WSU ECONOMIC OUTLOOK

CONFERENCE

JOHN DIEKER

VP STRATEGIC PROJECTS

LEARJET

OCTOBER 11, 2012

BOMBARDIER

AEROSPACE

AIRCRAFT

INDUSTRY

OUTLOOK

ABOUT

BOMBARDIER

Transportation

#1 manufacturer in the world Revenues: $9.8 billion

Workforce: 36,200

Aerospace

#3 manufacturer in the world Revenues: $8.6 billion

Workforce: 33,600

Bombardier Inc.

Headquartered in Montréal, Canada

Revenues: $18.3 billion

Workforce: 70,000

Note: All information as of December, 2011; All monetary amounts are expressed in 2011 US dollars unless otherwise indicated

A WORLD LEADER IN MOBILITY SOLUTIONS

THE EVOLUTION OF MOBILITY

Commercial Aircraft CRJ Series, Q-Series and

CSeries

Business Jets Learjet, Challenger and Global

Amphibious & Specialized Bombardier 415 and Specialized a/c

Customer Services Service Centers, Trainings, Parts,

Smart Services

Aircraft Solutions Aircraft Management, Fractional

and Jet Cards (Flexjet)

EVERY 3 SECONDS, A BOMBARDIER AIRCRAFT TAKES

OFF OR LANDS SOMEWHERE AROUND THE GLOBE

THE EVOLUTION OF MOBILITY

WE HAVE REMAINED COMMITTED TO OUR INVESTMENTS IN NEW

PRODUCT DEVELOPMENT DESPITE THE DIFFICULT ECONOMIC

ENVIRONMENT…

1. Includes spend such as program tooling additions and R&D expenses

CRJ1000 NEXTGEN

CS100/CS300

Global 7000/8000 Vision Flight Deck Learjet 85 Learjet 70/75

0

200

400

600

800

1000

1200

1400

1600

1800

2003 2004 2005 2006 2007 2008 2009 2010 2011 Budgeted 2012

Net product development investments 1

(Intangible assets) Fiscal years ended January 31, 2004-2011

Calendar years ended December 31, 2011-2012

In m

illi

on

s o

f U

.S.

do

lla

rs

Source: 2003-2011 Annual reports and 2012 Budget

A COMPANY OF CHOICE

BOTTOM LINE IS: EXECUTION ON OUR NEW

PROGRAMS IS KEY

CRJ900

CRJ700

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Challenger 300

Learjet 40*

Learjet 45 XR*

Global 5000*

Global

Express XRS*

Learjet

40 XR*

CRJ700 NextGen*

CRJ900 NextGen*

Challenger 605*

Learjet 60 XR* Q400 NextGen*

CRJ1000

NextGen*

CS100

Learjet 85

Vision

Flight Deck*

Global 7000

2017

Global

8000

In Production

In Development

* Derivatives

CS300

Learjet 7075

Challenger

OUR PRIORITIES

LEARJET

FAMILY

CHALLENGER

FAMILY

GLOBAL

FAMILY

Turboprops

Regional jets

Single-aisle

mainline jets

Learjet 40XR/70 Learjet 45XR /75 Learjet 60 XR

Challenger 300 Challenger 605 Challenger 850

Global 5000 Global 6000 Global 7000

Q400 and Q400 NextGen

CRJ700 NextGen CRJ900 NextGen CRJ1000 NextGen

CSeries CS300

BOMBARDIER HAS A BROAD PORTFOLIO OF

PRODUCTS

Global 8000

Challenger 870

CSeries CS100

Learjet 85

BU

SIN

ES

S A

IRC

RA

FT

C

OM

ME

RC

IAL

AIR

CR

AF

T

ALL OF OUR THREE MAIN MARKET SEGMENTS ARE EXPECTED TO

GROW SIGNIFICANTLY OVER THE NEXT FEW YEARS

Units (K)

45

30

15

0

Fleet

2029

29.0

Retirements

11.2

Deliveries

26.0

Fleet

2010

14.2

Units (K)

30

20

10

0

Fleet

2029

17.3

Retirements

6.7

Deliveries

12.8

Fleet

2010

11.2

US$B

9

6

3

0

Revenue

Forecast

2019

7.8

4.3

3.5

Revenue

Growth

3.3

1.4

1.9

Revenue

Forecast

2010

4.5

2.9

1.6

Commercial Aircraft Business Aircraft

Source: Bombardier Market Forecasts

$626B in

deliveries

$612B in

deliveries

A COMPANY OF CHOICE

Business Aircraft Fleet Commercial Aircraft Fleet

Maintenance, Repair,

Overhaul and Training Market

CURRENT

MARKET

CONDITIONS

INDUSTRY DELIVERIES IN THE FIRST HALF OF 2012

BETTER ACROSS THE BOARD VERSUS SAME

PERIOD LAST YEAR

Light Category

Deliveries

Medium Category

Deliveries

Large Category

Deliveries

2012

YTD

88

2011

YTD

101

2011

245

2010

194

2009

238

2008

501

+15%

8469

189208212

306

2012

YTD

2011

YTD

2011 2010 2009 2008

+22%

5953

129142

124120

2012

YTD

2011

YTD

2011 2010 2009 2008

+11%

244210

563544

574

927

2011 YTD 2011 2012 YTD 2008 2010 2009

+16%

Industry Deliveries, units, 2008 to Q2-2012

(all OEMs)

Source: GAMA; excludes very light & large corporate airliners segments.

17.8%17.2%

16.1%15.7%

15.2% 15.2% 15.0%14.4%

13.8% 13.7% 13.6% 13.6% 13.4%13.3%

12.2%

10.9% 10.9%10.5% 10.6% 10.4%

9.8%

9.0% 8.8% 9.1% 9.1%8.7%

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12

Industry - All A/C

Industry - In-Prod

INDUSTRY PRE-OWNED INVENTORY

Q2 INDUSTRY PRE-OWNED INVENTORY IS APPROACHING NORMAL

Percentage (%) of fleet, all aircraft

.

SOURCE: JETNET.

Note: Excluding VLJ & LCA

BUSINESS JET UTILIZATION

SOURCE: FAA. SOURCE: EUROCONTROL.

US Business Jet Utilization, ‘000s departures and

landings

European Business Jet Utilization, ‘000s departures

and landings

1,0341,0151,0101,0131,041

1,0061,0191,0181,001960945927

874

-1%

Q2

12

Q1

12

Q4

11

Q3

11

Q2

11

Q1

11

Q4

10

Q3

10

Q2

10

Q1

10

Q4

09

Q3

09

Q2

09

123

99105

137128

100108

133

120

97103

124

113

-4%

Q2

12

Q1

12

Q4

11

Q3

11

Q2

11

Q1

11

Q4

10

Q3

10

Q2

10

Q1

10

Q4

09

Q3

09

Q2

09

Q2 US AND EUROPEAN BUSINESS JET UTILIZATION IMPROVED VS. Q1

37

43

49

414142

48

42

37

5050

Q3

11

Q4

11

Q1

12

Q2

11

Q4

10

Q2

10

Q1

11

Q1

10

Q3

10

Q2

12

Q3

12*

-14%

*August 15 survey

SOURCE: UBS

THE INDEX IS SCORED ON A SCALE OF ZERO TO 100, WITH 51-100 REPRESENTING INCREMENTALLY

STRENGTHENING MARKET CONDITIONS, 50 INCREMENTALLY STABLE, AND 0-49 INCREMENTALLY WEAKENING

MARKET CONDITIONS.

DESPITE DROP IN SURVEY, UBS BELIEVES THAT THE NORTH AMERICAN

MARKET IS IMPROVING DRIVEN BY REPLACEMENT DEMAND

UBS BUSINESS JET MARKET INDEX

Declines in customer

interest and willingness

scores with regards to

aircraft purchase

intentions drove majority

of the drop in the index.*

DEMAND FOR AIR TRAVEL REFLECTED IN ORDERS

FOR NEW AIRCRAFT

Commercial aircraft orders reflect GDP growth trends

• New aircraft order intake (20-

220 seats) reached more

than 2,300 units in 2011, a

314% increase vs. 2009

• Non-North American and

European economies to

account for 61% of GDP

growth from 2012 to 2031

• New aircraft orders for the

20- to 149- seat segment to

be evenly distributed between

mature and emerging

markets

COMMERCIAL AIRCRAFT ORDERS AND GDP GROWTH

KEY MARKET

DRIVERS AND

INFLUENCING

ISSUES

MARKET DRIVERS OF AIR TRAVEL DEMAND

•Air travel demand will be cyclical and directly related to GDP growth

•Global GDP forecast at 3.2% over the 20-year forecast period Economic Growth

•Forecast at $126/bbl over the 20-year period •Fleet mix will be affected by fuel prices Fuel Prices

•Increasing fuel price volatility will dampen airline profits

Fuel Volatility

•Due to age, technical obsolescence and cost inefficiencies, more than half of the current aircraft fleet will be replaced in the next 20 years Replacement Demand

•Emerging markets are expected to lead global economic growth

•Strong growth in air traffic despite the constraints of lagging aviation infrastructure

Emerging Markets

•Increasing regulation will encourage lower per-passenger fuel burns and emissions, thereby affecting fleet mix

Environmental Regulations

•Imposition of environmental and emissions fees will increase airline operating costs Environmental Fees

•Contractual restrictions on airline operations will ease over time Labor Trends

ENVIRONMENTAL ISSUES AND REGULATIONS

INCREASINGLY IMPORTANT OVER THE FORECAST

17

Improvements in aircraft emissions, local air quality and community noise

• Modern aircraft achieve fuel efficiency of 3.5L / 100 passenger km comparable to hybrid passenger cars

Goal of carbon-neutral growth over the forecast period

• ICAO-led industry goal of a 50% reduction in CO2 emissions from 2005 levels by 2050

Higher demand for efficient new aircraft

• Retirement of older aircraft, fleet modernization, application of new technology

LONG-TERM OIL PRICES FORECAST TO AVERAGE $126/BBL

Sustained high oil prices will continue to challenge airlines’ profitability

• Jet fuel accounts for an average of 34% of an airline’s operating costs

• New aircraft with cost-reducing technologies will accelerate the

retirement of older aircraft

BUSINESS

AIRCRAFT

MARKET

FORECAST

2012-2031

BUSINESS AVIATION HAS A SIGNIFICANT GROWTH RUNWAY

Penetration index represents the number of business aircraft per $100B US GDP

Note: Penetration index defined as business aircraft fleet per $100 B US of GDP. Data excludes very light jets and large corporate airliners Source: Ascend, IHS Global Insight, 2005 constant Dollars

0

10

20

30

40

50

60

70

Penetration index

(Fleet per $100B US)

4

2

China

3

2

25

19

Middle-East

22

17

India

12

4

Europe

12

6

Asia &

Oceania

Leading

Market

North

America

67

54

Latin

America

41

28

Russia

& CIS

29

6

Africa

2000

2010

20

SOURCE: ASCEND, UNITED NATIONS AND IHS GLOBAL INSIGHT.

1960-2031 Fleet per Capita vs. GDP per Capita

BUSINESS JETS WILL PENETRATE NEW MARKETS

WORLDWIDE

1

10

100

1000

10000

100 1,000 10,000 100,000

GDP per Capita (USD, Log Scale)

Fle

et

pe

r 1

00

Millio

n P

op

ula

tio

n (

Lo

g S

ca

le)

2nd driving

force:

removal of

barriers

1st driving

force: GDP

growth

NORTH AMERICA

LATIN AMERICAEUROPE &

RUSSIA

ASIA

MIDDLE-EAST &

AFRICA

Average

growth path

NORTH AMERICA

LATIN AMERICA

MIDDLE-EAST

& AFRICA

ASIA

EUROPE &

RUSSIA

1st driving

force: GDP

growth

2nd driving

force:

removal of

barriers

Average

growth path

24,000 BUSINESS JET DELIVERIES WORTH $648B

OVER NEXT 20 YEARS

SOURCE: BOMBARDIER BUSINESS AIRCRAFT MARKET FORECAST, REVENUES IN CONSTANT 2011 BILLIONS $.

40

35

30

25

20

30 29 28 27 26 25 24 23 22 21 15 14 13 12 20 19 18 17 16

15

10

5

0

31

$292B

(45%)

$117B

(18%)

$239B

(37%)

Large

Medium

Light

10,700

(45%)

7,800

(32%)

5,500

(23%)

Total 20Yrs

$648B

Total 20Yrs

24,000 units 20-Year Revenue Forecast by Size Category, $ Billion

NORTH AMERICA, EUROPE, CHINA WILL BE THE

LARGEST MARKETS FOR BUSINESS JET DELIVERIES

Regional 10-Year and 20-Year Delivery Outlook, Units

Total World

2012-2021 9,800

2022-2031 14,200 SOURCE: BOMBARDIER ANALYSIS.

115

210

340

375

400

435

1650

1890

9725

India

China

Africa

Asia Pacific

Russia &CIS

Middle East

LatinAmerica

Europe

NorthAmerica

970

1170

1420

1470

1800

2590

3135

5125

13750

Africa

Asia Pacific

India

Middle East

Russia & CIS

China

LatinAmerica

Europe

NorthAmerica

64%

12%

11%

3%

3%

2%

2%

1%

1%

5%

44%

16%

10%

8%

6%

5%

4%

3%

CAGR: 13%

CAGR: 2%

CAGR: 5%

CAGR: 3%

CAGR: 13%

CAGR: 8%

CAGR: 6%

CAGR: 6%

CAGR: 5%

Total Fleet Size ~15,200 Total Fleet Size ~31,500

Distribution of World Fleet in 2011, units Distribution of World Fleet in 2031F, units

100% 100%

BUSINESS JET FLEET BY REGION – 2011 VS. 2031F

SIGNIFICANT FLEET ADDITIONS IN HIGH GROWTH ECONOMIES EXPECTED

SOURCE: BOMBARDIER MARKET FORECAST.

% %

COMMERCIAL

AIRCRAFT

MARKET

FORECAST

2012-2031

MIDDLE CLASS CONSUMER SPENDING TO EXPAND

RAPIDLY IN EMERGING MARKETS

• Asia-Pacific middle-class spending to jump to $32.6 trillion in 2030, compared to $5.0 trillion in 2009

• In South America, Africa and the Middle East, middle-class spending is poised to double

MIDDLE-CLASS CONSUMER SPENDING IN TRILLIONS USD*

HIGH OIL PRICES AND ENVIRONMENTAL REGULATIONS TO

DRIVE THE USE OF TURBOPROPS

Advanced turboprops’ lower fuel burn allows carriers to maintain capacity and shrink their overall environmental footprint

2,850 turboprop aircraft to be delivered from 2012 to 2031

2001 Actual 2011 Actual Average

Turboprop

Regional Jet

Units per year

Oil @ $111 per barrel Oil @ $26 per barrel Oil @ $126 per barrel

248 319 295

Source: Bombardier Commercial Aircraft Market Forecast 2012-2031, Energy Information Administration 2012-2031 forecast

INCREASED AIRCRAFT RETIREMENTS DUE TO COST

INEFFICIENCIES AND AGE

2011 Fleet

(units)

FLEET EVOLUTION FROM 2011-2031

20- TO 149-SEAT FLEET

PACE OF OLDER AIRCRAFT RETIREMENTS INCREASES

60% of current 20- to 149- seat aircraft fleet will retire

by 2031: 3000 aircraft

New-generation 100- to 149- seat aircraft

expected to account for half of 20- to 149- seat

fleet by 2031

% o

f fle

et

active

Age

Source: Bombardier Analysis

COMMERCIAL AIRCRAFT GENERAL RETIREMENT PROFILE

STRONG GROWTH IN LARGER SEAT SEGMENT FLEETS

Overall fleet growth of 52%, representing a compound annual growth rate of 2.1%

11,200

12,800

2031

Fleet

2011

Fleet

Total

7,000

17,000

BOMBARDIER MARKET SEGMENTATION EVOLUTION

FLEET, DELIVERIES, RETIREMENT 2011-2031

DEMAND FOR NEW AIRCRAFT IS SHIFTING TO EMERGING

MARKETS

Total World

2012-2031 12,800

Regional 20-Year Delivery Outlook

CONCLUSION

• NEW AIRCRAFT WILL BE

MORE ENVIRONMENTALLY

FRIENDLY AND EFFICIENT

• MARKET OUTLOOK REMAINS

OPTIMISTIC (BUSINESS AND

COMMERCIAL)

• EMERGING MARKETS ARE

EXPECTED TO LEAD GLOBAL

ECONOMIC GROWTH

32