Bombardier Inc. revised earnings guidance for the fiscal ended December 31, 2014. Bombardier Inc. announced the pause of its Learjet 85 business aircraft program. The pause is due to weak demand for the Learjet 85 aircraft and follows a downward revision of Bombardier's business aircraft market forecast.

This reflects the continued weakness of the Light aircraft category since the economic downturn. As a result, the company will record a pre-tax special charge in the fourth quarter of 2014 of approximately $1.4 billion mainly related to the impairment of the Learjet 85 development costs. Earnings before financing expenses, financing income and income taxes (EBIT) before special items at Aerospace (BA) is expected to be approximately 4% compared with a previous guidance of 5%.

The variation is mainly due to increased provisions for credit and residual value guarantees, pricing pressure on new aircraft sold, as well as a decrease in fair value of used aircraft. EBIT before special items at Transportation (BT) is expected to be approximately 5% compared to a previous guidance of 6%. This variation is mainly due to revised escalation assumptions for some contracts which impacted estimated future revenues.

Cash flow from operating activities at Aerospace is expected to be approximately $800 million while net additions to property, plant and equipment (PP&E) and intangible assets are expected to be approximately $1.8 billion, compared with a previous guidance for cash flow from operating activities between $1.2 billion and $1.6 billion and net additions to PP&E and intangible assets between $1.6 billion and $1.9 billion. The variation in Aerospace's cash flow from operating activities is mainly due to a lower level of customer advances, a lower EBIT and an increase in used aircraft inventory. Free cash flow for Transportation is expected to be slightly positive compared with a previous guidance of free cash flow generally in line with EBIT.

This variation is mainly due to a different cash flow profile in some contracts and a lower level of advances on options in relation to framework contract agreements.