NFI Investor Update. as at May 10, North America s leading Transit Bus & Motor Coach Manufacturer and Parts Distributor

Transcription

1 NFI Investor Update as at May 10, North America s leading Transit Bus & Motor Coach Manufacturer and Parts Distributor

2 1 Company Highlights Fiscal 2017 Q1 LTM Performance: Revenue: US $2.3B Adj EBITDA: US $292.4M Return on Sales: 12.8% Net Debt: $474M Leverage: 1.67X (Converts treated as Equity) ROIC: 14.5% FCF: US $158.3M Payout Ratio: 28.0% Fully Diluted Market Cap: ~$C 3.3B (3) North America s: #1 Transit Bus & Motor Coach manufacturer and parts supplier Leading installed base (nearly 70,000 vehicles or ~50%) ~5,100 employees Current Backlog (at Q1 2017): Firm: 3,302 EU, $1.7B Options: 6,682 EU, $3.4B LTM Book-to-Bill Ratio: 120% Common Share (TSX:NFI) Shares Outstanding: 62.0M 60-day average Daily Volume: ~ 230K Dividend = C$1.30/share (1), Yield: ~2.5% (3) TSR (2) : 17 YTD = 31% 16 = 47% 15 =115% Convertible Debt (TSX:NFI.DB.U) Principal Outstanding: US $6.1M 60-day average Daily Volume: ~US $3K Coupon: 6.25%, Yield: ~ 1.7% (3) Matures: June 30, 2017 Dec 18-15: NFI added to S&P/TSX Composite Index Mar 14-16: NFI added to S&P/TSX Equal Weight Industrials Index Mar 11-16: NFI Equity Options commenced trading on Montreal Exchange Apr 24-17: NFI added to S&P/TSX Composite Shareholder Yield Index, (1) Effective May 10, 2017 the Dividend increased from C$0.95 to C$1.30 per share annually. Paid quarterly. (2) Total Shareholder s Return ( TSR ) is calculated by the growth in capital assuming the dividends are reinvested each time they are paid. (3) Calculated using closing TSX market price as at May 8, 2017 Forward Looking Statements and Non-GAAP Measures are defined in APPENDIX B.

3 2 NFI Investment Thesis Scale combined with Leading Share in Diversified Markets Deep Relationships with High Quality Customer Base Broad Product Offering with Technology Leadership Experienced Team focused on Growth & Diversification Strong Financial flexibility and performance North Americas #1 heavy-duty transit bus brand, #1 motor coach brand and #1 aftermarket parts and service supplier Leading installed bus fleet with >70,000 vehicles (transit buses and motor coaches) currently in service or ~50% share of Canadian and US installed base Compliant with Buy-America and Canadian content policies (with 2/3 s of productive capacity located in the US). Integrated aftermarket parts and services operations. Founded in the 1930 s, NFI and MCI have established relationships with nearly all domestic transit authorities and specifically 24 out of 25 of the largest agencies Strong reputation and long standing relationship with hundreds of motor coach operators in Canada and US operating MCI or SETRA (Daimler) motor coaches Leading in-house engineering and new product development capability Offer the industry s widest range of green propulsion options: clean diesel, diesel-electric hybrid, natural gas, and zero-emission (electric trolley, battery-electric and fuel cell). Successful track record of positioning the business for growth, increased profitability and proven cash flow generation Extensive LEAN transformation and OpEx experience with demonstrated ability to complete accretive acquisitions and achieve synergies Business operates in USD with ~90% revenue in USD Flexible cost base with 89% of expenses variable Proven financial performance and low leverage (~2X). Strong/Predictable cash flow with proven de-levering and consistent dividends paid. Experience M&A and solid integration experience

4 3 Business Strategy Our Facilities, Processes & Products Our Market Leading Positions in Bus/Coach/Parts Our Business and Revenue Stream Our Revenue, EBITDA and CashFlow Optimize, Defend, Diversify & Grow 1. Offer Canadian and US operators the industry s best buses, services and value Migrate from selling buses to providing solutions and deliver best value and support for life of our products focusing on lowest Total Cost of Ownership Provide complete offering: Bus ( Workhorses of the Fleet ) supported by Parts, Service & Valued Added services Lead the market in innovation, reliability and quality Excel at customer support, response and follow up with emphasis on aftermarket parts and services 2. Operate as a world class OEM using LEAN principles, a Quality Roadmap and a Safety Culture Be recognized as an Employer of Choice with an industry leading safety culture Excel in engineering, supply chain, strategic sourcing and appropriate in-sourcing Continuous pursuit of eliminating waste and cost reduction to improve competiveness Operate as a responsible, sustainable and environmentally conscious business 3. Perform while seeking Diversification and Growth Lead the North American transit bus and motor coach industries and deliver strong TSR Operate with an appropriate and flexible capital structure, pay and appropriate dividend and grow the business Seek to diversify over long term to ensure longevity and sustainability: Product (type of bus) and/or Market (Public vs Private) and/or Geography (North America vs International).

5 4 Strategic Plan and Execution has delivered TSR Total Shareholder Return (1) Cultural & Structural Change Adopted Stakeholder Model. Commitment to Culture, People & LEAN operations Migrated Capital Structure from Income Deposit Security (Yield) to Common Share (Growth and Yield) in Strategic Acquisitions Total Return Investment in NFI NFI's first acquisition in 2010 enhanced US part fabrication capability and capacity Equity investment in NFI by a leading global bus and coach body manufacturer NFI acquired Orion s parts business from Daimler in S&P/TSX Composite -- Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 NFI acquired US manufacturer of heavyduty transit buses and parts distributor in 2013 NFI acquired North America s leading manufacturer of motor coach and parts/service support in 2015 Source: FactSet, Company filings 1. Total shareholder return includes capital appreciation and dividends paid. 2. Calculated using closing TSX market price as at May 8, 2017

6 5 Proven Leadership with extensive Industry Experience Paul Soubry President & CEO, Wayne Joseph President,Transit Bus Ian Smart President,Motor Coach Brian Dewsnup President, Aftermarket Parts Joined New Flyer in 2009 as President and CEO after 24 years with Standard Aero. Holds a Bachelor of Commerce, attended Exec Ed at Harvard Business School and the Institute of Corporate Directors. In 2003, was named a recipient of Canada s Top 40 under 40 award, inducted into the CME Manufacturing Hall of Fame in 2014, and recognized as Canada s 2016 CEO of the Year by the Financial Post. Joined New Flyer in 2008 as VP Operations and then assumed responsibility as EVP Transit Bus. Prior held executive positions in bus manufacturing for over forty years with NABI, Blue Bird and Flxible, and then at BAE Systems. Holds a Bachelor of Science in Business Administration and an Accounting Degree and is Certified in Production and Inventory Management (CPIM). Joined New Flyer in 2011 as EVP Aftermarket and prior held various executive positions at Standard Aero for 15 years - one of the world s largest independent aviation service companies. Lead the project to privatize and conduct LEAN implementation at a United States Air Force Base. Holds a Bachelor of Science in Industrial Engineering. Forrmely NABI s CFO since 2006 (which NFI acquired in 2013), and then VP Business Development of New Flyer. Led the acquisition of MCI and became VP & GM Aftermarket. Prior served as Controller of Johns Manville's-Waterville operations, and held various capacities at Ford Motor and Visteon. Holds a Bachelor's in Mechanical Engineering, Masters in Mechanical Engineering, and an MBA in Finance. Glenn Asham CFO, Joined New Flyer in Obtained chartered accountant designation and holds a Bachelor of Commerce. Prior worked with Deloitte providing client services in the areas of accounting, auditing, taxation and management consulting Colin Pewarchuk, General Counsel, Joined New Flyer in Prior practiced law with Aikins, Macauley and Thorvaldson and was a Banking Officer with Royal Bank of Canada. Holds a Bachelor of Commerce in Finance and a Bachelor of Laws. Janice Harper EVP HR, Joined New Flyer in Holds a Diploma in Creative Communications, a Certificate in Human Resources, is a Charterer Professional in Human Resources (CPHR) and holds a Human Resources Compensation Committee management designation. David White EVP Supply, Joined New Flyer in 1998 as Corporate Controller, and moved into Supply Management as Vice President in Prior worked for Deloitte as a Chartered Accountant. Holds a Bachelor of Commerce in Finance and obtained Chartered Accountant designation.

7 25,000 20,000 15,000 10,000 5,000 - Annual Deliveries and Market Demand Transit Bus EUs delivered in Can/US Motor Coaches delivered in Can/US Total New Flyer Market Share MCI Industry Market Share 80% 70% 60% 50% 40% 30% 20% 10% 0% Public Bid Universe & Active Transit Bus Opportunities (EUs) Operator RFPs Issued. EUs for Proposals in development Bids submitted by NFI and EUs awaiting selection NFI forecasted EU buys in next 5 years US Federal Funding for Transportation Ongoing Bids Submitted Bids Forecast Source: NFI/MCI Database & Management Estimates 6 1,492 2,485 1,862 2,990 1,767 2,824 1,190 2,381 1,479 2,330 1,514 2,048 1,022 1, ,343 1,050 1,752 1,292 2,099 1,056 1,852 1,012 1, , , , , , , , ,416 80% 70% 60% 50% 40% 30% 20% 10% 0% 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 ISTEA TEA-21 SAFETEA-LU Extension to SAFETA-LU MAP-21 ARRA DRRA FAST Bus Deliveries (EU) 25, ,000 15,000 10,000 5, US Federal Funding ($ millions) ,797 1,050 5,347 1,500 5,816 1,864 6,236 2,051 5,388 1,272 5,009 1,731 4,723 1,871 5,212 1,585 4,333 1,422 4,047 2,115 5,065 2,164 5,284 2,258 6,032 2,025 5,933 1,814 5,154 1,656 5,109 1,868 5,010 2,437 5,128 2,457 5,533 2,569 5,795 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

8 7 #1 Market Share in Transit Bus Heavy-Duty: Xcelsior Launch in 2009 based on >20 years experience with low floor transit buses. Primary targets is metropolitan & urban fleets Offered in 35, 40, and 60 lengths Typical sale price of ~US $450K for 35 /40 and US $700K for 60 articulated HD Transit Bus Share (2016 market is ~5,800 units) Active Canada/US HD Transit Bus Coach Fleet ~85,000 California Owned by REV Group 5% 1% 19% Montreal and New York Owned by Volvo Truck & Bus Average Age of the HD Transit Fleet: US = 7.8 years, Canada = 7.3 years Source: APTA Public Transportation Factbook 2016 California Privately Owned by Henry Crown and Company 30% 45% Orion Parts and NABI acquired by NFI in 2013 Source: New Flyer Database & Management Estimates

9 8 Transit Bus Market Segments in Canada and US Transit Market Segments and primary targets 24 of the 25 largest Transit Agencies operate NF supported transit buses Metropolitan Fleets 17 operators 39% of installed fleet Urban Fleets 200 operators 45% of installed fleet Municipal Fleets 900 Operators 16% of installed fleet New market entrants focusing only on battery-electric buses: Source: New Flyer Database & Management Estimates

10 9 #1 Market Share in Motor Coaches New Coach Private New Coach Public Pre-Owned Coach J Model Targets the mid-range to luxury segments J Model #1 selling coach in N.A. private market NA Distributor of Daimler s SETRA coaches D Model Targets the mid-range segment Buy America compliant D Model is the #1 selling coach of all time in N.A. Trade-in option to support new coach sales (~350 annually) Coaches are refurbished at MCI s service centers and various 3 rd parties Motor Coach Share: 2016 market ~2,400 units Active Canada/US Motor Coach Fleet ~55,500 units Turkey Owned by Sabanchi Group Average Age of the Motor Coach Fleet: US and Canada = 9 years Source: ABA Motorcoach Census, published February % Quebec and New York Belgium & Macedonia Privately owned 26% 28% Mexico Owned by Volvo Truck & Bus 50% 1% 26% 23% 39% Negligible Deliveries Source: MCI Database & Management Estimates Spain & Mexico US MCI Share increased by 1% in 2016 over 2015

11 10 Motor Coach Market in Canada and US Market Segments and primary targets Private Market Segment Definitions Transit Fixed Route/ Line Haul Tour & Charter Conversion 12% of installed fleet 34% of installed fleet 52% of installed fleet 2% of installed fleet Public Private Private Private Source: MCI Database & Management Estimates

12 11 Environmental Commitment Clean Diesel Natural Gas Electric Trolley Hybrid Electric Battery Electric/ Fuel Cell Xcelsior 35, 40, 60 D Model 40, 45 J Model 45 with 35 in development ecoach in Development

13 12 New Flyer Leadership in Zero Emissions NF estimates 283 zero emission buses ( ZEBs ) were delivered by the industry in 2016 NF delivered 241 equivalent units ( EUs ) ZEB (8.3% of NF s total transit production), with 85% ZEB market share. Increase of 48% from 144 EU s delivered by NBF in NF has now delivered >6,400 transit buses powered by electric motors (including hybrids). Current Status of NF Battery-Electric Bus NF battery-electric buses have been delivered to transit agencies in Washington, Chicago, & Winnipeg. NF currently has 52 electric bus orders in-process including: LA Metro, AC Transit, MBTA (Boston), Utah Transit Authority, Tri-Met (Portland), OCTA (Orange County), SunLine Transit (Palm Springs) NF current ZEB bid pipeline of 893 EU s. Total bid universe relating to ZEB buses is 1,519 EU s or 8%. NF ZEB Differentiators NF is the only NA Bus manufacturer to offer all ZEB types (battery-electric, trolley-electric, and fuel cell) NF unmatched design and manufacturing capability allows operators ability to customize and optimize charging method, infrastructure and range capability All NF ZEBS are based the proven Xcelsior transit bus platform and utilize shared and common electric accessories. MCI zero emission coach (ZEC) now in development All public data indicates NF electric buses can match or exceed the energy storage capability of competitor electric buses, but with the ability to carry significantly more passengers

14 13 Manufacturing, Fabrication and Service Footprint MCI - Winnipeg, MB Parts Fabrication, MCI D Model Shell Assembly Complete J Model manufacture New Product Development Frank Fair Fiberglass Fabrication NFI - Winnipeg, MB Parts Fabrication and Bus Shell Assembly New Product Development Montreal, PQ MCI Service Center Renton, WA NFI Service Center AB SK MB ON QC Arnprior, ON NFI Service Center ND MN NY Jamestown, NY Part Fabrication/Assembly Hayward, CA MCI Service Center Opening Q3-17 CA IL IN OH ` WV PA NJ Blackwood, NJ MCI Service Center Ontario, CA NFI Completion & Service Center KY Los Alamitos, CA MCI Service Center Pembina, ND MCI D Shell Completion TX AL FL Winter Garden, FL MCI Service Center St Cloud, MN NFI Bus Manufacture Des Plaines, IL MCI Service Center Crookston, MN NFI Bus Completion Dallas, TX MCI Service Center Elkhart, IN TCB Part Fabrication Anniston, AL NFI Bus Manufacture

15 14 Industry s most comprehensive Parts offering Widest bus and motor coach product assortment, industry leading distribution network with shortest delivery times. Added value through unique offerings (Kits, Mid-life upgrade programs, Vendor Managed Inventory, KanBan, etc). New MCI website offering state of the art on-line sales and distribution features.

16 15 Financial Performance Sales ($M US) Adjusted EBITDA ($M US) ,274 2, ,451 1, , ,865 1, ,132 1, Q1 LTM Q1 LTM Bus Aftermarket Bus Aftermarket Quarterly Adjusted EBITDA ($M US) Return on Invested Capital Millions Adjusted EBITDA LTM Adjusted EBITDA 16% 14% 12% 10% 8% 6% 4% 2% 0% 6.2% 548 ROIC = 8.6% Net operating profit after tax Average invested capital for the period 8.5% 12.2% % 14.5% Q1 LTM Average Invested Capital for the period Return on Invested Capital 1,078 1, Millions

17 16 Operating Performance Deliveries of new Bus and Coach Equivalent Units (EUs) Adjusted EBITDA per new EU delivered ($000 US) 1,200 1,100 1, ,207 3, , ,2552,3482,3922,4372,4552,4672,4712, , ,943 1,7851,795 1,7391,656 1,704 1, LTM Deliveries ,511 3,574 3,500 3,000 2,500 2,000 1,500 1, $70 $60 $50 $40 $30 $20 $ $0 Aftermarket EBITDA Margin % Aftermarket Adjusted EBITDA / Aftermarket Revenue 22% 21.8% 20.5% 20.6% 20% 18.3% 18.6% 18.8% 18.6% 18.6% 20.2% 19.8% 18% 17.1% 16.3% 16% 14% 15.4% 14.8% 14.7%14.6%14.6% 14.0% 16.2% 16.0% 14.2% 12%

18 17 Public Customer Book-to-Bill and Backlog Book-to-Bill consistently >100% for 16 of last 17 Quarters 6,000 5,000 4,000 3,000 2,000 1,000 - Order Intake vs Deliveries Q1 LTM New Orders (EUs) LTM Deliveries (EUs) LTM Order Intake / Deliveries 300% 250% 200% 150% 100% 50% 0% 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Total Backlog (Firm and Option EUs) MCI Public backlog added in Q4-15 Firm Deferred Order Firm Option Deferred Order Option US Customer deferred Order was removed from backlog IN 2013 following 5 years of inaction. Firm = 3,302 EUs Options = 6,682 EUs Equivalent Units Option History and Current Status (EUs) 3, % 92% 90% 2,500 79% 80% 2,000 73% 70% 60% 1,500 54% 50% 40% 1,000 35% 30% % 10% - 0% Options expired Options exercised Current option expiry Conversion rate Conversion rate % is calculated as, Options exercised / (Options expired Options exercised)

19 18 Additional Growth, Combination & Margin Opportunities New US Administration focus on Infrastructure spending, US economic health and tax reform could assist with further rejuvenation of aging bus/coach fleet Potential for NFI/MCI to grow market share in core bus and coach OEM business New product offerings already in development (35 coach, zero-emission bus and motor coaches announced Dec 2016) Proven LEAN manufacturing and OpEx expertise deployment continues company-wide which has cost reduction and working capital benefits, plus improved competitiveness Significant progress made and continued investment planned for critical parts fabrication both for bus and coach Overhead and cost synergies resulting from common IT platform across NFI and MCI in process (announced June 2016) Potential for additional aftermarket share with added cost and Working capital benefits from combining the NFI and MCI parts businesses into one (announced Dec 2016) Continue M&A opportunities being investigated: Vertical (part fabrication, supply chain and aftermarket) and Horizontal (other bus types or other bus markets)

20 19 Cash Flow Performance 2017 Q1 LTM Adjusted EBITDA to Free Cash Flow ($M) Free Cash Flow and Dividends (C $M) Q1 LTM Free Cash Flow Dividends Free Cash Flow and Net Earnings ($/share) Dividends (C$/share) $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $ Q1 LTM Free Cash Flow per share (C$) Earnings per share (US$) 2.3 $1.40 $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.585 Annual dividend rate (C$) $ Q2, $1.30 $0.95 $0.70 Dividend Payout Ratio 140% 120% 100% 80% 60% 40% 20% 0%

21 20 Strong Balance Sheet with low Leverage Majority of Convertible Debentures issued in 2012 have now converted Total Leverage does not include Convertible Debenture as debt. Under NFI Senior Credit Agreement, Total Leverage Ratio must be maintained below 3.75X Adj EBITDA, reducing to 3.5X effective January 1, Total Debt ($US M) $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $ Q1 LTM Total Leverage Ratio $6M Convertible Debentures issued in 6.25%. Convert price $US10/share $343M Revolver Facility used to manage working capital fluctuations ($18M outstanding) $482M Senior Secured Term Loan IDS Debt Bachelor Bonds Senior Term Loan Revolver Convertible Debenture Total leverage ratio

22 21 Capital Allocation Policy Invest in current business and growth Growth balanced between organic and M&A growth Invest in LEAN manufacturing to improve quality & cost effectiveness Invest in vertical integration of critical supply Four acquisitions completed from Seek additional M&A (Tuck in and Growth). Maintain balance sheet flexibility Prudent use of Leverage Provide liquidity for fluctuating working capital requirements Seek normal operations between 2-2.5X leverage Add leverage to fund accretive acquisitions capable of reducing leverage through earnings Return capital to shareholders Common Share Dividend Sustainable: Distributions have been paid consistently since IPO in 2005 Current annual dividend of CAD $0.95/share. Paid quarterly. Foundation of Capital Allocation Policy is built on a strong balance sheet and an operating model providing consistent and predictable cash flow

23 APPENDIX A 22 Bus Market Segment Summary (April 2016) GLOBAL BUS MARKET ~420K/YR CANADA/US BUS MARKET ~56K/YR

24 APPENDIX B FORWARD LOOKING STATEMENTS, FINANCIAL TERMS, DEFINITIONS AND CONDITIONS 23 FORWARD LOOKING STATEMENTS This investor presentation contains forward-looking statements relating to expected future events, including the integration of the acquired business into New Flyer s existing business and expected synergies, the diversification and growth of the combined bus and aftermarket parts businesses. Although the forward-looking statements contained in this investor presentation are based upon what management believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. Actual results may differ materially from management expectations as reflected in such forward-looking statements for a variety of reasons, including risks related the ability to implement the operational changes necessary to achieve the intended synergies, acquisitions, joint ventures and other strategic relationships with third parties (including liabilities relating thereto), the covenants contained in the Company s new senior credit facilities could impact the ability of the Company to fund dividends, market and general economic conditions and economic conditions of and funding availability for customers to purchase buses and to purchase parts or services, customers may not exercise options to purchase additional buses, the ability of customers to suspend or terminate contracts for convenience and the other risks and uncertainties discussed in the materials filed with the Canadian securities regulatory authorities and available on SEDAR at Due to the potential impact of these factors, the Company disclaims any intention or obligation to update or revise any forwardlooking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. FINANCIAL TERMS, DEFINITIONS AND CONDITIONS References to EBITDA are to earnings before interest, income taxes, depreciation and amortization, gains or losses on disposal of property, plant and equipment and unrealized foreign exchange losses or gains on non-current monetary items. References to Adjusted EBITDA are to EBITDA after adjusting for: the effects of certain non-recurring and/or non-operations related items that have impacted the business and are not expected to recur, including non-recurring costs relating to business acquisitions, product rationalization costs, impairment loss on equipment and intangible assets, equity settled stock-based compensation, past service costs, fair value adjustment to MCI s inventory and deferred revenue, proportion of the total return swap realized, loss on derecognition of long-term debt and costs associated with assessing strategic and corporate initiatives. Return on Invested Capital ROIC is calculated by dividing Net Operating Profit After Tax by Average Invested Capital for the period. References to Net Operating Profit After Tax are to Adjusted EBITDA less depreciation of plant and equipment and income taxes. References to Invested Capital are to shareholders equity plus long-term debt, obligations under finance leases, other long-term liabilities, convertible debentures and derivative financial instrument liabilities less cash. Management believes EBITDA, Adjusted EBITDA, ROIC and Free Cash Flow (as defined below) are useful measures in evaluating the performance of the Company. Free Cash Flow means net cash generated by operating activities adjusted for changes in non-cash working capital items, interest paid, interest expense, income taxes paid, current income tax expense, effect of foreign currency rate on cash, past service costs, defined benefit funding, non-recurring transitional costs relating to business acquisitions, costs associated with assessing strategic and corporate initiatives, product rationalization costs, defined benefit expense, cash capital expenditures, fair value adjustment to MCI s inventory and deferred revenue, proceeds from disposition of property, plant and equipment, gain received on total return swap settlement, proportion of the total return swap realized and principal payments on capital leases. However, EBITDA, Adjusted EBITDA, ROIC and Free Cash Flow are not recognized earnings measures and do not have standardized meanings prescribed by IFRS. Readers of this presentation are cautioned that EBITDA, and Adjusted EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with IFRS as an indicator of New Flyer's performance, and Free Cash Flow should not be construed as an alternative to cash flows from operating, investing and financing activities determined in accordance with IFRS as a measure of liquidity and cash flows. A reconciliation of net earnings and cash flow to EBITDA and Adjusted EBITDA, based on the Financial Statements, has been presented In Management s Discussion and Analysis of Financial Condition under the heading Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA and Reconciliation of Cash Flow to EBITDA and Adjusted EBITDA, respectively. A reconciliation of Free Cash Flow to cash flows from operations is provided under the heading Summary of Free Cash Flow. New Flyer s method of calculating EBITDA, Adjusted EBITDA, ROIC and Free Cash Flow may differ materially from the methods used by other issuers and, accordingly, may not be comparable to similarly titled measures used by other issuers. Dividends paid from Free Cash Flow are not assured, and the actual amount of dividends received by holders of Shares will depend on, among other things, the Company's financial performance, debt covenants and obligations, working capital requirements and future capital requirements, all of which are susceptible to a number of risks, as described in New Flyer s public filings available on SEDAR at All figures are in U.S. dollars unless otherwise noted.