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Bombardier Announces Financial Results for the Third Quarter Ended October 31, 2007

Nov. 28, 2007, Montréal, Que. - Bombardier today released strong financial results for the third quarter of fiscal year 2008.


November 28, 2007
By Carey Fredericks

Nov. 28, 2007, Montréal, Que. – Bombardier
today released strong financial results for the third quarter of fiscal
year 2008.

(All amounts in this press release are in U.S. dollars unless otherwise indicated.)

  • Consolidated revenues of $4.2 billion, compared to $3.4 billion last fiscal year
  • EBITDA from continuing operations of $326 million, compared to $234 million last fiscal year
  • EBIT from continuing operations of $201 million, compared to $105 million last fiscal year
  • Income from continuing operations of $91 million ($0.05 per share), compared to $53 million ($0.03 per share) last fiscal year
  • Free cash flow of $560 million, an improvement of $677 million over the same period last fiscal year
  • Cash position of $3.6 billion, allowing for the intended repurchase of long-term debt totalling $1.1 billion
  • Record backlog of $51.6 billion

 Earnings before financing income, financing expense and
income taxes, from continuing operations (EBIT), reached $201 million,
compared to $105 million for the same period last year. This brings the
EBIT margin to 4.8%, which compares favourably to last year's 3.1% for
the same quarter. Free cash flow (cash flows from operating activities
less net additions to property, plant and equipment) also surged by
$677 million to reach $560 million. As for the Corporation's overall
backlog, it climbed to a historic high of $51.6 billion as at October
31, 2007.

Cash and cash equivalents increased by $1 billion
compared to January 31, 2007, totalling $3.6 billion at the end of the
third quarter of fiscal 2008. Due to this strong cash position, the
Corporation intends to repurchase, prior to the end of the current
fiscal year, the following three long-term debts: €282-million
($408-million) notes, bearing interest at 5.75%, due in February 2008;
£300-million ($623-million) of Bombardier Capital's notes, bearing
interest at 6.75%, due in May 2009; and another long-term debt of $26
million.

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"Both business groups produced substantial increases in
revenues and made steady improvement in profitability," commented
Laurent Beaudoin, Chairman of the Board and Chief Executive Officer,
Bombardier Inc. "They also generated high levels of free cash flow for
the quarter. At Aerospace, orders for business aircraft remained solid,
and deliveries of both business and regional aircraft continued to
climb. At Transportation, order levels were similarly robust, bringing
our book-to-bill ratio to a healthy 1.7 for the quarter," added Mr.
Beaudoin. "Indeed, the Corporation's solid backlog, which now tops more
than $50 billion, testifies to the enduring demand for our fully
diversified product offering. I am confident that Bombardier will
continue to build from this solid foundation to execute its market
leadership strategy."

Bombardier Aerospace

EBIT
at Bombardier Aerospace rose to $122 million, compared to $43 million
for the same period last year. This represents an EBIT margin of 5.2%,
versus last year's 2.3% for the same quarter. Free cash flow of $579
million, compared to last year's $18 million, represents a $561 million
improvement.

Bombardier Aerospace's backlog soared to a new
record level of $19.6 billion, an increase of $6.4 billion compared to
the backlog as at January 31, 2007. Firm orders totalled 124 business
and regional aircraft, compared to 95 aircraft for the same period last
fiscal year. Deliveries also climbed to 90 aircraft, versus 73 for the
corresponding period last year.

With 112 net orders for business
aircraft in the third quarter, compared to 57 for the same period last
fiscal year, Bombardier Aerospace reaffirmed its market leadership.
Indeed, the group received its largest single order for Challenger 300 aircraft, as U.S.-based XOJET placed a firm order for 20 of such jets, with options for an additional 60 jets.

Building on the Learjet aircraft family's celebrated heritage for innovation and performance, Bombardier Aerospace launched an all-new Learjet aircraft, provisionally named Learjet NXT. To date, the group has received more than 85 letters-of-intent for the Learjet NXT.

Based on the growing number of firm orders on a year-to-date basis, in addition to the production rate increase for the CRJ700 and CRJ900
aircraft announced last August, Bombardier Aerospace elected to further
step up its production rate to one aircraft every three days.
Bombardier Aerospace therefore expects to produce approximately 50 CRJ700 and CRJ900 aircraft during this fiscal year and approximately 64 regional jets during fiscal year 2009.

Bombardier Aerospace's Q-Series continues to attract high demand from regional airlines. In addition to the 10 Q400
aircraft orders received during the quarter from a European customer,
subsequent to October 31, 2007, Bombardier Aerospace received an order
for 12 Q400 turboprops from Qantas Airways of Australia, with options and purchase rights for 24 additional Q400 aircraft, showing the continued confidence airline customers have in this product.

Bombardier Transportation

Bombardier
Transportation's EBIT reached $79 million, compared to $62 million for
the same quarter last fiscal year. This represents an EBIT margin of
4.2%, versus 4% for the same quarter last fiscal year. Meanwhile, free
cash flow totalled $35 million, an improvement of $177 million over the
same quarter last fiscal year.

New order intake reached $3.1
billion, leading to a book-to-bill ratio of 1.7 for the third quarter,
bringing the order backlog to $32 billion as of October 31, 2007.

In China, Bombardier Transportation was awarded a breakthrough signalling contract for its INTERFLO
450 European Rail Traffic Management System (ERTMS) Level 2 system.
Subsequent to the quarter, Bombardier Sifang Power (Qingdao)
Transportation Ltd. (BSP) received from the Chinese Ministry of
Railways an order for 40 high-speed trainsets featuring ZEFIRO technology. This is the largest single order for rail passenger cars placed at one time in Chinese rail history.

In
connection with the framework agreement signed in February 2007 between
Bombardier Transportation and Germany's Deutsche Bahn (DB) for the
supply of 321 new TALENT 2 trains, a first order of 42 trains, representing 168 cars, was received during the third quarter of fiscal 2008.

In
October, with the inauguration in France of the world's first dual-mode
and dual-voltage AGC (Autorail Grande Capacité), Bombardier
Transportation reaffirmed its reputation for ingenuity and innovation.
This groundbreaking hybrid AGC combines a specific set of operating
features for the first time ever in a train.

In November,
Bombardier purchased all the shares held by Power Pacific Corporation
Limited in the capital stock of the holding of Bombardier
Transportation's joint ventures in China, for a total consideration of
$39 million. This transaction brings the group's participation in its
various joint ventures in this country to 50%.

Financial highlights

(unaudited, in millions of U.S. dollars, except per share amounts, which are shown in dollars)

FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED OCTOBER 31, 2007

ANALYSIS OF RESULTS

Consolidated results

Consolidated
revenues totalled $4.2 billion for the third quarter ended October 31,
2007, compared to $3.4 billion for the same period last year. For the
nine-month period ended October 31, 2007, consolidated revenues reached
$12.2 billion compared to $10.5 billion for the same period last year.
The $826-million and $1.8-billion increases mainly reflect higher
manufacturing revenues for business aircraft and regional aircraft;
higher revenues in Transportation, mainly due to a positive currency
impact, higher mainline, system, propulsion and controls and service
revenues, partially offset by a lower level of activities in the North
America region; and higher service revenues in Aerospace.

EBIT
from continuing operations amounted to $201 million, or 4.8% of
revenues, for the third quarter ended October 31, 2007, compared to
$105 million, or 3.1% of revenues, for the same period the previous
year. In Aerospace, EBIT for the three-month period ended October 31,
2007 was favourably impacted by the mix of business and regional
aircraft, as well as improved selling prices for wide-body business
aircraft and regional aircraft, and higher volume of activities.
However, EBIT was negatively impacted by the strengthening of the
Canadian dollar and the pound sterling versus the U.S. dollar,
including a charge of $23 million following the change in the long-term
foreign exchange assumption for the Canadian dollar, which led to a
revision of cost estimates for programs under average cost accounting,
and by higher production costs. In Transportation, EBIT has slightly
increased, despite the costs incurred for the development of the new
platform, in relation to the first order received under the DB
framework agreement for the new TALENT 2 trains.

For
the nine-month period ended October 31, 2007, EBIT from continuing
operations before special items amounted to $597 million, or 4.9% of
revenues, compared to $333 million, or 3.2% of revenues, for the same
period the previous year. EBIT for the nine-month period ended October
31, 2007 reflects higher margin percentage in Aerospace, mainly due to
a favourable mix of business aircraft as well as improved selling
prices for wide-body business aircraft, improved margins on service
activities and improved selling prices for regional aircraft. This was
partially offset by the negative impact of the strengthening of the
Canadian dollar and the pound sterling versus the U.S. dollar,
including a charge of $45 million following the changes in the
long-term foreign exchange assumption for the Canadian dollar, which
led to revisions of cost estimates for programs under average cost
accounting, and by higher production costs. In Transportation, EBIT
benefited from procurement initiatives and quality enhancement programs
while adjustments for service contracts, mainly in the United Kingdom
(U.K.), and costs for the development of the new platform, in relation
to the first order received under the DB framework agreement for the
new TALENT 2 trains, negatively impacted EBIT.

Net
financing expense amounted to $68 million for the third quarter of
fiscal year 2008, compared to $50 million for the corresponding period
of last year. For the nine-month period ended October 31, 2007, net
financing expense reached $209 million, compared to $148 million for
the same period last year. The $18-million and $61-million increases
are mainly due to higher interest expense on long-term debt and net
losses on certain financial instruments, including certain call options
on long-term debt, partially offset by higher interest income on cash
and cash equivalents, and interest income on invested collateral.

Income
from continuing operations, net of tax, amounted to $91 million, or
$0.05 per share, for the third quarter of fiscal year 2008, compared to
$53 million, or $0.03 per share, for the same period the previous year.
For the nine-month period ended October 31, 2007, income from
continuing operations before special items, net of tax, was $261
million, or $0.14 per share, compared to $153 million, or $0.08 per
share, for the same period the previous year.

The special item
for the nine-month period ended October 31, 2007 relates to the
write-off of the carrying value of the investment in Metronet in
Transportation.

For the third quarter of fiscal year 2008, net
income reached $91 million, or $0.05 per share, compared to $74
million, or $0.04 per share, for the same period the previous year. A
net income of $99 million, or $0.04 per share, was recorded for the
nine-month period ended October 31, 2007, compared to $156 million, or
$0.08 per share, for the same period the previous year.

For the
three-month period ended October 31, 2007, free cash flow amounted to
$560 million, compared to a usage of $117 million for the corresponding
period the previous year. For the nine-month period ended October 31,
2007, free cash flow amounted to $1 billion, compared to a usage of
$510 million for the corresponding period last year, representing a
$1.5-billion increase. These improvements are mainly due to better
management of working capital in both groups.

As at October 31,
2007, Bombardier's order backlog reached a record level of $51.6
billion, compared to $40.7 billion as at January 31, 2007. The
$10.9-billion increase is due to higher order intake compared to
revenues recorded in Aerospace and Transportation, and a net currency
impact in Transportation, mainly arising from the strengthening of the
euro and the pound sterling versus the U.S. dollar as at October 31,
2007, compared to January 31, 2007.

Bombardier Aerospace

  • Revenues of $2.3 billion
  • EBITDA of $219 million
  • EBIT of $122 million or 5.2% of revenues
  • Free cash flow of $579 million
  • Net orders totalling 124 aircraft
  • Order backlog of $19.6 billion
  • 90 aircraft deliveries

Bombardier
Aerospace's revenues amounted to $2.3 billion for the three-month
period ended October 31, 2007, compared to $1.9 billion for the same
period the previous year. This increase is mainly due to higher
manufacturing revenues for business and regional aircraft, and higher
service revenues.

EBIT amounted to $122 million, or 5.2% of
revenues, for the third quarter ended October 31, 2007, compared to $43
million, or 2.3% of revenues, for the same period the previous year.
EBIT for the three-month period ended October 31, 2007 was favourably
impacted by the mix of business and regional aircraft, as well as
improved selling prices for wide-body business aircraft and regional
aircraft, and higher volume of activities. EBIT was negatively impacted
by the strengthening of the Canadian dollar and the pound sterling
versus the U.S. dollar, including a charge of $23 million following the
change in the long-term foreign exchange assumption for the Canadian
dollar, which led to a revision of cost estimates for programs under
average cost accounting, and by higher production costs.

Free
cash flow totalled $579 million for the third quarter ended October 31,
2007, compared to $18 million for the same period last fiscal year.
Free cash flow was positively impacted by a net change in non-cash
balances related to operations and higher profitability. Higher net
additions to property, plant and equipment, reflecting the investments
in the CRJ1000 regional jet program and the recently launched all-new Learjet aircraft, provisionally named the Learjet NXT, also impacted free cash flow.

For
the quarter ended October 31, 2007, aircraft deliveries totalled 90,
compared to 73 for the same period the previous year. The 90 deliveries
consisted of 57 business aircraft (42 aircraft for the corresponding
period last fiscal year) and 33 regional aircraft (31 aircraft for the
corresponding period last fiscal year).

Aerospace received 124
net orders during the quarter ended October 31, 2007, compared to 95
during the corresponding period the previous year. In business
aircraft, the group received 112 net orders during the three-month
period ended October 31, 2007, compared to 57 net orders during the
same period last fiscal year. The order intake remains very strong and
is consistent with the continued strength in the business aircraft
market. For the third quarter of fiscal year 2008, Aerospace received
12 net orders for regional aircraft, compared to 38 for the same period
last year. Major orders for the quarter included an order for 10 Q400 aircraft from a European airline.

As
at October 31, 2007, Aerospace's firm order backlog reached a record
level of $19.6 billion, compared to $13.2 billion as at January 31,
2007. This 48% increase mainly reflects strong order intake in both
regional and business aircraft. The decision to introduce the next
generation version of the CRJ700 and CRJ900 regional jets, in May 2007, as well as the launch of the CRJ1000
regional jet in February 2007, have contributed to this increase. In
business aircraft, both narrow-body and wide-body aircraft order
backlogs have increased and the order backlog for each product family
remains strong.

Bombardier Transportation

  • Revenues of $1.9 billion
  • EBITDA of $107 million
  • EBIT of $79 million
  • Free cash flow of $35 million
  • New order intake totalling $3.1 billion (book-to-bill ratio of 1.7)
  • Order backlog of $32 billion

Bombardier
Transportation's revenues amounted to $1.9 billion for the three-month
period ended October 31, 2007, compared to $1.5 billion for the same
period last year. The increase is mainly due to a positive currency
impact, higher mainline, system, propulsion and controls and service
revenues, partially offset by a lower level of activities in the North
America region.

EBIT totalled $79 million, or 4.2% of revenues,
for the third quarter ended October 31, 2007, compared to $62 million,
or 4% of revenues, for the same quarter the previous year. EBIT for the
three-month period ended October 31, 2007 was negatively impacted by
costs for the development of the new platform in relation to the first
order received under the DB framework agreement for the new TALENT 2 trains.

Free
cash flow for the quarter ended October 31, 2007 was $35 million,
compared to a usage of $142 million for the same period last fiscal
year. Free cash flow for the current period was positively impacted by
a net change in non-cash balances related to operations and by higher
profitability. Higher net additions to property, plant and equipment
also impacted free cash flow.

The order intake during the
three-month period ended October 31, 2007, totalled $3.1 billion,
compared to $2.8 billion for the same period last year. The increase
for the three-month period is mainly due to higher order intake in
mainline, mass transit and locomotive and to a positive currency
impact, partially offset by a particularly high level, in the previous
fiscal year, of order intake in services, and total transit system.
Major orders were for: 340 MOVIA metro cars from Delhi Metro Rail Corporation Ltd. (DMRC) in India, valued at $590 million, 42 TALENT 2 trains from DB Regio AG, as part of the framework agreement signed in February 2007, valued at $242 million and 60 TRAXX locomotives from Angel Trains, valued at $316 million.

Bombardier
Transportation's backlog totalled $32 billion as at October 31, 2007,
compared to $27.5 billion as at January 31, 2007. The increase is due
to the strengthening of the euro and the pound sterling compared to the
U.S. dollar and to a higher order intake compared to revenues recorded.

DIVIDENDS ON PREFERRED SHARES

Series 2 Preferred Shares
A
monthly dividend of $0.13021 Cdn per share on Series 2 Preferred Shares
has been paid on September 15, October 15 and November 15, 2007.

Series 3 Preferred Shares
A
quarterly dividend of $0.32919 Cdn per share on Series 3 Preferred
Shares is payable on January 31, 2008 to the shareholders of record at
the close of business on January 18, 2008.

Series 4 Preferred Shares
A
quarterly dividend of $0.390625 Cdn per share on Series 4 Preferred
Shares is payable on January 31, 2008 to the shareholders of record at
the close of business on January 18, 2008.

About Bombardier
A
world-leading manufacturer of innovative transportation solutions, from
regional aircraft and business jets to rail transportation equipment,
systems and services, Bombardier Inc. is a global corporation
headquartered in Canada. Its revenues for the fiscal year ended Jan.
31, 2007, were $14.8 billion US, and its shares are traded on the
Toronto Stock Exchange (BBD). Bombardier is listed as an index
component to the Dow Jones Sustainability World and North America
indexes. News and information are available at www.bombardier.com.

Challenger,Challenger 300, CRJ, CRJ700, CRJ900, CRJ1000, INTERFLO, Learjet, Learjet NXT, MOVIA, Q400, Q-Series, TALENT, TRAXX and ZEFIRO are trademarks of Bombardier Inc. or its subsidiaries.

For information
Isabelle Rondeau
Director, Communications
+514-861-9481

Shirley Chénier
Senior Director, Investor Relations
+514-861-9481

The Management's Discussion and Analysis and the Consolidated Financial Statements are available at www.bombardier.com.

FORWARD-LOOKING STATEMENTS
This
press release includes forward-looking statements. Forward-looking
statements generally can be identified by the use of forward-looking
terminology such as "may", "will", "expect", "intend", "anticipate",
"plan", "foresee", "believe" or "continue" or the negatives of these
terms or variations of them or similar terminology. By their nature,
forward-looking statements require Bombardier Inc. (the "Corporation")
to make assumptions and are subject to important known and unknown
risks and uncertainties, which may cause the Corporation's actual
results in future periods to differ materially from forecasted results.
While the Corporation considers its assumptions to be reasonable and
appropriate based on current information available, there is a risk
that they may not be accurate. For additional information with respect
to the assumptions underlying the forward-looking statements made in
this press release, please refer to the respective Management's
Discussion and Analysis ("MD&A") sections of the Corporation's
aerospace segment ("Aerospace") and the Corporation's transportation
segment ("Transportation") in the Corporation's annual report for
fiscal year 2007.

Certain factors that could cause actual
results to differ materially from those anticipated in the
forward-looking statements include risks associated with general
economic conditions, risks associated with the Corporation's business
environment (such as the financial condition of the airline industry,
government policies and priorities and competition from other
businesses), operational risks (such as regulatory risks and dependence
on key personnel, risks associated with doing business with partners,
risks involved with developing new products and services, warranty and
casualty claim losses, risks from legal proceedings, risks relating to
the Corporation's dependence on certain key customers and key
suppliers, risks resulting from fixed term commitments, human resource
risks and environmental risks), financing risks (such as risks
resulting from reliance on government support, risks relating to
financing support provided on behalf of certain customers, risks
relating to liquidity and access to capital markets, risks relating to
the terms of certain restrictive debt covenants and market risks,
including currency, interest rate and commodity pricing risk). See
Risks and Uncertainties in the MD&A section of Bombardier Inc.'s
annual report for fiscal year 2007 for further information. 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. The forward-looking
statements set forth herein reflect the Corporation's expectations as
at the date of this press release and are subject to change after such
date. Unless otherwise required by applicable securities laws, the
Corporation expressly disclaims any intention, and assumes no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

CAUTION REGARDING NON-GAAP EARNINGS MEASURES
This
press release is based on reported earnings in accordance with Canadian
generally accepted accounting principles (GAAP). It is also based on
EBITDA, EBIT, EBT and EPS from continuing operations before special
items as well as on Free Cash Flow. These non-GAAP measures are
directly derived from the Consolidated Financial Statements, but do not
have a standardized meaning prescribed by GAAP; therefore, others using
these terms may calculate them differently. Management believes that a
significant number of the users of its MD&A analyze the
Corporation's results based on these performance measures and that this
presentation is consistent with industry practice. The special item for
the nine-month period ended October 31, 2007 relates to
Transportation's write-off of the carrying value of its investment in
Metronet. The special item for the nine-month period ended October 31,
2006 relates to the restructuring plan initiated in fiscal year 2005 to
reduce the cost structure in Transportation. Management views these
items as potentially distorting the analysis of trends.