 45 on December
2022
Aged 65 on December
2022
2023
2023
22.2
20.7
20.9
22.2
20.6
20.8
23.2
22.2
23.6
23.2
22.1
23.5
Life expectancy over 65 for a female member currently
Country
Canada
Mortality tables
2014 Private Sector Mortality Table ("CPM2014Priv")
projected generationally using CPM Improvement
Scale B ("CPM-B") with adjustment
U.S.
Pri-2012 mortality table projected generationally
using the MP-2021 improvement scale
Germany
Dr. K Heubeck 2018 G without any adjustment
Aged 65 on December
2022
2023
Aged 45 on December
2022
2023
24.6
22.7
24.3
24.5
22.6
24.2
25.5
24.1
26.5
25.5
24.0
26.4
A 0.25 percentage point increase in one of the following actuarial assumptions would have the following effects,
all other actuarial assumptions remaining unchanged, for the fiscal year 2023 and as at December 31, 2023:
Assumption
Discount rate
Rate of compensation increase
Rate of price inflation
Retirement benefit
cost
Net retirement
benefit liability
$
$
$
(11)
1
—
$
$
$
(137)
13
1
A one year additional life expectancy as at December 31, 2023 for all DB plans would increase the net retirement
benefit liability by $7 million and the retirement benefit cost by $100 million.
As at December 31, 2023, the health care cost trend rate for retirement benefits other than pension, which is a
weighted-average annual rate of increase in the per capita cost of covered health and dental care benefits, is
assumed to be 5.09% and to decrease progressively to 5.03% by calendar year 2031 and then remain at that
level for all participants.
140 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
A one percentage point change in assumed health care cost trend rates would have the following effects, for the
fiscal year 2023 and as at December 31, 2023:
One percentage point increase
One percentage point decrease
22.
TRADE AND OTHER PAYABLES
Trade and other payables were as follows, as at:
Trade payables
Accrued liabilities
Interest payable
Other
Retirement benefit
cost
1
(1)
$
$
Net retirement
benefit liability
10
(9)
$
$
December 31, 2023
1,554
$
37
88
141
1,820
$
$
December 31, 2022
1,040
38
88
120
1,286
$
BOMBARDIER INC. / 2023 FINANCIAL REPORT 141
23. PROVISIONS
Changes in provisions were as follows, for fiscal years 2023 and 2022:
Balance as at December 31, 2022
Additions
Utilization
Reversals
Accretion expense
Effect of changes in discount rates
Balance as at December 31, 2023
Of which current
Of which non-current
Balance as at January 1, 2022
Additions
Utilization
Reversals
Accretion expense
Effect of changes in discount rates
Balance as at December 31, 2022
Of which current
Of which non-current
$
Product
warranties
184
84
(41)
(89) (2)
1
1
140
66
74
140
$
$
$
$
Product
warranties
166
83
(35)
(29)
1
(2)
184
63
121
184
$
$
$
$
Credit and
residual
value
guarantees
1
$
2
—
(1)
—
—
2 (4) $
—
$
2
2
Onerous
contracts
36
2
(13)
(12) (2)(3)
1
—
14
2
12
14
$
$
$
$
Credit and
residual
value
guarantees
52
$
—
(1)
(50)
—
—
1 (4) $
1
$
—
1
Onerous
contracts
70
$
14
(37)
(12) (3)
1
—
36
7
29
36
$
$
$
$
Other (1)
13
3
(2)
(2)
—
—
12
10
2
12
Other (1)
42
5
(9)
(25) (2)
—
—
13
11
2
13
$
$
$
$
$
$
$
$
Total
234
91
(56)
(104)
2
1
168
78
90
168
Total
330
102
(82)
(116)
2
(2)
234
82
152
234
$
$
$
$
$
$
$
$
(1) Mainly comprised of claims and litigation.
(2) Includes changes in divestitures provisions.
(3) Includes reversal of Learjet 85 aircraft program cancellation provisions.
(4) Following the sale of the CRJ business, the Corporation retains those provisions and has a back-to-back agreement with MHI. See
Note 18 – Other assets.
142 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
24. OTHER FINANCIAL LIABILITIES
Other financial liabilities were as follows, as at:
Government refundable advances(1)
Lease liabilities
Credit and residual value guarantees payable(2)
Derivative financial instruments(3)
Vendor non-recurring costs
Liabilities related to RASPRO assets(4)
Other(5)
Of which current
Of which non-current
December 31, 2023
520
$
448
48
8
3
—
93
1,120
148
972
1,120
$
$
$
$
December 31, 2022
507
448
164
88
20
206
119
1,552
345
1,207
1,552
$
$
$
(1) Of which $359 million has a back-to-back agreement with ACLP as at December 31, 2023 ($341 million as at December 31, 2022). Refer to
Note 17 – Other financial assets for the receivable from ACLP. The Corporation is required to pay amounts to governments based on the
number of deliveries of aircraft.
(2) Of which $29 million has a back-to-back agreement with MHI as at December 31, 2023 ($26 million as at December 31, 2022). Refer to
Note 17 – Other financial assets for more information.
(3) See Note 11 – Financial instruments.
(4) The Corporation had previously retained the regional aircraft securitization program assets (RASPRO) for which the Corporation transferred
the net beneficial interest through a back-to-back agreement with MHI. In fiscal year 2023, the Corporation has transferred the legal title of
RASPRO assets and MHI has assumed the related liabilities. Refer to Note 17 – Other financial assets.
(5) Mainly represent liabilities related to various divestitures.
The Corporation has entered into leases for which the asset is still under construction, and therefore the right-of-
use assets and the lease liabilities related to these leases are not recorded as at December 31, 2023, since the
lease has not yet commenced. The Corporation’s undiscounted lease commitments were as follows, as at:
Less than 1 year
From 1 to 3 years
Thereafter
25. OTHER LIABILITIES
Other liabilities were as follows, as at:
Employee benefits(1)
Supplier contributions to aerospace programs
Sales incentive and customer credit notes
Income taxes payable
Other
Of which current
Of which non-current
December 31, 2023
287
$
198
72
36
87
680
437
243
680
$
$
$
December 31, 2023
—
$
1
53
54
$
$
December 31, 2022
281
228
73
32
88
702
434
268
702
$
$
$
(1) Comprises all employee benefits excluding those related to retirement benefits, which are reported in the line items Retirement benefits and
in Other assets, refer to Note 21 – Retirement benefits.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 143
26.
LONG-TERM DEBT
Long-term debt was as follows, as at:
Senior Notes
Debentures
Other
Of which current
Of which non-current
Amount in
currency of
origin
Currency
Contractual
interest rate
(1)
December 31
2023
December 31
2022
Maturity
Amount
Amount
1,001
1,733
750
750
750
510
396
1,139
150
18
USD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
7.13 % (2)
7.88 % (2)
6.00 %
7.50 %
8.75 %
7.45 %
7.50 % (2)
7.50 % (2)
7.35 %
Jun. 2026 $
Apr. 2027
Feb. 2028
Feb. 2029
Nov. 2030
May 2034
n/a
n/a
Dec. 2026
7.95 %
Apr. 2026
996 $
1,724
744
748
757
507
—
—
113
18
1,191
1,880
743
—
—
507
395
1,136
110
18
$
$
$
5,607 $
5,980
— $
5,607
5,607 $
—
5,980
5,980
(1) Interest on long-term debt as at December 31, 2023 is payable semi-annually.
(2) The Corporation completed full repayment of the Senior Notes due 2024, 2025 and partial repayment of the Senior Notes due 2026, 2027
during fiscal year 2023 (partial repayment of the Senior Notes due 2024, 2025 and 2027 during fiscal year 2022).
All Senior Notes rank pari-passu and are unsecured.
The carrying value of long-term debt includes principal repayments, transaction costs and unamortized discounts.
The following table presents the contractual principal repayments of the long-term debt, as at:
Within 1 year
Between 1 and 5 years
More than 5 years
$
December 31, 2023 December 31, 2022
—
4,756
1,260
6,016
—
3,615
2,010
5,625
$
$
$
144 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
27. SHARE CAPITAL
Preferred shares
The preferred shares authorized were as follows, as at December 31, 2023 and 2022:
Series 2 Cumulative Redeemable Preferred Shares
Series 3 Cumulative Redeemable Preferred Shares
Series 4 Cumulative Redeemable Preferred Shares
The preferred shares issued and fully paid were as follows, as at:
Series 2 Cumulative Redeemable Preferred Shares
Series 3 Cumulative Redeemable Preferred Shares
Series 4 Cumulative Redeemable Preferred Shares
Series 2 Cumulative Redeemable Preferred Shares
Authorized for the
specific series
12,000,000
12,000,000
9,400,000
December 31, 2023 December 31, 2022
2,684,527
2,684,527
9,315,473
9,400,000
9,315,473
9,400,000
Redemption: Redeemable, at the Corporation’s option, at $25.50 Cdn per share.
Conversion: Convertible on a one-for-one basis, at the option of the holder, on August 1, 2027 and on August 1 of every
fifth year thereafter into Series 3 Cumulative Redeemable Preferred Shares. Fourteen days before the
conversion date, if the Corporation determines, after having taken into account all shares tendered for
conversion by holders, that there would be less than 1,000,000 outstanding Series 2 Cumulative Redeemable
Preferred Shares, such remaining number shall automatically be converted into an equal number of Series 3
Cumulative Redeemable Preferred Shares. Likewise, if the Corporation determines fourteen days before the
conversion date that, at such time, there would be less than 1,000,000 outstanding Series 3 Cumulative
Redeemable Preferred Shares, then no Series 2 Cumulative Redeemable Preferred Shares may be
converted.
Since September 2002, the variable cumulative preferential cash dividends are payable monthly on the
15th day of each month, if declared, with the annual variable dividend rate being set between 50% to 100% of
the Canadian prime rate, and adjusted as follows. The dividend rate will vary in relation to changes in the
prime rate and will be adjusted upwards or downwards on a monthly basis to a monthly maximum of 4% if the
trading price of Series 2 Cumulative Redeemable Preferred Shares is less than $24.90 Cdn per share or more
than $25.10 Cdn per share.
Dividend:
Series 3 Cumulative Redeemable Preferred Shares
Redemption: Redeemable, at the Corporation’s option, at $25.00 Cdn per share on August 1, 2027 and on August 1 of
every fifth year thereafter.
Conversion: Convertible on a one-for-one basis, at the option of the holder, on August 1, 2027 and on August 1 of every
fifth year thereafter into Series 2 Cumulative Redeemable Preferred Shares. Fourteen days before the
conversion date, if the Corporation determines, after having taken into account all shares tendered for
conversion by holders, that there would be less than 1,000,000 outstanding Series 3 Cumulative Redeemable
Preferred Shares, such remaining number shall automatically be converted into an equal number of Series 2
Cumulative Redeemable Preferred Shares. Likewise, if the Corporation determines fourteen days before the
conversion date that, at such time, there would be less than 1,000,000 outstanding Series 2 Cumulative
Redeemable Preferred Shares, then no Series 3 Cumulative Redeemable Preferred Shares may be
converted.
For the five-year period from August 1, 2022 and including July 31, 2027, the Series 3 Cumulative
Redeemable Preferred Shares carry fixed cumulative preferential cash dividends at a rate of 4.588% or
$1.147 Cdn per share per annum, payable quarterly on the last day of January, April, July and October of each
year at a rate of $0.28675 Cdn, if declared. For each succeeding five-year period, the applicable fixed annual
rate of the cumulative preferential cash dividends calculated by the Corporation shall not be less than 80% of
the Government of Canada bond yield, as defined in the Restated Articles of Incorporation.
Dividend:
BOMBARDIER INC. / 2023 FINANCIAL REPORT 145
Series 4 Cumulative Redeemable Preferred Shares
Redemption: The Corporation may, subject to certain provisions, on not less than 30 nor more than 60 days’ notice, redeem
for cash the Series 4 Cumulative Redeemable Preferred Shares at $25.00 Cdn.
Conversion:
The Corporation may, subject to the approval of the Toronto Stock Exchange and such other stock exchanges
on which the Series 4 Cumulative Redeemable Preferred Shares are then listed, at any time convert all or any
of the outstanding Series 4 Cumulative Redeemable Preferred Shares into fully paid and non-assessable
Class B Shares (subordinate voting) of the Corporation. The number of Class B Shares (subordinate voting)
into which each Series 4 Cumulative Redeemable Preferred Shares may be so converted will be determined
by dividing the then applicable redemption price together with all accrued and unpaid dividends to, but
excluding the date of conversion, by the greater of $2.00 Cdn and 95% of the weighted-average trading price
of such Class B Shares (subordinate voting) on the Toronto Stock Exchange for the period of 20 consecutive
trading days, which ends on the fourth day prior to the date specified for conversion or, if that fourth day is not
a trading day, on the trading day immediately preceding such fourth day. The Corporation may, at its option, at
any time, create one or more further series of Preferred Shares of the Corporation, into which the holders of
Series 4 Cumulative Redeemable Preferred Shares could have the right, but not the obligation, to convert
their shares on a share-for-share basis.
Dividend:
The holders of Series 4 Cumulative Redeemable Preferred Shares are entitled to fixed cumulative preferential
cash dividends, if declared, at a rate of 6.25% or $1.5625 Cdn per share per annum, payable quarterly on the
last day of January, April, July and October of each year at a rate of $0.390625 Cdn per share.
Common shares
All common shares are without nominal or par value.
Class A Shares (multiple voting)
Voting rights: Ten votes each.
Conversion: Convertible, at any time, at the option of the holder, into one Class B Share (subordinate voting).
Dividend:
After payment of the priority dividend on the Class B Shares (subordinate voting) mentioned below, the Class
A Shares (multiple voting) shall share equally, share for share, with respect to any additional dividends which
may be declared in respect of the Class A Shares (multiple voting) and Class B Shares (subordinate voting).
These dividends, if declared, shall be payable quarterly on the last day of March, June, September and
December of each year.
Class B Shares (subordinate voting)
Voting rights: One vote each.
Conversion: Convertible, at the option of the holder, into one Class A Share (multiple voting): (i) if an offer made to Class A
(multiple voting) shareholders is accepted by the present controlling shareholder (the Bombardier family); or
(ii) if such controlling shareholder ceases to hold more than 50% of all outstanding Class A Shares (multiple
voting) of the Corporation.
Dividend:
The holders of Class B Shares (subordinate voting) are entitled, in priority to the holders of Class A Shares
(multiple voting) to non-cumulative dividends at the rate of $0.0390625 Cdn per share, payable quarterly on
the last day of March, June, September and December of each year at a rate of $0.00976562 Cdn per share,
if declared. After payment of said priority dividend, the Class B Shares (subordinate voting) shall share
equally, share for share, with respect to any additional dividends which may be declared in respect of the
Class A Shares (multiple voting) and the Class B Shares (subordinate voting). These dividends, if declared,
shall be payable quarterly on the last day of March, June, September and December of each year.
The change in the number of common shares issued and fully paid and in the number of common shares
authorized was as follows as at:
Class A Shares (multiple voting)
Issued and fully paid
Balance at beginning of year
Converted to Class B
Balance at end of year
Authorized
December 31, 2023 December 31, 2022
12,349,370
—
12,349,370
143,680,000
12,349,370
—
12,349,370
143,680,000
146 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
Class B Shares (subordinate voting)
Issued and fully paid
Balance at beginning of year
Issuance of shares
Cancellation of shares
Held in trust under the PSU and RSU plans
Balance at beginning of year
Purchased
Distributed
Balance at end of year
Authorized
December 31, 2023 December 31, 2022
85,450,731
1,936,142
(85,800)
87,301,073
(3,704,417)
(514,200)
2,225,172
(1,993,445)
85,307,628
143,680,000
85,311,960
288,363
(149,592)
85,450,731
(2,150,001)
(1,578,085)
23,669
(3,704,417)
81,746,314
143,680,000
On May 18, 2023, the Corporation confirmed that it had received approval from the Toronto Stock Exchange for its
new normal course issuer bid to purchase, from May 23, 2023 to May 22, 2024, up to 600,000 Class B shares
(subordinate voting) (880,000 Class B shares (subordinate voting) in 2022). All Class B shares (subordinate
voting) are being purchased either for cancellation or to satisfy future obligations under the Corporation’s
employee PSU and RSU plans and are being delivered to a trustee for the benefit of the participants to such
plans. As of December 31, 2023, the Corporation had purchased $20 million of Class B shares (subordinate
voting) ($38 million as at December 31, 2022).
The change in the number of warrants exercisable was as follows as at:
Balance at beginning of year
Expiration of warrants(1)
Balance at end of year
(1) In February 2023, 4 million of warrants held by CDPQ expired.
Dividends
Dividends declared were as follows:
December 31, 2023 December 31, 2022
4,234,074
—
4,234,074
4,234,074
(4,234,074)
—
Class A common shares
Class B common shares
Series 2 Preferred Shares
Series 3 Preferred Shares
Series 4 Preferred Shares
Per share
(Cdn$)
Per share
(Cdn$)
Dividends declared for fiscal years
2022
Total
(in millions
of U.S.$)
—
—
—
3
6
11
20
20
2023
Total
(in millions
of U.S.$)
—
—
—
3
8
11
22
22
1.03
1.07
1.56
— $
—
$
$
— $
—
1.74
1.15
1.56
— $
—
Per share
(Cdn$)
Dividends declared after
December 31, 2023
Total
(in millions
of U.S.$)
—
—
—
—
2
3
5
5
0.15
0.29
0.39
$
BOMBARDIER INC. / 2023 FINANCIAL REPORT 147
28. SHARE-BASED PLANS
PSU, DSU and RSU plans
The Board of Directors of the Corporation approved a PSU and a RSU plan under which PSUs and RSUs may be
granted to executives and other designated employees. The PSUs and the RSUs give recipients the right, upon
vesting, to receive a certain number of the Corporation’s Class B Shares (subordinate voting). The PSUs and
RSUs also give certain recipients the right to receive a cash payment equal to the value of the PSUs or RSUs.
The Board of Directors of the Corporation has also approved a DSU plan under which DSUs may be granted to
senior officers. The DSU plan is similar to the PSU plan, except that their exercise can only occur upon retirement
or termination of employment. During fiscal year 2023, a combined value of $19 million of DSUs, PSUs and RSUs
were authorized for issuance ($16 million during fiscal year 2022).
The number of PSUs, DSUs and RSUs has varied as follows, for fiscal years:
PSU
DSU
2023
RSU
PSU
DSU
2022
RSU
Balance at beginning
of year
Granted
Vested
Forfeited
Balance at end of year
738,403
215,489
—
(22,216)
931,676
38,609
2,953,698
1,161,453
38,609
2,676,482
—
—
—
38,609 (1)
202,172
(2,277,279)
(37,268)
841,323
377,686
(23,669)
(777,067)
738,403
—
—
—
38,609 (1)
363,754
—
(86,538)
2,953,698
(1) Of which 38,609 DSUs are vested as at December 31, 2023 (38,609 as at December 31, 2022).
PSUs and DSUs granted will vest if a financial performance threshold is met. The conversion ratio for vested
PSUs and DSUs ranges from 0% to 200%. PSUs and DSUs generally vest three years following the grant date if
the financial performance thresholds are met. RSUs generally vest three years following the grant date regardless
of the performance. For grants issued and outstanding between January 1, 2021 and December 31, 2023, the
vesting dates range from June 2024 to May 2026.
The weighted-average grant date fair value of PSUs and RSUs granted during fiscal year 2023 was $40.08 (for
PSUs and RSUs was $23.32 during fiscal year 2022). The fair value of each PSUs and RSUs granted was
measured based on the closing price of a Class B Share (subordinate voting) of the Corporation on the Toronto
Stock Exchange at the grant date.
From time to time, the Corporation provides instructions to a trustee or a broker, under the terms of a Trust
Agreement or normal course issuer bid, as the case may be, to purchase Class B Shares (subordinate voting) of
the Corporation in the open market (see Note 27 – Share capital) in connection with the PSU and/or RSU plan.
These shares are held in trust for the benefit of the beneficiaries until the PSUs and RSUs become vested or are
cancelled. The cost of these purchases has been deducted from share capital.
The compensation expense with respect to the PSU, DSU and RSU plans amounted to $22 million during the
fiscal year 2023 ($15 million during fiscal year 2022).
Share option plan
Under share option plan, options are granted to key employees to purchase Class B Shares (subordinate voting).
Of the 8,985,648 Class B Shares (subordinate voting) reserved for issuance, 2,574,276 were available for
issuance under these share option plans, as at December 31, 2023.
The most significant terms and conditions of the plan are as follows:
•
the exercise price is equal to the weighted-average trading prices on the stock exchange during the five
trading days preceding the date on which the options were granted;
the options vest at the expiration of the third year following the grant date; and
the options expire no later than seven years after the grant date.
•
•
148 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
The summarized information on the current share option plan is as follows as at December 31, 2023:
Exercise price range (Cdn$)
0 to 50
50 to 100
100 to 200
Number of
options
363,769
740,862
221,037
1,325,668
Issued and outstanding
Weighted-
average
exercise
price (Cdn$)
27.94
60.05
103.86
Weighted-
average
remaining
life (years)
4.81
2.11
1.36
Exercisable
Weighted-
average
exercise
price (Cdn$)
—
60.08
103.86
Number of
options
—
647,499
221,037
868,536
The number of options issued and outstanding under the current share option plan has varied as follows, for fiscal
years:
Balance at beginning of year
Granted
Exercised
Forfeited
Expired
Balance at end of year
Options exercisable at end of year
2023
Weighted-
average
exercise
price (Cdn$)
56.52
60.20
48.18
84.24
49.40
58.54
71.22
Number of
options
3,683,172
89,830
(1,936,142)
(499,934)
(11,258)
1,325,668
868,536
Number of
options
4,922,748
149,592
(288,363)
(348,601)
(752,204)
3,683,172
3,030,875
2022
Weighted-
average
exercise
price (Cdn$)
55.50
29.75
46.20
63.36
45.33
56.52
63.53
Share-based compensation expense for options
The weighted-average grant date fair value of stock options granted during fiscal year 2023 was $27.67 per option
($13.69 per option for fiscal year 2022). The fair value of each option granted was determined using a Black-
Scholes option pricing model, which incorporates the share price at the grant date, and the following weighted-
average assumptions, for fiscal years:
Risk-free interest rate
Expected life
Expected volatility in market price of shares
Expected dividend yield
2023
2.90 %
5 years
74.31 %
0.00 %
2022
2.73 %
5 years
70.72 %
0.00 %
A compensation expense of $2 million was recorded during fiscal year 2023 with respect to share option plan
($4 million during fiscal year 2022).
BOMBARDIER INC. / 2023 FINANCIAL REPORT 149
29. NET CHANGE IN NON-CASH BALANCES
Net change in non-cash balances was as follows, for fiscal years:
Trade and other receivables
Inventories
Contract assets
Contract liabilities
Other financial assets and liabilities, net
Other assets
Trade and other payables
Provisions
Retirement benefits liability
Other liabilities
2023
(6)
(413)
(17)
(71)
(256)
54
532
(66)
(26)
(31)
(300)
$
$
2022
12
(87)
(13)
726
214
—
125
(97)
70
(41)
909
$
$
The following table presents the reconciliation of movements of liabilities to cash flows arising from financing
activities:
Balance as at January 1, 2022
Changes from financing cash flows
Repayment of long-term debt
Total changes from financing cash flows
Effect of changes in foreign exchange rates
Other
Balance as at December 31, 2022
Changes from financing cash flows
Proceeds from long-term debt
Repayment of long-term debt
Transaction costs
Total changes from financing cash flows
Effect of changes in foreign exchange rates
Other
Balance as at December 31, 2023
Long-term debt
7,047
$
(1,073)
(1,073)
(7)
13
5,980
1,500
(1,893)
(22)
(415)
3
39
5,607
$
150 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
30. CREDIT FACILITIES
Revolving credit facility
The Corporation has a committed secured revolving credit facility of $300 million (the “Revolving Credit Facility”).
The Revolving Credit Facility matures in November 2027 and drawings will bear interest at SOFR plus a margin.
This facility is available for cash drawings for the ongoing working capital needs of the Corporation and for the
issuance of performance letters of credit. This facility was undrawn both for cash and letters of credit as at
December 31, 2023 and the availability, which is based on the collateral (which may vary from time to time), was
$251 million as at December 31, 2023.
Financial covenants
The Revolving Credit Facility includes financial covenants, among which a minimum liquidity to be maintained at
all times. The terms are defined in the credit agreement and do not correspond to the Corporation’s global metrics
as described in Note 31 – Capital management. Minimum liquidity required is not defined as comprising only cash
and cash equivalents as presented in the consolidated statement of financial position.
The Corporation regularly monitors financial covenants and has controls in place to ensure that such covenants
are met. The Corporation was in compliance with such covenants as at December 31, 2023.
Letter of credit facilities
Letters of credit of $29 million were outstanding under various bilateral agreements as at December 31, 2023
($426 million as at December 31, 2022). In addition, the Corporation also uses bilateral bonding facilities with
insurance companies to support its operations. An amount of $460 million was outstanding under such facilities as
at December 31, 2023 ($318 million as at December 31, 2022).
31. CAPITAL MANAGEMENT
The Corporation analyzes its capital structure using established metrics, which are based on a broad economic
view of the Corporation, in order to assess the creditworthiness of the Corporation. The Corporation has
emphasized its plan to make deleveraging one of its key priorities and will execute on its plan through a phased
approach.
As the Corporation progressively reshapes its business and reaps the benefits from its various initiatives, it aims
to lower its adjusted net debt to adjusted EBITDA ratio to approximately 2x - 2.5x by 2025. The Corporation’s
objective is to achieve this by continuing to grow its adjusted EBITDA towards its 2025 objective of greater than
$1.625 billion and allocate excess available liquidity towards debt repayment.
The Corporation aims at maintaining an adequate debt maturity runway by opportunistically refinancing or
deploying excess liquidity towards debt pay down thereby building manageable and flexible debt
maturity stacks while focusing on reducing its interest expense.
Global metrics – The following global metrics do not represent the ratios required for any covenants.
Interest paid(1)
Adjusted Net debt(2)
Adjusted EBITDA(3)
Adjusted net debt to adjusted EBITDA ratio
$
$
$
2023
425
4,013
1,230
3.3
$
$
$
2022
492
4,298
930
4.6
(1) Interest paid comprises interest on long-term debt excluding up-front costs paid related to the negotiation of debts or credit facilities.
(2) Represents long-term debt less cash and cash equivalent and certain restricted cash supporting various bank guarantees.
(3) Represents EBIT plus amortization and some adjustments including restructuring charges, loss (gain) related to disposal of business,
impairment and program termination and loss (gain) on pension related items.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 151
Bombardier continues to evaluate various options to address other debt maturities in an opportunistic manner and
to improve its capital structure and credit quality so as to support its operations and the future development of its
business.
Over the longer term, the Corporation’s capital allocation strategy will focus on deploying, in a disciplined manner,
the excess cash generated from the business towards investments in the Corporation’s products and services,
and to additional debt reduction. In order to adjust its capital structure, the Corporation may opportunistically issue
or reduce long-term debt, make discretionary contributions to pension funds, repurchase or issue share capital, or
vary the amount of dividends paid to shareholders. For debt reduction, the Corporation will continue to evaluate
the most efficient debt reduction strategies, which for example could include redemptions, tenders or open market
repurchases. The amount involved may be material.
In addition, the Corporation separately monitors its net retirement benefit liability which amounted to $0.7 billion as
at December 31, 2023 ($0.4 billion as at December 31, 2022). The measurement of this liability is dependent on
numerous key long-term financial and actuarial assumptions such as discount rates, future compensation
increases, inflation rates and mortality rates. In recent years, this liability has been particularly volatile due to
changes in discount rates. Such volatility is exacerbated by the long-term nature of the obligation. The
Corporation closely monitors the impact of the net retirement benefit liability on its future cash flows and has
introduced significant risk mitigation initiatives in recent years in this respect such as buying out annuities on
behalf of pensioners. Refer to Note 21 – Retirement benefits for more details.
32.
FINANCIAL RISK MANAGEMENT
The Corporation is primarily exposed to credit risk, liquidity risk and market risk as a result of holding financial
instruments.
Credit risk
Risk that one party to a financial instrument will cause a financial loss for the other party by failing to
discharge an obligation.
Liquidity risk
Risk that an entity will encounter difficulty in meeting its obligations associated with financial liabilities.
Market risk
Risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices, whether those changes are caused by factors specific to the individual financial instrument
or its issuer, or factors affecting all similar financial instruments traded in the market. The Corporation is
primarily exposed to foreign exchange risk and interest rate risk.
Credit risk
The Corporation is exposed to credit risk through its normal treasury activities on its derivative financial
instruments and other investing activities. The Corporation is also exposed to credit risk through its trade
receivables arising from its normal commercial activities.
The effective monitoring and controlling of credit risks is a key component of the Corporation’s risk management
activities. Credit risks arising from the treasury activities are managed by a central treasury function in accordance
with the Corporate Foreign Exchange Risk Management Policy and Corporate Investment Policy (the “Policy”).
The objective of the policy is to minimize the Corporation’s exposure to credit risk from its treasury activities by
ensuring that the Corporation transacts strictly with investment-grade financial institutions and money market
funds based on pre-established consolidated counterparty risk limits per financial institution and fund.
Credit risks are arising from the Corporation’s normal commercial activities. The main credit exposure arises from
customer credit risk. Customer credit ratings and credit limits are analyzed and established by internal credit
specialists, based on inputs from external rating agencies, recognized rating methods and the Corporation’s
experience with the customers. The credit risks and credit limits are dynamically reviewed based on fluctuations in
the customer’s financial results and payment behavior.
152 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
These customer credit risk assessments and credit limits are critical inputs in determining the conditions under
which credit or financing will be offered to customers, including obtaining collateral to reduce the Corporation’s
exposure to losses. Specific governance is in place to ensure that financial risks arising from large transactions
are analyzed and approved by the appropriate management level before financing or credit support is offered to
the customer.
Credit risk is monitored on an ongoing basis using different systems and methodologies depending on the
underlying exposure. Various accounting and reporting systems are used to monitor trade receivables and other
direct financings.
Maximum exposure to credit risk – The maximum exposure to credit risk for financial instruments is usually
equivalent to their carrying value, as presented in Note 11 – Financial instruments, except for the financial
instruments in the table below, for which the maximum exposures were as follows, as at:
Investments in financing structures(1)
Derivative financial instruments
Investments in securities
December 31, 2023 December 31, 2022
—
13
197
n/a
70
109
$
$
$
$
$
(1) Following the sale of the CRJ business, the Corporation has retained those other financial assets and has a back-to-back agreement with
MHI as such there is no credit risk arising from other financial assets as at December 31, 2022. During fiscal year 2023, the Corporation has
transferred the legal title of these assets and MHI has assumed the related liabilities. See Note 24 – Other financial liabilities.
Credit quality – The credit quality, using external and internal credit rating systems, of financial assets that are
neither past due nor impaired is usually investment grade, except for receivables. Receivables are usually not
externally or internally quoted, however the credit quality of customers are dynamically reviewed and is based on
the Corporation’s experience with the customers and payment behavior.
Refer to Note 36 – Commitment and contingencies for the Corporation’s off-balance sheet credit risk, including
credit risk related to support provided for sale of commercial aircraft.
Liquidity risk
The management of consolidated liquidity requires a constant monitoring of expected cash inflows and outflows,
which is achieved through a detailed forecast of the Corporation’s liquidity position, as well as long-term operating
and strategic plans, to ensure adequacy and efficient use of cash resources. The Corporation uses scenario
analyses to stress-test cash flow projections. Liquidity adequacy is continually monitored which involves the
application of judgment, taking into consideration historical volatility and seasonal needs, stress-test results, the
maturity profile of indebtedness, access to capital markets, the level of customer advances, availability of letter of
credit and similar facilities, working capital requirements, the availability of working capital financing initiatives and
the funding of product development and other financial commitments.
The Corporation monitors any financing opportunities to optimize its capital structure and maintain appropriate
financial flexibility. The Corporation also routinely reviews its debt profile with a view to managing or extending
maturities and/or negotiating more favorable terms and conditions with respect to its bank facilities. The
Corporation also routinely reviews the terms and conditions of its financing arrangements. These amendments
are subject to prevailing market and other conditions that are beyond its control and there can be no assurance
that the Corporation will be able to successfully negotiate such amendments on commercially reasonable terms,
or at all.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 153
Maturity analysis – The maturity analysis of financial assets and financial liabilities, excluding derivative financial
instruments, was as follows, as at December 31, 2023:
Carrying
amount
Undiscounted cash flows
(before giving effect to the related hedging instruments)
Less
than 1
year
1 to 3
years
3 to 5
years
5 to 10
years
Over 10
years
With no
specific
maturity
Cash and cash equivalents
Trade and other receivables
Other financial assets(1)
Assets
Trade and other payables
Other financial liabilities(1)
Long-term debt
Principal
Interest
Liabilities
Net amount
$
1,594 $ 1,594 $
258
551
258
29
1,881
$
1,820 $ 1,820 $
635
85
— $
—
167
167
— $
106
— $
—
105
105
— $
148
— $
—
233
233
— $
317
5,607
—
422
2,327
1,132
805
2,043
2,483
410
3,041
1,500
318
2,135
$
(446) $ (1,876) $ (2,936) $ (1,902) $
— $
—
143
143
— $
139
510
13
662
(519) $
Total
— $ 1,594
258
—
693
16
16
2,545
— $ 1,820
795
—
—
5,625
1,968
—
— 10,208
16 $ (7,663)
(1) The carrying amount of other financial assets excludes derivative financial instruments and the back-to-back agreement that the Corporation
has with MHI related to credit and residual value guarantees payable. The carrying amount of other financial liabilities excludes derivative
financial instruments, lease liabilities, and credit and residual value guarantees payable related to MHI.
Other financial assets include a back-to-back agreement that the Corporation has with ACLP related to certain
government refundable advances. Other financial liabilities include government refundable advances. Under the
respective agreements, the Corporation is required to pay amounts to governments at the time of the delivery of
aircraft. Due to uncertainty about the number of aircraft to be delivered and the timing of delivery of aircraft, the
amounts shown in the table above may vary.
The maturity analysis of derivative financial instruments, excluding embedded derivatives, was as follows, as at
December 31, 2023:
Nominal
value (USD
equivalent)
Undiscounted cash flows
(1)
Less
than 1
year
1 year
2 to
3 years
3 to
5 years
Over
5 years
Total
Derivative financial assets
Forward foreign exchange contracts
Derivative financial liabilities
Forward foreign exchange contracts
$
$
Net amount
2,809 $
46 $
26 $
— $
— $
— $
72
398 $
$
(8) $
38 $
— $
26 $
— $
— $
— $
— $
— $
— $
(8)
64
(1) Amounts denominated in foreign currency are translated at the year end exchange rate.
Lease liabilities
The Corporation leases buildings, equipment and land.
Maturity analysis – The maturity analysis of lease liabilities (undiscounted cash flows) was as follows, as at:
Within 1 year
Between 1 to 5 years
More than 5 years
154 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
$
December 31, 2023
65
199
722
986
$
Market risk
Foreign exchange risk
The Corporation is exposed to significant foreign exchange risks in the ordinary course of business through its
international operations, in particular to the Canadian dollar, Euro and Mexican Peso. The Corporation employs
various strategies, including the use of derivative financial instruments and by matching asset and liability
positions, to mitigate these exposures.
The Corporation’s main exposures to foreign currencies are covered by the central treasury function. Foreign
currency exposures are mitigated in accordance with the Corporation’s Foreign Exchange Risk Management
Policy (the “FX Policy”). The objective of the FX Policy is to reduce the impact of foreign exchange movements on
the Corporation’s consolidated financial statements to acceptable levels. Under the FX Policy, potential losses
caused by adverse movements in foreign exchange rates on deviations from progressive policy hedge
percentages should not exceed Board authorized pre-set limits. Potential loss is defined as the maximum
expected loss that could occur if an over-or under hedged foreign currency exposure was exposed to an adverse
change of foreign exchange rates over a one-month period. Additionally, any trade that is increasing the overall
currency risk of the Corporation is prohibited.
Under the FX Policy, it is the responsibility of the Corporation’s management to identify all actual and potential
foreign exchange exposures arising from the operations. Initially, the Corporation mitigates foreign currency risks
by maximizing transactions in its functional currency for operations such as material procurement, sale contracts
and financing activities. Secondly, the Corporation maintains long-term cash flow forecasts in each currency,
which are communicated to the central treasury group, which has the responsibility to execute the hedge
transactions in accordance with the FX Policy for hedge implementation.
The Corporation has adopted a progressive hedging strategy to limit the effect of currency movements on the
results.
The Corporation mainly uses forward foreign exchange contracts to manage the Corporation’s exposure in foreign
currencies. The Corporation applies hedge accounting for a significant portion of anticipated transactions and firm
commitments denominated in foreign currencies, designated as cash flow hedges. Cash flow hedges are meant
to reduce the variability of future cash flows resulting from forecasted sales and purchases and firm commitments.
In addition, the Corporation manages balance sheet exposures to foreign currency movements by matching asset
and liability positions. This program consists mainly in matching the long-term liabilities in foreign currency with
long-term assets denominated in the same currency.
The Corporation’s foreign currency hedging programs are typically unaffected by changes in market conditions, as
related derivative financial instruments are generally held to maturity, consistent with the objective to lock in
currency rates on the hedged item. These programs are reviewed annually and amended as necessary to reflect
current market conditions or practices.
Sensitivity analysis
Foreign exchange risk arises on financial instruments that are denominated in foreign currencies. The foreign
exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure of the
Corporation’s financial instruments recorded in its statement of financial position. The following impact on EBT for
fiscal year 2023 is before giving effect to cash flow hedge relationships.
Gain (loss)
+10 % $
(29) $
Variation CAD/USD EUR/USD
Effect on EBT
Other
(2)
(1) $
BOMBARDIER INC. / 2023 FINANCIAL REPORT 155
The following impact on OCI for fiscal year 2023 is for derivatives designated in a cash flow hedge relationship.
For these derivatives, any change in fair value is mostly offset by the re-measurement of the underlying exposure.
Gain (loss)
Effect on OCI before income taxes
Variation CAD/USD EUR/USD
Other
+10 % $
(171) $
(3) $
(15)
Interest rate risk
The Corporation is exposed to gains and losses arising from changes in interest rates, which includes
marketability risks, through its financial instruments carried at fair value. These financial instruments include
certain derivative financial instruments.
Sensitivity analysis
The interest rate risk primarily relates to financial instruments carried at fair value. Assuming a 100-basis point
increase in interest rates impacting the measurement of these financial instruments, excluding derivative financial
instruments in a hedge relationship, as at December 31, 2023, the impact on EBT would have been a negative
adjustment of $83 million as at December 31, 2023 (negative adjustment of $38 million as at December 31, 2022).
33.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value amounts disclosed in these consolidated financial statements represent the Corporation’s estimate of
the price at which a financial instrument could be exchanged in a market in an arm’s length transaction between
knowledgeable, willing parties who are under no compulsion to act. They are point-in-time estimates that may
change in subsequent reporting periods due to market conditions or other factors. Fair value is determined by
reference to quoted prices in the principal market for that instrument to which the Corporation has immediate
access. However, there is no active market for most of the Corporation’s financial instruments. In the absence of
an active market, the Corporation determines fair value based on internal or external valuation models, such as
discounted cash flow models. Fair value determined using valuation models requires the use of assumptions
concerning the amount and timing of estimated future cash flows, discount rates, the creditworthiness of the
borrower, default probability, generic industrial bond spreads and marketability risk. In determining these
assumptions, the Corporation uses primarily external, readily observable market inputs, including factors such as
interest rates, credit ratings, credit spreads, default probabilities, currency rates, and price and rate volatilities, as
applicable. Assumptions or inputs that are not based on observable market data are used when external data are
unavailable. These calculations represent management’s best estimates. Since they are based on estimates, the
fair values may not be realized in an actual sale or immediate settlement of the instruments.
Methods and assumptions
The methods and assumptions used to measure fair value for items recorded at FVTP&L and FVOCI are as
follows:
Investments in securities – The Corporation uses discounted cash flow models to estimate the fair value of
unquoted investments in fixed-income securities, using market data such as interest rates.
Receivable from ACLP and the related government refundable advances – The Corporation uses
discounted cash flow analysis to estimate the fair value using market data for interest rates and credit spreads.
Derivative financial instruments – Fair value of derivative financial instruments generally reflects the estimated
amounts that the Corporation would receive to sell favorable contracts i.e. taking into consideration the
counterparty credit risk, or pay to transfer unfavorable contracts i.e. taking into consideration the Corporation’s
credit risk, at the reporting dates. The Corporation uses discounted cash flow analysis and market data such as
interest rates, credit spreads and the foreign exchange spot rate to estimate the fair value of forward agreements.
The Corporation uses option-pricing models and discounted cash flow models to estimate the fair value of
embedded derivatives using applicable market data.
156 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
The methods and assumptions used to measure fair value for items recorded at amortized cost are as follows:
Financial instruments whose carrying value approximates fair value – The fair values of cash and cash
equivalents, trade and other receivables, restricted cash, certain receivable from MHI and trade and other
payables measured at amortized cost, approximate their carrying value due to the short-term maturities of these
instruments, because they bear variable interest-rate or because the terms and conditions are comparable to
current market terms and conditions for similar items.
Long-term debt – The fair value of long-term debt is estimated using public quotations, when available, or
discounted cash flow analyses, based on the current corresponding borrowing rate for similar types of borrowing
arrangements.
Government refundable advances and vendor non-recurring costs – The Corporation uses discounted cash
flow analysis to estimate the fair value using market data for interest rates and credit spreads.
Fair value hierarchy
The following table presents financial assets and financial liabilities measured at fair value on a recurring basis
categorized using the fair value hierarchy as follows:
•
•
quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
inputs from observable markets other than quoted prices included in Level 1, including indirectly observable
data (Level 2); and
inputs for the assets or liabilities that are not based on observable market data (Level 3).
•
Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment.
The fair value of financial assets and liabilities by level of hierarchy was as follows, as at December 31, 2023:
Financial assets
Receivable from ACLP(1)
Investments in securities
Derivative financial instruments(2)
Financial liabilities
Government refundable advances(1)
Derivative financial instruments(2)
Total
Level 1
Level 2
Level 3
$
$
$
$
359
109
274
742
359
8
367
$
$
$
$
—
—
—
—
—
—
—
$
$
$
$
—
109
274
383
—
8
8
$
$
$
$
359
—
—
359
359
—
359
(1) This receivable represents a back-to-back agreement that the Corporation has with ACLP related to certain government refundable
advances.
(2) Derivative financial instruments consist of forward foreign exchange contracts and embedded derivatives.
Level 3 financial instruments include only assets and liabilities with a back-to-back agreement and their
corresponding back-to-back assets and liabilities.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 157
Fair value hierarchy for items recorded at amortized cost
The following table presents financial assets and financial liabilities measured at amortized cost categorized using
the fair value hierarchy as follows:
•
•
•
quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
inputs from observable markets other than quoted prices included in Level 1, including indirectly observable
data (Level 2); and
inputs for the assets or liabilities that are not based on observable market data (Level 3).
The fair value of financial assets and liabilities by level of hierarchy was as follows, as at December 31, 2023:
Financial assets
Trade and other receivables
Other financial assets(1)
Financial liabilities
Trade and other payables
Long-term debt
Other financial liabilities
Government refundable advances
Other(1)
Total
Level 1
Level 2
Level 3
$
$
$
$
258
112
370
1,820
5,746
169
593
8,328
$
$
$
$
—
—
—
—
—
—
—
—
$
$
$
$
258
112
370
1,820
5,746
—
—
7,566
$
$
$
$
—
—
—
—
—
169
593
762
(1) Of which $29 million represents a back-to-back agreement that the Corporation has with MHI related to credit and residual value guarantees
payable.
158 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
34.
TRANSACTIONS WITH RELATED PARTIES
The Corporation’s related parties are its joint ventures, associates and key management personnel.
Associates and Joint ventures
There were no material transactions or outstanding balances with associates and joint ventures for fiscal years
2023 and 2022 and as at December 31, 2023 and December 31, 2022.
Compensation paid to key management personnel
The annual remuneration and related compensation costs of the executive and non-executive board members
and key Corporate management, defined as the President and Chief Executive Officer of Bombardier Inc., and the
Senior/Executive Vice Presidents of Bombardier Inc., were as follows, for fiscal years:
Salaries, bonuses and other short-term benefits
Share-based benefits
Retirement benefits
Termination and other long-term benefits
2023
15
13
1
1
30
$
$
2022
16
11
1
—
28
$
$
35. UNCONSOLIDATED STRUCTURED ENTITIES
The following table presents the assets and liabilities of unconsolidated structured entities in which the
Corporation had a significant exposure, as at:
Financing structures related to the sale of commercial aircraft
December 31, 2023
December 31, 2022
Assets Liabilities
7
7 $
$
Assets
$
749 $
Liabilities
129
The Corporation has provided credit and/or residual value guarantees to certain structured entities created solely
to provide financing related to the sale of commercial aircraft.
Typically, these structured entities are financed by third-party long-term debt and by third-party equity investors.
The aircraft serve as collateral for the structured entities long-term debt. The Corporation retains certain interests
in the form of credit and residual value guarantees, subordinated debt and residual interests. Residual value
guarantees typically cover a percentage of the first loss from a guaranteed value upon the sale of the underlying
aircraft at an agreed upon date. The Corporation also provides administrative services to certain of these
structured entities in return for a market fee.
The Corporation was holding investments in financing structure amounting to $204 million as at December 31,
2022. Following the sale of the CRJ business, the Corporation had previously retained a portion of the
investments in financing structure and had a back-to-back agreement with MHI. In fiscal year 2023, the
Corporation has transferred the legal title of those investments and MHI has assumed the related liabilities.
The Corporation’s maximum potential exposure was $2 million, of which $2 million was recorded as provisions
and related liabilities as at December 31, 2023 ($8 million and $1 million, respectively, as at December 31, 2022).
The Corporation’s maximum exposure under these guarantees is included in Note 36 – Commitments and
contingencies. In connection with the sale of the CRJ business, all of the above are included in a back-to-back
agreement with MHI.
The Corporation concluded that it did not control these structured entities.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 159
36. COMMITMENTS AND CONTINGENCIES
The Corporation enters into various sale support arrangements. The Corporation is also subject to other off-
balance sheet risks described in the following table. These off-balance sheet risks are in addition to the
commitments and contingencies described elsewhere in these consolidated financial statements. Some of these
off-balance sheet risks are also included in Note 35 – Unconsolidated structured entities. The maximum potential
exposure does not reflect payments expected to be made by the Corporation.
The table below presents the maximum potential exposure for each major group of exposure, as at:
Aircraft sales
Residual value (a)
Credit (a)
Mutually exclusive exposure(1)
Total credit and residual value exposure
Trade-in commitments (b)
Conditional repurchase obligations (c)
Other(2)
December 31, 2023 December 31, 2022
$
$
$
$
2
2
(2)
2
277
—
$
$
$
$
8
8
(8)
8
428
62
(1) Some of the residual value guarantees can only be exercised once the credit guarantees have expired without exercise. Therefore, the
guarantees must not be added together to calculate the combined maximum exposure for the Corporation.
(2) The Corporation has also provided other guarantees (see section (d) below).
The Corporation’s maximum exposure in connection with credit and residual value guarantees related to the sale
of aircraft represents the face value of the guarantees before giving effect to the net benefit expected from the
estimated value of the aircraft and other assets available to mitigate the Corporation’s exposure under these
guarantees. Provisions for anticipated losses amounting to $2 million as at December 31, 2023 ($1 million as at
December 31, 2022) have been established to cover the risks from these guarantees after considering the effect
of the estimated resale value of the aircraft, which is based on information obtained from external appraisals and
reflect specific factors of the current aircraft market and a balanced market in the medium and long-term, and the
anticipated proceeds from other assets covering such exposures. The provisions for anticipated losses are
expected to cover the Corporation’s total credit and residual value exposure, after taking into account the
anticipated proceeds from the sale of underlying aircraft. In connection with the sale of the CRJ business, all of
the above are included in a back-to-back agreement with MHI.
Aircraft sales
a) Credit and residual value guarantees – The Corporation has provided credit guarantees in the form of lease
and loan payment guarantees, as well as services related to the remarketing of commercial aircraft. These
guarantees, which are mainly issued for the benefit of providers of financing to customers, mature in 2025.
Substantially all financial support involving potential credit risk lies with regional commercial airline customers.
In addition, the Corporation had provided guarantees for the residual value of commercial aircraft at an agreed-
upon date, generally at the expiry date of related financing and lease arrangements. The arrangements generally
include operating restrictions such as maximum usage and minimum maintenance requirements. The guarantee
provides for a contractually limited payment to the guaranteed party, which is typically a percentage of the first
loss from a guaranteed value. In most circumstances, a claim under such guarantees may be made only upon
resale of the underlying aircraft to a third party.
The following table summarizes the outstanding residual value guarantees, at the earliest exercisable date, and
the period in which they can be exercised, as at:
Less than 1 year
From 1 to 5 years
$
December 31, 2023 December 31, 2022
6
2
8
—
2
2
$
$
$
160 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
In connection with the sale of the CRJ business, all of the above are included in a back-to-back agreement with
MHI.
b) Trade-in commitments – In connection with the signing of firm orders for the sale of new aircraft, the
Corporation enters into specified-price trade-in commitments with certain customers. These commitments give
customers the right to trade-in their pre-owned aircraft as partial payment for the new aircraft purchased.
The Corporation’s trade-in commitments were as follows, as at:
Less than 1 year
From 1 to 3 years
Thereafter
$
December 31, 2023 December 31, 2022
294
114
20
428
227
50
—
277
$
$
$
c) Conditional repurchase obligations – In connection with the sale of new aircraft, the Corporation enters into
conditional repurchase obligations with certain customers. Under these obligations, the Corporation agrees to
repurchase the initial aircraft at predetermined prices, during predetermined periods or at predetermined dates,
conditional upon mutually acceptable agreement for the sale of a new aircraft. At the time the Corporation enters
into an agreement for the sale of a subsequent aircraft and the customer exercises its right to partially pay for the
subsequent aircraft by trading-in the initial aircraft to the Corporation, a conditional repurchase obligation is
accounted for as a trade-in commitment.
The Corporation’s conditional repurchase obligations, as at the earliest exercise date, were as follows, as at:
Less than 1 year
Other guarantees
December 31, 2023 December 31, 2022
62
—
$
$
d) Other – In the normal course of its business, the Corporation has entered into agreements that include
indemnities in favour of third parties, mostly tax indemnities. These agreements generally do not contain specified
limits on the Corporation’s liability and therefore, it is not possible to estimate the Corporation’s maximum liability
under these indemnities.
In connection with the disposal of businesses and the disposal of investment in associate, the Corporation has
entered into arrangements that include indemnities and guarantees which are typically limited as to their duration
and maximum potential financial exposure to the Corporation.
Other commitments
The Corporation also has purchase obligations, under various agreements, made in the normal course of
business. The purchase obligations are as follows, as at December 31, 2023:
Within 1 year
Between 1 to 5 years
Total
3,708
1,321
5,029
$
$
The purchase obligations of the Corporation include capital commitments for the purchase of PP&E amounting to
$98 million as at December 31, 2023.
Legal proceedings
In the normal course of operations, the Corporation is a defendant in certain legal proceedings before various
courts or other tribunals including in relation to product liability, contractual disputes with customers or suppliers,
claims and disputes arising from divestiture or acquisition transactions, and other legal proceedings with third
parties. The Corporation’s approach is to vigorously defend its position in these matters.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 161
While the Corporation cannot predict the final outcome of all legal proceedings pending as at December 31, 2023,
based on information currently available and known by the Corporation, management believes that the resolution
of these legal proceedings will not have a material adverse effect on its financial position.
Sweden
While this matter relates to the Transportation business, which has been divested as part of the sale to Alstom on
January 29, 2021, the Corporation remains involved in this legal proceeding and remains liable to Alstom, as
acquirer of Transportation, in the event of any damage suffered in connection thereof.
Since the fourth quarter of 2016, the Swedish police authorities have been conducting an investigation in relation
to allegations concerning a 2013 contract for the supply of signaling equipment and services to Azerbaijan
Railways ADY (the “ADY Contract”). In October 2016, the Corporation launched an internal review into the
allegations which is conducted by external forensic advisors, under the supervision of the General Counsel and
external counsel. The internal review is still on-going. On August 18, 2017, charges were laid against a then
employee of the Swedish subsidiary of the Corporation for aggravated bribery and, alternatively, influence
trafficking. The trial on these charges took place from August 29 to September 20, 2017. No charges were laid
against the subsidiary of the Corporation. In a decision rendered on October 11, 2017, the then employee was
acquitted of all charges. The decision was appealed regarding all charges on October 25, 2017 by the
Prosecution Authority. On June 19, 2019, the Prosecution Authority confirmed that the acquittal on charge of
influence trafficking is no longer being appealed; accordingly, this acquittal on this charge stands as a final
judgment. The case is pending with the Swedish Court of Appeal with a likely scenario that the Swedish Court of
Appeal will set a date for the appeal trial. On June 9, 2021, charges were laid against a different former employee
of the former Swedish subsidiary of the Corporation for aggravated bribery. The trial took place from November 11
to November 24, 2021. On December 22, 2021, the former employee was acquitted by the Swedish District Court.
A notice of appeal was filed by the Prosecution Authority on January 12, 2022. The trial in appeal with the
Swedish Court of Appeal took place in April 2023. In May 2023, the Court of Appeal confirmed the verdict of
acquittal rendered in December 2021. This decision is now final and non-appealable.
World Bank
The ADY Contract is being audited by the World Bank Group pursuant to its contractual audit rights. The audit is
on-going. The Corporation’s policy is to comply with all applicable laws and it is cooperating to the extent possible
with the investigation and the audit. As reported in the media, on November 15, 2018, the World Bank Integrity
Vice Presidency (“INT”) issued a ‘show cause’ letter to Bombardier, outlining INT’s position regarding alleged
collusion, corruption, fraud and obstruction in the ADY Contract. The Corporation was invited to respond to these
preliminary findings and has done so. As the World Bank’s audit process is governed by strict confidentiality
requirements, the Corporation can only reiterate that it strongly disagrees with the allegations and preliminary
conclusions contained in the letter.
U.S. Department of Justice
On February 10, 2020, Bombardier received a letter from the U.S. Department of Justice (the “DOJ”) requesting
the communication of documents and information regarding the ADY Contract. The Corporation’s internal review
about the reported allegations is on-going but based on information known to the Corporation at this time, there is
no evidence that suggests a corrupt payment was made or offered to a public official or that any other criminal
activity involving Bombardier took place.
The DOJ also made requests regarding contracts in South Africa and Indonesia (see below), as well as requests
with respect to other sales of aircraft and services. Bombardier is cooperating with the DOJ’s requests.
South Africa (Transnet)
While this matter relates to the Transportation business, which has been divested as part of the sale to Alstom on
January 29, 2021, the Corporation remains involved in this matter and remains liable to Alstom, as acquirer of
Transportation, under certain circumstances.
The Corporation learned through various media reports of the appointment of a Judicial Commission of Inquiry
into Allegations of State Capture, Corruption and Fraud in the Public Sector, including organs of state (the “Zondo
Commission”) for which the terms of reference were published by presidential proclamation on January 25, 2018.
The media reported allegations of irregularities with respect to multiple procurements regarding the supply of
162 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
1,064 locomotives by South African train operator Transnet Freight Rail in 2014. On September 7, 2018,
Bombardier Transportation South Africa (Pty.) Ltd. (“BTSA”) was informed that the Special Investigation Unit
(“SIU”), a forensic investigation agency under the Department of Justice in South Africa, had opened an
investigation with respect to the acquisition of the 1,064 locomotives by Transnet.
The Corporation conducted an internal review into the allegations by external advisors under the supervision of
counsel. Based on information known to the Corporation at this time, there is no reason to believe that the
Corporation has been involved in any wrongdoing with respect to the procurement by Transnet of 240 TRAXX
locomotives from Bombardier Transportation. Following the sale of the Transportation business to Alstom, Alstom
has been managing the Zondo Commission and SIU related aspects of the matter.
While the National Prosecution Agency (“NPA”) of South Africa has not communicated any request to the
Corporation, the Corporation understands that the NPA is investigating the Transnet contracts.
U.K. Serious Fraud Office (“SFO”) (Indonesia)
In May 2020, the Indonesian Corruption Court convicted the former CEO of Garuda Indonesia (Persero) TBK
(“Garuda”) and his associate of corruption and money laundering in connection with five procurement processes
involving different manufacturers, including the 2011-2012 acquisition and lease of Bombardier CRJ1000 aircraft
by Garuda (the “Garuda Transactions”). No charges were laid against the Corporation or any of its directors,
officers or employees. Shortly thereafter, the Corporation launched an internal review into the Garuda
Transactions, which is being conducted by external counsel.
The SFO commenced a formal investigation into the Garuda Transactions. The Corporation has communicated
with the SFO regarding the Corporation’s internal review and its potential assistance with the SFO investigation
on a voluntary basis.
RCMP
In 2021, Bombardier also received a communication from the RCMP’s Sensitive and International Investigation
Unit advising that it would be undertaking an investigation on the Garuda Transactions, and requested
communication of documents from the Corporation.
The various regulators’ investigations here above mentioned and internal reviews are on-going.
Claim from Certain Holders of Senior Notes due 2034
On January 31, 2022, the Corporation received a letter (the “Letter”) from counsel to certain holders of 7.450%
Senior Notes due 2034 (the “2034 Notes”), and has learned that such holders also filed a complaint before the
Supreme Court of the State of New York (the “Action”), reiterating claims made in a letter addressed to the
Corporation in April 2021 (the “April 2021 Letter”) substantially to the effect that the Corporation’s divestitures of
non-core assets, including its transportation business, regional jet program and aerostructures division, constitute
a breach of certain covenants under the indenture governing the 2034 Notes and further alleging that the actions
of the Corporation in May 2021, addressing the matters raised in the April 2021 Letter, breached the rights of such
holders. The Corporation believes that these allegations are without merit and intends to vigorously defend itself
against the Action.
Class action
On February 15, 2019, the Corporation was served with a Motion for authorization to bring an action pursuant to
Section 225.4 of the Quebec Securities Act and application for authorization to institute a class action before the
Superior Court of Québec in the district of Montréal against Bombardier Inc. and Messrs. Alain Bellemare and
John Di Bert (“Motion”) (formerly the President and Chief Executive Officer and the Senior Vice President and
Chief Financial Officer, respectively, of Bombardier) to claim monetary damages in an unspecified amount in
connection with alleged false and misleading representations about the Corporation’s business, operations,
revenues and free cash flow, including an alleged failure to make timely disclosure of material facts concerning its
guidance for 2018. In the class action component of the Motion, the Plaintiff Denis Gauthier seeks to represent all
persons and entities who have purchased or acquired Bombardier’s securities during the period of August 2, 2018
to November 8, 2018, inclusively, and held all or some of these securities until November 8, 2018. Both the action
pursuant to the Quebec Securities Act and the class action require an authorization from the Court before they
BOMBARDIER INC. / 2023 FINANCIAL REPORT 163
can move forward. Until they are authorized, there are no monetary claims pending against the defendants in the
context of these Court proceedings.
Bombardier Inc. and Messrs. Bellemare and Di Bert are contesting this Motion. The Corporation’s preliminary view
at this juncture is that the possibility that these Court proceedings will cause the Corporation to incur material
monetary liability appears to be remote.
Alstom Request for Arbitration
The Corporation received a notice from Alstom S.A. requesting arbitration before the International Chamber of
Commerce pursuant to the agreement relating to the sale by Bombardier of its Transportation business on
January 29, 2021 (the “Transaction”). In its request for arbitration, Alstom is alleging that the Corporation is in
breach of certain contractual provisions. While litigation proceedings inherently carry uncertainties, the
Corporation has good grounds to defend itself against Alstom’s claim and intends to do so vigorously. The
Corporation also intends to challenge certain purchase price adjustments which resulted in proceeds from the
Transaction being lower than initially estimated. Evidentiary hearing on the arbitration is currently expected in late
2025 and proceedings are subject to confidentiality provisions.
RSU Class Action
On April 21, 2023, a motion for authorization to institute a class action was filed with the Superior Court of Québec
in the district of Montréal against Bombardier Inc. and Messrs. Pierre Beaudoin, Éric Martel and Alain Bellemare
(“Motion”) (respectively the Chairman of the Board of Directors, the President and Chief Executive Officer and the
former President and Chief Executive Officer of Bombardier Inc.). The Motion seeks permission to represent all
persons who received, in November 2020, Restricted Share Units vesting in November 2023 (the RSUs) and to
claim on their behalf an unspecified amount equal to the value of the RSUs which were canceled when they were
prorated at the closing of the sale of the Transportation segment on January 29, 2021.
Plaintiff alleges that the defendants engaged in fraudulent omissions and manoeuvres in not sharing their
interpretation of the RSU plan pursuant to which former employees would not get the benefit of RSUs vesting
after the closing date of a transaction leading to the end of their employment with Bombardier. The class action
requires an authorization from the Court before it can move forward. Until it is authorized, there are no monetary
claims pending against any of the defendants in the context of this Court proceeding.
Bombardier Inc. and the other defendants are contesting this Motion. The Corporation’s preliminary view at this
juncture is that the proposed class action is without merit, that the inclusion of Messrs. Beaudoin, Martel and
Bellemare as defendants is unfounded and that the possibility that these Court proceedings will cause the
Corporation to incur material monetary liability appears to be remote.
37. RECLASSIFICATION
Certain comparative figures in the consolidated statements of income have been reclassified to conform to the
presentation adopted in the current period, mainly a reclassification from special items and other expense
(income) to gain related to disposal of business, impairment and program termination, and restructuring charges.
164 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
INVESTOR INFORMATION
Our Board of Directors
BOARD MEMBERS(1)
Pierre Beaudoin
Éric Martel
Joanne Bissonnette
Charles Bombardier
Rose Damen
Diane Fontaine
Ji-Xun Foo
Diane Giard
Anthony R. Graham
Chair of the Board of Directors and director since 2004
President and Chief Executive Officer and director since 2020
Corporate Director and a director of Bombardier since 2012
Corporate Director and a director of Bombardier since 2019
Managing Director, Damen Yachting and director of Bombardier since 2023
Senior Portfolio Manager and Investment Advisor of RBC Dominion Securities Inc. and a
director of Bombardier since 2019
Managing Partner of GGV Capital Asia and a director of Bombardier since 2022
Corporate Director and a director of Bombardier since 2017
Chair, President and Chief Executive Officer of Sumarria Inc. (an investment holding
company) and a director of Bombardier since 2019
Douglas (Doug) R. Oberhelman Corporate Director and a director of Bombardier since 2017
Melinda Rogers-Hixon
Eric Sprunk
Antony N. Tyler
Deputy Chair, Rogers Communications Inc. and a director of Bombardier since 2021
Corporate Director and a director of Bombardier since 2021
Corporate Director and a director of Bombardier since 2017
(1) As at December 31, 2023. Supplemental information regarding our Board of Directors can be found on our website at bombardier.com.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 165
BOARD COMMITTEES
Board
committees
Board
representation(1) Key responsibilities(2)
Audit
Committee
Diane Giard (Chair)
Rose Damen
Ji-Xun Foo
Anthony R. Graham
Eric Sprunk
Corporate
Governance
and
Nominating
Committee
(“CGNC”)
Douglas (Doug) R.
Oberhelman (Chair)
Diane Giard
Melinda Rogers-
Hixon
Antony N. Tyler
Human
Resources
and
Compensation
Committee
(“HRCC”)
Anthony R. Graham
(Chair)
Douglas (Doug) R.
Oberhelman
Melinda Rogers-
Hixon
Antony N. Tyler
The Audit Committee assists the Board of Directors in fulfilling its obligations for
overseeing financial reporting and audit matters, as well as monitoring risk
management matters, of the Corporation. Some of the key responsibilities of the Audit
Committee are to:
• oversee the integrity of our financial statements and financial reporting process,
including the Corporate Audit Services and Risk Assessment, and financing
activities of the Corporation;
• oversee the qualifications and independence of our external auditors, Ernst &
Young, and the work of our financial management team and external auditors;
• provide an open avenue of communication between the external auditors and the
Board of Directors;
• reviewing financial disclosures and monitoring policies regarding disclosures and
communications with the public;
• ensure that an appropriate system of internal accounting and financial controls, and
appropriate risk management frameworks, are maintained in view the risks and
exposures facing the Corporation;
• monitor risks related to financing activities of the Corporation and retirement plan
fund management;
• oversee risks related to environmental matters, and ensuring adequate procedures
are in place for any ESG-related metrics that are disclosed in Bombardier’s ESG
Report or otherwise; and
• monitor the adequacy and effectiveness of the disclosure controls and systems of
internal control of the Corporation through the reports provided by management or
Ernst & Young, as the case may be.
The CGNC assists the Board in fulfilling its oversight responsibility by monitoring the
composition of the Board of Directors and its Committees, and monitoring corporate
governance. Some of the key responsibilities of the CGNC are to:
• monitor the size, independence and composition of the Board of Directors and its
Committees to ensure effective decision-making, including the competencies,
skills, personal attributes and diversity (gender and other characteristics), and
recommending director nominees for the annual meeting of shareholders;
• oversee the process for assessing the effectiveness of our Board of Directors as a
whole, each Committee and the contribution of each director;
• recommend director share (or similar equity) ownership guidelines, and
remuneration of non-executive directors;
• oversee director development programs, including orientation and continuing
education;
• oversee ESG matters, including our annual ESG Report, in conjunction with the
Audit Committee’s responsibilities regarding ESG-related metrics; and
• review our corporate governance policies and practices, including our Code of
Ethics, and recommend any new principles or best practices to the Board of
Directors.
The HRCC supports the Board’s supervision of human resources and compensation
matters and procedures. Some of the key responsibilities of the HRCC are to
oversee:
• CEO and executive officer appointments, succession planning, and leadership
development;
• total senior executive compensation policies, and executive share ownership
guidelines;
• the CEO’s total compensation;
• the CEO’s objectives and performance assessment against those objectives;
• the CEO’s performance assessment of the other senior executives and
compensation recommendations;
• compensation governance to ensure the Corporation is able to attract, motivate and
retained qualified personnel in order to meet Bombardier’s business objectives;
• incentive compensation and equity-based plans and bonus payouts;
• our executive compensation disclosure;
• occupational health and safety matters;
• adequacy of policies and procedures regarding social issues, including employment
equity, harassment and discrimination, and compliance therewith; and
• workplace diversity, and monitoring progress towards diversity goals and targets.
(1) As at December 31, 2023. Supplemental information regarding our Board of Directors can be found on our website at bombardier.com.
(2) Full details of the responsibilities of each of the Board Committees are described in their respective Charters, which can be found on our
website at bombardier.com.
166 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
STOCK EXCHANGE LISTINGS
Class A Shares (Multiple
Voting) and Class B
Subordinate Voting Shares
Preferred Shares, Series 2,
Series 3 and Series 4
Stock listing ticker
Toronto (Canada)
Toronto (Canada)
BBD (Toronto)
FISCAL YEAR 2024 FINANCIAL RESULTS
First Quarterly Report
Second Quarterly Report
April 25, 2024
July 25, 2024
Third Quarterly Report
November 7, 2024
2024 Annual Financial Report
February 6, 2025
PREFERRED DIVIDEND PAYMENT DATES
Payment subject to approval by the Board of Directors
Series 2
Record date
Payment date
Record date
Payment date
2023-12-29
2024-01-31
2024-02-29
2024-03-28
2024-04-30
2024-05-31
Series 3
2024-01-15
2024-02-15
2024-03-15
2024-04-15
2024-05-15
2024-06-15
2024-06-28
2024-07-31
2024-08-30
2024-09-30
2024-10-31
2024-11-29
Series 4
2024-07-15
2024-08-15
2024-09-15
2024-10-15
2024-11-15
2024-12-15
Record date
Payment date
Record date
Payment date
2024-01-15
2024-04-15
2024-07-15
2024-10-15
2024-01-31
2024-04-30
2024-07-31
2024-10-31
2024-01-15
2024-04-15
2024-07-15
2024-10-15
2024-01-31
2024-04-30
2024-07-31
2024-10-31
Please note that unless stated otherwise, all dividends paid by Bombardier since January 2006 on all of its
common and preferred shares are considered “eligible dividends” as per the Canadian Income Tax Act and any
corresponding provincial or territorial legislation. The same designation applies under the Quebec Taxation Act for
dividends declared after March 23, 2006.
BOMBARDIER INC. / 2023 FINANCIAL REPORT 167
Contact Information
Bombardier Inc.
Investor Relations
400 Côte-Vertu Road West
Dorval, Québec,
Canada H4S 1Y9
Telephone: +1 514 240-9649
Email: investors@bombardier.com
DUPLICATION
Although Bombardier strives to ensure that registered
shareholders receive only one copy of corporate
documents, duplication is unavoidable if securities are
registered under different names and addresses. If this
is the case, please call Computershare Investor
Services at one of the following numbers:
+1 514 982 7555 or +1 800 564 6253 (toll-free, North
America only) or send an email to
service@computershare.com.
ONLINE INFORMATION
For additional information, we invite you to visit our
websites at:
bombardier.com and ir.bombardier.com
TRANSFER AGENT AND REGISTRAR
Shareholders with inquiries concerning their shares
should contact:
Computershare Investor Services Inc.
100 University Avenue, 8th Floor
Toronto, Ontario
Canada M5J 2Y1
or
650 de Maisonneuve West, 7th floor
Montréal, Québec
Canada H3A 3T2
Tel.: +1 514 982 7555 or +1 800 564 6253
(toll-free, North America only)
Fax: +1 416 263 9394 or +1 888 453 0330
(toll-free, North America only)
Email: service@computershare.com
AUDITORS
Ernst & Young LLP
900 de Maisonneuve Blvd. West
Suite 2300
Montréal, Québec
Canada H3A 0A8
ANNUAL MEETING
The annual meeting of shareholders will be held on
Thursday, April 25, 2024, at 10:30 a.m. (Montréal
time).
168 BOMBARDIER INC. FINANCIAL REPORT - FISCAL YEAR ENDED DECEMBER 31, 2023
The Global 8000 aircraft is currently under development
and remains to be finalized and certified. It is expected to
enter service in 2025(1). All specifications and data are
approximate, may change without notice and are subject to
certain operating rules, assumptions and other conditions.
Bombardier, Bombardier Pũr Air, Bombardier Vision Flight
Deck, Chaise, Challenger, Challenger 300, Challenger 350,
Challenger 3500, Challenger 600, Challenger 601,
Challenger 604, Challenger 605, Challenger 650,
Exceptional by Design, Executive, Global, Global 5000,
Global 5500, Global 6000, Global 6500, Global 7500,
Global 8000, Global Express, Global Express XRS, Global
Vision, Global XRS, Learjet, Learjet 40, Learjet 45, Learjet
70, Learjet 75, Learjet 75 Liberty, L’Opéra, Nuage, Nuage
Cube, PrecisionPlus, Smart Parts, Smart Parts
Maintenance Plus, Smart Parts Plus, Smart Parts
Preferred, Smart Services, Smart Services Elite, Smartfix,
Smartfix Plus, Smartlink, Smartlink Plus, Smooth Flĕx
Wing, Soleil and Touch are trademarks of Bombardier Inc.
or its subsidiaries.
The printed version of this annual report uses paper containing 30% sustainable recycled fiber.
Using this paper, instead of virgin paper, saves(2):
5
mature tree,
equivalent to 1
metric ton of wood
328 kg of CO2,
equivalent to
1,307 kilometres
driven
2,000 liters
of water, equal to
15 10-minute
showers
consumption in
Northern America
Completely recyclable -
the responsible choice
Printed in Canada
978-2-923797-65-6
Legal deposit, Bibliothèque et
Archives nationales du Québec
All rights reserved.
© 2023 Bombardier Inc. or its subsidiaries
FSC® is not responsible for calculating
resources saved when using this paper.
(1) See the forward-looking statements disclaimer in the overview section of Bombardier’s Management Discussion and Analysis for the fiscal
year-ended 2023.
(2) Data issued by the paper manufacturer.