Q1 2020 Earnings Call

May 7, 2020

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All participants please standby you'll consensus would need to begin.

Operator: Good morning, ladies and gentlemen, and welcome to the Bombardier Q1 2020 Earnings Conference Call. Please be advised that this call is being recorded. At this time, I'd like to turn the discussion over to Mr. Patrick Ghoche, Vice President, Corporate Strategy and Investor Relations for Bombardier. Please go ahead, Mr. Ghoche.

Good morning, ladies and gentlemen, and welcome to Dibrom why do you first quarter 2020, <unk> earnings Conference call. Please be advised that this call is being recorded I decided I'd like to turn your discussion over to Mr., Patrick Gosh, Vice President corporate strategy and Investor Relations Football Marquee. Please go ahead Mr. gosh.

Good morning, everyone and welcome to both parties earnings calls for the first quarter ended March 31st 2020.

Patrick Ghoche: Good morning, everyone, and welcome to Bombardier's Earnings Call for Q1 ending 31 March 2020. I wish to remind you that during the course of this call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the corporation. There are risks that actual events or results may differ materially from these statements. For additional information on forward-looking statements and underlying assumptions, please refer to the MD&A. I'm making this cautionary statement on behalf of each speaker on this call. With me today is our new President and Chief Executive Officer, Éric Martel, and our Chief Financial Officer, John Di Bert, to review our operations and financial results for Q1 2020. I would now like to turn over the discussion to Éric.

I wish to remind you that during the course of this call we may make projections or other forward looking statements regarding future events or to future financial performance of the Corporation.

Patrick Ghoche: There are risks that actual events or results may differ materially from these statements. For additional information on forward-looking statements and underlying assumptions, please refer to the MD&A. I'm making this cautionary statement on behalf of each speaker on this call.

There are risks that actual events or results may differ materially from these statements.

For additional information on forward looking statements an underlying assumptions. Please refer to the Mdna I'm, making this cautionary statement on behalf of each speaker on this call.

Patrick Ghoche: With me today is our new President and Chief Executive Officer, Éric Martel, and our Chief Financial Officer, John Di Bert, to review our operations and financial results for Q1 2020. I would now like to turn over the discussion to Éric.

With me today is our new President and Chief Executive Officer, You think method and our Chief Financial Officer, John divert the reviewer operations and financial results for the first quarter of 2020.

I would now like to turn over the discussion to Eric.

Éric Martel: Thank you, Patrick, and good morning, everyone that are joining us this morning, and thank you for being present. Let me start this morning by first of all recognizing that these are very unusual and challenging times for all of us, and I hope that you and your families are well and remaining safe. It is clear that we are facing a completely new reality. It is critical to embrace this new reality very quickly. We will need to change significantly how we operate, how we lead, and how we move forward. This is exactly what we're doing. Our number one priority, of course, is the health and safety of our employees and communities.

Thank you bye take and good morning, everyone that are joining us this morning, and thank you for a four being present.

Let me start this morning by a first of all recognizing that these are very unusual in challenging times for all of us and I hope that you and your families are well and remaining safe.

Éric Martel: It is clear that we are facing a completely new reality. It is critical to embrace this new reality very quickly. We will need to change significantly how we operate, how we lead, and how we move forward. This is exactly what we're doing. Our number one priority, of course, is the health and safety of our employees and communities.

It is clear that's we are facing a complete new reality.

It is critical to embrace this new reality very quickly.

We will need to change significantly or we operate.

Oh, we lead and how we move forward and this is exactly what we're doing.

Our number one priority of course is the health and safety of our employees and communities.

Éric Martel: I'd like to recognize and thank the Bombardier site leaders and team members working around the clock to ensure that we have the right procedures and safeguard in place to protect the well-being of our employees around the world. I also want to take this opportunity to thank all the essential workers on the front line fighting the COVID-19 pandemic. We truly appreciate your efforts and sacrifices. I am also proud of the Bombardier employees who are supporting these efforts. This includes our colleagues out in the field ensuring that public transportation system remain operational, as well as our employees working to provide first responder with the equipment they need. To go from making rail cars and business jet to assembling life-saving protective equipment and ventilators in just days is a testament to the skill and commitment of our people at Bombardier.

And I'd like to recognize and thank the bump RG site leaders and team members working around the clock to ensure that we are the right procedures and safeguards in place to protect the wellbeing of our employees around the world.

I also want to take this a portion is D.

Oh, thank all the essential workers on the frontline fighting to covert 19 pandemic.

We truly appreciate your efforts in sacrifices.

Éric Martel: I am also proud of the Bombardier employees who are supporting these efforts. This includes our colleagues out in the field ensuring that public transportation system remain operational, as well as our employees working to provide first responder with the equipment they need. To go from making rail cars and business jet to assembling life-saving protective equipment and ventilators in just days is a testament to the skill and commitment of our people at Bombardier.

I'm also proud of the bump our the employees who are supporting these efforts. This includes our colleagues out in the field and serving the public transportation system remain operational as well as our employees working to provide first responder with the equipment they need.

The go from making railcars and business jet to assembling lifesaving protective equipment and ventilators and just days is a testament of to the skill and commitment of our people have been Marty.

While our world has changed dramatically.

Éric Martel: While our world has changed dramatically, Bombardier remains a company defined by its strong product portfolio and by thousands of smart, passionate, and thoughtful employees who want to be part of a winning team. As most of you know, this is my first earnings call as Bombardier's President and CEO, and I am honored and excited to be back at Bombardier. There is truly nowhere I would rather be given my passion for the company and the opportunities I see to elevate our culture and performance. Since rejoining Bombardier, my primary focus has been on managing the business through this crisis. This includes daily leadership calls, an intense focus on managing costs and cash flows, as well as regular communication with customers and key suppliers, confirming orders and resetting delivery schedules as we deal with the current reality.

Somebody remains a company defined by a strong product portfolio.

And by Tarzan's of smart passionate and thoughtful employees.

Wants to be part of a winning team.

As most of you know this is my first earning calls as barges president and CEO and I am honored and excited to be back at the margin.

Éric Martel: There is truly nowhere I would rather be given my passion for the company and the opportunities I see to elevate our culture and performance. Since rejoining Bombardier, my primary focus has been on managing the business through this crisis. This includes daily leadership calls, an intense focus on managing costs and cash flows, as well as regular communication with customers and key suppliers, confirming orders and resetting delivery schedules as we deal with the current reality.

There is truly nowhere I would rather be given my passion for the company and the unfortunate these I seem to elevate our culture and performance.

Since rejoining Bargy My primary focus has been on managing the business through this crisis.

This includes they needed there ship calls an intense focus on managing cost.

And cash flows as well as regular communication with customer and key suppliers confirming orders and resetting delivery schedule as we deal with the current reality.

Éric Martel: I've also been getting up to speed on all aspects of the business. This includes a deep dive into our major aerospace program and largest rail projects to better understand the risks, the challenges, but also the opportunities. While the COVID-19 related travel restrictions and shutdowns have limited my abilities to visit our operations, I have had the opportunity to meet virtually with the top leaders across the business and to set clear priorities for both the immediate and the near-term future. These priorities include, first, continuing to proactively manage our business through the COVID-19 crisis to ensure our company's long-term sustainability. Number two, making our rail business predictable by being consistent in our performance. Number three, aligning Bombardier's aviation product production with market demand to be more profitable and a steadier cash flow generating business. Number four, driving business aviation aftermarket growth opportunities.

I've also been getting up to speed on all aspects of the business. This includes deep dive into our major aerospace program and largest rail projects to better understand the risk that challenge, but also the unfortunate.

And while the Kuvan 19 related travel the restriction and shut don't have limited my abilities to visit our operation I have had the opportunity to meet virtually with the top leaders across the business and to set clear priorities for both the immediate.

Éric Martel: While the COVID-19 related travel restrictions and shutdowns have limited my abilities to visit our operations, I have had the opportunity to meet virtually with the top leaders across the business and to set clear priorities for both the immediate and the near-term future. These priorities include, first, continuing to proactively manage our business through the COVID-19 crisis to ensure our company's long-term sustainability.

And the near term future.

So these priorities include.

First continuing to proactively manage our business through the coven 19 crisis, two ensures our company long term sustainability.

Éric Martel: Number two, making our rail business predictable by being consistent in our performance. Number three, aligning Bombardier's aviation product production with market demand to be more profitable and a steadier cash flow generating business. Number four, driving business aviation aftermarket growth opportunities.

Number two making our rail business predictable by being consistent in our performance.

Number three aligning barges have you shouldn't product production with market demand to be more profitable and a steadier cash flow generating business.

Number four driving business have you shouldnt aftermarket rotor fortunate these.

Éric Martel: Number five, completing the aerospace divestiture currently underway and the sale of Bombardier Transportation to address our balance sheet challenges. Finally, number six, set the foundation for long-term success by defining a clear vision for our company and resetting our culture to be more people and customer-centric, more accountable, and more focused on operational excellence. With these priorities and culture, our objectives are clear. Navigate through the crisis and make Bombardier a more profitable and predictable company with a healthier balance sheet. This is how we will redefine winning going forward. Turning now to the current situation and the actions we're taking in response to the COVID-19 pandemic. While there is still a great deal of uncertainty surrounding the duration and impact of the pandemic, we believe that we are taking the right actions to best position the company to navigate the crisis.

Number five completing the aerospace divestiture currently underway and the sale of on budget transportation to address our balance sheet challenges and finally number six set the foundation for long term success by defining a clear vision for our company and a resetting our culture.

Yeah.

To be more people and customer centric more accountable and more focused on operational excellence.

Éric Martel: With these priorities and culture, our objectives are clear. Navigate through the crisis and make Bombardier a more profitable and predictable company with a healthier balance sheet. This is how we will redefine winning going forward. Turning now to the current situation and the actions we're taking in response to the COVID-19 pandemic. While there is still a great deal of uncertainty surrounding the duration and impact of the pandemic, we believe that we are taking the right actions to best position the company to navigate the crisis.

With these priorities and culture.

Our objectives are clear.

Navigate through the crisis and make Bargy, a more profitable and predictable company with a altscher balance sheet.

This is how we will redefine winning going forward.

Turning now to the current situation and the actions we are taking in response to the Kogan 19 pandemic.

While there is still a great deal of uncertainty surrounding the duration and impact of the pandemic.

We believe that we are taking the right actions to be best position to best position the company to navigate the crisis.

Éric Martel: You'll recall that when the crisis began to unfold, we acted swiftly to protect the health and safety of our employees, to support government mandates to slow the spread of the virus, and to service our customer to the best of our ability. We also manage our operation to reduce costs, preserve cash, and ensure sufficient liquidity. This includes ongoing dialogue with government where we have major operation regarding additional support program, should they be necessary to navigate through the extended crisis. With respect to our previously announced divestitures, we expect the CRJ sale, as confirmed by MHI, to close on 1 June 2020. The Aerostructures sale to Spirit remains on track to close in the coming months. Collectively, when completed, these transactions will improve our cash position by over $1 billion. They will also mark the completion of Bombardier's exit from the commercial aerospace market.

You will recall that when the crisis began to unfold, we acted swiftly to protect the health and safety of our employees.

To support government mandates to slow the spread of the virus and to service our customer to the best of our ability.

We also manage our operation to reduce costs preserve cash and ensure sufficient liquidity.

Éric Martel: This includes ongoing dialogue with government where we have major operation regarding additional support program, should they be necessary to navigate through the extended crisis. With respect to our previously announced divestitures, we expect the CRJ sale, as confirmed by MHI, to close on 1 June 2020.

This includes ongoing dialogue with government, where we have major operation regarding additional support program.

Should they be necessary to navigate through the extended prices.

With respect to our previously announced divestitures.

We we expect the Crj sale as confirmed by May try to close on June Onest.

Éric Martel: The Aerostructures sale to Spirit remains on track to close in the coming months. Collectively, when completed, these transactions will improve our cash position by over $1 billion. They will also mark the completion of Bombardier's exit from the commercial aerospace market.

The aerostructure sales to spirit remains on track to close in the coming months.

Collectively when completed these transaction will improve our cash position by over a billion dollar.

They will also marked the completion of from barges exits from the commercial aerospace aerospace market.

Éric Martel: We also continue to make progress working with Alstom to complete the sale of our transportation business. Throughout the crisis, our most senior leaders and planning teams have remained in constant contact, and we currently do not expect any delays to the original timeline as a result of the COVID-19 pandemic. The pandemic will, however, have a material impact on our financial performance and cash consumption. We saw a significant impact in Q1 with more to come in Q2, as a large part of our operations have been shut down for the past eight weeks, and international borders remain closed. For Q1, the cash impact is estimated to be between $600 and $800 million.

We also continue to make progress working with all of them to complete the sale of our transportation business.

Throughout the crisis, our most senior leaders and planning teams have remained constant contact.

And we currently do not expect any delays to the original timeline as our results of the Covance 19 endemic.

The pandemic will however, I have a materially impact on our financial performance and cash consumption.

Éric Martel: The pandemic will, however, have a material impact on our financial performance and cash consumption. We saw a significant impact in Q1 with more to come in Q2, as a large part of our operations have been shut down for the past eight weeks, and international borders remain closed. For Q1, the cash impact is estimated to be between $600 and $800 million.

We saw a significant impact in Q1 with more to come in Q2 as a large part of our operation have been shut down for the past eight weeks and international border remained close.

For the first quarter the cash impact is estimated to be between 600 and 800 million dollar.

Éric Martel: This reflects our inability to deliver aircraft following the government-imposed travel restriction and border closings, production shutdowns at a number of our facilities, and lower than anticipated order intake at both Transportation and Aviation. John will walk you through the Q1 details in a few minutes. From an operation perspective, we are beginning the process of gradually resuming manufacturing activities at both Aviation and Transportation. This is a tremendous undertaking. It involves restarting operation at dozens of facilities around the world with new stringent health and safety procedures, recalling thousands of furloughed employees, restoring disrupted supply chains, and resetting delivery schedule with customer. We expect this process will occur over the remainder of the quarter, and it will likely generate some challenges along the way.

This reflects our inability to deliver aircraft following the government imposed traveler restriction and border closings.

Suction shutdowns at a number of our facilities.

And lower than anticipated order intake at both transportation and aviation.

John will walk you through the Q1 details in a few minutes.

From an operation perspective, we are beginning the process of gradually resuming manufacturing activities at boat execution and transportation.

Éric Martel: From an operation perspective, we are beginning the process of gradually resuming manufacturing activities at both Aviation and Transportation. This is a tremendous undertaking.

This is a tremendous undertaking it involves restarting operation at dozens of facilities around the world with new stringent health and safety procedures.

Éric Martel: It involves restarting operation at dozens of facilities around the world with new stringent health and safety procedures, recalling thousands of furloughed employees, restoring disrupted supply chains, and resetting delivery schedule with customer. We expect this process will occur over the remainder of the quarter, and it will likely generate some challenges along the way.

Regarding thousands of furloughed employees, restoring disrupted supply chains.

And resetting delivery schedule with customer.

We expect this process will occur over the remainder of the quarter and it will likely generate some challenges along the way.

Given this uncertainty will come to you to manage costs deferred capital expenditure and ensure that our production rates aligned with the current market demand and customer ability to accept deliveries.

Éric Martel: Given this uncertainty, we'll continue to manage costs, defer capital expenditure, and ensure that our production rates align with the current market demand and customer ability to accept deliveries. We look to give you more color on our outlook as we get clearer visibility on the full impact of the pandemic. Based on our current assessment and timeline for gradual resumption and stabilization of operation, we expect business activity to hit a low point in Q2 with similar cash usage as Q1, before gradually recovering in H2. Let me say a few words on each of our business units here. In Q1, Bombardier Aviation led the industry with 26 business aircraft deliveries, including six Global 7500. Since the onset of the pandemic and travel restrictions, sales activity has slowed down significantly.

We look to give you more color on our outlook as we get clear visibility on the full impact of the pandemic. However, based on our current assessment and timeline for gradual resumption and stabilization of operation, We expect business activity too. It's a low point in the second quarter with similar cash usage as Q.

Éric Martel: Based on our current assessment and timeline for gradual resumption and stabilization of operation, we expect business activity to hit a low point in Q2 with similar cash usage as Q1, before gradually recovering in H2. Let me say a few words on each of our business units here. In Q1, Bombardier Aviation led the industry with 26 business aircraft deliveries, including six Global 7500. Since the onset of the pandemic and travel restrictions, sales activity has slowed down significantly.

One before gradually recovering in the second half of the year.

Let me see a few word on each of our business unit here.

In the first quarter numbers, you have you should lead the industry with 26 business aircraft delivery, including six global 7500.

Since the onset of the pandemic and travel restriction sales activity has slowed down significantly most analysts predicted a 30 to 35 industry wide reduction for 2020 deliveries with a large with a with the large cabin segment less impacted.

Éric Martel: Most analysts predicted a 30 to 35 industry-wide reduction for 2020 deliveries with the large cabin segment less impacted. While this feels directionally right for the short term, we think it's still too early to call the market with any certainty, and note that we've seen limited cancellation in our backlog and remain in close contact with all our customers. Lower aircraft usage will have a negative impact on revenues associated with flight hours, including parts sales. However, our service centers remain busy and most maintenance activities are continuing as scheduled. As we resume operation, we're focusing on completing the aircraft currently in production and the firm orders in the backlog as we watch how the market responds.

While this feels directionally ride photos short term, we think it's still too early to call the market with and then any on any assortment and certainty and note that we've seen limited cancellation in our backlog and remain in close contact with all our customer.

Lower aircraft usage will have a negative impact on revenues associated with flight hours, including part sales. However, our service center remain busy and most maintenance activities are continuing as scheduled.

Éric Martel: Lower aircraft usage will have a negative impact on revenues associated with flight hours, including parts sales. However, our service centers remain busy and most maintenance activities are continuing as scheduled. As we resume operation, we're focusing on completing the aircraft currently in production and the firm orders in the backlog as we watch how the market responds.

As we resume operation we're focusing on completing the aircraft currently in production and the firm order and the backlog as we watch out to market response.

Éric Martel: For the Global 7500, where we have a solid backlog, our focus will be on achieving our learning curve goals as we ramp up production in H2. With the lost time from the shutdowns, we'll deliver a few less 7500 than originally planned. At Transportation, the focus has been on production ramp up in the UK, Switzerland, and Germany, which is reflected in the strong Q1 revenue growth. Progress in Q1 also included reaching a commercial agreement with SBB, transferring title to the 32 trains in revenue service, and reflecting the significant reliability improvements that have been made. Going forward, the COVID-19-related production shutdown and supply chain disruption will delay the achievement of certain future milestones and associated cash inflows.

But a global 7500, where we have a sole is a solid backlog our focus will be on achieving our learning curve goals as we ramp up production in the second half of the year.

With the most time from the shutdowns will deliver.

A few less 75 hundredd than originally planned.

At transportation the focus has been on production ramp up in the UK, Switzerland, and Germany, which is reflected in the strong Q1 revenue growth.

Éric Martel: Progress in Q1 also included reaching a commercial agreement with SBB, transferring title to the 32 trains in revenue service, and reflecting the significant reliability improvements that have been made. Going forward, the COVID-19-related production shutdown and supply chain disruption will delay the achievement of certain future milestones and associated cash inflows.

Progress in the first quarter also included reaching a commercial agreement would SBB transferring title to the 32 trains in revenue service and reflecting the significant reliability improvements that have been made.

Going forward the coven 19 related production shut down in supply chain disruption will delay the achievement of certain future milestone and associated cash inflows.

Éric Martel: We are currently working with our customer and our supplier to reestablish new milestones and delivery schedule, and we'll look to provide a more complete update with our Q2 earnings call. We also negotiated a new $386 million equity injection from the CDPQ in BT in the quarter, providing additional flexibility as we manage through the crisis and schedule reset. From an overall market perspective, while passenger rail operators have seen an unprecedented drop in ridership and revenue due to COVID-19, the long-term outlook remains positive with continued growth expected in the coming years. Okay, let me stop here now and hand it off to John to walk you through the Q1 numbers and our liquidity position in detail. John, over to you.

We are currently working what our customer and our supplier to reestablish new milestone and delivery schedule and we'll look to provide a more complete update with our Q2, earning call.

We also negotiated a new 386 million dollar equity injection from the CPQ in BT in the quarter, providing additional flexibility as we managed through the crisis and scheduled reset.

From an overall market perspective, while passenger rail operator, I've seen unprecedent drop in ridership and revenue do coven 19, the long term long term the outlook remains positive with continued growth expected in the coming years.

Éric Martel: From an overall market perspective, while passenger rail operators have seen an unprecedented drop in ridership and revenue due to COVID-19, the long-term outlook remains positive with continued growth expected in the coming years. Okay, let me stop here now and hand it off to John to walk you through the Q1 numbers and our liquidity position in detail. John, over to you.

Okay. Let me stop here now and the ended up to Joan to walk you through the Q1 numbers and our liquidity position in detail jump over to you.

John Di Bert: Thank you, Éric, and good morning, everyone. In my commentary this morning, I'll focus on three key areas. First, our liquidity status at the end of Q1 and the additional liquidity initiatives that are underway. Second, I'll provide color on Q1 financial performance across our businesses. Third, I'll provide insight on our short-term outlook and the actions we are taking as we navigate the current health crisis and its impacts on our operations. We've always managed our liquidity prudently, and we have been proactive in maintaining adequate cash on hand and a long runway to debt maturities. Specifically, we entered 2020 with over $2.6 billion of cash on hand and almost $4 billion of total available liquidity. Moreover, our next debt maturity is a $450 million Eurobond due one year from now in May 2021.

Thank you, Eric and good morning, everyone.

In my commentary this morning, I'll focus on three key areas.

First our liquidity status at the end of Q1.

And the additional liquidity initiatives that are underway.

Second I will provide color on Q1 financial performance across our businesses and third I'll provide insight on our short term outlook and the actions. We are taking as we navigate the current health crisis and its impact on our operations.

John Di Bert: Third, I'll provide insight on our short-term outlook and the actions we are taking as we navigate the current health crisis and its impacts on our operations. We've always managed our liquidity prudently, and we have been proactive in maintaining adequate cash on hand and a long runway to debt maturities. Specifically, we entered 2020 with over $2.6 billion of cash on hand and almost $4 billion of total available liquidity. Moreover, our next debt maturity is a $450 million Eurobond due one year from now in May 2021.

We've always managed our liquidity currently and we have been proactive and maintaining adequate cash on hand, and a long runway for debt maturities.

Specifically, we entered 2020 with over $2.6 billion of cash on hand, and almost $4 billion of total available liquidity.

Moreover, our net debt maturity is a 450 million dollar Euro bond you one year from now in May 2021.

And although the current pandemic poses additional challenges to our business our financial strategy remains intact.

John Di Bert: Although the current pandemic poses additional challenges to our business, our financial strategy remains intact to strengthen our balance sheet, notably by completing our planned divestitures and to build a bridge to a stronger and better capitalized business jet franchise. To that end, we are managing our operations with discipline, and we're making the adjustments necessary to protect our balance sheet and build added flexibility. As Eric mentioned, we are making progress in our early initiatives to add cash to the balance sheet and increase our capacity to support working capital during the crisis. We have completed our exit of the A220 program and received $530 million in proceeds during Q1. We have also benefited from the additional $386 million of the CDPQ equity injection into BT.

To strengthen our balance sheet, notably by completing our planned divestitures and to build a bridge to a stronger and better capitalized business jet franchise.

To that end, we're making our operation we are managing our operations with discipline, and we're making the adjustments necessary to protect our balance sheet and build added flexibility.

John Di Bert: To that end, we are managing our operations with discipline, and we're making the adjustments necessary to protect our balance sheet and build added flexibility. As Eric mentioned, we are making progress in our early initiatives to add cash to the balance sheet and increase our capacity to support working capital during the crisis. We have completed our exit of the A220 program and received $530 million in proceeds during Q1. We have also benefited from the additional $386 million of the CDPQ equity injection into BT.

As Eric mentioned.

We're making progress in our early initiatives to add cash for the balance sheet and increase our capacity to support higher working capital during the crisis.

We have completed our exit of the eight to 20 program and received $530 million in proceeds during Q1.

And we're also benefited from the additional $386 million of the Cdps, you inject equity injection into BT.

Let me provide some details on the new CPQ investment.

John Di Bert: Let me provide some details on the CDPQ investment. CDPQ invested $386 million in Q1, the equivalent of EUR 350 million directly into Transportation equity, and generally under the same terms and conditions as the original investment. The cash provides BT with financial flexibility to manage working capital as we deal with disruptions to operations. As the business recovers, it should generate sufficient cash to buy back this equity ahead of the closing of the sale to Alstom. It's important to note that this injection will not affect the expected net proceeds to Bombardier from the transaction, whether it is repaid ahead or as part of the closing, so long as the minimum cash threshold is achieved on closing.

If you invested $386 million in the first quarter.

Equivalent of 350 million euro directly into transportation equity and generally under the same terms and conditions as the original investment.

The cash provides beauty with financial flexibility to manage working capital as we deal with disruptions to operation.

John Di Bert: As the business recovers, it should generate sufficient cash to buy back this equity ahead of the closing of the sale to Alstom. It's important to note that this injection will not affect the expected net proceeds to Bombardier from the transaction, whether it is repaid ahead or as part of the closing, so long as the minimum cash threshold is achieved on closing.

As the business recovers it should generate sufficient cash to buyback. This equity ahead of the closing of the sale to awesome.

It's important to note that this injection will not affect the expected net proceeds from bharti from the transaction.

Whether it is repaid ahead or as part of the closing so long as the minimum cash threshold is achieved on closing.

In conjunction with this equity injection, we further increased our financial flexibility by amending the financial covenants on diabetes credit facilities.

John Di Bert: In conjunction with this equity injection, we further increased our financial flexibility by amending the financial covenants under BT's credit facilities. Our banks have been very supportive in the process, providing temporary financial covenant relief. With these measures, we had total liquidity of $2.9 billion on 31 March, including $2.1 billion of cash on hand. We feel we have the liquidity and the financial support from our partners to weather this storm. As we continue to work diligently to strengthen our balance sheet in the short term with the upcoming close of MHI's transaction set for 1 June, which will bring our pro forma liquidity to $3.5 billion. In addition, we continue to make steady progress on the Spirit transaction, which will add another $500 million to cash.

Our banks have been very supportive in the process, providing temporary financial covenant relief.

With these measures we had total liquidity of $2.9 billion on March 30, onest, including $2.1 billion of cash on hand.

John Di Bert: We feel we have the liquidity and the financial support from our partners to weather this storm. As we continue to work diligently to strengthen our balance sheet in the short term with the upcoming close of MHI's transaction set for 1 June, which will bring our pro forma liquidity to $3.5 billion. In addition, we continue to make steady progress on the Spirit transaction, which will add another $500 million to cash.

We feel we have the liquidity and the financial support from our partners to weather the storm.

And as we continue to work diligently to strengthen our balance sheet in the short term with the upcoming close of Emmy tries transaction sent for June 1st which will bring our pro forma liquidity to $3.5 billion.

In addition, we continued to make steady progress on the spirit transaction, which will add another $500 million to cash.

These deals bridges to the transaction would also them, which when completed will significantly improve the health of our balance sheet.

John Di Bert: These deals bridge us to the transaction with Alstom, which when completed, will significantly improve the health of our balance sheet. Turning now to Q1 results, which got off to a strong start on revenue growth before being interrupted mid-March by the COVID-19 crisis. Consolidated revenues reached $3.7 billion, 5% higher year over year, reflecting an 8% increase at Aviation, which includes 16% growth from Business Aircraft activities alone. This impressive growth was driven by six Global 7500 deliveries, but was offset by the decreasing activities in Commercial Aircraft. At Transportation, we experienced 5% organic growth, mainly reflecting production ramp-ups in the UK and Germany. Transportation's revenues were offset by some unfavorable currency impacts as the euro weakened year-over-year.

Turning now to Q1 results, which golf was strong start on revenue growth before being interrupted mid March by the covert 19 crisis.

Consolidated revenues reached $3.7 billion, 5% higher year over year, reflecting an 8% increase at aviation.

John Di Bert: Consolidated revenues reached $3.7 billion, 5% higher year over year, reflecting an 8% increase at Aviation, which includes 16% growth from Business Aircraft activities alone. This impressive growth was driven by six Global 7500 deliveries, but was offset by the decreasing activities in Commercial Aircraft.

Which 16, which includes 60% growth from business aircraft activities along.

This impressive growth was driven by six global 7500 delivery, but was offset by the by the decreasing activities in commercial aircraft.

John Di Bert: At Transportation, we experienced 5% organic growth, mainly reflecting production ramp-ups in the UK and Germany. Transportation's revenues were offset by some unfavorable currency impacts as the euro weakened year-over-year.

At transportation, we experienced 5% organic growth, mainly reflecting production ramp ups in the UK and Germany.

With these revenues were offset by some unfavorable currency impact as the euro weekend year over year.

Adjusted EBITDA totaled 171 million and adjusted EBIT was $60 million, representing a 1.6% margin.

John Di Bert: Adjusted EBITDA totaled $171 million, and adjusted EBIT was $60 million, representing a 1.6% margin. Aviation's margin was 1.6%, below the mid-single-digit margin range we were targeting. The dilution came from an unfavorable product mix, which included Global 7500 and less legacy aircraft, as some March deliveries were delayed due to the travel restrictions. At Transportation, the margin was 2.4%, generally in line with our low single-digit expectations as we execute and burn down low-margin contracts in the backlog. Our free cash flow usage was $1.6 billion for the quarter and includes a significant shortfall associated with the pandemic, estimated at between $600 and $800 million. A third of this shortfall is from Transportation, where cash inflows tied to certain milestones were delayed.

Aviations margin was 1.6% below the mid single digit margin range, we were targeting.

The dilution came from an on favorable product mix, which included global 7500, and less legacy aircraft. Some March deliveries were delayed due to the travel restrictions.

John Di Bert: At Transportation, the margin was 2.4%, generally in line with our low single-digit expectations as we execute and burn down low-margin contracts in the backlog. Our free cash flow usage was $1.6 billion for the quarter and includes a significant shortfall associated with the pandemic, estimated at between $600 and $800 million. A third of this shortfall is from Transportation, where cash inflows tied to certain milestones were delayed.

At transportation the margin was 2.4% generally in line with our low single digit expectations as we execute and burned down low margin contracts in the backlog.

Our free capital usage was $1.6 billion for a quarter and includes a significant shortfall associated with a pandemic estimated that between 600 and $800 million.

Third of the shortfall this firm transportation, where cash inflows tied to certain milestones were delayed.

John Di Bert: This was caused by disruptions to our engineering and production activities, the inability to homologate trains, and customers' inabilities to accept rolling stock during this period. Finally, the deferral of certain orders which reduced cash deposits and advances. The larger share of the shortfall is associated with aviation, where more than a handful of aircraft could not be delivered for logistical reasons, despite our best efforts. Additionally, our order intake slowed as the crisis mounted, reducing cash advances. Finally, we paid out approximately $100 million for RVGs related to the CRJ business being divested. Post-closing of the transaction with MHI, the amount due on these RVGs will be below $300 million and will be spread much more evenly over the next three years. Looking at the outlook for the remainder of the year.

And this was caused by disruptions to our engineering and production activities.

The inability to Homologated trains and customers in abilities to accept rolling stock during this period and finally, the deferral of certain orders, which reduced cash deposits and advances.

The larger share of the shortfall is associated with aviation.

We're more than a handful of aircraft could not be delivered logistical reasons.

Despite our best efforts.

John Di Bert: Additionally, our order intake slowed as the crisis mounted, reducing cash advances. Finally, we paid out approximately $100 million for RVGs related to the CRJ business being divested. Post-closing of the transaction with MHI, the amount due on these RVGs will be below $300 million and will be spread much more evenly over the next three years. Looking at the outlook for the remainder of the year.

Additionally, our order intake slowed as the crisis mounted reducing cash advances.

Finally, we paid out approximately $100 million RV GE is related to the crj business being divested.

Post closing of the transaction what I May chart. The amount you on these RV geez will be below $300 million and will be spread much more evenly over the next three years.

Looking at the outlook for the remainder of the year.

John Di Bert: Given the unprecedented uncertainties related to the global macroeconomic situation and our operations, we suspended our full-year guidance and believe it is still too early to provide longer-term forecasts. For Q2, we expect business activity to hit a low point before gradually recovering. As Eric mentioned, we are dealing with production shutdowns that extended through April and are continuing in May. We expect a reduction of our production and deliveries, and therefore revenues by almost half versus the same quarter last year. With the lower top line anticipated, and while we are highly focused on managing costs in the short term, we nonetheless expect to incur an EBIT loss for Q2. As we move through the rest of the year, we will look for revenue normalization, and we will be fully adjusting our cost structure to return to profitability.

Given the unprecedented uncertainties related to the global macroeconomic situation and our operations, we suspended our full year guidance and believe it is still too early to provide longer term forecasts.

For the second quarter, we expect business activity to hit a low point before to gradually recover.

As Eric mentioned, we're dealing with production shutdowns that extended through April and are continuing in may.

John Di Bert: We expect a reduction of our production and deliveries, and therefore revenues by almost half versus the same quarter last year. With the lower top line anticipated, and while we are highly focused on managing costs in the short term, we nonetheless expect to incur an EBIT loss for Q2. As we move through the rest of the year, we will look for revenue normalization, and we will be fully adjusting our cost structure to return to profitability.

We expect a reduction of our production and deliveries and therefore revenues by almost half versus the same quarter last year.

With a lower topline anticipated and why are we and while we are highly focused on managing costs in the short term, we nonetheless expects to incur an EBIT loss for the second quarter.

As we move through the rest of the year, we will look for revenue normalization and we will be fully adjusting our cost structure to return to profitability.

John Di Bert: From a free cash flow perspective, we expect usage to be significant in the quarter as we deal with lower output and order intake, and suboptimal productivity. It will also be too early to see any benefit from any cash flows deferred from Q1. We expect, however, that as we focus on consuming existing working capital and reducing spending, we can limit cash usage in line with Q1. We'll also be pursuing several initiatives to improve our cash flows, including applying for various wage subsidies, as well as tax deferral and pension holiday programs enacted by governments. Finally, we are managing down costs through aggressive company-wide action, limiting non-essential or discretionary spending. This includes reducing CapEx and tooling investments, mainly at BA, by $200 million to approximately $300 to 400 million on a consolidated basis for 2020.

From a free cash flow perspective, we expect usage to be significant in the quarter as we deal with lower output and order intake and sub optimal productivity.

We'll also be too early to see any benefit from any cash flows differed from the fourth quarter.

We expect however, as we focus on consuming exists existing working capital and reducing spending we can limit cash usage in line with the first quarter.

We also be pursuing several initiatives to improve our cash flows including applying for various weve subsidies as well as tax deferral and pension holiday programs enacted by governments.

John Di Bert: We'll also be pursuing several initiatives to improve our cash flows, including applying for various wage subsidies, as well as tax deferral and pension holiday programs enacted by governments. Finally, we are managing down costs through aggressive company-wide action, limiting non-essential or discretionary spending. This includes reducing CapEx and tooling investments, mainly at BA, by $200 million to approximately $300 to 400 million on a consolidated basis for 2020.

Finally, we are managing down costs through aggressive companywide action limiting non essential for discretionary spending.

This includes reducing capex and tooling investment mainly at VA by a couple of hundred million dollars through approximately three to 400 million on a consolidated basis for 20 point.

For the full year, we're running multiple cash flow scenario that include lower production rates at aviation and reschedule deliveries at transportation.

John Di Bert: For the full year, we are running multiple cash flow scenarios that include lower production rates at Aviation and rescheduled deliveries at Transportation. We expect that our strength and liquidity, combined with the anticipated closing of the aerospace transactions, will be sufficient to absorb the volatility associated with the operating uncertainties. As we continue to monitor situation, we will keep the market updated on developments. With that, operator, we're ready for our first question.

We expect that our strengthened liquidity combined with the anticipated closing of the aerospace transactions will be sufficient to absorb the volatility associated with the operating uncertainties.

And as we continue to monitor situation, we will keep the market updated on developments.

With that operator, we're ready for our first question.

Operator: Thank you. If you have a question, please press star one on your touchtone telephone. If you are using a speakerphone, please lift your handset and then press star one. Should you wish to cancel your question, please press the pound sign. To allocate time for all participants, please limit yourself to one question and one follow-up. Our first question is from Myles Walton from UBS. Please go ahead.

Thank you.

If you had a question. Please press star one on your Touchstones telephone if you why you're seeing a speaker phone. Please ask your handset and then press star one should you wish to cancel your question. Please press the pound sign.

Okay time for all participants please limit yourself to one question and one follow up.

Our first question is from Myles Walton from you'll be yes. Please go ahead.

Good morning, everyone. This tools at a one for miles.

Louis Raffetto: Good morning, everyone. This is Louis Raffetto on for Myles Walton.

John Di Bert: Morning.

Good morning, good morning mice.

Éric Martel: Good morning, Myles.

So just can you help me understand what you are seeing from demand wise and Bizjet is complete the the order environment is it stopped and.

Louis Raffetto: Just can you help me understand what you are seeing from demand-wise in BizJet? Is it completely, you know, the order environment, is it completely stopped? Do you see that 35% lining up, or just can you provide any additional color for us?

Do you see that 30, 35% lining up or you just can you keep Friday additional color for us.

John Di Bert: Yeah. Okay, good. Fair question, Miles. As I said this morning, you know most of the analysts right now, and I would say also our competitor are talking about a 25% to 35% reduction on delivery for this year.

Okay. Good the fair question the Myles.

As I said, the this morning and old most of the analysts right now and I I would say also our competitor are talking about a 25% to 35% reduction on delivery for this year and what I said earlier is that we are approximately in the same zone. So within that the that range also in terms of.

Éric Martel: What I said earlier is that we are approximately in the same zone, so within that range also in terms of reducing our deliveries that were committed earlier this year. But at the same time, we're saying it is a little bit too early to assess, and we see some movement. As an example, you know, we have a very solid backlog in the Global 7500, and we don't see that part moving a lot. So the large segment is better protected, I would say, as we can see it right now when we talk to customer by customer. But when we look at the light segment and the medium size, you know, it is a little bit more volatile right now.

Reducing our delivery that's we're committed earlier this year.

But at the same time, we're saying it is a little bit too early to assess and we see some movement. As an example, you know we have a very very solid backlog in the 7500, and we don't see that part moving a lot. So the large segment is is better protected I would see as we can see it right now.

Éric Martel: As an example, you know, we have a very solid backlog in the Global 7500, and we don't see that part moving a lot. So the large segment is better protected, I would say, as we can see it right now when we talk to customer by customer. But when we look at the light segment and the medium size, you know, it is a little bit more volatile right now.

When we talk to customer by customer.

But when we look at the light segment and the is the medium size.

Diluted it is a little bit more volatile right now. So so we are taking the time to assess this properly and I would say our customer are pretty much in the same thing I need to know exactly what's going to happen with the pandemic. So is it going to last and other two weeks or is it going to last another three months. So you know you've heard pretty much the same thing on the.

Éric Martel: We are taking the time to assess this properly. I would say our customer are pretty much saying the same thing. I need to know exactly what's going to happen with the pandemic. Is it going to last another two weeks, or is it going to last another three months? You know, you've heard pretty much the same thing on the recall. There's no clear science on this right now. Most of the economy, including ourselves, we're restarting our operation because we do believe that, you know, the worst is behind and that we can do it properly. That's how we are assessing the market today.

On the recall there is no.

Éric Martel: There's no clear science on this right now. Most of the economy, including ourselves, we're restarting our operation because we do believe that, you know, the worst is behind and that we can do it properly. That's how we are assessing the market today.

We are science on this right now most of the economy, including Ourself were restarting our operation because we do believe that the worse is behind US we can do with properly. So thats, how we are assessing the market study.

Okay. Thank you and just one quick follow up do you see second half free cash flow being positive.

Louis Raffetto: Okay, thank you. Just one quick follow-up. Do you see H2 free cash flow being positive?

John Di Bert: Maybe I'll take that one, Luc. I think at this point in time, you know, we've not given full year guidance. I do believe that from what we see today and as we kind of stabilize through operations, particularly in H1, I would expect that H2 would start to break even or be positive on cash flow. That's. It's an early signal at this point in time, but that would be my expectation.

Maybe I'll take down loop. So I think at this point in time, we've we've not given full year guidance I do believe that.

From what we see today and as the year kind of stabilized through.

Operations, particularly in the first half I would expect that the second half would start to.

Breakeven or be positive on cash flows so thats.

But its and its an early signal at this point in time, but that would be my expectation.

Great. Thank you.

Louis Raffetto: Great. Thank you.

Operator: Thank you. Our following question is from Cai von Rumohr from Cowen and Company. Please go ahead.

Thank you.

The following question is from Cai von Rumohr.

From Cowen and company. Please go ahead.

Hey, guys. This is Dan on for Tycho. Thanks for the question good morning.

[Analyst] (Cowen and Company): Hey, guys. This is Dan on for Kai. Thanks for the question. Good morning.

John Di Bert: Good morning.

[Analyst] (Cowen and Company): Yeah. I guess I'm wondering how quickly can you guys deliver, you know, the biz jet aircraft once the shutdowns are lifted. I know there might be lack of visibility into that currently, but if you have any insight on that. Just, you know, how many aircraft are currently sitting, waiting to be delivered? Related, are customers kind of obligated to accept delivery of those? Does it depend based on the class of aircraft? Any insight you could offer on that would be helpful.

Good.

Yes so.

I guess, it's not.

I guess I'm wondering how quickly can you guys deliver.

As jet aircraft once the shutdowns are listed.

There might be lack of visibility into that currently but if you have any insight on that and just.

How many aircrafts.

Our currently sitting waiting to be delivered.

Okay and related our customers kind of obligated to accept delivery of those does it depends.

Based on the class their aircraft any any insight you could offer on that would be helpful.

Éric Martel: Clearly in the large segment, but also in the medium one, we had airplanes that were ready for delivery at the end of Q1. Unfortunately, with the pandemic and the borders closing, you know, there were difficulties. Some we've been able to, but some others, you know, were just sitting there, and customers were not even able to get either inspect the airplanes or take delivery of the airplanes. We've lost a couple of airplanes right at the end of the quarter. Clearly, as we resume our operations, you know, our focus will be to make sure that, you know, we deliver those airplanes as fast as possible. That will be, of course, as you can imagine, helpful for our cash flow.

Clearly in the large segment, but also in the in the medium when we had airplane that were ready for delivery at the end of Q1.

But unfortunately would depend they make and the borders closing and or there was a difficulties. Some some we've been able to but some others you know.

Or just sitting there and test them or without even able to get them either inspect airplane or take delivery of their airplanes. So so we've lost a couple of airplane or right at the end of the quarter. So clearly as we resume our operation into our focus will be to make sure that the you know we deliver those airplane as much as fast as.

Éric Martel: We've lost a couple of airplanes right at the end of the quarter. Clearly, as we resume our operations, you know, our focus will be to make sure that, you know, we deliver those airplanes as fast as possible. That will be, of course, as you can imagine, helpful for our cash flow.

Possible, so that will be a of course as you can imagine helpful for us for our cash flow and of course, we are.

Éric Martel: Of course, we are, you know, assessing the market and restarting, you know, with prudence, I would say, our operation. We are being ready to go back to a full production when ready. You know, our business is a long lead time and bring some particularities. We are able to deliver, to answer your question, some short-term delivery. As we resume, you know, at the new cadence or a cadence that we had before, we'll be able to restart our delivery process.

Assessing the market than restarting you know with Prudence I would say our operation, but we are being ready to go back to a two.

Full production at when they're ready so.

You know our businesses.

This is a long lead time and bring some project clarity. So we are able to delivered to answer your question. Some short term delivery and as we resumed million to what the new cadence or.

Cadence that we had before we'll be able to us to start restart of delivery process.

Okay, great. Thanks, and then how many production facilities or are currently.

[Analyst] (Cowen and Company): Okay. Great. Thanks. How many production facilities are currently shut right now? How many are running or scheduled to reopen soon?

Right now how many are running our are scheduled to reopen said, it's a good point at some point I think pretty much all our facility were closed a a certain point in time.

Éric Martel: That's a good point. At some point, I think pretty much all our facilities were closed at a certain point in time. We are resuming everywhere. Actually, you know, since probably 4 May and even a little bit before in April, we have started gradually, you know, putting new measures in place to start. There is only one facility that I know it's Crespin in France that has not been restarting, but it's planned to restart next Monday.

But we are resuming everywhere actually you know since Brody may 4th and even a little bit before in April we have started gradually putting you measure in place to start there is only one facility to note I know, which could if any in friends that has not been restarting, but its blends the restart next month.

Awesome. Thanks.

[Analyst] (Cowen and Company): Awesome. Thanks.

Thank you. Following question is from vending Lapalme from Desjardins capital markets. Please go ahead.

Operator: Thank you. Our following question is from Benoit Poirier from Desjardins Capital Markets. Please go ahead.

Benoit Poirier: Yes. Thank you very much, and good morning, Éric. Good morning, John.

Yes. Thank you very much on good morning, good morning, John.

Éric Martel: Also, good morning.

Benoit Poirier: Quick question. Could you talk a little bit about action or measure to be taken to reduce or adjust the production rate lower and maybe talk about the magnitude of some potential charges that could be taken on the back of the lower production rates?

In one quarter junk.

Could you talk a little bit about action or measure to be taken to reduce or adjusted production rate lower and maybe talk about the magnitude of some potential charges that could be taking them on the back of the lower production rates.

John Di Bert: Yeah. Good morning, Benoit Poirier. I would say that, you know, as Éric Martel said, we're in the current process now of assessing what the right rates would be in H2. I think that, you know, we've acted pretty quickly right out of the gate in terms of March, in terms of managing the operations here. It was taking out quite a bit of, just the, as I mentioned, all the discretionary spending, but also, we've been able to limit overhead spending. As we go into Q2, I think that'll help us mitigate the impacts. In terms of special charges, I think it's a bit early to call now.

Hi, Good morning had been wise, so I would say the you know as Eric said, we're in the current process now of of assessing what the right with the right rates would be in the second half.

I think that.

We we reacted pretty quickly it right out of the gate in terms of March in terms of managing the operations here. So it was taken out quite a bit of.

John Di Bert: It was taking out quite a bit of, just the, as I mentioned, all the discretionary spending, but also, we've been able to limit overhead spending. As we go into Q2, I think that'll help us mitigate the impacts. In terms of special charges, I think it's a bit early to call now.

As I mentioned, all discretionary spending, but also we've been able to to limit overhead spending and as we want to second quarter that'll help us mitigates the impact in terms of special charges I think it's a bit early to call now.

John Di Bert: You know, it's important that we get a good bead on what the production rates will be. I think there's a few important things to note here, and Éric mentioned them. One, you got a 7500 that sold out over several years. We see, you know, pretty good steady state there. It's a matter of really the interruption of the business and trying to get back straight up and running, and I think that'll happen as Éric described. On the rest of the portfolio, you do have some open orders in the production rates.

You know the.

Pardon.

We got a good bead on what.

Production rate will be.

I think there's a few important things to note here and Eric mentioned them. One you got to 7500 that sold out over several years. So we see pretty good steady state there. It's a matter really the interruption in the business and trying to get back straight up and running I think that'll happen as Rick described on the rest of the portfolio you have some open orders.

John Di Bert: We see, you know, pretty good steady state there. It's a matter of really the interruption of the business and trying to get back straight up and running, and I think that'll happen as Éric described. On the rest of the portfolio, you do have some open orders in the production rates.

In the production.

Okay.

Benoit Poirier: Okay.

John Di Bert: I think that overall from a restructuring charge or any kind of, you know, special charges, we'll give you guys better color as we get through the middle of the year here.

So I think that overall from a restructuring charge or any kind of.

Special charges will give you guys better color as we get through the middle of the area.

Benoit Poirier: Okay, perfect. Second question, could you talk, John, maybe, about additional measure taken to boost liquidity and meet the upcoming debt maturities in 2021?

Okay, Perfect and second question could you talk John maybe about additional measures taken to boost liquidity and meet the upcoming debt maturities in 2021 [noise].

John Di Bert: Sure, Benoit. It's a good question. I think, you know, it's important to just take a step back here. Nobody comes in prepared for this kind of an event. That's for sure. But I think that we have been pretty prepared in terms of liquidity and planning with respect to our balance sheet, even with the heavy debt load. When you think about it, just in simple terms, we came into the year with about $4 billion of liquidity right out of the gate, right? $2.6 billion of cash and over $1.3 billion of facilities. We described in my commentary, you know, kind of a one-sixth burn in Q1, and we expect something, you know, in that neighborhood, in Q2.

Urban lines. Good question. So I think you know it's important to just take a step back here.

Nobody comes in prepared for this kind of an event that's for sure, but I think that we have been pretty prepared in terms of liquidity and and planning with respect to our balance sheet, even with the heavy that flow. So when you think about it just in simple terms, we came into the year, what about 4 billion, though of of liquidity right now.

John Di Bert: When you think about it, just in simple terms, we came into the year with about $4 billion of liquidity right out of the gate, right? $2.6 billion of cash and over $1.3 billion of facilities. We described in my commentary, you know, kind of a one-sixth burn in Q1, and we expect something, you know, in that neighborhood, in Q2.

Right. So 2.6 of the rational for one reason facilities.

We described in my commentary you know kind of a one six burn in the first quarter and we expect something in that neighborhood in the second quarter. So just take that as kind of just the general three.

John Di Bert: Just take that as kind of a general 3 for easy math. From there, I think we got off to a good start with liquidity builds in Q1. You had the A220 closed, cash in the bank. It's half a billion. CDPQ, you know, just rounding that out, that's $1 billion between the two. When you think about that, we've already put $1 billion of new liquidity onto that 4, even though we have some significant COVID-related burn here. Then from here, we announced overnight this morning that we're set on track now for 1 June on MHI at the half a billion, and then a half a billion to come from Spirit.

Just for easy math, so from there we think we Oh, we got off to a good start with with liquidity builds in Q1, you had the eight to 20 Kohl's cash and the bank. It's a half a billion CPQ just rounding in that office of billion between the two so when you think about that we've already put a $1 billion.

John Di Bert: When you think about that, we've already put $1 billion of new liquidity onto that 4, even though we have some significant COVID-related burn here. Then from here, we announced overnight this morning that we're set on track now for 1 June on MHI at the half a billion, and then a half a billion to come from Spirit.

Your liquidity onto that for even though we have some significant corporate related burn here and then from year, we announced the overnight this morning.

Were set on track now for Tim first on any sign that's a half a billion and then a half billion to come from from spirit.

John Di Bert: By and large, you know, we're $2 billion into this thing here as we complete the transactions that we're working on. I would say, you know, H2, as I mentioned just previously in my comments, we're gonna be looking at trying to, you know, stem this and bring cash generation back over the last six months. I think with this, you know, we're putting ourselves in a place here where we have a good bridge to the ultimate transaction. It's hard to call when that closes, but certainly same as we always expected, H1 of 2021, and that's continuing to progress very nicely. Long and short of it is, I think we've got a runway to deal with liquidity. Of course, you know, we're looking at things as they are today.

So by and large were $2 billion into this thing here as we complete the transactions that were working on and I would say you know the second half as I mentioned just previously on my comments were going to be looked at trying to stem this and bring cash generation back over the last six months.

John Di Bert: I think with this, you know, we're putting ourselves in a place here where we have a good bridge to the ultimate transaction. It's hard to call when that closes, but certainly same as we always expected, H1 of 2021, and that's continuing to progress very nicely. Long and short of it is, I think we've got a runway to deal with liquidity. Of course, you know, we're looking at things as they are today.

So I think with this no we're putting yourself in a place here, where we have a good bridge to the awesome transaction, it's hard to call when that closes, but certainly same as real expected first half of 21 and Thats a continuing to progress very nicely. So long and short of it is I think we've got a runway to deal with liquidity of.

For us.

I think that ER.

Benoit Poirier: Okay, perfect. Maybe just a quick one on the transportation. Have you experienced any cancellation or deferrals at BT given the drop in the public transit demand, or is there a desire from customers to increase rail spending, to as a government stimulus?

Éric Martel: No, so far we haven't, Benoit. We feel right now that, of course, the ridership being extremely low right now. You saw some of our major customers this week announcing some major loss. Clearly, you know, the transportation business is a business that, you know, people will still need. We feel that everywhere right now, we have clear sign that the government are stepping in to support our customer.

Benoit Poirier: Thank you very much for the time.

John Di Bert: You as well.

Operator: Thank you. Thank you. Our following question is from Yilma Abebe from JP Morgan. Please go ahead.

John Di Bert: Thank you. I guess the first question is on the free cash flow. John, as you look at, you know, the Q2 free cash flow being similar to the Q1 and H2, you know, breakeven or positive, which business is more negative in terms of free cash flow usage in the upcoming quarter and then in H2? I'd say that, you know, the. When you look at the Q1, it was a pretty abrupt impact, right? I mean, you came out of this thing in March and, you know, we were building up a lot of inventory across the board. Typically, you would do that in Q1 anyway as you build off the year.

Yilma Abebe: Thank you. I guess the first question is on the free cash flow. John, as you look at, you know, the Q2 free cash flow being similar to the Q1 and H2, you know, breakeven or positive, which business is more negative in terms of free cash flow usage in the upcoming quarter and then in H2?

John Di Bert: I'd say that, you know, the. When you look at the Q1, it was a pretty abrupt impact, right? I mean, you came out of this thing in March and, you know, we were building up a lot of inventory across the board. Typically, you would do that in Q1 anyway as you build off the year.

John Di Bert: As Eric mentioned, we got caught with a lot of aircraft that logistically we couldn't deliver and, you know, a few also that were in the process of sales that just got kind of distracted and interrupted, so they stayed behind. I'd say that, you know, at BA, it's really a jet delivery related and coming out of that last couple of weeks. At BT, I'd say that, you know, we had a lot of milestones that in Q1 were closing up. We were building up a lot of inventory as we have a big ramp in H2 on especially in UK, Germany, and France.

John Di Bert: I'd say that, you know, at BA, it's really a jet delivery related and coming out of that last couple of weeks. At BT, I'd say that, you know, we had a lot of milestones that in Q1 were closing up. We were building up a lot of inventory as we have a big ramp in H2 on especially in UK, Germany, and France.

John Di Bert: We're now, you know, trying to stem the inventories, especially we took the decisions in March to slow down the supply chains on both sides of the businesses. When you look at, you know, the H2, I would say that you'll see a benefit at BT from resetting the supply chains and kind of balancing out the production rate, which was, you know, destined for big ramp and big deliveries in the H2. I think that that'll get the bigger benefit.

John Di Bert: On BA, I expect a similar quarter as Q1, so a little bit of improvement at BT in Q2, a similar quarter in BA as we had in Q1 for Q2, because we're gonna have quite a bit less delivery in jets.

I expect a similar quarter as Q1, so a little bit of improvement it'd be T.N. to to similar quarter and in N.B.A. as a as we had into one for the second quarter, because we're gonna have quite a bit less ah delivery in ER object.

Oh 10, K.. One then I guess you know the follow up Ah I'm Gonna question around sort of new to the cost reduction efforts so to you're you're putting in place yeah. I think as we look at sort of the second quarter. I can you talk about seeing some of the benefits in terms of five you know right sizing I said the cost of them you know for for for for demand.

Yilma Abebe: Thank you. Then I guess, you know, the follow-up, you know, question would be around sort of the cost reduction efforts that you're putting in place. You know, I think as we look at sort of Q2, I think you talked about, you know, seeing some of the benefits. In terms of, I mean, right sizing the costs, you know, for demand, how should we be thinking about sort of, you know, Q2 and into H2? Maybe you can give us a little more color in terms of, you know, what the benefits are gonna look like as we move on in the next couple quarters here.

Yilma Abebe: In terms of, I mean, right sizing the costs, you know, for demand, how should we be thinking about sort of, you know, Q2 and into H2? Maybe you can give us a little more color in terms of, you know, what the benefits are gonna look like as we move on in the next couple quarters here.

How should we be thinking about <unk>. They know that you know that the second quarter and into second half.

Maybe you can give us a little more color in terms of you know what to the benefits are going to look like as well as you move on next couple of quarters here.

Well like I said, I mean, where I were in the middle of planning and completing those kind of production adjustments, but we've made decisions on cap accident. That's something you can think about the pretty much now signed and sealed we'll get a couple of hundred million dollars of savings in terms of just not needing the same kind of capacity rates and.

John Di Bert: Well, like I said, I mean, we're in the middle of planning and completing those kind of production adjustments. We made decisions on CapEx. I think that's something you can think about being pretty much now, you know, signed and sealed. We'll get $200 million of savings in terms of just not needing the same kind of capacity rates and, you know, some other discretionary CapEx spend that we could have, we would have had this year. That's kind of pushed out now, and we'll revisit that at, you know, a future date. For 2020, that's pretty much locked in. I'd say that the next piece of this is gonna be what kind of rate we set at BA.

John Di Bert: We'll get $200 million of savings in terms of just not needing the same kind of capacity rates and, you know, some other discretionary CapEx spend that we could have, we would have had this year. That's kind of pushed out now, and we'll revisit that at, you know, a future date. For 2020, that's pretty much locked in. I'd say that the next piece of this is gonna be what kind of rate we set at BA.

You know some other discussion <unk> spend that we could have we would have had this year. So that kind of pushed out now and we'll revisit that it you know a future date for 2020, that's pretty much locked and I'd say that the next piece of this is going to be what kind of rate, who said it it'd be a.

John Di Bert: We'll make the right adjustments on the variable costs and production rates. I mean, it's as simple as that. It'll be really about sizing the output capability of the business and making sure that we're building the right amount of jets for the market demand. I think we have, you know, some of that in the backlog, which is nice, and the rest of it we'll have to adjust to the market. I wouldn't say that there's more commentary on that. We've got discretionary spend, you know, pretty locked down. My expectation here is that the H2, under the circumstances I see today, I should be able to go back to generating some amount of cash. It's really gonna be about what kind of a rate we put out there.

Then we'll make the right adjustments on a variable costs and the production rates minutes as simple as that so it'll be a really about size in the the output capability of the business.

And.

Making sure that we're building the right amount of jets for the market demand.

I think we have you know some of that in the backlog, which is nice and the rest of it'll have to adjust to the market. So.

I wouldn't say that there's more commentary on that we we've got discretionary spent you know pretty locked down.

John Di Bert: We've got discretionary spend, you know, pretty locked down. My expectation here is that the H2, under the circumstances I see today, I should be able to go back to generating some amount of cash. It's really gonna be about what kind of a rate we put out there.

My expectation years at the second half under the circumstances I see today I should be able to go back to generating some amount of cash, but it's really going to be about what kind of a rate we put out there and V.T.S. difference at 33 billion dollar backlog B.T., it's really all about just getting to supply chain and getting the operations up and running again and productively.

John Di Bert: BT is different. It's a $33 billion backlog. BT, it's really all about just getting the supply chain and getting the operations up and running again productively. We've got a $33 billion backlog that we chew into. It's about working with the customers and making sure that we can reset the contracts and schedules with them as to how they can do.

Then we got a 33 billion dollar backlog that we we chew into so it's about working with the customers and making sure that we can reset contracts and schedules with them as to how they can be thanks very much that's all I had.

Yilma Abebe: Thank you very much. That's all I had.

John Di Bert: Thank you.

Operator: Thank you. The following question is from Doug Karson from Bank of America. Please go ahead.

Thank you. Thank you.

Funneling question, you sound like I say from the Bank of America.

Go ahead.

Doug Karson: Greg, good morning, guys.

Great Good morning, guys.

John Di Bert: Good morning, Doug.

Doug Karson: Thanks for the detail. I have a question around the CDPQ. If you could shed any light on, like, how the discussions went, and I know you can't speak for them, but what's some of their decision points to invest more equity in the train business? Can one extrapolate that if that could kind of point to a more likely closing of the ultimate train sale? Is that kind of reaching too far? I think Bombardier is reacting positively to that equity investment. I want to see if we can learn a little more about it.

Things for the detail.

I requested around the C.D.P.Q.

You could shed any light of like had discussions when didn't I know you can't speak for them, but I'll always wonder decision points to invest more equity in.

In a in the train business in in can one extrapolate that.

Doug Karson: Can one extrapolate that if that could kind of point to a more likely closing of the ultimate train sale? Is that kind of reaching too far? I think Bombardier is reacting positively to that equity investment. I want to see if we can learn a little more about it.

Exactly kind of 0.2 or more likely closing of the ultimately train sale is that kind of reaching too far.

I think vinyls reacting positively to that equity investment I want to see if we can learn a little more about it.

John Di Bert: Hey, Doug. Good morning. I mean, I think that, you know, first of all, as you said, I can't speak for the Caisse, but they're a partner. They've been a partner since day one in our train transportation franchise. Honestly, it's been a very good partnership, and we've been able successfully to bring the transaction with Alstom to bear as well. You can see that there's been a lot of collaboration from the get-go. I think that they just, they're a significant minority interest shareholder. They wanna see the business be successful. We wanted to create flexibility at BT. We knew we were coming into something challenging here.

<unk>. Good morning, So I mean, I think that you know for so long as you said I can't speak for for the case, but.

They're a partner they've been a partner since the one on in our train a transportation franchise and honest it's been a very good partnership and we've been able to successfully to bring yeah. The transaction would Austin to bear as well. So you can see that it in a lot of cooperation from the get go I think that they just.

John Di Bert: You can see that there's been a lot of collaboration from the get-go. I think that they just, they're a significant minority interest shareholder. They wanna see the business be successful. We wanted to create flexibility at BT. We knew we were coming into something challenging here.

There are a significant minority interest shareholder or they want to see the business to be a successful we wanted to create flexibility a D.T. when you were coming into something or challenging here, we didn't want to kind of a short changed the the the management of the liquidity that we want to make sure. The business had we <unk> into conversations with the.

John Di Bert: We didn't wanna kind of shortchange the management of the liquidity that we wanted to make sure the business had. We engaged in the conversations with the CDPQ, and they've looked favorably upon making additional injection. Reading into the Alstom transaction, I think that, you know, notwithstanding what they may or may not be thinking at CDPQ, I think that it's fair to say that we continue to make good progress. We have a very strong cadence of reviews on the transaction. You know, we still are very excited. We think that it brings value to the market.

C.B.Q. and a they've do looked favorably upon.

Making additional injection reading him to be awesome transaction I think that you know notwithstanding would they may or may not be thinking it's easy you I I think that it's fair to say that we continue to make good progress. We are very strong cadence of reviews on the transaction and you know we we still are very excited we think that brings.

John Di Bert: Reading into the Alstom transaction, I think that, you know, notwithstanding what they may or may not be thinking at CDPQ, I think that it's fair to say that we continue to make good progress. We have a very strong cadence of reviews on the transaction. You know, we still are very excited. We think that it brings value to the market.

Evaluate to the market I think I can't speak for awesome, either but it wouldn't believe that they can do to be equally engaged in a in there you have a very positive outcome of this.

John Di Bert: I think I can't speak for Alstom either, but I would believe that they continue to be equally engaged in their view of a very positive outcome of this.

Are there any components in that the equity investment you know if the transaction doesn't go through.

Doug Karson: Are there any covenants in that equity investment, you know, if the transaction doesn't go through, the money goes back to them? I haven't really read all the details of that yet this morning, if there are any out there. Are there any limitations to that equity investment?

The money goes back to them or I haven't really read all the details of that yet. This morning. If there are already out there are there any limitations to that equity investment.

John Di Bert: No, I would keep it simple to say that it really has the same terms that we had in the original investment. It increases their ownership. With that increased ownership, whether we make the sale or not, I mean, they are a larger equity holder of BT.

No I would keep it simple to say that it really it. It. It has the same terms that we had in the original or investments. It it increases their ownership and that would that increase the ownership or whether we make the sale or not I mean, they are a larger a equity older of <unk>.

Okay I like it just has one more question as a might out the cash flow I wasn't expecting.

Doug Karson: Okay. If I could just ask one more question. As I model out the cash flow, I wasn't expecting a $1.6 billion burn, but I guess it's understandable given this crisis is, like, unprecedented. Am I right in thinking that Q2 could be at a similar level of another $1.6 billion? Then I think you talked about, like, a progression to a break even or positive cash flow in the H2. It seems like a lot of cash burn in the H1 to get to a break even or positive in the H2. I'm concerned about, like, Q3 and Q4.

1.6 billion dollar burned, but I I guess, it's understandable given this crisis is unprecedented.

And I am I right in thinking that two q. could be at a similar level.

Of another 1.6, and then I think he talked about like a a progression to a a break even or a positive cash flow and and the second half, but <unk>. It seems like a lot of cash burning the first half to get it to a break even are positive in the second half some concerned about.

Doug Karson: Then I think you talked about, like, a progression to a break even or positive cash flow in the H2. It seems like a lot of cash burn in the H1 to get to a break even or positive in the H2. I'm concerned about, like, Q3 and Q4. I know you can't give guidance on that, but how would you expect to go from such a huge cash negative to a break even or cash positive in H2?

Three q. and <unk>, you can't give guidance on that but how would you expect to go from such a huge cash negative to a break even a cash positive and the second half.

Doug Karson: I know you can't give guidance on that, but how would you expect to go from such a huge cash negative to a break even or cash positive in H2?

John Di Bert: Yeah. I think, Doug, the first thing is that, you know, good or bad, it's our seasonal pattern is that we tend to burn-

Yeah. So I think dug the first thing is it you know good or bad it's our seasonal patterns that we tend to right.

Doug Karson: Right.

John Di Bert: quite a bit of cash in Q1, and we tend to have a very strong Q4. We're working through obviously the, you know, all the operational logistics of making sure we sustain the kind of the ability to move a lot of product out through the Q4. I speak to you now viewing the world as it is today, right? I mean, as things progress.

Quite a bit of cash and Q1, and we tend to have a very strong for and so we're working through obviously the the the all the the operational logistics of making sure. We we sustain that kind of.

To to move a lot of product out through the the fourth quarter I speak to you now viewing the world as it is today right I mean, so things progressed anymore. Then there's a level of of of unknown. That's out there so but from from our view of of the business now.

Operator 2: Right

Operator: Right

John Di Bert: ... we'll know more. There's a level of unknown that's out there. From our view of the business now, Q1, you know, it's typically in absolute terms, you know, a pretty deep burn quarter anyway. We talked $600 to 800 million here, COVID-related. In fact, I think, you know, probably Q2 has more COVID-related burn than Q1 in it. That, as I said, and you mentioned, it gets us kind of a similar cash burn in absolutes for Q1 and Q2, but more of Q2 will be COVID-related. It's gonna be about being down in operations here.

Q1, you know, it's it's typically in absolute terms that you know pretty deep burn quarter anyway, we talk six $800 million you're covered related.

In fact, I think you know probably cute too as more cold that related burn than Q1 in it and that that as as I said and you mentioned that gets us kind of a similar cash burn.

John Di Bert: That, as I said, and you mentioned, it gets us kind of a similar cash burn in absolutes for Q1 and Q2, but more of Q2 will be COVID-related. It's gonna be about being down in operations here.

Salute for two wanting to too but more of a cue to be a covert related it's going to be about being down and operations. Here you know kind of like almost two months and low productivity and then getting back up and running and managing supply chains and outputs at the same time with customers. So I think that that we're trying to be prudent than at the same time, you know realistic and making sure in front of stuff, where we can.

John Di Bert: You know, kind of like almost two months in low productivity, and then getting back up and running and managing supply chains and outputs at the same time with customers. So I think that we're trying to be prudent and at the same time, you know, realistic and making sure we're in front of the stuff where we can be. In Q3, you know, we're assuming now some level of normalcy, I think, you know, and that's all I can say. Doesn't mean it's business as usual, it just means that we're in a more normal environment. With that, I think you get to pivot into Q4 and make sure you move out a lot of the product that we have and we'll keep you guys posted.

In a in Q3, you know we're assuming now some level of normality I think you know and that's all I can say doesn't mean, it's business as usual it just means that we're in a more normal environment.

John Di Bert: In Q3, you know, we're assuming now some level of normalcy, I think, you know, and that's all I can say. Doesn't mean it's business as usual, it just means that we're in a more normal environment. With that, I think you get to pivot into Q4 and make sure you move out a lot of the product that we have and we'll keep you guys posted.

And with that I think you get to pivot into Q4 and make sure you you move out a lot of the product that we have and and we'll keep you guys posted but at this point in time you know we're also be very very I think strong on working capital management and how we set those rates is going to be a responsible.

John Di Bert: At this point in time, you know, we're also being very strong on working capital management and how we set those rates is gonna be responsible. So that's, you know, that's the kind of color I can give you. You know, CapEx, like I said, early decisions. So all those things will benefit us in the H2 as we, you know, adjusting the size of our operations as well. So those are H2 benefits, I think they're there. Takes a little bit of time to get everything in place.

John Di Bert: At this point in time, you know, we're also being very strong on working capital management and how we set those rates is gonna be responsible. So that's, you know, that's the kind of color I can give you. You know, CapEx, like I said, early decisions. So all those things will benefit us in the H2 as we, you know, adjusting the size of our operations as well. So those are H2 benefits, I think they're there.Takes a little bit of time to get everything in place.

So that's you know that's the kind of color I can give you we don't cap acts like a Saturday decisions. It's all those things will benefit from the second half as we are.

Adjusting the the size of operation as well. So those are second half benefits I think yeah that they're they're they're takes a little bit of time to get already in place.

Patrick Ghoche: Thanks, Doug.

Patrick Ghoche: No, that's very helpful. That's a very helpful color. I guess last one I'll sneak in, and I promise that'll be it. A lot of big companies are, you know, hitting the market with liquidity measures, whether you have Boeing or Ford alike, kind of this downside protection. Had you guys anticipated potentially any kind of like safety net liquidity that you may try to raise in the, you know, in the event that Alstom doesn't come through? Are you guys kind of thinking about that at all?

It's very helpful.

It's very helpful color and I guess last one I'll sneak in and I promise so that'll be it a lot of big companies are you hitting the market with liquidity measures Olympia Boeing or for a like kind of does downside protection and you guys anticipated potential any kind of like a safety net liquidity that you may try.

Patrick Ghoche: Had you guys anticipated potentially any kind of like safety net liquidity that you may try to raise in the, you know, in the event that Alstom doesn't come through? Are you guys kind of thinking about that at all?

To raise in the in the event that Austin doesn't come through.

You guys kind of thinking about that at all yeah.

John Di Bert: Yeah. No, absolutely. I would say that we've already engaged discussion, you know, in case we may have some need with the different government, you know, that we are working with. I would say across the world because we have, as you know, a vast operation. Clearly, some discussion have already taken place to make sure that if ever we have a need, you know, and I will call it a temporary need because that's what we're-

<unk> and I I would say that we've we've already engaged discussion you know in case, we we may have some neat with the different government.

You know that we are working with I would say across the world because we have a as you in a way a vast operation. So clearly some some some discussion I've already taken place to make sure that if ever we have a neat.

<unk> and I will call it eight temporary neat because that's what we're talking about here to get through then of course, those discussion will will will be attention more right alright. Thanks, guys for taking three my questions.

Éric Martel: Right

Éric Martel: ... we're talking about here to get through, then of course, those discussion will be advancing more.

Éric Martel: Right

Éric Martel: ... we're talking about here to get through, then of course, those discussion will be advancing more.

Doug Karson: Great. All right. Thanks, guys, for taking three of my questions.

John Di Bert: Thanks, Doug.

But.

Operator: Thank you. Our following question is from Konark Gupta from Scotiabank. Please go ahead. Mr. Gupta, your line is open. You may proceed with your question.

<unk>.

<unk> some scotiabank piece go ahead.

<unk>. We proceed with your question.

Hi, it's always going to hear me, yes, yes, yes, good morning, again, but <unk>.

Konark Gupta: Hi. Sorry, can you hear me?

Operator: Yes.

John Di Bert: Yes. Yes, good morning, Konark.

Konark Gupta: Thank you. Good morning and welcome, Éric.

Éric Martel: Good morning. Thank you.

The morning, Thank you.

Konark Gupta: Yeah, first I wanted to ask you on the guidance or kind of indication you provided for aircraft deliveries down 30% to 35% in the full year. Just want to clarify, you had a lot of obviously CRJs last year, and you will have very few this year. That 30% to 35%, should I assume that includes CRJs in both years or just business jets?

Yeah. So first I want to ask you on the guidance all kind of indication you provided for Ah aircraft deliveries down 30% to 35%. The end up <unk> just wanted to like you had a lot of obviously C.O.J.'s last year and you have a very few this year so that.

5% should I zoomed out any deal with C.O.J.'s in both you saw just business yet.

Just business jet it was just business yet yeah on this one I think embassy idea, we're just managing out the the remainder of the the skyline and delivering the backlog.

John Di Bert: Just business jets.

Patrick Ghoche: It was just business jets.

Éric Martel: It was just business jets.

John Di Bert: Yeah.

Patrick Ghoche: Yeah.

Patrick Ghoche: On this one, I think on the CRJ, we're just managing out the remainder of the SkyLine and delivering the backlog to that, you know. With the MHI transaction closing 1 June, now it kind of won't be a factor in the count.

You know and with the the I may try a transaction personality kind of won't be a factor in.

Into account.

Konark Gupta: Okay. No, makes sense. Thanks. Secondly on the cash, John. Thanks for providing a good color on quarterly cadence and stuff. I mean, you obviously have some covenants and some restrictions on the cash, so if you can help us understand what is in the new kind of structure, what is the minimum cash position at any time you require? Any goalposts you have set for cash position at the end of 2020.

Makes sense. Thanks, and then a second me on the cash John So thanks for letting a good color on on quarterly Gejdenson stuff I'm Gonna you, obviously have some <unk> some restrictions on the cash. So if you can't help us understand want this in the new kind of structure what is the minimum cash position at any time, you get a choir.

And then any gold coast you have set for cash position I'd be on a plane 20.

So just all all I I missed the last part of that question can you would just <unk> yeah. So it's like any goal posts for cash position at the end up 2020, I know you have 2.1 at the end of March 20th March study plus well what do you expect cash at the end of this year.

John Di Bert: I missed the last part of that question. Can you just repeat, Konark, just the last one?

Konark Gupta: Yeah. Is there any goalposts for cash position at the end of 2020. I know you have $2.1 billion at the end of 31 March 2020. But-

John Di Bert: Okay

Konark Gupta: What do you expect cash at the end of this year?

John Di Bert: Okay. I think that the first thing is that it's important to note that there are no minimum liquidity cash requirements. We did have at one point a covenant under the CDPQ arrangement, but that had expired with the fourth anniversary year, I believe, so it would've been February of this year. There is no requirement on a minimum cash basis for the company. On the covenants, maybe just a bit of color there. I think that you know, the only covenants we have are at BT, and they support the revolver and some letters of credit that we issue on performance and so on. The good news is that you know, we have a very supportive syndicate of banks.

Okay.

Okay. So I think that the first thing is that it's important to know that there are no minimum liquidity a cash requirements. We did have at one point it out and then under the C.D. arrangement, but that had a expired would be fourth anniversary year I believe sort of instead of this year. So there is no a requirement on their own cash.

John Di Bert: There is no requirement on a minimum cash basis for the company. On the covenants, maybe just a bit of color there. I think that you know, the only covenants we have are at BT, and they support the revolver and some letters of credit that we issue on performance and so on. The good news is that you know, we have a very supportive syndicate of banks.

As for the company on the covenants, maybe just a bit of color there.

I think that you know the the only covenants, we have our it to be tea and that they support the other revolver and and some letters of credit we are shown performance and so on and so the good news is that you know we have a very supportive us indicative banks. So we've been working very closely with the them, particularly.

John Di Bert: We've been working very closely with them, particularly over this period of uncertainty. You know, in Q1, we were able to make some adjustments. I think it's important that we came out of the gate. I mean, this hit everybody with, you know, pretty hard and we wanted to just make sure that we had the right flexibility. We've taken care of that, I'd say, for the first couple of quarters of the year. What’s important now is that they also have an IG, a pretty good credit. It's important to know that they're kind of, you know, their balance sheets and their lending arrangement is under a pretty good credit backdrop.

The over this period of uncertainty and when the first quarter, we were able to make some some adjustments.

Think it's important even came out of the gay I mean, just hit everybody with a with you know pretty hard and we want it to just make sure that we had the right flexibility. So we've we've taken care of that I'd say for the first couple of quarters and there was you know what's important now is that they also have an I.D.T. pretty good credit. So it's a it's important to know that did it.

John Di Bert: We've taken care of that, I'd say, for the first couple of quarters of the year. What’s important now is that they also have an IG, a pretty good credit. It's important to know that they're kind of, you know, their balance sheets and their lending arrangement is under a pretty good credit backdrop.

There you know their their balance sheet and and they're lending arrangement is is under a pretty good credit a backdrop, so long and short of it is that we you know support with the also C.D.B.Q. your.

John Di Bert: Long and short of it is that we, you know, support with also CDPQ here their financial covenants. The access to the revolver is full. It's not impacted during the interim quarters. We can borrow all the way down to the 1.3. At the end of the quarter, we do have to make sure we meet those covenants. The injection by CDPQ was helpful in that regard. Of course, the flexibility that the banks are giving us relative to the situation is as well. Going forward, I got to stay close to that, but at the end of the day, I do believe that we will have that well managed.

Their their financial covenants the the access a revolver is full it's not a it's not a impacted journey into reporters, we can bar all the way down to the 1.3 at the end a quarter, we do have to make sure we make those covenants the injection by C.B.Q. was helpful in that regard.

John Di Bert: At the end of the quarter, we do have to make sure we meet those covenants. The injection by CDPQ was helpful in that regard. Of course, the flexibility that the banks are giving us relative to the situation is as well. Going forward, I got to stay close to that, but at the end of the day, I do believe that we will have that well managed.

And of course, the flexibility the banks are giving us a relative to the situation is as well so going forward I got to stay close to that but at the end of the day I do believe that we will have that well managed so I I not the biggest first a piece of concern, but it's one that we're working left on the full year I do hesitate to be honest to give out.

John Di Bert: It's not the biggest first piece of concern, but it's one that we're working on. On the full year, I do hesitate, to be honest, to give out too many goalposts or expectations. I did a little bit of math for you. If you just take that maybe and, you know, kind of conclude it on yourself, in terms of just overall liquidity. We started the year with about $4. We talked here about the H1 being, you know, call it $3 from just math's sake down. We're adding $2 from all the activities that we're pursuing between the equity investments at CDPQ, the sale of A220, MHI, and Spirit in combination, all of those.

Too many goalposts <unk> I did a little bit <unk> for you. If you just take back maybe in you know kind of a computer on yourself in terms of just overall liquidity. We started the year would about four.

John Di Bert: We started the year with about $4. We talked here about the H1 being, you know, call it $3 from just math's sake down. We're adding $2 from all the activities that we're pursuing between the equity investments at CDPQ, the sale of A220, MHI, and Spirit in combination, all of those.

We talk to your about the first half being you know call. It three for just map safe down.

Adding to from all the activities that we're we're pursuing between the equity investments.

It'd be q. the sale of eight to 20 M.H.I. in spirit in combination all of those and then the second half. So we expect that you know probably we we turned a corner and start to have some generation I won't comment on the size you know break even are positive and so if you do a bit of math there you'd get a number that you know kinda says that.

John Di Bert: The second half, we expect that, you know, probably we turn the corner and start to have some generation. I won't comment on the size, you know, breakeven or positive. If you do a bit of math there, you get a number that, you know, kind of says that, we close the year here with, probably something in the neighborhood of, you know, maybe $1.5 billion plus minus, we'll see.

Before we close the year year with probably something in the neighborhood of you know you know maybe a million and a half plus minus we'll see.

Konark Gupta: Okay. That's it for me. Thanks a lot.

Okay. That's let me think swatch.

John Di Bert: Thank you.

Thinking.

Operator: Thank you. Our following question is from Walter Spracklin from RBC Capital Markets. Please go ahead.

Thank you.

<unk> some Walter subtracting from I.B.C. capital markets. Please go ahead.

Ryle Stroud: Hi, good morning. This is Ryle Stroud calling in for Walter Spracklin at RBC. Thanks for taking my questions.

Operator: Hi, good morning. This is Ryle Stroud calling in for Walter Spracklin at RBC. Thanks for taking my questions.

Hi, Good morning. This is <unk> see things take my questions.

Éric Martel: Morning.

Just one one is 20.

Éric Martel: Just wanted to quick

John Di Bert: Good morning.

Ryle Stroud: Just wanted to quickly touch on covenants again. You mentioned you received some relief there, but indicated that it was temporary. I'm just curious, how long is the relief in place for, and where are you in terms of your covenants right now?

Ryall Stroud: Just wanted to quickly touch on covenants again. You mentioned you received some relief there, but indicated that it was temporary. I'm just curious, how long is the relief in place for, and where are you in terms of your covenants right now?

Just just wanted to sit there quickly touch on on covenants again to see you mentioned you you're a skewed.

Release, there Ah, but indicated that it was temporary I'm just curious how how long is the relief in place for and where are you in terms of your your your covenants right now.

All were in full compliance.

John Di Bert: Oh, we're in full compliance. You know, I mean when I say temporary, it just means that, you know, the metrics have been adjusted for the early part of the year here into H1. Then we'll be monitoring the situation. In fairness to the banks, I mean, we want to have an ongoing dialogue. This is just a question of saying, we'll give you guys an update, and then at that point in time, we'll, you know, be working with them to look for what's appropriate in H2. Again, you know, I don't want to get too far ahead here, but we also have the flexibility here at corporate to make injections as necessary.

And so you know that's I mean, no and then when I say temporary it just means that you know the the metrics I've been adjusted for the early part of the year here. So into the first half and then that will be a monitor situation in fairness to the bank I mean, we want to have an ongoing dialogue. So this is.

John Di Bert: This is just a question of saying, we'll give you guys an update, and then at that point in time, we'll, you know, be working with them to look for what's appropriate in H2. Again, you know, I don't want to get too far ahead here, but we also have the flexibility here at corporate to make injections as necessary.

It's a question of saying, we'll give you guys an update and then at that point in time will there'll be working with them to to look for for what's appropriate in the second half again, you know I don't want to get to too far ahead here, but we also have the flexibility yet corporate to to make injections as necessary, but we do.

John Di Bert: We do always stay in good control of our situation on the covenants. Like I said, only at BT.

You always Stan and good control of our situation on the covenants and like I said only.

Great Great. That's that's helped but I guess just one more for me you know looking maybe looking beyond coded.

Ryle Stroud: Great. That's helpful. I guess just one more for me, you know, looking beyond COVID, what types of aircraft do you envision generating the most significant customer demand, you know, post the pandemic? Do you see there being a potential for an acceleration in demand for certain aircraft models?

Ryall Stroud: Great. That's helpful. I guess just one more for me, you know, looking beyond COVID, what types of aircraft do you envision generating the most significant customer demand, you know, post the pandemic? Do you see there being a potential for an acceleration in demand for certain aircraft models?

What what types of aircraft do you envision rendering the most significant customer demand.

Pandemic in and do you see there being a a potential for an acceleration in in demand for certain aircraft models.

You know actually it's interesting you know so of course, there is still discussion I would see as we speak.

Éric Martel: You know, actually, it's interesting. You know, so of course there is still discussion, I would say, as we speak, you know, going on with our customers. Our typical customer right now, you know, may have some time available, so they're calling us and getting informed on what's going on and what airplane could be available. And, you know, actually, we haven't seen much cancellation, which is great news. I think everybody is assessing right now. Our customers are doing the same thing. What will be the outcome of this pandemic? When will be the outcome of this pandemic? Clearly, it is moving at a slow pace. There's no decision being made.

You know going on what our customers, so so or or typical customer right. Now you know me made me I have some time available so they're calling us and getting in form on on the what's going on then what airplane could be available so.

Éric Martel: And, you know, actually, we haven't seen much cancellation, which is great news. I think everybody is assessing right now. Our customers are doing the same thing. What will be the outcome of this pandemic? When will be the outcome of this pandemic? Clearly, it is moving at a slow pace. There's no decision being made.

And you know we haven't seen a major.

Actually we haven't seen much cancellation, which is a great news I think everybody is in assessing right now our customers are doing the same thing what will be the outcome of disbanded make when will be the outcome up that they spend Emmy. So clearly it is moving at a slow pace. There's no there's no decision being.

Are being made and and.

Éric Martel: Hopefully, you know, and that's what we're starting to see is that we think that, you know, when we have more visibility on the pandemic, that the activity level will be restarting. So far there's little activity, it's more information. You know, those customers are approaching us right now to understand, you know, what could be possible, when delivery, what airplane could be available. That's positive. Hopefully when everybody has more of a solid ground in understanding the real impact, we foresee that the activity level will start to pick up again.

Oh believe you know one that's what we're we're we're we're starting to see is that we're saying that the you know when we have more visibility and up and they make that'd be activity level will be will be restarting. So so far there was a there's a little activity. It's more information, but you know those customer are approaching us right now too.

Éric Martel: You know, those customers are approaching us right now to understand, you know, what could be possible, when delivery, what airplane could be available. That's positive. Hopefully when everybody has more of a solid ground in understanding the real impact, we foresee that the activity level will start to pick up again.

Understand you know what could be possible.

When delivery what airplane could be available. So so that's positive and hopefully when the everybody has more a a solid ground in understanding the the the really impact we foresee dead the activity level will will start to pick up again.

Ryle Stroud: That's great. Thanks a lot. That's it for me. I'll pass the line.

Ryall Stroud: That's great. Thanks a lot. That's it for me. I'll pass the line.

That's great. Thanks, a lot and that's it for me.

John Di Bert: Thank you.

<unk>.

Operator: Thank you. Our following question is from Brian Lalli from Barclays. Please go ahead.

Thank you.

Oh following question is something that Brian <unk>. Please go ahead.

Brian Lalli: Hey, guys. Good morning.

Hey, guys good morning.

John Di Bert: Morning.

Éric Martel: Good morning.

But.

Éric Martel: Morning. John, maybe just a couple of questions following up on some of the previous. First, I believe you'd mentioned in your prepared remarks that the sale of the additional equity to CDPQ wouldn't change the net proceeds back to you guys. Could you maybe walk us through that in a bit more detail, how that mechanism works? I guess a bit of a follow-on to that, would those proceeds to you move if you had a significant revolver draw at Transportation at closing? You know, I get the sense that there's still some market confusion, if you will, around how that $1 billion Transportation cash relates to the $8.2 billion enterprise value. Any help on that would be great. I have one follow-up. Thanks, sir.

Morning, maybe John maybe just a a couple of questions. Following up on some of the previous first I believe you'd mentioned in your compared to the market. The sale of the additional equity D.C.B.Q. wouldn't change their net proceeds back to you guys could you may be walk us through that and a bit more detailed mechanism work study.

Éric Martel: I guess a bit of a follow-on to that, would those proceeds to you move if you had a significant revolver draw at Transportation at closing? You know, I get the sense that there's still some market confusion, if you will, around how that $1 billion Transportation cash relates to the $8.2 billion enterprise value. Any help on that would be great. I have one follow-up. Thanks, sir.

I guess and they didn't fall into that one day proceeds to you moved if you had a significant revolver draw air transportation at closing you know get instead of just there's still some you know marketing teasing. If you will around how about 1 billion transportation cash relates to the 8.2 billion enterprise that he's so any help on that would be great and then it has.

One follow up next year.

John Di Bert: Sure. Well, let me try to keep it simple here and see if this does the trick, but you can ask a follow-on if it doesn't. I think that at the end of the day, there's a minimum cash requirement at the end of the year when at the deal closing for BT solely is struck at 31 December 2020. Essentially it's ensuring that we have positive cash on the books there.

Sure well, let me try to keep it simple here and and see if if this does the trick, but you can ask a follow on if it doesn't.

<unk>, there's a minimum cash requirements at the end of the year when you know closing for beauty. So.

<unk> to December 31st 2020.

And essentially it's ensuring that we have a positive cash on the book there. So what it means is that to the extent that we generate.

John Di Bert: What it means is that to the extent that we generate cash from the business sufficient to have positive cash on hand at the end of the year, then the injection of CDPQ, either one is paid out from that cash on hand and maintains that positive balance, so sufficient cash there, including the equity injection that you restore it. Or two, the cash stays there, but it is added to the total sales proceeds received because it's new cash into the business. I think that that's the way to think about it, right? When we go back to the announcement of the transaction, I think we signaled up to about $1 billion of cash on the balance sheet that at BT that would go with BT.

Cash from the business sufficient to have a positive cash on hand at the end of the year.

And the injection of C.D.B.Q., either one is paid out from that cash on hand, and maintains that positive balance so sufficient cash there, including the equity injection that you were storm or to the cash stays there, but it is added to the the total sales proceeds or receive because it's.

John Di Bert: Or two, the cash stays there, but it is added to the total sales proceeds received because it's new cash into the business. I think that that's the way to think about it, right? When we go back to the announcement of the transaction, I think we signaled up to about $1 billion of cash on the balance sheet that at BT that would go with BT.

New cash into the business. So I think that that's the way to think about it right. When we go back to you know the transaction I think we signal up to about a billion dollars of a of cash on the the balance sheet that I'd be t. that would go with <unk>.

John Di Bert: Maybe if I can simplify it again, you know, just kind of keeping it simple. To the extent that you don't have a burn of more than $1 billion incremental to that view, you would protect the proceeds at BT. Does that make sense?

So maybe if I can simplify it again, you know just kind of keep it simple to the extent that you don't have a burn of more than a billion incremental to that to view you would protect the proceeds at.

Does that make sense, okay, yeah, I guess I mean, any any name again, maybe I'm alone and next Monday, there's a little confusing Ain't it today.

Brian Lalli: Got it. Okay. Yeah, I guess, I mean, it is. I mean, maybe again, maybe I'm alone in this, but it is a little confusing relative to the total enterprise value, but I'm happy to follow up a bit offline if that's okay.

<unk> I'm happy game to follow up a day off line small if that's okay.

John Di Bert: Yes, absolutely.

Brian Lalli: Maybe my second one, just, you know, more broadly, and I know you touched on this a couple of times, but I appreciate all the proactive work on the liquidity front. You know, still with so much uncertainty, could you know, to a question earlier, could you expand on maybe what pools of liquidity from, you know, government support specifically that you might be able to access? I don't believe that you have, you know, kind of a typical secured debt access given the negative pledge in your indentures. I guess, one, is that correct? Does that change how you think about future issuance and how, you know, potential pools of liquidity could develop if you did in fact need them, if this progresses longer, the weakness lasts longer, et cetera?

And then maybe a second one just you know more broadly in in a touch and it's a couple of times, but in appreciate all day.

Active work on the liquidity fine, but you know still with so much uncertainty can you you don't want to a question earlier could you expand.

Maybe what pools of liquidity from you know government support specifically that you might be able to.

<unk> I don't believe you have you know kind of the typical secured debt access given the negative quite junior indentures I guess, if one is that correct in that change how you think about future issuance in in how you don't potential pools iniquity could develop if you didn't in fact read them. If this progress is longer than weakness.

Brian Lalli: I don't believe that you have, you know, kind of a typical secured debt access given the negative pledge in your indentures. I guess, one, is that correct? Does that change how you think about future issuance and how, you know, potential pools of liquidity could develop if you did in fact need them, if this progresses longer, the weakness lasts longer, et cetera?

Yeah, you're a et cetera.

So you're correct and would you say it. It's also true they'll just as a matter of fact that we we can use working capital essentially inventory as a as a form of security. So that is an option that we do have with respect to to our ability to.

John Di Bert: You're correct in what you say. It's also true, though, just as a matter of fact, that we can use working capital, essentially inventory, as a form of security. That is an option that we do have with respect to our ability to generate any additional debt. We could look at securing any kind of temporary support if we needed it with some kind of a working capital facility. Just think about the nature of what we're going through here, right? It's just be very pragmatic about it, is that we're going through a kind of system shock, and that system shock is causing us to build up working capital.

To generate any additional that so we could look at.

Securing any kind of temporary support if we needed it with some kind of a working capital facility and and just think about the nature of what we're going through your right and it's just be very pragmatic about it is that we're going through it kind of a a system shop and that system shock is a is causing us to build up working capital. So if there was an area where.

John Di Bert: Just think about the nature of what we're going through here, right? It's just be very pragmatic about it, is that we're going through a kind of system shock, and that system shock is causing us to build up working capital.

John Di Bert: If there was an area where we wanted to get some, you know, additional flexibility, we would do so, could do so through the working capital that we have and making sure we got some financing against that. I think in terms of government support and so on, I don't wanna speculate here on, you know, any specifics, but the reality is that I think that all of the major jurisdictions where we operate wanna see our business go back to some form of normal. We are a big employer in many of the regions that we operate. We have, you know, great businesses that make products that make a difference in all those communities, particularly on the train side. The aircraft business, a very important industry for Canada and Quebec as well.

We want it to get some some some additional err flexibility we would do so could do so through the working capital, though we have and making sure that we got some financial gains that I think in terms of government to support and so on I don't want to speculate a year on you know any specifics, but the reality is that's I think.

But all of the major jurisdictions, where we operate Wanna see our business go back to some form of normal we are big employer. Many of the regions that we operate we have you know grade businesses that make products that to make a difference and all those communities, particularly on the train side.

John Di Bert: We are a big employer in many of the regions that we operate. We have, you know, great businesses that make products that make a difference in all those communities, particularly on the train side. The aircraft business, a very important industry for Canada and Quebec as well.

The aircraft or business are very important industry for Canada and come back as well. So those are just important parts of the the sector and more important part of just getting you know the the general economy started so I think to the extent that it was important for us to to have some support we would have open lines of communication dialogue and I think that people have been.

John Di Bert: Those are just important parts of the sector and more important part of just getting, you know, the general economy started. I think to the extent that it was important for us to have some support, we would have open lines of communication and dialogue. I think that people have been, you know, getting educated on just, you know, how we're managing through this and making sure that they know where we are, and at the same time, we're being responsible all on our own. At the same time, I think, you know, all of that will play itself out over the next few months based on what's the right thing to do. That's some of the optionality we have.

John Di Bert: I think that people have been, you know, getting educated on just, you know, how we're managing through this and making sure that they know where we are, and at the same time, we're being responsible all on our own. At the same time, I think, you know, all of that will play itself out over the next few months based on what's the right thing to do. That's some of the optionality we have.

You know getting educated on a just you know how we're managing through this and making sure that they know where we are and at the same time, we're being responsible on our own and at the same time I think you know all of that will play itself out here over the next few months based on what's the right thing to do that some of the off now that we have.

Brian Lalli: Thanks.

Thanks, Thanks brain will the operator will take or last question before some concluding remarks.

Patrick Ghoche: Got it.

Patrick Ghoche: Thanks, Brian. Operator, we'll take our last question before some concluding remarks.

Operator: Certainly. Our last question is from David Strauss from Barclays. Please go ahead.

<unk> Oh last question you some David Chong.

Please please go ahead.

Kate Koppels: Hi, guys. It's Kate Koppels on for David. Thanks for taking the question. I wanted to ask Eric. I know that he was at aircraft during the prior aircraft downturn. Now that you're back, Eric, just kinda what do you see as different about the business this time? How do you see kinda decremental margins being different? And then just another related question, do you think Global 7500 volumes are those still targeted at kind of the prior ultimate 35 to 40 annually, or could that be less? Thank you.

I guess you take.

D that taking the question I wanted us to Eric I now that he was that.

At aircraft during the prior downturn, so not not not your back Eric and just kind of what what do you see is different.

This time, well, how do you see kind of Sacramento margin being different and then just that just another related question do you think well the 7500 volume and those still targeted that kinda crier Ultimate 35, 40 annually aren't happy life. Thank you.

Kate Koppels: And then just another related question, do you think Global 7500 volumes are those still targeted at kind of the prior ultimate 35 to 40 annually, or could that be less? Thank you.

Éric Martel: Thanks, Katie. That's a good question. Actually, there's clearly some similarities between this, to use your expression, this shock right now that is happening, to use John's expression. I remember when the price of oil, you know, dropped in December 2014 by about half. You know, we had a major reaction, you know, from our customer base. What was interesting at the time is that, you know, we saw a major cancellation right away. I would say what is different today is that, as I mentioned earlier, we haven't seen

Thanksgiving that's that's a good question actually there's clearly some similarities between this to use your expression does shop right now that the that is happening to use Jones expression.

The I I'm I'm going back forward and I'm I'm I remembered the when the price of oil you know drop in December 14 by about half a you know we had a major reaction you know from our customer base and what was interesting at the time is that you know we saw this we saw it m- m- major cancellation.

Right away I would see what is different today is that as I mentioned earlier, we haven't seen that rush of cancellation you know despite the shop that is evident but in 2014. We did the also we have limited you know exposure today on on the.

Éric Martel: That rush of cancellation, you know, despite the shock that is evident. In 2014 we did. We have limited, you know, exposure today on the light jet versus either 2008 or even 2014. You know, we always felt going through those crises that the large segment market was much more robust. Today, as you know, we are much more dependent on that segment. Which makes me believe that, you know, our backlog will remain, you know, much more solid. I'm not saying there will be no cancellation. I'm sure there will be, but I think it will be minimal compared to what we may have seen as an example in 2018.

Jet versus either 2008 or or even 2014, but you know we always fail going through those crisis.

The large segments market was much more robust and today as you know we are much more dependent on that segment. So which makes me believe that you know our backlog will will remain you know much more solid I'm, not saying that would be no cancellation I'm sure they will be but I think it will be minimal.

Éric Martel: Today, as you know, we are much more dependent on that segment. Which makes me believe that, you know, our backlog will remain, you know, much more solid. I'm not saying there will be no cancellation. I'm sure there will be, but I think it will be minimal compared to what we may have seen as an example in 2018.

Bear to watch when they I've seen as an example in 2018 that market by the we never really completely recovered since then on the light market, but we feel that are with large market segment is very robust as Jones said ordered a backlog or backlog is is extremely solid, especially in the 75 unread and we are just coming out also.

Éric Martel: That market, by the way, never really completely recovered since then, on the light market. We feel that our large market segment is very robust. As John said earlier, the backlog, our backlog is extremely solid, especially on the Global 7500. We are just coming out also with a brand-new product, the Global 6500, which is also an amazing product out there. I hope that answered your question.

What a brand new product to 6500, which is also a an amazing product out there. So open answer your question.

Yeah, Yeah, and then can could you just comment on call. The 7500 volume that are you guys did you guys think that you could still get to that 35 to 40 or I guess, you're kind of making decisions now for kind of how much capacity and how much kind of <unk>, it's going to be so are you guys considering at lower rates than previously targeted.

Kate Koppels: Yeah. Could you just comment on Global 7500 volumes? Do you guys think that you could still get to the 35 to 40? Or I guess you're kinda making decisions now for kinda how much capacity and how much kinda what your cost base is gonna be. Are you guys considering a lower rate than previously targeted?

Éric Martel: On the Global 7500 today, because the backlog is strong, we do anticipate the same rate moving forward.

<unk> and read today, because the backlog is strong we do anticipate the same rate.

Oh before.

Kate Koppels: Okay.

Éric Martel: Of course, we're gonna be-

Kate Koppels: Great. Thanks, guys.

Éric Martel: Losing a couple of planes probably this year because of the weeks we haven't produced. We should go back to normal. You know, I would like to just say a few words. First of all, to thank you for joining us this morning. I do appreciate your question, but also interest in Bombardier. I'm also looking forward to spending more time with you as soon as travel restriction will allow. I'm interested in hearing your concerns, also share more on my vision and also my priorities for Bombardier. I think that you will find that I am a strong believer in open two-way communication with all stakeholders.

Of course, we're gonna be okay plain, probably this year because of the the weeks we haven't produce but then we we should go back to to normal.

So you know I would like to adjust see a few word and think first of all to tanks you for joining us. This morning I I do appreciate your question, but also interests two in bombard g.

Éric Martel: I do appreciate your question, but also interest in Bombardier. I'm also looking forward to spending more time with you as soon as travel restriction will allow. I'm interested in hearing your concerns, also share more on my vision and also my priorities for Bombardier. I think that you will find that I am a strong believer in open two-way communication with all stakeholders.

I'm also looking forward to spending more time, which you as a as soon as travel a restriction will allow.

I'm interested in hearing that your concerns also share more of an on my vision and also my priorities <unk> I think that you will find that I am a strong believer in open two way communication with all stakeholders are wildly a Christian environment is is extremely challenging right now I'm optimistic about our future.

Éric Martel: While the current environment is extremely challenging right now, I am optimistic about our future and also excited to be leading a company with such a strong product portfolio, but also so many great people. I am looking forward to working with this team to advance the priorities I outlined at the beginning of the call. Of course, I recognize one thing is that our action, not our words, will dictate your views and confidence in our future. I have given the clear message inside the company that we have not met expectation and must become much more predictable. Going forward, we will fully be transparent and set clear priorities. Among them, of course, restoring our reputation and culture around operational excellence.

And also excited about a excited to be leading a company, which such a strong product portfolio, but also so many great people I am looking forward to working with disdain too advanced the priorities I outline at the beginning of the call.

Éric Martel: Of course, I recognize one thing is that our action, not our words, will dictate your views and confidence in our future. I have given the clear message inside the company that we have not met expectation and must become much more predictable. Going forward, we will fully be transparent and set clear priorities. Among them, of course, restoring our reputation and culture around operational excellence.

Of course I recognize one thing is that our action that are words will dictate your views and confidence in our future.

I have given to the clear message inside the company.

That we have not met expectation and must become much more predictable going forward, we will fully be fully transparent and set clear priorities among among them of course, restoring our reputation and culture around operational excellence and finally, and most importantly in closing I old that.

Éric Martel: Finally, and most importantly, in closing, I hope that you and your families remain safe and healthy in the days ahead. Thank you, and thanks for participating this morning.

<unk>.

And your family's remain safe and LT in today's ahead. So thank you and things for participating this morning.

[noise]. Thank you <unk> peace, it's gonna kill nine.

Operator 2: Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation. This conference is no longer being recorded. L'enregistrement de cette conférence est interrompu. This conference is no longer being recorded. L'enregistrement de cette conférence est interrompu.

Operator: Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation. This conference is no longer being recorded. L'enregistrement de cette conférence est interrompu. This conference is no longer being recorded. L'enregistrement de cette conférence est interrompu.

<unk>.

Thank you for your participation.

This conference is no longer being recorded.

[laughter].

This conference is no longer being recorded.

[laughter].

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