New Flyer Recent Research

Table of Contents
Rpt. 27513415
20-Nov-2015
NEW FLYER INDUSTRIES-INITIATING COVERAGE

ALTACORP CAPITAL
- MURRAY, CHRIS, ET AL
6 - 13
Rpt. 27480517
17-Nov-2015
NEW FLYER INDUSTRIES

DIRECTORS DEALS LTD.
- COMPANY SNAPSHOT, ET AL
14 - 14
Rpt. 27471998
16-Nov-2015

ALTACORP CAPITAL
15 - 21
Rpt. 27421224
11-Nov-2015

ALTACORP CAPITAL
22 - 32
Rpt. 27420414
11-Nov-2015

NATIONAL BANK FINANCIAL
- JOHNSON, TREVOR, ET AL
33 - 35
Rpt. 27416084
10-Nov-2015

CANACCORD GENUITY
- TYERMAN, DAVID
36 - 51
Rpt. 27412688
10-Nov-2015

CANACCORD GENUITY
- TYERMAN, DAVID
52 - 65
Rpt. 27416442
10-Nov-2015

CIBC WORLD MARKETS INC. (CANADA)
- CHIANG, KEVIN
66 - 80
Rpt. 27412953
10-Nov-2015

ALTACORP CAPITAL
81 - 84
Rpt. 27387187
09-Nov-2015

BMO CAPITAL MARKETS
- POWELL, BERT, ET AL
85 - 94
These reports were compiled using a product of Thomson Reuters
www.thomsonreuters.com
Table of Contents
Rpt. 27382788
09-Nov-2015

CANACCORD GENUITY
- TYERMAN, DAVID
95 - 111
Rpt. 27396447
09-Nov-2015

ALTACORP CAPITAL
112 - 121
Rpt. 27380711
08-Nov-2015

122 - 124
Rpt. 27389328
06-Nov-2015

MINKABU
- RESEARCH DEPARTMENT
125 - 133
Rpt. 27350306
05-Nov-2015

ALTACORP CAPITAL
134 - 137
Rpt. 27340282
04-Nov-2015

BMO CAPITAL MARKETS
138 - 142
Rpt. 27341063
04-Nov-2015

- CHIANG, KEVIN
143 - 152
Rpt. 27225049
23-Oct-2015

ALTACORP CAPITAL
153 - 156
Rpt. 27173066
16-Oct-2015

ALTACORP CAPITAL
157 - 161
Rpt. 27173630
16-Oct-2015

CANACCORD GENUITY
- TYERMAN, DAVID
162 - 177
Table of Contents
Rpt. 27175078
16-Oct-2015

BMO CAPITAL MARKETS
178 - 185
Rpt. 27167024
15-Oct-2015

- CHIANG, KEVIN
186 - 194
Rpt. 27078715
30-Sep-2015

BUYSELLSIGNALS RESEARCH
- RESEARCH TEAM, ET AL
195 - 213
Rpt. 27012158
20-Sep-2015

- CHIANG, KEVIN
214 - 224
Rpt. 27025470
18-Sep-2015

BMO CAPITAL MARKETS
- POWELL, BERT
225 - 230
Rpt. 26724333
10-Aug-2015

CANACCORD GENUITY
- TYERMAN, DAVID
231 - 247
Rpt. 26730768
10-Aug-2015

ALTACORP CAPITAL
248 - 260
Rpt. 26722648
09-Aug-2015

261 - 263
Rpt. 26716769
07-Aug-2015

ALTACORP CAPITAL
264 - 267
Rpt. 26715345
07-Aug-2015

BMO CAPITAL MARKETS
- POWELL, BERT
268 - 272
Table of Contents
Rpt. 26712903
07-Aug-2015

- CHIANG, KEVIN
273 - 286
Rpt. 26588693
23-Jul-2015

- RESEARCH TEAM, ET AL
287 - 300
Rpt. 26538855
20-Jul-2015

CANACCORD GENUITY
- TYERMAN, DAVID
301 - 317
Rpt. 26511889
16-Jul-2015

ALTACORP CAPITAL
318 - 322
Rpt. 26515137
16-Jul-2015

323 - 326
Rpt. 26511212
16-Jul-2015

BMO CAPITAL MARKETS
- POWELL, BERT
327 - 331
Rpt. 26505185
15-Jul-2015

- CHIANG, KEVIN
332 - 341
Rpt. 26377506
30-Jun-2015

ALTACORP CAPITAL
342 - 345
Rpt. 26269963
15-Jun-2015

BMO CAPITAL MARKETS
346 - 353
Rpt. 26041709
11-May-2015

CANACCORD GENUITY
- TYERMAN, DAVID
354 - 370
Table of Contents
Rpt. 26029265
08-May-2015

ALTACORP CAPITAL
371 - 379
Rpt. 26014635
07-May-2015

380 - 382
Rpt. 26017870
07-May-2015

BMO CAPITAL MARKETS
- POWELL, BERT
383 - 388
Rpt. 26025626
07-May-2015

- CHIANG, KEVIN
389 - 399
Rpt. 26008105
30-Apr-2015

400 - 410
Rpt. 25821445
15-Apr-2015

ALTACORP CAPITAL
411 - 415
Rpt. 25821512
15-Apr-2015

BMO CAPITAL MARKETS
- POWELL, BERT
416 - 420
Rpt. 25822884
15-Apr-2015

CANACCORD GENUITY
- TYERMAN, DAVID
421 - 437
Rpt. 25817200
14-Apr-2015

- CHIANG, KEVIN
438 - 447
Rpt. 25746318
02-Apr-2015

ALTACORP CAPITAL
448 - 455
INSTITUTIONAL EQUITY RESEARCH: DIVERSIFIED INDUSTRIES
COMPANY UPDATE
NFI | TSX
New Flyer Industries Inc.
$26.07
Rating: Outperform
One Year Target: C$35.00
Total Return: 36.9%
Yield: 2.6%
November 20, 2015
Notes from Toronto

Solid Meetings Explain Rationale for MCI Transaction: We had the opportunity
to host institutional investor meetings with senior management of New Flyer Industries
Inc. The company addressed a number of questions related to the recent acquisition of
MCI along with commentary on the demand and pricing environment.
Financial Metrics (US$)

52-w eek High/ Low :
C$26.30 / C$12.05
2.6%
Dividend Yield:
Shares Outstanding ($mm):
55.5 (basic)
Market Capitalization ($mm):

Float ($mm)
C$1446.0
55.5 (fd)
39.7
151.0
3-Month Avg. Daily Volume ('000):

Por Forma Net Debt (Q4/15) ($mm):
Enterprise Value Incl. OBSD ($mm):
(Assumes Acquisition of MCI Closes in Q4/15)
$651.9
$1744.9
(FYE Dec 31)
2016e
2014
Revenue ($mm)
2015e
$1,451.1 $1,552.1 $2,450.7
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
2014
$19.7
$107.4
$144.8
$243.6
$0.65
$0.99
$1.65
Q2
Q3
Q4
$27.0
$25.7
$35.0
2015
$31.4
$39.2
$36.3
$37.9e
2016
$51.9e
$52.8e
$69.0e
$69.8e
Q2
Q3
Q4
Adjusted FD EPS
Q1
2014
$0.10
$0.16
$0.15
$0.24
2015
$0.20
$0.30
$0.26
$0.23e
2016
$0.29e
$0.31e
$0.52e
$0.53e
$30
$25

Volume ('000)
1200
Last Sale Price
1000
$20
800
$15
600
$10
400
$5
200
0
$0
Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15
Chris Murray, P. Eng., CFA

Managing Director
647.776.8246
cmurray@altacorpcapital.com
We Expect Synergies to Materially Grow: When announcing the transaction to

acquire MCI, NFI management indicated an expectation of synergies of $10mm. We
believe this number is very low, with management acknowledging during meetings that
while they believed the combination stood on its own from a financial perspective, they
would run a process similar to how the integration of NABI progressed. For reference,
when the company announced the decision to move NABI to the Xcelsior platform, the
expectation was for a two to three-year payback implying $7mm to $10mm in savings.
Since that point, management has increased estimates of run rate savings indicating that
savings were expected to be $16.5mm with Q3/15 reporting and updating that number to
$18.0mm with marketing. We believe with a combined ~$1.6bn purchasing spend, the
ability to leverage Marcopolos global sourcing network in the private market, weak IT
systems at MCI and an acknowledgement that MCI is only in the early stage of lean
optimization relative to NFI operations that significant further savings are available.
Underlying Margin Improvement Continues: We continue to expect the trend in
underlying margin per equivalent unit to continue to improve in 2016 and 2017. At
Q3/15 EBITDA margin per EU on a trailing basis stood at $33.2k/EU, which marks a
high point since early 2011. We believe the synergies derived from NABI, estimated at
$18mm could add ~$6.5k/EU to 2016 and 2017 run rates, which would bias our
estimates higher. Management continues to be conservative in any guidance, also
cautioning there can be significant period to period variation, however during meeting
did acknowledge the trend toward improved pricing in backlog has begun to materialize
as competition normalizes indicating that the average margin in backlog expected to be
produced in 2016 and 2017 is better than what was experienced through 2014 and 2015.
Maintain Outperform and $35.00 Target: Based on our discussions with
management, we believe the MCI acquisition has significant potential to improve the
earnings and cash flow profile of the company. We see a number of opportunities to
increase returns with higher synergies, while we continue to see improving fundamentals
in core bus manufacturing operations and the aftermarket segment. We maintain our
Outperform rating and our 12-month price target of C$35.00. Our target price is based
on a blend of a 14.0x earnings and 7.5x EBITDA multiple of the four quarters ending
Q3/17 reflecting our 12-month forward valuation period as well as an exchange rate of
C$1.32/$US.
Samarth Modwal, Associate

647.776.8245
smodwal@altacorpcapital.com
Regulatory Disclosures and policy on the dissemination of research: last page or at www.altacorpcapital.com
I NSTITUTIONAL
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INDUSTRIES
INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES
ALTACORP CAPITAL INC.
Operating & Financial Highlights

Current Valuations
Unit Price (C$)
$26.07
EV/EBITDA
2014
2015
2016
Peer Average
10.4x
12.5x
9.0x
9.3x
7.3x
7.2x
Income Statement
2014
2015e
2016e
2014
2015
2016
Peer Average
14.7x
30.0x
13.7x
19.9x
12.4x
11.9x
Trend Free Cash Flow (FCF)
2014
2015e
2016e
2017e
Revenues
Bus Manufacturing
1,132,066 1,231,170 2,016,079 2,075,781
Aftermarket
319,034 320,916 434,615 455,938
Revenue
1,451,100 1,552,086 2,450,693 2,531,719
Aftermarket % of Total
22.0%
20.7%
17.7%
18.0%
EBITDA - Bus Manufacturing
57,374
82,262 145,663 153,647
5.1%
6.7%
7.2%
7.4%
Margin - Bus Manufacturing
EBITDA - Aftermarket Ops.
49,991
62,531
87,897
92,888
15.7%
19.5%
20.2%
20.4%
Margin - Aftermarket Ops.
Total EBITDA incl. Other/ Synergies
86,457 136,232 243,560 274,816
6.0%
8.8%
9.9%
10.9%
Margin
Adjusted EBITDA
107,365 144,793 243,560 274,816
7.4%
9.3%
9.9%
10.9%
Margin
Amortization
35,837
42,564
60,691
59,052
Operating Earnings
50,620
93,669 182,869 215,763
EBT
37,568
76,452 145,217 190,679
Cash provided by operations

45,823 80,172 100,496
Changes in non-cash working capital
35,255
9,367 62,883
OCF less working capital
81,078 89,538 163,379
Principal portion of capital lease payments
(1,766) (1,908) (2,004)
Net capital expenditures
(10,889) (12,502) (30,278)
Non-operating, non-recurring items affecting FCF 15,398
7,766
Net defined benefit pension funding
FX gain on cash held in foreign currency
(154)
(961)
Free Cash Flow
83,667 81,933 131,098
177,337
16,023
193,360
(2,004)
(36,908)
154,448
Taxes
Net Income
10,849
26,719
23,890
52,562
53,730
91,487
70,551
120,128
Dividends Declared on Common Shares (C$)

Ratio of Dividends Declared to FCF
Reported FD EPS
Adjusted FD EPS
$0.48
$0.65
$0.95
$0.99
$1.65
$1.65
$2.16
$2.16
2015e
2016e
2017e
Growth
2014
Revenue
Weeks of Production
Bus Manufacturing
Aftermarket
52
15.0%
48.4%
21.0%
13.4%
Adjusted EBITDA
52
8.8%
0.6%
7.0%
34.9%
53
63.8%
35.4%
57.9%
68.2%
2017e
Price/Earnings
52
3.0%
4.9%
3.3%
12.8%
Adjusted FD EPS
2.7%
51.0%
66.8%
31.3%
FX Assumptions
2014
2015e
2016e
2017e
0.9057
0.9050
0.7834
0.7463
0.7526
0.7634
0.7783
0.7937
Average CAD/USD Rate

EOP CAD/USD Rate
Free cash flow (C$)

per Share
FCF Yield
FCF per share growth
Trend
92,829 104,615 173,985 198,313

$1.67
$1.88
$3.13
$3.57
6.4%
7.2%
12.0%
13.7%
82.8%
12.6%
66.3%
14.0%
Dividend Per Share (C$)
Dividends on Common Shares

Cash Yield
Trend Key Operating Metrics

Bus Deliveries (Equivalent Units (EU))
Revenue Per EU (US$000's)
EBITDA Per EU (US$000's)
Average Weekly Delivery Rate (EU)
Average Weekly Line Entry Rate (EU)
Book:Bill Ratio (New Orders+Exercised Options)
Option Expiry as % of Opening Options
Trend Leverage
Net Debt (EOP)
Net Debt to Trailing EBITDA
Net Debt to Total Capitalization
2014
2015e
2016e
2017e
32,457
35.0%
33,931
32.4%
38,854
22.3%
38,854
19.6%
$0.585
2.2%
$0.611
2.3%
$0.700
2.7%
$0.700
2.7%
2014
2015e
2016e
2017e
2,437
464.5
23.5
49.2
48.5
0.9x
20.7%
2,503
491.9
32.9
49.1
48.0
1.1x
5.0%
4,065
496.0
35.8
78.2
77.1
1.0x
18.4%
4,170
497.8
36.8
81.8
80.7
1.0x
19.9%
2014
2015e
2016e
2017e
Trend
Trend
Trend
229,034 651,891 610,915 500,725

2.1x
4.5x
2.5x
1.8x
33.6%
57.6%
53.0%
44.2%
Option Expiry of Backlog of 5410 Equivalent Units (EU)
Firm and Option Order Backlog ($bn)

$5.0
Firm
Option
2020, 12%
2015, 8%
$4.0
2016, 16%
$3.0
2019, 28%
$2.0
$1.0
2017, 10%
$0.0
Q109 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15 Q3/15
2018, 26%
Note: All amounts in US$ 000's, unless otherwise specified.

Source: New Flyer Industries Inc., AltaCorp Capital Inc.
New Flyer Industries
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Marketing Highlights from Toronto

We had the opportunity to host institutional investor meetings with senior management of
New Flyer Industries Inc. (NFI-T), including the companys President and CEO, Paul Soubry
and the companys CFO, Glenn Asham. The company addressed a number of questions
related to the recent acquisition of Motor Coach Industries International Inc. (MCI) along
with commentary on the demand and pricing environment. Overall, the tone was consistent
with the companys conference call and we highlight some additional details below:
When announcing the transaction to acquire MCI, NFI management indicated an

expectation of synergies of $10mm coming from certain head office cost savings, the
removal of the CEO at MCI as well as minor purchasing synergies. We believe that this
number is very low, with management acknowledging during meetings that while they
believed the combination stood on its own from a financial perspective, they would run a
process similar to how the integration of NABI progressed. For reference, when the
company announced the decision to move NABI to the Xcelsior platform, the expectation
was for a two to three-year payback implying $7mm to $10mm in savings. Since that
point, management has increased estimates of run rate savings indicating that savings
were expected to be $16.5mm with Q3/15 reporting and updating that number to
$18.0mm with marketing. We believe with a combined ~$1.6bn purchasing spend, the
ability to leverage Marcopolos global sourcing network in the private market, weak IT
systems at MCI and an acknowledgement that MCI is only in the early stage of lean
optimization relative to NFI operations that significant further savings are available. We
do expect higher capital spending through 2016 and 2017 to support a number of
maintenance capex and cost-saving initiatives, which are already included in our
estimates.
Management indicated that lenders were being very supportive with the new credit
facility to support the transaction. Management indicated the $482mm term loan
represents the MCI cash purchase price of $455mm as well as $27mm of transaction and
refinancing costs. The company expects to see proforma leverage at a net debt to
EBITDA ex-convertible debentures at 3.0x on transaction close and expects with the
strong cash flows to be at ~2.0x levered within two years. The corresponding covenant in
the new credit facility limits leverage to 4.0x in the first year, dropping to 3.75x at the
first anniversary and 3.5x at the second anniversary. With internally generated cash flows
adequate to support the acquisition, there is no intention to issue equity to fund the MCI
transaction.
The transaction is expected to close before year-end. There are some accounting
adjustments required due to the differences in standards and functional currencies
between NFI and MCI, which could impact the opening balance sheet, but that were
described as not overly material. Managements early expectation is that a $10mm
working capital adjustment payment is likely at close, with recovery in H1/16.
Management did note that MCI is less working capital intensive than NFI as for
approximately 60% of the business (70% private less two major customers) 100% of the
purchase price of coaches is received prior to shipment although seasonality can play a
factor into inter-period draws.
New Flyer management had approached KPS, the seller of MCI about the acquisition,
which took approximately a 10-month process as opposed to an auction process.
Management believe that NFI was the natural buyer of MCI given the proximity of
operations, and other strategic synergies to be gained.
The sales and service agreement with Daimler has seen sales of 40 to 50 coaches per
year. With the agreement NFI also gets a technology sharing relationship to support the
product.
3
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Most unionised labour contracts at MCI are in place for several years with the exception
of a smaller group of service employees in Illinois whose contract expires in January
2016. The manufacturing operation in Winnipeg represented by IAMAW ratified a threeyear agreement in July 2015. We believe the companys experience with labour relations
as well as intentions to bring plant conditions up to NFI standards with MCI should
mitigate any risk of labour issues.
The majority of management at MCI is expected to stay except the current CEO, who
will be replaced by Mr. Soubry. The intent is to run MCI as a separate organization in
2016 based on its current business plan supplemented by a senior VP from NFI
supporting integration efforts.
MCI carries approximately 325 used buses in inventory. With a process started by
KPS/MCI management to manage refurbishment costs, NFI management believes the fair
market value relative to carrying value of the inventory is appropriate.
The New Jersey Transit Authority for 772 45-foot coaches plus 375 options contract won
in July 2015 is expected to drive incremental growth in sales for MCI. There is an
additional contract MCI is expected to bid for 350 additional 40-foot coaches with
deliveries likely to occur later this decade. We believe cost synergies are likely to be the
primary driver of value creation as opposed to revenue growth.
We continue to expect the trend in underlying margin per equivalent unit to continue to
improve in 2016 and 2017. At Q3/15 EBITDA margin per EU on a trailing basis stood at
$33.2k/EU, which marks a high point since early 2011. We believe the synergies derived
from NABI, estimated at $18mm could add ~$6.5k/EU to 2016 and 2017 run rates, which
would bias our estimates higher. Management continues to be conservative in any
guidance, also cautioning there can be significant period to period variation, however
during meeting did acknowledge the trend toward improved pricing in backlog has begun
to materialize as competition normalizes indicating that the average margin in backlog
expected to be produced in 2016 and 2017 is better than what was experienced through
2014 and 2015.
Bus Manufacturing EBITDA per EU Quarterly and Trailing Basis

50.0
EBITDA Per EU
EBITDA per EU TTM Basis
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
Q1/09 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15 Q3/15
Figure 1 Bus Manufacturing EBITDA per EU Quarterly and Trailing Basis
Source: Bloomberg, AltaCorp Capital Inc.
Based on our discussions with management, we believe the MCI acquisition has significant
potential to improve the earnings and cash flow profile of the company. We see a number of
opportunities to increase returns with higher synergies, while we continue to see improving
fundamentals in core bus manufacturing operations and the aftermarket segment. We maintain
our Outperform rating and our 12-month price target of C$35.00. Our target price is based on
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]
a blend of a 14.0x earnings and 7.5x EBITDA multiple of the four quarters ending Q3/17
reflecting our 12-month forward valuation period as well as an exchange rate of C$1.32/$US.
Key risks to failing to achieve our price target include, but are not limited to changes in raw
material and component costs, foreign exchange risks, competition risk, changes in public
sector transportation spending, and failure by management to execute on disclosed strategies.
10
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Appendix 1: Comparables Valuation

Ticker
Rating &
Target

TSX:NFI
OP (C$35.00)
Marcopolo S.A.
BOVESPA:POMO4
NR
Wajax Corporation
TSX: WJX
NR
Ag Growth International Inc.
TSX: AFN
NR
Superior Plus Corp.
TSX: SPB
NR
The Greenbrier Companies, Inc.
GBX
NR
Oshkosh Corporation
OSK
NR
Spartan Motors Inc.
SPAR
NR
Wabash National Corp.
WNC
NR
Thor Industries Inc.
THO
NR
Winnebago Industries, Inc.
WGO
NR
Navistar International Corporation
NAV
NR
Student Transportation Inc.
TSX: STB
NR
Blue Bird Corporation
BLBD
NR
Cubic Corporation
CUB
NR
Average
Trading Local
Market
Currency Price Cap ($mm)
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
26.07
2.43
16.21
29.75
9.98
34.18
42.59
3.65
12.88
55.55
21.55
13.30
5.60
10.47
44.60
1,447.4
2,096.7
323.9
427.8
1,402.9
972.9
3,186.1
125.1
856.5
2,915.4
581.5
1,084.2
540.4
218.6
1,199.0
Net
Debt
EV
($mm)
2014
EPS
2015e
249.8
1,305.5
167.5
323.6
927.2
204.4
896.3
(15.7)
135.8
(176.3)
(70.2)
4,511.0
274.2
188.1
(43.0)
1,342.6
3,436.1
491.5
751.4
2,330.1
1,308.0
4,082.4
109.3
992.3
2,739.1
511.2
5,605.2
910.0
456.7
1,156.2
0.65
0.25
2.46
0.31
0.45
4.62
3.49
0.03
0.88
3.55
1.61
(5.07)
0.03
0.00
2.47
0.99
0.16
1.62
1.97
0.58
6.66
2.68
(0.05)
1.39
3.93
1.54
(0.07)
0.04
0.76
2.44
P/E
2016e 2014 2015e 2016e
1.65
0.22
1.68
2.67
0.89
5.62
3.52
0.10
1.38
4.51
1.74
2.30
0.04
1.15
2.79
30.0x
7.3x
6.6x
NM
22.1x
7.4x
12.2x
NM
14.7x
15.7x
13.4x
NM
NM
NM
18.0x
14.7x
19.9x 11.9x
11.4x 8.2x
10.0x 9.6x
15.1x 11.2x
17.3x 11.2x
5.1x
6.1x
15.9x 12.1x
NM
38.4x
9.2x
9.4x
14.1x 12.3x
14.0x 12.4x
NM
5.8x
NM
NM
13.7x 9.1x
18.3x 16.0x
13.7x 12.4x
2014
EBITDA
2015e
2016e
2014
EV/EBITDA
2015e
2016e
Price
to BV
ROIC
ROE
107.4
268.8
82.4
63.4
282.4
257.4
591.2
9.4
160.7
298.8
65.8
331.0
69.0
25.9
119.3
144.8
206.1
77.5
72.0
279.0
496.1
494.8
8.1
214.5
333.5
66.1
563.5
70.3
75.5
120.6
243.6
337.1
80.6
91.5
348.1
411.3
589.1
10.9
206.8
390.8
75.3
742.0
86.9
81.7
132.3
12.5x
12.8x
6.0x
11.8x
8.3x
5.1x
6.9x
11.6x
6.2x
9.2x
7.8x
16.9x
13.2x
17.6x
9.7x
10.4x
9.3x
16.7x
6.3x
10.4x
8.4x
2.6x
8.3x
13.5x
4.6x
8.2x
7.7x
9.9x
12.9x
6.1x
9.6x
9.0x
7.2x
10.2x
6.1x
8.2x
6.7x
3.2x
6.9x
10.0x
4.8x
7.0x
6.8x
7.6x
10.5x
5.6x
8.7x
7.3x
2.3x
1.2x
1.0x
1.7x
2.3x
1.3x
1.7x
0.8x
2.0x
2.7x
2.6x
NM
2.2x
NM
1.6x
1.8x
7.0%
2.3%
7.9%
4.1%
6.0%
21.5%
8.7%
0.8%
13.7%
17.7%
18.1%
9.7%
2.5%
4.5%
5.8%
8.7%
10.2%
8.2%
11.7%
(9.6%)
7.2%
36.9%
11.8%
(4.7%)
22.6%
19.8%
19.9%
NM
1.8%
NM
4.6%
10.8%
Source: Capital IQ, Company Reports, AltaCorp Capital Inc.

NFI 2016e EV/EBITDA is based on pro forma Enterprise Value of $1744.7, assuming close of MCI acquisition in Q4/15
As of November 20, 2015. All figures in millions, unless otherwise noted.
11
I NSTITUTIONAL EQUITY R ESEARCH: DIVERSIFIED INDUSTRIES
Disclosure Requirements

NFI
C$26.07
Rating:
Outperform
12 Month Target:
C$35.00
Is this an issuer related or industry related publication?
Does the analyst, a member of the analyst's household, associate or employee who prepared this research
report hold or are short on any of the issuer's securities directly or through derivatives? If yes, state name and
the nature of the interest:
Issuer
N
Is AltaCorp Capital making a market in an equity or equity related security of the issuer?
Does AltaCorp Capital and its affiliates collectively beneficially own more than 1% of any class of common
equity of the issuer?
Does AltaCorp Capital or the analyst have any actual material conflicts of interest with the issuer? If yes, please
explain:
Does any director, officer, employee of AltaCorp Capital or member of their household serve as a director or
officer or advisory capacity of the issuer? If yes, state name:
Did the analyst and/or associate who prepared this research report receive compensation based solely upon
investment banking revenues?
Did the analyst receive any payment or reimbursement of travel expenses by the issuer?
Has the analyst received any compensation based on a specific investment banking transaction relative to this
issuer?
10 Has any director, officer or employee who prepared this research report received any compensation from the
subject company in the past 12 months?
11 Has AltaCorp Capital provided the issuer or its predecessor with non-investment banking securities-related
services in the past 12 months?
12 Has AltaCorp Capital managed or co-managed an offering of securities by the issuer or its predecessor in the
past 12 months?
13 Has AltaCorp Capital received compensation for investment banking and related services from the issuer or its
predecessor in the 12 months prior to the date of this report?
Rating System
AltaCorp's rating system reflects our outlook for expected
performance of an issuer's equity securities relative to its
peer group over the next 12 months.
Ranking
% IB
Distribution
Clients
Outperform
59%
26%
Sector Perform
25%
12%
Underperform
2%
0%
Speculative Buy
2%
0%
Restricted
3%
25%
Not Rated
5%
0%
Tender
3%
0%
100%
19%
Total
An Outperform (Buy) rating represents a security

expected to provide a return greater than the peer group
average.
A Sector Perform (Hold) rating represents a security
expected to provide a return in line with the peer group
average.
An Underperform (Sell) rating represents a security
expected to provide a return less than the peer group
average.
A Speculative Buy rating represents a security where the
return potential is high, but the risk of a significant loss is
material.
The information contained herein is for information purposes only and is not to be construed as an offer or solicitation for the
sale or purchase of securities. While the accuracy or completeness of the information contained in this document cannot be
guaranteed by AltaCorp Capital Inc., it was obtained from sources believed to be reliable. AltaCorp Capital Inc. and/or its
officers, directors and employees may from time to time acquire, hold or sell positions in the securities mentioned herein as
principal or agent.
410, 585 8 Avenue SW

Calgary, Alberta T2P 1G1
Tel: 403 539 8600
TD Tower
66 Wellington Street West, Suite 3530
Toronto, Ontario M5K 1A1
Tel: 403 539 8600
www.altacorpcapital.com
The author of this report hereby certifies that the views expressed in this report accurately reflect his/her personal views about
the subject security and issuer.
The author of this report further certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the
specific recommendations or views contained in this research report.
AltaCorp Capital Inc. may receive or intends to seek compensation for investment banking services from all issuers under
research coverage within the next three months.
This report has not been approved by AltaCorp Capital Inc. for the purposes of section 21 of the Financial Services and Markets
Act 2000 as it is being distributed only to persons who are investment professionals within the meaning of article 19 of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and is not intended to, and should not be relied
upon, by any other person.
AltaCorp Capital (USA) Inc. has taken reasonable steps regarding the accuracy of key statements in this report and accepts
responsibility for the content in this research report.
U.S. Institutions interested in effecting transactions in any of the securities discussed in this report must contact AltaCorp Capital
(USA) Inc. at 403-539-8600.
12
Direct
@altacorpcapital.com
__________________________________________________________________________________________________________
Institutional Equity Research

E&P- Domestic
Patrick J. ORourke, CFA, Analyst
Yasir Siddiqi, Associate
Nicholas Lupick, CFA, Analyst
Sunneva Bernhardsdottir, Associate
Thomas Matthews, P.Eng., CFA, Analyst
Christian Erana, Associate
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
Energy Infrastructure
Dirk Lever, CA, Senior Analyst
Ward Hallett, CA, Associate
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
Dana Benner, CFA, Senior Analyst
Karim Merali, Associate
Mark Westby, Analyst
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
Diversified Industries
Chris Murray, P.Eng., CFA, Senior Analyst
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
Peter Prattas, CPA, CA, CFA, Analyst
Stuart Pattillo, Associate
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
Victoria Hoa, Research Assistant
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601
ggosbee@altacorpcapital.com
Paul Sarachman, CFA, FCSI

President
Managing Director Capital Markets
647 776 8250
psarachman@altacorpcapital.com
ATB Financial
Executive Vice President

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Institutional Trading
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
Calgary AB Canada T2P 1G1
403 539 8600 Main
403 539 8575 Fax
TORONTO
Toronto, ON Canada M5K 1A1
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee
Debt Capital Markets

Jason Caldarelli
647 776 8243
jcaldarelli
Exploration & Production

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage
Agriculture & Diversified Industries

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________
Acquisitions & Divestitures

Leslie Kende, P.Eng.
Bruce Alexander, P.Geol.
Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
member CIPF IIROC FINRA SIPC
Private Wealth
David Lush, Head of Private Wealth
Vojtech Krb, Investment Advisor
Tomasz Okuszko, Investment Advisor
Michelle Hennebery, Client & Marketing Coordinator
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
13
New Flyer Industries Inc

www.newflyer.com
Tue, 17 Nov, 2015
Y
Y
Fundamentals
Market Cap:
Year
End:
P/E:
Dividend Yield:
Listing Date:
Listings
$1,055 million
31 - Dec
Common Shares
NFI CA
EPIC:
ISIN:
Shares In Issue:
Current Price:
39.58
2.38
19-Aug-2011
Canada
CA64438T4019
55.52 million
C$25.32
CA
Traded In:
Y
Y
Trade Bulletin
Maximum Significance: 82
(Traded 13th November)

Total bought: 65,396
Brian Dewsnup maiden bought 5,376 @ $18.5045
$99,480
Y
Y
Share Performance Since
18-Nov-2013
(Index & ICB sector rebased)
Price
28
TSX Vent Comp
24
Ind Goods &

Serv
20
Results Dates
12
Q1
INTERIM
Q3
FINAL
/2
01
/2
01
Y
Y
The Board & Their Holdings
Other Directors
Mcleod, Wayne
Smith, Paul
Marinucci, Giovanni
Jacobsen, Patricia
Directors: 2,F
Y
Y
Financial Results
2014
2013
2012
Net T'over (m) EBITDA (m)
USD
USD
USD
1,451
1,199
873
www.directorsdeals.com
Aug-13
z Last traded
7
0
0
8
0
2
0
6
Mar-14
Sep-11
Jun-14
Mar-13
Sep-11
z Last traded
0
Nov-15
# = Adjusted, F = Former, P = Person Dispencing Managerial Responsibility, SP-X = Sale Post Exercise
(Discretionary trades only)
Directors announcing trades today
Year
2015
Next
6-May-16
6-Aug-16
4-Nov-16
18-Mar-16
z = Other Directorships held

z Last traded
Total Holding: 161,700 (0.29%)

Executive
USD Value
Score Holding
1 Soubry,Paul
President & Chief Executive Officer 161,700 (0.291%) $3.07m
Non-Executive
USD Value
Score Holding
2 Tobin,Hon Brian.Vincent
Chairman
84,700 (0.153%) $1.61m
3 Cochran,Phyllis.Elaine
4 Edwards,Larry.Dean
10,498 (0.019%) $0.20m
5 Gray,Adam.L
6 Hoeg,Krystyna
2,000 (0.004%)
$0.04m
7 Marinucci,Giovanni.(John)
150,000 (0.270%) $2.85m
8 Millar,William.Wells
25,000 (0.045%) $0.47m
9 Sardo,Vincent.James
3,000 (0.005%)
$0.06m
PDMR
USD Value
Score Holding
10 Dewsnup,Brian.Keith
Divisional Vice President
5,376 (0.010%)
$0.10m
Y
Y
History
Last
6-May-15
6-Aug-15
4-Nov-15
18-Mar-15
/1
1
10
/2
01
/1
0
19
/2
01
/0
9
24
/2
01
/0
9
01
/2
01
/0
8
10
/2
01
/0
7
16
/2
01
/0
6
23
/2
01
/0
6
01
/2
01
/0
5
07
/2
01
/0
4
15
/2
01
/0
3
23
/2
01
/0
2
27
/2
01
/0
2
04
/2
01
/0
1
13
/2
01
/1
2
17
/2
01
/1
1
25
/2
01
/1
1
03
/2
01
/1
0
09
/2
01
/0
9
17
/2
01
/0
8
25
/2
01
/0
7
31
/2
01
/0
7
09
/2
01
/0
6
16
/2
01
/0
5
23
/2
01
/0
4
30
/2
01
/0
4
07
/2
01
/0
3
14
/2
01
/0
2
20
/2
01
28
/0
1
/2
01
/0
1
/2
01
/1
2
06
/1
1
10
18
SELL
SP-X
Multiple
Close Period
Graph not available
16
BUY
Subscribe
86.0
74.0
25.9
Dividends
EPS
48.0c
51.0c
22.0c
Q1
15c(27-Mar)
Interim
15c(26-Jun)
15c(27-Mar)
15c(26-Mar)
22c(28-Mar)
15c(26-Jun)
15c(26-Jun)
22c(27-Jun)
27-Aug-14
20-Aug-14
27-Jun-14
14-May-14
27-Mar-14
15c
15c
15c
17c
BUY
SELL
SELL
BUY
BUY
Q3
(28-Sep)
(26-Sep)
(26-Sep)
(26-Sep)
1,500
7,300
8,035
4,500
12,060
@
@
@
@
@
Final
15c (29-Dec)
15c (29-Dec)
15c (27-Dec)
15c (27-Dec)
=
=
=
=
C$13.73
C$13.85
C$12.25
C$11.71
C$11.16
Annual
60c
59c
59c
74c
14
COMPANY UPDATE
NFI | TSX
$24.36
Rating: Outperform
Total Return: 46.5%
Yield: 2.8%
November 16, 2015
Index Implications of the Recent Move in Share Prices

C$25.52 / C$12.05
2.8%
Dividend Yield:
55.5 (basic)

Float ($mm)
C$1351.2
55.5 (fd)
39.7
145.3

$651.9
$1665.6
(FYE Dec 31)
2016e
2014
Revenue ($mm)
2015e
$1,451.1 $1,552.1 $2,450.7
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
2014
$19.7
$107.4
$144.8
$243.6
$0.65
$0.99
$1.65
Q2
Q3
Q4
$27.0
$25.7
$35.0
2015
$31.4
$39.2
$36.3
$37.9e
2016
$51.9e
$52.8e
$69.0e
$69.8e
Adjusted FD EPS
2014
Q1
$0.10
Q2
Q3
Q4
$0.16
$0.15
$0.24
2015
$0.20
$0.30
$0.26
$0.23e
2016
$0.29e
$0.31e
$0.52e
$0.53e
$25

Volume ('000)
1000
Last Sale Price
$20
800
$15
600
$10
400
$5
200
$0
0

Managing Director
647.776.8246
Index Inclusion Could Provide the Next Catalyst: With the recent move in New
Flyer Industries share prices and increase in market capitalization, we believe the
company is increasingly eligible for inclusion in the S&P/TSX Composite Index, which
we believe could provide a catalyst for share prices. The next rebalance announcement is
expected after market close on December 11, with implementation scheduled for
December 18 after market close.
Major Criteria for Inclusion: The major criteria to be included in the S&P/TSX
Composite include a float adjusted market cap greater than 0.05% of the index float
weighted market cap after including the weight of the companys own addition, a
volume test that calls for a float turnover of greater than 0.5x of the trailing 12-month
period volume and a predominate domicile in Canada.
Early Signs Point to Meeting Thresholds: We estimate NFI shares would have to
trade above $21.75 during the measurement period in order to be eligible for inclusion.
We also estimate the companys trailing float turnover at 1.09x.
Previous Inclusions Indicate Positive Impact: We believe the discussion around
New Flyers possible inclusion in the S&P/TSX Composite Index could create a nearterm catalyst for share prices. We have reviewed share price behaviour of other
companies added to this index since 2012, looking at performance at various intervals
relative to the announcement date of their inclusion. Generally, we have seen strong
returns across sectors leading into the announcement date as we believe investors take
positions in advance of the announcement in anticipation of inclusion. We believe the
inclusion on a company in such a key index increases the breadth of potential
institutional investors and enhances trading liquidity. Within the industrial subgroup, our
data set showed a return of 9.4% 30 days prior to the announcement date. While
individual stock fundamentals are important to consider, we believe this trend is
instructive for New Flyer holders.
Maintain Outperform and $35.00 Target: While we remain positively biased on
our fundamental outlook for New Flyer shares, we believe investors should consider the
impact of the near-term tactical allocation of a positon given the historical performance
of shares considered for addition to major indices. We caution however that this can be a
double edged sword should NFI fail to be included we would expect a sharp reversal
in share prices. We maintain our Outperform rating and our 12-month price target of
C$35.00. Our target price is based on a blend of a 14.0x earnings and 7.5x EBITDA
multiple of the four quarters ending Q3/17 reflecting our 12-month forward valuation
period as well as an exchange rate of C$1.32/$US.

647.776.8245
15
I NSTITUTIONAL
EQUITY
R ESEARCH:
DIVERSIFIED
INDUSTRIES
INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES

Current Valuations
Unit Price (C$)
$24.36
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
10.2x
8.8x
7.2x
Peer Average
14.3x
13.3x
12.0x
11.8x
8.7x
6.8x
27.9x
18.5x
11.1x
Incom e Statem ent
2014
2015e
2016e
2015e
2016e
2017e
Trend
Bus Manufacturing
Aftermarket
Revenue
Free Cash Flow (FCF)
2014
Revenues
1,132,066 1,231,170 2,016,079 2,075,781
319,034
320,916
434,615
455,938
1,451,100 1,552,086 2,450,693 2,531,719
45,823
2017e
Changes in non-cash w orking capital
35,255
OCF less w orking capital
81,078
89,538 163,379 193,360
(1,766)
(1,908)
9,367
62,883
(2,004)
16,023
(2,004)
22.0%
20.7%
17.7%
18.0%
57,374
82,262
145,663
153,647
5.1%
6.7%
7.2%
7.4%
49,991
62,531
87,897
92,888
15.7%
19.5%
20.2%
20.4%
Free Cash Flow
83,667
86,457
136,232
243,560
274,816
6.0%
8.8%
9.9%
10.9%
Free cash flow (C$)
92,829 104,615 173,985 198,313
107,365
144,793
243,560
274,816
per Share
7.4%
9.3%
9.9%
10.9%
FCF Yield
Amortization
35,837
42,564
60,691
59,052
FCF per share grow th
Operating Earnings
50,620
93,669
182,869
215,763
EBT
37,568
76,452
145,217
190,679
Taxes
10,849
23,890
53,730
70,551
Net Income
26,719
52,562
91,487
120,128
Reported FD EPS
$0.48
$0.95
$1.65
$2.16
Adjusted FD EPS
$0.65
$0.99
$1.65
$2.16
2015e
2016e
2017e

Margin
Adjusted EBITDA
Margin
Grow th
2014
(10,889) (12,502) (30,278) (36,908)


Revenue
7,766
(154)
(961)
81,933 131,098 154,448
$1.67
Trend
$1.88
$3.13
$3.57
6.9%
7.7%
12.9%
14.7%
82.8%
12.6%
66.3%
14.0%
2014
2015e
2016e
2017e
32,457
33,931
38,854
38,854
35.0%
$0.585
32.4%
$0.611
22.3%
$0.700
19.6%
Cash Yield
2.4%
2.5%
2.9%
2.9%
Key Operating Metrics
2014
2015e
2016e
2017e
2,437
2,503
4,065
4,170
52
52
53
52
464.5
491.9
496.0
497.8
15.0%
8.8%
63.8%
3.0%
23.5
32.9
35.8
36.8
Aftermarket
48.4%
0.6%
35.4%
4.9%
49.2
49.1
78.2
81.8
Adjusted EBITDA
21.0%
13.4%
7.0%
34.9%
57.9%
68.2%
3.3%
12.8%

48.5
0.9x
48.0
1.1x
77.1
1.0x
80.7
1.0x
Adjusted FD EPS
2.7%
51.0%
66.8%
31.3%
2014
0.9057
2015e
0.7834
2016e
0.7526
2017e
0.7783
EOP CAD/USD Rate
0.9050
0.7463
0.7634
0.7937
FX Assum ptions

Trend
Leverage
Net Debt (EOP)
Trend
$0.700
Bus Manufacturing
Weeks of Production
Trend
80,172 100,496 177,337
20.7%
5.0%
18.4%
19.9%
2014
2015e
2016e
2017e
Trend
Trend
229,034 651,891 610,915 500,725

2.1x
4.5x
2.5x
1.8x
33.6%
57.6%
53.0%
44.2%

$5.0
Firm
Option
2020, 12%
2015, 8%
$4.0
2016, 16%
$3.0
2019, 28%
$2.0
2017, 10%
$1.0
$0.0
Q109 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15 Q3/15
2018, 26%
Note: All amounts in US$ 000's, unless otherw ise specified.

16
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]
Looking at Index Implications of the MCI Acquisition

With the recent move in New Flyer Industries share prices and increase in market
capitalization, we believe the company is increasingly eligible for inclusion in the S&P/TSX
Composite Index, which we believe could provide a catalyst for share prices. The next
rebalance announcement is expected after market close on December 11, with implementation
scheduled for December 18 after market close.
The major criteria to be included in the S&P/TSX Composite include a float adjusted market
cap greater than 0.05% of the index float weighted market cap after including the weight of
the companys own addition, a volume test that calls for a float turnover of greater than 0.5x
of the trailing 12-month period volume and a predominate domicile in Canada.
Threshold Calculations for Index Inclusion
Last Price
S&P/TSX Composite Index
13,075.42
Estimated Float Weighted Market Cap for 0.05% inclusion

1,629,664,500
815,240
$24.36
Float Turnover (>0.50x)
1.09x
Share Price >$1
TRUE
Units Outstanding (mm)
Market Cap
55.520
Float Adjustment Factor
0.6751
Share Price Needed to make threshold
$21.75
Figure 1 Threshold Calculations for Index Inclusion

Source: Bloomberg, AltaCorp Capital Inc.
In replicating these criteria based on Fridays closing prices, we estimate NFI shares would
have to trade above $21.75 during the measurement period in order to be eligible for
inclusion. In our calculations, we have used the float adjustment factor provided by
Bloomberg of 0.6751, which reflects the large blocks held by Marcopolo S.A. as well as
Coliseum Capital along with insider holdings as reported through SEDI. We also estimate the
companys trailing float turnover at 1.09x. With its headquarters in Winnipeg and operations
across Canada, reinforced with the addition of MCI we do not see an issue with domicile. We
note NFI shares and debentures currently have their primary listing on the TSX, which is an
additional criteria for consideration.
17
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We believe the discussion around New Flyers possible inclusion in the S&P/TSX Composite
Index could create a near-term catalyst for share prices. We have reviewed share price
behaviour of other companies added to this index since 2012, looking at performance at
various intervals relative to the announcement date of their inclusion. Generally, we have seen
strong returns across sectors leading into the announcement date as we believe investors take
positions in advance of the announcement in anticipation of inclusion. We believe the
inclusion on a company in such a key index increases the breadth of potential institutional
investors and enhances trading liquidity. Within the industrial subgroup, our data set showed a
return of 9.4% 30 days prior to the announcement date. While individual stock fundamentals
are important to consider, we believe this trend is instructive for New Flyer holders.
Impact of Index Additions on Share Prices
Figure 2 Impact of Index Additions on Share Prices

Source: Capital IQ, S&P Dow Jones Indices, AltaCorp Capital Inc.
While we remain positively biased on our fundamental outlook for New Flyer shares, we
believe investors should consider the impact of the near-term tactical allocation of a positon
given the historical performance of shares considered for addition to major indices. We
caution however that this can be a double edged sword should NFI fail to be included we
would expect a sharp reversal in share prices. We maintain our Outperform rating and our 12month price target of C$35.00. Our target price is based on a blend of a 14.0x earnings and
7.5x EBITDA multiple of the four quarters ending Q3/17 reflecting our 12-month forward
valuation period as well as an exchange rate of C$1.32/$US.
18
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Ticker
Marcopolo S.A.
Wajax Corporation
Ag Grow th International Inc.
Superior Plus Corp.
Oshkosh Corporation
Spartan Motors Inc.
Cubic Corporation
Average
Rating &
Target
TSX:NFI
OP (C$35.00)
BOVESPA:POMO4
NR
TSX: WJX
NR
TSX: AFN
NR
TSX: SPB
NR
GBX
NR
OSK
NR
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
CUB
NR
Trading
Local
Currency Price
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
24.36
2.34
17.36
30.61
9.98
31.95
40.96
3.70
12.67
53.55
20.40
12.16
5.46
10.75
43.42
Market
Cap ($m m )
1,352.5
2,054.1
346.9
439.7
1,402.9
909.4
3,251.8
126.8
842.5
2,810.4
550.4
991.3
526.9
224.4
1,167.3
P/E
EV
EV/EBITDA
Net
Debt
($m m )
2014
2015e
2016e
2014
2015e
2016e
Price
to BV
ROIC
ROE
249.8
1,305.5
167.5
323.6
927.2
204.4
896.3
(15.7)
135.8
(176.3)
(70.2)
4,511.0
274.2
188.1
(43.0)
1,263.5
3,393.4
514.4
768.3
2,330.1
1,244.5
4,147.4
111.0
978.3
2,634.1
480.2
5,512.3
896.5
462.5
1,124.5
27.9x
7.0x
7.1x
NM
22.1x
6.9x
11.7x
NM
14.4x
15.1x
12.7x
NM
NM
NM
17.6x
14.3x
18.5x
10.5x
10.7x
14.3x
17.3x
4.8x
15.3x
NM
9.1x
13.6x
13.3x
NM
NM
14.1x
17.8x
13.3x
11.1x
7.8x
10.3x
9.3x
10.7x
5.7x
11.6x
38.9x
9.2x
11.9x
11.7x
4.8x
NM
9.3x
15.6x
12.0x
11.8x
12.6x
6.2x
12.1x
8.3x
4.8x
7.0x
11.8x
6.1x
8.8x
7.3x
16.7x
13.0x
17.8x
9.4x
10.2x
8.7x
16.2x
6.6x
10.2x
8.3x
2.5x
8.4x
13.7x
4.6x
7.9x
7.3x
9.8x
12.8x
6.1x
9.3x
8.8x
6.8x
9.9x
6.4x
7.5x
6.8x
3.0x
7.0x
10.2x
4.7x
6.7x
6.4x
7.3x
10.3x
5.7x
8.5x
7.2x
2.1x
1.1x
1.1x
1.7x
2.3x
1.3x
1.6x
0.8x
2.0x
2.6x
2.5x
NM
2.2x
NM
1.5x
1.8x
7.0%
2.3%
7.9%
4.1%
6.0%
21.5%
8.7%
0.8%
13.7%
17.7%
18.1%
9.7%
2.5%
4.5%
5.8%
8.7%
10.2%
8.2%
11.7%
(9.6%)
7.2%
36.9%
11.8%
(4.7%)
22.6%
19.8%
19.9%
NM
1.8%
NM
4.6%
10.8%

NFI 2016e EV/EBITDA is based on pro forma Enterprise Value of $1665.6, assuming close of MCI acquisition in Q4/15
19

NFI
C$24.36
Rating:
Outperform
12 Month Target:
C$35.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
59%
25%
Sector Perform
25%
9%
Underperform
2%
0%
Speculative Buy
2%
0%
Restricted
4%
20%
Not Rated
5%
0%
Tender
3%
0%
100%
18%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
20
Direct
__________________________________________________________________________________________________________

E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
21
COMPANY UPDATE
NFI | TSX
$23.90
Rating: Outperform
(previously $26.00)
Total Return: 49.3%
Yield: 2.8%
November 11, 2015
Executing on the Promise of the Strategy The Acquisition

of MCI Builds a Diversified Transportation Leader

C$24.40 / C$12.05
2.8%
Dividend Yield:
55.5 (basic)

Float ($mm)
C$1325.7
Buying MCI: New Flyer announced that the company has entered into a definitive
agreement to acquire Motor Coach Industries International Inc. (MCI) from an affiliate
of KPS Capital L.P. and Daimler. The cash purchase price of $455mm represents an
implied multiple of 6.0x 2015e EBITDA although we note there are likely a number of
other minor working capital and pension adjustments to be reconciled. Management
expects the transaction to close by the end of 2015 subject to customary closing
conditions including clearing competition regulators.
55.5 (fd)
39.7
133.7

$651.9
$1652.0
(FYE Dec 31)
2016e
2014
Revenue ($mm)
2015e
$1,451.1 $1,552.1 $2,450.7
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
$107.4
$144.8
$243.6
$0.65
$0.99
$1.65
Q2
Q3
Q4
2014
$19.7
$27.0
$25.7
$35.0
2015
$31.4
$39.2
$36.3e
$37.9e
2016
$51.9e
$52.8e
$69.0e
$69.8e
Q2
Q3
Q4
$0.16
$0.15
$0.24
Adjusted FD EPS
2014
Q1
$0.10
2015
$0.20
$0.30
$0.26e
$0.23e
2016
$0.29e
$0.31e
$0.52e
$0.53e
$25

Volume ('000)
1000
Last Sale Price
$20
800
$15
600
$10
400
$5
200
$0
0

Managing Director
647.776.8246
About MCI: MCI is a leading motor coach manufacturer and parts and service supplier
in North America with an installed base of ~28,000 units and a 42% motor coach market
share. The company is ~2x the size of its nearest competitor and the leading coach
provider both in the public and private sectors. For the nine months ended September 30,
2015, MCI delivered 576 new coaches (EU), representing ~$315mm in revenue with
aftermarket parts and service business contributing ~$128mm.
Highly Accretive to Estimates: We update our estimates to reflect the effect of the
acquisition and respective additional debt. Our 2016e EBITDA increases to $243.6mm
from $157.7mm with no material change in our 2015 estimate. Our 2017e estimate for
Adjusted EBITDA increases to $274.8mm from $168.6mm, which includes $22mm in
synergies. We also believe it important to mention the considerable increase in free cash
flow despite our expectations for additional capital spending at MCI. We forecast a
33.1% and 45.6% increase in free cash flow on an absolute and per share basis with
2016 free cash flow at $174.0mm and 2017 at $198.3mm, up from $104.6mm in 2015.
Maintain Outperform; Increasing Target to C$35.00: The acquisition of MCI
fulfills the long-held promise of the benefits of operational excellence as well as
building the next phase of the story. We expect the combination should lead to improved
margins, cash flows, returns on capital deployed and ultimately on share prices. We also
expect the move to a higher market cap as well as the possible inclusion in a number of
indices including the S&P/TSX Composite with a threshold on float weight at
approximately $22 during the December / January rebalance should be constructive for
share prices. Despite a number of positive trading biases however, the companys
fundamental outlook greatly improved in our opinion with the announcement of the MCI
transaction and we continue to recommend investors evaluate a position at current
levels. We maintain our Outperform rating and are increasing our 12-month price target
to C$35.00 from C$26.00, previously. Our target price is based on a blend of a 14.0x
earnings and 7.5x EBITDA multiple of the four quarters ending Q3/17 reflecting our 12month forward valuation period as well as an exchange rate of C$1.32/$US.
647.776.8245
22
I NSTITUTIONAL
EQUITY
R ESEARCH:
DIVERSIFIED
INDUSTRIES
INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES

Current Valuations
Unit Price (C$)
$23.90
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
10.3x
8.8x
7.2x
Peer Average
14.6x
13.8x
12.3x
11.7x
8.6x
6.8x
27.5x
18.2x
10.9x
Incom e Statem ent
2014
2015e
2016e
2015e
2016e
2017e
Trend
Bus Manufacturing
Aftermarket
Revenue
2014
Revenues
1,132,066 1,231,170 2,016,079 2,075,781
319,034
320,916
434,615
455,938
1,451,100 1,552,086 2,450,693 2,531,719
45,823
2017e
35,255
81,078
89,538 163,379 193,360
(1,766)
(1,908)
9,367
62,883
(2,004)
16,023
(2,004)
22.0%
20.7%
17.7%
18.0%
57,374
82,262
145,663
153,647
5.1%
6.7%
7.2%
7.4%
49,991
62,531
87,897
92,888
15.7%
19.5%
20.2%
20.4%
Free Cash Flow
83,667
86,457
136,232
243,560
274,816
6.0%
8.8%
9.9%
10.9%
Free cash flow (C$)
92,829 104,615 173,985 198,313
107,365
144,793
243,560
274,816
per Share
7.4%
9.3%
9.9%
10.9%
FCF Yield
Amortization
35,837
42,564
60,691
59,052
Operating Earnings
50,620
93,669
182,869
215,763
EBT
37,568
76,452
145,217
190,679
Taxes
10,849
23,890
53,730
70,551
Net Income
26,719
52,562
91,487
120,128
Reported FD EPS
$0.48
$0.95
$1.65
$2.16
Adjusted FD EPS
$0.65
$0.99
$1.65
$2.16
2015e
2016e
2017e

Margin
Adjusted EBITDA
Margin
Grow th
2014
(10,889) (12,502) (30,278) (36,908)


Revenue
7,766
(154)
(961)
81,933 131,098 154,448
$1.67
Trend
$1.88
$3.13
$3.57
7.0%
7.9%
13.1%
14.9%
82.8%
12.6%
66.3%
14.0%
2014
2015e
2016e
2017e
32,457
33,931
38,854
38,854
35.0%
$0.585
32.4%
$0.611
22.3%
$0.700
19.6%
Cash Yield
2.4%
2.6%
2.9%
2.9%
2014
2015e
2016e
2017e
2,437
2,503
4,065
4,170
52
52
53
52
464.5
491.9
496.0
497.8
15.0%
8.8%
63.8%
3.0%
23.5
32.9
35.8
36.8
Aftermarket
48.4%
0.6%
35.4%
4.9%
49.2
49.1
78.2
81.8
Adjusted EBITDA
21.0%
13.4%
7.0%
34.9%
57.9%
68.2%
3.3%
12.8%

48.5
0.9x
48.0
1.1x
77.1
1.0x
80.7
1.0x
Adjusted FD EPS
2.7%
51.0%
66.8%
31.3%
2014
0.9057
2015e
0.7834
2016e
0.7526
2017e
0.7783
EOP CAD/USD Rate
0.9050
0.7463
0.7634
0.7937
FX Assum ptions

Trend
Leverage
Net Debt (EOP)
Trend
$0.700
Bus Manufacturing
Weeks of Production
Trend
80,172 100,496 177,337
20.7%
5.0%
18.4%
19.9%
2014
2015e
2016e
2017e
Trend
Trend
229,034 651,891 610,915 500,725

2.1x
4.5x
2.5x
1.8x
33.6%
57.6%
53.0%
44.2%

$5.0
Firm
Option
2020, 12%
2015, 8%
$4.0
2016, 16%
$3.0
2019, 28%
$2.0
2017, 10%
$1.0
$0.0
Q109 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15 Q3/15
2018, 26%

23
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
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]
New Flyer Announces the Acquisition of MCI

New Flyer (NFI-T) announced that the company has entered into a definitive agreement to
acquire Motor Coach Industries International Inc. (MCI) from an affiliate of KPS Capital L.P.
and Daimler. The cash purchase price of $455mm represents an implied multiple of 6.0x
2015e EBITDA although we note there are likely a number of other minor working capital
and pension adjustments to be reconciled. Management expects the transaction to close by the
end of 2015 subject to customary closing conditions including clearing competition
regulators.
The transaction is expected to be funded through a new $825mm senior secured credit
facilities comprising of a four year maturity of a $482mm term loan and a US$343mm
revolver. Management expects the revolver to be ~$135mm drawn which would represent a
pro forma debt to Adjusted EBITDA of ~3.0x at closing assuming the outstanding debentures
are treated as equity.
About MCI
MCI is a leading motor coach manufacturer and parts and service supplier in North America
with an installed base of ~28,000 units and a 42% motor coach market share. The company is
~2x the size of its nearest competitor and the leading coach provider both in the public and
private sectors. For the nine months ended September 30, 2015, MCI delivered 576 new
coaches (EU), representing ~$315mm in revenue with aftermarket parts and service business
contributing ~$128mm.
MCI Key Market Statistics
Figure 1 MCI Key Market Statistics

MCIs revenue streams are split into three main segments, New Coach (public and private),
Pre-Owned Coach and Aftermarket. Within the New Coach segment, MCI targets the
mid-range to luxury segments for private and the mid-range for public clients, including
transit authorities, universities, Federal Government and Correctional Facilities. The PreOwned segment caters to value customers within the private market as well as small private
fleet operations. Coaches are refurbished at MCIs service centres and a trade-in option is also
available. The Aftermarket segment provides support to an installed coach fleet of 28,000
buses with a North American footprint which includes six service centres, three distribution
facilities and over 3,000 emergency response partners.
24
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MCIs Revenue Streams and Target Markets
Figure 1 MCIs Revenue Streams and Target Markets

MCI has long-standing relationships with major transit authorities in North America, some of
whom are also long-time New Flyer customers. There is limited concentration in the market
with the 10 largest operators in North America accounting for ~44% of new coach volume in
2014. Of particular importance is the recent $395mm award for 722 coaches ($512k/unit)
over a five-year period by the New Jersey Transit Authority (NJTA) to replace the majority of
the existing fleet. MCIs relationship dates back to 1982 with the company having been
awarded the largest public transit award in North American history for 1,400 coaches in 2000.
We believe MCI remains ideally positioned for new contract wins from NJTA as well as other
transit authorities. In addition, the contract calls for an average of 75 buses per year over the
five-year term.
Within the private market, the company has strong relationships with key fleet operators
including Coach USA and Greyhound. While private coach orders have limited visibility,
NFIs management highlighted the historical consistent growth within the segment.
MCIs Customer Base
Figure 2 MCIs Customer Base

Source: New Flyer Industries Inc.
25
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MCIs revenues have grown consistently over the last four years with robust growth in both
pricing and volumes. Revenue per EU has increased to $446K YTD, highlighting the higher
margins in the private market segment. We note the NJTA contract is expected to contribute
to 2016 volume and beyond.
MCI Historical Financial Performance
Figure 2 MCI Historical Financial Performance

Acquisition Expands New Flyers Portfolio in a Healthy Demand Environment

The demand environment for the motor coach industry continues to look strong with expected
deliveries of ~2,100 coaches in 2015, up ~9% y/y. Management expects population growth
and urbanization to continue to support moderate growth rate within the segment. We note
demand across transit authorities is expected to stabilize with the private sectors driving
majority of the growth in the coming years, including an increasing corporate use of buses.
Canada and US Motor Coach Industry Annual Deliveries of New Coaches
Figure 3 Canada and US Motor Coach Industry Annual Deliveries of New Coaches
The acquisition of MCI diversifies NFIs product offering by not only providing significant
exposure to the private coach industry but also materially expanding NFIs aftermarket parts
and service business. The transaction is expected to be highly accretive to EPS and free cash
flow per share before synergies. The combined entity will employ~4,800 people and support
an installed base of over 42,000 transit buses and 28,000 motor coaches across North
America.
The acquisition of MCI will allow New Flyer access to the private market while building on a
significant aftermarket segment. MCI will introduce new capabilities, including preventative
maintenance, spare parts and accident repair. MCI has over 3,000 approved independent
service locations to support their fleet. The company is also the North American distributor of
Daimlers Setra coaches, considered a premium product positioned above the MCI brands
and also provides exclusive sales and service support for the fleet in Canada and the U.S.
Management expects the present relationship to continue noting that any anti-trust issues are
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unlikely given that Setra is a differentiated offering, outside of MCIs target mid-range
coaches.
There remains a complementary geographic footprint of the two companies noting that MCIs
manufacturing locations are closely aligned with NFIs in both US and Canada. With the
expected completion of the acquisition, the combined entity will have manufacturing facilities
in North Dakota, Alabama, Minnesota and Manitoba.
Combined Manufacturing, Parts & Service Footprint
Figure 3 Combined Manufacturing, Parts & Service Footprint

The company is targeting annual synergies of ~$10mm expected to be realized through

operational initiatives and rationalization of corporate costs. NFIs management highlighted
that the company will seek to standardize the IT systems in MCI as the first priority.
Management declined to comment on expected synergies, especially from the aftermarkets
segment, stating that further updates will be announced as the company moves forward in the
integration process. We believe that management is remaining decidedly conservative in its
estimate for synergies given the geographic proximity of certain manufacturing facilities as
well as possible sourcing and operational efficiencies from the synchronization of MCIs
aftermarket segment. Management also believe that revenue synergies are limited with both
companies sharing a majority of the customers.
Our core belief with regards to synergies and our scepticism in managements target comes
from our understanding of the progress the company has made in becoming a world-class
manufacturer. At a minimum, bringing the MCI operation up to current standard should afford
a multiple of the proposed synergies. We remind investors that the initial $20mm investment
planned to integrate NABI called for a two to three-year payback. At Q3/15, management
revised expected synergies at $16.5mm and indicated it likely that further gains were possible.
We find it difficult to believe that a significantly larger organization, which essentially
emerged from bankruptcy in 2010 and that has significant information systems issues does not
offer dramatically higher levels of opportunities. One of the hallmarks of our thesis
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surrounding New Flyer remains our previous experience of the financial gains of the
implementation of lean principles in a manufacturing operation, reinforced only by the higher
level of standard production of the MCI product portfolio. Ultimately, we believe the
synergies from this transaction, with the core competencies demonstrated by the management
team at NFI to be able to integrate discreet manufacturing operations are likely to be multiples
of the initial base. We believe it important to note that this does not imply material head count
changes rather this is very much is a Demingesqe shift in the ability of management to
radically improve the operating system. We expect a combination of process improvements,
internalization of work where accretive, purchasing synergies, efficiencies garnered from
information systems and employee engagement offer a host of margin enhancement
opportunities; all we expect which drive margin expansion.
Forecast and Outlook
Management noted that there is considerable seasonality in MCIs revenues, particularly on
the private side with ~70% of total sales in H2. We estimate 2015e revenue from MCI to be
~$661mm assuming that 65% of the companys bus manufacturing revenues and 75% of
aftermarket revenues were realized by Q3/15. Using a 6.0x EBITDA multiple of the purchase
price, we estimate 2015e MCI EBITDA of $75.8mm, implying an ~11.5% EBITDA margin.
Although no backlog or production rate details were provided for MCI, we assume the
company remains on track to deliver ~1,174 EU in 2015. In our 2016 estimates, the most
important impact stems from the New Jersey contract, which likely represents the majority of
y/y improvement stemming from an average sell price of $512k/unit as well as our forecast
for the shipment of 1,356 units which represents the base and options order from the NJT
contract. We expect further growth in 2017, with production rates normalising with 1,435
units delivered.
With the closing of the acquisition, New Flyer intends to increase dividends by 12.9% from
C$0.62 to C$0.70 per share. The company has also moved from a monthly to a quarterly
payment schedule, consistent with other large mid-cap companies.
We update our estimates to reflect the effect of the acquisition and additional debt on the
balance sheet. Our 2016e EBITDA increases to $243.6mm from $157.7mm with no material
change in our 2015 estimate. Our 2017e estimate for Adjusted EBITDA increases to
$274.8mm from $168.6mm, which includes $22mm in synergies. We also believe it important
to mention the considerable increase in free cash flow despite our expectations for additional
capital spending at MCI. We forecast a 33.1% and 45.6% increase in free cash flow on an
absolute and per share basis with 2016 free cash flow at $174.0mm and 2017 at $198.3mm,
up from $104.6mm in 2015. A summary of our key changes to estimates is provided in the
figure below.
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Change in Estimates ($000s, except per share)

Revenue
Bus Manufacturing
Aftermarket
Revenue
ACC Old Estim ates

2015e
2016e
2017e
ACC New Estim ates

2015e
2016e
2017e
2015e
Change
2016e
2017e
1,231,170 1,399,122 1,419,613

320,916 298,615 314,498
1,552,086 1,697,736 1,734,111
20.7%
17.6%
18.1%
1,231,170 2,016,079 2,075,781

320,916 434,615 455,938
1,552,086 2,450,693 2,531,719
20.7%
17.7%
18.0%
0.0%
0.0%
0.0%
0 bps
44.1%
45.5%
44.4%
15 bps
46.2%
45.0%
46.0%
(13) bps
EBITDA
Margin
82,262
6.7%
62,531
19.5%
136,232
8.8%
93,528
6.7%
64,199
21.5%
157,726
9.3%
99,373
7.0%
69,190
22.0%
168,562
9.7%
82,262
6.7%
62,531
19.5%
136,232
8.8%
145,663
7.2%
87,897
20.2%
243,560
9.9%
153,647
7.4%
92,888
20.4%
274,816
10.9%
0.0%
55.7%
54.6%
0 bps
54 bps
40 bps
0.0%
36.9%
34.3%
0 bps (127) bps (163) bps
0.0%
54.4%
63.0%
0 bps
65 bps 113 bps
Adjusted EBITDA
Margin
144,793
9.3%
157,726
9.3%
168,562
9.7%
144,793
9.3%
243,560
9.9%
274,816
10.9%
0.0%
0 bps
54.4%
65 bps
63.0%
113 bps
Operating Earnings
EBT
96,873
80,931
118,318
106,633
130,053
118,749
93,669
76,452
182,869
145,217
215,763
190,679
(3.3%)
(5.5%)
54.6%
36.2%
65.9%
60.6%
Net Incom e
Reported FD EPS
Adjusted FD EPS
55,383
$1.00
$1.04
67,179
$1.21
$1.21
74,812
$1.35
$1.35
52,562
$0.95
$0.99
91,487
$1.65
$1.65
120,128
$2.16
$2.16
(5.1%)
(5.1%)
(4.9%)
36.2%
36.2%
36.2%
60.6%
60.6%
60.6%
Free Cash Flow

Free Cash Flow
80,121
89,487
(12,502)
81,882
126,851
114,933
(14,556)
98,373
111,492
122,178
(14,070)
106,104
80,172
89,538
(12,502)
81,933
100,496
163,379
(30,278)
131,098
177,337
193,360
(36,908)
154,448
0.1%
0.1%
0.0%
0.1%
(20.8%)
42.2%
108.0%
33.3%
59.1%
58.3%
162.3%
45.6%
Free cash flow (C$)

per Share
FCF Yield
104,547
$1.88
9.4%
130,702
$2.35
11.8%
136,341
$2.46
12.3%
104,615
$1.88
8.9%
173,985
$3.13
14.8%
198,313
$3.57
16.8%
0.1%
0.1%
(54) bps
33.1%
33.1%
299 bps
45.5%
45.5%
455 bps
33,931
32.5%
$0.61
34,413
26.3%
$0.62
34,413
25.2%
$0.62
33,931
32.4%
$0.61
38,854
22.3%
$0.70
38,854
19.6%
$0.70
196,942
1.4x
29.0%
110,547
0.7x
17.4%
39,908
0.2x
6.5%
651,891
4.5x
57.6%
610,915
2.5x
53.0%
500,725
1.8x
44.2%
231.0%
231.0%
98.8%
452.6%
257.9%
204.2%
1154.7%
669.6%
578.1%
2,503
491.9
32.9
48.0
1.1x
5.0%
2,709
516.5
34.5
50.7
1.0x
18.4%
2,735
519.1
36.3
51.6
1.0x
19.9%
2,503
491.9
32.9
48.0
1.1x
5.0%
4,065
496.0
35.8
77.1
1.0x
18.4%
4,170
497.8
36.8
80.7
1.0x
19.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0 bps
50.1%
(4.0%)
3.8%
52.1%
0.0%
0 bps
52.5%
(4.1%)
1.4%
56.4%
0.0%
0 bps

Leverage
Net Debt (EOP)
0.0%
12.9%
12.9%
(2) bps (400) bps (565) bps
0.0%
12.9%
12.9%
Figure 4 Change in Estimates

Source: AltaCorp Capital Inc.
The acquisition of MCI fulfills the long-held promise of the benefits of operational excellence
as well as building the next phase of the story. We expect the combination should lead to
improved margins, cash flows, returns on capital deployed and ultimately on share prices. We
also expect the move to a higher market cap as well as the possible inclusion in a number of
indices including the S&P/TSX Composite with a threshold on float weight at approximately
$22 during the December / January rebalance should be constructive for share prices. Despite
a number of positive trading biases however, the companys fundamental outlook greatly
improved in our opinion with the announcement of the MCI transaction and we continue to
recommend investors evaluate a position at current levels.
We maintain our Outperform rating and are increasing our 12-month price target to C$35.00
from C$26.00, previously. Our target price is based on a blend of a 14.0x earnings and 7.5x
EBITDA multiple of the four quarters ending Q3/17 reflecting our 12-month forward
valuation period as well as an exchange rate of C$1.32/$US.
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Ticker
Marcopolo S.A.
Wajax Corporation
Superior Plus Corp.
Oshkosh Corporation
Spartan Motors Inc.
Cubic Corporation
Average
Rating &
Target
TSX:NFI
OP (C$35.00)
BOVESPA:POMO4
NR
TSX: WJX
NR
TSX: AFN
NR
TSX: SPB
NR
GBX
NR
OSK
NR
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
CUB
NR
Trading
Local
Currency Price
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
23.90
2.32
17.72
30.56
10.53
35.30
41.98
3.87
12.70
56.25
21.08
12.77
5.54
10.68
44.39
P/E
Market
EV/EBITDA
Cap ($m m ) 2014 2015e 2016e

1,326.9
1,922.6
354.1
438.9
1,480.2
1,004.8
3,287.8
132.7
844.5
2,952.1
568.8
1,041.0
528.7
222.9
1,193.3
27.5x
7.0x
7.2x
NM
23.4x
7.6x
12.0x
NM
14.5x
15.8x
13.1x
NM
NM
NM
18.0x
14.6x
18.2x
13.2x
10.9x
14.3x
18.2x
5.3x
15.7x
NM
9.1x
14.3x
13.7x
NM
NM
14.0x
18.2x
13.8x
10.9x
7.8x
10.5x
9.3x
11.3x
6.3x
11.9x
40.7x
9.2x
12.5x
12.1x
5.1x
NM
9.3x
15.9x
12.3x
2014
2015e
2016e
Price
to BV
ROIC
ROE
11.7x
12.1x
6.3x
12.1x
8.5x
5.2x
7.1x
12.4x
6.1x
9.3x
7.6x
16.8x
11.6x
17.8x
9.6x
10.3x
8.6x
14.7x
6.7x
10.2x
8.6x
2.7x
8.5x
14.4x
4.6x
8.3x
7.5x
9.9x
11.4x
6.1x
9.5x
8.8x
6.8x
9.5x
6.5x
7.5x
7.1x
3.3x
7.1x
10.7x
4.7x
7.1x
6.6x
7.4x
9.0x
5.6x
8.7x
7.2x
2.1x
1.1x
1.1x
1.7x
2.4x
1.4x
1.7x
0.8x
2.0x
2.8x
2.6x
NM
2.0x
NM
1.5x
1.8x
7.0%
2.3%
7.9%
6.1%
6.0%
21.5%
8.7%
0.8%
13.7%
17.7%
18.1%
9.7%
2.6%
4.5%
5.8%
8.8%
10.2%
8.2%
11.7%
(2.5%)
7.2%
36.9%
11.8%
(4.7%)
22.6%
19.8%
19.9%
NM
NA
NM
4.6%
12.1%

30

NFI
C$23.90
Rating:
Outperform
12 Month Target:
C$35.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
60%
26%
Sector Perform
24%
10%
Underperform
2%
0%
Speculative Buy
2%
0%
Restricted
4%
20%
Not Rated
5%
0%
Tender
3%
0%
100%
19%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
10
31
Direct
__________________________________________________________________________________________________________

E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
32
Title: New Flyer Industries - NFI (T) Cdn$17.88
Price: Cdn$17.88
StockRating: Outperform
TargetPrice: Cdn$20.00
November 10, 2015
Headline: XX
The NBF Daily Bulletin

Road & Rail

Cdn$23.90
NFI (T)
Outperform
Stock Rating:
Cdn$29.00
Target:
(Was Cdn$24.00)
Target Up On Highly Accretive M&A
Average
Risk Rating:
(Unchanged)
Est. Total Return
24.2%
Stock Data:
Cash Yield
2.9%
Implied Price Return
21.3%
52-w eek High-Low
$24.40-$12.05
Bloomberg/Reuters:
NFI CN/ NFI.TO
Forecasts: DEC YE
Revenue (USmln)
Company Update
(Unchanged)
2014a
2015e
$86.5
$129.8
Transformative acquisition
NFI is acquiring Motor Coach Industries International, Inc. (MCI) North Americas leading manufacturer of motor coaches and an
extensive provider of aftermarket parts and repair services - from KPS
Capital Partners L.P. The purchase price is ~US$455 million,
representing ~6x estimated 2015 Adjusted EBITDA and financed
entirely with debt via a new credit facility totaling US$825 mln.
Diversifying North American footprint

With three manufacturing facilities, nine service and parts distribution
centres and an installed base of 28k coaches, MCIs footprint is
complementary to NFI, in that it is: 1) well-established and brings
dominant market share (MCI representing ~42% of 2014 coach
deliveries and ~50% of installed base compared with NFIs 43-50% of
transit bus manufacturing); 2) Winnipeg headquartered and caters to
the North American market, with 30% of sales to public customers
(NFIs legacy audience) and 70% to the private market; 3) an
assembler of heavy duty buses providing the opportunity for
operational and purchasing synergies over time (management
anticipates at least US$10 mln annually); 4) focused on green
technologies and creating value for customers through technological /
efficiency improvements; and 5) also a provider of comprehensive
aftermarkets support and parts supply.
Highly accretive to DCPS

Our preliminary forecasts indicate 2016e top line increases 40% to
US$2.2 bln, EBITDA +53% to US$218 mln and DCPS +36% to
US$2.01. Payout declines to 27% (was 32%) after incorporating the
+13% dividend increase (to Cdn$0.70/year). Note that we included
only one quarter of production from MCIs recent large New Jersey win
and nothing for synergies, suggesting the potential for upside to our
forecasts over time. We expect NFI to be leveraged an elevated ~3.2x
net debt to pro forma EBITDA (including converts), but are comfortable
with this level, as: 1) NFIs new free cash flow profile suggests rapid
deleveraging; and 2) the company still has ~$200 mln in unused credit
to continue financing growth.
Target price to $29 (from $24); Reiterate Outperform
2016e
$1,451.1 $1,486.5 $2,202.8
EBITDA (USmln)
HIGHLIGHTS
$218.0
DCPS ($US)
$1.06
$1.19
$2.01
Dividend
$0.58
$0.60
$0.70
Payout Ratio
49%
39%
27%
DC Yield
4.9%
6.4%
10.9%
EV/EBITDA
14.5x
10.4x
8.3x
P/DCPS
20.2x
15.6x
9.1x
Financial Data (pro form a MCI)

Shares Outstanding (mln)
55.5
Market Capitalization (mln)
$1,326.9
Cash
Net Debt
$3.7
$702.5
Net Debt to Capitalization
35%
Net Debt to '15 EBITDA
3.2x
Industry Rating: Market Weight

(NBF Economics & Strategy Group)
Company Profile:
Headquartered in Winnipeg, Manitoba, New Flyer Industries
is the leading manufacturer of heavy-duty transit buses in
North America, as well as a comprehensive provider of
aftermarket parts and services. The company is entering the
North American motor coach industry with the acquisition of
leading player MCI.
Stock Performance (Thomson)

22.00
20.00
18.00
Trevor Johnson, CFA, MBA - (416) 869-8511

trevor.johnson@nbc.ca
16.00
14.00
Associates:
Endri Leno - (416) 869-8047
endri.leno@nbc.ca
Kyle Stanley - (416) 507-8108
kyle.stanley@nbc.ca
Alex Bauer - (416) 869-7535
alex.bauer@nbc.ca
600,000
300,000
0
02 17 02 16
Q1 2015
01 16 01 19 01 16 02 16
Q2 2015
04 17 01 16 01 16 02 16
Q3 2015
Q4 2015
33
Page 2
Investment Summary
We will provide additional commentary after this weeks Q3 reporting wraps up, but at this
stage have enough conviction regarding the value creation from NFI acquiring MCI to
increase our target price to $29 (was $24) and reiterate an Outperform rating. Our early
estimates suggest the transaction is more than 35% accretive to DCPS, and this does not yet
account for the full benefits of MCIs recent large New Jersey win and any potential operating
synergies. Including these factors could result in 50%+ accretion for NFI, a function of the
relatively inexpensive purchase price multiple and ability to finance with 100% debt. NFI
trades at 8.3x 2016e EV/EBITDA and 9.1x P/CF, a 2-3x discount to TSX diversified yield
peers and 1-1.5x discount to its recent trading range before the MCI announcement, both
suggesting additional upside. We use a 9.5x forward EV/EBITDA multiple (was ~10x) to
arrive at a $29 target (was $24), the more conservative valuation due to the risks associated
with the transaction and NFI entering a new (albeit complementary) vertical.
34
Page 3
DISCLOSURES:
Ratings And What They Mean: PRIMARY STOCK RATING: NBF has a three-tiered rating system that is relative to the coverage universe of the particular analyst. Here is a brief
description of each: Outperform The stock is expected to outperform the analysts coverage universe over the next 12 months; Sector Perform The stock is projected to perform in
line with the sector over the next 12 months; Underperform The stock is expected to underperform the sector over the next 12 months. SECONDARY STOCK RATING: Under
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35

Auto Components
David Tyerman,MBA | Canaccord Genuity Corp. (Canada) | DTyerman@canaccordgenuity.com | 1.416.869.7304

Tao Ding | Canaccord Genuity Corp. (Canada) | tding@canaccordgenuity.com | 416.869.7375
Canadian Equity Research

10 November 2015
Raising Target Price
BUY
unchanged
PRICE TARGET
from C$22.00
Price (10-Nov)
Ticker
C$26.00
Target boosted after MCI deal
C$23.90
NFI-TSX
52-Week Range (C$):

Avg Daily Vol (M) :
Market Cap (C$M):
Dividend /Shr (C$):
Dividend Yield (%) :
Shares Out., FD (M) :
Total Return to Target (%) :
Net Debt (Cash) (US$M):
Website:
FYE Dec
2014A
2015E
2016E
2017E
1.18
1.18
0.5
1.55
1.54
0.4
2.73
1.81
0.3
3.03
1.90
0.2
FCF /Shr (C$)

Previous
Payout Ratio (x)
Sales (US$M)
Previous
ROIC (%)
12.05 - 24.40
0.05
1,327
0.68
2.9
62.0
11.6
247.7
www.newflyer.com
1,513 2,117 2,259

1,513
1,472
1,515
11
18
19
1,451
1,451
6
Quarterly FCF /
Shr
2014A
2015E
2016E
2017E
Q1
Q2
Q3
Q4
0.19
0.22A
0.71
0.78
0.29
0.48A
0.63
0.71
0.32
0.40A
0.68
0.75
0.38
0.45
0.71
0.78
22
Recommend BUYing for improving performance, MCI deal upside

We recommend BUYing NFI to take advantage of NFIs improving margins, stronger
industry macro conditions and benefits from the MCI deal.
We expect NFI to generate solid EBITDA growth from its city bus business from modest
bus production and margin expansion and low-mid single digit aftermarket sales growth
and stable good aftermarket margins. There could be upside from improving macro
environment conditions and NFI profit improvement initiatives. We also expect significant
growth from NFIs pending MCI acquisition.
MCI deal fits well and looks nicely accretive
NFI announced it has entered into a definitive agreement to acquire MCI for $455
million, which equates to approximately 6x EV/EBITDA.
MCI is North Americas largest on-highway bus manufacturer and it has a significant
parts and service business. This would make NFI the leading heavy-duty city bus and onhighway bus manufacturer in North America.
We think this is a logical move into an adjacent market by NFI.
The deal comes with significant growth, as MCI just won a large bus order from New
Jersey Transit, which could boost MCI new bus sales by 18-28%, starting in late 2016.
Synergies are not expected to be significant at $10 million.
Management indicated NFIs pro forma debt/EBITDA will be in the 3x range, which
looks reasonable to us, especially given that a significant portion of NFIs business is
somewhat less cyclical government business. NFI should deleverage quickly.
Dividend boosted
NFI indicated that it intends to boost its dividend 12.9% (to C$0.70/year from C$0.62/
year), effective the close of the transaction, which is expected by the end of 2015.
20
18
16
14
12
Oct-15
Nov-15
Sep-15
Jul-15
Aug-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
Feb-15
Dec-14
10
NFI
Source:FactSet
New Flyer is a leading manufacturer of heavy-duty transit

buses in the United States and Canada and provider of
aftermarket parts and service.
Forecast boosted on deal

We adjusted our forecast to include the roughly 50% increase in sales and EBITDA from
the MCI acquisition, and we adjusted the balance sheet for the $455 million price tag.
Net, this pushed up our forecasted EPS, EBITDA and FCFPS significantly.
We boosted our target C$4.00 to C$26.00 due to our forecast changes. We maintain
a BUY rating given the solid 11.6% 1-year implied investor return. We note the strong
30.7% 2-year implied investor return, which takes into account the benefits of the New
Jersey contract.
Normal valuation maintained
We have maintained our valuation multiple at 7.5x EV/NTM EBITDA (or 7.5x Q3/16E EV /
Q4/16E - Q3/17E EBITDA), which is in line with the companys trading range in the past
60 months.
Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX | CF. : LSE)
The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all
the companies and securities that are the subject of this report discussed herein.
For important information, please see the Important Disclosures beginning on page 13 of this document.
36

MCI looks like it will boost shareholder

value, EBITDA, FCFPS nicely
NFIs looks quite positive from several standpoints:
The deal was done at a nicely accretive level from a valuation standpoint. NFI is
buying MCI for roughly 6x EBITDA and NFI trades at about 7.5x EBITDA,
The deal is large, with the acquired enterprise value being $455 million (excluding
$25 million of net pension liabilities), which is about 40% of NFIs pre-deal
enterprise value. This means the accretion is on a meaningful base,
MCI diversifies NFIs business into a new area (on-highway buses), which may
provide new growth opportunities and broadens NFIs exposure to another end
market than the government-dominated city bus market (which is subject to
political and government finance risks),
MCI comes with a significant amount of growth from a recently-won New Jersey
Transit contract. This contract has a firm component that anticipates delivery of
772 buses over 5 years, with an option to add another 75 buses per year. NFI
expects this program to ramp up in late 2016, and
The deal significantly enhances NFIs shareholder value, EBITDA and FCFPS
according to our calculations. Our new one-year target was increased C$4.00 to
C$26.00 due to the addition of MCI, while our two-year target increases an even
larger C$7.00 to C$30.00 due to the ramp-up of the MCI New Jersey contract.
There may be other potential benefits including greater than target synergies and
benefits from a supply link with Daimler AG (Daimler supplies a high-end bus to MCI).
On the risk side, we think there is a risk that MCI will increase NFIs cyclicality, as we
believe MCIs customers may prove more cyclical than NFIs city bus customers. MCIs
customers are ultimately exposed to consumer discretionary spending, which is
probably more discretionary than consumer spending on city bus travel.
Buy unchanged Target Price C$26.00 from C$22.00 | 10 November 2015
Auto Components 2
37

Forecast boosted on MCI deal

We have incorporated the MCI deal, as discussed in the deal press release and
conference call.
Specifically, we have added about $78 million of incremental EBITDA from the $455
million acquisition (6x EBITDA) and we have benchmarked new and used coach
volumes and prices and parts and service revenues based on past trends (as shown
in the investor presentation on the companys website).
We have assumed the deal is financed with debt, per managements guidance and we
benchmark the debt to NFIs guidance of a $482 million new term debt and an
anticipated draw of $135 million on the companys new revolving debt facility. We
assume the companys significant free cash is used to pay down the revolving debt
facility.
Our revised forecast is shown in Figure 2, and full financial statement tables begin
with Figure 7.
Auto Components 3
38

Figure 1: Revised Canaccord Genuity forecast for New Flyer: limited changes
Yrs E n ded D ec . 31 ( $M )
Dividend/share (C$)
% change
Free cash flow/share (C$)
% change
Free cash flow/share (C$) 2
2015E
N ew
Old
Fc s t
Fc s t
0.608 0.608
4%
4%
2016E
N ew
Old
Fc s t
Fc s t
0.700 0.620
15%
2%
2017E
N ew
Old
Fc s t
Fc s t
0.700 0.620
0%
0%
2018E
N ew
Old
Fc s t
Fc s t
0.700 0.620
0%
0%
2019E
N ew
Old
Fc s t
Fc s t
0.700 0.620
0%
0%
2014
0.59
n.m.
Q 3/15
0.16
6%
1.18
#N/A
0.40
24%
0.45
19%
0.45
17%
1.55
31%
1.54
31%
2.73
76%
1.81
17%
3.03
11%
1.90
5%
3.24
7%
1.96
3%
3.37
4%
2.03
4%
0.71
0.23
1.21
1.19
1.53
1.51
2.04
1.49
2.13
1.63
2.54
1.68
3.11
1.74
Payout ratio
Revenue
% change
Q 4/15E
N ew
Old
Fc s t
Fc s t
0.155 0.155
6%
6%
50%
39%
34%
35%
39%
39%
26%
34%
23%
33%
22%
32%
21%
31%
1,451
21%
365
1%
393
-6%
393
-6%
1,513
4%
1,513
4%
2,117
40%
1,472
-3%
2,259
7%
1,515
3%
2,329
3%
1,552
2%
2,406
3%
1,601
3%
91
6.3%
35
9.6%
37
9.5%
37
9.5%
136
9.0%
136
9.0%
225
10.6%
146
9.9%
243
10.8%
153
10.1%
257
11.1%
156
10.1%
266
11.0%
161
10.1%
(35)
(34)
17
18
33
20
41
17
31
17
17
EBITDA
EBITDA margin
Investment in NCWC & capital assets 3
46
Bus deliveries (units)

Bus revenue/unit
Bus EBITDA/unit
Aftermarket EBITDA
2,437
465
24
50
625
469
35
15
685
469
33
15
685
469
33
15
2,476
481
33
63
2,476
481
33
63
2,485
472
34
61
2,485
472
34
61
2,535
475
35
64
2,535
475
35
64
2,571
478
35
66
2,571
478
35
66
2,629
481
35
69
2,629
481
35
69
New orders (units)

Firm backlog (units)
2,263
2,102
466
1,880
620
1,815
620
1,815
2,342
1,815
2,342
1,815
2,485
1,815
2,485
1,815
2,535
1,815
2,535
1,815
2,571
1,815
2,571
1,815
2,629
1,815
2,629
1,815
10.0%
10.1%
11.2%
11.1%
12.1%
11.7%
12.7%
12.4%
1.300
1.300
1.300
1.300
1.300
1.300
1.300
1.300
Return on capital
5.2%
CAD / USD (period average)

1
NFI definition
1.104
Cash from ops. less capex
8.9%
1.300
7.3%
1.300
10.0%
1.300
6.7%
1.300
9.0%
1.300
NCWC means non-cash working capital. Positive number means NCWC generates cash.
Source: Company reports, Canaccord Genuity Research estimates
Auto Components 4
39

VALUATION
NFIs yields continue to decline (Figure 3), but NFIs EV/EBITDA valuation (Figure 4)
appears to be settling into a new range. We think the companys dividend yield will
bottom out around 3% range (about 1-2% over the 10-year Canada bond yield) and
EV/EBITDA will be stable in the 6-8x NTM EBITDA range. We note near-term
EV/EBITDA data is modestly distorted by the MCI acquisition.
Figure 2: NFI distribution/dividend yields settling into the 3% range, or roughly 2.5% above the 10-year Canada bond yield
Source: Company reports, Bloomberg, Canaccord Genuity Research estimates
Figure 3: Valuation has been stable in the 6-8x EBITDA range
NFIs dividend yield also appears to have converged with other high-yield industrial
names (Figure 5).
Auto Components 5
40

Figure 4: We think a valuation multiple in-line with other industrial high yield companies is reasonable
Mar k et
Ne w F l y e r I nd ustr i e s
Cur .
Eq ui ty Pr i ce :
Cur .
Year
No v. 7, 2015
Di v.
2015
$20. 00
$0. 61
Co nse nsus A ve r a ge
Di v.
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M )
EPS
3. 0%
$1. 54
4. 9%
De b t/
P/E
39. 5% $1, 108 $0. 95 21. 1 34. 3%

70. 2%
Gr o wth
Ca p ('15- '17)
16. 0 39. 4%
6. 1%
10. 4%
Chorus Aviation
2015
$5.51
$0.48
8.7%
$0.88
54.7%
$673 $0.80
6.9
89.6%
12.9%
Davis + Henderson
2015
$34.95
$1.28
3.7%
$2.09
61.2%
$3,690 $2.49
14.1
41.2%
15.8%
Westshore Terminals
2015
$22.36
$1.32
5.9%
$1.27
103.9%
$1,660 $1.68
13.3
0.0%
3.3%
Cineplex Galaxy
2015
$50.07
$1.54
3.1%
$1.68
91.7%
$3,159 $2.02
24.8
32.1%
14.1%
Note that the New Flyer dividend is the new sustainable dividend level
We have maintained our valuation multiple at 7.5x EV/NTM EBITDA (or 7.5x Q3/16E
EV / Q4/16E - Q3/17E EBITDA), given that the stock has traded in this range for some
time (average of 7.7x over the past 60 months). We think our target multiple is well
supported by NFIs solid 2.9% dividend yield. We think the dividend upside potential
from forecasted stronger future free cash further strengthens the dividend yield
support argument (as was demonstrated by NFIs dividend increase announced with
the MCI deal).
Our target multiple generates a target dividend yield of 2.7% and a FCFPS yield of
11.3%, both of which seem reasonable relative to comparable companies and
appropriately better than in the past, reflecting NFIs improved risk profile.
Our valuation also translates into a reasonable to attractive 1.0% dividend yield and
9.6% FCFPS spreads over Government of Canada bond rates, which reflects the much
higher risk of NFI versus government bonds.
Auto Components 6
41

Figure 5: Canaccord Genuity target calculation for New Flyer Industries
1-year
t arget
238.5
2-year
t arget
253.6
7.5
1,788.5
(544.8)
1,243.7
7.5
1,901.7
(464.2)
1,437.5
Units/Shares - fully diluted

Value per unit/share US$
Canaccord Genuity target (value per unit/share C$)
62.0
20.05
26.00
62.0
23.18
30.00
Dividends per share C$

Value per share plus dividend
0.68
26.68
1.38
31.38
Rate of return to target plus dividend
11.4%
30.7%
Dividend yield at target

FCFPS yield at target
2.7%
11.3%
2.3%
10.6%
Years en di n g rou ghl y D ec . 31 ( US $ m i l l i on s )

EBITDA
Multiplier
EV
Debt (excludes unit debt)
Enterprise value to shareholders
Dividend yield over 10-year gov't of Canada bond

FCFPS yield over 10-year gov't of Canada bond
1.0%
9.6%
FCFPS C$
2.95
3.18
One year target based on:

7.5x EV/NTM EBITDA (or 7.5x Q3/16E EV / Q4/16E - Q3/17E EBITDA)
Two year target based on:
Source: Canaccord Genuity Research estimates
Our target was increased C$4.00 to C$26.00 due to our stronger forecast from the
MCI deal. We note that the 2-year target is materially stronger (up C$7.00 to C$30.00)
due to the benefit of the deal and the launch of MCIs New Jersey Transit contract.
We have maintained our rating at BUY, given the more attractive implied one-year and
especially two-year investment returns.
Auto Components 7
42

Figure 6: Canaccord Genuity Researchs forecast for New Flyer Industries Dividend payout analysis
Y ears ended Dec. 3 1 ($ m illions)
F ree cash
Cash from operations
Change in working capital
Interest paid
Interest expense
Income taxes paid
Current income tax expense
Capital expenditures
Proceeds from sale of redundant assets
Business acquisition cost
Costs associated with strategic initiatives
Defined benefit funding
Defined benefit expense
Realized investment tax credits
Foreign exchange impact on cash
Free cash flow
Exchange rate
Free cash flow (CAD)
Declared dividends (CAD)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
28.7
(4.6)
4.0
(3.1)
2.1
(13.7)
(0.5)
(4.3)
1.3
0.8
(0.7)
(0.2)
9.8
1.252
12.3
8.1
(22.8)
42.3
1.8
(2.8)
16.4
(12.5)
(0.5)
(1.9)
1.6
0.8
(0.8)
(0.1)
21.5
1.226
26.4
8.4
11.6
6.5
3.8
(2.8)
14.1
(14.4)
(0.5)
(1.8)
1.0
0.8
(0.8)
(0.7)
16.8
1.317
22.1
8.6
IDS units/Shares outstanding
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5
Free cash per share (CAD)

Dividend per share (CAD)
0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.22
0.15
0.48
0.15
Q3 /1 5 Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
59.5
(36.7)
3.0
(3.0)
11.0
(11.0)
(0.7)
(2.0)
0.8
(0.8)
(0.7)
19.4
1.300
25.2
8.6
77.1
7.4
12.6
(11.6)
43.6
(51.6)
(2.1)
(10.0)
3.9
3.2
(3.2)
(1.7)
67.6
1.300
86.1
33.8
114.2
16.2
31.3
(31.3)
60.7
(60.7)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
116.7
1.300
151.7
38.9
118.8
24.1
28.6
(28.6)
69.6
(69.6)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
129.3
1.300
168.0
38.9
138.6
13.5
27.1
(27.1)
76.0
(76.0)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
138.4
1.300
179.9
38.9
165.7
(8.2)
26.1
(26.1)
79.9
(79.9)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
143.8
1.300
186.9
38.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5
0.40
0.16
0.45
0.16
1.55
0.61
2.73
0.70
3.03
0.70
3.24
0.70
3.37
0.70
Auto Components 8
43

Figure 7: Canaccord Genuity Researchs forecast for New Flyer Industries Income statement
Incom e statem ent
Revenues
Cost of sales and SG&A
Foreign exchange gain (loss)
EBITDA
Depreciation & amortization
Unrealized FX gain (loss)
Fair value adjustments
Other
Operating profit (EBIT)
Interest expense on long-term debt
Other interest and bank charges
Fair value adjustment on int rate swaps
Other expenses
Distributions on B and C shares
Pre-tax income
Income taxes
Net Income (loss)
Div. per share/Dist. per unit (C$)
FCFPS (CFO - capex)
FCFPS (NFI definition)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
Q3 /1 5 Q4 /1 5 E
865.3 1,199.4
(810.2) (1,120.2)
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
380.3
(352.1)
1.5
29.7
(9.5)
(1.9)
0.0
0.0
18.2
(2.3)
(0.7)
(0.5)
(0.6)
0.0
14.1
(3.3)
10.9
375.0
(340.7)
(0.7)
33.7
(9.8)
0.8
0.0
0.0
24.6
(2.2)
(0.6)
0.3
(0.6)
0.0
21.6
(9.2)
12.4
364.7
(329.1)
(0.6)
35.0
(10.0)
(1.0)
0.0
0.0
24.0
(2.2)
(0.6)
(0.1)
(0.6)
0.0
20.5
(4.0)
16.6
2015E
2016E
2017E
2018E
2019E
393.1 1,513.1 2,116.9 2,259.1 2,329.4 2,406.2

(355.7) (1,377.5) (1,892.3) (2,015.7) (2,071.9) (2,140.4)
0.0
0.1
0.0
0.0
0.0
0.0
37.4
135.7
224.6
243.4
257.4
265.8
(10.8)
(40.2)
(46.0)
(44.1)
(42.8)
(41.8)
0.0
(2.1)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
26.5
93.4
178.6
199.2
214.7
224.0
(2.3)
(9.0)
(28.5)
(25.9)
(25.0)
(25.0)
(0.7)
(2.6)
(2.8)
(2.7)
(2.1)
(1.1)
0.0
(0.3)
0.0
0.0
0.0
0.0
(0.6)
(2.4)
(2.4)
(2.4)
(2.4)
(2.4)
0.0
0.0
0.0
0.0
0.0
0.0
22.9
79.1
144.9
168.2
185.2
195.5
(9.0)
(25.4)
(52.8)
(61.6)
(68.1)
(72.0)
13.9
53.7
92.2
106.6
117.1
123.5
0.75
(0.10)
0.63
0.58
0.26
0.87
0.15
0.28
0.19
0.15
(0.01)
0.29
0.15
(0.04)
0.32
0.15
0.49
0.38
0.59
0.71
1.18
0.15
0.55
0.22
0.15
(0.54)
0.48
0.16
0.23
0.40
0.16
1.21
0.45
0.61
1.53
1.55
0.70
2.04
2.73
0.70
2.13
3.03
0.70
2.54
3.24
0.70
3.11
3.37
52.3
58.9
55.5
55.6
55.7
55.7
55.6
55.8
55.9
56.1
62.0
57.4
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
17.4%
16.6%
0.0%
7.8%
8.2%
65.6%
4.0%
9.0%
1.1%
23.7%
6.0%
9.6%
-6.4%
19.3%
6.0%
9.5%
4.3%
31.4%
4.0%
9.0%
39.9%
76.2%
15.1%
10.6%
6.7%
10.8%
0.0%
10.8%
3.1%
7.1%
0.0%
11.1%
3.3%
3.9%
0.0%
11.0%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
7.6%
8.8%
8.9%
7.3%
6.7%
10.0%
11.2%
12.1%
12.7%
Bus revenues
Bus EBITDA (excl. FX gains/losses)
Bus sales growth
Bus EBITDA % (excl. FX gains/losses)
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
290.7
14.7
15.9%
5.1%
572
508
26
26
285.8
22.4
7.5%
7.8%
594
481
38
30
293.0
21.6
5.1%
7.4%
625
469
35
33
321.1
22.6
-4.6%
7.0%
685
469
33
33
1190.6
81.4
5.2%
6.8%
2,476
481
33
33
1172.3
84.5
-1.5%
7.2%
2,485
472
34
34
1203.5
88.7
2.7%
7.4%
2,535
475
35
35
1228.3
90.0
2.1%
7.3%
2,571
478
35
35
1263.9
92.0
2.9%
7.3%
2,629
481
35
35
Aftermarket revenues
Aftermarket EBITDA (excl. FX)
Aftermarket sales growth
Aftermarket EBITDA % (excl. FX)
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
89.6
16.7
22.8%
18.6%
89.2
16.8
10.6%
18.8%
71.7
14.7
-12.6%
20.5%
72.0
14.8
-13.6%
20.5%
322.5
62.9
1.1%
19.5%
299.6
61.4
-7.1%
20.5%
311.6
63.9
4.0%
20.5%
324.0
66.4
4.0%
20.5%
336.8
69.0
4.0%
20.5%
Shares outstanding/Units (fully diluted)

Perform ance m etrics
Increase in revenues
Change in distributable cash
Change in cash distribution
EBITDA/sales
ROC
Segm ented data
Auto Components 9
44

Figure 8: Canaccord Genuity Researchs forecast for New Flyer Industries Balance sheet
Y ears ended Dec. 3 1 ($ m illio ns)
Balance sheet
Cash
Accounts receivable
Inventories
Prepaid expenses and deposits
Derivative financial instruments
Future income tax assets
Other
Total current assets
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
7.6
186.9
232.0
3.5
0.1
0.0
0.0
430.0
8.8
189.2
242.3
3.9
0.2
0.0
0.0
444.4
6.5
217.7
240.4
3.7
0.0
0.0
0.0
468.3
Capital assets
Deferred charges
Intangible assets
Accrued benefit asset
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
64.3
0.0
539.1
67.9
0.0
0.0
1,101.4
64.3
0.0
533.9
68.6
0.0
0.0
1,111.2
63.5
0.0
528.5
74.9
0.0
0.0
1,135.2
Bank indebtedness
Accounts payable & accrued liabs
Due to parent company
Deferred revenue
Provision for warranty costs
Current portion of capital leases
Current portion of LTD
Other current liabilities
Total current liabilities
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
226.5
0.0
23.0
35.0
1.6
13.0
18.6
317.6
0.0
201.8
0.0
18.3
39.7
1.7
48.0
10.4
319.8
0.0
203.0
0.0
22.0
42.1
1.6
44.0
12.7
325.5
0.0
285.0
0.0
29.8
56.9
1.6
135.0
11.9
520.1
0.0
285.0
0.0
29.8
56.9
1.6
135.0
11.9
520.1
0.0
291.2
0.0
29.8
56.9
1.6
65.0
9.8
454.2
0.0
310.4
0.0
29.8
56.9
1.6
0.0
8.8
407.5
0.0
319.3
0.0
29.8
56.9
1.6
0.0
7.8
415.3
0.0
311.9
0.0
29.8
56.9
1.6
0.0
6.8
407.0
Accrued benefit liability

Obligations under capital lease
Future income tax liabilities
Long-term debt
Derivative financial instruments (Liab)
Other long-term liabilities
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
0.9
2.9
105.5
201.0
2.2
13.9
4.1
5.0
102.5
201.6
1.9
12.7
3.8
6.5
100.0
202.2
2.0
21.1
3.8
6.5
98.0
543.0
2.0
21.1
3.8
6.5
98.0
543.0
2.0
21.1
3.8
6.5
90.0
543.0
2.0
21.1
3.8
6.5
82.1
543.0
2.0
21.1
3.8
6.5
74.1
543.0
2.0
21.1
3.8
6.5
66.2
543.0
2.0
21.1
Other liabilities (class B and C shares)

Share capital
Retained earnings
Total liabilities & equity
CAPEX
Non-cash working capital
Net debt
Net debt to LTM EBITDA
Book value / unit
Sales / fixed assets
0.0
480.8
(136.8)
0.0
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
0.0
594.5
(141.8)
0.0
594.7
(137.5)
0.0
595.2
(131.6)
Q3 /1 5 Q4 /1 5 E
0.0
595.7
(121.6)
34.3
268.3
329.9
5.4
0.0
0.0
0.0
637.9
2015E
2016E
2017E
2018E
2019E
34.3
268.3
329.9
5.4
0.0
0.0
0.0
637.9
31.6
278.0
338.4
7.6
0.0
0.0
0.0
655.5
38.4
296.8
361.3
8.1
0.0
0.0
0.0
704.6
129.9
306.3
372.9
8.4
0.0
0.0
0.0
817.4
248.4
298.9
363.9
8.2
0.0
0.0
0.0
919.3
90.1
90.1
82.5
76.9
72.8
69.8
0.0
0.0
0.0
0.0
0.0
0.0
523.1
523.1
501.7
480.2
458.8
437.3
74.9
74.9
74.9
74.9
74.9
74.9
0.0
0.0
0.0
0.0
0.0
0.0
(0.0)
(0.0)
(0.1)
(0.3)
(0.4)
(0.5)
1,675.9 1,675.9 1,664.4 1,686.4 1,773.5 1,850.8
0.0
595.7
(114.3)
0.0
595.7
(114.3)
0.0
595.7
(52.0)
0.0
0.0
0.0
595.7
24.7
595.7
111.9
595.7
205.5
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,101.4
1,111.2
1,135.2
1,675.9
1,675.9
1,664.4
1,686.4
1,773.5
1,850.8
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
4.3
119.4
1.9
165.5
1.8
181.8
2.0
220.1
10.0
220.1
17.0
236.3
17.1
260.4
17.2
273.8
17.3
265.6
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
210.9
2.1x
8.24
23.8x
247.5
2.2x
8.35
23.3x
247.7
2.0x
8.54
22.8x
651.8
4.8x
8.67
20.5x
651.8
4.8x
8.67
19.7x
584.5
2.6x
9.79
24.5x
512.7
2.1x
11.17
28.3x
421.2
1.6x
12.75
31.1x
302.7
1.1x
14.43
33.7x
Auto Components 10
45

Figure 9: Canaccord Genuity Researchs forecast for New Flyer Industries Cash flow statement
C ash flo w statem ent
Net income
Amortization of fixed assets
Amortization of intangibles
Amortization of deferred charges
Loss on disposition of PP&E
Future income taxes (recovery)
Unrealized gain on int rate swap
Items not affecting cash
Other
Cash from operations before WC
Cash from operations after WC
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
10.9
4.2
5.3
0.0
0.0
3.4
0.0
1.9
0.0
0.7
(0.8)
0.4
(2.0)
24.1
4.6
28.7
12.4
4.5
5.4
0.0
0.0
9.2
0.0
(0.8)
0.0
4.5
(0.8)
0.3
(15.1)
19.5
(42.3)
(22.8)
16.6
4.7
5.4
0.0
0.0
4.0
0.0
1.0
0.0
0.8
(0.8)
1.0
(14.5)
18.1
(6.5)
11.6
Investing
Additions to capital assets
Net funds used in investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(4.3)
(4.3)
(1.9)
(1.9)
Financing
Bank indebtness, net
Proceeds from issue of long-term debt
Redemption of class B and C shares
Repayment of long-term debt
Repayment of capital leases
Deferred debt financing costs
Share issuance
Dividends
Net funds from financing
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.7)
(34.1)
Effect of exchange rates on cash
Q3 /1 5 Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
13.9
5.5
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
0.8
(0.8)
0.0
0.0
22.8
36.7
59.5
53.7
18.8
21.4
0.0
0.0
14.6
0.0
2.1
0.0
6.9
(3.2)
1.8
(31.5)
84.5
(7.4)
77.1
92.2
24.5
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
130.3
(16.2)
114.2
106.6
22.7
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
142.9
(24.1)
118.8
117.1
21.3
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
152.1
(13.5)
138.6
123.5
20.3
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
157.4
8.2
165.7
(1.8)
(1.9)
(2.0)
(457.0)
(10.0)
(465.1)
(17.0)
(17.0)
(17.1)
(17.1)
(17.2)
(17.2)
(17.3)
(17.3)
0.0
33.1
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.6)
26.0
0.0
(4.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.8)
(11.3)
0.0
431.9
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
425.2
0.0
433.9
0.0
0.0
(1.4)
0.0
0.0
0.0
(26.7)
405.8
0.0
(70.0)
0.0
0.0
0.0
0.0
0.0
0.0
(29.9)
(99.9)
0.0
(65.0)
0.0
0.0
0.0
0.0
0.0
0.0
(29.9)
(94.9)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(29.9)
(29.9)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(29.9)
(29.9)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
(0.2)
(0.1)
(0.7)
0.0
(1.0)
0.0
0.0
0.0
0.0
Net cash flow

Cash position - beginning of period
Cash position - end of period
1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
(9.9)
17.5
7.6
1.3
7.6
8.8
(2.3)
8.8
6.5
27.8
6.5
34.3
16.8
17.5
34.3
(2.7)
34.3
31.6
6.8
31.6
38.4
91.5
38.4
129.9
118.5
129.9
248.4
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
24.4
(24.7)
9.8
(397.5)
(388.0)
97.2
101.7
121.4
148.4
Auto Components 11
46

Investment risks
Potential risks to our investment thesis and target price valuation methodology
include, but are not limited to, availability of government funding and company
execution of contracts.
Auto Components 12
47

Appendix: Important Disclosures

Analyst Certification
Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the
recommendations and opinions expressed in this research accurately reflect the authoring analysts personal, independent and
objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring
analysts coverage universe and (ii) no part of the authoring analysts compensation was, is, or will be, directly or indirectly, related to the
specific recommendations or views expressed by the authoring analyst in the research.
Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of
Canaccord Genuity Inc. and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications
with a subject company, public appearances and trading securities held by a research analyst account.
Target Price / Valuation Methodology:
New Flyer Industries Inc. - NFI
We have maintained our valuation multiple at 7.5x EV/NTM EBITDA (or 7.5x Q3/16E EV / Q4/16E - Q3/17E EBITDA), which is in line with
the companys trading range in the past 60 months.
Risks to achieving Target Price / Valuation:
Principal risks include availability of government funding and company execution of contracts.
Distribution of Ratings:
Global Stock Ratings (as of 11/10/15)
Rating
Coverage Universe
IB Clients
#
%
%
Buy
600
61.48%
31.67%
Hold
290
29.71%
12.41%
Sell
27
2.77%
3.70%
Speculative Buy
59
6.05%
57.63%
976*
100.0%
*Total includes stocks that are Under Review
Canaccord Genuity Ratings System
BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.
HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.
SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months.
NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer.
Risk-adjusted return refers to the expected return in relation to the amount of risk associated with the designated investment or the
relevant issuer.
Risk Qualier
SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the
stock may result in material loss.
Canaccord Genuity Company-Specific Disclosures (as of date of this publication)
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Corporate Finance/
Investment Banking services from New Flyer Industries Inc. in the next six months.
Auto Components 13
48

New Flyer Industries Inc. Rating History as of 11/10/2015

H:C$8.25
11/14/12
H:C$8.75
01/11/13
H:C$9.25
01/29/13
Jan 2013
Apr 2013
H:C$9.75
02/06/13
H:C$10.00
03/25/13
H:C$10.25
04/18/13
B:C$11.25
06/24/13
H:C$11.75
08/07/13
H:C$11.25
11/07/13
B:C$12.00
01/15/14
B:C$12.50
03/23/14
H:C$11.50
05/11/14
H:C$11.75
06/24/14
25
20
15
10
5
H:C$12.00
07/16/14
B:C$14.00
08/06/14
Jul 2013
H:C$14.00
11/09/14
B:C$12.50
12/12/14
Oct 2013
H:C$14.00
01/12/15
Jan 2014
Apr 2014
B:C$15.00
03/19/15
B:C$16.00
05/11/15
Closing Price
Jul 2014
Oct 2014
B:C$17.00
07/20/15
B:C$21.00
08/10/15
Jan 2015
H:C$20.00
10/16/15
Apr 2015
Jul 2015
Oct 2015
B:C$22.00
11/09/15
Target Price
Buy (B); Speculative Buy (SB); Sell (S); Hold (H); Suspended (SU); Under Review (UR); Restricted (RE); Not Rated (NR)
Online Disclosures
Up-to-date disclosures may be obtained at the following website (provided as a hyperlink if this report is being read electronically)
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Canaccord Genuity Inc., Canaccord Genuity Limited, Canaccord Genuity Corp., and Canaccord Genuity (Australia) Limited, an affiliated
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The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Corp. a Canadian
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The authoring analysts who are responsible for the preparation of this research have received (or will receive) compensation based upon
(among other factors) the Corporate Finance/Investment Banking revenues and general profits of Canaccord Genuity. However, such
authoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specific
Corporate Finance/Investment Banking activities, or to recommendations contained in the research.
Canaccord Genuity and its affiliated companies may have a Corporate Finance/Investment Banking or other relationship with the issuer
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The information contained in this research has been compiled by Canaccord Genuity from sources believed to be reliable, but (with the
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Auto Components 14
49

Canaccord Genuitys affiliates, principal trading desk, and investing businesses may make investment decisions that are inconsistent
with the recommendations or views expressed in this research.
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Auto Components 15
50

For Hong Kong Residents:

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permission of the entities listed above.
Auto Components 16
51

Auto Components


10 November 2015
BUY
Motor Coach Industries pending acquisition
C$22.00
C$21.23
NFI-TSX
PRICE TARGET
Price (9-Nov)
Ticker
52-Week Range (C$):
Avg Daily Vol (000s) :
Shares Out. (M) :
Market Cap (C$M):
Dividend /Shr (C$):
12.05 - 21.32
134.30
55.5
1,178.7
0.62
3.1
22
20
18
16
14
12
Oct-15
Nov-15
Sep-15
Jul-15
Aug-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
Feb-15
Dec-14
10
NFI
Source:FactSet

Recommend BUYing for improving performance

We recommend BUYing NFI to take advantage of NFIs improving margins and stronger
industry macro conditions.
We think NFI should generate solid 6.1% EBITDA growth from 2015-17 from modest
environment conditions, NFI profit improvement initiatives and deployment of NFI excess
cash resources.
Motor Coach Industries (MCI) acquisition looks nicely accretive
NFI announced it has entered into a definitive agreement to acquire MCI for $455
million, which equates to approximately 6x EV/EBITDA.
MCI is North Americas largest on-highway bus manufacturer and it has a significant
parts and service business. This would make NFI the leading heavy-duty city bus and onhighway bus manufacturer in North America.
We think this is a logical move into an adjacent market by NFI. However, we believe it
could add an increased element of cyclicality, as we believe the on-highway bus market
could be more economically sensitive than the city bus market.
Synergies are not expected to be significant at $10 million, which makes sense given
that the two businesses operate in different markets and the products are likely to be
fairly differentiated.
We estimate that the deal should add about C$2.00/NFI share in value (current target of
C$22.00), based on the preliminary data provided in the press release announcing the
deal, and all other factors being equal. This is because NFI is buying MCI using debt and
NFI trades at a premium multiple (7.4x on EV/2016E EBITDA basis) to the deal price.
Management indicated NFIs pro forma debt/EBITDA will be in the 3x range, which
looks reasonable to us, especially given that a significant portion of NFIs business is
somewhat less cyclical government business.
Dividend boost pending
NFI indicated that it intends to boost its dividend 12.9% (to C$0.70/year from C$0.62/
year), effective the close of the transaction, which is expected to occur by the end of
2015.
Valuation near trading range of past 5 years
60 months.
52

Company Update
Motor Coach Industries pending

acquisition value impact estimate
We estimate that the MCI deal would potentially add C$2.00 to our current C$22.00
target, based on the deal metrics provided in the deal announcement press release,
and all other factors being equal (Figure 1).
Figure 1: Estimated pro forma NFI value, post the MCI acquisition
1-year
t arget
2-year
t arget
EBITDA
Multiplier
237.0
7.5
241.0
7.5
1,777.5
1,807.5
EV
(617.0)
(617.0)
1,160.5
62.0
1,190.5
62.0
18.71
19.20
24.00
25.00

0.62
1.24
24.62
26.24

Buy Target Price C$22.00 | 10 November 2015
Auto Components 2
53

Company Update
VALUATION
bottom out around 3% range (about 1-2% over the 10-year Canada bond yield) and
EV/EBITDA will be stable in the 6-8x NTM EBITDA range.
names (Figure 4).
Auto Components 3
54

Company Update
Mar k et
Cur .
Eq ui ty Pr i ce :
Cur .
Y e a r No v. 10, 2015
Di v.
2015
$21. 23
$0. 61
Di v.
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M )
EPS
2. 9%
$1. 54
4. 8%
De b t/
P/E
Gr o wth
Ca p ('15- '17)
39. 5% $1, 108 $0. 95 22. 4 34. 3%
6. 1%
69. 6%
8. 6%
16. 3 39. 4%
Chorus Aviation
2015
$5.45
$0.48
8.8%
$0.88
54.7%
$666 $0.80
6.8
89.6%
12.9%
Davis + Henderson
2015
$35.33
$1.28
3.6%
$1.99
64.5%
$3,730 $2.49
14.2
41.2%
12.8%
Westshore Terminals
2015
$22.21
$1.24
5.6%
$1.28
97.1%
$1,649 $1.68
13.2
0.0%
-3.0%
Cineplex Galaxy
2015
$50.05
$1.54
3.1%
$1.67
92.5%
$3,157 $2.02
24.8
32.1%
14.1%
Our valuation multiple is 7.5x EV/NTM EBITDA (or 7.5x Q3/16E EV / Q4/16E - Q3/17E
EBITDA), which is consistent with NFIs trading range for some time (average of 7.7x
over the past 60 months). We think our target multiple is supported by NFIs solid
2.9% dividend yield (3.3% dividend yield post the intended dividend increase). We
think the dividend upside potential from forecasted stronger future free cash further
strengthens the dividend yield support argument.
Auto Components 4
55

Company Update
1-year
t arget
151.0
2-year
t arget
155.3
7.5
1,132.3
(95.2)
1,037.1
7.5
1,165.1
(44.9)
1,120.2

62.0
16.72
22.00
62.0
18.06
23.00

0.62
22.62
1.24
24.24
13.1%
21.2%

2.8%
8.5%
2.7%
8.4%

1.1%
6.8%
FCFPS C$
1.88

EBITDA
Multiplier
EV
1.94

Auto Components 5
56

Company Update
F ree cash
Interest paid
Interest expense
Income taxes paid
Free cash flow
Exchange rate
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
28.7
(4.6)
4.0
(3.1)
2.1
(13.7)
(0.5)
(4.3)
1.3
0.8
(0.7)
(0.2)
9.8
1.252
12.3
8.1
(22.8)
42.3
1.8
(2.8)
16.4
(12.5)
(0.5)
(1.9)
1.6
0.8
(0.8)
(0.1)
21.5
1.226
26.4
8.4
11.6
6.5
3.8
(2.8)
14.1
(14.4)
(0.5)
(1.8)
1.0
0.8
(0.8)
(0.7)
16.8
1.317
22.1
8.6
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5

0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.22
0.15
0.48
0.15
Q3 /1 5 Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
58.8
(36.3)
3.0
(3.0)
11.4
(11.4)
(0.7)
(2.0)
0.8
(0.8)
(0.7)
19.0
1.300
24.7
8.6
76.3
7.8
12.6
(11.6)
44.0
(52.0)
(2.1)
(10.0)
3.9
3.2
(3.2)
(1.7)
67.2
1.300
85.6
33.8
83.0
7.8
11.5
(11.5)
41.3
(41.3)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
77.2
1.300
100.3
34.4
89.7
5.2
11.0
(11.0)
44.5
(44.5)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
81.2
1.300
105.5
34.4
92.4
4.8
10.4
(10.4)
46.5
(46.5)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
83.6
1.300
108.6
34.4
95.4
4.8
9.9
(9.9)
48.7
(48.7)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
86.5
1.300
112.5
34.4
55.5
55.5
55.5
55.5
55.5
55.5
55.5
0.40
0.16
0.45
0.16
1.54
0.61
1.81
0.62
1.90
0.62
1.96
0.62
2.03
0.62
Auto Components 6
57

Company Update
Incom e statem ent
Revenues
EBITDA
Other
Other expenses
Pre-tax income
Income taxes
Net Income (loss)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
Q3 /1 5 Q4 /1 5 E
865.3 1,199.4
(810.2) (1,120.2)
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
380.3
(352.1)
1.5
29.7
(9.5)
(1.9)
0.0
0.0
18.2
(2.3)
(0.7)
(0.5)
(0.6)
0.0
14.1
(3.3)
10.9
375.0
(340.7)
(0.7)
33.7
(9.8)
0.8
0.0
0.0
24.6
(2.2)
(0.6)
0.3
(0.6)
0.0
21.6
(9.2)
12.4
364.7
(329.1)
(0.6)
35.0
(10.0)
(1.0)
0.0
0.0
24.0
(2.2)
(0.6)
(0.1)
(0.6)
0.0
20.5
(4.0)
16.6
2015E
2016E
2017E
2018E
2019E
393.1 1,513.1 1,471.9 1,515.1 1,552.3 1,600.7

(355.7) (1,377.5) (1,326.0) (1,362.5) (1,395.9) (1,439.6)
0.0
0.1
0.0
0.0
0.0
0.0
37.4
135.7
145.9
152.6
156.4
161.1
(9.8)
(39.2)
(38.2)
(37.0)
(36.2)
(35.6)
0.0
(2.1)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
27.6
94.4
107.7
115.6
120.2
125.5
(2.3)
(9.0)
(9.3)
(9.3)
(9.3)
(9.3)
(0.7)
(2.6)
(2.2)
(1.7)
(1.1)
(0.6)
0.0
(0.3)
0.0
0.0
0.0
0.0
(0.6)
(2.4)
(2.4)
(2.4)
(2.4)
(2.4)
0.0
0.0
0.0
0.0
0.0
0.0
24.0
80.1
93.9
102.2
107.4
113.2
(9.4)
(25.8)
(33.4)
(36.5)
(38.5)
(40.7)
14.6
54.4
60.5
65.7
68.9
72.5

FCFPS/Dist. cash per IDS (C$)
FCFPS
0.75
0.63
0.63
0.58
0.87
0.87
0.15
0.19
0.19
0.15
0.29
0.29
0.15
0.32
0.32
0.15
0.38
0.38
0.59
1.18
1.18
0.15
0.22
0.22
0.15
0.48
0.48
0.16
0.40
0.40
0.16
0.45
0.45
0.61
1.54
1.54
0.62
1.81
1.81
0.62
1.90
1.90
0.62
1.96
1.96
0.62
2.03
2.03
52.3
58.9
55.5
55.6
55.7
55.7
55.6
55.8
55.9
56.1
62.0
57.4
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
17.4%
16.6%
0.0%
7.8%
8.2%
65.6%
4.0%
9.0%
1.1%
23.7%
6.0%
9.6%
-6.4%
17.0%
6.0%
9.5%
4.3%
30.6%
4.0%
9.0%
-2.7%
17.2%
1.9%
9.9%
2.9%
5.2%
0.0%
10.1%
2.5%
2.9%
0.0%
10.1%
3.1%
3.6%
0.0%
10.1%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
7.6%
8.8%
8.9%
10.0%
9.0%
10.1%
11.1%
11.7%
12.4%
Bus revenues
Bus sales growth
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
290.7
14.7
15.9%
5.1%
572
508
26
26
285.8
22.4
7.5%
7.8%
594
481
38
30
293.0
21.6
5.1%
7.4%
625
469
35
33
321.1
22.6
-4.6%
7.0%
685
469
33
33
1190.6
81.4
5.2%
6.8%
2,476
481
33
33
1172.3
84.5
-1.5%
7.2%
2,485
472
34
34
1203.5
88.7
2.7%
7.4%
2,535
475
35
35
1228.3
90.0
2.1%
7.3%
2,571
478
35
35
1263.9
92.0
2.9%
7.3%
2,629
481
35
35
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
89.6
16.7
22.8%
18.6%
89.2
16.8
10.6%
18.8%
71.7
14.7
-12.6%
20.5%
72.0
14.8
-13.6%
20.5%
322.5
62.9
1.1%
19.5%
299.6
61.4
-7.1%
20.5%
311.6
63.9
4.0%
20.5%
324.0
66.4
4.0%
20.5%
336.8
69.0
4.0%
20.5%

EBITDA/sales
ROC
Segm ented data
Auto Components 7
58

Company Update
Balance sheet
Cash
Accounts receivable
Inventories
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
7.6
186.9
232.0
3.5
0.1
0.0
0.0
430.0
8.8
189.2
242.3
3.9
0.2
0.0
0.0
444.4
6.5
217.7
240.4
3.7
0.0
0.0
0.0
468.3
Capital assets
Deferred charges
Intangible assets
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
64.3
0.0
539.1
67.9
0.0
0.0
1,101.4
64.3
0.0
533.9
68.6
0.0
0.0
1,111.2
63.5
0.0
528.5
74.9
0.0
0.0
1,135.2
Bank indebtedness
Deferred revenue
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
226.5
0.0
23.0
35.0
1.6
13.0
18.6
317.6
0.0
201.8
0.0
18.3
39.7
1.7
48.0
10.4
319.8
0.0
203.0
0.0
22.0
42.1
1.6
44.0
12.7
325.5
0.0
211.1
0.0
22.0
42.1
1.6
44.0
12.0
332.8
0.0
211.1
0.0
22.0
42.1
1.6
44.0
12.0
332.8
0.0
191.2
0.0
22.0
42.1
1.6
44.0
9.9
310.9
0.0
196.5
0.0
22.0
42.1
1.6
44.0
8.9
315.1
0.0
202.2
0.0
22.0
42.1
1.6
44.0
7.9
319.8
0.0
208.0
0.0
22.0
42.1
1.6
44.0
6.9
324.6

Long-term debt
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
0.9
2.9
105.5
201.0
2.2
13.9
4.1
5.0
102.5
201.6
1.9
12.7
3.8
6.5
100.0
202.2
2.0
21.1
3.8
6.5
98.0
202.2
2.0
21.1
3.8
6.5
98.0
202.2
2.0
21.1
3.8
6.5
90.0
202.2
2.0
21.1
3.8
6.5
82.1
202.2
2.0
21.1
3.8
6.5
74.1
202.2
2.0
21.1
3.8
6.5
66.2
202.2
2.0
21.1

Share capital
Retained earnings
CAPEX
Net debt
Book value / unit
0.0
480.8
(136.8)
0.0
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
0.0
594.5
(141.8)
0.0
594.7
(137.5)
0.0
595.2
(131.6)
Q3 /1 5 Q4 /1 5 E
0.0
595.7
(121.6)
56.7
198.7
230.0
4.0
0.0
0.0
0.0
489.4
2015E
2016E
2017E
2018E
2019E
56.7
198.7
230.0
4.0
0.0
0.0
0.0
489.4
101.2
180.9
234.0
3.7
0.0
0.0
0.0
519.8
152.3
186.2
238.0
3.8
0.0
0.0
0.0
580.3
206.1
191.6
242.0
3.9
0.0
0.0
0.0
643.6
262.7
197.1
246.0
4.0
0.0
0.0
0.0
709.8
61.1
61.1
56.4
52.9
50.4
48.6
0.0
0.0
0.0
0.0
0.0
0.0
523.1
523.1
501.7
480.2
458.8
437.3
74.9
74.9
74.9
74.9
74.9
74.9
0.0
0.0
0.0
0.0
0.0
0.0
(0.0)
(0.0)
(0.1)
(0.3)
(0.4)
(0.5)
1,148.5 1,148.5 1,152.6 1,188.1 1,227.3 1,270.1
0.0
595.7
(113.6)
0.0
595.7
(113.6)
0.0
595.7
(79.6)
0.0
595.7
(40.4)
0.0
0.0
595.7
2.0
595.7
48.0
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,101.4
1,111.2
1,135.2
1,148.5
1,148.5
1,152.6
1,188.1
1,227.3
1,270.1
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
4.3
119.4
1.9
165.5
1.8
181.8
2.0
145.5
10.0
145.5
12.0
153.3
12.1
158.5
12.2
163.3
12.3
168.1
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
210.9
2.1x
8.24
23.8x
247.5
2.2x
8.35
23.3x
247.7
2.0x
8.54
22.8x
197.6
1.5x
8.68
25.2x
197.6
1.5x
8.68
24.2x
153.0
1.0x
9.30
25.1x
101.9
0.7x
10.00
27.7x
48.2
0.3x
10.77
30.0x
(8.5)
0.0x
11.59
32.3x
Auto Components 8
59

Company Update
Net income
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
10.9
4.2
5.3
0.0
0.0
3.4
0.0
1.9
0.0
0.7
(0.8)
0.4
(2.0)
24.1
4.6
28.7
12.4
4.5
5.4
0.0
0.0
9.2
0.0
(0.8)
0.0
4.5
(0.8)
0.3
(15.1)
19.5
(42.3)
(22.8)
16.6
4.7
5.4
0.0
0.0
4.0
0.0
1.0
0.0
0.8
(0.8)
1.0
(14.5)
18.1
(6.5)
11.6
Investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(4.3)
(4.3)
(1.9)
(1.9)
Financing
Share issuance
Dividends
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.7)
(34.1)
Q3 /1 5 Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
14.6
4.4
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
0.8
(0.8)
0.0
0.0
22.4
36.3
58.8
54.4
17.8
21.4
0.0
0.0
14.6
0.0
2.1
0.0
6.9
(3.2)
1.8
(31.5)
84.2
(7.8)
76.3
60.5
16.7
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
90.8
(7.8)
83.0
65.7
15.6
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
94.9
(5.2)
89.7
68.9
14.7
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
97.2
(4.8)
92.4
72.5
14.1
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
100.2
(4.8)
95.4
(1.8)
(1.9)
(2.0)
(2.0)
(10.0)
(10.1)
(12.0)
(12.0)
(12.1)
(12.1)
(12.2)
(12.2)
(12.3)
(12.3)
0.0
33.1
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.6)
26.0
0.0
(4.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.8)
(11.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(6.6)
0.0
2.1
0.0
0.0
(1.4)
0.0
0.0
0.0
(26.7)
(26.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
(0.2)
(0.1)
(0.7)
0.0
(1.0)
0.0
0.0
0.0
0.0
Net cash flow

1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
(9.9)
17.5
7.6
1.3
7.6
8.8
(2.3)
8.8
6.5
50.1
6.5
56.7
39.2
17.5
56.7
44.5
56.7
101.2
51.1
101.2
152.3
53.7
152.3
206.1
56.6
206.1
262.7
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
24.4
(24.7)
9.8
56.8
66.2
71.0
77.6
80.2
83.1
Auto Components 9
60

Company Update
Investment risks
Auto Components 10
61

Company Update

Our target price of C$22.00 is based on a valuation multiple of 7.5x EV/NTM EBITDA (or 7.5x Q3/16E EV / Q4/16E - Q3/17E EBITDA),
which is in line with the companys trading range in the past 60 months.
Rating
Coverage Universe
IB Clients
#
%
%
Buy
600
61.48%
31.67%
Hold
290
29.71%
12.41%
Sell
27
2.77%
3.70%
Speculative Buy
59
6.05%
57.63%
976*
100.0%
relevant issuer.
Risk Qualier
Auto Components 11
62

Company Update

H:C$8.25
11/14/12
H:C$8.75
01/11/13
H:C$9.25
01/29/13
Jan 2013
Apr 2013
H:C$9.75
02/06/13
H:C$10.00
03/25/13
H:C$10.25
04/18/13
B:C$11.25
06/24/13
H:C$11.75
08/07/13
H:C$11.25
11/07/13
B:C$12.00
01/15/14
B:C$12.50
03/23/14
H:C$11.50
05/11/14
H:C$11.75
06/24/14
25
20
15
10
5
H:C$12.00
07/16/14
B:C$14.00
08/06/14
Jul 2013
H:C$14.00
11/09/14
Oct 2013
B:C$12.50
12/12/14
H:C$14.00
01/12/15
Jan 2014
B:C$15.00
03/19/15
Apr 2014
B:C$16.00
05/11/15
Closing Price
Jul 2014
Oct 2014
B:C$17.00
07/20/15
B:C$21.00
08/10/15
Jan 2015
H:C$20.00
10/16/15
Apr 2015
Jul 2015
Oct 2015
B:C$22.00
11/09/15
Target Price
Online Disclosures
General Disclosures
Auto Components 12
63

Company Update
account.
Inc.
Auto Components 13
64

Company Update

regulated by ASIC.
Auto Components 14
65
INSTITUTIONAL EQUITY RESEARCH

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
Kevin.Chiang@cibc.com
Khaled.Omar@cibc.com
EARNINGS UPDATE
j

1 +1 = 3 ... Acquisition Of MCI Checks All
The Boxes
What's The Event
NFI announced that it has entered a definitive agreement to acquire
MCI for cash consideration of $455MM with the deal expected to
close by the end of 2015.
- Why We Like The Deal: With NFI the #1 heavy duty bus
manufacturer, combining with MCI, the #1 coach bus manufacturer,
there is an opportunity for one plus one to equal three. We view the
deal positively given the potential synergies between the two
companies, and the acquisition meets NFI's strategy of diversifying
its product line. The combination of these two companies should
result in the sum being greater than the parts.
- Deal Metrics Appealing: NFI noted the purchase price is ~6x
EBITDA and we estimate the ROIC from the deal is ~15%. NFI's
ROIC as of Q3 was 11.5%. But we believe this multiple could
contract down to below 5x when considering potential synergies and
the ramp up of the NJTA contract recently awarded to MCI.
- Synergies Look Understated: NFI is targeting ~$10MM in annual
synergies through the rationalization of corporate costs and from
sourcing. We believe this estimate is conservative and expect
potential synergy benefits to increase as NFI fully integrates MCI.
Firstly, NFI and MCI have an overlapping geographic footprint.
Secondly, NFI has a history of being conservative with its synergy
targets (i.e. synergies from NABI acquisition steadily increased).
November 10, 2015

Capital Equipment
Stock Rating:
Sector Weighting:
Key Ratios and Statistics
12-18 mo. Price Target
NFI-TSX (11/10/15)
SECTOR OUTPERFORMER
MARKET WEIGHT
C$28.50
C$23.90
Key Indices:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Float
Avg. Daily Trading Vol.
Market Capitalization
Dividend/Div Yield
Fiscal Year Ends
Book Value
2015 ROE (E)
LT Debt
Net AssetEquity
Value
Common
Convertible Available
EBITDA ($mln)
Current
Prior
Estimates (Dec.
(Dec. 31)
31)
Valuation
EV/EBITDA-Curr
EV/EBITDA-Prior
Toronto
NM
C$12.05-C$23.90
55.5M
44.0M Shrs
38,000
C$1,054.5M
C$0.70 / 3.3%
December
$11.90 per Shr
13.0%
$141.0M
$474.1M
Yes
2013
$94.7A
2014
$107.4A
2015
$143.1E
2016
$225.7E
$147.5E
17.9X
15.8X
11.8X
7.5X
11.5X
- Still Committed To Returning Cash To Shareholders: NFI is raising

its dividend by 12.9% from C$0.62 to C$0.70 annually and moving
from a monthly to a quarterly payment schedule. This reflects NFI
stated commitment of returning cash to shareholder, which is
supported by the company's improving FCF generation.
We raised our 2016E EBITDA from $148M to $226M reflecting the
acquisition of MCI. Our PT increases from C$24.00 to C$28.50 and
we maintain our SO rating. We continue to have a favourable
outlook on NFI reflecting improving bus industry fundamentals,
strong FCF generation, and the creation of a more diverse revenue
stream.
All figures in US dollars, unless otherwise stated.(C$1.327:US$1)
Company Description
New Flyer Industries Inc. is the largest North American manufacturer of
heavy-duty transit buses supplying transit authorities in Canada and the U.S.
www.newflyer.com
15-139086 2015
CIBC World Markets Corp., the U.S. broker-dealer, and CIBC World Markets Inc., the Canadian broker-dealer (collectively,
CIBC World Markets Corp./Inc.) do and seek to do business with companies covered in its research reports. As a result,
investors should be aware that CIBC World Markets Corp./Inc. may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
For required regulatory disclosures please refer to "Important Disclosures" beginning on page 11. Please see
"Price Target Calculations" and "Key Risks to Price Target" information on page(s) 8.
Find CIBC research on Bloomberg, Reuters, firstcall.com
and ResearchCentral.cibcwm.com
CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000
CIBC World Markets Corp., 425 Lexington Avenue, New York, NY 10017 (212)-856-4000
66
1 +1 = 3 ... Acquisition Of MCI Checks All The Boxes - November 10, 2015
Sector Outperformer
NFI-TSX
11/10/15
12- To 18- Month Price Target:
Capital Equipment
Sector Weighting:
All figures in US$ millions, except per share data.
EV/EBITDA Multiples
Consensus estimates except New Flyer
High-Yielding Industrials
Commercial Vehicle & Parts
Manufacturers
P/E Multiples 1
C$23.90
C$28.50
Kevin Chiang, (416-594-7198) Kevin.Chiang@cibc.ca

Khaled Omar, (416-956-6807) Khaled.Omar@cibc.ca
Market Weight
2014A
2015E
2016E
Company Profile
15.8x
9.6x
9.7x
11.8x
8.6x
9.3x
7.5x
7.3x
8.2x
2014A
2015E
2016E
Investment Thesis
New Flyer Industries Inc. is the largest North American manufacturer of heavy-duty transit buses
supplying transit authorities in Canada and the U.S. with approximately one-third the market.

Manufacturers
Key Financial Metrics
2013A
21.7x
16.1x
16.2x
15.8x
15.1x
14.4x
11.4x
14.4x
12.5x
Fundamentals for bus demand are improving due to rising U.S. state/municipal tax revenue, growing bus
ridership numbers (reflecting the cost advantage of taking bus transit versus driving and modestly
declining unemployment rate), and public transit being a more green option.
2014A
2015E
2016E
New Flyer is well positioned to take advantage of the improving heavy duty bus fundamentals given its
leading market share in both bus manufacturing and aftermarket services.
EBITDA Margin
Current Ratio
Debt/Equity
Debt/Total Capital
Income Statement
7.9%
1.1x
51.3%
33.9%
2013A
7.4%
1.1x
53.1%
34.7%
2014A
9.4%
1.3x
374.5%
78.9%
2015E
10.1%
1.3x
301.9%
75.1%
2016E
$991.2
$215.0
$1,199.4
$1,078.7
$120.8
$94.7
$49.0
$34.6
$26.8
$1,132.1
$319.0
$1,451.1
$1,312.8
$138.3
$107.4
$51.4
$37.6
$26.7
$1,200.7
$324.3
$1,525.0
$1,341.2
$183.7
$143.1
$93.2
$78.9
$54.6
$1,794.2
$449.0
$2,243.2
$1,961.4
$281.8
$225.7
$163.2
$135.9
$87.6
Bus Manufacturing Revenues

Aftermarket Revenues
Revenues - Consolidated
Cost of Sales
Gross Profit
EBITDA
EBIT
EBT
Net Income
Balance Sheet
Q3/15A
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Shareholders' Equity
468
1,135
326
661
474
New Flyer is guiding towards 2015 production line rate of ~50 EUs/week, we view its C$0.70/share
annual dividend as safe.
2014 Revenue by Operating Segment

Aftermarket
Operations
22%
Canada
16%
Revenue from Aftermarket Operations

3,000
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
0
2009
2010
Revenues ($ Millions)
2011
2012
2013
Deliveries(EUs)
2014
$ Millions
$1,200,000
$350
2008
United States
84%
Bus Operations
78%
Revenue from Bus Manufacturing Operations
2007
2014 Revenue by Geography
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2009
2010
2011
2012
$50
$0
2007
2008
2013
2014
Source: Company reports and CIBC World Markets Inc.
67
Acquiring MCI 1 + 1 = 3
New Flyer announced that it has entered a definitive agreement to acquire MCI
(Motor Coach Industries) from an affiliate of KPS Capital Partners for cash
consideration of $455 million with the deal expected to close by the end of 2015.
Why We Like The Deal

With New Flyer the #1 heavy duty bus manufacturer, and combining with MCI,
the #1 coach bus manufacturer, there is an opportunity for one plus one to
equal three. We view the acquisition of MCI by New Flyer positively as the deal
metrics are appealing, synergy opportunities look significant, diversification of
New Flyers revenue, and the contribution to the companys commitment of
returning cash to shareholders (we go into detail on each of these points below).
Essentially, the combination of these two companies should result in the sum
being greater than the parts.
Deal Metrics On Standalone Basis Is Appealing

At a purchase price of $455 million, New Flyer noted the implied purchase
multiple is ~6x suggesting MCI is generating ~$76 million of EBITDA. The
transaction will be funded through a new $825 million senior secured credit
facilities with a four-year maturity consisting of a $482 million term loan and a
$343 million revolver. Assuming the transaction closes on December 31, 2015,
New Flyer expects the revolver to have ~ $135 million drawn, which would
result in expected pro forma total indebtedness to combined adjusted EBITDA of
~3.0x at closing. New Flyer has obtained fully underwritten financing
commitments for the new credit facilities.
Exhibit 1. Deal Summary
Deal Metrics ($ MM Unless Noted)
Acquisition Price
455
Stated Acquisition Multiple
6.0x
MCI Estimated 2015 Adjusted EBITDA
76
Source: Company reports.
While the deal metrics on a standalone basis already suggest a fair multiple
being paid by New Flyer, when considering potential synergies and the ramp up
of the recently awarded New Jersey Transit Authority (NJTA) contract, the
acquisition multiple potentially contracts to sub-5x. In July 2015, MCI was
awarded a $395 million contract to deliver 772 coaches over a five year period
starting in 2016. This order will replace the majority of NJTAs existing fleet and
there is an option for an additional 75 coaches a year.
68
Exhibit 2. Acquisition Multiple Adjusted For Potential Synergies And New Jersey Contract
NJ Contract EBITDA Potential
Contract Size ($ 000)
Adjusted Acquisition Multiple Calculation

395,000
$MM
Comment
Firm Orders
772
Acquired EBITDA Run Rate ($ MM)
76
2015E EBITDA
Price Per Bus ($ 000)
512
Targeted Synergies ($ MM)
10
NFI's targeted synergies which we believe are conservative
Annual Bus Delivery
155
NJ Contract
$395MM contract for 772 coaches for 5 years with option for additional 75 per year
Total EBITDA
94
Firm Order Annual Revenue
79,307
Assume NFI Margin
7%
Firm Order EBITDA
5,551
Option Orders Exercised
75
Options Annual Revenue
38,374
Assume NFI Margin
MCI Purchase Price
455
Adjusted Acquisition Multiple
4.8x
7%
Option Order EBITDA
2,686
Total EBITDA
8,238
In addition, this deal looks highly accretive from an ROIC perspective. Assuming
$76 million of annualized EBITDA and ~$6-$7 million in capex would infer an
ROIC of ~15% based on the cash purchase price (and this is pre-synergies).
New Flyers ROIC at the end of Q3 was 11.5%.
Exhibit 3.
Inferred ROIC ($ MM Unless Noted)
Annual EBITDA Acquired
76
Capex
Annual Return
70
Acquisition Price
Inferred ROIC
455
15.4%
Synergies Look Understated

New Flyer is targeting ~$10 million in annual synergies through the
rationalization of corporate costs and from sourcing. We believe this number is
conservative and would expect potential synergy benefits to increase as New
Flyer fully integrates MCI.
Overlapping Network: As the map below highlights, both New Flyers and
MCIs operations are clustered in the same geographic area. While New Flyer
noted that at this time it is unlikely that it will combine manufacturing facilities
(MCI produces more standardized buses while New Flyers transit buses require
more customization), we suspect there are opportunities to find synergies on the
aftermarkets side. The company noted there are opportunities to utilize both
MCIs and New Flyers best practices to improve aftermarket sales within both
the public and private sector, which we do not believe is contemplated in the
$10 million synergy estimate. And longer-term, the question remains whether it
is necessary to have such a large aftermarket footprint and whether there is an
opportunity to consolidate the asset base.
69
Exhibit 4. New Flyer And MCI Combined Footprint
Source: Company reports
History Has Shown New Flyer Is Conservative On Its Synergy Targets:

Looking back at when New Flyer acquired NABI, we believe the integration
process will be similar with MCI. Recall, New Flyer took a year to study NABIs
operations before deciding to convert its facilities to the Xcelsior platform. When
the NABI deal was announced in June 2013, New Flyer stated that it expects
basic synergies from this deal. A year later, it announced a plan to stream line
NABIs operations, spending $20 million to realize annualized savings of $14.0
million. Recently, the New Flyer increased the expected annual cost savings to
$16.5 million.
Still Committed To Returning Cash To

Shareholders
In conjunction with this announcement, New Flyer is raising its dividend by
12.9% from C$0.62 to C$0.70 annually and moving from a monthly to a
quarterly payment schedule. We believe this reflects New Flyers stated
commitment of returning cash to shareholder, which is supported by the
companys improving FCF generation.
Summary Of MCIs Operations

MCI is North Americas leading motor coach manufacturer and parts and service
supplier with three manufacturing facilities (Winnipeg, Manitoba and Pembina,
North Dakota), and nine service and parts distribution centers in North America.
Below we provide a breakdown of the companys business segments.
New Coach Private: MCI targets the mid-range to luxury markets of this
segment, with its J Model the number one selling coach in the North American
private market. Customers in this market include tour and charter operators,
hotels and casinos, inter-city line-haul operators, and contract carriers.
70
New Coach Public: MCI targets the mid-range segment of this market and is
Buy America compliant. The D Model is the number one selling coach in North
America. Customers in this market include transit authorities, universities, U.S.
Federal Government, and correctional facilities.
Pre-Owned Coach: MCI provides trade-in options to support new coach sales.
Coaches are refurbished at MCIs service centers and re-sold in the pre-owned
market. Customers in this segment include value customers in the private
market, and small private fleets.
Aftermarket: MCI has a significant aftermarket footprint in North America, with
six service centers, three distribution facilities, and over 3,000 emergency
response partners. This segment supports its installed fleet of 28,000 Coaches.
Customers in this segment include all public and private coach fleets.
Exhibit 5. MCI Business Overview
Year Founded
1933 in Winnipeg, MB
Product Models
J Coach - primarily private market

D Coach - primarily public market
U.S. and Canada distributor for Daimler's Setra coaches
Manufacturing Facilities
Winnipeg, MB (Coach manufacturing and Frank Fair

composite fabrication)
Pembina, ND
30-Sep-15 YTD New Coach Volume
763 units
330 private
246 public
30-Sep-15 YTD Pre-Owned Coach Sales
186 units
30-Sep-15 YTD Revenue
$443M
Employees
1,500 employees
As of December 31, 2014, MCI had the largest installed base of motor coaches
in North America with ~28,000 units (~2x nearest competitor) with a 50% share
of the total installed base in North America. Additionally MCI has a 42% market
share in the Motor Coach market based on unit deliveries.
Exhibit 6. Leading Industry Player In The Motor Coach Market
Motor Coach Market Share (Total: ~1,920 units)
Installed Base (Total: ~55,500 units)

Temsa
1%
Temsa
9%
MCI
42%
Vanhool
24%
Prevost
25%
Prevost
26%
MCI
50%
Vanhool
23%
MCIs customer base predominantly comprises of private businesses (i.e. private

charter and tour operators). Nonetheless, its customers include some of the
largest fleet operators in both the private and public sectors. And while a
number of its public customers overlap with NFI (transit authorities in New York,
New Jersey, Houston, and Denver), it does not directly compete with the
company. MCI also has a strategic partnership with Daimler AG, whereby
71
Daimler owns a 10% minority equity position in the company (will sunset upon
transaction close) in exchange for exclusive distribution rights for Daimlers
Setra motor coaches and aftermarket parts in North America. In terms of
customer concentration, 10 of its largest customers account for ~44% of new
coach volumes in FY2014, with the largest customer contributing less than 12%.
Exhibit 7. Diverse Installed Customer Base
Public
Private
Key Customers
Start of Relationship (Year)
Installed Base
NJ Transit
1982
1,500
GO (Toronto)
1995
450
Metro (Houston)
2000
300
RTD (Denver)
1991
100
LADOT (Los Angeles)
2009
95
Coach USA
1960s
2,200
A Academy
1970s
700
Peter Pan
1950s
250
Roberts Hawaii
1980s
200
Martz Trailways
1950s
197
In terms of its financial profile, for the nine months ended on September 30
2015, MCI delivered 576 new coaches resulting in new coach revenue of
~US$315MM and also generated pre-owned coach and aftermarket parts and
service combined revenue of ~US$128MM. Total revenue for this period was
~US$443MM. Below we provide additional details on its financial profile.
Exhibit 8. Improving Financial Profile
Segmented Revenue (US$M)
Total Coach Units Sold

1,102
1200
1000
800
600
400
200
926
345
281
240
1,146
207
763
187
349
324
246
614
362
452
330
0
2012
2013
Private
Public
2014
YTD
Pre-Owned Coach
$700
$600
$500
$400
$300
$200
$100
$0
$607
$580
$508
$39
$42
$43
$130
$134
$349
$409
$430
2012
2013
2014
$120
Private
Public
$443
$26
$102
$315
YTD
Pre-Owned Coach
From an industry perspective, similar to the heavy-duty-bus market, we are

seeing improving industry fundamentals in the motor coach market on the back
of a recovering U.S. economy, expanding urban markets, and the need for more
cost-effective transportation solutions. As such, we have seen annual industry
deliveries in North America increase by 8.5% Y/Y in 2014 to 1,920 units with
New Flyer expecting annual coach delivery levels to trend at north of 2,000
units over the next four to five years.
72
Exhibit 9. Canada And U.S. Motor Coach Industry

Annual Coach Bus Deliveries In North America
2,500
2,300
2,100
1,900
1,700
1,500
1,300
1,100
900
700
500
2,048
1,862
1,747
1,431
1,772
1,681
1,439
1,302
1,769
1,920
2,096 2,070
2,278 2,243 2,205
1,430
1,142
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Estimates Increase And Taking Up

Price Target To $28.50; Reaffirming
SO Rating
We raised our 2016 EBITDA estimate from $148 million to $226 million
reflecting the acquisition of MCI. Our price target increases from C$24.00 to
C$28.50 and we maintain our Sector Outperformer rating. We continue to have
a favourable outlook on New Flyer reflecting improving bus industry
fundamentals, strong FCF generation, and the diversification of revenue stream.
Exhibit 10. Income Statement
F2013
Q1/F14
Q2/F14
Q3/F14
Q4/F14
F2014
Q1/F15
Q2/F15
Q3/F15
Q4/F15E
F2015E
F2016E
Revenue
$1,199,424
$323,865
$346,484
$360,762
$419,989
$1,451,100
$380,301
$375,012
$364,683
$404,970
$1,524,966
$2,243,160
Cost of Sales
$1,078,657
$293,851
$309,256
$326,482
$383,228
$1,312,817
$340,674
$326,581
$315,349
$358,639
$1,341,243
$1,961,374
Gross Profit
$120,767
$30,014
$37,228
$34,280
$36,761
$138,283
$39,627
$48,431
$49,334
$46,331
$183,723
$281,785
SGA
$26,082
$10,348
$10,262
$8,583
$1,725
$30,918
$8,213
$9,240
$13,057
$10,124
$40,634
$56,079
EBITDA
$94,685
$19,666
$26,966
$25,697
$35,036
$107,365
$31,414
$39,191
$36,277
$36,207
$143,089
$225,706
Amortization
$28,001
$7,718
$8,131
$10,012
$9,976
$35,837
$9,507
$9,845
$10,021
$9,913
$39,286
$62,519
FX loss (gain)
$118
$802
$387
$226
$132
$0
($1,455)
$688
$628
$0
($139)
$0
Operating Earnings
$66,566
$11,146
$18,448
$15,459
$24,928
$69,981
$23,362
$28,658
$25,628
$26,294
$103,942
$163,187
Unrealized FX Loss
$2,146
$380
($1,000)
$117
($317)
$0
$1,914
($829)
$984
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$15,457
$762
$6,685
$2,561
$9,353
$19,361
$3,209
$4,846
$645
$0
$8,700
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
EBIT
$48,963
$10,004
$12,763
$12,781
$15,892
$51,440
$18,239
$24,641
$23,999
$26,294
$93,173
$163,187
Interest On Long-Term Debt
$8,749
$2,257
$2,257
$2,203
$2,180
$8,897
$2,334
$2,200
$2,161
$2,396
$9,635
$12,890
Accretion In Carrying Value Of Long-Term Debt
$2,208
$540
$549
$565
$575
$2,229
$584
$598
$609
$609
$2,400
$2,436
Other Interest And Bank Charges (Recovered)
$2,857
$823
$1,190
$713
$795
$3,521
$726
$602
$590
$600
$2,518
$2,400
$532
($314)
$377
($785)
($53)
($775)
$487
($310)
$128
$0
$0
$0
Interest Expense
$14,346
$3,306
$4,373
$2,696
$3,497
$13,872
$4,131
$3,090
$3,488
$3,605
$14,314
$27,259
EBT
$34,617
$6,698
$8,390
$10,085
$12,395
$37,568
$14,108
$21,551
$20,511
$22,689
$78,859
$135,929
Income Tax Expense
$7,856
$1,214
$4,827
($160)
$4,968
$10,849
$3,253
$9,181
$3,952
$7,838
$24,224
$48,362
Net Income
$26,761
$5,484
$3,563
$10,245
$7,427
$26,719
$10,855
$12,370
$16,559
$14,851
$54,635
$87,567
$0.81
$0.11
$0.18
$0.18
$0.30
$0.83
$0.24
$0.29
$0.31
$0.27
$1.14
$1.58
Income Statement (US$ 000)
Gain On Disposition Of PPE

Unusuals
Fair Value Adjustment To Other Liabilities, Class B And C Common Shares
Fair Market Value Adjustment On Cross-Currency Interest Rate Swap
FD EPS (ex-unusuals)
73
Price Target Calculation

We derive our C$28.50 price target by applying an ~8.5x EV/EBITDA multiple to
our 2016 EBITDA estimate and using pro-forma net debt. Our target multiple is
in line with New Flyers historical trading range given the longer-term positive
impact of heavy-duty bus demand and the companys leverage to an improving
U.S. economy.
Key Risks To Price Target

Competition: Several established players are continually battling New Flyer for
market share. Recently, several international firms entered the North American
bus market; however, the 60% content Buy American rules should limit the
potential impact from international competitors.
Government Budget And Funding Concerns: With the potential for greater
U.S. state budget cuts and with Canadian infrastructure stimulus having ceased
at the end of 2010, New Flyer management has highlighted some concerns
pertaining to the funding available to TAs throughout North America. An inability
of TAs to purchase buses could have a negative impact on future sales.
Labor Agreements: New Flyer has four collective labor agreements with two
different unions (CAW and CWA). The company experienced a major labor
disruption at its Winnipeg facility in 2006. There is always a risk that such an
event can occur again in the future, resulting in production delays and increased
costs.
Foreign Exchange Rates: New Flyer is exposed to changes in the C$/US$ rate,
in terms of revenue, operating costs, and financial obligations. New Flyer
engages in hedging practices to protect itself from changes in the value of the
C$/US$ exchange rate and by adjusting prices of its products by attempting to
anticipate, as closely as possible, the number of orders for the year (TAs
generally order buses one year in advance).
Raw Material And Component Costs: Raw materials and components
represent a majority of the costs in the manufacturing of buses. Nearly 92% of
New Flyers costs are variable costs. Additional costs are generally passed onto
customers through price adjustments. However, significant increases, or
fluctuations, in copper, resins or oil prices could affect margins.
74
Our EBITDA ($mln) estimates are shown below:
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Current
$31.4A
$39.2A
$36.3A
$36.2E
$143.1E
2016 Prior
--
--
--
--
$147.5E
2016 Current
--
--
--
--
$225.7E
10
75
IMPORTANT DISCLOSURES:
Analyst Certification: Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research
report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions
expressed herein accurately reflect such research analyst's personal views about the company and securities that are the
subject of this report and all other companies and securities mentioned in this report that are covered by such research
analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the
specific recommendations or views expressed by such research analyst in this report.
Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be
associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on
communications with a subject company, public appearances and trading securities held by a research analyst account.
Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets Corp./Inc. are
compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World
Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from
specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and
any member of his or her household from executing trades in the securities of a company that such research analyst
covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer,
director or advisory board member of a company that such analyst covers.
In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report,
CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the
securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures
set forth below, may at times give rise to potential conflicts of interest.
Important Disclosure Footnotes for New Flyer Industries Inc. (NFI)

CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking
services from New Flyer Industries Inc. in the next 3 months.
11
76
CIBC World Markets Corp./Inc. Stock Rating System

Abbreviation
Rating
Description
SO
Sector Outperformer
Stock is expected to outperform the sector during the next 12-18 months.
SP
Sector Performer
Stock is expected to perform in line with the sector during the next 12-18 months.
SU
Sector Underperformer
Stock is expected to underperform the sector during the next 12-18 months.
NR
Not Rated
CIBC World Markets does not maintain an investment recommendation on the stock.
Restricted
CIBC World Markets is restricted (due to potential conflict of interest) from rating the stock.
Stock Ratings
Sector Weightings (note: Broader market averages refer to S&P 500 in the U.S. and S&P/TSX Composite in Canada.)
O
Overweight
Sector is expected to outperform the broader market averages.
Market Weight
Sector is expected to equal the performance of the broader market averages.
Underweight
Sector is expected to underperform the broader market averages.
NA
None
Sector rating is not applicable.
"Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues.
Ratings Distribution*: CIBC World Markets Corp./Inc. Coverage Universe

(as of 10 Nov 2015)
Count
Percent
Sector Outperformer (Buy)
151
42.2%
Sector Performer (Hold/Neutral)
161
45.0%
38
10.6%
Sector Underperformer (Sell)
2.0%

Restricted
Inv. Banking Relationships
Count
Percent
146
96.7%
154
95.7%
Restricted
33
86.8%
100.0%
Ratings Distribution: Capital Equipment Coverage Universe

(as of 10 Nov 2015)
Count
Percent
100.0%
Restricted
Count
Percent
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Restricted
0.0%
Capital Equipment Sector includes the following tickers: NFI.

*Although the investment recommendations within the three-tiered, relative stock rating system utilized by CIBC World Markets
Corp./Inc.do not correlate to buy, hold and sell recommendations, for the purposes of complying with FINRA rules, CIBC World
Markets Corp./Inc. has assigned buy ratings to securities rated Sector Outperformer, hold ratings to securities rated Sector
Performer, and sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.
The distributions above reflect the combined historical ratings of CIBC World Markets Corp. and CIBC World Markets Inc.
Important disclosures required by applicable rules can be obtained by visiting CIBC World Markets on the web at
http://researchcentral.cibcwm.com. Important disclosures for each issuer can be found using the "Coverage" tab on the
top left of the Research Central home page. Access to the system for rating investment opportunities and our
dissemination policy can be found at the bottom of each page on the Research Central website. These important
disclosures can also be obtained by writing to CIBC World Markets Corp., 425 Lexington Avenue, New York, NY 10017
(212-856-4000) or CIBC World Markets Inc.,161 Bay Street, 4th Floor, Toronto, ON M5H 2S8, Attention: Research
Disclosures Request.
12
77
CIBC World Markets Corp./Inc. Price Chart
HISTORICAL PERFORMANCE OF CIBC WORLD MARKETS CORP./INC. RECOMMENDATIONS FOR NEW FLYER
INDUSTRIES INC. (NFI)
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
05/08/2015
07/15/2015
08/07/2015
09/20/2015
11/04/2015
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
14.69
15.77
17.88
18.85
20.32
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SO
SO
SO
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
15.75
16.50
19.50
22.00
24.00
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
The chart above reflects the combined historical recommendations of CIBC World Markets Corp. and CIBC World Markets
Inc.
13
78
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Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential
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Legal Disclaimer (Continued)

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15
80
RESEARCH ALERT
NFI | TSX
$21.23
Rating: Outperform
Announces Acquisition of MCI
November 10, 2015

Managing Director
647.776.8246

647.776.8245
Acquisition of MCI: New Flyer announced that the company has entered into a
definitive agreement to acquire Motor Coach Industries International Inc. (MCI)
from an affiliate of KPS Capital L.P. The purchase price of $455mm represents an
implied multiple of 6.0x 2015e EBITDA. Management expects the transaction to
close by the end of 2015 subject to customary closing conditions. Based on YTD
revenues to Q3/15 for MCI of $443mm, we estimate the combined business
operates at a ~13% EBITDA margin.
Committed Financing in Place: The transaction is expected to be funded through a

new $825mm senior secured credit facilities comprising of a four year maturity of a
$482mm term loan and a US$343mm revolver. Management expects the revolver to
be ~$135mm drawn which would represent a pro forma debt to Adjusted EBITDA
of ~3.0x at closing assuming the outstanding debentures are treated as equity.
About MCI: MCI is a leading motor coach manufacturer and parts and service
supplier in North America with an installed base of ~28,000 units and a 42% motor
coach market share. For the nine months ended September 30, 2015, MCI delivered
576 new coaches (EU), representing ~$315mm in revenue with aftermarket parts
and service business contributing ~$128mm.
Rationale: The acquisition of MCI diversifies NFIs product offering by not only
providing significant exposure to the private coach industry but also materially
expanding NFIs aftermarket parts and service business. The transaction is expected
to be highly accretive to EPS and free cash flow per share before synergies. The
combined entity will employ~$4,800 people and support an installed base of over
42,000 transit buses and 28,000 motor coaches across North America. The company
is targeting annual synergies of ~$10mm expected to be realized through
operational initiatives and rationalization of corporate costs. We note MCIs
manufacturing locations are closely aligned with NFIs in both US and Canada with
the company having over 3,000 approved independent service locations to support
their fleet. MCI also provides exclusive sales and service support for Daimlers
Setra coaches in Canada and the US.
Announces Increase in Dividend: With the closing of the acquisition, New Flyer
intends to increase dividends by 12.9% from C$0.62 to C$0.70 per share. The
company has also moved from a monthly to a quarterly payment schedule.
Expect News To Be Well Received: We expect the news of the acquisition to be

well received by investors. The company has scheduled a conference call today at
2:00pm ET (1-888-231-8191) where we expect management to provide further
details with respect to the acquisition.
81
Combined Manufacturing, Parts & Service Footprint
Figure 1 - Combined Manufacturing, Parts & Service Footprint

MCI Overview
Figure 2 - MCI Overview

82

NFI
C$21.23
Rating:
Outperform
12 Month Target:
C$26.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
62%
25%
Sector Perform
24%
10%
Underperform
2%
0%
Speculative Buy
3%
0%
Restricted
2%
50%
Not Rated
5%
0%
Tender
3%
0%
100%
19%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
83
Direct
__________________________________________________________________________________________________________

E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
84
November 9, 2015
Bert Powell, CFA
(NFI-TSX)
Rating:
Target Price:
Price (6-Nov):
Market Perform
$22.00 Total Return: 13%
$20.00
Adel Kanso
BMO Nesbitt Burns Inc.
adel.kanso@bmo.com
Higher-Than-Anticipated EBITDA per EU; Market

Fundamentals Continue to Improve
416-359-6193
New Flyer Industries Inc (NFI)

Price: High,Low,Close
Earnings/Share
20
Event
New Flyer (NFI) reported Q3/15 EPS of $0.29, above our expectations and the
mean estimate of $0.22. Revenue was up 1% y/y to $365 million, below our
expectations and the mean estimate of $373 million. Adj. EBITDA margin was up
280bps y/y to 9.9%, above our expectations of 8.5% and the mean estimate of 8.0%.
Valuation & Recommendation

We continue to rate NFI shares Market Perform. We increased our target price
to C$22.00 (US$16.50) from C$19.00 (US$14.50) based on 7.0x our 2017E
EBITDA. This implies ~3% dividend yield.
Annual EPS
2015E $0.88 to $1.00
2016E $1.05 to $1.07
0.5
10
0.0
-0.5
-1.0
Volume (mln)
NFI posted better-than-expected results from increased profitability in both the

Bus Manufacturing and Aftermarket businesses. In the Aftermarket business this
was the first quarter after the end of the CTA rebuild program, so revenues fell as
expected, but profitability improved. Margins this quarter looked more in line with
historical levels, and future streamlining could improve margins further, but it
wont be until well into 2016 before we see the benefits. This is the second quarter
in a row where EBITDA per bus is well above $30K and has averaged $32k per
bus in the first nine months of 2015 compared to $16K per bus (excluding the
inclusion of investment tax credits) in the first nine months of 2014, up 100% y/y.
Management had noted that lower margins in 2014 should start to dissipate in
2015 as low margin bookings from the 2008/2009 time period get worked off and
they realize on the $16.5 million annual savings from platform rationalization. We
did not expect a 100% improvement in EBITDA y/y in the first nine months. This
$30 million improvement is well in excess of the platform rationalization cost
saving plan, and while it also reflects the attrition of low-margin business, it was
noted as being positively impacted by product mix. Looks like Bus Manufacturing
segment profitability is sustainable for the next quarter or so, but we would expect
it to mean revert at some point, and the risk is that it may be a reality check for the
stock when it does.
Annual CFPS
2015E $1.58 to $1.57
2016E $1.59 to $1.74
Quarterly EPS
Q4/15E $0.24 to $0.28
1.5
1.0
15
Impact & Analysis
Changes
416-359-5301

bert.powell@bmo.com
0
NFI Relative to S&P/TSX Comp
400
400
200
0
200
2012
2013
2014
2015
Last Data Point: November 6, 2015
(FY-Dec.)
EPS
P/E
CFPS
P/CFPS
Rev. ($mm)
EV ($mm)
EBITDA ($mm)
EV/EBITDA
2014A
$0.48
2015E
$1.00
20.0x
2016E
$1.07
18.7x
2017E
$1.22
16.4x
$1.46
$1.57
12.7x
$1.74
11.5x
$1.88
10.6x
$1,451
$1,000
$91
10.9x
$1,538
$1,058
$136
7.8x
$1,579
$1,022
$140
7.4x
Q3
$0.18
$0.30a
$0.28
$1,605
$960
$148
6.5x
Quarterly EPS
2014A
2015E
2016E
Q1
$0.10
$0.20a
$0.24
Q2
$0.06
$0.22a
$0.26
Q4
$0.13
$0.28
$0.29
Dividend
Book Value
Shares O/S (mm)
Float O/S (mm)
Wkly Vol (000s)
Net Debt ($mm)
$0.62
$8.54
55.5
43.9
456
$247
Yield
3.1%
Price/Book
1.8x
Mkt. Cap (mm)
$1,110
Float Cap (mm)
$878
Wkly $ Vol (mm)
$7.3
Next Rep. Date February (E)
Notes: Share price, target & capitalization in C$, all others US$
Major Shareholders: Marcopolo S.A. (20.0%), Coliseum Capital
(11.1%), Mawer (7.1%), QV Investors (6.5%)
First Call Mean Estimates: NEW FLYER INDUSTRIES INC (US$)
2015E: $0.84; 2016E: $1.10; 2017E: $1.25
Target
$19.00 to $22.00
This report was prepared by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under
FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 8 to 10.
85
BMO Capital Markets
Details & Analysis
New Flyer (NFI) reported Q3/15 EPS of $0.29, above our expectations and the mean estimate
of $0.22. So far in 2015 it appears that the product rationalization plans and industry
fundamentals have enabled NFI to beat expectations and improve the margins.
Total revenue was up 1% y/y to $365 million, below our expectations and the mean estimate
of $373 million. Bus deliveries were up 1% y/y to 625 equivalent units (EUs), while the
average EU selling price was up 4% y/y to $469k.
Adj. EBITDA margin was up 280bps y/y to 9.9%, above our expectations of 8.5% and the
mean estimate of 8.0%. Adj. EBITDA per EU was ~$35k this quarter, up from ~$20k per EU
same period last year.) This is the second quarter in a row were NFI has booked higher-thananticipated EBITDA per EU. The increase was mainly driven by the sales mix and
operational improvement initiatives. The aftermarket segment EBITDA margin has also
improved by 450bps y/y to 20.5% mainly due to improved market fundamentals and product
mix.
NFI expects its core aftermarket parts revenue to grow by 5% in 2015. The company is also
looking to identify cost-cutting initiatives in this business to improve the margin.
Management has said that margins should be higher in 2015 after working through some
lower-margin backlog and cost initiatives. Management continues to expect its operational
improvements to more than offset the benefits of the ITCs that were included in EBITDA last
year.
Page 2 November 9, 2015
86
BMO Capital Markets
Variance Analysis
Estimate
Q3/15
Actual
Q3/15
Variance
Actual
Q2/15
Actual
Q3/14
Q/Q
% Chg
Y/Y
% Chg
Bus Manufacturing
Aftermark et Operations
300.0
73.2
293.0
71.7
(7.0)
(1.5)
285.8
89.2
278.7
82.0
2.5%
-19.6%
5.1%
-12.6%
Revenues
373.2
364.7
(8.5)
375.0
360.8
-2.8%
1.1%
Cost of Sales
% of revenues
321.7
86.2%
305.3
83.7%
(16.4)
-2.5%
316.7
84.5%
316.5
87.7%
Gross Profit
% of revenues
51.5
13.8%
59.4
16.3%
7.9
2.5%
58.3
15.5%
44.3
12.3%
1.9%
70 bps
34.0%
400 bps
Sales, general and admin. expenses

% of revenues
Foreign Exchange (gains) Losses
19.8
5.3%
0.0
23.7
6.5%
0.6
3.9
1.2%
0.6
23.9
6.4%
0.7
21.2
5.9%
0.2
EBITDA
% of revenues
31.7
8.5%
35.0
9.6%
3.3
1.1%
33.7
9.0%
22.9
6.4%
4.0%
60 bps
52.8%
320 bps
ITCs
Other
Adjusted EBITDA
% of revenues
$0.0
$0.0
31.7
8.5%
$0.0
$1.3
36.3
9.9%
0.0
1.3
4.6
1.5%
$0.0
$1.8
35.5
9.5%
$2.4
$0.4
25.7
7.1%
2.2%
50 bps
41.2%
280 bps
Depreciation of Property and Equipment

% of revenues
Amortization of Intangible Assets
% of revenues
Unrealized FX loss
4.5
1.2%
5.0
1.3%
0.0
4.7
1.3%
5.4
1.5%
1.0
0.1
0.1%
0.4
0.1%
1.0
4.5
1.2%
5.4
1.4%
(0.8)
4.6
1.3%
5.4
1.5%
0.1
EBIT
% of revenues
Net Interest Expense
Other Expense
22.2
6.0%
3.4
0.0
24.0
6.6%
3.5
0.0
1.8
0.6%
0.1
0.0
24.6
6.6%
3.1
0.0
12.8
3.5%
3.5
(0.8)
-2.6%
0 bps
87.8%
300 bps
18.8
5.0%
6.2
33.0%
20.5
5.6%
4.0
19.3%
1.7
0.6%
(2.2)
-13.7%
21.6
5.7%
9.2
42.6%
10.1
2.8%
(0.2)
-1.6%
-4.8%
-10 bps
103.4%
280 bps
Net Income
% of revenues
12.6
3.4%
16.6
4.5%
4.0
1.2%
12.4
3.3%
10.2
2.8%
33.9%
120 bps
61.6%
170 bps
Reported EPS (basic)

Reported EPS (fully diluted)
$0.23
$0.22
$0.30
$0.29
$0.07
$0.07
$0.22
$0.21
$0.18
$0.19
33.8%
37.3%
61.5%
56.5%
WA Shares Outstanding (fully diluted)
55.9
55.5
(0.4)
55.9
55.5
Bus Manufacturing EBITDA

% of revenues
Aftermarket Operations EBITDA
% of revenues
Adjusted EBITDA
% of revenues
18.9
6.3%
12.8
17.5%
31.7
8.5%
21.6
7.4%
14.7
20.5%
36.3
9.9%
2.7
1.1%
1.9
3.0%
4.6
1.5%
22.4
7.8%
16.8
18.8%
39.2
10.5%
12.6
4.5%
13.1
16.0%
25.7
7.1%
-3.6%
-50 bps
-12.6%
170 bps
-7.4%
-50 bps
72.1%
290 bps
11.7%
440 bps
41.2%
280 bps
Adjusted EPS (Fully Diluted)
$0.22
$0.29
$0.07
$0.21
$0.19
37.3%
56.5%

US$ millions except per share data
EBT
% of revenues
Income Taxes
Tax Rate as % of EBT
Source: BMO Capital Markets, Company Reports
87
BMO Capital Markets
Revised Estimates
BMO CM Estimates
Current
Mean
Previous
(US$ millions,
except per share data)
2015
2016
2017
2015
2016
Bus Manufacturing
Current
2015
2016
2017
$1,213
$1,266
$1,276
$1,182
$1,217
y/y%
7.1%
4.4%
0.8%
4.4%
3.0%
Aftermarket Operations
$325
$313
$329
$326
$315
y/y%
Total Revenue
y/y%
1.8%
$1,538
6.0%
-3.7%
$1,579
2.7%
5.0%
$1,605
1.6%
2.3%
$1,509
4.0%
-3.6%
$1,532
1.6%
$1,531
5.5%
$1,584
3.4%
$1,646
3.9%
Bus Manufacturing
y/y%
y/y%
Other
Total EBITDA
% of revenue
$82
6.7%
$63
19.4%
-$8.6
$136
8.9%
$76
6.0%
$63
20.2%
$0.0
$140
8.9%
$79
6.2%
$69
21.0%
$0.0
$148
9.2%
$75
6.4%
$59
18.2%
-$7.3
$127
8.4%
$75
6.2%
$55
17.5%
$0.0
$130
8.5%
$134
8.7%
$140
8.8%
$151
9.2%
EBIT
% of revenue
$95
6.2%
$102
6.5%
$111
6.9%
$88
5.8%
$100
6.5%
$84
5.5%
$109
6.9%
$104
6.3%
EBT
% of revenue
$81
5.2%
$89
5.6%
$101
6.3%
$74
4.9%
$87
5.7%
Net Income
% of revenue
$56
3.7%
$60
3.8%
$68
4.2%
$49
3.2%
$59
3.8%
EPS - Basic
$1.01
$1.08
$1.22
$0.88
$1.05
$0.84
$1.11
$1.25
Source: BMO Capital Markets; Thomson One
Up/Down Scenario
Downside
$16.00
-17%
Current
Price
Target
Price
Upside
$20.00
$22.00
+13%
$27.00
+38%
88
BMO Capital Markets
Downside
Base Case
Upside
Share Price
$17.00
$22.00
$27.00
Total Return
-12%
13%
38%
EV/EBITDA multiple
6.5x
7.0x
7.5x
$1.32
0.0%
$1.32
0.0%
$1.32
0.0%
Deliveries (EUs)
y/y % growth
Avg. Revenue Per EU (000s)
y/y % growth
Bus Manufacturing
y/y % growth
2,481
-3.0%
$480.0
-3.0%
$1,191
-5.9%
2,552
-0.2%
$500
1.0%
$1,276
0.8%
$2,609.0
2.0%
$510.0
3.0%
$1,331
5.1%
y/y % growth
Total Revenues
y/y % growth
$319.3
2.0%
$1,510
-4.4%
$328.7
5.0%
$1,605
1.6%
$334.9
7.0%
$1,665
5.5%
Adj. EBITDA - Bus Manufacturing

% of bus manufacturing
Adj. EBITDA - Aftermarket
% of aftermarket
EBITDA
% of revenues
EBITDA Per EU (000s)
$66
5.6%
$61
19.0%
$127
8.4%
$26.7
$79
6.2%
$69
21.0%
$148
9.2%
$31.0
$91
6.9%
$74
22.0%
$165
9.9%
$35.0
EBIT
% of revenues
$90
6.0%
$111
6.9%
$128
7.7%
Net income
% of revenues
$54
3.6%
$68
4.2%
$79
4.8%
W.A. shares outstanding - basic
55.5
55.5
55.5
EPS - Reported
$0.97
$1.22
$1.43
FFO Exc W.C.

Capex
Free Cash Flow
Cash
Long-term Debt
$90
-$10
$80
$35
$163
$105
-$10
$95
$49
$163
$116
-$10
$106
$60
$163
NFI:TSX
Daily close : $20.0
2017E - US$ million

US$/CA$ FX rate
y/y % change
Source: BMO Capital Markets
89
BMO Capital Markets
Historical and Forecasted Results

INCOME STATEMENT
2015E
Year end: December

In millions of US$
2013
2014
US$/CA$ FX rate
y/y%
$1.04
3.5%
$1.10
6.3%
Deliveries (EUs)
y/y%
Avg. revenue per EU (000s)
y/y%
2,191
32.3%
$447
-1.1%
Bus Manufacturing
y/y%
y/y%
Revenues
y/y%
Cost of Sales
% of revenues
Gross profit
% of revenues
% of revenues
Foreign exchange losses (gains)
% of net revenues
Q1
Q2
Q3
2016E
2017E
Q4E
2015E
Q1E
Q2E
Q3E
Q4E
2016E
Q1E
Q2E
Q3E
Q4E
2017E
$1.25 $1.23 $1.30

13.7% 12.9% 18.8%
$1.32
15.7%
$1.27
15.8%
$1.32
5.1%
$1.32
7.0%
$1.32
1.6%
$1.32
0.0%
$1.32
3.4%
$1.32
0.0%
$1.32
0.0%
$1.32
0.0%
$1.32
0.0%
$1.32
0.0%
2,437
11.2%
$463
3.7%
572
3.2%
$508
12.2%
594
2.1%
$481
5.3%
625
0.6%
$469
4.4%
693
2.0%
$495
0.0%
2,484
1.9%
$488
5.4%
616
7.6%
$495
-2.6%
618
4.0%
$495
2.9%
642
682
2.8% -1.6%
$495 $495
5.6% 0.0%
2,558
3.0%
$495
1.4%
593
-3.6%
$500
1.0%
633
2.5%
$500
1.0%
650
676
1.2% -0.9%
$500 $500
1.0% 1.0%
2,552
-0.2%
$500
1.0%
984.4 1,132.1
31.8% 15.0%
215.0
319.0
81.7% 48.4%
1,199.4 1,451.1
38.6% 21.0%
1,078.7 1,312.8
89.9% 90.5%
120.8
138.3
10.1%
9.5%
69.5
81.3
5.8%
5.6%
0.1
1.5
0.0%
0.1%
63.6
57.4
290.7
15.9%
89.6
22.8%
380.3
17.4%
340.7
89.6%
39.6
10.4%
20.9
5.5%
(1.5)
-0.4%
14.7
285.8
7.5%
89.2
10.6%
375.0
8.2%
326.6
87.1%
48.4
12.9%
23.9
6.4%
0.7
0.2%
22.4
293.0
5.1%
71.7
-12.6%
364.7
1.1%
315.3
86.5%
49.3
13.5%
23.7
6.5%
0.6
0.2%
21.6
318.0
8.5%
75.3
5.0%
393.3
7.8%
341.6
86.9%
51.7
13.1%
25.2
6.4%
0.0
0.0%
20.4
337.6 1,266.1
-1.6%
4.4%
78.1
313.0
5.0%
-3.7%
415.8 1,579.1
-0.4%
2.7%
364.0 1,382.1
87.5% 87.5%
51.8
197.0
12.5% 12.5%
24.1
94.7
5.8%
6.0%
0.0
0.0
0.0%
0.0%
20.9
76.4
296.6
-2.7%
84.0
5.0%
380.6
-1.1%
333.6
87.7%
47.0
12.3%
22.1
5.8%
0.0
0.0%
16.6
316.4
3.5%
83.6
5.0%
400.0
3.8%
347.9
87.0%
52.1
13.0%
24.0
6.0%
0.0
0.0%
19.8
324.9
2.2%
79.1
5.0%
404.0
2.7%
349.5
86.5%
54.5
13.5%
25.9
6.4%
0.0
0.0%
21.1
338.0 1,276.0
0.1%
0.8%
82.0
328.7
5.0%
5.0%
420.0 1,604.6
1.0%
1.6%
365.8 1,396.8
87.1% 87.1%
54.2
207.8
12.9% 12.9%
24.4
96.3
5.8%
6.0%
0.0
0.0
0.0%
0.0%
21.6
79.1
7.8%
16.8
6.4%
15.4
6.5%
16.6
343.2 1,212.7 304.8 305.7

1.9%
7.1%
4.8%
7.0%
74.4
324.9
80.0
79.6
-10.8% 1.8% -10.8% -10.8%
417.6 1,537.6 384.7 385.3
-0.6%
6.0%
1.2%
2.8%
365.4 1,348.0 340.0 336.6
87.5% 87.7% 88.4% 87.3%
52.2
189.6
44.8
48.8
12.5% 12.3% 11.6% 12.7%
24.2
92.8
21.5
23.9
5.8%
6.0%
5.6%
6.2%
0.0
(0.1)
0.0
0.0
0.0%
0.0%
0.0%
0.0%
23.0
81.7
16.8
18.3
% of bus manufacturing revenues

Adj. EBITDA - Aftermarket
6.5%
31.0
5.1%
50.0
5.1%
16.7
7.4%
14.7
6.7%
14.9
6.7%
63.0
5.5%
16.0
6.0%
15.9
6.2%
16.0
6.0%
63.4
5.6%
17.6
6.3%
17.6
6.4%
17.2
6.2%
69.0
% of aftermarket revenue
One time items (expenses)
14.4%
(15.6)
15.7%
(16.1)
18.6% 18.8% 20.5%

(1.8)
(5.5)
(1.3)
20.0%
0.0
19.4%
(8.6)
20.0%
(0.0)
20.0% 20.5% 20.5%

(0.0)
0.0
0.0
20.2%
(0.0)
21.0%
0.0
21.0% 21.0% 21.0%

0.0
0.0
0.0
21.0%
0.0
EBITDA
% of revenues
EBITDA Per EU (000s)
79.1
6.6%
29.1
91.3
6.3%
23.5
29.7
7.8%
25.8
33.7
9.0%
37.7
35.0
9.6%
34.6
37.9
9.1%
33.2
136.2
8.9%
32.9
32.8
8.5%
27.2
34.3
8.9%
29.7
35.8
9.1%
31.7
36.9
8.9%
30.7
139.8
8.9%
29.9
34.2
9.0%
28.0
37.3
9.3%
31.3
37.7
9.3%
32.5
38.9
9.3%
32.0
148.2
9.2%
31.0
Depreciation of property and equipment

% of revenues
Amortization of intangible assets
% of revenues
Other income
EBIT
% of revenues
Net interest expense
% of revenues
EBT
% of revenues
Income taxes
Tax rate as % of EBT
Net incom e
% of revenues
9.6
0.8%
18.4
1.5%
2.1
49.0
4.1%
14.3
1.2%
34.6
2.9%
7.9
23%
26.8
2.2%
$0.52
$0.49
15.4
1.1%
20.5
1.4%
4.0
51.4
3.5%
13.9
1.0%
37.6
2.6%
10.8
29%
26.7
1.8%
$0.48
$0.48
4.2
1.1%
5.3
1.4%
1.9
18.2
4.8%
4.1
1.1%
14.1
3.7%
3.3
23%
10.9
2.9%
$0.20
$0.19
4.5
1.2%
5.4
1.4%
(0.8)
24.6
6.6%
3.1
0.8%
21.6
5.7%
9.2
43%
12.4
3.3%
$0.22
$0.21
4.7
1.3%
5.4
1.5%
1.0
24.0
6.6%
3.5
1.0%
20.5
5.6%
4.0
19%
16.6
4.5%
$0.30
$0.29
4.6
1.1%
5.4
1.3%
0.0
27.9
6.7%
3.4
0.8%
24.5
5.9%
8.1
33%
16.4
3.9%
$0.30
$0.28
17.9
1.2%
21.4
1.4%
2.1
94.8
6.2%
14.2
0.9%
80.7
5.2%
24.5
30%
56.2
3.7%
$1.01
$0.98
4.3
1.1%
5.3
1.4%
0.0
23.2
6.0%
3.4
0.9%
19.9
5.2%
6.6
33%
13.3
3.5%
$0.24
$0.23
4.1
1.1%
5.3
1.4%
0.0
24.9
6.5%
3.3
0.9%
21.6
5.6%
7.1
33%
14.4
3.7%
$0.26
$0.25
4.0
1.0%
5.3
1.3%
0.0
26.5
6.7%
3.3
0.8%
23.2
5.9%
7.7
33%
15.6
4.0%
$0.28
$0.27
4.0
1.0%
5.3
1.3%
0.0
27.7
6.7%
3.2
0.8%
24.5
5.9%
8.1
33%
16.4
3.9%
$0.30
$0.28
16.5
1.0%
21.0
1.3%
0.0
102.3
6.5%
13.2
0.8%
89.1
5.6%
29.4
33%
59.7
3.8%
$1.08
$1.04
4.1
1.1%
5.3
1.4%
0.0
24.9
6.5%
3.2
0.8%
21.7
5.7%
7.2
33%
14.6
3.8%
$0.26
$0.25
4.0
1.0%
5.3
1.3%
0.0
28.1
7.0%
2.7
0.7%
25.5
6.4%
8.4
33%
17.1
4.3%
$0.31
$0.30
3.9
1.0%
5.3
1.3%
0.0
28.6
7.1%
2.2
0.5%
26.5
6.6%
8.7
33%
17.7
4.4%
$0.32
$0.32
3.8
0.9%
5.3
1.2%
0.0
29.9
7.1%
2.2
0.5%
27.7
6.6%
9.1
33%
18.6
4.4%
$0.33
$0.33
15.7
1.0%
21.0
1.3%
0.0
111.5
6.9%
10.1
0.6%
101.4
6.3%
33.4
33%
67.9
4.2%
$1.22
$1.20
Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted
55.5
62.3
55.5
61.1
55.5
61.4
55.9
61.3
55.5
59.9
55.5
60.0
55.5
60.5
55.5
60.0
55.5
60.0
55.5
60.0
55.5
60.0
55.5
60.0
55.5
60.0
55.5
60.0
55.5
55.5
55.5
55.5
55.5
57.6
Adjusted EBITDA - Exc. ITCs

% of revenues
Adjusted EBITDA Per EU - Exc. ITCs (000s)
y/y%
$71.0
5.9%
$25.3
3.0%
$139.8
8.9%
$29.9
-9.0%
$34.2
9.0%
$28.0
2.8%
$37.3
9.3%
$31.3
5.2%
$37.7
9.3%
$32.5
2.6%
$38.9
9.3%
$32.0
4.3%
$148.2
9.2%
$31.0
3.8%
$79.6
$29.5
5.5%
7.8%
$18.7
$25.5
-26.1% 108.6%
$33.7 $35.0 $37.9

9.0% 9.6%
9.1%
$37.7 $34.6 $33.2
96.9% 111.2% 28.4%
$136.0
8.8%
$32.8
75.3%
$32.8 $34.3
8.5%
8.9%
$27.2 $29.7
6.9% -21.3%
$35.8 $36.9
9.1% 8.9%
$31.7 $30.7
-8.4% -7.5%
Source: BMO Capital Markets Estimates, Company Reports
90
BMO Capital Markets
CASH FLOW STATEMENT

2015E
In millions of US$
2016E
2013
2014
Q1
Q2
Q3
Q4E
2015E
2016E
Q1E
Q2E
Q3E
Q4E
2016E
Q1E
Q2E
Q3E
Q4E
2017E
Operating activities
Net income
Deferred income taxes
Other
Cash Provided From Operations
Changes in non-cash w orking capital items
27
27
11
12
17
16
56
13
14
16
16
60
15
17
18
19
68
28
(11)
9
53
(23)
30
36
(1)
20
81
(35)
46
10
1
3
24
5
29
10
(7)
5
20
(42)
(23)
10
(10)
2
18
(6)
12
10
0
0
26
16
43
39
(35)
9
70
(28)
42
10
0
0
23
22
45
9
0
0
24
14
38
9
0
0
25
(10)
15
9
0
0
26
(49)
(24)
37
0
0
97
(24)
74
9
0
0
24
48
72
9
0
0
26
4
30
9
0
0
27
(8)
19
9
0
0
28
(46)
(19)
37
0
0
105
(3)
102
Financing activities
Long-term debt (net of repayments)
Issue (repayment) of capital lease
Proceeds from share issue
Dividends on common shares
Share repurchases
Other
Cash Provided From Financing
13
(2)
114
(29)
0
(2)
93
5
(2)
0
(30)
0
(3)
(29)
(27)
(0)
0
(7)
0
0
(34)
35
(0)
0
(7)
0
(2)
26
(4)
(1)
0
(7)
0
0
(11)
(5)
(1)
0
(7)
0
0
(12)
(1)
(2)
0
(27)
0
(2)
(31)
(5)
(1)
0
(7)
0
0
(12)
(5)
(1)
0
(7)
0
0
(12)
(5)
(1)
0
(7)
0
0
(13)
(5)
(1)
0
(7)
0
0
(13)
(20)
(2)
0
(27)
0
0
(49)
0
(1)
0
(7)
0
0
(8)
(61)
(1)
0
(7)
0
0
(69)
0
(1)
0
(8)
0
0
(8)
0
(1)
0
(8)
0
0
(8)
(61)
(2)
0
(30)
0
0
(93)
(15)
(102)
0
(6)
(123)
0
1
11
12
(11)
0
0
(0)
(11)
(0)
6
12
17
(4)
0
0
(0)
(4)
(0)
(10)
17
8
(2)
0
0
(0)
(2)
(0)
1
8
9
(2)
(0)
0
0
(2)
(1)
(2)
9
7
(2)
0
0
0
(2)
0
29
7
35
(10)
(0)
0
(0)
(10)
(1)
(1)
17
17
(3)
0
0
0
(3)
0
30
35
65
(3)
0
0
0
(3)
0
23
65
89
(3)
0
0
0
(3)
0
(0)
89
88
(3)
0
0
0
(3)
0
(39)
88
49
(10)
0
0
0
(10)
0
14
35
49
(3)
0
0
0
(3)
0
61
49
111
(3)
0
0
0
(3)
0
(41)
111
70
(3)
0
0
0
(3)
0
8
70
78
(3)
0
0
0
(3)
0
(29)
78
49
(10)
0
0
0
(10)
0
(1)
49
49
2013
2014
Q1
Q2
Q3
Q4E
2015E
Q1E
Q2E
Q3E
Q4E
2016E
Q1E
Q2E
Q3E
Q4E
2017E
Cash
Accounts receivable
Inventories
Other
Total Current Assets
12
230
183
8
433
17
212
230
6
465
8
187
232
4
430
9
189
242
4
444
7
218
240
4
468
35
239
221
4
498
35
239
221
4
498
65
211
232
4
512
89
178
233
4
503
88
194
238
4
525
49
242
240
4
535
49
242
240
4
535
111
209
227
4
551
70
185
241
4
499
78
200
244
4
525
49
245
241
4
538
49
245
241
4
538
Fixed assets
Intangible assets
Unused ITC
Goodw ill
Other
Total Assets
65
357
212
55
14
1,136
64
332
0
213
62
0
1,136
64
326
0
213
68
0
1,101
64
321
0
213
69
0
1,111
64
316
0
213
75
0
1,135
61
310
0
213
75
0
1,157
59
305
0
213
75
0
1,164
58
300
0
213
75
0
1,148
56
295
0
213
75
0
1,163
54
289
0
213
75
0
1,167
53
284
0
213
75
0
1,176
51
279
0
213
75
0
1,117
50
274
0
213
75
0
1,137
49
268
0
213
75
0
1,143
Accounts payable and accrued liabilities

Deferred revenue
Provision for w arranty costs
Current portion of long-term debt
Other
Total Current Liabilities
213
58
26
35
3
334
233
41
32
40
8
354
226
23
35
13
20
318
202
18
40
48
12
320
203
22
42
44
14
326
221
22
42
44
14
343
221
22
42
44
14
343
226
22
42
44
14
349
208
22
42
44
14
330
220
22
42
44
14
342
220
22
42
44
14
342
220
22
42
44
14
342
222
22
42
44
14
344
215
22
42
44
14
337
225
22
42
44
14
348
221
22
42
44
14
344
221
22
42
44
14
344
Accrued benefit liabilities

Future income taxes
Long term debt
IDS subordinated notes
Other
Total Liabilities
0
115
225
0
6
681
1
108
207
0
13
683
1
106
208
0
12
644
4
103
202
0
20
648
4
100
202
0
30
661
4
100
197
0
29
673
4
100
197
0
29
673
4
100
192
0
29
673
4
100
187
0
28
650
4
100
182
0
28
656
4
100
177
0
27
651
4
100
177
0
27
651
4
100
177
0
27
652
4
100
116
0
26
583
4
100
116
0
26
593
4
100
116
0
25
589
4
100
116
0
25
589
589
(126)
1,111
590
(116)
1,135
590
(106)
1,157
590
(91)
1,148
590
(83)
1,163
590
(74)
1,167
590
(56)
1,117
590
(46)
1,137
590
(35)
1,143
590
(35)
1,143
Investing activities
Purchase of property, plant and equipment
Business acquisitions
Dispositions of property, plant and equipment
Other
Cash Used for Investing
Effect of FX translation on cash
Change in Cash
Beginning Cash Balance (Deficit)
Ending Cash Balance (Deficit)
BALANCE SHEET
2015E
In millions of US$
Share capital
Retained earnings
Total Liabilities & Shareholders' Equity
588
(133)
1,136
588
589
(136) (131)
1,136 1,101
2016E
61
310
0
213
75
0
1,157
590
590
(106) (99)
1,157 1,164
2017E
54
289
0
213
75
0
1,167
590
590
(74) (66)
1,167 1,176
49
268
0
213
75
0
1,143
91
BMO Capital Markets

Target Price
Share Price
Quarterly Price
25
20
20
18
18
16
16
14
14
12
12
10
10
25
20
20
15
15
10
10
2) Mkt
1) NR
5
NFI Relative to S&P/TSX Comp.
NFI Relative to Machinery
600
600
500
500
400
400
300
300
200
200
100
2000
2005
2010
400
200
200
1.0
200
600
400
2015
Revenue / Share
Price / Revenue
300

600
100
1995
2013
2014
2015
NFI Relative to S&P/TSX Comp. Y/Y (%)

NFI Relative to Machinery Y/Y (%)
200
200
0.5
100
-200
2013
0.0
EPS (4 Qtr Trailing)
Price / Earnings
2014
2015
-200
400
200
0
1995
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
2000
2005
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
0.73
25.8
2010
2015
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
84
10.8
16.5
0.62
4.2
3.3
1.8
ROE
%
3
6
6
NFI - Rating as of 27-Nov-12 = NR
1
2
Date
20-Feb-13
3-Jul-13
Rating Change
R to NR
NR to Mkt
Share Price
$9.94
$11.14
* Current EPS is the 4 Quarter Trailing to Q2/2015.

* Valuation metrics are based on high and low for the fiscal year.
* Range indicates the valuation range for the period presented above.
Last Price ( November 6, 2015): $20.00

Sources: IHS Global Insight, Thomson Reuters, BMO Capital Markets.
92
BMO Capital Markets
IMPORTANT DISCLOSURES
Analyst's Certification
I, Bert Powell, CFA, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I
also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this
report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their
affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating
new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA (exceptions:
Alex Arfaei and Brodie Woods). These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the
NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a
research analyst account.
Company Specific Disclosure
Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the
past 12 months.
Disclosure 6: This issuer is a client (or was a client) of BMO NB, BMO Capital Markets Corp., BMO CM Ltd. or an affiliate within the past 12 months:
Non-Securities Related Services.
Disclosure 13: A partner, director, officer, employee or agent of BMO Capital Markets is an officer, director, employee of, or serves in an advisory
capacity to, this issuer: Brian Tobin (Member of Board of Directors)
Methodology and Risks to Price Target/Valuation
Methodology: Our $22.00 target is based on 7.0x our 2017E EBITDA.
Risks: A significant portion of new transit bus purchases are funded from government sources. As long as federal, state/provincial and municipal
budgets remain under pressure, funding for new bus purchases could be reduced or eliminated. Other risks include: price volatility of raw materials,
warranty costs could be material, labour disruptions from its predominantly unionized workforce and customer contract issues (early termination,
deferral, non-renewal).
Distribution of Ratings (September 30, 2015)
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
42.2%
18.6%
54.7%
44.3%
56.9%
56.3%
Hold
Market Perform
54.3%
11.3%
42.7%
51.8%
40.9%
38.7%
Sell
Underperform
3.5%
11.1%
2.7%
3.9%
2.2%
5.0%
*
Reflects rating distribution of all companies covered by BMO Capital Markets Corp. equity research analysts.
**
Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking services as
percentage within ratings category.
***
Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking
services as percentage of Investment Banking clients.
**** Reflects rating distribution of all companies covered by BMO Capital Markets equity research analysts.
***** Reflects rating distribution of all companies from which BMO Capital Markets has received compensation for Investment Banking services as
percentage of Investment Banking clients.
Rating and Sector Key (as of April 5, 2013):
We use the following ratings system definitions:
OP = Outperform - Forecast to outperform the analysts coverage universe on a total return basis
Mkt = Market Perform - Forecast to perform roughly in line with the analysts coverage universe on a total return basis
Und = Underperform - Forecast to underperform the analysts coverage universe on a total return basis
(S) = speculative investment;
NR = No rating at this time;
R = Restricted Dissemination of research is currently restricted.
BMO Capital Markets' seven Top 15 lists guide investors to our best ideas according to different objectives (CDN Large Cap, CDN Small Cap, US
Large Cap, US Small cap, Income, CDN Quant, and US Quant have replaced the Top Pick rating).
Prior BMO Capital Markets Ratings System (January 4, 2010April 4, 2013):
http://researchglobal.bmocapitalmarkets.com/documents/2013/prior_rating_system.pdf
Other Important Disclosures
For
Other
Important
Disclosures
on
the
stocks
discussed
in
this
report,
please
go
to
http://researchglobal.bmocapitalmarkets.com/Public/Company_Disclosure_Public.aspx or write to Editorial Department, BMO Capital Markets, 3
Times Square, New York, NY 10036 or Editorial Department, BMO Capital Markets, 1 First Canadian Place, Toronto, Ontario, M5X 1H3.
93
BMO Capital Markets
Dissemination of Research
BMO
Capital
Markets
Equity
Research
is
available
via
our
website
https://researchca.bmocapitalmarkets.com/Public/Secure/Login.aspx?ReturnUrl=/Member/Home/ResearchHome.aspx. Institutional clients may also receive our
research via Thomson Reuters, Bloomberg, FactSet, and Capital IQ. Research reports and other commentary are required to be simultaneously
disseminated internally and externally to our clients.
General Disclaimer
BMO Capital Markets is a trade name used by the BMO Investment Banking Group, which includes the wholesale arm of Bank of Montreal and its
subsidiaries BMO Nesbitt Burns Inc., BMO Capital Markets Limited in the U.K. and BMO Capital Markets Corp. in the U.S. BMO Nesbitt Burns Inc.,
BMO Capital Markets Limited and BMO Capital Markets Corp are affiliates. Bank of Montreal or its subsidiaries (BMO Financial Group) has
lending arrangements with, or provide other remunerated services to, many issuers covered by BMO Capital Markets. The opinions, estimates and
projections contained in this report are those of BMO Capital Markets as of the date of this report and are subject to change without notice. BMO
Capital Markets endeavours to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information
and opinions that are accurate and complete. However, BMO Capital Markets makes no representation or warranty, express or implied, in respect
thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or
reliance on, this report or its contents. Information may be available to BMO Capital Markets or its affiliates that is not reflected in this report. The
information in this report is not intended to be used as the primary basis of investment decisions, and because of individual client objectives, should not
be construed as advice designed to meet the particular investment needs of any investor. This material is for information purposes only and is not an
offer to sell or the solicitation of an offer to buy any security. BMO Capital Markets or its affiliates will buy from or sell to customers the securities of
issuers mentioned in this report on a principal basis. BMO Capital Markets or its affiliates, officers, directors or employees have a long or short position
in many of the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. The reader should
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to buy or sell securities of issuers discussed herein.
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To U.S. Residents: BMO Capital Markets Corp. furnishes this report to U.S. residents and accepts responsibility for the contents herein, except to the
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94

Auto Components


9 November 2015
Raising Recommendation
BUY
from HOLD
PRICE TARGET
from C$20.00
Price (6-Nov)
Ticker
C$22.00
Q3/15: upside surprise on margins drives forecast,

target and rating increases
C$20.00
NFI-TSX
52-Week Range (C$):

Avg Daily Vol (M) :
Market Cap (C$M):
Dividend /Shr (C$):
Website:
FYE Dec
12.05 - 20.86
0.05
1,110
0.62
3.1
62.0
13.1
247.7
www.newflyer.com
2014A
2015E
2016E
2017E
1.18
1.18
0.5
1.54
1.51
0.4
1.81
1.80
0.3
1.90
1.89
0.3
FCF /Shr (C$)

Previous
Payout Ratio (x)
1,451 1,513 1,472 1,515

1,451
1,527 1,496 1,540
6
12
12
12
Sales (US$M)
Previous
ROIC (%)
Quarterly FCF /
Shr
2014A
2015E
2016E
2017E
Q1
Q2
Q3
Q4
0.19
0.22A
0.50
0.53
0.29
0.48A
0.45
0.47
0.32
0.40A
0.43
0.45
0.38
0.45
0.42
0.44
Moving to BUY on upside margin surprise, better macro environment

We have increased our recommendation to BUY from Hold as the Q3/15 margin surprise
and stronger macro environment boosted our forecast expectations, resulting in an
improved target and increasing the implied one-year investment return to a solid 13.1%.
We think NFI should generate solid 6.1% EBITDA growth from 2015-17 from modest
environment conditions, NFI profit improvement initiatives and deployment of NFI excess
cash resources.
Large upside surprise in Q3/15 on bus manufacturing margins
NFI adjusted EBITDA of $36.3 million was much better than our forecast of $31.6 million
and consensus mean estimate of $31.4 million.
The big upside surprise was on bus margins, which reached $34,600/equivalent unit
(EU), well above our forecast of $28,000/EU. This marked the second quarter in a row
and third of four quarters of much improved margins.
Bus margins are quite volatile, but it appears that NFIs profit improvement initiatives
and better market conditions should result in sustained $30,000/EU EBITDA margins or
better on a rolling 12-month basis.
Aftermarket performance remains good, with much improved margins being sustained.
Forecast boosted substantially on margins
We have assumed a much stronger bus manufacturing margin, reflecting commentary
on the Q3/15 conference call. We have also modeled moderately stronger aftermarket
sales and margins per recent trends and management outlook discussion.
We boosted our 2015 EBITDA forecast by 6% and our 2016-19 EBITDA forecasts by
5.5-7.5% based on our new assumptions.
22
20
18
16
14
12
Oct-15
Nov-15
Sep-15
Aug-15
Jul-15
Jun-15
Apr-15
May-15
Feb-15
Mar-15
Jan-15
Dec-14
10
NFI
Source:FactSet

Target up on stronger forecast

60 months.
Our target was increased C$2.00 to C$22.00 due to our stronger forecast and our usual
one quarter valuation period roll forward.
We boosted our rating to BUY from Hold given that our implied one-year investment
return has increased to a solid 13.1% from a 3.4% return in our last Daily Letter (October
16, 2015).
95

Better than expected Q3/15; positive

implications
NFIs EBITDA was much better than our and consensus mean expectations, mainly on
stronger than expected bus manufacturing margins (Figure 1).
Figure 1: Q3/15: Better than expected on stronger than expected bus manufacturing margins
Dividend per share (C$)
Q 3/15
0.16
EPS (C$)
Free cash flow per share (C$)
0.29
0.40
CG es t . Con s en s u s
0.16
0.19
0.39
0.20
Q 3/14
0.15
Q 2/15
0.18
0.32
0.22
0.15
0.48
Payout ratio
39%
40%
45%
32%
Bus manufacturing revenue
293
301
279
286
Aftermarket revenue
Revenue
72
365
71
371
372
82
361
375
EBITDA
EBITDA margin
36.3
9.9%
31.6
8.5%
31.4
8.4%
25.7
7.1%
10.5%
(24)
(44)
Investment in NCWC & capital assets
(8)
89
39.2
625
625
621
594
Bus revenue/unit ($000)

Bus EBITDA/unit ($000)
Aftermarket EBITDA
469
35
14.7
481
28
14.1
449
20
13.1
481
16.8
466
1,880
313
1,880
416
2,023
2,192
New orders (units)

38
864
Return on capital
8.9%
7.8%
4.8%
8.8%
1.30
1.30
1.09
1.23
NCWC means non-cash working capital, positive number is cash generated
Source: Company reports, Canaccord Genuity Research estimates, Bloomberg estimates
Bus operations much better than expected

Bus deliveries were in line with the companys current build rate. NFIs EBITDA per bus
equivalent unit (EU) of $34,600 was much better than our expectations.
As noted above, bus manufacturing margins can be quite volatile. However, it appears
that NFIs bus manufacturing margins are shifting higher, based on the fact that this
was the second strong beat in a row and the third quarter out of four that NFI
recorded EBITDA/EU north of $30,000, and also given that the macro environment
seems better.
Management attributed better bus manufacturing margins to operational
improvements and a better market.
NFIs margin improvement efforts, including the shifting of the former NABI plant in
Anniston, Alabama to NFIs Excelsior platform from the NABI platform, appear to be
bearing fruit. Some further gains are expected from the Anniston move, which appears
to be the most significant operational improvement, but we got the impression that
the bulk of the gains were evident in Q3/15 results.
NFI also indicated that the market is stronger, resulting in better pricing. This appears
sustainable and should help bus manufacturing margins.
We boosted our margin forecast based on the better prognosis.
Buy from Hold Target Price C$22.00 from C$20.00 | 9 November 2015
Auto Components 2
96

While market conditions have improved, NFIs firm order run rate is still not sufficient
to drive production increases. However, firm order rates have increased significantly
and are near production rates, possibly implying further additional firm order strength
could drive production increases. So far, NFI has maintained guidance of line entry
rates (roughly production) of 50 EUs/week through the end of 2016. We project stepups of 1 EU/week in each of 2017 and 2018.
Aftermarket sales remains solid to good

Core aftermarket revenues (i.e., excluding revenues from the now-completed CTA bus
mid-life overhaul project) were up 7.3% to $71.0 million in Q3/15. NFI has been
working on improving its aftermarket business for a considerable time to enable it to
take advantage of its industry-leading installed bus market share. This appears to be
bearing fruit on both a sales and a margin basis.
We boosted our aftermarket sales modestly given good aftermarket sales in recent
periods.
Aftermarket margins remain strong

Aftermarket EBITDA margins improved to 20.5% in Q3/15 from 16.0% in Q3/14. A
significant part of this improvement was due to the conclusion of the CTA project, but
margins also increased from improved market fundamentals and the benefits to the
product mix that have resulted from a far broader portfolio of services and parts
offerings to customers.
We boosted our aftermarket margin expectations slightly given stronger than expected
performance in recent quarters.
NCWC increases again

NFI experienced a $6.5 million cash outflow from NCWC in Q3/15, following on the
large $42.3 million cash outflow from NCWC in Q2/15. Inventories remain the largest
issue. Inventories declined 30 EUs to 417 EUs but remain well above a more normal
350-360 EUs.
Management expects the inventory build to be reversed. However, we got the
impression that it will take longer than originally envisioned (inventory normalization
formerly expected by the end of 2015).
Management noted that NCWC is likely to remain a cash user on an annual basis,
although it sounded like the usage would be much lower than the $20 million or
greater of recent years.
Auto Components 3
97

Forecast boosted on bus manufacturing

margin, aftermarket sales and margin
forecast increases
We boosted our bus manufacturing margins to reflect the Q3/15 discussion.
We also increased our aftermarket sales and margin assumptions based on the
Q3/15 performance and prospects.
Net, the forecast assumption increases resulted in a 6% increase in our EBITDA
forecast for 2015 and a 5.5-7.5% increase in our 2016-19 EBITDA forecast.
with Figure 7.
Auto Components 4
98

Dividend/share (C$)
% change
% change
EBITDA
EBITDA margin
2015E
New
Old
Fc s t
Fc s t
0.608 0.608
4%
4%
2016E
New
Old
Fc s t
Fc s t
0.620 0.620
2%
2%
2017E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2018E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2019E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2014
0.59
n.m.
Q 3/15
0.16
6%
1.18
#N/A
0.40
24%
0.45
17%
0.42
10%
1.54
31%
1.51
28%
1.81
17%
1.80
19%
1.90
5%
1.89
5%
1.96
3%
1.97
5%
2.03
4%
2.04
3%
50%
39%
35%
37%
39%
40%
34%
34%
33%
33%
32%
31%
31%
30%
1,451
21%
365
1%
393
-6%
400
-5%
1,513
4%
1,527
5%
1,472
-3%
1,496
-2%
1,515
3%
1,540
3%
1,552
2%
1,577
2%
1,601
3%
1,626
3%
91
6.3%
35
9.6%
37
9.5%
33
8.3%
136
9.0%
128
8.4%
146
9.9%
136
9.1%
153
10.1%
142
9.2%
156
10.1%
148
9.4%
161
10.1%
153
9.4%
(34)
(13)
18
23
20
20
17
17
17
17
17
17
Payout ratio
Revenue
% change
Q 4/15E
New
Old
Fc s t
Fc s t
0.155 0.155
6%
6%
46

Bus revenue/unit
Bus EBITDA/unit
Aftermarket EBITDA
2,437
465
24
50
625
469
35
15
685
469
33
15
685
481
28
14
2,476
481
33
63
2,476
487
30
62
2,485
472
34
61
2,485
484
31
59
2,535
475
35
64
2,535
487
32
61
2,571
478
35
66
2,571
490
33
63
2,629
481
35
69
2,629
493
33
66
New orders (units)

2,263
2,102
466
1,880
620
1,815
907
2,102
2,342
1,815
2,476
2,102
2,485
1,815
2,485
2,102
2,535
1,815
2,535
2,102
2,571
1,815
2,571
2,102
2,629
1,815
2,629
2,102
11.1%
10.5%
11.7%
11.8%
12.4%
12.9%
1.300
1.300
1.300
1.300
1.300
1.300
Return on capital
1
5.2%
1.104
Cash from operations incl. NCWC less capex
8.9%
1.300
10.0%
1.300
8.6%
1.300
9.0%
1.300
8.4%
1.300
10.1%
1.300
9.3%
1.300
Auto Components 5
99

VALUATION
bottom out around the 3% range (about 1-2% over the 10-year Canada bond yield)
and EV/EBITDA will be stable in the 6-8x NTM EBITDA range.
names (Figure 5).
Auto Components 6
100

Mar k et
Cur .
Eq ui ty Pr i ce :
Cur .
Year
No v. 7, 2015
Di v.
2015
$20. 00
$0. 61
Di v.
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M )
EPS
3. 0%
$1. 54
4. 9%
De b t/
P/E
39. 5% $1, 108 $0. 95 21. 1 34. 3%

70. 2%
Gr o wth
Ca p ('15- '17)
16. 0 39. 4%
6. 1%
10. 4%
Chorus Aviation
2015
$5.51
$0.48
8.7%
$0.88
54.7%
$673 $0.80
6.9
89.6%
12.9%
Davis + Henderson
2015
$34.95
$1.28
3.7%
$2.09
61.2%
$3,690 $2.49
14.1
41.2%
15.8%
Westshore Terminals
2015
$22.36
$1.32
5.9%
$1.27
103.9%
$1,660 $1.68
13.3
0.0%
3.3%
Cineplex Galaxy
2015
$50.07
$1.54
3.1%
$1.68
91.7%
$3,159 $2.02
24.8
32.1%
14.1%
supported by NFIs solid 3.1% dividend yield. We think the dividend upside potential
from forecasted stronger future free cash further strengthens the dividend yield
support argument.
Auto Components 7
101

1-year
t arget
151.0
2-year
t arget
155.3
7.5
1,132.3
(95.2)
1,037.1
7.5
1,165.1
(44.9)
1,120.2

62.0
16.72
22.00
62.0
18.06
23.00

0.62
22.62
1.24
24.24
13.1%
21.2%

2.8%
8.5%
2.7%
8.4%

1.1%
6.8%
FCFPS C$
1.88

EBITDA
Multiplier
EV
1.94

Our target was increased C$2.00 to C$22.00 due to our stronger forecast and our
usual one quarter valuation period roll forward.
We have boosted our rating at BUY from Hold, given the more attractive implied one
year investment return. Our current target and estimated dividend currently produces
a 13.1% one-year implied investment return (including a 3.1% dividend yield).
Auto Components 8
102

F ree cash
Interest paid
Interest expense
Income taxes paid
Free cash flow
Exchange rate
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
Q3 /1 5 Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
28.7
(4.6)
4.0
(3.1)
2.1
(13.7)
(0.5)
(4.3)
1.3
0.8
(0.7)
(0.2)
9.8
1.252
12.3
8.1
(22.8)
42.3
1.8
(2.8)
16.4
(12.5)
(0.5)
(1.9)
1.6
0.8
(0.8)
(0.1)
21.5
1.226
26.4
8.4
11.6
6.5
3.8
(2.8)
14.1
(14.4)
(0.5)
(1.8)
1.0
0.8
(0.8)
(0.7)
16.8
1.317
22.1
8.6
58.8
(36.3)
3.0
(3.0)
11.4
(11.4)
(0.7)
(2.0)
0.8
(0.8)
(0.7)
19.0
1.300
24.7
8.6
76.3
7.8
12.6
(11.6)
44.0
(52.0)
(2.1)
(10.0)
3.9
3.2
(3.2)
(1.7)
67.2
1.300
85.6
33.8
83.0
7.8
11.5
(11.5)
41.3
(41.3)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
77.2
1.300
100.3
34.4
89.7
5.2
11.0
(11.0)
44.5
(44.5)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
81.2
1.300
105.5
34.4
92.4
4.8
10.4
(10.4)
46.5
(46.5)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
83.6
1.300
108.6
34.4
95.4
4.8
9.9
(9.9)
48.7
(48.7)
(2.6)
(8.0)
3.2
(3.3)
(3.0)
86.5
1.300
112.5
34.4
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5

0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.22
0.15
0.48
0.15
0.40
0.16
0.45
0.16
1.54
0.61
1.81
0.62
1.90
0.62
1.96
0.62
2.03
0.62
Auto Components 9
103

Incom e statem ent
Revenues
EBITDA
Other
Other expenses
Pre-tax income
Income taxes
Net Income (loss)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
Q3 /1 5 Q4 /1 5 E
865.3 1,199.4
(810.2) (1,120.2)
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
380.3
(352.1)
1.5
29.7
(9.5)
(1.9)
0.0
0.0
18.2
(2.3)
(0.7)
(0.5)
(0.6)
0.0
14.1
(3.3)
10.9
375.0
(340.7)
(0.7)
33.7
(9.8)
0.8
0.0
0.0
24.6
(2.2)
(0.6)
0.3
(0.6)
0.0
21.6
(9.2)
12.4
364.7
(329.1)
(0.6)
35.0
(10.0)
(1.0)
0.0
0.0
24.0
(2.2)
(0.6)
(0.1)
(0.6)
0.0
20.5
(4.0)
16.6
2015E
2016E
2017E
2018E
2019E
393.1 1,513.1 1,471.9 1,515.1 1,552.3 1,600.7

(355.7) (1,377.5) (1,326.0) (1,362.5) (1,395.9) (1,439.6)
0.0
0.1
0.0
0.0
0.0
0.0
37.4
135.7
145.9
152.6
156.4
161.1
(9.8)
(39.2)
(38.2)
(37.0)
(36.2)
(35.6)
0.0
(2.1)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
27.6
94.4
107.7
115.6
120.2
125.5
(2.3)
(9.0)
(9.3)
(9.3)
(9.3)
(9.3)
(0.7)
(2.6)
(2.2)
(1.7)
(1.1)
(0.6)
0.0
(0.3)
0.0
0.0
0.0
0.0
(0.6)
(2.4)
(2.4)
(2.4)
(2.4)
(2.4)
0.0
0.0
0.0
0.0
0.0
0.0
24.0
80.1
93.9
102.2
107.4
113.2
(9.4)
(25.8)
(33.4)
(36.5)
(38.5)
(40.7)
14.6
54.4
60.5
65.7
68.9
72.5

FCFPS
0.75
0.63
0.63
0.58
0.87
0.87
0.15
0.19
0.19
0.15
0.29
0.29
0.15
0.32
0.32
0.15
0.38
0.38
0.59
1.18
1.18
0.15
0.22
0.22
0.15
0.48
0.48
0.16
0.40
0.40
0.16
0.45
0.45
0.61
1.54
1.54
0.62
1.81
1.81
0.62
1.90
1.90
0.62
1.96
1.96
0.62
2.03
2.03
52.3
58.9
55.5
55.6
55.7
55.7
55.6
55.8
55.9
56.1
62.0
57.4
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
17.4%
16.6%
0.0%
7.8%
8.2%
65.6%
4.0%
9.0%
1.1%
23.7%
6.0%
9.6%
-6.4%
17.0%
6.0%
9.5%
4.3%
30.6%
4.0%
9.0%
-2.7%
17.2%
1.9%
9.9%
2.9%
5.2%
0.0%
10.1%
2.5%
2.9%
0.0%
10.1%
3.1%
3.6%
0.0%
10.1%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
7.6%
8.8%
8.9%
10.0%
9.0%
10.1%
11.1%
11.7%
12.4%
Bus revenues
Bus sales growth
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
290.7
14.7
15.9%
5.1%
572
508
26
26
285.8
22.4
7.5%
7.8%
594
481
38
30
293.0
21.6
5.1%
7.4%
625
469
35
33
321.1
22.6
-4.6%
7.0%
685
469
33
33
1190.6
81.4
5.2%
6.8%
2,476
481
33
33
1172.3
84.5
-1.5%
7.2%
2,485
472
34
34
1203.5
88.7
2.7%
7.4%
2,535
475
35
35
1228.3
90.0
2.1%
7.3%
2,571
478
35
35
1263.9
92.0
2.9%
7.3%
2,629
481
35
35
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
89.6
16.7
22.8%
18.6%
89.2
16.8
10.6%
18.8%
71.7
14.7
-12.6%
20.5%
72.0
14.8
-13.6%
20.5%
322.5
62.9
1.1%
19.5%
299.6
61.4
-7.1%
20.5%
311.6
63.9
4.0%
20.5%
324.0
66.4
4.0%
20.5%
336.8
69.0
4.0%
20.5%

EBITDA/sales
ROC
Segm ented data
Auto Components 10
104

Balance sheet
Cash
Accounts receivable
Inventories
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
7.6
186.9
232.0
3.5
0.1
0.0
0.0
430.0
8.8
189.2
242.3
3.9
0.2
0.0
0.0
444.4
6.5
217.7
240.4
3.7
0.0
0.0
0.0
468.3
Capital assets
Deferred charges
Intangible assets
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
64.3
0.0
539.1
67.9
0.0
0.0
1,101.4
64.3
0.0
533.9
68.6
0.0
0.0
1,111.2
63.5
0.0
528.5
74.9
0.0
0.0
1,135.2
Bank indebtedness
Deferred revenue
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
226.5
0.0
23.0
35.0
1.6
13.0
18.6
317.6
0.0
201.8
0.0
18.3
39.7
1.7
48.0
10.4
319.8
0.0
203.0
0.0
22.0
42.1
1.6
44.0
12.7
325.5
0.0
211.1
0.0
22.0
42.1
1.6
44.0
12.0
332.8
0.0
211.1
0.0
22.0
42.1
1.6
44.0
12.0
332.8
0.0
191.2
0.0
22.0
42.1
1.6
44.0
9.9
310.9
0.0
196.5
0.0
22.0
42.1
1.6
44.0
8.9
315.1
0.0
202.2
0.0
22.0
42.1
1.6
44.0
7.9
319.8
0.0
208.0
0.0
22.0
42.1
1.6
44.0
6.9
324.6

Long-term debt
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
0.9
2.9
105.5
201.0
2.2
13.9
4.1
5.0
102.5
201.6
1.9
12.7
3.8
6.5
100.0
202.2
2.0
21.1
3.8
6.5
98.0
202.2
2.0
21.1
3.8
6.5
98.0
202.2
2.0
21.1
3.8
6.5
90.0
202.2
2.0
21.1
3.8
6.5
82.1
202.2
2.0
21.1
3.8
6.5
74.1
202.2
2.0
21.1
3.8
6.5
66.2
202.2
2.0
21.1

Share capital
Retained earnings
CAPEX
Net debt
Book value / unit
0.0
480.8
(136.8)
0.0
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
0.0
594.5
(141.8)
0.0
594.7
(137.5)
0.0
595.2
(131.6)
Q3 /1 5 Q4 /1 5 E
0.0
595.7
(121.6)
56.7
198.7
230.0
4.0
0.0
0.0
0.0
489.4
2015E
2016E
2017E
2018E
2019E
56.7
198.7
230.0
4.0
0.0
0.0
0.0
489.4
101.2
180.9
234.0
3.7
0.0
0.0
0.0
519.8
152.3
186.2
238.0
3.8
0.0
0.0
0.0
580.3
206.1
191.6
242.0
3.9
0.0
0.0
0.0
643.6
262.7
197.1
246.0
4.0
0.0
0.0
0.0
709.8
61.1
61.1
56.4
52.9
50.4
48.6
0.0
0.0
0.0
0.0
0.0
0.0
523.1
523.1
501.7
480.2
458.8
437.3
74.9
74.9
74.9
74.9
74.9
74.9
0.0
0.0
0.0
0.0
0.0
0.0
(0.0)
(0.0)
(0.1)
(0.3)
(0.4)
(0.5)
1,148.5 1,148.5 1,152.6 1,188.1 1,227.3 1,270.1
0.0
595.7
(113.6)
0.0
595.7
(113.6)
0.0
595.7
(79.6)
0.0
595.7
(40.4)
0.0
0.0
595.7
2.0
595.7
48.0
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,101.4
1,111.2
1,135.2
1,148.5
1,148.5
1,152.6
1,188.1
1,227.3
1,270.1
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
4.3
119.4
1.9
165.5
1.8
181.8
2.0
145.5
10.0
145.5
12.0
153.3
12.1
158.5
12.2
163.3
12.3
168.1
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
210.9
2.1x
8.24
23.8x
247.5
2.2x
8.35
23.3x
247.7
2.0x
8.54
22.8x
197.6
1.5x
8.68
25.2x
197.6
1.5x
8.68
24.2x
153.0
1.0x
9.30
25.1x
101.9
0.7x
10.00
27.7x
48.2
0.3x
10.77
30.0x
(8.5)
0.0x
11.59
32.3x
Auto Components 11
105

Net income
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
10.9
4.2
5.3
0.0
0.0
3.4
0.0
1.9
0.0
0.7
(0.8)
0.4
(2.0)
24.1
4.6
28.7
12.4
4.5
5.4
0.0
0.0
9.2
0.0
(0.8)
0.0
4.5
(0.8)
0.3
(15.1)
19.5
(42.3)
(22.8)
16.6
4.7
5.4
0.0
0.0
4.0
0.0
1.0
0.0
0.8
(0.8)
1.0
(14.5)
18.1
(6.5)
11.6
Investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(4.3)
(4.3)
(1.9)
(1.9)
Financing
Share issuance
Dividends
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.7)
(34.1)
Q3 /1 5 Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
14.6
4.4
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
0.8
(0.8)
0.0
0.0
22.4
36.3
58.8
54.4
17.8
21.4
0.0
0.0
14.6
0.0
2.1
0.0
6.9
(3.2)
1.8
(31.5)
84.2
(7.8)
76.3
60.5
16.7
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
90.8
(7.8)
83.0
65.7
15.6
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
94.9
(5.2)
89.7
68.9
14.7
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
97.2
(4.8)
92.4
72.5
14.1
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
3.3
(3.2)
0.0
0.0
100.2
(4.8)
95.4
(1.8)
(1.9)
(2.0)
(2.0)
(10.0)
(10.1)
(12.0)
(12.0)
(12.1)
(12.1)
(12.2)
(12.2)
(12.3)
(12.3)
0.0
33.1
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.6)
26.0
0.0
(4.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.8)
(11.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(6.6)
0.0
2.1
0.0
0.0
(1.4)
0.0
0.0
0.0
(26.7)
(26.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
(0.2)
(0.1)
(0.7)
0.0
(1.0)
0.0
0.0
0.0
0.0
Net cash flow

1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
(9.9)
17.5
7.6
1.3
7.6
8.8
(2.3)
8.8
6.5
50.1
6.5
56.7
39.2
17.5
56.7
44.5
56.7
101.2
51.1
101.2
152.3
53.7
152.3
206.1
56.6
206.1
262.7
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
24.4
(24.7)
9.8
56.8
66.2
71.0
77.6
80.2
83.1
Auto Components 12
106

Investment risks
Auto Components 13
107


Rating
Coverage Universe
IB Clients
#
%
%
Buy
602
61.49%
31.56%
Hold
292
29.83%
12.67%
Sell
27
2.76%
3.70%
Speculative Buy
58
5.92%
56.90%
979*
100.0%
relevant issuer.
Risk Qualier
Auto Components 14
108


H:C$8.25
11/14/12
22
20
18
16
14
12
10
8
6
H:C$12.00
07/16/14
H:C$8.75
01/11/13
H:C$9.25
01/29/13
H:C$9.75
02/06/13
Jan 2013
Apr 2013
Jul 2013
B:C$14.00
08/06/14
H:C$14.00
11/09/14
B:C$12.50
12/12/14
H:C$10.00
03/25/13
Oct 2013
H:C$14.00
01/12/15
H:C$10.25
04/18/13
Jan 2014
B:C$15.00
03/19/15
B:C$11.25
06/24/13
Apr 2014
B:C$16.00
05/11/15
Closing Price
H:C$11.75
08/07/13
Jul 2014
H:C$11.25
11/07/13
Oct 2014
B:C$17.00
07/20/15
B:C$21.00
08/10/15
B:C$12.00
01/15/14
Jan 2015
B:C$12.50
03/23/14
Apr 2015
H:C$11.50
05/11/14
Jul 2015
H:C$11.75
06/24/14
Oct 2015
H:C$20.00
10/16/15
Target Price
Online Disclosures
General Disclosures
Auto Components 15
109

account.
Inc.
Auto Components 16
110


regulated by ASIC.
Auto Components 17
111
INSTITUTIONAL EQUITY R ESEARCH : DIVERSIFIED INDUSTRIES
COMPANY UPDATE
NFI | TSX
$20.00
Rating: Outperform
(previously $23.00)
Total Return: 33.1%
Yield: 3.1%
November 9, 2015
A Solid Quarter Adds Evidence of a Margin Expansion

Trend

C$20.86 / C$12.05
3.1%
Dividend Yield:
55.5 (basic)
55.5 (fd)
C$1109.3

Float ($mm)
39.7
135.0
$248.6
$1083.2
Net Debt (MRQ) ($mm):

(FYE Dec 31)
2014
Revenue ($mm)
2015e
2016e
FD EPS
EBITDA ($m m )
Q1
2014
$19.7
$107.4
$144.8
$157.7
$0.65
$1.04
$1.21
Q2
Q3
Q4
$27.0
$25.7
$35.0
2015
$31.4
$39.2
$36.3e
$37.9e
2016
$39.5e
$38.4e
$39.5e
$40.3e
Q2
Q3
Q4
$0.16
$0.15
$0.24
Adjusted FD EPS
Q1
$0.10
2015
$0.20
$0.30
$0.26e
$0.28e
2016
$0.30e
$0.29e
$0.30e
$0.31e
$25
We Believe Underlying Margin Performance Is Becoming Sustainable: We

believe the bus manufacturing margins should expand with a combination of normalized
pricing and improved synergies from product rationalization, now at $16.5mm annually,
up $2mm from prior estimates, should contribute to higher margins levels. As well, we
expect aftermarket margins are likely to expand later in 2016 as the company completes
IT systems implementation and a full analysis of the aftermarket business completing
the integration of the legacy NFI, Orion, and NABI aftermarket businesses.
$1,451.1 $1,552.1 $1,697.7
EBITDA ($mm)
2014
Strong Q3/15 Results: New Flyer announced Q3/15 results reporting revenue,
Adjusted EBITDA and Adjusted FD EPS of $364.7mm, $36.3mm and $0.26 as
compared to our estimates of $387.8mm, $32.1mm and $0.22, respectively. Consensus
expectations for revenue, Adjusted EBITDA and Adjus ted FD EPS were $371.8mm,
$31.4mm and $0.23.

Volume ('000)
1000
Last Sale Price
$20
800
$15
600
$10
400
$5
200
$0
0

Managing Director
647.776.8246

647.776.8245
More Disclosure around Return on Capital Shows Strong Positive Trend:

For the first time, NFI reported LTM return on invested capital with the company
generating returns in excess of 11% in Q3/15. With the transition to Xcelsior now
complete and moderating capital needs, we expect the positive trend to continue through
2016. The company continues to experience price normalization in bus manufacturing
providing substantial lift to EBITDA margins. We believe that mid-$30K EBITDA per
EU remains quite achievable on a sustainable basis.
Estimate Changes: We are updating our estimates to reflect the strong quarter and
revising our margin expectations upwards in 2016. Our 2015e and 2016e EBITDA
increase to $144.8mm and $157.7mm from $140.3mm and $154.8mm, respectively. Our
expectations for Adjusted 2015e and 2016e EPS increase to $1.04 and $1.21 from $0.99
and $1.18, respectively.
Maintain Outperform; Increasing Target to C$23.00: We expect continued
operational improvements should positively impact EBITDA margins even as the
company continues to see price normalization through 2016. We expect management
and the Board are likely to discuss the return of capital to shareholders in the form of
higher dividends or buybacks along with the possibility of an upwards revision to the
average corporate line entry rate should bookings continue at the current pace. We also
believe that as returns on capital trend higher that multiples should expand, noting the
positive trend that now has metrics above 10% and expected to increase further. W e
maintain our Outperform rating and are increasing our 12-month price target to C$26.00
from C$23.00. Our target price is based on a blend of a 15.0x earnings and 7.5x
EBITDA multiple of the four quarters ending Q3/17 (+1Q) reflecting our 12-month
forward valuation period as well as an exchange rate of C$1.32/$US.
112
INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES
I NSTITUTIONAL
EQUITY
R ESEARCH:
DIVERSIFIED
INDUSTRIES

Current Valuations
Unit Price (C$)
$20.00
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
10.3x
9.2x
7.3x
Peer Average
14.3x
13.4x
10.4x
10.1x
7.5x
6.9x
23.0x
14.5x
12.4x
Incom e Statem ent
2014
2015e
2016e
2015e
2016e
2017e
Trend
Revenues
Bus Manufacturing
Aftermarket
Revenue
1,132,066 1,231,170 1,399,122 1,419,613

319,034
320,916
298,615
314,498
1,451,100 1,552,086 1,697,736 1,734,111
2014
45,823
35,255
81,078
89,487 114,933 122,178
(1,766)
(1,908)
22.0%
20.7%
17.6%
18.1%
57,374
82,262
93,528
99,373
5.1%
6.7%
6.7%
7.0%
49,991
62,531
64,199
69,190
15.7%
19.5%
21.5%
22.0%
86,457
136,232
157,726
168,562
6.0%
8.8%
9.3%
9.7%
107,365
144,793
157,726
168,562
per Share
7.4%
9.3%
9.3%
9.7%
FCF Yield
Amortization
35,837
39,360
39,408
38,509
Operating Earnings
50,620
96,873
118,318
130,053
EBT
37,568
80,931
106,633
118,749
Taxes
10,849
25,547
39,454
43,937
Net Income
26,719
55,383
67,179
74,812
Reported FD EPS
$0.48
$1.00
$1.21
$1.35
Adjusted FD EPS
$0.65
$1.04
$1.21
$1.35
2015e
2016e
2017e

Total EBITDA incl. Other
Margin
Adjusted EBITDA
Margin
Grow th
2014
9,367 (11,918)
(2,004)
10,686
(2,004)
7,766
(154)
(961)
Free Cash Flow
83,667
81,882
Free cash flow (C$)
92,829 104,547 130,702 136,341

$1.67

Revenue
$1.88
98,373 106,104
$2.35
$2.46
8.4%
9.4%
11.8%
12.3%
82.8%
12.6%
25.0%
4.3%
2014
2015e
2016e
2017e
32,457
33,931
34,413
34,413
35.0%
$0.585
32.5%
$0.611
26.3%
$0.620
25.2%
Cash Yield
2.9%
3.1%
3.1%
3.1%
2014
2015e
2016e
2017e
2,437
2,503
2,709
2,735
52
52
53
52
464.5
491.9
516.5
519.1
15.0%
8.8%
13.6%
1.5%
23.5
32.9
34.5
36.3
Aftermarket
48.4%
0.6%
(6.9%)
5.3%
49.2
50.1
53.1
54.7
Adjusted EBITDA
21.0%
13.4%
7.0%
34.9%
9.4%
8.9%
2.1%
6.9%

48.5
0.9x
48.0
1.1x
50.7
1.0x
51.6
1.0x
Adjusted FD EPS
2.7%
58.7%
16.5%
11.4%
20.7%
5.0%
18.4%
19.9%
2015e
0.7834
2016e
0.7526
2017e
0.7783
2014
2015e
2016e
2017e
2014
0.9057
229,034 196,942 110,547
39,908
EOP CAD/USD Rate
0.9050
0.7463
0.7634
0.7937
FX Assum ptions

Trend
Leverage
Net Debt (EOP)

$5.0
Trend
$0.620
Bus Manufacturing
Weeks of Production
Trend
80,121 126,851 111,492
(10,889) (12,502) (14,556) (14,070)
Trend
2017e
2.1x
1.4x
0.7x
0.2x
33.6%
29.0%
17.4%
6.5%
Trend
Trend
Firm
Option
2020, 12%
2015, 8%
$4.0
2016, 16%
$3.0
2019, 28%
$2.0
2017, 10%
$1.0
$0.0
Q109 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15
2018, 26%

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Q3/15 Earnings Beat Driven By Strong Margin Improvement

in Both Segments
New Flyer announced Q3/15 results reporting revenue, Adjusted EBITDA and Adjusted FD
EPS of $364.7mm, $36.3mm and $0.26 as compared to our estimates of $387.8mm, $32.1mm
and $0.22, respectively. Consensus expectations for revenue, Adjusted EBITDA and Adjus ted
FD EPS were $371.8mm, $31.4mm and $0.23.
Q3/15 Highlights ($000s, except per share)
Q3/15
Q3/14
y/y
Grow th
Q2/15 y/y
Grow th

Backlog End of Period (US$mm)
625.0
468.8
34.6
3,590.0
621.0
448.8
20.2
3,069.5
0.6%
4.4%
71.0%
17.0%
2.1%
5.3%
58.1%
(1.5%)
Operating Segments
Bus Manufacturing
Revenue
EBITDA
EBITDA Margin Reported
EBITDA Margin Normalized
292,970
21,606
7.4%
7.4%
278,713
12,557
4.5%
4.9%
5.1%
72.1%
2.9%
2.4%
7.5%
65.1%
2.6%
2.4%
71,713
14,671
20.5%
82,049
13,140
16.0%
(12.6%)
11.7%
4.4%
10.6%
28.3%
2.6%
364,683
36,277
16,559
360,762
25,697
10,245
1.1%
41.2%
61.6%
8.2%
45.3%
247.2%
$0.30
$0.26
$0.18
$0.15
61.5%
75.2%
246.9%
81.4%
Aftermarket
Revenue
EBITDA
EBITDA Margin
Total
Revenue
Adjusted EBITDA
Reported Net Income
Fully Diluted Earnings Per Share
Reported
Adjusted
Figure 1 Q3/15 Highlights
Source: Company reports, AltaCorp Capital Inc.
Items of Note
During the quarter, revenues increased by 1.1% y/y while Adjusted EBITDA increased by
41.2%. The company attributes the growth to a favorable produ ct mix as well as several
initiatives aimed at improving operational efficiencies which are starting to positively impact
margins.
Bus manufacturing revenues grew 5.1% y/y with a 0.6% increase in deliveries and a 4.5%
increase in average selling price per EU to $468.8K. Adjusted EBITDA increased by 72.1%
y/y representing a margin expansion of 290bps attributable to a favorable sales mix as well as
increased efficiencies and cost savings achieved from the transition to the Xcelsior platform.
Management indicated in the report that savings from the transition are now estimated at
$16.5mm, up from $14mm previously. EBITDA per EU increased to $34.6K from $20.2K in
Q3/14 and well above our estimate for $29.2K.
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Evolution of Revenue per EU
Figure 2 Evolution of Revenue per EU

While aftermarket revenues declined expectedly as a result of the completion of the Chicago
Transit Authority mid-life overhaul program, EBITDA increased by 11.7% y/y to $14.7mm
representing a margin of 20.5%. The increase is attributable to a broader portfolio of products
and services in an improved market.
Production outlook remains relatively strong with management noting that the number of
filled production slots is up by ~20% y/y. The company currently has no plans to increase
production instead focusing its efforts on improving program management, optimizing the
supply chain and enhancing financial performance. We note that with the conversion to
Oracle R12 application, the entire bus segment is running on a common platform. Within the
aftermarkets segment, the legacy parts business and Orion are already running on Oracle R12
application with the NABI parts business expected to complete the transition by mid-2016
under Project Convergence. The company expects the synchronization to drive further
efficiencies in the supply chain, including in parts sourcing, project bidding, reporting and
delivery. We expect the completion of Project Convergence to be incrementally impact
margins as well as lower working capital needs.
Backlog in Q3/15 was 7,290EU valued at $3.59bn versus 7,011EU ($3.49bn) in Q2/15 and
6,239EU ($3.07bn) in Q3/14. Of the 1,169 pending new firm and option orders, the company
has received a contract for 725 EU from the Massachusetts Bay Transportation Authority
which include a firm order for 175 CNG XN40 and 150 diesel-electric hybrid XDE40 buses
as well as options for an additional 200 clean diesel buses XD40 and 200 diesel-electric
hybrid XDE40 buses. On a TTM basis, the company reported a book-to-bill ratio of 1.00x in
Q3/15.
The companys liquidity position of $68mm comprised of $6.5mm in cash and $61.5mm in
available revolving credit facility. At the end of the quarter, the company had $44.0mm in
direct borrowing and $9.5mm in outstanding letters of credit related to the credit facility. We
note the company is intentionally carrying additional inventory to smooth the transition of
NABI to the Xcelsior platform which it expects to deliver by the end of 2015.
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Management continues to expect an average corporate line entry rate of ~50EU per available
production week for 2015 and 2016. We note that in the first week of July, there were no
scheduled assembly line entries which impacted production by ~35EU. The company
continues to see normalization in pricing guiding towards higher 2015 EBITDA margins as
compared to 2014. In the aftermarket segment, parts revenue should grow by 5% y/y in 2015
along with an expected improvement in margins as the company continues to synchronize the
systems and processes in place.
For the first time, NFI reported LTM return on invested capital noting that the company has
generated returns in excess of 11% in Q3/15. With the transition to Xcelsior now complete
and moderating capital needs, we expect the positive trend to continue through 2016.
Furthermore, the company continues to experience price normalization in bus manufacturing
along with various operating expenses providing substantial lift to the EBITDA margins. We
believe that a mid-$30K EBITDA per EU remains quite achievable in the current environment
as transit authorities in the US continue to find ways to replace older fleets. We expect any
long-term transportation funding bill will allow planning flexibility and drive quicker fleet
decisions which should provide an incremental lift to the share prices.
Trailing Return on Invested Capital (ROIC)
Figure 3 Trailing Return on Invested Capital (ROIC)

We are updating our estimates to reflect the strong quarter and revising our margin
expectations upwards in 2016. We believe the bus manufacturing margins should expand with
a combination of normalized pricing and improved synergies from product rationalization
should contribute to higher margins levels. As well, we expect aftermarket margins are likely
to expand later in 2016 as the company completes IT systems implementation and a full
analysis of the aftermarket business completing the integration of the legacy NFI, Orion, and
NABI aftermarket businesses. Our 2015e and 2016e EBITDA increase to $144.8mm and
$157.7mm from $140.3mm and $154.8mm, respectively. Our expectations for Adjusted
2015e and 2016e EPS increase to $1.04 and $1.21 from $0.99 and $1.18, respectively. A
summary of our key changes to estimates is provided in the figure below.
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Revenue
Bus Manufacturing
Aftermarket
Revenue
ACC Old Estim ates

2015e
2016e
2017e
ACC New Estim ates

2015e
2016e
2017e
2015e
Change
2016e
2017e
1,285,164 1,451,643 1,435,601

320,186 300,069 316,975
1,605,350 1,751,712 1,752,577
19.9%
17.1%
18.1%
1,231,170 1,399,122 1,419,613

320,916 298,615 314,498
1,552,086 1,697,736 1,734,111
20.7%
17.6%
18.1%
(4.2%)
0.2%
(3.3%)
73 bps
(3.6%)
(0.5%)
(3.1%)
46 bps
(1.1%)
(0.8%)
(1.1%)
5 bps
EBITDA
Margin
78,872
6.1%
61,380
19.2%
132,963
8.3%
92,564
6.4%
62,252
20.7%
154,816
8.8%
93,314
6.5%
66,565
21.0%
159,879
9.1%
82,262
6.7%
62,531
19.5%
136,232
8.8%
93,528
6.7%
64,199
21.5%
157,726
9.3%
99,373
7.0%
69,190
22.0%
168,562
9.7%
4.3%
54 bps
1.9%
32 bps
2.5%
49 bps
1.0%
31 bps
3.1%
75 bps
1.9%
45 bps
6.5%
50 bps
3.9%
100 bps
5.4%
60 bps
Adjusted EBITDA
Margin
140,251
8.7%
154,816
8.8%
159,879
9.1%
144,793
9.3%
157,726
9.3%
168,562
9.7%
3.2%
59 bps
1.9%
45 bps
5.4%
60 bps
Operating Earnings
EBT
93,923
79,188
115,923
104,017
121,826
110,189
96,873
80,931
118,318
106,633
130,053
118,749
3.1%
2.2%
2.1%
2.5%
6.8%
7.8%
Net Incom e
Reported FD EPS
Adjusted FD EPS
50,648
$0.91
$0.99
65,530
$1.18
$1.18
69,419
$1.25
$1.25
55,383
$1.00
$1.04
67,179
$1.21
$1.21
74,812
$1.35
$1.35
9.3%
9.3%
4.6%
2.5%
2.5%
2.5%
7.8%
7.8%
7.8%
Free Cash Flow

Free Cash Flow
68,870
94,596
(15,069)
84,256
92,515
112,449
(14,187)
96,451
61,729
115,676
(13,689)
100,175
80,121
89,487
(12,502)
81,882
126,851
114,933
(14,556)
98,373
111,492
122,178
(14,070)
106,104
16.3%
(5.4%)
(17.0%)
(2.8%)
37.1%
2.2%
2.6%
2.0%
80.6%
5.6%
2.8%
5.9%
Free cash flow (C$)

per Share
FCF Yield
105,267
$1.90
9.5%
121,225
$2.18
10.9%
120,162
$2.16
10.9%
104,547
$1.88
9.4%
130,702
$2.35
11.8%
136,341
$2.46
12.3%
(0.7%)
(0.7%)
(9) bps
7.8%
7.8%
83 bps
13.5%
13.5%
143 bps
33,928
32.2%
$0.61
34,413
28.4%
$0.62
34,413
28.6%
$0.62
33,931
32.5%
$0.61
34,413
26.3%
$0.62
34,413
25.2%
$0.62
0.0%
0.0%
0.0%
22 bps (206) bps (340) bps
0.0%
0.0%
0.0%
208,046
1.5x
0.3x
157,087
1.0x
0.2x
137,729
0.9x
0.2x
196,942
1.4x
0.3x
110,547
0.7x
0.2x
39,908
0.2x
0.1x
(5.3%)
(8.3%)
(4.6%)
(29.6%)
(30.9%)
(25.5%)
(71.0%)
(72.5%)
(67.2%)
2,561
501.8
30.8
48.5
1.1x
5.0%
2,755
526.9
33.6
52.6
1.0x
18.7%
2,711
529.5
34.4
52.6
1.0x
20.0%
2,503
491.9
32.9
48.0
1.1x
5.0%
2,709
516.5
34.5
50.7
1.0x
18.4%
2,735
519.1
36.3
51.6
1.0x
19.9%
(2.3%)
(2.0%)
6.7%
(1.0%)
(0.5%)
0 bps
(1.7%)
(2.0%)
2.8%
(3.7%)
0.0%
(26) bps
0.9%
(2.0%)
5.6%
(1.8%)
0.0%
(9) bps

Leverage
Net Debt (EOP)

We are also rolling forward our valuation period by one quarter which now represents the four
quarters ending Q3/17. We note our valuation remains sensitive to the multiple applied to
estimates as shown in the figure below.
Sensitivity of Target Price to EBITDA and EBITDA Multiple
% Variance
Valuation Period EBITDA ($000s)
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
149,758
158,078
166,398
174,718
183,038
6.50x
7.00x
$19.89
$21.68
$21.18
$23.06
$22.47
$24.45
$23.75
$25.83
$25.04
$27.22
7.50x
$23.46
$24.94
$26.42
$27.91
$29.39
8.00x
8.50x
$25.24
$27.02
$26.82
$28.70
$28.40
$30.38
$29.99
$32.06
$31.57
$33.74
Figure 5 Sensitivity of Target Price to EBITDA and EBITDA Multiple

We expect continued operational improvements should positively impact EBITDA margins

even as the company continues to see price normalization through 2016. We expect
management and the Board are likely to discuss the return of capital to shareholders in the
form of higher dividends or buybacks along with the possibility of an upwards revision to the
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average corporate line entry rate should bookings continue at the current pace. We also
believe that as returns on capital trend higher that multiples should expand, noting the positive
trend that now has metrics above 10% and expected to increase further. We maintain our
Outperform rating and are increasing our 12-month price target to C$26.00 from C$23.00.
Our target price is based on a blend of a 15.0x earnings and 7.5x EBITDA multiple of the four
quarters ending Q3/17 (+1Q) reflecting our 12-month forward valuation period as well as an
exchange rate of C$1.32/$US.
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Ticker
Marcopolo S.A.
Wajax Corporation
Superior Plus Corp.
Oshkosh Corporation
Spartan Motors Inc.
Cubic Corporation
Average
Rating &
Target
Trading
Local
Currency Price
TSX:NFI
OP (C$26.00)
BOVESPA:POMO4
NR
TSX: WJX
NR
TSX: AFN
NR
TSX: SPB
NR
GBX
NR
OSK
NR
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
CUB
NR
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
20.00
2.28
18.99
30.62
10.39
36.87
42.28
4.10
12.95
55.66
21.48
14.12
5.45
10.83
45.75
Market
Cap ($m m )
1,110.4
1,959.7
379.5
439.8
1,460.5
1,049.5
3,311.3
140.5
861.1
2,921.2
579.6
1,151.1
524.0
226.1
1,229.9
EPS
EV
Net
Debt
($m m )
2014
2015e
249.8
1,305.5
167.5
328.7
927.2
204.4
895.6
(15.7)
135.8
(176.3)
(70.2)
4,511.0
199.6
188.1
(43.0)
1,084.9
3,299.0
547.0
768.5
2,387.7
1,384.5
4,206.9
124.6
996.9
2,744.8
509.3
5,672.1
794.0
464.2
1,187.1
0.65
0.25
2.46
0.31
0.45
4.62
3.49
0.03
0.88
3.55
1.61
-5.07
0.03
0.00
2.47
1.04
0.14
1.62
2.14
0.65
6.62
2.68
-0.05
1.39
3.93
1.54
-0.07
0.02
0.76
2.44
P/E
EBITDA
2016e 2014 2015e 2016e

1.21
0.23
1.68
3.28
0.93
5.61
3.53
0.10
1.38
4.51
1.75
2.51
0.05
1.15
2.79
23.0x
6.9x
7.7x
NM
23.0x
8.0x
12.1x
NM
14.8x
15.7x
13.3x
NM
NM
NM
18.5x
14.3x
14.5x
12.3x
11.7x
14.3x
16.0x
5.6x
15.8x
NM
9.3x
14.2x
14.0x
NM
NM
14.2x
18.7x
13.4x
12.4x
7.4x
11.3x
9.3x
11.2x
6.6x
12.0x
NM
9.4x
12.3x
12.3x
5.6x
NM
9.4x
16.4x
10.4x
EV/EBITDA
2014
2015e
2016e
2014
2015e
2016e
Price
to BV
ROIC
ROE
107.4
268.8
82.4
63.4
282.4
257.4
591.2
9.4
160.7
298.8
65.8
331.0
69.0
25.9
119.3
144.8
170.0
77.5
75.5
277.7
489.3
494.8
8.1
214.5
333.5
66.1
566.1
70.3
75.5
120.6
157.7
343.0
80.6
101.8
342.7
441.6
589.1
10.9
206.8
390.8
75.3
758.0
88.6
81.7
132.3
10.1x
12.3x
6.6x
12.1x
8.5x
5.4x
7.1x
13.2x
6.2x
9.2x
7.7x
17.1x
11.5x
17.9x
10.0x
10.3x
7.5x
19.4x
7.1x
10.2x
8.6x
2.8x
8.5x
15.4x
4.6x
8.2x
7.7x
10.0x
11.3x
6.2x
9.8x
9.2x
6.9x
9.6x
6.8x
7.5x
7.0x
3.1x
7.1x
11.4x
4.8x
7.0x
6.8x
7.5x
9.0x
5.7x
9.0x
7.3x
1.7x
1.0x
1.2x
1.7x
2.4x
1.5x
1.7x
0.9x
2.0x
2.7x
2.6x
NM
2.0x
NM
1.6x
1.8x
7.0%
2.3%
7.9%
6.1%
6.0%
21.5%
8.7%
(0.0%)
13.7%
17.7%
18.1%
9.7%
2.6%
4.5%
5.8%
8.8%
10.2%
8.2%
11.7%
(2.5%)
7.2%
36.9%
11.8%
(4.7%)
22.6%
19.8%
19.9%
NM
NA
NM
4.6%
12.1%

119

NFI
C$20.00
Rating:
Outperform
12 Month Target:
C$26.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
61%
26%
Sector Perform
25%
9%
Underperform
2%
0%
Speculative Buy
3%
0%
Restricted
2%
50%
Not Rated
5%
0%
Tender
3%
0%
100%
19%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
120
Direct
__________________________________________________________________________________________________________

E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
121
Price: Cdn$17.88
November 8, 2015
Headline: XX

Road & Rail

Cdn$20.00
NFI (T)
Outperform
Stock Rating:
Cdn$24.00
Target:
(Was Cdn$20.00)
Average
Risk Rating:
Continued Earnings Momentum Prompts

Higher Target
(Unchanged)
Est. Total Return
23.1%
Stock Data:
Cash Yield
3.1%
20.0%
52-w eek High-Low
$20.86-$12.05
Bloomberg/Reuters:
NFI CN/ NFI.TO
Forecasts: DEC YE
Revenue (USmln)
Q3/15 Review
(Unchanged)
2014a
2015e
HIGHLIGHTS
2016e
$1,451.1 $1,486.5 $1,562.8
EBITDA (USmln)
$86.5
$129.8
DCPS ($US)
$1.06
$1.19
$141.0
$1.48
Dividend
$0.58
$0.60
$0.62
Payout Ratio
49%
39%
32%
DC Yield
5.9%
7.6%
9.6%
EV/EBITDA
12.4x
9.6x
8.3x
P/DCPS
16.9x
13.1x
10.4x
Financial Data
55.5
$1,110.4
Cash
Net Debt
$6.5
$239.7
18%
1.7x

Company Profile:
aftermarket parts and services.
Results keep outpacing expectations

NFI reported Q3/15 revenue of US$364.7 mln (vs. US$362.3
mln est. & US$360.8 mln Q3/14), adj. EBITDA of US$36.3 mln
(vs. US$29.4 mln est. & US$25.7 mln Q3/14) and DCPS of
US$0.30 (Cdn$0.40) reflecting a 39% payout ratio (vs.
US$0.29 (C$0.39) / 40% est. & US$0.29 (Cdn$0.32) and 45%
Q3/14). Q3 results were in line with consensus top line of
$371.7 mln and similarly well ahead of the Streets $31.3 mln
EBITDA forecast.
Manufacturing margins continue to impress
Bus manufacturing revenue of US$293 mln was in line with our
US$288 mln forecast (625 deliveries previously disclosed, at
average pricing of US$470k/unit); however, the story continues
to be NFIs margin per bus which remained at a healthy
US$35k/delivery Q3. This result is just below last Qs US$38k,
with the last six months profitability at levels not seen since
2011. Benefits from the standardization to the Xcelsior platform,
investments into production efficiencies and a healthy demand
environment are all ongoing factors that cause us to raise our
2016e EBITDA/bus assumption to US$34k (was US$31k), a
slight discount to Q2/Q3 levels due to a relatively favourable
recent product mix (as mentioned by mgmt on Fridays call).
Aftermarkets outperforms
US$14.6 mln adj. EBITDA was ahead of our US$12 mln est., as
weaker-than-forecast top line (-13% y/y vs. -10% est., the
decline due to the CTA overhaul contract ending) was more
than offset by record profitability (20% adj. EBITDA margin vs.
16% est. & 17% TTM avg.). Same store top line excluding the
CTA impact would have been +7% y/y, consistent with our
organic growth expectations for the aftermarkets vertical, and
we increased our 2016e margin assumption to 17% (was 16%)
given favourable trends and backdrop.

Daily NFI.TO
2014-11-03 - 2015-11-25 (TOR)
Line, NFI.TO, 2015-11-06, 20.00-0.47

Price
CAD
18

16
14
Associates:
Endri Leno - (416) 869-8047
endri.leno@nbc.ca
Kyle Stanley - (416) 507-8108
kyle.stanley@nbc.ca
Alex Bauer - (416) 869-7535
alex.bauer@nbc.ca
12
Vol, NFI.TO, 2015-11-06, 117,163.00
Volume
0
17 01 16 02 16 02 17 02 16
Q4 2014
Q1 2015
01 16 01 19 01 16 02 16 04 17 01 16 01 16 02 16
Q2 2015
Q3 2015
Q4 2015
122
Page 2
Investment Summary
Q3s backlog / order book update and financial results both continue to support our positive
investment bias, as it is clear the appetite for transit bus demand is robust and operationally
NFI is performing the best we have seen in our eight years following the company.
1) In the LTM NFI added 4k units of new firm and option orders, representing over 54% of
the current 7.3k unit / US$3.6 bln backlog. This represents more than three years of
production at the current run-rate, and we expect the pricing and margins from this book
of business to be consistent with the healthy performance realized of late. NFI has finally
chewed through less attractive backlog signed up during the economic downturn, and
evidence suggests the sharp improvements realized the last few quarters (particularly in
terms of EBITDA/delivery) better reflects the amount transit bus manufacturers can
make in the current environment. Transit authorities are replacing fleets given better
access to funding, an elevated age, environmental reasons and to drive operating
efficiencies all themes positioned to continue.
2) Management has been actively investing in improved IT, plant design / workflow,
operating efficiencies and to standardize its bus platform to Xcelsior, the benefits being
reflected in margin gains from the manufacturing segment and to a lesser extent
aftermarkets.
3) Aftermarkets profitability is at its highest levels ever, and while the ending of the CTA
mid-life overhaul program will weigh on top line the next three quarters, this segments
EBITDA outlook remains robust. We continue to believe the disconnect between NFIs
manufacturing market share (~48% of North America) and aftermarkets (~33%)
represents an opportunity as the latter plays catch up.
After adjusting for Q3 takeaways our 2016e EBITDA forecast increases 7% to US$141 mln
and DCPS +8% to US$1.48 reflecting a 32% payout. Given this cushion and NFIs
conservatively leveraged 1.7x net debt to EBITDA balance sheet, we believe investors
should anticipate continued dividend increases.
We use an unchanged ~10x 2016e EV/EBITDA multiple on our new estimates (and update
our FX assumptions) to arrive at a $24 target price (was $20), our target multiple
representing the average valuation for TSX diversified yield equities which we argue fairly
reflects NFIs relative attributes. With a 23%+ implied total return we reiterate an Outperform
rating.
123
Page 3
DISCLOSURES:
exchanges.
124
November 06, 2015
Current (CAD)
Ticker: NFI
Country: CA
Currency: CAD
Buy
Exchange: Toronto SE
Industry: Heavy Machinery & Vehicles
1W (CAD)
1W (%)
LW (CAD)
Close price
20.00
1.04
5.4 8 %
18.96
T arget price
20.08
0.63
3.23 %
19.4 5
New Flyer Industries Inc. (NFI) is a manufacturer of heavy-duty transit buses in the United States and Canada. The Company operates in two
business segments: Bus Operations and Aftermarket Operations. The Bus Operations segment is involved in the manufacture of heavy-duty
transit buses for public transportation and MiDi. The Aftermarket Operations segment is involved in the provision of service parts and
support related to transit buses. The Company offers the product line, including drive systems powered by diesel, natural gas, electric trolley,
fuel cell, diesel-electric hybrid and battery-electric. NFI also operates the industry's aftermarket parts organization, sourcing parts from
hundreds of different suppliers and providing support for all types of heavy-duty transit buses.
-
Rat ios
MA18
MA36
Target price 20.08

20
T his week
20.00
18.96
High
20.56
19.4 9
Low
19.91
18.63
Beta
0.09
0.05
1,110 M
1,04 5 M
Market cap
19
18
Volume
- -
11/4
11/5
P/S ratio
0.57 x
0.55 x
P/E ratio
27.73 x
26.56 x
P/B ratio
1.84 x
1.76 x
DPS yield
+3.52 %
+3.65 %
EV/EBITDA
11/3
Last week
Close price
- -
11/6
(UnitCAD)
Headline
Created at
Type
Title
2015/11/04
reuters.com
BRIEF-New Flyer Q3 earnings per share $0.30
2015/10/15
reuters.com
BRIEF-New Flyer says delivered 625 equivalent units in Q3 2015
2015/10/05
reuters.com
BRIEF-Wood Buffalo, Alberta awards New Flyer a contract for 25 midi and xcelsior buses
2015/09/28
reuters.com
BRIEF-New Flyer of America says Omnitrans awards contract for up to 217 Xcelsior Buses
Rating and Target Price
(UnitCAD)
Analyst projections(2015)
Consensus
Target price
Revenue
20.08
Buy
Last week
Weight
17.17
+5.51 %
2,136 M
1,982 M
1.11
+55.00 %
1.11
1.11
DPS
0.74
+5.62 %
0.81
0.62
T arget price
(UnitCAD)
2010
2011
2012
2013
2014
1,284 M
1,209 M
1,129 M
1,565 M
1,894 M
84 M
89 M
43 M
66 M
66 M
3M
20 M
12 M
34 M
34 M
Operating income
+37 %
Net income
-
Outperform
Part icipant s
2,037 M
Revenue
Analyst s consensus
Low
Income Statement Summary
Overvalued
17.51
T arget price
High
EPS
Valuat ion analysis
Overvalued
(UnitCAD)
vs.LFY
2B
Outperf orm
21.63
20.83
+63 %
1B
Ret ail consensus
T arget price
2010
2011
Tot al revenue
2012
Operat ing income
2013
2014
Net income
T he c om pany profile, other c om pany- related inform ation, analysts' opinion and projec tions in this Report are supplied by T hom son Reuters. T his Report is intended to be used for inform ation and referenc e
purposes only, and does not c onstitute a solic itation, or an offer to m ake an investm ent in, or to purc hases or sell, any spec ific investm ent produc ts. T he inform ation in this Report m ay c ontain projec tions,
opinions, assum ptions, estim ates and forec asts relating to future business perform anc e and events. Minkabu Group m akes no warranty regarding the ac c urac y or reliability of suc h projec tions, opinions,
assum ptions, estim ates or forec asts, and has no liability for any dam age of any kind arising out of relianc e on suc h inform ation. For m ore details, please refer to the Disc laim er on the last page of this
Report.
Copyright ( C ) MINKABU GROUP All rights reserved.
125
November 06, 2015

Ticker: NFI Exchange: Toronto SE
Valuation analysis
Overvalued
based on
Target price
Potential
P/S ratio
17.51 CAD
-12.44 %
Overall results
Last week
Overvalued
based on
Target price
P/S ratio
17.17 CAD
Recent figures (3 monthes)
New Flyer Industries Inc is considered overvalued in both of its historical
Curr.
Max.
Min.
Price
20.00
19.07
20.4 7
16.96
Volume
117,163
124 ,988
300,960
17,833
Market cap
1,110 M
1,062 M
1,138 M
994 M
(KPI: P/S ratio) and peer (KPI: P/B ratio) comparison analysis. As a result,
this stock is considered 'overvalued'. However New Flyer Industries Inc
would be considered 'undervalued' if its price declined below 17.51.
(UnitCAD)
Disclaimer: The f act that New Flyer Industries Inc is considered

"overvalued" by the analysis does not mean that its price will decline in the f uture. Monitor the sales of New Flyer Industries Inc closely and keep an
eye on its external environment to support your investment decision.
Valuation analysis
Historical comparison
Peer comparison
Sales
Prof it
BookValue
Dividend
Cash-f low
P/S rat io
P/E rat io
P/B rat io
DPS yield
EV/EBIT DA
0.57 x
27.73 x
1.84 x
+3.52 %
Result
overvalued
overvalued
overvalued
overvalued
overvalued
Average
0.50 x
23.11 x
1.51 x
+4 .4 5 %
10.61 x
Importance
High
Low
Low
Low
Low
Result
overvalued
undervalued
overvalued
overvalued
overvalued
Average
2.84 x
35.56 x
6.54 x
+1.52 %
25.23 x
Adjusted
0.50 x
35.56 x
1.51 x
+4 .4 5 %
10.61 x
Correlation
0.26
0.73
+0.4 9
Low
Low
High
Low
Low
Comparison
Importance
Historical comparison
Currently, New Flyer Industries Inc is considered 'overvalued' by the analysis because its P/S ratio is higher than its historical average.
Peer comparison
On the other hand, the P/B ratio of this stock tends to have a high correlation with the average of all listed companies worldwide. As a result, many
investors may estimate the trend of its net assets by comparing the company with all listed companies worldwide.And New Flyer Industries Inc
tended to trade at a discount in the past compared to its peers. As a result, this stock is considered 'overvalued' based on a peer comparison.
Analysts consensus
Outperform
2 weeks ago
Outperf orm
-
Target price
Potential
21.63 CAD
+8.14 %
Last week
Outperf orm
20.83 CAD
Based on analyst projections

Consensus
Low
High
Domest ic()
PSR
0.54 x
0.53 x
0.57 x
0.83 x
2.12 x
PER
17.89 x
17.89 x
17.89 x
17.4 9 x
28.19 x
Global()
Number of Opinions
Target price
Outperform
Valuation
Current
Outperf orm
Last week
Global()
Based on last year's results
0
2 we e ks ago
Buy
Out perf o rm
Las t we e k
Ho ld
Curre nt
Underperf o rm
Sell
New Flyer Indust ries Inc
Domest ic()
P/S ratio
0.57 x
1.77 x
3.4 1 x
P/E ratio
27.73 x
20.4 9 x
4 7.02 x
Report.
126
November 06, 2015

Industry average (domestic): Heavy Machinery & Vehicles w/Top 3 market cap
Rating & Valuation
(UnitCAD)
AT S Aut omat ion
New Flyer
T ooling Syst ems
Indust ries Inc
Inc
[AT A/CA]
Close price
20.00
Rating
Valuation analysis
Overvalued
Target price
Potential
Rating
Analysts consensus
Exco T echnologies
Ag Growt h
Lt d
Int ernat ional Inc
[XT C/CA]
[AFN/CA]
12.51
Undervalued
14 .19
Undervalued
Domest ic()
30.62
Undervalued
17.51
14 .87
14 .89
51.07
-12.4 4 %
+18.93 %
+4 .93 %
+66.79 %
Outperf orm
Target price
Outperf orm
Outperf orm
Outperf orm
21.63
17.78
18.70
4 4 .64
+8.15 %
+4 2.17 %
+31.78 %
+4 5.79 %
Rating
Target price
Potential
Market cap
1,110 M
1,157 M
601 M
4 39 M
173 M
EnterpriseValue
Potential
Retail consensus
P/E ratio
1,4 13 M
1,34 2 M
593 M
572 M
268 M
last FY (norm.)
27.73 x
29.78 x
19.4 2 x
90.98 x
20.4 9 x
projected
17.89 x
15.4 7 x
14 .4 5 x
13.4 2 x
17.4 9 x
last FY
0.57 x
1.23 x
1.63 x
1.09 x
1.77 x
projected
0.54 x
1.10 x
1.22 x
0.93 x
0.83 x
11.4 4 x
12.4 8 x
11.01 x
9.17 x
7.77 x
PSR
EV/EBITDA(LFT)
Fundamentals
New Flyer
Indust ries Inc
Sales
T ooling Syst ems
Exco T echnologies
Ag Growt h
Lt d
Int ernat ional Inc
Inc
Domest ic()
last FY
1,930 M
936 M
368 M
4 00 M
318 M
projected
2,037 M
1,052 M
4 91 M
4 72 M
4 88 M
vs last FY
+5.51 %
+12.39 %
+33.4 8 %
+18.10 %
49 M
55 M
40 M
36 M
27 M
27 M
last FY
Income bef ore tax
AT S Aut omat ion
projected
66 M
60 M
41 M
13 M
vs last FY
+76.76 %
+9.4 3 %
+2.4 8 %
-63.04 %
EBITDA(LFY)
123 M
107 M
53 M
62 M
42 M
Book value(LFY)
602 M
570 M
202 M
209 M
124 M
100
80
60
40
20
0
P/E(LFY)

Domest ic()
P/E(Proje cte d)
P/S(LFY)
AT S Aut omat ion Tooling Syst ems Inc
P/S(Proje cte d)
Exco Technologies Lt d
EV/EBITDA(LFT)
Ag Growt h Int ernat ional Inc
Report.
127
November 06, 2015

Industry average (worldwide): Heavy Machinery & Vehicles Market cap Top3
Rating & Valuation
(UnitCAD)
New Flyer
Danaher Corp
CRRC Corp Lt d
ABB Lt d
Indust ries Inc
[DHR/US]
[601766/CN]
[ABBN/CH]
Close price
20.00
Rating
Valuation analysis
Overvalued
Target price
Potential
Rating
Analysts consensus
3.10
-
25.37
Undervalued
17.51
164 .80
27.26
-12.4 4 %
+30.62 %
+7.4 6 %
Outperf orm
Target price
126.16
Undervalued
Global()
Outperf orm
Hold
Hold
21.63
130.81
2.64
25.97
+8.15 %
+3.69 %
-14 .92 %
+2.37 %
Rating
Target price
Potential
Market cap
1,110 M
86,4 55 M
78,54 3 M
58,729 M
836 M
EnterpriseValue
1,4 13 M
87,071 M
79,884 M
59,910 M
28,286 M
last FY (norm.)
27.73 x
26.4 0 x
37.94 x
24 .85 x
4 7.02 x
projected
17.89 x
22.22 x
33.61 x
17.91 x
28.19 x
last FY
0.57 x
3.29 x
3.16 x
1.12 x
3.4 1 x
projected
0.54 x
3.13 x
1.70 x
1.24 x
2.12 x
11.4 4 x
15.13 x
4 0.35 x
10.4 9 x
20.85 x
Potential
Retail consensus
P/E ratio
PSR
EV/EBITDA(LFT)
Fundamentals
New Flyer
Indust ries Inc
Sales
Income bef ore tax
CRRC Corp Lt d
ABB Lt d
Global()
last FY
1,930 M
26,216 M
24 ,837 M
52,4 36 M
613 M
projected
2,037 M
27,54 9 M
4 9,668 M
4 7,333 M
1,094 M
vs.LFY
+5.51 %
+5.08 %
+99.97 %
-9.73 %
last FY
49 M
4 ,632 M
1,64 4 M
5,184 M
52 M
83 M
projected
66 M
4 ,758 M
3,539 M
4 ,296 M
+76.76 %
+3.81 %
+117.31 %
-16.67 %
EBITDA(LFY)
123 M
5,752 M
1,979 M
5,710 M
75 M
Book value(LFY)
602 M
31,106 M
8,4 84 M
21,64 7 M
317 M
vs.LFY
Danaher Corp
50
40
30
20
10
0
P/E(LFY)
P/E(Proje cte d)
P/S(LFY)
Danaher Corp
CRRC Corp Lt d
P/S(Proje cte d)
ABB Lt d
EV/EBITDA(LFT)
Global()
Report.
128
November 06, 2015

Financials
Income statement
(UnitMCAD)
2010
2011
2012
2013
2014
Revenue
1,284
1,209
1,129
1,565
1,894
Total revenue
1,284
1,209
1,129
1,565
1,894
-2
-0
-3
1,129
1,059
1,033
1,4 08
1,713
154
150
96
157
180
61
54
56
90
106
Unusual expense income
Other operating expenses total
11
1,200
1,119
1,085
1,4 99
1,828
84
89
43
66
66
-85
-53
-28
-18
-14
Gain loss on sale of assets
-0
Other net
-3
-1
-1
-2
-2
Income bef ore tax
-5
34
13
45
49
Income tax total
-8
14
10
14
Income af ter tax
20
12
34
34
Net income bef ore extra items
20
12
34
34
Net income
20
12
34
34
Diluted net income
20
14
40
34
Dilution adjustment
20
12
34
34
20
12
34
34
25
68
76
72
Interest expense or income net operating

Cost of revenue total
Gross prof it
Selling general administrative expenses
total
Total operating expense

Operating income
Interest income or expense net non
operating
Income available to common excl extra

items
Income available to common incl extra
items
Diluted weighted average shares
Balance sheet summary
(UnitMCAD)
2010
2011
2012
2013
2014
Cash
95
13
14
15
Cash and short term investments
95
13
14
15
22
22
Accounts receivable trade net
68
14 4
14 1
288
255
Total receivables net
79
151
14 8
300
277
Total inventory
108
122
162
239
300
Prepaid expenses
Other current assets total
290
293
331
565
607

Property plant equipment total gross
84
95
112
172
Accumulated depreciation total
-35
-4 6
-57
-89
Property plant equipment total net
48
48
54
84
83
Goodwill net
263
263
263
277
Intangibles net
4 66
446
4 26
74 3
4 33
39
83
94
90
81
1,108
1,136
1,171
1,4 83
1,4 83
304
Other long term assets total

Total assets
124
198
196
278
Accrued expenses
Payable accrued
Current port of lt debt capital leases
14
54
47
54
Other current liabilities total
91
51
49
110
95
224
267
300
4 37
4 61
Long term debt
528
217
232
259
261
533
220
235
261
265
Capital lease obligations

Total long term debt
Report.
129
Def erred income tax
164
Other liabilities total

Total liabilities
Additional paid in capital
Retained earnings or accumulated
def icit
Other equity total
Total equity
Total liabilities and shareholders equity
Total debt
155
159
14 9
November 06, 2015

14 1
19
15
26
40
22
94 2
659
722
889
892
-129
-14 5
-170
-173
-177
-3
-1
-2
165
4 77
449
594
590
1,108
1,136
1,171
1,4 83
1,4 83
536
235
289
308
320
Cash flow summary
(UnitMCAD)
2010
2011
2012
2013
2014
Net income starting line
20
12
34
34
Depreciation depletion
10
10
10
12
20
Amortization
20
20
20
24
26
Def erred taxes
14
10
14
Non cash items
95
14
14
40
Cash interest paid
65
56
22
14
15
Cash taxes paid
14
24
15
Changes in working capital
-37
-131
-4 5
-56
-76
Cash f rom operating activities
92
-50
39
59
-10
-10
-14
-27
-14
Other investing cash f low items total
-132
Cash f rom investing activities
-10
-10
-14
-159
-14
Total cash dividends paid
-24
-32
-4 4
-38
-38
Issuance or retirement of stock net
Issuance or retirement of debt net
11
15
55
13
Cash f rom f inancing activities
-28
-24
121
-38
Financing cash f low items
-15
-7
-4
14 5
Foreign exchange ef f ects
-0
55
-82
Net change in cash

-
2B
1.5B
1B
500M
2010
2011
2012
Tot al Asset s
2013
2014
Tot al Liabilit ies
Report.
130
November 06, 2015

Corporate profile
Company profile
New Flyer Industries Inc. (NFI) is a manuf acturer of heavy-duty transit buses in the United States and Canada. The
Company operates in two business segments: Bus Operations and Af termarket Operations. The Bus Operations
segment is involved in the manuf acture of heavy-duty transit buses f or public transportation and MiDi. The
Business summary
Af termarket Operations segment is involved in the provision of service parts and support related to transit buses. The
Company of f ers the product line, including drive systems powered by diesel, natural gas, electric trolley, f uel cell,
diesel-electric hybrid and battery-electric. NFI also operates the industry's af termarket parts organization, sourcing
parts f rom hundreds of dif f erent suppliers and providing support f or all types of heavy-duty transit buses.
BRIEF: For the 26 weeks ended 28 June 2015, New Flyer Industries Inc. revenues increased 13% to $755.3M. Net
income increased f rom $9M to $23.2M. Revenues ref lect Bus Operations segment increase of 12% to $576.5M, Af ter
Financial summary
Market Operations segment increase of 16% to $178.8M, United States segment increase of 17% to $668M. Net
income benef ited f rom Foreign exchange loss (gain) decrease f rom $1.2M (expense) to $767K (income).
Homepage
http://www.newf lyer.com/
Address
711 Kernaghan Ave WINNIPEG MB
Public contact
Investor Relations Jon Kof f man
Phone number
1-204 -224 1251
Contact phone number
1-204 -224 1251
Contact email
investor@newf lyer.com
Management
Rank
Name
Posit ion
Since
Brian V. Tobin
Independent Chairman of the Board
Paul Soubry
President, Chief Executive Of f icer, Director
2009-5-11
Glenn Asham
Chief Financial Of f icer
2013
Colin Pewarchuk
Executive Vice President, General Counsel and Corporate Secretary
2007
Paul Graham Smith
Executive Vice President - Sales and Marketing
Wayne R. Joseph
Executive Vice President - Operations
2008-7
Ian Smart
Executive Vice President - Af ter market
2011-10
David White
Executive Vice President - Supply Management
2006-1-1
Janice Harper
Vice President - Human Resources
2009-10
10
Margaret Lewis
Vice President - Quality Assurance and Continuous Improvement
2009-10
Age
60
56
On December 29, 2013 New Flyer Industries Inc had 3,200 Employees.
Report.
131
November 06, 2015

Historical Charts
M3 Chart
Historical data
(UnitCAD)
High
MA18
MA36
Target price 20.08

20
18
16
14
8/17
8/31
9/14
9/28
10/12
10/26
Y1 Chart
Low
Volume
2015/08/10 -
19.29
17.95
851,4 00
2015/08/17 -
19.95
18.36
837,258
2015/08/24 -
19.11
16.08
366,011
2015/08/31 -
19.36
18.54
4 07,925
2015/09/07 -
19.25
18.01
397,206
2015/09/14 -
19.10
18.06
4 09,526
2015/09/21 -
19.88
18.95
4 11,151
2015/09/28 -
20.84
18.4 1
776,239
2015/10/05 -
20.20
19.27
64 7,84 9
2015/10/12 -
20.00
19.02
4 76,399
2015/10/19 -
19.4 5
18.04
74 7,058
2015/10/26 -
19.54
18.51
535,382
During
20.84
16.08
Historical data
(UnitCAD)
High
MA18
MA36
Target price 20.08

20
17.5
15
12.5
Low
Volume
2014 /12/01 -
13.60
12.05
1,869,288
2015/01/01 -
13.88
12.58
1,221,080
2015/02/01 -
13.99
12.95
656,14 0
2015/03/01 -
14 .4 4
13.4 6
1,363,24 2
3,007,086
2015/04 /01 -
14 .90
13.75
2015/05/01 -
14 .4 9
14 .25
128,100
2015/07/01 -
16.61
15.93
610,384
During
16.61
12.05
10
1/1
3/1
7/1
9/1
Y5 Chart
-
MA18
MA36
Target price 20.08

15
10
2011/9
2012/1
2012/5
2012/9
2013/1
2013/5
2013/9
2014/1
2014/5
2014/9
2015/1
2015/5
Report.
132
November 06, 2015

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Report.
133
INSTITUTIONAL EQUITY R ESEARCH : DIVERSIFIED INDUSTRIES
RESEARCH ALERT
NFI | TSX
$20.32
Rating: Outperform
November 5, 2015
Q3/15 First Look: Earnings Beat Driven By Strong Margin

Improvement in Both Segments
Q3/15 Results: New Flyer announced Q3/15 results reporting revenue, Adjusted
EBITDA and Adjusted FD EPS of $364.7mm, $36.3mm and $0.26 as compared to
our estimates of $387.8mm, $32.1mm and $0.22, respectively. Consensus
expectations for revenue, Adjusted EBITDA and Adjusted FD EPS were
$371.8mm, $31.4mm and $0.23. A conference call is scheduled for Friday,
November 6, 2015 at 9:00am ET (1-888-231-8191) where we expect management
to provide further insights on the transition to the Xcelsior platform, updates on the
synchronization of the aftermarket business and details on future margins.
Margin Improvement in Bus Manufacturing: Bus manufacturing revenues grew

5.1% y/y with a 0.6% increase in deliveries and a 4.5% increase in average selling
price per EU to $468.8K. Adjusted EBITDA increased by 72.1% y/y representing a
margin expansion of 290bps attributable to a favorable sales mix as well as
increased efficiencies and cost savings achieved from the transition to the Xcelsior
platform. Management indicated in the report that savings from the transition are
now estimated at $16.5mm, up from $14mm previously. EBITDA per EU increased
to $34.6K from $20.2K in Q3/14 and well above our estimate for $29.2K.
Margins in Aftermarket Operations Exceed 20% : While aftermarket revenues

declined expectedly as a result of the completion of the Chicago Transit Authority
mid-life overhaul program, EBITDA increased by 11.7% y/y to $14.7mm
representing a margin of 20.5%. The increase is attributable to a broader portfolio of
products and services in an improved market. We expect management to provide
additional details with respect to Project Convergence during the call.
Outlook: Management continues to expect an average corporate line entry rate of

~50EU per available production week for 2015 and 2016. We note that in the first
week of July, there were no scheduled assembly line entries which impacted
production by ~35EU. The company continues to see normalization in pricing
guiding towards higher 2015 EBITDA margins as compared to 2014. In the
aftermarket segment, parts revenue should grow by 5% y/y in 2015 along with an
expected improvement in margins as the company continues to synchronize the
systems and processes in place.
Quarter Should Be Well Received: Overall, we expect the quarter to be well

received. On an LTM basis, the company reported an 11.5% return on invested
capital which was the highest in the last five years. Management continues to expect
a robust demand environment in 2016 which we believe should support discussions
around an increased average line entry rate or return of capital to the shareholders .

Managing Director
647.776.8246

647.776.8245
134
Q3/15 Highlights (US$000s, except per share)

ACC Estim ate Reported
Q3/15
Q3/15
Q3/14
Q2/15
Grow th y/y Grow th
Estim ate
Estim ate
Variance $ Variance %

Backlog End of Period (US$M)
625.0
508.0
29.2
3,568.6
625.0
468.8
34.6
3,590.0
621.0
448.8
20.2
3,069.5
0.6%
4.4%
71.0%
17.0%
2.1%
5.3%
58.1%
(1.5%)
(39.2)
5.4
21
0.0%
(7.7%)
18.3%
0.6%
Operating Segm ents

Bus Manufacturing
Revenue
EBITDA
317,500
18,256
5.8%
5.8%
292,970
21,606
7.4%
7.4%
278,713
12,557
4.5%
4.9%
5.1%
72.1%
2.9%
2.4%
7.5%
65.1%
2.6%
2.4%
(24,530)
3,350
(7.7%)
18.3%
1.6%
1.6%
70,284
13,880
19.7%
71,713
14,671
20.5%
82,049
13,140
16.0%
(12.6%)
11.7%
4.4%
10.6%
28.3%
2.6%
1,429
791
2.0%
5.7%
0.7%
387,784
32,137
11,975
364,683
36,277
16,559
360,762
25,697
10,245
1.1%
41.2%
61.6%
8.2%
45.3%
247.2%
(23,101)
4,140
4,584
(6.0%)
12.9%
38.3%
$0.22
$0.22
$0.30
$0.26
$0.18
$0.15
61.5%
75.2%
246.9%
81.4%
$0.08
$0.04
38.3%
19.8%
Afterm arket
Revenue
EBITDA
EBITDA Margin
Total
Revenue
Adjusted EBITDA
Reported Net Income
Reported
Adjusted
Consensus
Actual vs.
Consensus
371,803
31,350
(1.9%)
15.7%
$0.23
14.8%
Figure 1. New Flyer Industries Inc. Q3/15 Highlights

Source: AltaCorp Capital, Company reports
Historical Return on Invested Capital

800
Average Invested Capital
Return on Invested Capital

11.5%
700
(in $mm)
600
9.3%
8.6%
8.0%
6.2%
641.5
300
503.0
706.6
703.2
547.6
2.0%
100
0
6.0%
4.0%
200
2011
2012
Figure 2. Historical Return on Invested Capital
12.0%
10.0%
8.5%
500
400
14.0%
0.0%
2013
2014
LTM-Q3/15
135

NFI
C$20.32
Rating:
Outperform
12 Month Target:
C$23.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
61%
26%
Sector Perform
25%
9%
Underperform
2%
0%
Speculative Buy
3%
0%
Restricted
2%
50%
Not Rated
5%
0%
Tender
3%
0%
100%
19%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
136
Direct
__________________________________________________________________________________________________________

E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
137

(NFI-TSX)
Rating:
Market Perform
Target Price:
Price (4-Nov):
$19.00
$20.32
Total Return: -3%
November 4, 2015
Bert Powell, CFA
416-359-5301

bert.powell@bmo.com
Adel Kanso
adel.kanso@bmo.com
416-359-6193
Q3/15 Results Beat Expectations; Higher-Than-Anticipated EBITDA per EU; Market

Fundamentals Continue to Improve
New Flyer (NFI) reported Q3/15 EPS of $0.29, above our expectation and the Mean estimate of $0.22. Total Revenue was
up 1% y/y to $365 million, below our expectation and the Mean estimate of $373 million. Bus deliveries were up 1% y/y to
625 equivalent units (EUs), while the average EU selling price was up 4% y/y to $469k. Adj. EBITDA margin was up 280
bps y/y to 9.9%, above our expectation of 8.5% and the Mean estimate of 8.0%. Adj. EBITDA per EU was ~$35k this
quarter, up from ~$20k per EU same period last year. Conference call details: Friday, November 6 at 9:00 a.m. ET; Tel: 1888-231-8191 or 647-427-7450.
Our View:
So far in 2015 it appears that the product rationalization plans and industry fundamentals have enabled NFI to beat
expectations and improve the margins.
This is the second quarter in a row where NFI has booked higher-than-anticipated EBITDA per EU. The increase was
mainly driven by the sales mix and operational improvement initiatives. The aftermarket segment EBITDA margin has
also improved by 450 bps y/y to 20.5% mainly due to improved market fundamentals and product mix.
NFI expects its core aftermarket parts revenue to grow by 5% in 2015. The company is also looking to identify costcutting initiatives in this business to improve the margin.
Management has said that margins should be higher in 2015 after working through some lower margin backlog and cost
initiatives. Management continues to say these improvements are expected to offset the benefits of the ITCs that were
included in EBITDA last year. EBITDA for the first three quarters is already in excess of last year's EBITDA including
ITCs, so we are not sure how to interpret the implications for guidance.
With no changes in production, NFI is a cost story and has delivered in excess of what we thought on that front. NFI
continues to look for cost opportunities, but there are limits to growth from cost initiatives.
We believe that the stock is now discounting margins at higher levels.
Flash Page 1
138

Target Price
Share Price
Quarterly Price
25
20
20
18
18
16
16
14
14
12
12
10
10
25
20
20
15
15
10
10
2) Mkt
1) NR
5
500
400
400
300
300
200
200
100
2005
2010
400
200
200
2015
Revenue / Share
Price / Revenue
300
1.0
200
600
400
100
2000

600
500
1995
2013
2014
2015

200
200
0.5
100
-200
2013
0.0
Price / Earnings
2014
2015
-200
400
200
0
1995
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
0.73
2000
2005
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
25.8
2010
2015
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
84
10.8
16.5
0.62
4.2
3.3
1.8
ROE
%
3
6
6
1
2
Date
20-Feb-13
3-Jul-13
Rating Change
R to NR
NR to Mkt
Share Price
$9.94
$11.14

Last Price ( November 3, 2015): $18.98

Flash Page 2
139
report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates,
which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and
in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past
12 months.
Methodology: Our $19.00 target is based on ~7.3x our 2016E EBITDA.
Risks: A significant portion of new transit bus purchases are funded from government sources. As long as federal, state/provincial and municipal budgets
remain under pressure, funding for new bus purchases could be reduced or eliminated. Other risks include: price volatility of raw materials, warranty costs
could be material, labour disruptions from its predominantly unionized workforce and customer contract issues (early termination, deferral, non-renewal).
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
42.5%
18.6%
54.7%
44.3%
56.9%
56.3%
Hold
Market Perform
54.3%
11.3%
42.7%
51.8%
40.9%
38.7%
Sell
Underperform
3.5%
11.1%
2.7%
3.9%
2.2%
5.0%
*
**
Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking services
as percentage within ratings category.
***
****
Reflects rating distribution of all companies covered by BMO Capital Markets equity research analysts.
*****
Reflects rating distribution of all companies from which BMO Capital Markets has received compensation for Investment Banking services as
Flash Page 3
140

BMO Capital Markets' seven Top 15 lists guide investors to our best ideas according to different objectives (CDN Large Cap, CDN Small Cap, US Large
Cap, US Small cap, Income, CDN Quant, and US Quant have replaced the Top Pick rating).
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142

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
EARNINGS UPDATE
j

Strong Margins Drive Q3 Beat - Reiterate
SO And Raising PT To C$24 (From C$22)
What's The Event
NFI (NFI-SO) reported strong Q3 results. Revenue of $365MM was
generally in line with our estimate and consensus, and up 1.1% Y/Y.
Adjusted EBITDA came in at $36MM, topping our estimate of $30MM
(consensus was $34MM). This mainly reflected strong margin
performance as adjusted EBITDA margins during the quarter came
in at 9.9%, up from 7.1% last year, and 200 bps higher than we had
expected. Both the Bus Manufacturing and Aftermarkets divisions
performed better than expected.
- Bus Manufacturing: Q3 Bus Manufacturing revenue came in at
$293MM, up 5.1% Y/Y, and versus our estimate $298MM. While
selling prices were a bit lighter than expected, NFI still saw its
average selling price increase by 4.5% Y/Y to ~$470,000. The
increase in the average selling price was due to more favourable
sales mix of bus types and better pricing versus last year. Bus
Manufacturing adjusted EBITDA came in at $22MM, up 72.1% Y/Y,
and versus our estimate of $16MM as the company benefited from
more favorable sales mix and the cost savings achieved from the
transition to Xcelsior. Adjusted EBITDA margins in Q3 came in at
7.4%, up from 4.5% last year, and ~200 bps higher than we had
expected. Average EBITDA per EU was ~$34,600, up from
~$20,200 last year and versus our estimate of ~$26,400. During
the quarter, NFI delivered 625 EUs, but this was pre-released.
November 4, 2015
Capital Equipment
Stock Rating:
Sector Weighting:
NFI-TSX (11/4/15)
SECTOR OUTPERFORMER
MARKET WEIGHT
C$24.00
C$20.32
Key Indices:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Float
Dividend/Div Yield
Fiscal Year Ends
Book Value
2015 ROE (E)
LT Debt
Net AssetEquity
Value
Common
EBITDA ($mln)
Current
Prior
Estimates (Dec.
(Dec. 31)
31)
Valuation
EV/EBITDA-Curr
EV/EBITDA-Prior
Toronto
NM
C$12.05-C$20.85
55.5M
44.0M Shrs
38,000
C$1,054.5M
C$0.62 / 3.3%
December
$11.90 per Shr
13.0%
$141.0M
$474.1M
Yes
2013
$94.7A
2014
$107.4A
2015
$143.1E
$132.5E
2016
$147.5E
$138.4E
11.7X
10.3X
7.6X
8.3X
7.4X
8.0X
- Aftermarkets: Q3 Aftermarket revenue was $72MM, versus our

estimate of $74MM, and down 12.6% Y/Y primarily reflecting the roll
off of the lower margin CTA mid-life overhaul program. Excluding
the CTA mid-life overhaul program, core Aftermarkets revenue was
up 7.3% Y/Y. Adjusted EBITDA during the quarter was $15MM, up
11.7% Y/Y, and versus our estimate of $14MM reflecting betterthan-expected margins. Adjusted EBITDA margin in Q3 was 20.5%,
up from 16.0% last year, and ~200 bps above our estimate. This
was attributable to improved market fundamentals and product mix.
Aftermarkets remain a bright spot for NFI and we are encouraged by
the growth prospects in this segment.
Noted continues on page 3.
Company Description
www.newflyer.com
15-138888 2015
"Price Target Calculations" and "Key Risks to Price Target" information on page(s) 3 to 4.
CIBC World Markets Corp., 425 Lexington Avenue, New York, NY 10017 (212)-856-4000
143
Strong Margins Drive Q3 Beat - Reiterate SO And Raising PT To C$24 (From C$22) - November 04, 2015
Sector Outperformer
NFI-TSX
11/4/15
Capital Equipment
Sector Weighting:
EV/EBITDA Multiples
Manufacturers
P/E Multiples
Manufacturers
2013A
EBITDA Margin
Current Ratio
Debt/Equity
Debt/Total Capital
Income Statement
Cost of Sales
Gross Profit
EBITDA
EBIT
EBT
Net Income
Balance Sheet
C$20.32
C$24.00
Market Weight
2014A
2015E
2016E
10.3x
9.5x
10.0x
7.7x
8.4x
8.5x
7.4x
7.0x
7.4x
2014A
2015E
2016E
Investment Thesis
24.5x
16.9x
17.0x
17.8x
14.6x
13.0x
18.0x
13.1x
11.8x
Fundamentals for bus demand are improving due to rising U.S. state/municipal tax revenue, growing
bus ridership numbers (reflecting the cost advantage of taking bus transit versus driving and modestly
2014A
2015E
2016E
7.9%
1.1x
51.3%
33.9%
2013A
7.4%
1.1x
53.1%
34.7%
2014A
9.4%
1.3x
40.6%
28.9%
2015E
9.6%
1.3x
49.5%
33.1%
2016E
$991.2
$215.0
$1,199.4
$1,078.7
$120.8
$94.7
$49.0
$34.6
$26.8
$1,132.1
$319.0
$1,451.1
$1,312.8
$138.3
$107.4
$51.4
$37.6
$26.7
$1,200.7
$324.3
$1,525.0
$1,341.2
$183.7
$143.1
$93.2
$78.8
$54.6
$1,231.3
$308.3
$1,539.6
$1,353.5
$186.0
$147.5
$109.2
$94.8
$62.8
Q3/15A
Current Assets
Total Assets
Current Liabilities
Total Liabilities

468
1,135
326
661
474
Company Profile
New Flyer is guiding towards 2015 production line rate of ~50 EUs/week, we view its $0.62/share
Canada
16%

$350
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
0
2009
2010
2011
2012
Deliveries(EUs)
2013
2014
$ Millions
3,000
2008
United States
84%
Bus Operations
78%
$1,200,000
2007

Aftermarket
Operations
22%
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2009
2010
2011
2012
$50
$0
2007
2008
2013
2014
144
The outlook for NFI remains favourable with the company noting that bus
competitions have normalized and expects that bus margins realized this year
will be, on average, higher than those realized in 2014. NFI also reiterated that
it expects the average line entry rate to be ~50 EUs this year and next year, in
line with our expectations. With respect to the Aftermarket segment, NFI
continues to expect core aftermarket parts revenue growth of ~5% in 2015.
Combined with improving industry fundamentals, NFI is also benefiting from its
restructuring plans as it converts the old NABI facility to the Xcelsior platform.
While this restructuring will cost ~$20 million, annualized cost savings will be
~$14 million, highlighting a quick payback.
We have adjusted our estimates as we actualized Q3/15 results and increased
our margins per EU in 2016 from ~$32,000 to ~$35,000 to reflect the improving
fundamentals and cost-savings initiatives. On a TTM basis, average margins per
EU were just over ~$33,000. We have also tweaked our Aftermarkets margins
by 70 bps higher after a strong Q3 to 19.5%. As such, our 2015E and 2016E
EBITDA increases to $143 million (from $133 million) and $148 million (from
$138 million) respectively. Our price target increases from C$22.00 to C$24.00.
We reiterate our SO rating with Q3 results reaffirming our positive thesis on the
name. We continue to like NFI based on its margin expansion opportunities
(reflecting improving industry fundamentals and cost cutting); increasing FCF
conversion with capex expected to hover around $12 million-$14 million
annually even with the step up in earnings; and improving ROIC. On this last
point, NFI's ROIC at the end of Q3 was 11.5%, up 90 bps Q/Q and versus 8.5%
at the end of 2014. Overall, we see the company positioned well to continue to
raise its dividend and pursue strategic tuck-in acquisitions.
Exhibit 1. Summary Of Changes
2015
2016
Before
After
Before
After
Total Shipments (EUs)
2476
2481
2500
2500
Total Revenues ($Mln)
$1,532
$1,525
$1,542
$1,540
$1,205
$1,201
$1,231.3
$1,231.3
Average EU Selling Price ($000)
$487
$484
$311
$493
Aftermarket Operations Revenues ($Mln)
$326
$324
$311
$308
$133
$143
$138
$148
Bus Manufacturing EBITDA ($Mln)
$72
$81
$80
$87
Margin (%)
6.0%
6.7%
6.5%
7.1%
Bus Manufacturing EBITDA per EU ($000)
$29.0
$32.6
$32.0
$35.0
$61
$62
$58
$60
18.6%
19.2%
18.8%
19.5%
Bus Manufacturing Revenues ($Mln)
Total EBITDA ($Mln)
Aftermarket Operations EBITDA ($Mln)

Margin (%)

our 2016 EBITDA estimate and using current net debt. Our target multiple is in
line with New Flyers historical trading range given the longer-term positive
U.S. economy.
145

costs.
F2013
Q1/F14
Q2/F14
Q3/F14
Q4/F14
F2014
Q1/F15
Q2/F15
Q3/F15
Q4/F15E
F2015E
F2016E
Revenue
$1,199,424
$323,865
$346,484
$360,762
$419,989
$1,451,100
$380,301
$375,012
$364,683
$404,970
$1,524,966
$1,539,571
Cost of Sales
$1,078,657
$293,851
$309,256
$326,482
$383,228
$1,312,817
$340,674
$326,581
$315,349
$358,639
$1,341,243
$1,353,540
Gross Profit
$120,767
$30,014
$37,228
$34,280
$36,761
$138,283
$39,627
$48,431
$49,334
$46,331
$183,723
$186,031
SGA
$26,082
$10,348
$10,262
$8,583
$1,725
$30,918
$8,213
$9,240
$13,057
$10,124
$40,634
$38,489
EBITDA
$94,685
$19,666
$26,966
$25,697
$35,036
$107,365
$31,414
$39,191
$36,277
$36,207
$143,089
$147,541
Amortization
$28,001
$7,718
$8,131
$10,012
$9,976
$35,837
$9,507
$9,845
$10,021
$9,913
$39,286
$38,320
FX loss (gain)
$118
$802
$387
$226
$132
$0
($1,455)
$688
$628
$0
($139)
$0
Operating Earnings
$66,566
$11,146
$18,448
$15,459
$24,928
$69,981
$23,362
$28,658
$25,628
$26,294
$103,942
$109,221
Unrealized FX Loss
$2,146
$380
($1,000)
$117
($317)
$0
$1,914
($829)
$984
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$15,457
$762
$6,685
$2,561
$9,353
$19,361
$3,209
$4,846
$645
$0
$8,700
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
EBIT
$48,963
$10,004
$12,763
$12,781
$15,892
$51,440
$18,239
$24,641
$23,999
$26,294
$93,173
$109,221
$8,749
$2,257
$2,257
$2,203
$2,180
$8,897
$2,334
$2,200
$2,161
$2,409
$9,635
$9,763
$2,208
$540
$549
$565
$575
$2,229
$584
$598
$609
$609
$2,400
$2,436
$2,857
$823
$1,190
$713
$795
$3,521
$726
$602
$590
$600
$2,518
$2,400
$532
($314)
$377
($785)
($53)
($775)
$487
($310)
$128
$0
$0
$0
Interest Expense
$14,346
$3,306
$4,373
$2,696
$3,497
$13,872
$4,131
$3,090
$3,488
$3,618
$14,327
$14,419
EBT
$34,617
$6,698
$8,390
$10,085
$12,395
$37,568
$14,108
$21,551
$20,511
$22,676
$78,846
$94,803
Income Tax Expense
$7,856
$1,214
$4,827
($160)
$4,968
$10,849
$3,253
$9,181
$3,952
$7,835
$24,221
$32,031
Net Income
$26,761
$5,484
$3,563
$10,245
$7,427
$26,719
$10,855
$12,370
$16,559
$14,842
$54,626
$62,772
$0.81
$0.11
$0.18
$0.18
$0.30
$0.83
$0.24
$0.29
$0.31
$0.27
$1.14
$1.13

Unusuals
146
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Prior
$31.4A
$39.2A
$30.0E
$31.9E
$132.5E
2015 Current
$31.4A
$39.2A
$36.3A
$36.2E
$143.1E
2016 Prior
--
--
--
--
$138.4E
2016 Current
--
--
--
--
$147.5E
147

148

Abbreviation
Rating
Description
SO
Sector Outperformer
SP
Sector Performer
SU
NR
Not Rated
Restricted
Stock Ratings
O
Overweight
Market Weight
Underweight
NA
None

(as of 04 Nov 2015)
Count
Percent
152
42.2%
162
45.0%
37
10.3%
2.2%

Restricted
Count
Percent
147
96.7%
155
95.7%
Restricted
31
83.8%
100.0%

(as of 04 Nov 2015)
Count
Percent
100.0%
Restricted
Count
Percent
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Restricted
0.0%

149
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
05/08/2015
07/15/2015
08/07/2015
09/20/2015
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
14.69
15.77
17.88
18.85
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SO
SO
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
15.75
16.50
19.50
22.00
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Inc.
150
Legal Disclaimer
and recommendations expressed herein constitute judgments as of the date of this report
151

and are subject to change without notice.
in prosecution.
10
152
RESEARCH ALERT
NFI | TSX
$18.56
Rating: Outperform
Announces An Award for Up To 725 Xcelsior Buses
October 23, 2015

Managing Director
647.776.8246
Large Order from MBTA: New Flyer announced that the company has been
awarded an award for up to 725 40-foot Xcelsior heavy-duty transit buses (725
equivalent units (EU)) by the Massachusetts Bay Authority (MBTA). The contract
includes a firm order for 175 CNG buses and 150 diesel-electric hybrid buses along
with five-year options for an additional 200 clean diesel and 200 diesel-electric
hybrid buses.
Value Should Skew Backlog Metrics Positively: The award is valued at

~US$477mm with ~US$223mm in firm orders and the remainder, ~US$254mm, in
options representing ~$658k/EU ($686k/EU firm, $635k/EU options), which is well
above the value per EU in total backlog estimated at $489k/EU and $515k/EU in
firm backlog. We believe the contract award which comprises a mix of clean
technology buses should skew higher in value due to propulsion, however we
believe the values reported are indicative that more normalized pricing is being
achieved, with more appropriate embedded margins likely leading to continued
margin improvement in the bus manufacturing segment. We note the order contains
72% clean technology propulsion systems (525/725EU) as compared to backlog at
Q3/15, which contained 71%.
Orders Part of Q4/15 backlog: The order for 725EU represents the pending award
highlighted in the Q3/15 orders and backlog release and is included in the Q4/15
backlog. We note the company has an additional 444EU firm and option orders for
which approvals have been received but the manufacturer is awaiting purchase
documentation.
Long-Standing Relationship with the MBTA: We note MBTA is the fifth largest
mass transit system in the US in terms of daily ridership with more than 70% of its
fleet supported by New Flyer. MBTA presently operates a fleet of 1,008 heavy-duty
transit buses, including 412 built by New Flyer and 299 built by NABI.
Expect a Strong Book to Bill at Year End: With the announcement, we expect the
book to bill in Q4/15 and for the year to be well in excess of 1.0x. We are
forecasting a book to bill of 1.30x for Q4/15 and 1.06x for 2015. We continue to
highlight New Flyers improving margin profile and a healthy order book which
should accelerate discussions around return of capital to shareholders.

647.776.8245
153
2015 YTD Announced Firm Orders and Options

Date Announced Transit Authority
2015 YTD Orders
22-Oct-15
Massachusetts Bay Transport Authority
13-Oct-15
08-Oct-15
05-Oct-15
30-Sep-15
28-Sep-15
24-Sep-15
13-Aug-15
13-Aug-15
08-Jul-15
07-Jul-15
30-Jun-15
29-Jun-15
29-Jun-15
22-Jun-15
12-Jun-15
01-Jun-15
28-May-15
26-May-15
26-May-15
26-May-15
22-May-15
21-May-15
20-May-15
14-May-15
13-May-15
13-May-15
01-May-15
09-Apr-15
09-Apr-15
08-Apr-15
13-Mar-15
10-Mar-15
10-Mar-15
03-Mar-15
26-Feb-15
18-Feb-15
18-Feb-15
06-Feb-15
03-Feb-15
21-Jan-15
09-Jan-15
08-Jan-15
ABQ RIDE, Albuquerque

Washington Area Transit Authority (WMATA)
Regional Municipality of Wood Buffalo, Alberta
Southeastern Pennsylvania Transportation Authority
Omnitrans of San Bernardino, California
University of Georgia
Charleston Area Regional Transportation Authority
Fairfax County
Orange County
City of Brampton
King County Metro (Seattle)
Detroit Department of Transportation
Massachusetts Bay Transportation Authority (MBTA)
Le Group Transbus
Oahu Transit Services Inc.
Grand River Transit
RTD of Denver
Low er Rio Grande Valley Development Council
City & Council of Honolulu
Temiskaming Shores
Dallas Area Rapid Transit (DART)
Community Transit (Everett, WA)
Clark County (Portland, Washington, Vancouver, OR)
San Diego (MTS)
Greate Attleboro Taunton RTA
Martha's Vineyard RTA
New York City
Minnesota
Milw aukee County Transit System
Califorinia Energy Commission
Transportation Commission of Southern Nevada
City of London
Capital District Transportation Authority (CDTA)
Santa Monica
Nassau County
Halifax
St. Albert
Lane Transit
Hamilton
New York City
Orange County
San Francisco
Total - YTD
Midi
40'
13
28
40'
Option
60'
EU
Total
Buses
400
400
725
20
1
12
20
1
25
28
15
4
3
17
234
16
252
20
325
2
20
14
36
15
20
2
63
39
20
26
3
4
72
40
28
1
75
27
4
14
52
9
5
14
36
195
202
122
2,445
63
63
202
7
202
10
10
83
1
25
35
217
4
3
17
228
8
138
10
325
2
20
14
18
15
10
2
63
29
10
13
3
4
72
20
75
1
305
18
20
7
110
9
5
20
18
120
212
424
3,458
16
8
114
10
325
2
14
0
10
0
18
15
10
2
63
19
10
10
13
3
4
72
20
28
1
35
9
20
9
2
7
52
9
5
45
202
1,490
Annual Run Rate (50 EUs/w eek)

YTD Booked Production
Booked Firm and Option Orders / Current Annual Run Rate
Im plied Full Year Book to Bill at Current Rate on Firm Orders Only
Midi
325
24
79
EU
325
15
4
3
5
202
12
Firm
60'
7
18
75
61
438
10
47
150
47
100
18
58
13
10
200
1,140
20
163
304
350
36
58
26
10
526
1,755
EU
Propulsion
725
CNG/ Clean
Diesel/Diesel-Electric
83
CNG
1
Electric
25
Diesel
35
Diesel
217
CNG
4
Diesel
3
Diesel
17
Diesel
244
CNG
16 Clean Diesel/ Electric
Clean
252 Diesel, Hybrid, Trolley
20
Clean Diesel
325
CNG
2
Clean Diesel
40
Clean Diesel
14
Clean Diesel
36
Clean Diesel
15
20
Clean Diesel
2
63
CNG
39
Clean Diesel
20
Diesel-Hybrid
26
CNG
3
Diesel
4
Diesel
72
40
Clean Diesel
75
Clean Diesel
1
Fuel Cell
425
CNG
27
Clean Diesel
40 Clean Diesel / Hybrid
14
CNG
110
CNG
9
Clean Diesel
5
Clean Diesel
40
Hybrid
36
CNG
195
Clean Diesel
212
CNG
648
Hybrid
4,200
2,600
4,200
161.5%
1.2x
Figure 1 - 2015 YTD Announced Firm Orders and Options

Source: New Flyer Industries Inc., AltaCorp Capital
Revenue per EU Metrics
Figure 2 - Revenue per EU Metrics

Source: New Flyer Industries Inc., AltaCorp Capital
154

NFI
C$18.56
Rating:
Outperform
12 Month Target:
C$23.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
60%
21%
Sector Perform
25%
9%
Underperform
2%
0%
Speculative Buy
3%
0%
Restricted
2%
50%
Not Rated
6%
0%
Tender
3%
0%
100%
16%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
155
Direct
__________________________________________________________________________________________________________

E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
156
COMPANY UPDATE
NFI | TSX
$19.95
Rating: Outperform
Total Return: 18.4%
Yield: 3.1%
October 16, 2015
Q3/15 Orders and Backlog Update

C$20.85 / C$12.04
3.1%
Dividend Yield:
55.5 (basic)

Float ($mm)
C$1106.6
55.5 (fd)
39.7
123.0
$248.5
$1107.3

(FYE Dec 31)
2014
Revenue ($mm)
2015e
2016e
$1,451.1 $1,605.3 $1,751.7
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
2014
$19.7
$107.4
$140.3
$154.8
$0.65
$0.99
$1.18
Q2
Q3
Q4
$27.0
$25.7
$35.0
2015
$31.4
$39.2
$32.1e
$37.5e
2016
$39.4e
$36.5e
$36.5e
$42.4e
Adjusted FD EPS
2014
Q1
$0.10
Q2
Q3
Q4
$0.16
$0.15
$0.24
2015
$0.20
$0.30
$0.22e
$0.28e
2016
$0.30e
$0.27e
$0.27e
$0.34e
$25

Volume ('000)
1000
Last Sale Price
$20
800
$15
600
$10
400
$5
200
$0
0
Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15

Managing Director
647.776.8246

647.776.8245
Q3/15 Orders and Deliveries: New Flyer released orders and backlog data for
Q3/15 reporting deliveries of 625 equivalent units (EU) compared to 621EU in Q3/14.
Work-in-process (WIP) decreased to 417EU, down 30EU from the previous quarter and
down 9EU from our estimates for Q3/15. We expect WIP to decline further by the end
of 2015 with the company completing the transition to the Xcelsior platform at its
Anniston, AL facility.
A Weak Book to Bill Is Merely a Timing Issue: In Q3/15, the company received
firm orders for 253EU valued at $114.5mm and new option orders for 880EU valued at
$400.6mm. Options for 213EU valued at $120.1mm were converted to firm orders.
During the quarter, options for 76EU expired as compared to options for 119EUs that
expired in Q2/15. The company also reported that 153EU in firm orders were either
cancelled or expired which included a firm order for 100EU where the customer
declined to convert from NABI to the Xcelsior bus model. Management notes that the
same customer is now soliciting proposals for this order. TTM book to bill ratio of 1.00x
for Q3/15 was below our expectations for 1.33x. We note NFI has pending firm and
option orders for 1,169 EU which are not included in the Q3/15 backlog as the company
is awaiting purchase documentation. Subsequent to Q3/15, NFI received purchase
documentation for 725EU of the 1,169EU which are now part of the Q4/15 backlog. The
companys active bid universe decreased to 6,195EU, down 18% sequentially. Backlog
in Q3/15 was 7,290EU valued at $3.59bn versus 7,011EU ($3.49bn) in Q2/15 and
6,239EU ($3.07bn) in Q3/14.
Y/Y Decline in Aftermarket Orders Expected: The company reported a 20.3% y/y
decline in gross orders with the expiry of the Chicago Transit Authority (CTA) mid-life
upgrade program. When normalized for the CTA program, NFI reported a 7.6% y/y
increase in gross orders. Total aftermarket shipments decreased by 14.0% y/y but
increased by 4.0% y/y when normalized for the CTA contract.
Estimate Changes: Management maintained guidance for the average line entry rate
of approximately 50 EU/ production week which we believe implies a production
increase in Q4/15. Our 2015e Adjusted EBITDA declines to $140.3mm from $141.4mm
with no material change in our 2016 estimate.
Maintain Outperform and C$23.00 Target: Overall, we continue to highlight
NFIs strong order book and an improving margin profile with the completion of the
transition to the Xcelsior platform and the expected synchronization in the aftermarket
segment. We maintain our Outperform rating and our 12-month target price of C$23.00.
Our target price is based on a blend of a 15.0x earnings and 7.5x EBITDA multiple of
the four quarters ending Q2/17 reflecting our 12-month forward valuation period as well
as an exchange rate of C$1.27/$US.
157
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
: [INDUSTRY
]

Current Valuations
Unit Price (C$)
$19.95
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
10.4x
8.2x
7.0x
Peer Average
14.0x
13.2x
11.1x
10.2x
7.8x
7.1x
23.6x
15.6x
13.1x
Incom e Statem ent
2014
2015e
2016e
2017e
Trend
Revenues
Bus Manufacturing
Aftermarket
Revenue
1,132,066 1,285,164 1,451,643 1,435,601

319,034
320,186
300,069
316,975
1,451,100 1,605,350 1,751,712 1,752,577
22.0%
19.9%
17.1%
18.1%
57,374
78,872
92,564
93,314
5.1%
6.1%
6.4%
6.5%

2014
2015e
2016e
45,823
74,972
96,407 151,706
35,255
19,624
16,042 (36,030)
81,078
94,596 112,449 115,676
(1,766)
(1,812)

(1,812)
2017e
(1,812)
(10,889) (15,069) (14,187) (13,689)

6,765
49,991
61,380
62,252
66,565
(154)
(223)
15.7%
19.2%
20.7%
21.0%
Free Cash Flow
83,667
84,256
86,457
132,963
154,816
159,879
6.0%
8.3%
8.8%
9.1%
Free cash flow (C$)
92,829 105,267 121,225 120,162
107,365
140,251
154,816
159,879
per Share
7.4%
8.7%
8.8%
9.1%
FCF Yield
Amortization
35,837
39,040
38,893
38,052
Operating Earnings
50,620
93,923
115,923
121,826
EBT
37,568
79,188
104,017
110,189
Taxes
10,849
28,540
38,486
40,770
Net Income
26,719
50,648
65,530
69,419
Reported FD EPS
$0.48
$0.91
$1.18
$1.25
Adjusted FD EPS
$0.65
$0.99
$1.18
$1.25
2015e
2016e
2017e

Margin
Adjusted EBITDA
Margin
Grow th
2014
Revenue
Weeks of Production
$1.90
96,451 100,175
$2.18
$2.16
8.4%
9.5%
10.9%
10.9%
82.8%
13.3%
15.2%
(0.9%)
2014
2015e
2016e
2017e
32,457
33,928
34,413
34,413
35.0%
$0.585
32.2%
$0.611
28.4%
$0.620
28.6%
Cash Yield
2.9%
3.1%
3.1%
3.1%
2014
2015e
2016e
2017e
2,437
2,561
2,755
2,711
529.5
464.5
501.8
526.9
23.5
30.8
33.6
34.4
5.6%
49.2
51.2
54.0
54.2
0.0%
3.3%

48.5
0.9x
48.5
1.1x
52.6
1.0x
52.6
1.0x
52
53
52
15.0%
13.5%
13.0%
(1.1%)
Aftermarket
48.4%
0.4%
(6.3%)
Adjusted EBITDA
21.0%
13.4%
10.6%
30.6%
9.1%
10.4%
Adjusted FD EPS
2.7%
51.8%
18.8%
5.9%
2014
0.9057
2015e
0.8004
2016e
0.7953
2017e
0.8335
EOP CAD/USD Rate
0.9050
0.7874
0.8130
0.8547

Trend
Leverage
Net Debt (EOP)

$5.0
Trend
$0.620
52
Bus Manufacturing
FX Assum ptions
$1.67
Trend
Trend
20.7%
5.0%
18.7%
20.0%
2014
2015e
2016e
2017e
229,034 201,945 147,094
37,759
2.1x
1.4x
1.0x
0.2x
33.6%
29.7%
22.2%
6.4%
Trend
Trend

Firm
Option
2020, 12%
2015, 8%
$4.0
2016, 16%
$3.0
2019, 28%
$2.0
2017, 10%
$1.0
$0.0
Q109 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15
2018, 26%

158
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
: [INDUSTRY
]

Ticker
Marcopolo S.A.
Wajax Corporation
Superior Plus Corp.
Oshkosh Corporation
Spartan Motors Inc.
Cubic Corporation
Average
Rating &
Target
Trading
Local
Currency Price
TSX:NFI
OP (C$23.00)
BOVESPA:POMO4
NR
TSX: WJX
NR
TSX: AFN
NR
TSX: SPB
NR
GBX
NR
OSK
NR
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
CUB
NR
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
19.95
1.87
23.80
36.10
10.92
38.29
39.68
4.52
11.26
53.94
19.28
14.61
5.55
10.97
43.01
Market
Cap ($m m )
1,107.6
1,659.3
475.6
518.0
1,383.3
1,125.7
3,107.7
154.8
749.7
2,826.2
519.3
1,191.0
533.6
229.0
1,156.2
Net
Debt
EV
P/E
($m m )
2014 2015e 2016e
2014
2015e
2016e
Price
to BV
ROIC
ROE
249.4
1,268.6
167.3
328.7
939.9
316.0
854.2
(15.4)
196.5
(176.3)
(49.2)
4,511.0
199.6
188.1
(43.0)
1,098.1
2,953.9
642.9
846.7
2,323.2
1,552.3
3,961.9
139.3
946.2
2,649.8
470.1
5,712.0
785.1
467.1
1,113.5
23.6x
5.8x
9.7x
NM
24.2x
8.3x
11.4x
NM
12.8x
15.2x
12.0x
NM
NM
NM
17.4x
14.0x
10.2x
11.0x
7.8x
13.4x
8.2x
6.0x
6.7x
14.8x
5.9x
8.9x
7.1x
17.3x
11.4x
18.0x
9.3x
10.4x
7.8x
11.5x
7.3x
11.1x
8.3x
3.4x
7.3x
11.2x
4.7x
7.8x
7.0x
10.1x
10.2x
6.2x
9.3x
8.2x
7.1x
8.4x
7.0x
8.1x
7.3x
3.3x
6.8x
8.2x
4.7x
6.8x
6.6x
7.4x
8.9x
5.7x
8.3x
7.0x
1.9x
1.0x
1.5x
2.0x
2.4x
1.6x
1.6x
0.9x
1.9x
2.7x
2.5x
NM
2.1x
NM
1.5x
1.8x
6.4%
3.2%
9.0%
6.1%
6.2%
18.1%
8.9%
1.6%
12.1%
17.7%
19.4%
9.7%
3.0%
4.5%
5.8%
8.8%
9.0%
11.8%
13.0%
(2.5%)
5.7%
34.7%
12.2%
0.7%
20.6%
19.8%
21.5%
NM
2.0%
NM
4.6%
11.8%
15.6x
8.5x
11.4x
16.7x
20.5x
6.3x
12.2x
NM
8.8x
13.7x
12.5x
NM
NM
14.4x
17.4x
13.2x
EV/EBITDA
13.1x
6.0x
10.8x
10.8x
11.4x
6.1x
10.8x
23.8x
8.5x
12.0x
11.3x
5.9x
NM
9.5x
15.9x
11.1x

As of October 15, 2015. All figures in millions, unless otherwise noted.
159

NFI
C$19.95
Rating:
Outperform
12 Month Target:
C$23.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
60%
21%
Sector Perform
25%
9%
Underperform
2%
0%
Speculative
3%
0%
Restricted
2%
50%
Not Rated
6%
0%
Tender
3%
0%
100%
16%
Total

average.
average.
average.
A Speculative rating represents a security where the
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
160
Direct
__________________________________________________________________________________________________________

E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
sbernhardsdottir
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8591
dbenner
kmerali
mwestby
Dave Mowat
647 776 8246

647 776 8245
cmurray
smodwal
President & CEO

780 408 7181
dmowat@atb.com
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
Ian Wild
All Sectors
403 539 8607
vhoa
George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial

403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Mervin Kopeck
Jon Varley
Michael Capobianco
647 776 8040

647 776 8235
647 776 8231
mkopeck
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Jesse Hardage
403 539 8628
jhardage

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
161

Auto Components


16 October 2015
Lowering Recommendation
HOLD
from BUY
PRICE TARGET
from C$21.00
Price (15-Oct)
Ticker
C$20.00
52-Week Range (C$):

Avg Daily Vol (M) :
Market Cap (C$M):
Dividend /Shr (C$):
Website:
FYE Dec
Forecast and rating cut post-Q3/15 reported

deliveries and orders data
C$19.95
NFI-TSX
12.04 - 20.85
0.06
1,107
0.62
3.1
62.0
3.4
247.5
www.newflyer.com
2014A
2015E
2016E
2017E
1.18
1.18
0.5
1.51
1.53
0.4
1.80
1.86
0.3
1.89
1.95
0.3
FCF /Shr (C$)

Previous
Payout Ratio (x)
1,451 1,527 1,496 1,540

1,451 1,538 1,535 1,579
6
11
11
0
Sales (US$M)
Previous
ROIC (%)
Quarterly FCF /
Shr
2014A
2015E
2016E
2017E
Q1
Q2
Q3
Q4
0.19
0.22A
0.49
0.52
0.29
0.39
0.46
0.48
0.32
0.39
0.43
0.45
0.38
0.42
0.42
0.44
22
20
18
16
14
12
Oct-15
Sep-15
Jul-15
Aug-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
Feb-15
Dec-14
Nov-14
10
NFI
Source:FactSet

Reducing to HOLD on slightly lower target, share price appreciation

We are downgrading NFI to HOLD from BUY as our slightly lower target (down C$1.00 to
C$20.00) and strong share price performance have reduced our one-year investment
return to only 3.4% including a 3.1% annual dividend yield. We reduced our EBITDA
forecast 1-3% on lower bus delivery and Aftermarket sales assumptions.
We expect NFI to post solid results, but NFIs guidance of flat line entry rates in 2015
and 2016 suggests limited growth potential in the near term. NFI could have greater
long-term growth potential given strong order rates, but this has been the case for a
considerable period of time. So far, option conversion rates have been insufficient to
support line entry growth.
Q3/15 forecast benchmarked to actual/reported orders and backlog
We benchmarked our orders and backlog forecasts to the actual/reported data in the
quarter.
We lowered our Q3/15 deliveries by 2% and total firm backlog decreased by 32%
on weaker-than-expected new firm orders and 153 bus equivalent units (EUs) of
cancellations. However, we do not read too much into it as deliveries and orders are
volatile on quarterly basis. We also cut our Q3/15 Aftermarket EBITDA forecast 5% as
Aftermarket shipments were lower than expected.
2015 and 2016 guidance suggests relatively flat deliveries
NFI bus line entry guidance of 50 EUs suggests a low-single digit increase in
bus deliveries in 2015. New 2016 guidance of 50 EUs suggests no growth bus
manufacturing growth, at this point.
We expect a strong increase in bus EBITDA/EU guidance in 2015 and a small
improvement thereafter.
We have reduced our Aftermarket EBITDA outlook 5% reflecting lower than expected
Q3/15 Aftermarket sales.
Importantly, FCF seems likely to improve as the recent WIP inventory increase appears to
be normalizing (WIP inventory down 30 EUs to 417 EUs).
Net, we expect 40% growth in EBITDA in 2015, mainly on margin expansion, and more
modest mid-single-digit EBITDA growth in 2016 and beyond.
Unchanged valuation
We maintain our valuation at 7.5x EV/NTM EBITDA (or 7.5x Q2/16E EV / Q3/16E Q2/17E EBITDA), which is in-line with the companys trading range in the past 60
months. Our target was unchanged due to the relatively unchanged forecast.
162

Q3/15 slightly reduced on reported data

Minimal forecast adjustments
We benchmarked our Q3/15 results to NFIs reported deliveries, orders and backlog
data. Deliveries came in slightly below our expectations, but aftermarket revenues
look stronger than we expected. We also incorporated NFIs 2016 guidance of flat line
entry rates at 50 EUs/week. Net, our adjustments resulted in 1-3% lower EBITDA.
with Figure 6.
Hold from Buy Target Price C$20.00 from C$21.00 | 16 October 2015
Auto Components 2
163

Q 3/15E
Old
New
Fc s t
Fc s t
0.155 0.155
6%
6%
2015E
Old
New
Fc s t
Fc s t
0.608 0.608
4%
4%
2016E
Old
New
Fc s t
Fc s t
0.620 0.620
2%
2%
2017E
Old
New
Fc s t
Fc s t
0.620 0.620
0%
0%
2018E
Old
New
Fc s t
Fc s t
0.620 0.620
0%
0%
2019E
Old
New
Fc s t
Fc s t
0.620 0.620
0%
0%
2014
0.59
n.m.
Q 2/15
0.15
4%
1.18
#N/A
0.48
66%
0.39
22%
0.41
26%
1.51
28%
1.53
30%
1.80
19%
1.86
21%
1.89
5%
1.95
5%
1.97
5%
2.05
5%
2.04
3%
2.11
3%
50%
32%
40%
38%
40%
40%
34%
33%
33%
32%
31%
30%
30%
29%
1,451
21%
375
8%
371
3%
380
5%
1,527
5%
1,538
6%
1,496
-2%
1,535
0%
1,540
3%
1,579
3%
1,577
2%
1,624
3%
1,626
3%
1,668
3%
91
6.3%
34
9.0%
32
8.5%
33
8.6%
128
8.4%
130
8.4%
136
9.1%
140
9.1%
142
9.2%
147
9.3%
148
9.4%
154
9.5%
153
9.4%
158
9.5%
46
44
(8)
(8)
23
23
20
20
17
17
17
17
17
17

Bus revenue/unit
Bus EBITDA/unit
Aftermarket EBITDA
2,437
465
24
50
594
481
38
17
625
481
28
14
635
481
28
15
2,476
487
30
62
2,486
487
30
63
2,485
484
31
59
2,535
484
31
62
2,535
487
32
61
2,584
487
32
64
2,571
490
33
63
2,634
490
33
67
2,629
493
33
66
2,679
493
33
69
New orders (units)

2,263
2,102
864
2,192
313
1,880
615
2,172
2,476
2,102
2,486
2,102
2,485
2,102
2,535
2,102
2,535
2,102
2,584
2,102
2,571
2,102
2,634
2,102
2,629
2,102
2,679
2,102
10.5%
11.0%
11.8%
12.3%
12.9%
13.5%
1.300
1.300
1.300
1.300
1.300
1.300
Dividend/share (C$)
% change
% change
Payout ratio
Revenue
% change
EBITDA
EBITDA margin
Return on capital
1
5.2%
1.230
1.104
8.8%
7.8%
1.300
8.2%
1.300
8.4%
1.300
8.5%
1.300
9.3%
1.300
9.7%
1.300
Auto Components 3
164

Forecast outlook
We are projecting solid revenue and EBITDA growth over the next five years from a
combination of the modest growth from bus deliveries and margin expansion.
2015 bus production outlook unchanged; moderate growth seems

likely
NFI maintained guidance of line entry rates of 50 EUs/week. This is slightly lower than
normal, largely due to challenges related to the switchover of the Anniston facility to
the Excelsior bus. This implies a roughly 2% increase in deliveries in 2015 over 2014.
Market prospects suggest fairly stable demand for the foreseeable future.
Management noted that although its bid universe has increased, actual firm orders do
not seem likely to change much. NFI believes there is pent-up demand, but continuing
government finance limitations seem to be limiting the ability of customers to increase
orders.
2015 bus margins expected to increase significantly

We expect much improved bus manufacturing margins, as measured by EBITDA/EU,
based on current trends. However, we continue to expect bus manufacturing margins
to remain well below pre-2011 levels as competition levels appear to have increased
despite a decrease in the number of competitors.
Focus on operating improvements from product consolidation

NFI continues to implement its $20 million program to consolidate its bus line-up into
its Excelsior model. This Project United will result in the conversion of the NABI plant in
Anniston, AL, to Excelsior production. This conversion is expected to generate lower
costs, streamline design, improve product attributes and better serve customer
needs. NFI expects 2-3 year pay back through cost reductions and synergies.
Focus on operating improvements from Aftermarket rationalization

NFI is also focusing on improving Aftermarket operations through business
rationalization in a new program dubbed Project Convergence. Management indicated
that this is not a capital-intensive project as it mainly focuses on business
organization and systems. The project is expected to be completed by early 2016.
NCWC seems likely to be less of a cash flow drag

NFI has experienced four years of significant cash outflows from NCWC. Q3/15
inventory developments look like a positive step back on this metric, although this
comes on the back of a temporary ballooning of inventories in Q2/15.
We believe NFI could be positioned for material cash generation from NCWC in H2/15
as NCWC normalizes, followed by modest cash outflows from NCWC after 2015
related to modest growth.
Auto Components 4
165

Valuation
NFIs yields (Figure 3) and valuation (Figure 4) appear to be settling into a new range.
The companys dividend yield seems to be settling into the 4-5% range (about 2.5%
over the 10-year Canada bond yield) and EV/EBITDA is stable in the 7-8x NTM EBITDA
range.
Figure 2: NFI distribution/dividend yields settling into the 4-5% range, or roughly 2.5% above the 10-year Canada bond yield
names (Figure 5).
Auto Components 5
166

Figure 4: We think a mid-point valuation multiple is reasonable versus industrial high yield companies
Mar k et
Cur .
Eq ui ty Pr i ce :
Cur .
Year
Oct. 16, 2015
Di v.
2015
$19. 95
$0. 61
Di v.
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M )
EPS
3. 0%
$1. 53
4. 6%
De b t/
P/E
Gr o wth
Ca p ('15- '17)
39. 6%
$993 $0. 82 24. 4 34. 8%
6. 3%
70. 2%
17. 0 39. 5%
10. 5%
Chorus Aviation
2015
$5.53
$0.48
8.7%
$0.88
54.7%
$676 $0.80
6.9
89.6%
12.9%
Davis + Henderson
2015
$39.62
$1.28
3.2%
$2.09
61.2%
$4,183 $2.59
15.3
41.2%
15.8%
Westshore Terminals
2015
$27.29
$1.32
4.8%
$1.27
103.9%
$2,026 $1.86
14.7
0.0%
3.3%
Cineplex Galaxy
2015
$48.04
$1.54
3.2%
$1.68
91.7%
$3,031 $2.03
23.6
32.1%
14.1%
We maintain our valuation multiple at 7.5x EV/NTM EBITDA (or 7.5x Q2/16E EV /
Q3/16E - Q2/17E EBITDA), given that the stock has traded in this range for some time
(average of 7.5x over the past 60 months). We think our target multiple is supported
by NFIs 3.1% dividend yield. We think there is dividend upside potential from
forecasted stronger future free cash, which further strengthens the dividend yield
support argument.
Our valuation also translates into acceptable 1.7% dividend yield and 7.8% FCFPS
spreads over Government of Canada bond rates, which reflects the much higher risk
of NFI versus government bonds.
Auto Components 6
167

1-year
t arget
138.9
2-year
t arget
145.4
7.5
1,042.0
(88.7)
953.3
7.5
1,090.2
(27.3)
1,062.9

62.0
15.37
20.00
62.0
17.14
22.00

0.62
20.62
1.24
23.24

EBITDA
Multiplier
EV
3.4%
16.5%

3.1%
9.2%
2.8%
8.8%

1.7%
7.8%
FCFPS C$
1.84
1.93

We reduced our target price C$1.00 to C$20.00 due to our slightly lower forecast.
We are cutting our rating to HOLD from BUY rating as the 1-year projected investment
return is a relatively small 3.4% including a 3.1% annual dividend yield.
Auto Components 7
168

F ree cash
Interest paid
Interest expense
Income taxes paid
Free cash flow
Exchange rate
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
28.7
(4.6)
4.0
(3.1)
2.1
(13.7)
(0.5)
(4.3)
1.3
0.8
(0.7)
(0.2)
9.8
1.252
12.3
8.1
(22.8)
42.3
1.8
(2.8)
16.4
(12.5)
(0.5)
(1.9)
1.6
0.8
(4.5)
(0.1)
21.5
1.226
26.4
8.4
38.9
(15.8)
3.0
(3.0)
9.1
(9.1)
(0.7)
(2.0)
0.8
(4.5)
(0.1)
16.8
1.300
21.8
8.6
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5

0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.22
0.15
0.48
0.15
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
44.9
(20.5)
3.0
(3.0)
9.7
(9.7)
(0.7)
(2.0)
0.8
(4.5)
(0.1)
17.9
1.300
23.3
8.6
89.8
1.4
11.8
(11.8)
37.3
(45.1)
(2.2)
(10.2)
2.9
3.2
(14.3)
(0.3)
66.1
1.300
83.8
33.8
94.0
8.4
11.3
(11.3)
36.7
(36.7)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
76.8
1.300
99.8
34.4
101.5
4.7
10.7
(10.7)
40.0
(40.0)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
80.5
1.300
104.7
34.4
105.2
4.7
10.1
(10.1)
43.0
(43.0)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
84.2
1.300
109.5
34.4
108.4
4.4
9.4
(9.4)
45.3
(45.3)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
87.1
1.300
113.2
34.4
55.5
55.5
55.5
55.5
55.5
55.5
55.5
0.39
0.16
0.42
0.16
1.51
0.61
1.80
0.62
1.89
0.62
1.97
0.62
2.04
0.62
Auto Components 8
169

Incom e statem ent
Revenues
EBITDA
Other
Other expenses
Pre-tax income
Income taxes
Net Income (loss)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
865.3 1,199.4
(810.2) (1,120.2)
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
380.3
(352.1)
1.5
29.7
(9.5)
(1.9)
0.0
0.0
18.2
(2.3)
(0.7)
(0.5)
(0.6)
0.0
14.1
(3.3)
10.9
375.0
(340.7)
(0.7)
33.7
(9.8)
0.8
0.0
0.0
24.6
(2.2)
(0.6)
0.3
(0.6)
0.0
21.6
(9.2)
12.4
371.2
(339.6)
0.0
31.6
(10.0)
0.0
0.0
0.0
21.6
(2.3)
(0.7)
0.0
0.0
0.0
18.6
(7.1)
11.5
2015E
2016E
2017E
2018E
2019E
400.1 1,526.6 1,496.3 1,539.7 1,576.9 1,626.0

(366.8) (1,399.2) (1,360.6) (1,397.6) (1,428.7) (1,473.4)
0.0
0.8
0.0
0.0
0.0
0.0
33.3
128.2
135.7
142.1
148.2
152.7
(10.2)
(39.5)
(40.2)
(38.6)
(37.4)
(36.5)
0.0
(1.1)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
23.1
87.6
95.5
103.5
110.9
116.2
(2.3)
(9.2)
(9.3)
(9.3)
(9.3)
(9.3)
(0.6)
(2.7)
(2.0)
(1.4)
(0.8)
(0.1)
0.0
(0.2)
0.0
0.0
0.0
0.0
0.0
(1.2)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
20.1
74.4
84.2
92.8
100.8
106.8
(7.7)
(27.3)
(28.8)
(32.1)
(35.1)
(37.4)
12.4
47.1
55.4
60.7
65.7
69.4

FCFPS
0.75
0.63
0.63
0.58
0.87
0.87
0.15
0.19
0.19
0.15
0.29
0.29
0.15
0.32
0.32
0.15
0.38
0.38
0.59
1.18
1.18
0.15
0.22
0.22
0.15
0.48
0.48
0.16
0.39
0.39
0.16
0.42
0.42
0.61
1.51
1.51
0.62
1.80
1.80
0.62
1.89
1.89
0.62
1.97
1.97
0.62
2.04
2.04
52.3
58.9
55.5
55.6
55.7
55.7
55.6
55.8
55.9
62.0
62.0
58.9
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
17.4%
16.6%
0.0%
7.8%
8.2%
65.6%
4.0%
9.0%
2.9%
21.8%
6.0%
8.5%
-4.7%
10.3%
6.0%
8.3%
5.2%
27.9%
4.0%
8.4%
-2.0%
19.1%
1.9%
9.1%
2.9%
4.9%
0.0%
9.2%
2.4%
4.6%
0.0%
9.4%
3.1%
3.4%
0.0%
9.4%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
7.6%
8.8%
7.8%
8.6%
8.4%
9.3%
10.5%
11.8%
12.9%
Bus revenues
Bus sales growth
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
290.7
14.7
15.9%
5.1%
572
508
26
26
285.8
22.4
7.5%
7.8%
594
481
38
30
300.7
17.5
7.9%
5.8%
625
481
28
31
329.6
19.2
-2.1%
5.8%
685
481
28
30
1206.8
73.8
6.6%
6.1%
2,476
487
30
30
1203.1
77.0
-0.3%
6.4%
2,485
484
31
31
1234.9
81.1
2.6%
6.6%
2,535
487
32
32
1260.1
84.8
2.0%
6.7%
2,571
490
33
33
1296.4
86.8
2.9%
6.7%
2,629
493
33
33
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
89.6
16.7
22.8%
18.6%
89.2
16.8
10.6%
18.8%
70.5
14.1
-14.1%
20.0%
70.5
14.1
-15.4%
20.0%
319.8
61.7
0.2%
19.3%
293.2
58.6
-8.3%
20.0%
304.8
61.0
4.0%
20.0%
316.8
63.4
3.9%
20.0%
329.6
65.9
4.0%
20.0%

EBITDA/sales
ROC
Segm ented data
Auto Components 9
170

Balance sheet
Cash
Accounts receivable
Inventories
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
7.6
186.9
232.0
3.5
0.1
0.0
0.0
430.0
8.8
189.2
242.3
3.9
0.2
0.0
0.0
444.4
Capital assets
Deferred charges
Intangible assets
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
64.3
0.0
539.1
67.9
0.0
0.0
1,101.4
64.3
0.0
533.9
68.6
0.0
0.0
1,111.2
Bank indebtedness
Deferred revenue
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
226.5
0.0
23.0
35.0
1.6
13.0
18.6
317.6
0.0
201.8
0.0
18.3
39.7
1.7
48.0
10.4
319.8
0.0
201.5
0.0
18.3
39.7
1.7
48.0
9.6
318.8
0.0
217.7
0.0
18.3
39.7
1.7
48.0
8.8
334.1
0.0
217.7
0.0
18.3
39.7
1.7
48.0
8.8
334.1
0.0
196.1
0.0
18.3
39.7
1.7
48.0
6.8
310.6
0.0
201.5
0.0
18.3
39.7
1.7
48.0
5.8
314.9
0.0
206.9
0.0
18.3
39.7
1.7
48.0
4.8
319.3
0.0
212.8
0.0
18.3
39.7
1.7
48.0
3.8
324.2

Long-term debt
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
0.9
2.9
105.5
201.0
2.2
13.9
4.1
5.0
102.5
201.6
1.9
12.7
4.1
5.0
100.5
201.6
1.9
12.7
4.1
5.0
98.5
201.6
1.9
12.7
4.1
5.0
98.5
201.6
1.9
12.7
4.1
5.0
90.6
201.6
1.9
12.7
4.1
5.0
82.7
201.6
1.9
12.7
4.1
5.0
74.7
201.6
1.9
12.7
4.1
5.0
66.8
201.6
1.9
12.7

Share capital
Retained earnings
CAPEX
Net debt
Book value / unit
0.0
480.8
(136.8)
0.0
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
0.0
594.5
(141.8)
0.0
594.7
(137.5)
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
0.0
595.2
(131.6)
33.3
183.6
231.2
3.8
0.2
0.0
0.0
452.0
63.7
202.2
207.0
4.1
0.2
0.0
0.0
477.2
2015E
2016E
2017E
2018E
2019E
63.7
202.2
207.0
4.1
0.2
0.0
0.0
477.2
119.2
183.9
210.6
3.7
0.2
0.0
0.0
517.7
182.1
189.2
214.2
3.8
0.2
0.0
0.0
589.6
248.6
194.6
217.8
4.0
0.2
0.0
0.0
665.2
318.3
200.2
221.4
4.1
0.2
0.0
0.0
744.2
67.6
70.7
70.7
64.0
59.0
55.3
52.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
528.5
523.1
523.1
501.7
480.2
458.7
437.3
68.6
68.6
68.6
68.6
68.6
68.6
68.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(3.7)
(7.4)
(7.4)
(22.2)
(37.1)
(51.9)
(66.7)
1,113.0 1,132.2 1,132.2 1,129.6 1,160.3 1,196.0 1,235.9
0.0
595.2
(126.7)
0.0
595.2
(120.9)
0.0
595.2
(120.9)
0.0
595.2
(92.0)
0.0
595.2
(57.8)
0.0
0.0
595.2
(18.6)
595.2
24.4
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,101.4
1,111.2
1,113.0
1,132.2
1,132.2
1,129.6
1,160.3
1,196.0
1,235.9
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
4.3
119.4
1.9
165.5
7.9
149.7
7.9
129.2
21.9
129.2
12.0
137.6
12.1
142.3
12.2
147.0
12.3
151.4
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
210.9
2.1x
8.24
23.8x
247.5
2.2x
8.35
23.3x
223.0
1.8x
8.44
22.5x
192.6
1.5x
8.54
23.1x
192.6
1.5x
8.54
22.7x
137.1
1.0x
9.06
22.2x
74.2
0.5x
9.68
25.1x
7.7
0.1x
10.39
27.6x
(62.0)
0.0x
11.16
30.2x
Auto Components 10
171

Net income
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
10.9
4.2
5.3
0.0
0.0
3.4
0.0
1.9
0.0
0.7
(0.8)
0.4
(2.0)
24.1
4.6
28.7
12.4
4.5
5.4
0.0
0.0
9.2
0.0
(0.8)
0.0
4.5
(0.8)
0.3
(15.1)
19.5
(42.3)
(22.8)
11.5
4.6
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
4.5
(0.8)
0.0
0.0
23.2
15.8
38.9
Investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(4.3)
(4.3)
(1.9)
(1.9)
Financing
Share issuance
Dividends
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.7)
(34.1)
0.0
33.1
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.6)
26.0
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
12.4
4.8
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
4.5
(0.8)
0.0
0.0
24.3
20.5
44.9
47.1
18.1
21.4
0.0
0.0
8.6
0.0
1.1
0.0
14.3
(3.2)
0.7
(17.0)
91.2
(1.4)
89.8
55.4
18.7
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
102.5
(8.4)
94.0
60.7
17.1
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
106.2
(4.7)
101.5
65.7
15.9
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
109.9
(4.7)
105.2
69.4
15.0
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
112.8
(4.4)
108.4
(7.9)
(7.9)
(7.9)
(7.9)
(21.9)
(22.0)
(12.0)
(12.0)
(12.1)
(12.1)
(12.2)
(12.2)
(12.3)
(12.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(6.6)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(6.6)
0.0
6.1
0.0
0.0
(0.9)
0.0
0.0
0.0
(26.5)
(21.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
(0.2)
(0.1)
0.0
0.0
(0.2)
0.0
0.0
0.0
0.0
Net cash flow

1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
(9.9)
17.5
7.6
1.3
7.6
8.8
24.5
8.8
33.3
30.4
33.3
63.7
46.2
17.5
63.7
55.5
63.7
119.2
62.9
119.2
182.1
66.5
182.1
248.6
69.6
248.6
318.3
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
24.4
(24.7)
31.1
37.0
67.8
82.0
89.4
93.0
96.1
Auto Components 11
172

Investment risks
Auto Components 12
173


Rating
Coverage Universe
IB Clients
#
%
%
Buy
608
62.87%
31.74%
Hold
275
28.44%
12.00%
Sell
26
2.69%
3.85%
Speculative Buy
58
6.00%
58.62%
967*
100.0%
relevant issuer.
Risk Qualier
Auto Components 13
174


H:C$8.25
11/14/12
22
20
18
16
14
12
10
8
6
H:C$12.00
07/16/14
H:C$8.75
01/11/13
Jan 2013
B:C$14.00
08/06/14
H:C$9.25
01/29/13
H:C$9.75
02/06/13
Apr 2013
H:C$14.00
11/09/14
Jul 2013
B:C$12.50
12/12/14
H:C$10.00
03/25/13
Oct 2013
H:C$14.00
01/12/15
H:C$10.25
04/18/13
Jan 2014
B:C$15.00
03/19/15
B:C$11.25
06/24/13
Apr 2014
B:C$16.00
05/11/15
Closing Price
H:C$11.75
08/07/13
Jul 2014
B:C$17.00
07/20/15
H:C$11.25
11/07/13
Oct 2014
B:C$12.00
01/15/14
Jan 2015
B:C$12.50
03/23/14
Apr 2015
H:C$11.50
05/11/14
Jul 2015
H:C$11.75
06/24/14
Oct 2015
B:C$21.00
08/10/15
Target Price
Online Disclosures
General Disclosures
Auto Components 14
175

account.
Inc.
Auto Components 15
176


regulated by ASIC.
Auto Components 16
177

(NFI-TSX)
Rating:
Target Price:
Price (16-Oct):
Market Perform
$19.00 Total Return: 2%
$19.31
Q3/15 Deliveries Basically as Expected; Forecast

Revised to Reflect ~6% Increase in EBITDA per EU
October 16, 2015
Bert Powell, CFA
416-359-5301

bert.powell@bmo.com
Adel Kanso
adel.kanso@bmo.com
416-359-6193

Earnings/Share
20
1.0
15
Event
NFI Q3/15 deliveries were up 2% y/y to 625 equivalent units (EUs). New firm
orders were 253 EUs ($114.5 million), up from 57 EUs ($33.2 million) during
the same period last year. Total firm backlog was down 6% q/q to $1.07 billion
partially due to certain order cancellations. Q2/15 aftermarket shipments (excl.
CTA program) increased 4% y/y.
0.5
10
0.0
-0.5
-1.0
Volume (mln)
0

We continue to rate NFI at Market Perform. We increased our target price to
C$19.00 (US$14.50) from C$16.00 (US$13.00) based on ~7.3x our 2016E
EBITDA. We have increased our EBITDA estimate for 2016 by 6% reflecting
$30k/EU compared to our prior expectation of $28k/EU. This implies ~3%
dividend yield. NFIs forward EV/EBITDA historic trading average is currently
~7.2x.
Annual EPS
2015E $0.83 to $0.88
2016E $1.00 to $1.05
400
200
Q3/15 bus deliveries were slightly below our expectations of 639 EUs. NFI was
able to reduce some of its work-in-progress (WIP) ending inventory during the
quarter as the company finalizes its platform rationalization plans. Without a
material increase in production schedule to drive revenue, NFI remains a cost
story. Last quarter, NFI achieved an EBITDA per EU (excl. ITCs) of ~$38k vs.
$19k in Q2/14, mainly due to product mix and cost savings. Management
previously guided that they would expect higher margins in 2015 due to work
orders and cost-saving initiatives. EBITDA per bus does spike periodically, so
we are cautious that this may be one of those quarters. We expect EBITDA per
EU to remain volatile and normalize around ~$30k in 2016. Build rate was
maintained for 2015 and 2016 as firm orders remain below annual production.
Pending orders, including firm orders and options, stood at 1,169 EUs after
quarter-end.
Changes
400
Impact & Analysis
Annual CFPS
2015E $1.61 to $1.58
2016E $1.56 to $1.59
1.5
200
2012
2013
2014
2015
Last Data Point: October 15, 2015
(FY-Dec.)
EPS
P/E
CFPS
P/CFPS
Rev. ($mm)
EV ($mm)
EBITDA ($mm)
EV/EBITDA
2013A
$0.49
2014A
$0.48
2015E
$0.88
21.9x
2016E
$1.05
18.4x
$0.95
$1.46
$1.58
12.2x
$1.59
12.1x
$1,199
$839
$95
8.8x
$1,451
$1,000
$91
10.9x
$1,509
$1,060
$127
8.3x
Quarterly EPS
2013A
2014A
2015E
Q1
$0.08
$0.10
$0.20a
Q2
$0.03
$0.06
$0.22a
Q3
$0.14
$0.18
$0.23
Dividend
Book Value
Shares O/S (mm)
Float O/S (mm)
Wkly Vol (000s)
Net Debt ($mm)
$0.62
$8.24
55.5
43.9
417
$248
Yield
Price/Book
Mkt. Cap (mm)
Float Cap (mm)
Wkly $ Vol (mm)
Next Rep. Date
$1,532
$1,007
$130
7.7x
Q4
$0.23
$0.13
$0.24
3.2%
1.8x
$1,072
$848
$6.3
Nov (E)
(11.1%), Mawer (9.8%), QV Investors (6.4%)
2015E: $0.85; 2016E: $1.07
Quarterly EPS
Q3/15E $0.22 to $0.23
Q4/15E $0.21 to $0.24
Target
$16.00 to $19.00
178
BMO Capital Markets
Revised Estimates
(US$ millions, except per share data)
BMO CM Estimates
Current
Prior
Mean
2015
2016
2015
2016
Deliveries
2,428
2,510
2,417
2,549
Bus Manufacturing
$1,190
$1,182
$1,217
$1,179
y/y%
4.4%
3.0%
4.1%
1.0%
$326
$315
$326
$305
y/y%
2015
2016
2.3%
-3.6%
2.2%
-6.4%
$1,509
$1,532
$1,505
$1,495
$1,534
$1,585
4.0%
1.6%
3.7%
-0.6%
5.7%
3.3%
Cost of Sales (Exc. D&A)

Gross Profit (Exc. D&A)
$1,297
$211
$1,325
$207
$1,305
$200
$1,297
$198
% of revenue
14.0%
13.5%
13.3%
13.2%
Total Revenue
y/y%
Bus Manufacturing
y/y%
$75
$75
$65
$71
6.4%
6.2%
5.5%
6.0%
$59
$55
$57
$52
18.2%
17.5%
17.4%
17.0%
Corporate
Total Adjusted EBITDA
-$7.3
$127
$0.0
$130
-$2.0
$120
$0.0
$123
$130
$137
% of revenue
8.4%
8.5%
8.0%
8.2%
8.5%
8.7%
$38
$30
$38
$31
y/y%
Depreciation & Amortization

EBIT
% of revenue

EBT
% of revenue
$88
$100
$80
$92
$84
$98
5.8%
6.5%
5.3%
6.2%
5.5%
6.2%
$14
$74
$13
$87
$13
$67
$9
$83
5.5%
$0.85
$1.07
4.9%
5.7%
4.4%
Income Tax Expense
$25
$29
$21
$27
Tax Rate
34%
33%
31%
33%
Net Income
$49
$59
$46
$56
% of revenue
3.2%
3.8%
3.1%
3.7%
$0.88
$0.84
$1.05
$1.02
$0.83
$0.78
$1.00
$0.94
EPS - Basic
EPS - Fully Diluted
Source: BMO Capital Markets, Thomson One
Page 2 October 16, 2015
179
BMO Capital Markets

New Flyer Industries Inc. (NFI-TSX)
INCOME STATEMENT
Year end: December
In millions of US$
Deliveries (EUs)
Bus Manufacturing
y/y%
y/y%
Revenues
y/y%
Cost of Sales
% of revenues
Gross profit
% of revenues
% of revenues
% of net revenues
2014
2013
2,191
984.4
31.8%
215.0
81.7%
1,199.4
38.6%
1,078.7
89.9%
120.8
10.1%
69.5
5.8%
0.1
0.0%
63.6
2015E
Q1
Q2
Q3
Q4E
2014
554
582
621
680
2,437
250.9 265.8 278.7 336.6 1,132.1

20.7% 23.5% 12.3% 7.5%
15.0%
73.0
80.7
82.0
83.4
319.0
95.4% 57.1% 40.7% 22.6% 48.4%
323.9 346.5 360.8 420.0 1,451.1
32.1% 30.0% 17.7% 10.2% 21.0%
293.9 309.3 326.5 383.2 1,312.8
90.7% 89.3% 90.5% 91.2% 90.5%
30.0
37.2
34.3
36.8
138.3
9.3% 10.7% 9.5%
8.8%
9.5%
18.8
21.2
21.2
20.1
81.3
5.8%
6.1%
5.9%
4.8%
5.6%
0.8
0.4
0.2
0.1
1.5
0.2%
0.1%
0.1%
0.0%
0.1%
7.8
13.9
12.6
23.2
57.4
Q1
Q2
Q3E
572
594
625
290.7
15.9%
89.6
22.8%
380.3
17.4%
340.7
89.6%
39.6
10.4%
20.9
5.5%
(1.5)
-0.4%
14.7
285.8
7.5%
89.2
10.6%
375.0
8.2%
326.6
87.1%
48.4
12.9%
23.9
6.4%
0.7
0.2%
22.4
300.0
7.6%
73.2
-10.8%
373.2
3.5%
331.2
88.7%
42.0
11.3%
19.8
5.3%
0.0
0.0%
18.9
7.8%
16.8
2016E
Q4E
2015E
Q1E
Q2E
637
2,428
598
662
305.8 1,182.3 290.2 321.1

-9.2%
4.4%
-0.2% 12.3%
74.4
326.4
80.0
79.6
-10.8% 2.3% -10.8% -10.8%
380.2 1,508.7 370.1 400.7
-9.5%
4.0%
-2.7% 6.8%
337.1 1,335.6 329.3 353.7
88.7% 88.5% 89.0% 88.3%
43.1
173.1
40.8
47.0
11.3% 11.5% 11.0% 11.7%
20.1
84.8
18.5
20.0
5.3%
5.6%
5.0%
5.0%
0.0
(0.8)
0.0
0.0
0.0%
-0.1%
0.0%
0.0%
19.3
75.3
16.0
20.5
Q3E
630
Q4E
2016E
620
2,510
305.6
1.9%
76.9
5.0%
382.4
2.5%
337.8
88.3%
44.6
11.7%
19.1
5.0%
0.0
0.0%
19.6
300.7 1,217.5
-1.7%
3.0%
78.1
314.6
5.0%
-3.6%
378.8 1,532.1
-0.4%
1.6%
334.4 1,355.2
88.3% 88.5%
44.4
176.8
11.7% 11.5%
18.9
76.6
5.0%
5.0%
0.0
0.0
0.0%
0.0%
19.2
75.3
6.4%
13.5
% of bus manufacturing revenues

Adj. EBITDA - Aftermarket Segment
6.5%
31.0
3.1%
11.9
5.2%
13.1
4.5%
13.1
6.9%
11.9
5.1%
50.0
5.1%
16.7
6.3%
12.8
6.3%
13.0
6.4%
59.3
5.5%
14.0
6.4%
13.9
6.4%
13.7
6.2%
55.1
% of aftermarket revenue
One time items (expenses)
14.4%
(15.6)
16.3%
(1.6)
16.2%
(3.2)
16.0%
(2.8)
14.2%
(8.6)
15.7%
(16.1)
18.6% 18.8% 17.5%

(1.8)
(5.5)
0.0
17.5%
0.0
18.2%
(7.3)
17.5%
(0.0)
17.5% 17.5% 17.5%

0.0
0.0
0.0
17.5%
0.0
79.1
6.6%
9.6
0.8%
18.4
1.5%
2.1
49.0
4.1%
14.3
1.2%
34.6
2.9%
7.9
23%
26.8
2.2%
$0.52
$0.49
18.1
5.6%
2.9
0.9%
4.8
1.5%
0.4
10.0
3.1%
3.3
1.0%
6.7
2.1%
1.2
18%
5.5
1.7%
$0.10
$0.10
23.8
6.9%
3.3
1.0%
4.8
1.4%
2.9
12.8
3.7%
4.4
1.3%
8.4
2.4%
4.8
58%
3.6
1.0%
$0.06
$0.06
22.9
6.4%
4.6
1.3%
5.4
1.5%
0.1
12.8
3.5%
2.7
0.7%
10.1
2.8%
(0.2)
-2%
10.2
2.8%
$0.18
$0.18
26.5
6.3%
4.6
1.1%
5.4
1.3%
0.6
15.9
3.8%
3.5
0.8%
12.4
3.0%
5.0
40%
7.4
1.8%
$0.13
$0.12
91.3
6.3%
15.4
1.1%
20.5
1.4%
4.0
51.4
3.5%
13.9
1.0%
37.6
2.6%
10.8
29%
26.7
1.8%
$0.48
$0.46
29.7
7.8%
4.2
1.1%
5.3
1.4%
1.9
18.2
4.8%
4.1
1.1%
14.1
3.7%
3.3
23%
10.9
2.9%
$0.20
$0.18
32.3
8.5%
4.4
1.1%
5.0
1.3%
0.0
22.9
6.0%
3.3
0.9%
19.6
5.2%
6.5
33%
13.2
3.5%
$0.24
$0.23
127.3
8.4%
17.5
1.2%
20.7
1.4%
1.1
88.0
5.8%
13.9
0.9%
74.1
4.9%
25.1
34%
49.0
3.2%
$0.88
$0.84
30.0
8.1%
3.6
1.0%
4.0
1.1%
0.0
22.3
6.0%
3.2
0.9%
19.1
5.2%
6.3
33%
12.8
3.5%
$0.23
$0.22
34.5
8.6%
3.6
0.9%
4.0
1.0%
0.0
26.9
6.7%
3.2
0.8%
23.7
5.9%
7.8
33%
15.9
4.0%
$0.28
$0.27
130.4
8.5%
14.1
0.9%
16.0
1.0%
0.0
100.2
6.5%
12.9
0.8%
87.4
5.7%
28.8
33%
58.5
3.8%
$1.05
$1.02
62.1
60.6
60.9
61.1
61.1
61.4
60.3
60.3
EBITDA
% of revenues
% of revenues
% of revenues
Other income
EBIT
% of revenues
% of revenues
EBT
% of revenues
Income taxes
Net incom e
% of revenues
WA Fully diluted Shares O/S (millions)
62.3
Adjusted EBITDA - Exc. ITCs

% of revenues
Adjusted EBITDA Per EU - Exc. ITCs (000s)
y/y%
$86.6
7.2%
$25.3
3.0%
$18.7 $24.2 $23.3 $29.4

$95.6
$31.2
5.8%
7.0%
6.5%
7.0%
6.6%
8.2%
$12.2 $19.2 $16.4 $25.8
$18.7
$25.5
-30.7% -3.9% -35.7% -26.9% -26.1% 108.6%
33.7
9.0%
4.5
1.2%
5.4
1.4%
(0.8)
24.6
6.6%
3.1
0.8%
21.6
5.7%
9.2
43%
12.4
3.3%
$0.22
$0.21
31.7
8.5%
4.5
1.2%
5.0
1.3%
0.0
22.2
6.0%
3.4
0.9%
18.8
5.0%
6.2
33%
12.6
3.4%
$0.23
$0.22
61.3
60.3
$39.2 $31.7
10.5% 8.5%
$37.7 $30.2
96.9% 84.7%
60.3
60.2
$32.3
8.5%
$30.2
17.0%
$134.4
8.9%
$30.9
65.2%
$30.0 $34.5
8.1%
8.6%
$26.7 $31.0
4.8% -17.7%
33.0
8.6%
3.5
0.9%
4.0
1.0%
0.0
25.5
6.7%
3.2
0.8%
22.3
5.8%
7.4
33%
14.9
3.9%
$0.27
$0.26
32.9
8.7%
3.4
0.9%
4.0
1.1%
0.0
25.5
6.7%
3.2
0.8%
22.3
5.9%
7.3
33%
14.9
3.9%
$0.27
$0.26
60.3
60.3
60.3
$33.0
8.6%
$31.0
2.6%
$32.9
8.7%
$31.0
2.6%
$130.4
8.5%
$30.0
-3.1%
180
BMO Capital Markets
CASH FLOW STATEMENT

2014
In millions of US$
2015E
2016E
2013
Q1
Q2
Q3
Q4E
2014
Q1
Q2E
Q3E
Q4E
2015E
Q1E
Q2E
Q3E
Q4E
2016E
Net income
Other
27
10
27
11
12
13
13
49
13
16
15
15
59
28
(11)
9
53
(23)
30
8
(3)
(0)
10
8
17
8
0
8
20
(19)
1
10
(2)
4
22
(22)
0
10
3
8
29
(2)
27
36
(1)
20
81
(35)
46
10
1
3
24
5
29
10
(7)
5
20
(42)
(23)
10
0
0
22
24
46
9
0
0
23
(5)
18
38
(24)
7
70
(19)
51
8
0
0
20
24
44
8
0
0
23
(41)
(18)
7
0
0
22
12
35
7
0
0
22
6
29
30
0
0
89
1
89
Share repurchases
Other
13
(2)
114
(29)
0
(2)
93
(4)
(0)
0
(7)
0
0
(12)
0
(0)
0
(7)
0
(2)
(9)
15
(0)
0
(8)
0
(0)
7
(6)
(1)
0
(7)
0
(1)
(15)
5
(2)
0
(30)
0
(3)
(29)
(27)
(0)
0
(7)
0
0
(34)
35
(0)
0
(7)
0
(2)
26
(15)
(1)
0
(7)
0
0
(22)
(10)
(1)
0
(7)
0
0
(17)
(17)
(2)
0
(27)
0
(2)
(47)
0
(1)
0
(7)
0
0
(7)
0
(1)
0
(7)
0
0
(7)
0
(1)
0
(7)
0
0
(7)
0
(1)
0
(7)
0
0
(7)
0
(2)
0
(27)
0
0
(29)
(15)
(4)
(102)
0
0
0
Dispositions of property, plant and equipme
Other
(6)
(0)
(123)
(4)
0
0
Change in Cash
1
2
11
12
12
14
(2)
0
0
(0)
(2)
0
(10)
14
4
(3)
0
0
(0)
(3)
(0)
4
4
9
(3)
0
0
(0)
(3)
(0)
9
9
17
(11)
0
0
(0)
(11)
(0)
6
12
17
(4)
0
0
(0)
(4)
(0)
(10)
17
8
(2)
0
0
(0)
(2)
(0)
1
8
9
(3)
0
0
0
(3)
0
21
9
30
(3)
0
0
0
(3)
0
(2)
30
28
(11)
0
0
(0)
(11)
(0)
(8)
17
10
(3)
0
0
0
(3)
0
34
28
62
(3)
0
0
0
(3)
0
(27)
62
35
(3)
0
0
0
(3)
0
25
35
60
(3)
0
0
0
(3)
0
19
60
79
(10)
0
0
0
(10)
0
51
28
79
BALANCE SHEET
2014
In millions of US$
2015E
2016E
2013
Q1
Q2
Q3
Q4
2014
Q1
Q2E
Q3E
Q4E
2015E
Q1E
Q2E
Q3E
Q4E
2016E
Cash
Accounts receivable
Inventories
Other
12
230
183
8
433
14
201
208
8
431
4
146
246
9
406
9
164
267
8
448
17
212
230
6
465
17
212
230
6
465
8
187
232
4
430
9
189
242
4
444
30
185
226
4
445
28
192
222
4
447
28
192
222
4
447
62
182
224
4
473
35
202
245
4
486
60
189
236
4
489
79
191
220
4
495
79
191
220
4
495
Fixed assets
Intangible assets
Unused ITC
Goodw ill
Other
Total Assets
65
357
66
352
13
212
55
1
1,129
65
343
9
213
57
1
1,094
65
338
6
213
59
0
1,129
64
332
0
213
62
0
1,136
64
326
0
213
68
0
1,101
64
321
0
213
69
0
1,111
62
316
0
213
69
0
1,104
60
311
0
213
69
0
1,100
59
307
0
213
69
0
1,120
58
303
0
213
69
0
1,129
57
299
0
213
69
0
1,127
56
295
0
213
69
0
1,128
212
55
14
1,136
64
332
0
213
62
0
1,136
60
311
0
213
69
0
1,100
56
295
0
213
69
0
1,128

Deferred revenue
Other
213
58
26
35
3
334
225
55
25
30
2
338
205
48
25
30
3
310
227
37
29
45
6
343
233
41
32
40
8
354
233
41
32
40
8
354
226
23
35
13
20
318
202
18
40
48
12
320
205
18
40
0
12
275
204
18
40
0
12
274
204
18
40
0
12
274
219
18
40
0
12
289
219
18
40
0
12
289
209
18
40
0
12
279
202
18
40
0
12
272
202
18
40
0
12
272

Future income taxes
Long term debt
Other
Total Liabilities
0
115
225
0
6
681
0
113
210
0
15
676
0
112
200
0
22
644
1
111
200
0
23
677
1
108
207
0
13
683
1
108
207
0
13
683
1
106
208
0
12
644
4
103
202
0
20
648
4
103
235
0
19
635
4
103
225
0
19
624
4
103
225
0
19
624
4
103
225
0
18
638
4
103
225
0
18
637
4
103
225
0
17
627
4
103
225
0
17
620
4
103
225
0
17
620
589
(139)
1,094
588
(136)
1,129
588
(136)
1,136
589
(126)
1,111
589
(120)
1,104
589
(114)
1,100
589
(98)
1,129
589
(90)
1,127
589
(82)
1,128
589
(82)
1,128
Share capital
588
589
Retained earnings
(133) (135)
1,136 1,129
588
589
(136) (131)
1,136 1,101
589
589
(114) (107)
1,100 1,120
181
BMO Capital Markets

Target Price
Share Price
Quarterly Price
25
20
20
18
18
16
16
14
14
12
12
10
10
25
20
20
15
15
10
10
2) Mkt
1) NR
5
500
400
400
300
300
200
200
100
2005
2010
400
200
200
2015
Revenue / Share
Price / Revenue
300
1.0
200
600
400
100
2000

600
500
1995
2013
2014
2015

200
200
0.5
100
-200
2013
0.0
Price / Earnings
2014
2015
-200
400
200
0
1995
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
2000
2005
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
0.58
34.6
2010
2015
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
>100
11.0
16.5
0.62
4.2
3.1
1.8
ROE
%
3
6
6
1
2
Date
20-Feb-13
3-Jul-13
Rating Change
R to NR
NR to Mkt
Share Price
$9.94
$11.14

Last Price ( October 15, 2015): $19.95

182
BMO Capital Markets
report.
past 12 months.
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
42.2%
18.6%
54.7%
44.3%
56.9%
56.3%
Hold
Market Perform
54.3%
11.3%
42.7%
51.8%
40.9%
38.7%
Sell
Underperform
3.5%
11.1%
2.7%
3.9%
2.2%
5.0%
*
**
***
183
BMO Capital Markets

For
Other
Important
Disclosures
on
the
stocks
discussed
in
this
report,
please
go
to
BMO
Capital
Markets
Equity
Research
is
available
via
our
website
General Disclaimer
Additional Matters
Nesbitt Burns Inc.
184
BMO Capital Markets

FDIC), BMO Ireland Plc, and Bank of Montreal (China) Co. Limited and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC) and
BMO Capital Markets GKST Inc. (Member SIPC) in the U.S., BMO Nesbitt Burns Inc. (Member Canadian Investor Protection Fund) in Canada, Europe and Asia,
BMO Capital Markets Limited in Europe and Australia, and BMO Advisors Private Limited in India.

A member of BMO
Financial Group
185

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
COMPANY UPDATE
j

Q3 Deliveries In Line With Expectations Continue To Maintain Favourable Outlook
What's The Event
NFI delivered 625 EUs in Q3 which was up from 621 Y/Y, and versus
our estimate of 620. As well, work-in-process was 417 EUs, down 30
EUs Q/Q, as the company transitions to the Xcelsior platform at its
Anniston, AL facility. Working capital should continue to unwind as
this restructuring program is completed at year-end.
October 15, 2015

Capital Equipment
Stock Rating:
Sector Weighting:
NFI-TSX (10/15/15)
SECTOR OUTPERFORMER
MARKET WEIGHT
C$22.00
C$19.95
Key Indices:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Float
New bus orders in the quarter totaled 1,133 EUs consisting of firm
orders for 253 EUs (valued at ~$114.5M), new option orders for 880 Dividend/Div Yield
EUs (valued at ~$400.6M), and options for 213 EUs converted to
Fiscal Year Ends
firm orders (valued at ~$120.1M). In addition, at the end of Q3,
Book Value
1,169 EUs of new firm and option orders were pending from
2015 ROE (E)
customers. Over the past couple of weeks, NFI has received
LT Debt
purchase documentation for 725 of these units and will be added to Common
Net AssetEquity
Value
the Q4 backlog once customer approval is received.
We continue to see a strong pipeline of demand for heavy-duty
buses with NFI's TTM book-to-bill ratio at 162% and the company
maintaining its average line entry rate of ~50 EUs/week. As well,
NFI's total backlog at the end of Q3 sat at 7,290 EUs (valued at
~$3.6B), up 279 EUs Q/Q. The company did note that 153 EUs were
removed from the backlog reflecting contracts that were cancelled or
expired without a notice to proceed from the customer. Note, of this
total, 100 EUs were related to customers that did not want to
convert their firm order from NABI buses to Xcelsior. That said, new
bids have gone out for these buses though and we suspect NFI will
participate. As well, NFI's total bid universe sits at 19,420 EUs with
total active bids reaching 6,195 EUs. While this is down from 7,571
EUs in Q2, this reflects recent large contract wins.
EBITDA ($mln)
Current
Estimates (Dec.
(Dec. 31)
31)
Valuation
EV/EBITDA-Curr
Toronto
NM
C$12.04-C$20.85
55.5M
44.0M Shrs
38,000
C$1,054.5M
C$0.80 / 3.3%
December
$8.36 per Shr
9.0%
$141.0M
$464.0M
Yes
2013
$94.7A
2014
$107.4A
2015
$132.5E
2016
$138.4E
11.5X
10.2X
8.2X
7.9X
In the aftermarkets space, NFI saw gross orders received decrease

by 20.3% Y/Y in Q3 with the CTA mid-life bus upgrade program
complete. Normalizing for this, gross orders increased 7.6% Y/Y.
Aftermarket shipments decreased 14.0% Y/Y versus our estimate of
a 10.0% Y/Y decline. We continue to view NFI's aftermarkets
division as a key growth area as it consolidates its operations,
benefits from a higher-margin profile versus manufacturing, and
potentially finding tuck-in acquisition opportunities.
Continued on page 3.
Company Description
www.newflyer.com
15-138502 2015
"Price Target Calculations" and "Key Risks to Price Target" information on page(s) 3.
CIBC World Markets Corp., 425 Lexington Avenue, New York, NY 10017 (212)-856-4000, jointly prepared by
186
Q3 Deliveries In-line With Expectations - Continue To Maintain Favourable Outlook - October 15, 2015
Sector Outperformer
NFI-TSX
10/15/15
Capital Equipment
Sector Weighting:
EV/EBITDA Multiples
Manufacturers
P/E Multiples
Manufacturers
2013A
EBITDA Margin
Current Ratio
Debt/Equity
Debt/Total Capital
Income Statement
Cost of Sales
Gross Profit
EBITDA
EBIT
EBT
Net Income
Balance Sheet
C$19.95
C$22.00
Market Weight
2014A
2015E
2016E
10.2x
9.5x
10.0x
8.2x
8.4x
8.5x
7.9x
7.0x
7.4x
2014A
2015E
2016E
Investment Thesis
24.0x
16.9x
17.0x
20.0x
14.6x
13.0x
17.7x
13.1x
11.8x
2014A
2015E
2016E
7.9%
1.1x
51.3%
33.9%
2013A
7.4%
1.1x
53.1%
34.7%
2014A
8.7%
1.3x
41.0%
29.1%
2015E
9.0%
1.3x
50.1%
33.4%
2016E
$991.2
$215.0
$1,199.4
$1,078.7
$120.8
$94.7
$49.0
$34.6
$26.8
$1,132.1
$319.0
$1,451.1
$1,312.8
$138.3
$107.4
$51.4
$37.6
$26.7
$1,205.3
$326.4
$1,531.7
$1,362.4
$169.4
$132.5
$85.2
$70.7
$47.4
$1,231.3
$310.6
$1,541.8
$1,364.8
$177.0
$138.4
$100.6
$86.3
$62.5
Q2/15A
Current Assets
Total Assets
Current Liabilities
Total Liabilities

444
1,111
320
648
464
Company Profile
Canada
16%

$350
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
0
2009
2010
2011
2012
Deliveries(EUs)
2013
2014
$ Millions
3,000
2008
United States
84%
Bus Operations
78%
$1,200,000
2007

Aftermarket
Operations
22%
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2009
2010
2011
2012
$50
$0
2007
2008
2013
2014
187
Given Q3 deliveries were generally in-line with our expectations, we have kept
our earnings estimates unchanged. NFI is tentatively scheduled to report Q3
results on November 4. For the quarter we are forecasting revenue of $371M
(consensus $375M), up from $361M the year prior. We expect EBITDA to come
in at $30M (consensus $32M), up $4M Y/Y.
We maintain our $22 price target and SO rating. Our favourable view is
predicated on the uptrend in bus fundamentals, increasing margins, and
improving FCF conversion.

line with New Flyers historical trading range and reflects the longer-term
positive impact of heavy-duty bus demand and the companys leverage to an
improving U.S. economy.

costs.
188
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Current
$31.4A
$39.2A
$30.0E
$31.9E
$132.5E
2016 Current
--
--
--
--
$138.4E
189

190

Abbreviation
Rating
Description
SO
Sector Outperformer
SP
Sector Performer
SU
NR
Not Rated
Restricted
Stock Ratings
O
Overweight
Market Weight
Underweight
NA
None

(as of 15 Oct 2015)
Count
Percent
Count
Percent
162
43.8%
161
43.5%
157
96.9%
152
35
9.5%
30
94.4%
85.7%
Restricted
11
3.0%
Restricted
11
100.0%

(as of 15 Oct 2015)
Count
Percent
100.0%
Restricted
Count
Percent
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Restricted
0.0%

191
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
05/08/2015
07/15/2015
08/07/2015
09/20/2015
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
14.69
15.77
17.88
18.85
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SO
SO
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
15.75
16.50
19.50
22.00
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Inc.
192
Legal Disclaimer
and recommendations expressed herein constitute judgments as of the date of this report and
193

are subject to change without notice.
in prosecution.
194
Research Report: New Flyer Industries

Wednesday, September 30, 2015
New Flyer Industries (NFI : CAD20.0)

New Flyer Industries up 29.5% in
third quarter, highest gainer in
Auto sector
New Flyer Industries Inc., Canada's 4th largest Auto
company by market cap, jumped CAD4.56 (or 29.5%) in the
Figure 1: Stock Summary

52-Week Range
CAD11.75-CAD20.50
Sector
Auto
Market Cap
CAD1.1 billion (US$828.7

million)
quarter ended September 30 to close at CAD20.0. This

makes the stock the highest riser in the Auto sector which is
Shares Outstanding
55,505,604
down 12.1%. Compared with the S&P/TSX 60 Index which fell
Relative Strength (3 mo)
94
ISIN
CA64438T4019
PermID
1-4295861010
-68.7 points (or 8.0%), this is a relative price increase of

37.6%. The average daily volume of 88,465 shares in Q3 2015
was 1.2 times the average daily volume in Q2 2015. In the
third quarter the market cap jumped CAD262 million
(US$195.6 million).
Global Rank out of 45,086 stocks
Introduction with Trends
Description
Value
Rank
Quartile
MCap (US$)
828.7M
7,950
Top
Total Assets (US$)
982.3M
8,542
Top
Revenue (US$)
1.2B
5,200
Top
Net Profit (US$)
22M
9,747
Top
Return on Equity %
5.7
17,651
Second
Net Profit Margin %
1.8
21,667
Second
Price Earnings
37.6
17,731
Second
Yield %
3.0
7,040
Top
PV$1000 (1Year) US$*
1,358
4,532
Top
US$* Change (1Year) %
30.4
5,112
Top
Rel Strength 6 Mo (US$)
93
3,114
Top
We are currently bullish on this stock, both in

the short-term based on technical indicators,
as well as in the long-term based on
fundamental metrics.
What makes us most bullish on the stock is the
following:
In the last three months the stock has hit a new 52week high sixteen times, pointing to a significant
uptrend; also, the number of rises outnumbered falls
36:26 or 1.4:1.
"A dividend yield of at least two-thirds the triple-A bond
yield"; the stock's dividend yield is 2.1 times the tripe-A
bond yield of 1.4%.
Its Moving Average Convergence Divergence
indicators are rising, with its 12-day EMA higher than its
26-day EMA.
"Total debt equal or less than twice the net quick
liquidation value"; total debt of CAD288.5 Million is 1
times the net liquidation value of CAD276.53 Million.
The price to 200-day MAP ratio is 1.31, a bullish
indicator.
* 1 year ago CAD 1 = USD 0.92; Sep 30, 2015: CAD 1 = USD 0.75
Fig 2: Financial Summary

Year ended (Dec)
2014
2013
2012
Sales (USD)
1.2B
922.6M
645.7M
Pre-tax profit (USD M)
31
26.6
7.5
Net profit (USD M)
22
20.6
6.9
EPS (CAD)
0.5303
0.5398
0.2169
However, there are some reasons why some in the

market are more bearish on the stock:
Price/Earnings of 37.6 versus sector average of 11.8 and
market average of 15.1. We estimate the shares are
trading at a current year P/E of 24.9 and a forward year
P/E of 16.5.
www.BuySellSignals.com
Page 1
195

Analysis
Bullish Signals
The 2.4% discount to 12-month high of CAD20.50 against
the 70.3% premium to 12-month low of CAD11.75
suggests the stock continues to push for new highs.
Rises to Falls: In the last three months the number of rises
outnumbered falls 36:26 or 1.4:1.
In the last 8 trading sessions there has been a net rise of
4.5%; the stock has advanced eleven times and the
biggest one day rise was 5.3% on Sep 21.
In the Canadian market of 1,815 stocks and 75 units
traded today, the stock has a 6-month relative strength
of 94 which means it is beating 94% of the market.
A price rise combined with a high relative strength is a
bullish signal.
The Moving Average Convergence Divergence (MACD)
indicator of 12-day Exponential Moving Average (EMA)
of 19.29 minus the 26-day EMA of 18.95 is positive
suggesting a bullish signal. Both the 12-day EMA as well
as the 26-day EMA are rising, another bullish signal.
The Price/MAP 200 of 1.31 for New Flyer Industries is
higher than the Price/MAP 200 for the S&P/TSX 60 Index
of 0.9.
The price to 200-day MAP ratio is 1.31, a bullish indicator.
In the past 200 days this ratio has exceeded 1.31, ten
times suggesting further upside. The stock is trading
above both its MAPs and the 50-day MAP of CAD18.32 is
higher than the 200-day MAP of CAD15.23, a bullish
indicator. The 200-day MAP has increased to CAD15.23.
An increase is another bullish indicator.
The present value of CAD1,000 (PV1000) invested three
years ago in New Flyer Industries is CAD2,785, including a
capital gain of CAD1,665 and dividend reinvested of
CAD121.
Fig 3: Present Value of CAD1000

invested 3 years ago
3 years Multiplier in CAD = 2.785x

Compound Annual Growth Rate (CAGR) in CAD = 40.2%
Present Value of USD1,000 invested 3 years

ago:
The present value of USD1,000 (PV1000) invested three
years ago in New Flyer Industries is US$2,045, including a
capital gain of US$956 and dividend reinvested of US$88.
3 years ago CAD 1 equalled USD 1.0168
Fig 4: Present Value of USD1000

3 years Multiplier in USD = 2.045x

Compound Annual Growth Rate (CAGR) in USD = 26.6%
In the last three months the stock has hit a new 52-week
high sixteen times, pointing to a significant uptrend.
Page 2
196

Analysis (continued)
Undervaluation:
The earnings yield of 2.7% is 1.9 times the 10-year bond
yield of 1.43%.
The Q Ratio, defined by James Tobin as MCap divided
by Total Assets, is 0.8. Compared with the rest of the
market the stock is undervalued.
Other Bullish Signals:

Also, the following criteria set by Benjamin Graham:
bond yield of 1.4%.
The stock has a score of 5 out of 9 set by Joseph Piotroski
[pass mark >=5 ]:
Positive net income; positive operating cashflow; good
quality of earnings [operating cashflow exceeds net
income]; improvement in current ratio from 1.3 to 1.4;
improvement in asset turnover [growth in revenue of 29.7%
exceeded growth in assets of 9%].
Fig 5: Bullish Indicators and Rank

in Market
Description
Value
Rank In Market
Price/MAP200
1.31
In Top 5%
Price/MAP50
1.09
In Top 6%
94
In Top 7%
Turnover in Quarter
CAD122.3 million
In Top Quartile
MCap
US$828.7 million
In Top Quartile
Annual Revenue
CAD1.6 billion
(US$1.2 billion)
In Top Quartile
Price Change %
4.1
In Top Quartile
Relative Strength
(6M)
Note
Bearish Signals:
Overvaluation:
P/E of 16.5.
Price/Sales of 0.69 versus sector average of 0.6 and
trading at a current year Price/Sales of 0.5 and a
forward year Price/Sales of 0.4.
The Relative yield of the stock, defined by its yield of 3%,
divided by average yield of dividend yielding stocks in
the S&P/TSX 60 Index of 3.4% is 86.9%. This suggests the
stock is overvalued in dividend yield terms.
Other Bearish Signals:

Return on Equity of 5.7% versus sector average of 19.1%
and market average of 7.2%.
Total Liabilities/ EBITDA of 7.8 is more than or equal to 5,
this compares unfavourably with the Joseph Piotroski
benchmark of 5.
Return on Assets of 2.2% versus sector average of 8.8%
Return on Capital Employed of 6.4% versus sector
average of 20.5% and market average of 5.7%.
Net profit margin has averaged 1.7% in the last 3 years.
This suggests the company is less profitable with a low
margin of safety.
As per the Du Pont analysis, Return on Equity is less than
stellar at 5.7%. This is computed as net profit margin of
1.8% times asset turnover [sales/assets] of 1.2 times
leverage factor [total assets/shareholders' equity] of
2.5.Also, this has deteriorated from 5.8% last year.
ROE
Profit
Margin
Asset
Turnover
Equity
Multiplier
Current
Year
5.7
1.8
1.2
2.5
Previous
Year
5.8
2.2
1.0
2.5
Page 3
197

Fig 6: Bearish Indicators and Rank
in Market
Description
Value
Rank In Market
Return on Assets
[ROA] %
2.2
In Bottom Quartile
EBITDA Margin %
6.4
In Bottom Quartile
Price Earnings
37.6
In Bottom Quartile
Net Profit Margin %
1.8
In Bottom Quartile
Fig 7: Shareholder Returns

Trailing quarter: The stock rose 36 times (57.1% of the time),
fell 26 times (41.3% of the time) and was unchanged 1 time
(1.6% of the time). The aggregate volume was 1.2 times
average trading of 8 million shares. The value of CAD1,000
invested 3 months ago is CAD1,307 [vs 926 for the S&P/TSX 60
Index], including a capital gain of CAD296 and dividend
reinvested of CAD11.
Fig 9: Recent Analyst

Recommendations
Date
Brokerage
10-Aug- National Bank

2015
Financial
Action
Current
Rating
Boost Price
Target
Outperform
10-Aug- Canaccord Genuity Boost Price

2015
Target
Buy
08-Aug- CIBC
2015
Upgrade
Sector
Outperformer
07-Aug- CIBC
2015
Boost Price
Target
Outperform
20-Jul2015
Canaccord Genuity Boost Price

Target
Buy
16-Jul2015
CIBC
Sector Perform
Boost Price
Target
Trailing 12 Months: The stock rose 136 times (54.2% of the

time), fell 110 times (43.8% of the time) and was unchanged 5
times (2% of the time). The value of CAD1,000 invested a year
ago is CAD1,632 [vs 908 for the S&P/TSX 60 Index], including a
capital gain of CAD567 and dividend reinvested of CAD65.
PVCAD1,000
Trailing Qtr
Trailing Yr
Trailing 3 Yrs
CAD1,307
CAD1,632
CAD2,785
Auto sector
879
990
1,605
S&P/TSX 60
Index
926
908
1,116
NFI
Fig 8: Moving Annual Return
Last
Close
(CAD)
Dividen Capital % Yield Annual

ds
Gain %
Return
(CAD)
%
20
0.6
58.5
4.7
63.3
0.05
14.3
0.4
14.7
1 Yr ago 12.62
Page 4
198

Price Volume Dynamics

Fig 10: Weekly Price Volume
Dynamics (Last 12 Weeks)
Volatility
The stock traded between a 52-week low of CAD11.75 and a
high of CAD20.50. The average daily volatility of 2.2% places
the stock in the 3rd quartile in the market meaning it is mildly
volatile.
Fig 13: Price High Low Close
Price increase fuelled by above average Volume

Price increase on below average Volume
Price decrease fuelled by above average Volume
Price decrease on below average Volume
Price unchanged on above average Volume
Price unchanged on below average Volume
Untraded
Fig 11: Price/Moving Avg Price

[P/MAP200]
Fig 14: YTD Comparison Stock

Sector Index (%)
Fig 12: Trailing 3 months

Turnover
US$91.3 million
Volume
6,686,063
Volume Index (1 is avg)
1.2
Page 5
199


Fig 15: Trailing Price Change %
Price Change %
Quarter
Year
3 Years
NFI
29.55
56.72
166.49
Auto
-12.1
-0.98
60.55
S&P/TSX 60 index
-8
-9.23
11.62
Fig 16: Turnover Rate & Turnover

Period
Fig 17: Year-on-Year Comparison (Trailing year - ended 30 Sep)

2015
2014
2013
2012
2011
Price 30 Sep (CAD)
20
12.76
11.04
7.5
6.29
% Price Change
56.7
15.6
47.1
19.2
Avg Daily Volume
87,720
58,201
62,993
48,793
294,528
VWP (CAD)
15.25
11.47
9.67
6.53
6.14
Turnover Period
3 yrs 4 mo
4 yrs 2 mo
3 yrs 10 mo
4 yrs 10 mo
22 yrs 6 mo
Price Range (CAD)
11.75 - 20.5
9.53 - 13.62
7.31 - 11.48
5.04 - 8.07
5.42 - 7.46
Index Change %
-9.2
17.9
4.3
5.4
Relative Price Change %
65.9
-2.3
42.8
13.9
Fig 18: CAD1 buys USD 0.74 today: Appreciation of USD from 0.86
twenty-five years ago
Page 6
200

Price Volume Dynamics (continued)

Fig 19: Stock v Index (Trailing Year)
In the trailing 12 months New Flyer Industries has overperformed the S&P/TSX 60 index by 66.0%.
Fig 20: Price Volume Trend: Trailing Quarter
New Flyer Industries hit a 3-month high of CAD20 on Sep 30 and a 3-month low of CAD15 on Jul 07.
Page 7
201


Fig 21: Fibonacci Retracement
Page 8
202

Ranking
Fig 22: Global Peer Group Analysis (all figures in USD)
Name
Relative Str.
(6 mo)
MCap
PV $1000
(1 yr)
Revenue
Net Profit
Total Assets
Piaggio
46
866.6M
934.2
1.4B
17.9M
1.7B
Songz Automobile Air Conditioning
33
834M
397.5M
43.5M
589.3M
Ningbo Shuanglin Auto Parts
48
832.4M
1,264.2
235.5M
20.9M
572.9M
Jiangsu Nanfang Bearing
95
829.9M
2,139.0
47.4M
10.3M
106.1M
93
828.7M
1,358.3
1.2B
22M
982.3M
S&T Motiv Company
85
806.4M
1,449.4
879.4M
40.4M
905.4M
Ceat
96
788.2M
1,537.3
990.3M
48.5M
584.8M
ARB
77
778.5M
1,057.1
210.4M
29.9M
169.6M
Indus Motor
82
752.3M
1,598.2
558.5M
37.2M
250.7M
Global Peer Group Analysis (continued)

Code
Country
Last Price
P/E
P/S
PIA
IT
EUR2.15
48.3
002454
CN
CNY13.08
300100
CN
002553
P/Book
Turnover
Rate (%)
% Disc to 52w Hi
0.6
67.4
32.4
19.2
2.1
760.2
57.3
CNY13.45
39.8
3.5
4.6
291.7
58.8
CN
CNY15.17
80.9
17.5
8.6
442.4
19.0
NFI
CA
CAD20.0
37.6
0.7
30.4
2.4
A064960
KR
KRW70,000.0
20.0
0.9
1.8
64.6
CEATLTD
IN
Rs1,281.95
16.4
0.8
3.2
311.7
1.3
ARB
AU
AUD14.02
26.1
3.7
6.1
42.6
3.2
INDU
PK
PKR997.0
20.2
1.4
3.9
13.3
24.2
Sector Sorting
For Company searches, or for sorting by stocks and variables, an interactive version of today's Table is available
here
Page 9
203

Ranking (continued)
Fig 23: Relative Strength
Page 10
204

Annual Report: Key Parameters
31 December, 2014
Annual Report: New Flyer Industries EPS Growth down

New Flyer Industries (TSX:NFI), announced EPS of 53.03c (US45.71c) for the year-ended December 31, 2014, down 1.8% from
53.98c (US50.71c) in the previous year-ended December 31, 2013.
Major changes compared with previous year:

Favourable Changes:
Net profit up 7% from CAD27.6m ($US25.9m) to CAD29.5m ($US25.4m)

Total revenue up 29.7% from CAD1.2b ($US1.2b) to CAD1.6b ($US1.4b)
EBIT to total assets up from 4.1% to 4.4%
Total revenue to total assets up from 1.0 to 1.2
Current ratio up 4.6% from 1.3 to 1.4
Working capital to total assets up from 8.7% to 11.3%
Total current assets to Total Assets up from 38.1% to 42.9%
Unfavourable Changes:
EBIT Margin down 10% from 4.0% to 3.6%

EBITDA to Revenues down from 6.6% to 6.4%
EBIT to Revenues down from 4% to 3.6%
Profit before tax to Revenues down from 2.9% to 2.6%
Profit after tax to Revenues down from 2.2% to 1.8%
Debt to Equity up 3.8% from 0.5 to 0.6
Current Debtors to Total Assets down from 20.3% to 18.7%
Total Liabilities to EBITDA of 7.8 compares unfavourably with the Joseph Piotroski benchmark of <5. However, it has
improved by 12.9% from the previous year's ratio of 8.9.
Total Liabilities to Operating Cash Flow of 15.7 compares unfavourably with the Joseph Piotroski benchmark of <4.
However, it has improved by 33.2% from the previous year's ratio of 23.5.
Note:
EPS steady at 53.0c (US45.71c)

Interest cover steady at 3.6
Cost of Goods Sold to Revenues up from 87.6% to 88%
Intangibles to Total Assets down from 50.1% to 47.9%
Current Inventory to Total Assets up from 16.1% to 20.2%
Fixed Assets to Total Assets down from 5.7% to 5.6%
Annual
Company Name : New Flyer Industries Inc. (NFI)
December 31
Description
2014
CAD m
2013
CAD m
2014
$US m
2013
$US m
Change
(%)
Total Revenue
1,602.7
1,235.9
1,381.4
1,161
Up 29.7
EBITDA
102.5
81.6
88.4
76.7
Up 25.6
EBIT
57.7
49.9
49.7
46.9
Up 15.6
Interest
16.2
14.2
13.9
13.4
Up 13.7
Pre-Tax Profit/(Loss)
41.5
35.7
35.8
33.5
Up 16.3
Profit/(Loss) after
Tax
29.5
27.6
25.4
25.9
Up 7
Working Capital
148.1
104.9
127.6
98.6
Up 41.1
Page 11
205

Annual Report: Key Parameters (continued) 31 December, 2014

Current Assets
565
460.3
487
432.4
Up 22.7
Current Liabilities
416.9
355.3
359.4
333.8
Up 17.3
Shareholders' Funds 519.8
479.5
448
450.5
Up 8.4
Total Liabilities
796.1
727.3
686.2
683.2
Up 9.5
Total Assets
1,315.9
1,206.8
1,134.2
1,133.7
Up 9
Current Debt
48.1
38.6
41.5
36.2
Up 24.8
Non-Current Debt
240.3
216.9
207.2
203.8
Up 10.8
Total Debt
288.5
255.5
248.6
240
Up 12.9
Cash and cash

equivalents
20.2
12.6
17.4
11.9
Up 60
Operating Cash
Flow
50.6
30.9
43.6
29
Up 63.8
Net Assets
519.8
479.5
448
450.5
Up 8.4
Net Tangible Assets (110.8)
(124.9)
(95.5)
(117.3)
Improved 11.3
Per Share figures

December 31
2014
2013
2014
2013
Change (%)
Description
CAD
CAD
$US
$US
EBIT
0.9
0.9
Up 8.2
EBITDA
1.8
1.6
1.6
1.5
Up 17.6
Working Capital
2.7
2.3
1.9
Up 32.1
Shareholders' Funds 9.4
9.2
8.1
8.7
Up 1.5
Total Liabilities
14.3
14
12.4
13.2
Up 2.4
Total Assets
23.7
23.2
20.4
21.8
Up 2.1
Current Debt
0.9
0.7
0.7
0.7
Up 16.8
Non-Current Debt
4.3
4.2
3.7
3.9
Up 3.7
Total Debt
5.2
4.9
4.5
4.6
Up 5.7
Net Tangible Assets (2)
(2.4)
(1.7)
(2.3)
Improved 16.7
EPS Final
0.5
0.5
0.5
Down 1.9
0.5
December 31
Performance Ratios
2014
2013
Change (%)
Return on Equity (%)
5.7
5.8
Down 1.7
Return on Assets (%)
2.2
2.3
Down 4.3
Total Liabilities to EBITDA
7.8
8.9
Down 12.9
Total Liabilities to Operating

Cash Flow
15.7
23.5
Down 33.2
Debt/Equity
0.6
0.5
Up 3.8
Total Liabilities/Total Assets

(Steady % from 0.6 to 0.6)
0.6
0.6
Steady
Interest Cover
3.6
3.5
Up 1.4
Current Ratio
1.4
1.3
Up 4.6
50.1
Down 4.4
Common Size Ratios by Assets %

Intangibles to Total Assets
47.9
Page 12
206

Annual Report: Key Parameters (continued) 31 December, 2014

Total current assets to Total
Assets
42.9
38.1
Up 12.5
Current Inventory to Total

Assets
20.2
16.1
Up 25.1
Current Debtors to Total Assets 18.7
20.3
Down 7.8
Fixed Assets to Total Assets
5.7
Down 1.9
5.6
Common Size Ratios by Revenues %

Cost of Goods Sold to
Revenues
88.0
87.6
Up 0.5
EBITDA to Revenues
6.4
6.6
Down 3.1
EBIT to Revenues
3.6
4.0
Down 10.8
Profit before tax to Revenues
2.6
2.9
Down 9.9
Profit after tax to Revenues
1.8
2.2
Down 19.3
Fig 24: Historical perspective of growth and performance:

A track record of profits in 4 of the last 4 years
Description
Annual (CAD M)
Annual (US$ M)
5 years Avg (CAD 5 years Avg (US$

M)
M)
5 years CAGR %
Total Revenue
1,602.7
1,381.4
1,234.5
1,064
20.5
EBITDA
102.5
88.4
79.7
68.7
2.0
Operating Profit
57.7
49.7
44.5
38.4
-5.2
Net Profit
29.5
25.4
22.1
19.1
23.2
CAGR = Compound Annual Growth Rate

All Figures in %
Description
Annual
3 years Avg
EBITDA Margin
6.4
6.5
Operating Profit Margin
3.6
3.5
Net Profit Margin
1.8
1.7
Return on Equity
5.7
4.7
Return on Assets
2.2
1.9
Return on Capital Employed
6.4
5.4
Currency Conversion (December 31, 2014): $US1 = CAD1.16Currency Conversion (December 31, 2013): $US1 = CAD1.06
Page 13
207

Company Overview and Regulatory Announcements

Activities
Board and Management
New Flyer Industries Inc is a manufacturer of the heavy duty

transit buses. It also includes aftermarket parts and support,
including the sale of bus parts. The Company operates in two
segments namely Bus Operations and Aftermarket
Operation.
Hon. Brian Tobin

Chairman
Glenn Asham
CFO
Further details can be found at
Paul Soubry
President
http://www.newflyer.com.
Business Sector
Automobiles & Auto Parts
Industry Group
Economic Sector
Consumer Cyclicals
Stock BUZZ
To view the Stock BUZZ on New-Flyer-Industries, click
Adam Gray
Director
John Marinucci
Director
Phyllis Cochran
Director
here
Issued Capital
Krystyna Hoeg
Director
Based on 55,505,604 issued equity shares the market

capitalisation is CAD1.1 billion (US$828.7 million). It is
Canada's 6th largest Auto company by total revenue.
V. James Sardo
Independent Director
Larry Edwards
Colin Pewarchuk
Company Secretary
Meetings
May 01: New Flyer Industries announces AGM
New Flyer Industries has announced its Annual General
Meeting will take place on May 07, 2015.
Dividends
September 15: New Flyer Industries announces
dividend
New Flyer Industries today announced a monthly dividend of
5.17c per share. The record date is September 30, 2015 and it
is payable on October 15, 2015.
For more details click here.
August 27: New Flyer Industries announces dividend

5.0c per share. The ex dividend date is August 27, 2015 and it
is payable on September 15, 2015.
Page 14
208

Regulatory Announcements (continued)

July 15: New Flyer Industries announces dividend
5.17c per share. The record date is July 31, 2015 and it is
payable on August 17, 2015.
June 15: New Flyer Industries announces dividend

5.17c per share. The record date is June 30, 2015 and it is
payable on July 15, 2015.
May 15: New Flyer Industries announces dividend

5.17c per share. The record date is May 29, 2015 and it is
payable on June 15, 2015.
April 15: New Flyer Industries announces dividend

4.88c per share. The record date is April 30, 2015 and it is
payable on May 15, 2015.
January 28: New Flyer Industries announces dividend

5.0c per share. The ex dividend date is January 28, 2015 and
it is payable on February 16, 2015.
November 26 2014: New Flyer Industries announces

dividend
5.0c per share. The ex dividend date is November 26, 2014
and it is payable on December 15, 2014.
October 29 2014: New Flyer Industries announces

dividend
5.0c per share. The ex dividend date is October 29, 2014 and
it is payable on November 17, 2014.
Performance
August 06: New Flyer Announces Results for the Second
Quarter of 2015
[News Story] Summary (U.S. Dollars except as noted):
Consolidated revenue of $375.0 million increased by 8.2%
compared to 2014 Q2 due to growth in both bus
manufacturing and aftermarket revenue. Record quarterly
consolidated Adjusted EBITDA of $39.2 million, an increase of
45.3% compared to 2014 Q2.
August 06: New Flyer to announce 2015 second quarter

results on August 6, 2015 and hold conference call on
August 7, 2015
[News Story] WINNIPEG, July 10, 2015 /CNW/ - (TSX:NFI)
(TSX:NFI.DB.U) New Flyer Industries Inc. ("New Flyer" or the
"Company"), the leading manufacturer of heavy-duty transit
buses in Canada and the United States, announced today
that it intends to release its 2015 second quarter results on
Thursday August 6, 2015.
April 14: New Flyer Announces First Quarter 2015 Orders

and Backlog
[News Story]
<link>http://tmx.quotemedia.com/article.php?newsid=74749
342&qm_symbol=NFI</link>
Source: TMX Group
March 18: New Flyer Announces Fourth Quarter and

Fiscal Year 2014 Results
Fiscal 2014 revenue, Adjusted EBITDA and net earnings were
$1.45 billion, $107.4 million and $26.7 million, respectively,
compared to the same measures in Fiscal 2013 of $1.20
billion, $94.7 million and $26.8 million, respectively.
Estimated bus market share of EUs delivered for Fiscal 2014
was approximately 48%, an increase from 43% for Fiscal 2013.
Press Releases
September 30: Southeastern Pennsylvania
Transportation Authority awards New Flyer a contract
for up to 35 MiDi(Registered) buses
WINNIPEG, Sept. 30, 2015(TSX: NFI) (TSX: NFI.DB.U) New Flyer of
America Inc., a subsidiary of New Flyer Industries Inc. ("New
Flyer" or the "Company"), the leading manufacturer of heavyduty transit buses in the United States and Canada,
announced today that the Southeastern Pennsylvania
Transportation Authority ("SEPTA") awarded New Flyer a
contract for up to 35 30-foot MiDi(Registered) clean diesel
buses.
September 28: New Flyer Industries director granted

Restricted Share Units
New Flyer Industries (Canadian:NFI) director Gray Adam L.,
has been granted Restricted Share Units on 1,592 shares
worth CAD30,646. The transaction date was September 25,
2015. The shares last traded at CAD19.21.

Deferred Share Units
New Flyer Industries (Canadian:NFI) director Sardo Vincent
James, has been granted Deferred Share Units on 637 shares

New Flyer Industries (Canadian:NFI) director Tobin Brian
Vincent, has been granted Restricted Share Units on 1,210
shares worth CAD23,292. The transaction date was
September 25, 2015. The shares last traded at CAD19.21.

New Flyer Industries (Canadian:NFI) director Cochran Phyllis
Elaine, has been granted Deferred Share Units on 1,783
shares worth CAD34,323. The transaction date was
Page 15
209


July 08: Orange County Awards New Flyer Contracts for

218 Xcelsior Buses
New Flyer Industries (Canadian:NFI) director Hoeg Krystyna,

[News Story]WINNIPEG, July 8th, 2015 /CNW/ - (TSX: NFI) (TSX:

NFI.DB.U). New Flyer of America Inc., a subsidiary of New Flyer
Industries Inc ("New Flyer" or the "Company"), the leading
manufacturer of heavy-duty transit buses in the United States
and Canada, announced today that Orange County
Transportation Authority ("OCTA") has approved two
contracts to purchase 218 (234 equivalent units or "EUs")
Xcelsior compressed natural gas (CNG) heavy-duty buses.

New Flyer Industries (Canadian:NFI) director Marinucci
Giovanni (John), has been granted Deferred Share Units on
637 shares worth CAD12,262. The transaction date was

New Flyer Industries (Canadian:NFI) director Edwards Larry
Dean, has been granted Deferred Share Units on 637 shares
August 13: California Energy Commission approves

New Flyer zero-emission fuel cell demonstration project
[News Story] ST. CLOUD, MN, Aug. 13, 2015 /CNW/ - (TSX: NFI)
(TSX: NFI.DB.U) New Flyer of America Inc., a subsidiary of New
Flyer Industries Inc. ("New Flyer" or the "Company"), the
leading manufacturer of heavy-duty transit buses in the
United States and Canada, announced that the California
Energy Commission ("CEC") approved a $2.1 million grant to
conduct an advanced demonstration project involving a
New Flyer Xcelsior electric transit bus with a Hydrogenics
CelerityPlus fuel cell.
July 15: New Flyer Announces Second Quarter 2015

Orders and Backlog
buses in Canada and the United States, announced its order
activity and backlog update for the second fiscal quarter
ended June 28, 2015 ("Q2 2015").
Bus Deliveries, Order Activity, and Option Expiry
New Flyer delivered 594 equivalent units ("EUs") in Q2 2015, an
increase of 12 EUs compared to 582 EUs in the second fiscal
quarter ended June 29, 2014 ("Q2 2014").
<a
href='http://tmx.quotemedia.com/article.php?newsid=76764
906&qm_symbol=NFI'>Read more...</a>
Source: TMX Group
July 10: New Flyer to announce 2015 second quarter

August 7, 2015
June 30: Seattle's King County Metro Exercises Options

for 138 New Flyer Xcelsior Buses
[News Story] WINNIPEG, June 30, 2015 (TSX: NFI) (TSX:
NFI.DB.U) New Flyer of America Inc., a subsidiary of New Flyer
Industries Inc. ("New Flyer" or the "Company"), the leading
and Canada, announced today that King County Metro of
Seattle, Washington has exercised options for an additional
138 (235 equivalent units or "EUs") heavy-duty transit buses in
a variety of configurations including; 40 and 60-foot Xcelsior
diesel, diesel-electric hybrid buses and electric-trolleys.
June 29: New Flyer Industries director granted

worth CAD31,498. The transaction date was June 26, 2015.
The shares last traded at CAD15.17.
June 29: New Flyer Industries director granted Deferred

Share Units
819 shares worth CAD12,596. The transaction date was June
26, 2015. The shares last traded at CAD15.17.

Share Units
shares worth CAD20,932. The transaction date was June 26,


Page 16
210


June 12: Honolulu Awards New Flyer a Contract for up
to 20 60-foot Xcelsior Transit Buses
May 01: New York provides New Flyer award for an

additional 72 heavy-duty transit buses
WINNIPEG, June 12, 2015 (TSX: NFI) (TSX: NFI.DB.U) New Flyer
of America Inc., a subsidiary of New Flyer Industries Inc. ("New
announced today that Oahu Transit Services Inc., located in
Honolulu, Hawaii awarded New Flyer a contract for up to 20
heavy-duty 60-foot, clean diesel transit buses (40 equivalent
units or "EUs").
[News Story]WINNIPEG, May 1, 2015 /CNW/ - (TSX: NFI) (TSX:

manufacturer of heavy-duty transit buses in North America,
announced today that New York City Transit Authority
("NYCT") granted New Flyer an award for an additional 72
heavy-duty, 40-foot, low floor, Xcelsior(Registered) buses (72
equivalent units or "EUs").
May 22: Dallas Exercises Options For 63 Additional New

Flyer Buses
April 10: Milwaukee awards New Flyer a contract for up

to 75 Xcelsior(Registered) buses
[News Story] WINNIPEG, May 22, 2015 /CNW/ - (TSX: NFI) (TSX:
and Canada, announced today that the Dallas Area Rapid
Transit "(DART)" has exercised options for 17 40-foot NABI LFW
and 46 duty 40-foot New Flyer Xcelsior compressed natural
gas ("CNG") buses.
[News Story] WINNIPEG, April 9, 2015 /CNW/ - (TSX: NFI) (TSX:

and Canada, announced today that the Milwaukee County
Transit System ("MCTS") awarded New Flyer a contract for up
to 75 heavy-duty 40 foot Xcelsior(Registered) clean diesel
buses.
May 21: Community Transit exercises options for 29

New Flyer Xcelsior(Registered) buses
April 10: Minnesota exercises options for twenty New

Flyer 60-foot Xcelsior(Registered) buses
[News Story]WINNIPEG, May 21, 2015 (TSX: NFI) (TSX: NFI.DB.U)

New Flyer of America Inc., a subsidiary of New Flyer Industries
Inc. ("New Flyer" or the "Company"), the leading
and Canada, announced today that Community Transit in
Everett, Washington exercised options for 29 heavy-duty 40foot and 60-foot Xcelsior(Registered) clean diesel buses (39

and Canada, announced today that Metro Transit ("Metro")
a division of the Metropolitan Council, in Minneapolis,
Minnesota and MTS in Maple Grove, Minnesota have
exercised options off of their current contract for twenty
Xcelsior(Registered) clean diesel heavy-duty 60-foot buses
(40 equivalent units or "EUs").
May 07: New Flyer Announces First Quarter 2015 Orders

and Backlog
[News Story] WINNIPEG, April 14, 2015 /CNW/ - (TSX:NFI)
activity and backlog update for the first fiscal quarter ended
March 29, 2015 ("Q1 2015").
May 07: Events Calendar: New Flyer to announce 2015

first quarter results on May 6, 2015 and hold conference
call on May 7, 2015
WINNIPEG, April 14, 2015 /CNW/ - (TSX:NFI) (TSX:NFI.DB.U)
New Flyer Industries Inc. ("New Flyer" or the "Company"), the
leading manufacturer of heavy-duty transit buses in Canada
and the United States, announced today that it intends to
release its 2015 first quarter results on Wednesday May 6,
2015.
April 08: California Energy Commission Awards New

Flyer $1.7 Million in Support of Developing a ZeroEmission Fuel Cell Transit Bus
ST CLOUD, MN, April 8, 2015 (TSX: NFI) (TSX: NFI.DB.U) New
Flyer of America Inc., a subsidiary of New Flyer Industries Inc.
("New Flyer" or the "Company"), the leading manufacturer of
heavy-duty transit buses in North America, announced today
that the California Energy Commission ("CEC") issued the
Company a Notice of Proposed Award of USD $1.7 million for
the development of an advanced fuel cell transit bus.
April 01: New Flyer's Winnipeg Bargaining Unit

Collective Bargaining Agreement Extension
[News Story]WINNIPEG, March 31, 2015 /CNW/ - (TSX: NFI)
(TSX: NFI.DB.U) New Flyer Industries Inc. ("New Flyer" or the
buses in the United States and Canada, announced today
that the Company and members of the UNIFOR main
collective bargaining unit at New Flyer's Winnipeg facility are
continuing negotiations towards a new collective bargaining
agreement.
Page 17
211


April 01: New Flyer's Winnipeg, Manitoba Union to Hold
Ratification Vote on New Collective Agreement
[News Story]WINNIPEG, April 1, 2015 (TSX: NFI) (TSX: NFI.DB.U)
and the United States announced today that the Company
and the UNIFOR main collective bargaining unit at New
Flyer's Winnipeg facility have reached a tentative new threeyear collective bargaining agreement.
March 18: Events Calendar: New Flyer to Announce

2014 Year-End Results on March 18, 2015 and Hold
Conference Call on March 19, 2015
WINNIPEG, March 3, 2015 /CNW/ - (TSX:NFI) (TSX:NFI.DB.U)
release its 2014 fiscal year-end results on Wednesday March
18, 2015.
March 14: Las Vegas awards New Flyer a contract for

up to 305 Xcelsior(Registered) buses
[News Story] WINNIPEG, March 13, 2015 /CNW/ - (TSX: NFI)
that the Transportation Commission of Southern Nevada
("RTC") has awarded New Flyer a contract for up to 305 (425
equivalent units or "EUs") heavy-duty 40-foot and 60-foot
Xcelsior(Registered) compressed natural gas ("CNG") buses.
Page 18
212

Glossary
Annual Return (Fig 8):
Capital Gain/Loss from n Years Ago to n-1 Years Ago:
Dividends Paid In a 12-Month Period/Price at the Beginning of the

Period + Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)
Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)
Current Ratio:
Debt/Equity:
Current Assets/Current Liabiliites (times)
Net Debt/Net Assets (times)
Dividend Yield:
EBIT Margin :
Dividend Per Share/Share Price (%)
Earnings Before Interest and Tax/Revenue (%)
Earnings Yield:
Interest Cover:
Earnings Per Share/Share Price (%)
Earnings Before Interest and Tax/Interest (times)
Moving Average Price (n periods) (Fig 5, 11):
PVCAD1000 (Fig 7, 3, 4):
Sum of Prices for each Period/Number of Periods
Present value of CAD1000 invested 1 year/'n' years ago
Price Close/Moving Avg Price (Fig 5, 11):
Price/Earnings (Fig 23, 6):
Latest Price/Moving Average Price
Share Price/Earnings Per Share (times)
Price/NTA (Fig 23):
Price/Sales (Fig 23):
Closing Share Price/Net Tangible Assets Per Share (times)
Share Price/Sales Per Share (times)
Relative Price Change (Fig 17):
Relative Strength (n-th Period) (Fig 5, 23, 22):
Today's Relative price change with respect to Benchmark Index
Price close today/Price close 'n' periods ago, then ranked by

percentile within the entire market.
Return on Assets (Fig 6):
Return on Equity (Shareholders' Funds):
Net Profit/Total Assets (%)
Net Profit/Net Assets (%)
Turnover (Fig 5, 12):
Turnover Period (Fig 16, 17):
Last Price * Volume
Time Period required for trading all Outstanding Shares
Turnover Rate (Fig 23, 16):
Volume Index (VI) (Fig 12):
Canadian dollar value of annual trading volume as a percentage of

market capitalisation
Number of shares traded in the period/Average number of shares

traded for the period
Volume Weighted Price (VWP) (Fig 17):

The Volume Weighted Price (VWP) is the summation of turnover
divided by total volume in the same period.
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Page 19
213

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
EARNINGS UPDATE
j

On The Road With NFI Management
September 20, 2015

Capital Equipment
Stock Rating:
Sector Weighting:
NFI [Paul Soubry (President & CEO) and Glenn Asham (CFO)] was at 12-18 mo. Price Target
NFI-TSX (9/18/15)
our Montreal Conference and participated in a group lunch in
Toronto. We are increasing our PT to C$22 from C$19.50 and
Key Indices:
maintaining our SO rating. Key points from NFI's presentation were:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Bus Margins Showing An Upward Trajectory: Bus margins (EBITDA
Float
per EU) took a hit in 2014, down on average over ~$5,000 to
~$23,500, reflecting the impact of lower margin backlog booked in
2012/13 as the heavy duty bus industry faced a period of very
Dividend/Div Yield
competitive pricing for bids. Bus margins in H1/15 averaged just
Fiscal Year Ends
under ~$32,000. While we recognize that mix plays a role, this also
Book Value
reflects the fact that NFI is benefiting from lower margin buses
2015 ROE (E)
exiting the backlog and more normalized pricing. On the latter, the
LT Debt
heavy duty bus industry in North America has shrunk from five
Net AssetEquity
Value
Common
players to three (NFI having acquired NABI and Orion shutting
Convertible
Available
down) with NFI having 48% market share. As well, the improving
What's The Event
U.S. economy has resulted in more demand for buses (increasing

municipal/state tax revenue to purchase buses and rising
employment resulting in increasing ridership). As well, NFI's cost
cutting plans to streamline the NABI line to the Xcelsior platform will
yield ~$14 million in annualized cost savings with an investment of
just $20 million reflecting a high ROIC and quick payback. Taking all
of this into consideration, NFI believes that bus margins could
exceed $30,000 per EU.
EBITDA ($mln)
Current
Estimates (Dec.
(Dec. 31)
31)
Valuation
EV/EBITDA-Curr
SECTOR OUTPERFORMER
MARKET WEIGHT
C$22.00
C$19.00
Toronto
NM
C$12.04-C$19.95
55.5M
44.0M Shrs
38,000
C$1,054.5M
C$0.62 / 3.3%
December
$8.36 per Shr
9.0%
$141.0M
$464.0M
Yes
2013
$94.7A
2014
$107.4A
2015
$132.5E
2016
$138.4E
11.1x
9.8x
7.9x
7.6x
Growing Aftermarkets: In the aftermarkets segment, NFI has seen

tremendous growth through its acquisition of NABI's and Orion's
parts operations. By the end of 2015, we expect aftermarkets
revenue to have nearly tripled from 2011 levels and now accounts
for 44% of EBITDA versus just 30% in 2011. Aftermarkets is a
higher-margin operation (~2.5x bus manufacturing) and offers a
way for NFI to reduce its cyclicality. During periods of lower bus
demand, there is typically a greater demand for spare parts as
transit authorities extend the life of the current fleet. Also, with 33%
market share in this segment, NFI could pursue M&A opportunities
here given its improving FCF profile. On a bus, ~20% of the parts
are proprietary, which means that NFI can supply parts for other
buses that it does not manufacture. NFI's large installed base allows Company Description
it to grow aftermarkets revenue ahead of GDP.
Note continues on page 3.
www.newflyer.com
15-138096 2015
CIBC World Markets does and seeks to do business with companies covered in its research reports. As a result, investors
should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision.
See "Important Disclosures" section at the end of this report for important required disclosures, including potential
conflicts of interest. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report,
where applicable.
214
On The Road With NFI Management - September 20, 2015
Sector Outperformer
NFI-TSX
9/20/15
Capital Equipment
Sector Weighting:
C$19.00
C$22.00

Market Weight

EV/EBITDA Multiples
2014A
2015E
2016E
Company Profile

9.8x
9.4x
7.9x
8.4x
7.6x
6.9x

Manufacturers
9.6x
8.3x
7.3x
P/E Multiples
2014A
2015E
2016E
Investment Thesis

22.9x
19.0x
16.9x
16.8x
16.2x
14.4x
12.6x
12.8x
11.2x
New Flyer is well positioned to take advantage of the improving heavy duty bus fundamentals given
Manufacturers
2013A
2014A
2015E
2016E
EBITDA Margin
7.9%
7.4%
8.7%
9.0%
Current Ratio
Debt/Equity
1.1x
51.3%
1.1x
53.1%
1.3x
41.0%
1.3x
50.1%
Debt/Total Capital
Income Statement
33.9%
2013A
34.7%
2014A
29.1%
2015E
33.4%
2016E

$991.2
$215.0
$1,132.1
$319.0
$1,205.3
$326.4
$1,231.3
$310.6
$1,199.4
$1,078.7
$1,451.1
$1,312.8
$1,531.7
$1,362.4
$1,541.8
$1,364.8
Gross Profit
EBITDA
$120.8
$94.7
$138.3
$107.4
$169.4
$132.5
$177.0
$138.4
EBIT
EBT
$49.0
$34.6
$51.4
$37.6
$85.2
$70.7
$100.6
$86.3
Net Income
$26.8
$26.7
$47.4
$62.5
Balance Sheet
Q2/15A
its leading market share in both bus manufacturing and aftermarket services.
Cost of Sales
Current Assets
444
Total Assets
Current Liabilities

Aftermarket
Operations
22%

United States
84%
Bus Operations
78%
1,111
320
Total Liabilities
Canada
16%
648
464

$350
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
0
2007
2008
2009
2010
Revenu es ($ Milli ons)
2011
2012
2013
Del iveries(EUs)
2014
$ Millions
3,000
$1,200,000
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2009
2010
2011
2012
$50
$0
2007
2008
2013
2014
215
Update On Transit Fundamentals: NFI is seeing improving demand for buses

as noted by the upward trajectory in its bid universe with a step up in active
bids NFI is working on. In addition to an improving economic backdrop in the
U.S., it appears the order cycle has stabilized. While previous government
stimulus measures and historical order patterns from transit authorities (i.e.
loading up on options in one year and not ordering buses in subsequent years)
created a more cyclical demand profile, we are seeing a more stable
environment today with EUs delivered hovering at ~5,100 the last four years.
This partly reflects a change in ordering habits from major transit authorities
which now order more regularly (i.e. 100-200 buses a year) versus placing one
big order. This reduced cyclicality improves NFIs forward visibility and helps it
better manage its line rate, which currently sits at 50 EUs per week. As well,
while the likelihood of a long-term transit funding model being passed under this
current U.S. administration is low, the existing funding model has been
extended. We believe the risk of U.S. federal funding disappearing is a very low
probability tail risk, and recall, the federal government subsidizes 80% of the
bus purchase for municipalities. The average age of transit buses in the U.S.
having steadily increased from roughly six years to roughly eight years reflects
pent up demand. NFI can increase its line rate up to 65 EUs per week, so we
believe it is well positioned to benefit from rising bus demand, especially given
its leading market position. NFI delivers into 24 of the 25 largest transit
agencies in North America.
FCF Stepping Up: As noted above, NFI is benefiting from an improving margin
profile, a more stable operating environment (positive for pricing), and a better
mix (growing aftermarkets operations, which are higher margin). Add to that the
(quick payback) restructuring New Flyer is implementing to streamline its
operations, and we expect improving FCF conversion and ROIC from the
company, especially considering it has a pretty steady capital budget. We
forecast that NFI will generate FCFPS of $1.07 in 2016, with the companys FCF
yield hovering around ~6% before the recent run-up in its share price post the
strong Q2/2015 results. Our FCF is comprised of ~$70 million in operating cash
flow and capex running at ~$12 million. This infers a share price of ~$17.83 or
~C$23.36. So we continue to see good upside in the name with FCF
backstopping a higher earnings multiple. NFI also noted that its cash flow
priorities remain investing within its operations to drive improved efficiency,
returning cash to shareholders, and acquisition opportunities (i.e. within
aftermarkets space).
Sum Of The Parts Also Suggests Value North Of $21/Share: Given the
growing aftermarkets operations, we believe a sum- of-the-parts analysis is an
appropriate tool to look at the embedded value within NFI. Using a sum-of-theparts model, and applying a 7x for the bus manufacturing operations and 10x
for the aftermarkets business would yield a value for NFI of $21+/share. Note,
we are assuming current industry bus delivery trends. If we believe this peaks
out at ~6,000 EUs, this would add ~$2/share to NFIs value.
216
Exhibit 1. NFI Sum Of The Parts

New Flyer Sum Of The Parts
Industry Bus Demand (EUs)
5300
NFI Market Share
48%
NFI EU Shipments
EBITDA Per EU
Bus EBITDA
Bus Multiple
2518
$31,000
7.0x
$546,297,500
Aftermarket Rev enue
$320,000,000
Aftermarket EBITDA
Aftermarkets Multiple
Aftermarkets EV
=> 2016 Aftermarkets estimate
19%
$60,800,000
10.0x
$608,000,000
Total EV
$1,154,297,500
Net Debt
$244,654,000
Equity Value
$909,643,500
Shares Outstanding
=> Assume this is "normalized" bus margins and benefit of cost cutting
$78,042,500
Bus EV
Aftermarket EBITDA Margin
=> Current industry deliv eries but could get to ov er 6,000 EUs
=> Assume current net debt lev el
55,510,000
Per Share (US$)
$16.39
Per Share (C$)
$21.54
=> Assume 1.31 FX rate
Raising Price Target To C$22 And Maintaining SO Rating: Overall, we have

a constructive view on NFI reflecting its improving FCF and ROIC trends and
growing presence in aftermarkets. We expect these factors will support a higher
earnings multiple. As well, as we face some uncertainty in the global economy,
we believe NFI is well positioned given its leverage to the U.S. economy and that
its earnings/cash flow growth is more of a function of internal strategic efforts
than on the macro environment. As such, we raised our price target multiple by
0.5 points to 8.5x EV/EBITDA and adjusted our FX assumptions to match our in
house assumptions. Our price target increases from C$19.50 to C$22.00 and we
maintain our SO rating.

U.S. economy.

217
costs.
218
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Current
$31.4A
$39.2A
$30.0E
$31.9E
$132.5E
2016 Current
--
--
--
--
$138.4E
219
Analyst Certification: Each CIBC World Markets research analyst named on the front page of this research report, or
at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein
accurately reflect such research analyst's personal views about the company and securities that are the subject of this
report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii)
no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific
recommendations or views expressed by such research analyst in this report.
Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets are compensated from
revenues generated by various CIBC World Markets businesses, including the CIBC World Markets Investment Banking
Department. Research analysts do not receive compensation based upon revenues from specific investment banking
transactions. CIBC World Markets generally prohibits any research analyst and any member of his or her household from
executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets
generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that
such analyst covers.
CIBC World Markets may have a long position of less than 1% or a short position or deal as principal in the securities
discussed herein, related securities or in options, futures or other derivative instruments based thereon.

220
CIBC World Markets Inc. Stock Rating System

Abbreviation
Rating
Description
SO
Sector Outperformer
SP
Sector Performer
SU
NR
Not Rated
Restricted
Stock Ratings
O
Overweight
Market Weight
Underweight
NA
None
Ratings Distribution*: CIBC World Markets Inc. Coverage Universe

(as of 20 Sep 2015)
Count
Percent
163
44.2%
161
43.6%
35
9.5%
2.4%
Restricted

Restricted
Count
Percent
157
96.3%
153
95.0%
30
85.7%
100.0%

(as of 20 Sep 2015)
Count
Percent
100.0%
Restricted
Count
Percent
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Restricted
0.0%

*Although the investment recommendations within the three-tiered, relative stock rating system utilized by CIBC World Markets Inc.
do not correlate to buy, hold and sell recommendations, for the purposes of complying with NYSE and NASD rules, CIBC World
Markets Inc. has assigned buy ratings to securities rated Sector Outperformer, hold ratings to securities rated Sector Performer, and
sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.
Important disclosures required by IIROC Rule 3400, can be obtained by visiting CIBC World Markets Inc. on the web at
dissemination policy, can be found under 'Quick Links' on bottom right side of the Research Central homepage. These
important disclosures can also be obtained by writing to CIBC World Markets Inc., Brookfield Place, 161 Bay Street, 4th
Floor, Toronto, Ontario M5J 2S8, Attention: Research Disclosures Request
221
CIBC World Markets Inc. Price Chart
HISTORICAL PERFORMANCE OF CIBC WORLD MARKETS INC. RECOMMENDATIONS FOR NEW FLYER
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
05/08/2015
07/15/2015
08/07/2015
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
14.69
15.77
17.88
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SO
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
15.75
16.50
19.50
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
222
Legal Disclaimer
in securities discussed in the report through CIBC World Markets Corp. (the U.S. broker-dealer).
and recommendations expressed herein constitute judgments as of the date of this report and are subject to change
10
223

without notice.
2015 CIBC World Markets Inc. All rights reserved. Unauthorized use, distribution, duplication or disclosure
without the prior written permission of CIBC World Markets is prohibited by law and may result in prosecution.
11
224
September 18, 2015

Research Fact Sheet
Industrial Products
(NFI-TSX)
Stock Rating:
Target Price:
Market Perform
$16.00
Bert Powell, CFA

(416) 359-5301
bert.powell@bmo.com
Adel Kanso
(FY-Dec.)
Price (10-Sep)
Total Return
$18.47
-10%
52-Week High
52-Week Low
$19.95
$12.04
Dividend
Yield
$0.62
3.4%
Book Value
Price/Book
$8.24
1.7x
Shares O/S (mm)

Float O/S (mm)
Wkly Vol (000s)
Net Debt ($mm)
55.5
43.9
418
$218
Mkt. Cap ($mm)

Float Cap ($mm)
Wkly $ Vol (mm)
Next Rep. Date
Quarterly EPS
2013A
2014A
2015E
Q1
$0.08
$0.10
$0.20 a
Q2
$0.03
$0.06
$0.22 a
2013A
2014A
2015E
2016E
EPS
P/E
$0.49
$0.48
$0.85
21.7x
$1.00
18.5x
CFPS
P/CFPS
$0.95
$1.46
$1.61
11.5x
$1.56
11.8x
$1,025
$811
$6.3
Nov (E)
Rev. ($mm)
EV ($mm)
EBITDA ($mm)
EV/EBITDA
$1,199
$839
$95
8.8x
$1,451
$1,000
$91
10.9x
$1,518
$891
$121
7.3x
$1,500
$817
$124
6.6x
Q4
$0.23
$0.13
$0.21
EBITDA Margin
EBIT Margin
EBT Margin
Net Margin
6.2%
3.7%
2.5%
2.0%
6.5%
4.1%
3.3%
2.6%
7.8%
5.7%
5.0%
3.3%
na
na
na
na
Q3
$0.14
$0.18
$0.22
Notes: Share price, target & capitalization in C$, all others US$ Disclosures: 5, 6C, 13
Quarterly Price
Weekly Price; 40/200 Day M. Avg.
15
15
10
10
18
18
16
16
14
14
12
12
10
Earnings (4 Quarter Trailing)
10
Volume (mln)
1
0

IBES 2015FY Mean EPS ( Aug 15 = 0.85 )

IBES 2016FY Mean EPS ( Aug 15 = 1.07 )
400
400
200
200
1980
1985
1990
1995
2000
2005
2010
2015
Company Description New Flyer Industries (NFI),

through its wholly owned subsidiaries located in Canada and
the U.S., develops, manufactures, and assembles heavy-duty
transit buses, and provides after-market parts and service
support. Website: newflyer.com
Recent Results New Flyer (NFI) reported Q2/15 EPS of
$0.22, in line with our expectation and Mean estimates.
Total revenue was up 8.2% y/y to $375 million, in line with
1.0
1.0
0.8
0.8
0.6
Q4
Q1
Q2
Q3
2014
Q4
Q1
Q2
Q3
0.6
2015
expectations. Bus deliveries were up 2.1% y/y to 594

equivalent units (EUs), while the average EU selling price
was up 5.3% y/y to $481k. Adj. EBITDA was up 45% y/y to
$39 million, above our expectation of $31 million. Adj.
EBITDA margin was up 270 bps y/y to 10.5%, above our
expectation of 8.2%. Adj. EBITDA per bus was up to $38k
from $24k during the same period last year. Adj. EBITDA
excluded $3.7 million of pension benefits provided to
FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to the back pages.
225
employees for past service and $1.6 million of product

rationalization costs.
Forecasts We expect EPS of $0.85 in 2015 and $1.00 in

2016.
We remain confident in the companys ability to execute on

its platform rationalization plan to improve bus
manufacturing margins. 2015 is a transition year for NFI as
the company moves to a common bus platform and works
off the balance of low margin contracts booked during the
global financial crisis. Product rationalization and cost
reduction initiatives are expected to be completed in the
second half of the year. We expect EBITDA per bus to
increase to around $28k in 2016, up from $26k in 2015.
This implies a 6% EBITDA margin on the bus business. We
also expect NFI to continue to grow its product support
operations and partially offset the expiration of the CTA
mid-life upgrade program in mid-2015. We believe the
dividend increase signals NFIs confidence in its outlook
and underlying cash flow.
Valuation Our C$16.00 (US$13.00) target price is based

on 7.0x 2016E EBITDA. This implies a ~4% dividend yield.
Recommendation We continue to rate New Flyer Market
Perform. We expect NFI to improve bus margins, and that
expiring tax credits in 2015 will be more than offset by
platform rationalization savings over the next two years. We
do not expect NFI to improve EBITDA per bus relative to
historical levels given competition, but we anticipate some
improvement relative to 2014.
Research Fact Sheet
226
BMO Capital Markets
Disclosure Statement
fs
Page 3
227
BMO Capital Markets
I, Bert Powell, CFA, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers.
I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in
this report.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA
(exceptions: Alex Arfaei and Brodie Woods). These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be
subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading
securities held by a research analyst account.
past 12 months.
Disclosure 6: This issuer is a client (or was a client) of BMO NB, BMO Capital Markets Corp., BMO CM Ltd. or an affiliate within the past 12
months: Non-Securities Related Services.

Distribution of Ratings (June 30, 2015)
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
42.0%
21.9%
53.3%
41.9%
54.3%
54.6%
Hold
Market Perform
53.5%
14.4%
44.8%
53.3%
44.4%
40.0%
Sell
Underperform
4.4%
7.4%
1.9%
4.7%
1.3%
5.4%
*
**
services as percentage within ratings category.
***
****
*****
Reflects rating distribution of all companies from which BMO Capital Markets has received compensation for Investment Banking services
as percentage of Investment Banking clients.
Und = Underperform - Forecast to underperform the analysts coverage universe on a total return basis on a total return basis
Page 4
228
BMO Capital Markets

For
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Disclosures
on
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stocks
discussed
in
this
report,
please
go
to
BMO
Capital
Markets
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Research
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our
website
https://research-ca.bmocapitalmarkets.com/Public/Secure/Login.aspx?ReturnUrl=/Member/Home/ResearchHome.aspx
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subsidiaries BMO Nesbitt Burns Inc., BMO Capital Markets Limited in the U.K. and BMO Capital Markets Corp. in the U.S. BMO Nesbitt Burns
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has lending arrangements with, or provide other remunerated services to, many issuers covered by BMO Capital Markets. The opinions, estimates
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Page 5
229
BMO Capital Markets

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Page 6
230

Auto Components


10 August 2015
BUY
unchanged
PRICE TARGET
from C$17.00
Price (7-Aug)
Ticker
Q2/15: very good quarter, forecast increase on

margins
C$21.00
C$17.88
NFI-TSX
52-Week Range (C$):

Avg Daily Vol (M) :
Market Cap (C$M):
Dividend /Shr (C$):
Website:
FYE Dec
FCF /Shr (C$)
Previous
Payout Ratio (x)
12.04 - 18.10
0.08
993
0.62
3.5
62.0
20.9
247.5
www.newflyer.com
2014A
2015E
2016E
2017E
1.18
1.18
0.5
1.53
1.37
0.4
1.86
1.62
0.3
1.95
1.72
0.3
1,451 1,538 1,535 1,579

1,451 1,592 1,598
1,637
6
11
11
0
Sales (US$M)
Previous
ROIC (%)
Quarterly FCF /
Shr
2014A
2015E
2016E
2017E
Q1
Q2
Q3
Q4
0.19
0.22A
0.51
0.54
0.29
0.39
0.47
0.49
0.32
0.41
0.44
0.47
0.38
0.43
0.44
0.46
Continue to recommend BUYing for improving margins, aftermarket growth

We recommend BUYing NFI to benefit from balanced growth and income.
The company is driving top line growth in its aftermarket business and we think bus
production should increase modestly after 2015. Margins should also help as a result of
the companys product line streamline program and continuous improvement.
Net we expect growth and margin expansion to drive mid- to high-single-digit EBITDA
growth. We note we significantly increased our forecast.
We think solid growth plus an attractive dividend yield (3.5%) to result in attractive
investment returns (20.9%) from the current share price level. Accordingly, we continue
to recommend BUYing NFI shares.
Large upside surprise in Q2/15 on bus manufacturing margins
NFI adjusted EBITDA of $39.2 million was much better than our forecast of $31.4 million
and consensus mean estimate of $31.1 million.
The big upside surprise was on bus margins, which reached $37,700/equivalent
unit (EU), well above our forecast of $26,000/EU and recent performance in the mid$20,000/EU range.
Bus margins are quite volatile, but it appears that H2/15 margins could come in the high
$20,000/EU range and future margins could exceed $30,000/EU.
Aftermarket performance remains good, with much improved margins being sustained.
Forecast boosted substantially on margins
We have assumed a much stronger bus manufacturing margin, reflecting commentary
on the Q2/15 conference call. We have also modeled moderately stronger aftermarket
sales and margins per recent trends and management outlook discussion.
We boosted our 2015 EBITDA forecast by 6% and our 2016-19 EBITDA forecasts by
11-15% based on our new assumptions.
19
18
17
16
15
14
13
12
Aug-15
Jul-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
Feb-15
Dec-14
Oct-14
Nov-14
Sep-14
11
NFI
Source:FactSet


60 months.
We also note that the much weaker CAD is boosting our target versus our older targets,
although this is not a factor in our current C$4.00 target increase, as we adjusted to the
current CAD/USD exchange rate of roughly C$1.30/USD in our last forecast note (refer
to our Daily Letter of July 20, 2015 titled, Q2/15 Adjustments: Minor changes from
reported deliveries and orders data).
231


implications
stronger than expected bus manufacturing margins (Figure 1).
Figure 1: Q2/15: Better than expected on stronger than expected bus manufacturing margins
Q 2/15
0.15
EPS (C$)
0.15
0.22
0.48
0.31
0.39
0.20
Q 2/14
0.15
Q 1/15
0.06
0.29
0.19
0.15
0.22
Payout ratio
32%
39%
51%
66%
286
302
266
291
Aftermarket revenue
Revenue
89
375
91
393
380
81
346
380
39.2
10.5%
31.4
8.0%
31.1
8.2%
27.0
7.8%
31.4
(44)
(65)
(21)
594
594
582
572

Aftermarket EBITDA
481
38
16.8
508
26
16.0
457
24
13.1
508
16.7
864
2,192
864
2,192
202
2,228
1,922
EBITDA
EBITDA margin
New orders (units)

90
8.3%
26
392
Return on capital
8.8%
11.8%
5.9%
7.6%
1.23
1.24
1.09
1.24
Bus operations much better than expected

equivalent unit (EU) of $37,700 was much better than our expectations.
As noted above, bus manufacturing margins can be quite volatile, so the beat should
be assessed with some caution. However, management seemed comfortable with bus
manufacturing margins in the high $20,000/EU range in H2/15 and potential to
reach over $30,000/EU in the future. Both had positive implications versus our preQ2/15 forecast.
Management has also indicated that the company took 1 week of downtime, in terms
of line entries, at the start of July 2015 to provide an opportunity for employees to
enjoy vacations in an effort to lessen future volatility in manpower. This is expected to
reduce line entries by 35 EUs in Q3/15. However, the 2015 guidance of line entries of
50 EUs/week is unchanged, so we adjusted Q3/15 and Q4/15 line entries to take
this factor into account, with no implication for our annual 2015 line entry (or delivery)
forecast.
Aftermarket sales remains solid to good

Core aftermarket revenues (i.e., excluding revenues from the now-completed CTA bus
mid-life overhaul project) was flat at $72.4 million in Q2/15 and up 4.9% in H1/15.
NFI has been working on improving its aftermarket business for a considerable time to
Buy unchanged Target Price C$21.00 from C$17.00 | 10 August 2015
Auto Components 2
232

enable it to take advantage of its industry-leading installed bus market share. This
appears to be bearing fruit on both a sales and a margin basis.
Management believes aftermarket order growth is running in the 5%/year range. We
have boosted our aftermarket sales forecast to 4%/year from 2%/year due to
continued good aftermarket sales performance.
Aftermarket margins remain strong

As noted above, aftermarket margins appear to be benefiting from the companys
business process improvement initiatives.
Again, these results look sustainable and we built even more of the strong
performance into our new forecast.

likely
NFI continues to guide to line entry rates of 50 EUs/week. Market prospects suggest
fairly stable demand for the foreseeable future. NFI believes there is pent-up demand,
but continuing government finance limitations seem to be limiting the ability of
customers to increase orders.

NFI continues to implement its $20 million program to consolidate it bus line-up into
Anniston, Al. to Excelsior production.
This conversion is expected to generate lower costs, streamline design, improve
product attributes and better serve customer needs. NFI expects 2-3 year pay back
through cost reductions and synergies and a $14 million annual profit pick up, of
which some is already helping 2015 results.

rationalization in a new program dubbed Project Convergence. In previous conference
calls management indicated that this is not a capital-intensive project as it mainly
focusses on business organization and systems. The project is expected to be
completed by early 2016.
NCWC increases again

NFI experienced a large $42.3 million cash outflow from NCWC in Q2/15 mainly due
to increased inventories (63 units) and reduced accounts payable. The inventory
increase appears mostly related to the conversion of Anniston to Excelsior production.
Management expects the inventory build to be reversed, with inventories returning to
more normal levels by the end of 2015.
Capital allocation discussion

NFI indicated that there is an active discussion of capital allocation options at the
board level. For now, the company appears focused on completing its operational
improvement programs and determining sustainable cash flow levels coming out of
these programs.
However, NFI appears to be considering options for use of its considerable cash flow
potential. The principal interest appears to be in acquisitions in adjacent markets or
vertical integration opportunities. NFI also appears to be considering the appropriate
dividend level that is sustainable and meets the companys other criteria. We think
there is room for a dividend increase as we project a dividend/FCF (NFI definition) of
well below 50% over our forecast horizon.
Auto Components 3
233

Forecast boosted on bus manufacturing

margin, aftermarket sales and margin
forecast increases
We boosted our bus manufacturing margins to reflect the Q2/15 discussion. Our
forecast bus manufacturing margins remain modestly below the long-run bus
manufacturing margin levels of before the recession.
We also increased our aftermarket sales and margin assumptions based on the
Q2/15 performance and prospects.
Net, the forecast assumption increases resulted in a 5% increase in our EBITDA
forecast for 2015 and an 11-15% increase in our 2016-19 EBITDA forecast.
with Figure 7.
Auto Components 4
234

Dividend/share (C$)
% change
Q 3/15E
New
Old
Fc s t
Fc s t
0.155 0.155
6%
6%
2015E
New
Old
Fc s t
Fc s t
0.608 0.608
4%
4%
2016E
New
Old
Fc s t
Fc s t
0.620 0.620
2%
2%
2017E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2018E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2019E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2014
0.59
n.m.
Q 2/15
0.15
4%
0.71
#N/A
(0.54)
n.m.
0.67
n.m.
0.90
n.m.
1.53
114%
1.28
79%
1.78
17%
1.27
-1%
1.93
9%
1.41
11%
2.02
4%
1.45
3%
2.08
3%
1.48
2%
82%
-28%
23%
17%
40%
48%
35%
49%
32%
44%
31%
43%
30%
42%
1,451
21%
375
8%
380
5%
415
15%
1,538
6%
1,592
10%
1,535
0%
1,598
0%
1,579
3%
1,637
2%
1,624
3%
1,676
2%
1,668
3%
1,714
2%
91
6.3%
34
9.0%
33
8.6%
31
7.5%
130
8.4%
123
7.7%
140
9.1%
124
7.8%
147
9.3%
132
8.1%
154
9.5%
134
8.0%
158
9.5%
137
8.0%
46
44
(8)
(24)
23
24
20
19
17
17
17
16
17
16

Bus revenue/unit
Bus EBITDA/unit
Aftermarket EBITDA
2,437
465
24
50
594
481
38
17
635
481
28
15
670
508
26
14
2,486
487
30
63
2,486
508
26
60
2,535
484
31
62
2,535
511
27
56
2,584
487
32
64
2,584
514
29
57
2,634
490
33
67
2,634
517
29
58
2,679
493
33
69
2,679
520
29
59
New orders (units)

2,263
2,102
864
2,192
615
2,172
615
2,137
2,486
2,102
2,486
2,102
2,535
2,102
2,535
2,102
2,584
2,102
2,584
2,102
2,634
2,102
2,634
2,102
2,679
2,102
2,679
2,102
11.7%
11.0%
12.2%
12.3%
12.3%
13.5%
12.3%
1.300
1.300
1.300
1.300
1.300
1.300
1.300

% change
Payout ratio
Revenue
% change
EBITDA
EBITDA margin
Return on capital
1
5.2%
1.104
8.8%
1.230
8.2%
1.300
11.3%
1.300
8.5%
1.300
10.8%
1.300
9.7%
1.300
Auto Components 5
235

VALUATION
The companys dividend yield seems to be settling into the 4-5% range (about 2% over
the 10-year Canada bond yield) and EV/EBITDA is stable in the 6-7x NTM EBITDA
range.
names (Figure 5).
Auto Components 6
236

Mar k et
Cur .
Eq ui ty Pr i ce :
Cur .
Year
A ug. 9, 2015
Di v.
2015
$17. 88
$0. 61
Di v.
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M )
EPS
3. 4%
$1. 37
4. 5%
De b t/
P/E
Gr o wth
Ca p ('15- '17)
44. 4%
$921 $1. 09 16. 4 31. 6%
3. 6%
63. 0%
15. 4 39. 4%
10. 4%
Chorus Aviation
2015
$6.17
$0.48
7.8%
$1.01
47.5%
$754 $0.86
7.2
92.3%
13.3%
Davis + Henderson
2014
$42.39
$1.28
3.0%
$2.09
61.1%
$4,475 $2.57
16.5
41.2%
17.8%
Westshore Terminals
2014
$27.47
$1.32
4.8%
$1.55
85.4%
$2,040 $1.90
14.5
0.0%
2.5%
Cineplex Galaxy
2015
$47.41
$1.55
3.3%
$2.02
76.7%
$2,991 $2.13
22.3
32.1%
14.7%
supported by NFIs 3.5% dividend yield. We think the dividend upside potential from
forecasted stronger future free cash further strengthens the dividend yield support
argument.
Auto Components 7
237

1-year
t arget
143.5
2-year
t arget
150.2
7.5
1,076.1
(85.9)
990.3
7.5
1,126.7
(21.6)
1,105.1

62.0
15.97
21.00
62.0
17.82
23.00

0.62
21.62
1.24
24.24
20.9%
35.6%

3.0%
9.1%
2.7%
8.7%

1.5%
7.6%
FCFPS C$
1.91

EBITDA
Multiplier
EV
2.00

We have maintained our rating at BUY, given the attractive implied one year
investment return. Our current target and estimated dividend currently produces a
20.9% one-year implied investment return (including a 3.5% dividend yield).
Auto Components 8
238

F ree cash
Interest paid
Interest expense
Income taxes paid
Free cash flow
Exchange rate
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
28.7
(4.6)
4.0
(3.1)
2.1
(13.7)
(0.5)
(4.3)
1.3
0.8
(0.7)
(0.2)
9.8
1.252
12.3
8.1
(22.8)
42.3
1.8
(2.8)
16.4
(12.5)
(0.5)
(1.9)
1.6
0.8
(4.5)
(0.1)
21.5
1.226
26.4
8.4
39.7
(15.9)
3.0
(3.0)
9.5
(9.5)
(0.7)
(2.0)
0.8
(4.5)
(0.1)
17.4
1.300
22.6
8.6
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5

0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.22
0.15
0.48
0.15
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
45.0
(20.2)
3.0
(3.0)
10.0
(10.0)
(0.7)
(2.0)
0.8
(4.5)
(0.1)
18.4
1.300
23.9
8.6
90.7
1.5
11.8
(11.8)
37.9
(45.7)
(2.2)
(10.2)
2.9
3.2
(14.3)
(0.3)
67.1
1.300
85.2
33.8
97.0
8.2
11.3
(11.3)
38.4
(38.4)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
79.6
1.300
103.5
34.4
104.4
4.7
10.7
(10.7)
41.8
(41.8)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
83.4
1.300
108.5
34.4
108.6
4.7
10.0
(10.0)
45.1
(45.1)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
87.6
1.300
113.9
34.4
111.6
4.4
9.3
(9.3)
47.3
(47.3)
(2.6)
(8.0)
3.2
(18.0)
(0.2)
90.3
1.300
117.4
34.4
55.5
55.5
55.5
55.5
55.5
55.5
55.5
0.41
0.16
0.43
0.16
1.53
0.61
1.86
0.62
1.95
0.62
2.05
0.62
2.11
0.62
Auto Components 9
239

Incom e statem ent
Revenues
EBITDA
Other
Other expenses
Pre-tax income
Income taxes
Net Income (loss)
FCFPS (CFO - Capex) (C$)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
865.3 1,199.4
(810.2) ######
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
380.3
(352.1)
1.5
29.7
(9.5)
(1.9)
0.0
0.0
18.2
(2.3)
(0.7)
(0.5)
(0.6)
0.0
14.1
(3.3)
10.9
375.0
(340.7)
(0.7)
33.7
(9.8)
0.8
0.0
0.0
24.6
(2.2)
(0.6)
0.3
(0.6)
0.0
21.6
(9.2)
12.4
379.6
(347.0)
0.0
32.6
(10.0)
0.0
0.0
0.0
22.6
(2.3)
(0.7)
0.0
0.0
0.0
19.6
(7.5)
12.1
2015E
2016E
2017E
2018E
2019E
403.5 1,538.4 1,535.3 1,579.2 1,624.2 1,667.5

(369.6) (1,409.3) (1,395.1) (1,432.4) (1,470.6) (1,509.8)
0.0
0.8
0.0
0.0
0.0
0.0
34.0
129.9
140.2
146.8
153.6
157.7
(10.2)
(39.5)
(40.2)
(38.6)
(37.4)
(36.5)
0.0
(1.1)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
23.8
89.3
100.0
108.2
116.2
121.2
(2.3)
(9.2)
(9.3)
(9.3)
(9.3)
(9.3)
(0.6)
(2.7)
(2.0)
(1.4)
(0.7)
0.0
0.0
(0.2)
0.0
0.0
0.0
0.0
0.0
(1.2)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
20.8
76.1
88.7
97.5
106.2
111.9
(8.0)
(27.9)
(30.5)
(33.9)
(37.2)
(39.3)
12.9
48.2
58.2
63.7
69.1
72.6
0.75
0.63
(0.10)
0.58
0.87
0.26
0.15
0.19
0.28
0.15
0.29
(0.01)
0.15
0.32
(0.04)
0.15
0.38
0.49
0.59
1.18
0.71
0.15
0.22
0.55
0.15
0.48
(0.54)
0.16
0.41
0.67
0.16
0.43
0.78
0.61
1.53
1.53
0.62
1.86
1.78
0.62
1.95
1.93
0.62
2.05
2.02
0.62
2.11
2.08
52.3
58.9
55.5
55.6
55.7
55.7
55.6
55.8
55.9
62.0
62.0
58.9
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
17.4%
16.6%
0.0%
7.8%
8.2%
65.6%
4.0%
9.0%
5.2%
26.2%
6.0%
8.6%
-3.9%
13.0%
6.0%
8.4%
6.0%
30.0%
4.0%
8.4%
-0.2%
21.5%
1.9%
9.1%
2.9%
4.8%
0.0%
9.3%
2.9%
5.0%
0.0%
9.5%
2.7%
3.0%
0.0%
9.5%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
7.6%
8.8%
8.2%
8.9%
8.5%
9.7%
11.0%
12.3%
13.5%
Bus revenues
Bus sales growth
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
290.7
14.7
15.9%
5.1%
572
508
26
26
285.8
22.4
7.5%
7.8%
594
481
38
30
305.6
17.8
9.6%
5.8%
635
481
28
31
329.5
19.2
-2.1%
5.8%
685
481
28
30
1211.6
74.1
7.0%
6.1%
2,486
487
30
30
1227.3
78.6
1.3%
6.4%
2,535
484
31
31
1258.8
82.7
2.6%
6.6%
2,584
487
32
32
1291.0
86.9
2.6%
6.7%
2,634
490
33
33
1321.1
88.4
2.3%
6.7%
2,679
493
33
33
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
89.6
16.7
22.8%
18.6%
89.2
16.8
10.6%
18.8%
74.0
14.8
-9.8%
20.0%
74.0
14.8
-11.2%
20.0%
326.8
63.1
2.4%
19.3%
308.0
61.6
-5.8%
20.0%
320.4
64.1
4.0%
20.0%
333.2
66.6
4.0%
20.0%
346.4
69.3
4.0%
20.0%

EBITDA/sales
ROC
Segm ented data
Auto Components 10
240

Balance sheet
Cash
Accounts receivable
Inventories
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
7.6
186.9
232.0
3.5
0.1
0.0
0.0
430.0
8.8
189.2
242.3
3.9
0.2
0.0
0.0
444.4
Capital assets
Deferred charges
Intangible assets
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
64.3
0.0
539.1
67.9
0.0
0.0
1,101.4
64.3
0.0
533.9
68.6
0.0
0.0
1,111.2
Bank indebtedness
Deferred revenue
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
226.5
0.0
23.0
35.0
1.6
13.0
18.6
317.6
0.0
201.8
0.0
18.3
39.7
1.7
48.0
10.4
319.8
0.0
205.9
0.0
18.3
39.7
1.7
48.0
9.6
323.1
0.0
219.3
0.0
18.3
39.7
1.7
48.0
8.8
335.8
0.0
219.3
0.0
18.3
39.7
1.7
48.0
8.8
335.8
0.0
201.1
0.0
18.3
39.7
1.7
48.0
6.8
315.5
0.0
206.6
0.0
18.3
39.7
1.7
48.0
5.8
320.0
0.0
212.1
0.0
18.3
39.7
1.7
48.0
4.8
324.5
0.0
218.0
0.0
18.3
39.7
1.7
48.0
3.8
329.5

Long-term debt
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
0.9
2.9
105.5
201.0
2.2
13.9
4.1
5.0
102.5
201.6
1.9
12.7
4.1
5.0
100.5
201.6
1.9
12.7
4.1
5.0
98.5
201.6
1.9
12.7
4.1
5.0
98.5
201.6
1.9
12.7
4.1
5.0
90.6
201.6
1.9
12.7
4.1
5.0
82.7
201.6
1.9
12.7
4.1
5.0
74.7
201.6
1.9
12.7
4.1
5.0
66.8
201.6
1.9
12.7

Share capital
Retained earnings
CAPEX
Net debt
Book value / unit
0.0
480.8
(136.8)
0.0
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
0.0
594.5
(141.8)
0.0
594.7
(137.5)
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
0.0
595.2
(131.6)
34.0
187.7
231.2
3.9
0.2
0.0
0.0
457.0
64.6
204.0
207.0
4.1
0.2
0.0
0.0
479.9
2015E
2016E
2017E
2018E
2019E
64.6
204.0
207.0
4.1
0.2
0.0
0.0
479.9
123.1
188.7
210.6
3.8
0.2
0.0
0.0
526.5
188.9
194.1
214.2
3.9
0.2
0.0
0.0
601.5
258.8
199.7
217.8
4.1
0.2
0.0
0.0
680.6
331.7
205.3
221.4
4.2
0.2
0.0
0.0
762.8
67.6
70.7
70.7
64.0
59.0
55.3
52.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
528.5
523.1
523.1
501.7
480.2
458.7
437.3
68.6
68.6
68.6
68.6
68.6
68.6
68.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(3.7)
(7.4)
(7.4)
(22.2)
(37.1)
(51.9)
(66.7)
1,118.0 1,134.9 1,134.9 1,138.5 1,172.2 1,211.3 1,254.5
0.0
595.2
(126.1)
0.0
595.2
(119.9)
0.0
595.2
(119.9)
0.0
595.2
(88.2)
0.0
595.2
(51.0)
0.0
0.0
595.2
(8.4)
595.2
37.8
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,101.4
1,111.2
1,118.0
1,134.9
1,134.9
1,138.5
1,172.2
1,211.3
1,254.5
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
4.3
119.4
1.9
165.5
7.9
149.5
7.9
129.3
21.9
129.3
12.0
137.5
12.1
142.2
12.2
147.0
12.3
151.3
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
210.9
2.1x
8.24
23.8x
247.5
2.2x
8.35
23.3x
222.3
1.8x
8.45
23.0x
191.7
1.5x
8.56
23.3x
191.7
1.5x
8.56
22.9x
133.2
1.0x
9.13
22.8x
67.4
0.5x
9.80
25.7x
(2.5)
0.0x
10.57
28.4x
(75.4)
0.0x
11.40
30.9x
Auto Components 11
241

Net income
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
10.9
4.2
5.3
0.0
0.0
3.4
0.0
1.9
0.0
0.7
(0.8)
0.4
(2.0)
24.1
4.6
28.7
12.4
4.5
5.4
0.0
0.0
9.2
0.0
(0.8)
0.0
4.5
(0.8)
0.3
(15.1)
19.5
(42.3)
(22.8)
12.1
4.6
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
4.5
(0.8)
0.0
0.0
23.8
15.9
39.7
Investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(4.3)
(4.3)
(1.9)
(1.9)
Financing
Share issuance
Dividends
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.7)
(34.1)
0.0
33.1
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.6)
26.0
Q2 /1 5 Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
12.9
4.8
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
4.5
(0.8)
0.0
0.0
24.8
20.2
45.0
48.2
18.1
21.4
0.0
0.0
8.6
0.0
1.1
0.0
14.3
(3.2)
0.7
(17.0)
92.2
(1.5)
90.7
58.2
18.7
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
105.3
(8.2)
97.0
63.7
17.1
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
109.1
(4.7)
104.4
69.1
15.9
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
113.3
(4.7)
108.6
72.6
15.0
21.5
0.0
0.0
(7.9)
0.0
0.0
0.0
18.0
(3.2)
0.0
0.0
116.0
(4.4)
111.6
(7.9)
(7.9)
(7.9)
(7.9)
(21.9)
(22.0)
(12.0)
(12.0)
(12.1)
(12.1)
(12.2)
(12.2)
(12.3)
(12.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(6.6)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(6.6)
0.0
6.1
0.0
0.0
(0.9)
0.0
0.0
0.0
(26.5)
(21.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
(0.2)
(0.1)
0.0
0.0
(0.2)
0.0
0.0
0.0
0.0
Net cash flow

1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
(9.9)
17.5
7.6
1.3
7.6
8.8
25.2
8.8
34.0
30.5
34.0
64.6
47.1
17.5
64.6
58.6
64.6
123.1
65.8
123.1
189.0
69.9
189.0
258.9
72.8
258.9
331.7
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
24.4
(24.7)
31.8
37.1
68.7
85.0
92.3
96.4
99.3
Auto Components 12
242

Investment risks
Auto Components 13
243


Rating
Coverage Universe
IB Clients
#
%
%
Buy
606
61.03%
31.19%
Hold
300
30.21%
13.33%
Sell
33
3.32%
3.03%
Speculative Buy
54
5.44%
53.70%
993*
100.0%
relevant issuer.
Risk Qualier
Auto Components 14
244


H:C$7.25
08/13/12
H:C$8.00
09/19/12
H:C$8.25
11/14/12
H:C$8.75
01/11/13
H:C$9.25
01/29/13
H:C$9.75
02/06/13
Oct 2012
Jan 2013
Apr 2013
Jul 2013
Oct 2013
H:C$11.75
06/24/14
H:C$12.00
07/16/14
H:C$10.00
03/25/13
H:C$10.25
04/18/13
B:C$11.25
06/24/13
H:C$11.75
08/07/13
H:C$11.25
11/07/13
B:C$12.00
01/15/14
B:C$12.50
03/23/14
20
18
16
14
12
10
8
6
H:C$11.50
05/11/14
B:C$14.00
08/06/14
H:C$14.00
11/09/14
B:C$12.50
12/12/14
Jan 2014
H:C$14.00
01/12/15
Closing Price
Apr 2014
B:C$15.00
03/19/15
Jul 2014
B:C$16.00
05/11/15
Oct 2014
Jan 2015
Apr 2015
Jul 2015
B:C$17.00
07/20/15
Target Price
Online Disclosures
General Disclosures
Auto Components 15
245

account.
Inc.
Auto Components 16
246


regulated by ASIC.
Auto Components 17
247
COMPANY UPDATE
NFI | TSX
$17.88
Rating: Outperform
(previously $18.50)
Total Return: 32.1%
Yield: 3.5%
August 10, 2015
A Solid Quarter Foreshadows a Margin Expansion Trend

Adjusted EBITDA and Adjusted FD EPS of $375.0mm, $39.1mm and $0.30. The
results were well ahead of our expectations for revenue, Adjusted EBITDA and
Adjusted FD EPS of $377.1mm, $31.0mm and $0.18 versus consensus estimates of
$386.9mm, $31.3mm and $0.22.

Dividend Yield:

C$17.16 / C$12.04
3.5%
55.5 (basic)
55.5 (fd)
C$991.7
39.7
103.4
$248.5
$1005.8
(FYE Dec 31)
2015e

Float ($mm)
2014
Revenue ($mm)
EBITDA ($mm)
FD EPS
EBITDA ($mm)
Q1
2014
2015
2016
$19.7
$31.4
$39.4e
Adjusted FD EPS
2014
2015
2016
Q1
$0.10
$0.20
$0.30e
Q2
Q3
Q4
$27.0
$39.2
$36.5e
$25.7
$33.3e
$36.3e
$35.0
$37.5e
$42.4e
Q2
Q3
Q4
$0.16
$0.30
$0.27e
$0.15
$0.23e
$0.27e
$0.24
$0.28e
$0.34e

$15
2016e
$1,451.1 $1,627.9 $1,751.2

$107.4 $141.4
$154.7
$0.65
$1.01
$1.18
Volume ('000)
1000
Last Sale Price
$10
800
600
400
$5
200
$0
0
Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15

Managing Director
647.776.8246
Very Strong Margin Performance but Treat as One-time for Now: We note
management continues to see normalization in the pricing and demand environment. We
believe with the implementation of various cost-reduction and operational efficiency
initiatives, margin expansion will continue to take place. The company reported an
average EBITDA of $37.7k per EU in the quarter or $295k per EU on a trailing basis, up
from $23.9k in Q2/14. While the number is impressive, and was well in excess of our
expectations, we caution taking any one particular quarter and extrapolating is not
appropriate. We continue to see the combination of rationalized production offering cost
opportunities (the $14mm in synergies implies ~$5k per EU) plus improved selling
prices and margin capture with a more rational environment leading to margins in the
mid $30k per EU range into 2016.
Estimate Changes: We are updating our estimates to reflect the strong quarter and
are revising our expectations for margin performance upwards through the remainder of
the year. Our 2015e EBITDA increases to $141.4mm (+7.8%) while our 2016e EBITDA
increases by 3.4% to $154.7mm. Our expectations for Adjusted 2015e and 2016e EPS
increase to $0.93 and $1.18 from $0.87 and $1.13, respectively. We are also introducing
our estimates for 2017 forecasting revenue, Adjusted EBITDA and Adjusted FD EPS of
$1.75bn, $159.7mm and $1.25. With our 2017 estimates we have remained relatively
conservative in our assumptions keeping production rates relatively flat from 2016
levels and assuming only incremental margin improvements.
Maintain Outperform; Increasing Target to C$23.00: Overall, we believe the
quarter was well ahead of our and consensus expectations with tailwinds for margin
expansion expected to continue in an increasingly rationalized market. We note that as
the companys operational efficiency initiatives mature, discussions around return of
capital to shareholders will start to gain further traction. We also believe that with return
on capital increasing consistently and sustainably, a higher valuation multiple is
warranted. We maintain our Outperform rating and are increasing our 12-month price
target to C$23.00 from C$18.50. Our target price is based on a blend of a 15.0x earnings
(previously 14.0x) and 7.5x EBITDA (previously 7.0x) multiple of the four quarters
ending Q2/17 reflecting our 12-month forward valuation period as well as an exchange
rate of C$1.27/$US.

647.776.8245
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INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES

Current Valuations
Unit Price (C$)
$17.88
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
10.8x
8.4x
7.0x
Peer Average
14.3x
13.3x
11.0x
8.8x
6.7x
6.1x
20.8x
13.5x
11.6x
Incom e Statem ent
2014
2015e
2016e
2017e
Trend
Revenues
Bus Manufacturing
Aftermarket
Revenue
1,132,066 1,308,532 1,451,959 1,435,913

319,034
319,390
299,235
316,092
1,451,100 1,627,922 1,751,194 1,752,005
2014
2015e
2016e
45,823
76,111
93,835 151,588
35,255
19,320
18,505 (36,029)
81,078
95,431 112,340 115,560
(1,766)
(1,812)
22.0%
19.6%
17.1%
18.0%
57,374
80,216
92,584
93,334
5.1%
6.1%
6.4%
6.5%
49,991
61,222
62,077
66,379
15.7%
19.2%
20.7%
21.0%
86,457
134,150
154,661
159,714
6.0%
8.2%
8.8%
9.1%
107,365
141,438
154,661
159,714
per Share
7.4%
8.7%
8.8%
9.1%
FCF Yield
Amortization
35,837
39,040
38,893
38,052
Operating Earnings
50,620
95,110
115,768
121,661
EBT
37,568
80,374
103,862
110,024
Taxes
10,849
28,979
38,429
40,709
Net Income
26,719
51,396
65,433
69,315
Reported FD EPS
$0.48
$0.93
$1.18
$1.25
Adjusted FD EPS
$0.65
$1.01
$1.18
$1.25
2015e
2016e
2017e

Margin
Adjusted EBITDA
Margin
Grow th
2014
Weeks of Production
6,765
(154)
(223)
Free Cash Flow
83,667
85,092
Free cash flow (C$)
92,829 106,319 121,087 120,023

$1.67
96,342 100,059
$1.92
$2.18
9.4%
10.7%
12.2%
$2.16
12.1%
82.8%
14.5%
13.9%
(0.9%)
2014
2015e
2016e
2017e
32,457
33,928
34,413
34,413
35.0%
$0.585
31.9%
$0.611
28.4%
$0.620
28.7%
Cash Yield
3.3%
3.4%
3.5%
3.5%
2014
2015e
2016e
2017e
2,437
2,607
2,755
2,711
464.5
501.9
527.0
529.7
23.5
30.8
33.6
34.4
5.6%
49.2
52.1
54.0
54.2
0.0%
3.3%

48.5
0.9x
49.6
1.3x
52.6
1.0x
52.6
1.0x
20.7%
9.5%
17.8%
20.1%
2014
2015e
2016e
2017e
229,034 200,806 148,526
39,309
52
53
52
15.0%
15.6%
11.0%
(1.1%)
Aftermarket
48.4%
0.1%
(6.3%)
Adjusted EBITDA
21.0%
13.4%
12.2%
31.7%
7.6%
9.3%
Adjusted FD EPS
2.7%
53.9%
17.0%
5.9%
2014
0.9057
2015e
0.8004
2016e
0.7953
2017e
0.8335
EOP CAD/USD Rate
0.9050
0.7874
0.8130
0.8547

Trend
Leverage
Net Debt (EOP)

$5.0
Trend
$0.620
52
Bus Manufacturing
FX Assum ptions
(1,812)
Revenue
(1,812)
Trend
(10,889) (15,069) (14,187) (13,689)
Trend
2017e
2.1x
1.4x
1.0x
0.2x
33.6%
29.6%
22.3%
6.6%
Trend
Trend
Firm
Option
2020, 11%
2015, 14%
$4.0
2016, 12%
$3.0
2019, 23%
$2.0
$1.0
2017, 11%
$0.0
Q109 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15
2018, 29%

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Record Quarter on Significant Margin Expansion

EPS of $375.0mm, $39.1mm and $0.30. The results were well ahead of our expectations for
revenue, Adjusted EBITDA and Adjusted FD EPS of $377.1mm, $31.0mm and $0.18 versus
consensus estimates of $386.9mm, $31.3mm and $0.22.
Q2/15
Q2/14
y/y
Growth
Q1/15 y/y
Growth

594
481.1
37.7
3,487.1
582
456.8
23.9
3,538.5
2.1%
5.3%
58.1%
(1.5%)
3.2%
12.2%
84.1%
(3.3%)
Operating Segments
Bus Manufacturing
Revenue
EBITDA
285,793
22,412
7.8%
7.8%
265,831
13,889
5.2%
5.5%
7.5%
61.4%
2.6%
2.4%
15.9%
167.3%
2.0%
2.0%
89,219
16,779
18.8%
80,653
13,077
16.2%
10.6%
28.3%
2.6%
22.8%
40.0%
2.3%
375,012
39,191
12,370
346,484
26,966
3,563
8.2%
45.3%
247.2%
17.4%
59.7%
97.9%
$0.22
$0.30
$0.06
$0.16
247.0%
81.4%
97.8%
105.5%
Aftermarket
Revenue
EBITDA
EBITDA Margin
Total
Revenue
Adjusted EBITDA
Reported Net Income
Reported
Adjusted
Items of Note
NFI reported record Q2/15 results with total revenue up 8.2% y/y and Adjusted EBITDA up
45.3% y/y. The companys upgrade to the latest version of Oracle R-12 is progressing well
along with the transition of the NABI bus manufacturing line to the Xcelsior platform.
Management indicated annualized savings of $14mm should begin to appear later this year
and throughout 2016. Project Convergence also appears to remain on-track with the goal to
better integrate the spare parts businesses between NABI and New Flyer on a common IT
platform, which is expected to be completed in H1/16 and we expect to be incrementally
positive for margins and working capital requirements.
The company realized a 7.5% y/y growth in bus manufacturing revenues as a result of 2.1%
increase in total bus deliveries and 5.3% increase in average selling price due to a more
favourable mix. Adjusted EBITDA increased by 61.3% y/y due to a favorable mix and cost
savings achieved from Xcelsior transition.
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In the aftermarket segment, revenue increased by 10.6% y/y as a result of incremental revenue
from the Chicago Transit Authority (CTA) midlife overhaul program. Excluding the CTA
contract, revenue from aftermarket segment was $72.4mm, flat y/y. The company continues
to benefit from a broader portfolio of services and parts offerings with EBITDA up 28.3%
y/y. We estimate core aftermarket margins were approximately 19.7% in the quarter
demonstrating the solid performance the company is delivering and a trend we anticipate to
continue through the balance of the year. Management reiterated its guidance for the
aftermarket segment expecting core growth, excluding the CTA contract rate of 5.0% in 2015.
The CTA mid-life upgrade program ended in June 2015 and represented 18.6% of the total
2014 aftermarket revenues, which will impact H2/15 comparable periods.
The company increased its borrowings from the revolving credit facility by $35.0mm during
the quarter to fund working capital requirements cause by increase in inventories and decrease
in accounts payables. At the end of Q2/15, the company had $48.0mm in direct borrowings
and 17.3mm of outstanding letters of credit related to the revolving credit facility. The
company is intentionally carrying additional inventory related to the changeover in production
from NABI platforms to Xcelsior. This excess inventory is expected to be delivered by year
end.
At June 30, 2015 the company became eligible to accelerate the redemption of its US$
denominated 6.25% convertible debentures, due June 30, 2017. The company has the right to
accelerate the redemption, effectively forcing holders to convert to equity should share prices
trade at greater than 125% of the US$10 exercise price for 20 days on a VWAP basis.
Management indicated that barring some change in the business they would be content to hold
the debt to maturity given the tax shield of the interest payments results in a lower cash
impact than paying additional dividends.
The company reported a total backlog of 7,011equivalent units (EU) valued at $3.49bn as
compared to 7,193 EU valued at $3.57bn at the end of Q1/15. Of the 1,238 pending new firm
and option orders highlighted during Q2 orders and backlog update, the company has now
received contracts for 513 EU. On a TTM basis, the company reported a book-to-bill ratio of
0.99x however we expect the book to bill ratio to be well in excess of 1.0x in Q3/15.
The company announced the appointment of Mr. Paulo Cezar da Silva Nunes to the Board of
Directors. The appointment was proposed by Marcopolo, pursuant to the Investment
Agreement between the two companies dated January 23, 2013. Mr. Nunes has almost 40
years of leadership experience in manufacturing, distribution and automotive-related sectors.
Presently, he is an independent automotive business consultant to Brazilian companies and
also a member of the Board of Directors for Cesbe S.A. On the call, management suggested
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that Mr. Nunes appointment does not in their opinion signify any change in intent for
Marcopolo and welcomed the addition of his global experience in automotive and
manufacturing sectors.
Management maintained an H2/15 deadline for the completion of transition of NABI to the
Xcelsior platform. The company expects to invest ~$20.0mm in direct operating costs and
capital expenditures to fund this transition, of which $13.2mm have already been incurred
with $6.0mm in direct operating costs and $7.2mm in capital expenditures. The company
expects annualized cost savings of ~14.0mm. Management continues to guide towards higher
y/y margins in buses. The company anticipates a corporate average line entry rate of ~50EU
per production week for 2015, however this does imply a higher line entry rate of
approximately 56 EU/week in H2/15 allowing for two weeks of shutdown, one in each of
Q3/15 and Q4/15.
We note management continues to see normalization in the pricing and demand environment.
We believe with the implementation of various cost-reduction and operational efficiency
initiatives, margin expansion will continue to take place. The company reported an average
EBITDA of $37.7k per EU in the quarter or $295k per EU on a trailing basis, up from $23.9k
in Q2/14. While the number is impressive, and was well in excess of our expectations, we
caution taking any one particular quarter and extrapolating is not appropriate. We continue to
see the combination of rationalized production offering cost opportunities (the $14mm in
synergies implies ~$5k per EU) plus improved selling prices and margin capture with a
more rational environment leading to margins in the mid $30k per EU range into 2016.
We are updating our estimates to reflect the strong quarter and are revising our expectations
for margin performance upwards through the remainder of the year. Our 2015e EBITDA
increases to $141.4mm (+7.8%) while our 2016e EBITDA increases by 3.4% to $154.7mm.
Our expectations for Adjusted 2015e and 2016e EPS increase to $0.93 and $1.18 from $0.87
and $1.13, respectively.
We are also introducing our estimates for 2017 forecasting revenue, Adjusted EBITDA and
Adjusted FD EPS of $1.75bn, $159.7mm and $1.25. With our 2017 estimates we have
remained relatively conservative in our assumptions keeping production rates relatively flat
from 2016 levels and assuming only incremental margin improvements. We believe it
important to note the reduction in 2017 revenue and earnings over 2016 levels in bus
manufacturing stems from 2016 having 53 production weeks in the fiscal year, an event that
happens once every four years, while 2017 is expected to have the normal 52 weeks. We
believe the extra week will be included in Q1/16, however the company has not yet released
the formal fiscal schedule for 2016.
We note however, while we remain conservative in our forecasts, should book to bill ratios
continue to trend above 1.0x for a sustained period, that we believe a production rate increase
is likely. We believe the companys existing footprint in the context of its much improved
operational capability could see rates as high at 60EU/week be feasible with only additional
variable costs for materials and direct labour, affording a meaningful improvement in margins
as overheads are more fully absorbed. A summary of our key changes to estimates is provided
in Figure 3.
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Revenue
Bus Manufacturing
Aftermarket
Revenue
ACC Old Estim ates

2015e
2016e
ACC New Estim ates

2015e
2016e
2017e
1,294,477 1,414,167
305,404 296,999
1,599,881 1,711,165
19.1%
17.4%
1,308,532 1,451,959 1,435,913

319,390 299,235 316,092
1,627,922 1,751,194 1,752,005
19.6%
17.1%
18.0%
Change
2015e
2016e
1.1%
4.6%
1.8%
53 bps
2.7%
0.8%
2.3%
(27) bps
EBITDA
Margin
72,617
5.6%
58,598
19.2%
129,461
8.1%
90,116
6.4%
59,400
20.0%
149,516
8.7%
80,216
6.1%
61,222
19.2%
134,150
8.2%
92,584
6.4%
62,077
20.7%
154,661
8.8%
93,334
6.5%
66,379
21.0%
159,714
9.1%
10.5%
52 bps
4.5%
(2) bps
3.6%
15 bps
2.7%
0 bps
4.5%
75 bps
3.4%
9 bps
Adjusted EBITDA
Margin
131,215
8.2%
149,516
8.7%
141,438
8.7%
154,661
8.8%
159,714
9.1%
7.8%
49 bps
3.4%
9 bps
Operating Earnings
EBT
89,643
73,313
112,124
99,354
95,110
80,374
115,768
103,862
121,661
110,024
6.1%
9.6%
3.3%
4.5%
Net Incom e
Reported FD EPS
Adjusted FD EPS
48,154
$0.87
$0.87
62,593
$1.13
$1.13
51,396
$0.93
$1.01
65,433
$1.18
$1.18
69,315
$1.25
$1.25
6.7%
6.7%
15.3%
4.5%
4.5%
4.5%
78,345
96,987
(16,931)
79,568
108,643
107,570
(13,890)
91,867
76,111
95,431
(15,069)
85,092
93,835
112,340
(14,187)
96,342
151,588
115,560
(13,689)
100,059
(2.9%)
(1.6%)
(11.0%)
6.9%
(13.6%)
4.4%
2.1%
4.9%
Free cash flow (C$)

per Share
FCF Yield
99,425
$1.79
11.4%
115,489
$2.08
13.2%
106,319
$1.92
11.3%
121,087
$2.18
12.9%
120,023
$2.16
12.7%
6.9%
4.8%
6.9%
4.8%
(6) bps (33) bps

33,928
34.1%
$0.61
34,413
29.8%
$0.62
33,928
31.9%
$0.61
34,413
28.4%
$0.62
34,413
28.7%
$0.62
0.0%
0.0%
(221) bps (138) bps
0.0%
0.0%
195,660
1.5x
0.3x
171,641
1.2x
0.3x
200,806
1.4x
0.3x
148,526
1.0x
0.2x
39,309
0.2x
0.1x
2.6%
(4.8%)
1.2%
(13.5%)
(22.7%)
(14.7%)
2,547
508.2
28.5
50.9
1.2x
9.5%
2,650
533.6
34.0
52.0
1.0x
16.5%
2,607
501.9
30.8
49.6
1.3x
9.5%
2,755
527.0
33.6
52.6
1.0x
17.8%
2,711
529.7
34.4
52.6
1.0x
20.1%
2.4%
(1.2%)
7.9%
(2.7%)
10.8%
0 bps
4.0%
(1.2%)
(1.2%)
1.3%
0.0%
129 bps
Free Cash Flow

Free Cash Flow
Leverage
Net Debt (EOP)

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We highlight that the companys ROIC on a trailing basis has continued to trend higher even
as capital needs moderate and long-term growth remains at a sustainable level. We estimate a
trailing ROIC of 6.4% in Q2/15 as compared to 5.1% in Q1/15 and 4.9% in December 2014.
Trailing Return on Invested Capital (ROIC)
Figure 4 Trailing Return on Invested Capital (ROIC)

We believe that with return on capital increasing consistently and sustainably, a higher
valuation multiple is warranted. We are rebasing our valuation using a 7.5x forward
EV/EBITDA (from 7.0x) and 15.0x forward P/E multiple (from 14.0x). Our price target
increases to C$23.00 as a result of a higher multiple, the shift in our C$/US$ exchange rate
from C$1.22 to C$ 1.27 /$US as well as a result of rolling forward our valuation period by
two quarters now ending in Q2/17. We note our valuation remains sensitive to the multiple
applied to estimates as shown in the figure below.
% Variance
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
141,379
149,233
157,088
164,942
172,797
6.50x
7.00x
$16.82
$18.44
$17.99
$19.70
$19.16
$20.96
$20.33
$22.21
$21.49
$23.47
7.50x
$20.06
$21.40
$22.75
$24.10
$25.45
8.00x
8.50x
$21.67
$23.29
$23.11
$24.82
$24.55
$26.35
$25.99
$27.87
$27.43
$29.40

Overall, we believe the quarter was well ahead of our and consensus expectations with
tailwinds for margin expansion expected to continue in an increasingly rationalized market.
We note that as the companys operational efficiency initiatives mature, discussions around
return of capital to shareholders will start to gain further traction. We maintain our
Outperform rating and are increasing our 12-month price target to C$23.00 from C$18.50.
Our target price is based on a blend of a 15.0x earnings and 7.5x EBITDA multiple of the four
quarters ending Q2/17 reflecting our 12-month forward valuation period as well as an
exchange rate of C$1.27/$US.
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Ticker
Marcopolo S.A.
Wajax Corporation
Superior Plus Corp.
Oshkosh Corporation
Spartan Motors Inc.
Cubic Corporation
Average
Rating &
Target
TSX:NFI
OP (C$23.00)
BOVESPA:POMO4
NR
TSX: WJX
NR
TSX: AFN
NR
TSX: SPB
NR
GBX
NR
OSK
NR
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
CUB
NR
Trading
Local
Currency Price
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
17.88
2.10
21.77
44.45
10.95
43.63
36.96
4.85
13.58
56.00
21.93
16.75
5.56
13.05
43.62
Market
Cap ($m m )
941.6
1,839.1
404.5
652.2
1,412.5
1,287.7
2,878.2
160.0
911.5
2,915.2
592.0
1,369.2
533.6
269.4
1,243.3
EPS
EV
Net
Debt
($m m )
2014
2015e
249.4
1,268.6
167.3
165.9
939.9
316.0
854.2
(15.4)
196.5
(259.4)
(49.2)
4,419.0
220.9
195.6
(43.0)
949.2
3,133.8
656.5
818.1
2,352.4
1,714.3
3,732.4
144.5
1,108.0
2,655.8
542.8
5,821.2
816.4
515.1
1,200.6
0.65
0.25
2.46
0.31
0.45
4.62
3.49
0.03
0.88
3.55
1.61
-5.07
0.03
0.00
2.47
1.01
0.19
1.92
2.81
0.60
6.16
3.28
0.07
1.29
3.99
1.62
1.05
0.02
0.00
2.25
P/E
EBITDA
2016e 2014 2015e 2016e

1.18
0.27
2.18
3.91
1.11
6.32
3.70
0.19
1.35
4.58
1.90
2.42
0.06
0.00
0.00
20.8x
6.4x
8.9x
NM
24.3x
9.4x
10.6x
NM
15.5x
15.8x
13.6x
NM
NM
NM
17.6x
14.3x
13.5x
8.4x
11.4x
15.8x
18.2x
7.1x
11.3x
NM
10.5x
14.0x
13.5x
15.9x
NM
NM
19.4x
13.3x
11.6x
6.0x
10.0x
11.4x
9.9x
6.9x
10.0x
25.5x
10.1x
12.2x
11.6x
6.9x
NM
NM
NM
11.0x
EV/EBITDA
2014
2015e
2016e
2014
2015e
2016e
Price
to BV
ROIC
ROE
107.4
268.8
82.4
63.4
282.4
257.4
591.2
9.4
160.7
298.8
65.8
331.0
69.0
25.9
119.3
141.4
260.3
83.4
91.2
275.4
458.4
540.0
12.4
206.6
344.1
68.3
648.8
79.1
0.0
114.3
154.7
373.7
92.5
115.8
314.2
473.2
585.2
17.0
208.7
392.0
81.2
852.0
94.4
0.0
139.6
8.8x
11.7x
8.0x
12.9x
8.3x
6.7x
6.3x
15.3x
6.9x
8.9x
8.3x
17.6x
11.8x
19.9x
10.1x
10.8x
6.7x
12.0x
7.9x
9.0x
8.5x
3.7x
6.9x
11.6x
5.4x
7.7x
7.9x
9.0x
10.3x
NM
10.5x
8.4x
6.1x
8.4x
7.1x
7.1x
7.5x
3.6x
6.4x
8.5x
5.3x
6.8x
6.7x
6.8x
8.6x
NM
8.6x
7.0x
1.7x
1.1x
1.1x
2.9x
2.5x
1.9x
1.4x
1.0x
2.3x
2.8x
2.8x
NM
2.1x
NM
1.6x
1.9x
6.4%
3.2%
9.0%
8.4%
6.2%
18.1%
8.9%
1.6%
12.1%
17.8%
19.4%
13.7%
2.9%
NA
5.9%
9.5%
9.0%
11.8%
13.0%
(0.2%)
5.7%
34.7%
12.2%
0.7%
20.6%
20.1%
21.5%
NM
0.7%
NM
4.6%
11.9%

As of August 7, 2015. All figures in millions, unless otherwise noted.
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Appendix 2: Financial Statements

INCOME STATEMENT (Figures in US$000s)
2014
2015
2016
2017
Revenue
Bus Manufacturing
$1,132,066 $1,308,532 $1,451,959 $1,435,913
Aftermarket
319,034
319,390
299,235
316,092
Revenue
1,451,100 1,627,922 1,751,194 1,752,005
Operating Costs And Expenses
1,276,980 1,430,740 1,519,720 1,515,568
Sales, General Administration Costs And Other Operating Expenses
81,285
83,151
76,813
76,723
Bus Manufacturing
57,374
80,216
92,584
93,334
Aftermarket
49,991
61,222
62,077
66,379
EBITDA Excluding Realized FX Gain/Loss
88,004
133,383
154,661
159,714
Foreign Exchange Loss (gain)
1,547
(767)
EBITDA including realized FX gain/loss
86,457
134,150
154,661
159,714
Follow -On Offering Cost
Fair Market Value Adjustment To Deferred Revenue
Fair Market Value Adjustment To Accounts Payables And Accrued Liabilities
Fair Market Value Adjustment To Inventory
Fair Market Value Adjustment To Prepaid Expenses
Other (Embedded Derivative)
(20,908)
(7,288)
Adjustm ents To EBITDA
(20,908)
(7,288)
Adjusted EBITDA
107,365
141,438
154,661
159,714
Adjusted EBITDA (C$)
118,865
176,725
194,396
191,588
Amortization & Depreciation
35,837
39,040
38,893
38,052
Earnings from Operations
50,620
95,110
Other
Unrealized FX Loss On Non-Current Monetary Items And Forw ard Foreign Exchange(820)
Contracts 1,085
Follow -On Offering Related Costs
Fair Value Adjustment To Embedded Derivative
EBIT

Fair Market Value Adjustment On Cross-Currency Interest Rate Sw ap
Other
Interest Expense
Distributions On Class B And Class C Common Shares
EBT
Current Income Tax

Future Income Tax
Income Tax Expense
Net Incom e
Deficit - Beginning Of Period
Net Earnings (Loss) For The Period
Dividends Declared
Other Comprehensive loss for the period
Deficit - End Of Period
115,768
121,661
51,440
94,025
115,768
121,661
8,897
2,229
3,521
(775)
8,942
1,786
2,745
177
8,829
329
2,749
-
8,833
50
2,754
-
13,872
13,650
11,906
11,637
37,568
80,374
103,862
110,024
25,691
(14,842)
10,849
26,719
39,494
(10,515)
28,979
51,396
30,743
7,686
38,429
65,433
32,567
8,142
40,709
69,315
(133,167)
26,719
(29,333)
(135,781)
(135,781)
51,396
(26,971)
(111,356)
(111,356)
65,433
(27,370)
(73,293)
(73,293)
69,315
(28,682)
(32,660)
Reported Net Earnings (Loss) Per Unit
0.48
0.93
1.18
1.25
Net Earnings (Loss) Per Unit Adjusted (Excl. Non-cash charges,

Unrealized FX gains/losses, Tax Norm alized)
0.65
1.01
1.18
1.25
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BALANCE SHEET (Figures in US$000s)

2014
2015
2016
2017
17,456
212,125
230,002
4,393
689
778
465,443
55,581
264,144
250,260
4,925
240
575,151
106,049
277,683
273,311
5,178
240
662,460
213,454
292,739
213,428
5,459
240
725,319
63,804
544,464
62,235
169
1,136,115
64,256
523,127
65,300
1,227,834
61,010
501,667
57,614
1,282,751
58,106
480,207
49,473
1,313,105
LIABILITIES AND UNITHOLDERS EQUITY

Current Liabilities
Bank Indebtedness
Accounts Payable And Accrued Liabilities
Income Taxes Payable
Deferred Revenue
Provision For Warranty Costs
Derivative Financial Instruments
Current Portion Of performance unit plan liability
Current Portion Of Obligations Under Capital Lease
Current Portion Of Long-Term Debt
Other
233,073
45,923
32,330
6,090
1,551
40,000
358,967
253,240
6,492
72,257
40,901
3,888
48,000
424,778
266,220
6,492
71,625
46,890
3,888
48,000
443,116
280,655
6,492
44,976
50,587
3,888
48,000
434,598
Accrued Benefit Liability

Obligations Under Capital Lease
Deferred Compensation Obligation
Future Income Tax Liability
Long-Term Debt
Derivative Financial Instruments
Other Liabilities, Class B & C Common Shares
Other
Total Liabilities
1,026
3,225
2,939
108,465
140,747
1,733
6,677
683,493
4,117
5,813
3,533
102,520
141,612
1,911
4,871
749,730
4,117
4,001
3,533
102,520
141,941
1,911
4,871
766,583
4,117
2,189
3,533
102,520
141,991
1,911
4,871
756,304
589,586
(135,781)
452,622
1,136,115
589,701
(111,356)
478,105
1,227,834
589,701
(73,293)
516,168
1,282,751
589,701
(32,660)
556,801
1,313,105
ASSETS
Current Assets
Cash
Accounts Receivable
Inventory
Prepaid Expenses And Other Assets
Embedded Derivative Instrument
Due From Related Party
Future Income Tax Assets + Derivatives
Other
Property, Plant & Equipment
Long-term receivable
Intangible Assets
Future Income Tax Assets
Goodw ill
Other Assets & Foreign Exchange Contracts
Unused Investment Tax Credits
Other
Total Assets
Unitholder's Equity
Share Capital
Surplus (Deficit)
Total Equity
10
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CASH FLOW STATEMENT (Figures in US$000s)

2014
Operating Activities
Net Earnings
26,719
Amortization Of Plant & Equipment
15,372
Amortization Of Intangible Assets
20,465
Loss From Equity Accounted Investment
Loss (Gain) On Disposal Of PP&E
Future Income Taxes
Unrealized (Gain) Loss On Cross-Currency Interest Rate Sw ap
Unrealized Foreign Exchange (Gain) On Non-Current Monetary Items And
(820)
Forw ard Foreign Exchange Contracts
Foreign Exchange Loss (Gain) On Cash Held In Foreign Currency
154
Non-Cash Impact Of Embedded Derivative
Fair Value Adjustment To Embedded Derivative
Net Defined Benefit Expense
Other
5,510
Cash From Operating Activities Before Changes In Non-Cash Working Capital Items
67,400
Changes In Non-Cash Working Capital Items
(35,255)
32,145
Financing Activities
Repayment Of Obligations Under Capital Lease
(1,766)
Share Issuance
26
Costs Associated With Share Issuance
Proceeds (Repayment) of Long-Term Debt
5,000
Costs Associated With Debt Issuance
Proceeds of issue of convertible debentures/other LT liabilities
Repayment Of Other Liabilities, Class B And C Common Shares
(2,948)
Due From Related Parties
Dividend Paid To IDS And Common Shares
(29,532)
(29,220)
Investing Activities
Cash Provided From Consolidation Of New Flyer Holdings Inc
Proceeds From Disposition Of Property, Plant And Equipment
Acquisitons
Capital Expenditures
Maintenance
(2,589)
Grow th
(8,300)
Acquisitions
Total Capital Expenditures
(10,889)
(10,889)
Effect Of Foreign Exchange Rate On Cash
(154)
Increase In Cash
5,560
Cash - Beginning Of Period
11,896
Cash - End Of Period
17,456
2015
2016
2017
51,396
17,629
21,411
3,309
-
65,433
17,433
21,460
7,686
-
69,315
16,592
21,460
8,142
-
1,085
223
604
523
96,180
(19,320)
76,860
329
112,340
(18,505)
93,835
50
115,560
36,029
151,588
(1,812)
8,000
(1,923)
(26,862)
(22,597)
(1,812)
(27,370)
(29,182)
(1,812)
(28,682)
(30,494)
(96)
(3,585)
(11,484)
(15,069)
(15,165)
(223)
38,125
17,456
55,581
(3,375)
(10,812)
(14,187)
(14,187)
50,467
55,581
106,049
(3,256)
(10,433)
(13,689)
(13,689)
107,405
106,049
213,454
11
258

NFI
C$17.88
Rating:
Outperform
12 Month Target:
C$23.00
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
64%
25%
Sector Perform
21%
4%
Underperform
2%
0%
Speculative
1%
0%
Restricted
2%
50%
Not Rated
6%
12%
Tender
4%
0%
100%
18%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
12
259
Direct
__________________________________________________________________________________________________________
Chairman & CEO

403 539 8601
E&P- Domestic
Kate-Lynn Gordey, Associate
Thomas Matthews, P.Eng., Analyst
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
kgordey
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8591
dbenner
mwestby
647 776 8246

647 776 8245
cmurray
smodwal
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
All Sectors
403 539 8607
vhoa
George FJ Gosbee
President
647 776 8250
ATB Financial
Dave Mowat
President & CEO
780 408 7181
dmowat@atb.com
Ian Wild
403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Cheryl Polan
Jon Varley
Michael Capobianco
647 776 8244

647 776 8235
647 776 8231
cpolan
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Matt Colucci
403 539 8597
mcolucci

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Jesse Hardage
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

403 539 8628
647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
jhardage
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
Private Wealth
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________

403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
260
Price: Cdn$17.88
August 9, 2015
Headline: Manufacturing Profitability Well Ahead of Expectations; Target

Road & Rail

Cdn$17.88
NFI (T)
Outperform
Stock Rating:
(Unchanged)
Cdn$20.00
Target:
(Was Cdn$18.00)
Average
Risk Rating:
Manufacturing Profitability Well Ahead of

Expectations; Target to $20
(Unchanged)
Est. Total Return
15.3%
Stock Data:
Cash Yield
3.5%
11.9%
52-week High-Low
HIGHLIGHTS
$18.10-$12.04
Bloomberg/Reuters:
NFI CN/ NFI.TO
Forecasts: DEC YE
Revenue (USmln)
Q2/15 Review
2014a
2015e
2016e
$1,451.1
$1,490.0
$1,599.0
EBITDA (USmln)
$86.5
$123.5
$130.5
DCPS ($US)
$1.06
$1.17
$1.34
Dividend
$0.58
$0.60
$0.62
Payout Ratio
49%
41%
37%
DC Yield
6.6%
8.1%
9.4%
EV/EBITDA
11.3x
9.2x
9.2x
P/DCPS
15.1x
12.3x
10.7x
Financial Data
Cash
Net Debt
55.5
$992.6
$8.8
$240.8
20%
1.8x

Company Profile:
aftermarket parts and services.
EBITDA outpaces NBF and Street forecasts

NFI reported Q2/15 revenue of US$375 mln (vs. US$370 mln
est. & US$346 mln Q2/14), adj. EBITDA of US$39.2 mln (vs.
US$30.2 mln est. & US$27 mln Q2/14) and DCPS of US$0.39
(Cdn$0.48) reflecting a 30% payout ratio (vs. US$0.31
(Cdn$0.38) / 40% est. & US$0.26 (Cdn$0.29) and 51% Q2/14).
Q2 results were below consensus top line of $393 mln, but
similarly well ahead of the Streets $31.4 mln EBITDA forecast.
Manufacturing segment continues to impress
Bus manufacturing revenue of US$286 mln was just below our
US$295 forecast (594 deliveries previously disclosed, at
average pricing of US$481k/unit vs. US$497k est.); however
Q2 was the best quarter weve seen since 2011 in terms of
profitability, the segment generating average EBITDA/delivery
of US$37.7k (vs. US$29.7k est. & US$25.9k TTM avg.). This
resulted in manufacturing adj. EBITDA of US$22.4 mln, ahead
of our US$17.7 mln est. and US$13.1 mln Q2/14. Our view is
that manufacturing earnings momentum is well-positioned to
continue, a result of: 1) the benefits from NFIs investments into
new IT systems, operational excellence programs and
standardization are largely in their early stages; 2) the full
transition to the Xcelsior platform is expected in H2, the
expected cost another ~US$7 mln (~US$13 incurred YTD) but
projected to save US$14 mln in annual expenses; and 3) the
bid environment remains favourable, as evidenced by NFIs
sharp backlog growth, a result of acquiring NABI/Orion, the
U.S. economic rebound & ongoing sales & development efforts.
Aftermarkets outperforms
US$16.8 mln adj. EBITDA was ahead of our US$12.5 mln est.
on better-than expected top line (+11% y/y vs. -5% est., as the
end of the CTA mid-life overhaul program had little impact on
the quarter) and record profitability (18.8% EBITDA margins vs.
17.2% est. & 16.3% TTM average).

Associates:
Endri Leno - (416) 869-8047
endri.leno@nbc.ca
Kyle Stanley - (416) 507-8108
kyle.stanley@nbc.ca
Alex Bauer - (416) 869-7535
alex.bauer@nbc.ca
261
Page 2
Investment Summary
Q2s performance marks one of the best quarters weve seen from NFI in our six-plus years
covering the company, and our view is that earnings momentum will remain robust for the
foreseeable future given a number of favourable drivers:
1) Demand growth is sharp, with YTD orders totaling more than half of NFIs current ~7k
unit / ~US$3.5 billion backlog. Transit authorities are replacing fleets given better access
to funding, an elevated age, environmental reasons and to drive operating efficiencies
all themes positioned to continue.
2) Management has been actively investing in better IT, plant design / workflow, operating
efficiencies and to standardize its bus platform to Xcelsior, the benefits being reflected in
margin gains from the manufacturing segment; however, generally only at an early stage
in terms of impact.
3) Aftermarkets profitability is at its highest levels ever, and while the ending of the CTA
mid-life overhaul program will weigh on NTM results the impact is believed minimal and
already adequately captured in our/Street expectations.
After adjusting for Q2 takeaways our 2016e EBITDA forecast increases 4% to US$130 mln
and DCPS +3% to US$1.34 reflecting a 37% payout. Given this cushion and NFIs
conservatively leveraged 1.8x net debt to EBITDA balance sheet, we believe investors
should anticipate continued dividend increases.
As mentioned earlier NFIs manufacturing segment realized extremely robust
EBITDA/delivery of US$37.7k Q2/15 (vs. US$25.6k last quarter and US$23k-US$28k
2012-2014). Given the number of factors at play influencing one quarter of profitability (sales
mix, FX, timing, etc.) we are more conservatively forecasting US$31.2k through 2016, but if
the rebound continues to be as pronounced as Q2/15 there is upwards of US$20 mln
incremental annual EBITDA potential (+15% to our 2016e forecast).
We use a ~10x 2016e EV/EBITDA multiple (was ~9.5x) on our new estimates to arrive at a
$20 target price (was $18), representing the average valuation for TSX diversified yield
equities. With a 15%+ implied total return we reiterate an Outperform rating.
262
Page 3
DISCLOSURES:
exchanges.
263
RESEARCH ALERT
NFI | TSX
$16.96
Rating: Outperform
August 7, 2015
Q2/15 First Look: Record Quarter on Significant Margin

Expansion
Record Q2/15 Results: New Flyer announced Q2/15 results reporting revenue,
$386.9mm, $31.3mm and $0.22. The company has scheduled a conference call at
8:00am ET (1-888-231-8191) where we expect management to provide updated
guidance on the companys significantly improved margin profile and insights on
the demand and pricing outlook.
Segmented Results: The company realized a 7.5% y/y growth in bus

manufacturing revenues as a result of 2.1% increase in total bus deliveries and 5.3%
increase in average selling price due to a more favourable mix. Adjusted EBITDA
increased by 61.3% y/y due to a favorable mix and cost savings achieved from
Xcelsior transition. In the aftermarket segment, revenue increased by 10.6% y/y as a
result of incremental revenue from Chicago Transit Authority (CTA) midlife
overhaul program. The company continues to benefit from a broader portfolio of
services and parts offerings with EBITDA up 28.3% y/y.
Appointment of Mr. Paulo Cezar da Silva: The company announced the

appointment of Mr. Paulo Cezar da Silva to the Board of Directors. The
appointment was proposed by Marcopolo, pursuant to the Investment Agreement
between the two companies dated January 23, 2013.
Outlook for Remainder of 2015: Management maintained an H2/15 deadline for

the completion of transition of NABI to the Xcelsior platform. The company
expects to invest ~$20.0mm in direct operating costs and capital expenditures to
fund this transition, of which $13.2mm have already been incurred with $6.0mm in
direct operating costs and $7.2mm in capital expenditures. The company expects
annualized cost savings of ~14.0mm. Management continues to guide towards
higher y/y margins in buses. The company anticipates a corporate average line entry
rate of ~50EU per production week. Of the 1,238 pending new firm and option
orders highlighted during Q2 orders and backlog update, the company has now
received contracts for 513EU. Aftermarket segment is expected to growth at 5.0%.
We note the CTA mid-life upgrade program ended as of June 2015, which
represented 18.6% of the total aftermarket revenue during 2015 YTD.
Quarter Should Be Well Received: Overall, we expect the companys

significantly improved margin profile will be well received by investors even as
discussions around return of capital to the shareholders start to gain further traction.

Managing Director
647.776.8246

647.776.8245
264
Q2/15 Highlights (US$000s, except per share)

ACC Estim ate Reported
Q2/15
Q2/15
Q2/14
Q1/15
Grow th y/y Grow th
Estim ate
Estim ate
Variance $ Variance %

Backlog End of Period (US$M)
594.0
508.2
28.0
3,443.6
594.0
481.1
37.7
3,487.1
582.0
456.8
23.9
3,538.5
2.1%
5.3%
58.1%
(1.5%)
3.2%
12.2%
84.1%
(3.3%)
(27.1)
9.8
44
0.0%
(5.3%)
35.0%
1.3%
Operating Segm ents

Bus Manufacturing
Revenue
EBITDA
301,892
16,604
5.5%
5.5%
285,793
22,412
7.8%
7.8%
265,831
13,889
5.2%
5.5%
7.5%
61.4%
2.6%
2.4%
15.9%
151.1%
2.0%
2.0%
(16,099)
5,808
(5.3%)
35.0%
2.3%
2.3%
75,234
14,450
19.2%
89,219
16,779
18.8%
80,653
13,077
16.2%
10.6%
28.3%
2.6%
22.8%
40.0%
2.3%
13,985
2,329
18.6%
16.1%
(0.4%)
377,126
31,054
9,985
375,012
39,191
12,370
346,484
26,966
3,563
8.2%
45.3%
247.2%
17.4%
59.7%
97.9%
(2,114)
8,137
2,385
(0.6%)
26.2%
23.9%
$0.18
$0.18
$0.22
$0.30
$0.06
$0.16
247.0%
81.4%
97.8%
105.5%
$0.04
$0.12
23.9%
65.7%
Afterm arket
Revenue
EBITDA
EBITDA Margin
Total
Revenue
Adjusted EBITDA
Reported Net Income
Reported
Adjusted
Consensus
Actual vs.
Consensus
386,923
31,320
(3.1%)
25.1%
$0.22
37.5%
Figure 1. New Flyer Industries Inc. Q2/15 Highlights

265

NFI
C$16.96
Rating:
Outperform
12 Month Target:
C$18.50
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
64%
25%
Sector Perform
21%
4%
Underperform
2%
0%
Speculative
1%
0%
Restricted
2%
50%
Not Rated
6%
12%
Tender
4%
0%
100%
18%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
266
Direct
__________________________________________________________________________________________________________
Chairman & CEO

403 539 8601
E&P- Domestic
403 539 8615

403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
porourke
ysiddiqi
nlupick
kgordey
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8591
dbenner
mwestby
647 776 8246

647 776 8245
cmurray
smodwal
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
All Sectors
403 539 8607
vhoa
George FJ Gosbee
President
647 776 8250
ATB Financial
Dave Mowat
President & CEO
780 408 7181
dmowat@atb.com
Ian Wild
403 974 5127
iwild@atb.com
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Cheryl Polan
Jon Varley
Michael Capobianco
647 776 8244

647 776 8235
647 776 8231
cpolan
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Matt Colucci
403 539 8597
mcolucci

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Jesse Hardage
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

403 539 8628
647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
jhardage
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
Private Wealth
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________

403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
267

(NFI-TSX)
Rating:
Market Perform
Target Price:
Price (6-Aug):
$16.00
$16.96
Total Return: -2%
August 7, 2015
Bert Powell, CFA
416-359-5301

bert.powell@bmo.com
Adel Kanso
adel.kanso@bmo.com
416-359-6193
Q2/15 Results in Line; EBITDA Above Expectations

New Flyer (NFI) reported Q2/15 EPS of $0.22, in line with expectations and mean estimates. Total revenue was up 8.2% y/y
to $375 million, in line with expectations. Bus deliveries were up 2.1% y/y to 594 equivalent units (EUs), while the average
EU selling price was up 5.3% y/y to $481k.
Adj. EBITDA was up 45% y/y to $39 million, above our expectations of $31 million. Adj. EBITDA margin was up 270bps
y/y to 10.5%, above our expectations of 8.2%. Adj. EBITDA per bus was up to $38k from $24k during same period last
year. Adj. EBITDA excluded $3.7 million of pension benefits provided to employees for past service and $1.6 million of
product rationalization costs.
Conference call details: Friday, August 7 at 8:00 a.m. ET; Tel: 1-888-231-8191 or 647-427-7450.
Our View:
Results were in line with expectation as the higher tax expense offset the strong increase in EBITDA.
EBITDA was higher than expected mainly due to a favourable sales mix and cost savings from the operational
improvement initiatives. As management previously indicated, the average margin on orders planned for production in
2015 appears to be higher than in the prior year.
NFI looks on track to execute on its platform rationalization plan and improve bus manufacturing margins.
This quarters EBITDA per bus is a surprise to us and is well in excess of what management indicated was achievable.
NFI could be a different story if the average EBITDA per bus is going to be well above $30,000 per bus compared with
our expectation of $27,000. EBITDA per bus does spike periodically, so we are cautious that this may be one of those
quarters.
Flash Page 1
268

Target Price
Share Price
Quarterly Price
18
16
16
14
14
12
12
10
10
10
18
16
16
14
14
12
12
10
2) Mkt
6
1) NR
4
400
400
300
300
200
200
100
100
1995
2000
2005
2010
500
400
400
300
300
200
200
100
100
1.0
200

500
2015
Revenue / Share
Price / Revenue
300
2013
2014
2015

200
200
0.5
100
-200
2013
0.0
Price / Earnings
2014
2015
-200
400
200
0
1995
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
0.58
2000
2005
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
28.2
2010
2015
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
>100
10.7
16.5
0.62
4.2
3.8
1.5
ROE
%
3
6
6
NFI - Rating as of 24-Aug-12 = Mkt
1
2
Date
29-Oct-12
3-Jul-13
Rating Change
Mkt to NR
NR to Mkt
Share Price
$7.75
$11.14

Last Price ( August 5, 2015): $16.59

Flash Page 2
269
report.
12 months.
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
42.0%
21.9%
53.3%
41.9%
54.3%
54.6%
Hold
Market Perform
53.5%
14.4%
44.8%
53.3%
44.4%
40.0%
Sell
Underperform
4.4%
7.4%
1.9%
4.7%
1.3%
5.4%
*
**
***
****
*****
Flash Page 3
270

For
Other
Important
Disclosures
on
the
stocks
discussed
in
this
report,
please
go
to
BMO
Capital
Markets
Equity
Research
is
available
via
our
website
Conflict Statement
conflicts
of
interest
in
connection
with
investment
research
which
is
available
at
General Disclaimer
Additional Matters
Nesbitt Burns Inc.
Flash Page 4
271

FDIC), BMO Ireland Plc, and Bank of Montreal (China) Co. Limited and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC), and
BMO Capital Markets Limited in Europe and Australia and BMO Advisors Private Limited in India. Nesbitt Burns is a registered trademark of BMO Nesbitt Burns
Corporation Limited, used under license. BMO Capital Markets is a trademark of Bank of Montreal, used under license. "BMO (M-Bar roundel symbol)" is a
registered trademark of Bank of Montreal, used under license.

A member of BMO
Financial Group
Flash Page 5
272

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
CHANGE
IN
RATING - UPGRADE

Don't Miss The Bus - Upgrading To SO And
Raising PT To C$19.50
What's The Event
New Flyer reported a strong Q2 with adjusted EBITDA coming in at
$39 million, up 45% Y/Y, and versus our estimate of $32 million and
consensus of $31 million. The main variance to our estimate was
higher margins in bus manufacturing. As such, as of Aug. 6, we are
upgrading New Flyer from a SP to a SO and raising our price target
from C$16.50 to C$19.50. Even with the strong run-up in the share
price over the past 5 weeks (up 12%), we view Q2 results as a
reaffirmation of the improving margin and FCF profile at New Flyer.
Our upgrade is predicated on the following:
1. Improving Margin Profile: We have seen margins reach a floor in
Q3/14 and have now shown an upward trajectory. This reflects
higher margins per EU, and the completion of the CTA overhaul
contract has resulted in aftermarkets margins improving ~300 bps.
Looking ahead, we continue to see New Flyer's margin profile
improving as it goes through its restructuring.
August 6, 2015
Capital Equipment
Stock Rating:
Sector Weighting:
NFI-TSX (8/6/15)
SECTOR OUTPERFORMER
MARKET WEIGHT
C$19.50
C$16.96
Key Indices:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Float
Dividend/Div Yield
Fiscal Year Ends
Book Value
2015 ROE (E)
LT Debt
Net AssetEquity
Value
Common
EBITDA ($mln)
Current
2. Sum Of The Parts Suggests Higher Valuation: Using a sum of the Prior
parts model, and applying a 7x for the bus manufacturing operations Estimates (Dec. 31)
Valuation (Dec. 31)
and 10x for the aftermarkets business would yield a value for New
EV/EBITDA-Curr
Flyer of C$20+/share.
EV/EBITDA-Prior
Toronto
NM
C$12.04-C$16.96
55.5M
36.5M Shrs
38,000
C$941.3M
C$0.62 / 3.7%
December
$8.36 per Shr
9.0%
$141.0M
$464.0M
Yes
2013
$94.7A
2014
$107.4A
2015
$132.5E
$124.2E
2016
$138.4E
$126.9E
10.2x
9.0x
7.3x
7.8x
7.0x
7.6x
3. FCF Stepping Up: When we look out into 2016, we are forecasting
New Flyer will generate $1.00 in FCFPS and this compares to ~$0.60
in FCFPS back in 2014. We view New Flyer as a good FCF story
given that it is a low capex business resulting in a higher FCF
conversion rate as it expands its margin profile. Taking our 2016
FCFPS estimate and using New Flyer's FCF yield range of 5.5%-7.5%
would infer a value for the company of ~C$17.50 to ~C$23.50.
Improving FCF supports the dividend and M&A strategy.
4. Industry Fundamentals Look Good: We have a constructive
outlook on the heavy duty bus market and we have seen a step-up
in the total active bids New Flyer is working on.
We raised our estimates to reflect an increase in our margin
assumptions. Our 2015E and 2016E EBITDA increase to $133 million Company Description
(from $124 million) and $138 million (from $127 million)
respectively.
www.newflyer.com
15-137401 2015
where applicable.
273
Don't Miss The Bus - Upgrading To SO And Raising PT To C$19.50 - August 06, 2015
Sector Outperformer
NFI-TSX
8/6/15
Capital Equipment
Sector Weighting:
EV/EBITDA Multiples
Manufacturers
P/E Multiples
Manufacturers
2013A
EBITDA Margin
Current Ratio
Debt/Equity
Debt/Total Capital
Income Statement
Cost of Sales
Gross Profit
EBITDA
EBIT
EBT
Net Income
Balance Sheet
C$16.96
C$19.50
Market Weight
2014A
2015E
2016E
9.0x
9.8x
10.3x
7.3x
8.5x
8.5x
7.0x
6.9x
7.5x
2014A
2015E
2016E
Investment Thesis
20.4x
19.8x
17.5x
17.0x
15.4x
13.9x
15.1x
12.9x
12.2x
2014A
2015E
2016E
7.9%
1.1x
51.3%
33.9%
2013A
7.4%
1.1x
53.1%
34.7%
2014A
8.7%
1.3x
41.0%
29.1%
2015E
9.0%
1.3x
50.1%
33.4%
2016E
$991.2
$215.0
$1,199.4
$1,078.7
$120.8
$94.7
$49.0
$34.6
$26.8
$1,132.1
$319.0
$1,451.1
$1,312.8
$138.3
$107.4
$51.4
$37.6
$26.7
$1,205.3
$326.4
$1,531.7
$1,362.4
$169.4
$132.5
$85.2
$70.7
$47.4
$1,231.3
$310.6
$1,541.8
$1,364.8
$177.0
$138.4
$100.6
$86.3
$62.5
Q2/15A
Current Assets
Total Assets
Current Liabilities
Total Liabilities

444
1,111
320
648
464
Company Profile
Canada
16%

$350
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
0
2009
2010
2011
2012
2013
Deliveries(EUs)
2014
$ Millions
3,000
2008
United States
84%
Bus Operations
78%
$1,200,000
2007

Aftermarket
Operations
22%
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2009
2010
2011
2012
$50
$0
2007
2008
2013
2014
274
Getting On The Bus Upgrading To

SO And Raising PT To C$19.50
As of August 6, we are upgrading New Flyer from a Sector Performer to a Sector
Outperformer and raising our price target from C$16.50 to C$19.50. Even with
the strong run-up in the share price over the past five weeks (up 12%), we
believe second quarter results are a reaffirmation of the improving margin and
FCF profile at New Flyer. Our upgrade is predicated on the following reasons:
1. Improving Margin Profile

2014 was a bit of tougher year for New Flyer as it saw its profitability dip down
as it had to work through some low-margin inventory and was working through
the CTA aftermarkets contract (also lower margin). But we have seen margins
reach a floor in Q3/14 and have now shown an upward trajectory. This reflects
higher margins per EU, and the completion of the CTA overhaul contract has
resulted in aftermarkets margins improving ~300 bps.
Exhibit 1. EBITDA Margin Improving
EBITDA Margins
12%
10%
8%
6%
4%
2%
Q2/15
Q1/15
Q4/14
Q3/14
Q2/14
Q1/14
Q4/13
Q3/13
Q2/13
Q1/13
0%
And looking ahead, we continue to see New Flyers margin profile improving as it
goes through its restructuring and transitions the production of NABI bus models
from the Anniston, AL facility to the Xcelsior platform. New Flyer expects to
invest, in total, ~$20 million in direct operating costs and capex to complete the
transition. The company has incurred $13.2 million ($6.0 million of costs and
$7.2 million in capex). We expect a quick payback from this investment with
New Flyer noting that the annualized cost savings are expected to be ~$14
million. This restructuring is expect to be completed in H2/15.
2. Sum Of The Parts Suggests Higher Valuation

Given the growing aftermarkets operations, we believe a sum of the parts
analysis is an appropriate tool to look at the embedded value within New Flyer.
Using a sum of the parts model, and applying a 7x multiple for the bus
manufacturing operations and 10x for the aftermarkets business would
yield a value for New Flyer of C$20+/share.
275
Exhibit 2. New Flyer Sum Of The Parts

New Flyer Sum Of The Parts
Industry Bus Demand (EUs)
5300
NFI Market Share
48%
NFI EU Shipments
EBITDA Per EU
Bus EBITDA
Bus Multiple
2518
$29,000
7.0x
$511,052,500
Aftermarket Rev enue
$320,000,000
Aftermarket EBITDA
Aftermarkets Multiple
Aftermarkets EV
=> 2016 Aftermarkets estimate
19%
$60,800,000
10.0x
$608,000,000
Total EV
$1,119,052,500
Net Debt
$244,654,000
Equity Value
$874,398,500
Shares Outstanding
=> Assume this is "normalized" bus margins and benefit of cost cutting
$73,007,500
Bus EV
Aftermarket EBITDA Margin
=> Current industry deliv eries but could peak at 6,500 EUs
=> Assume current net debt lev el
55,510,000
Per Share (US$)
$15.75
Per Share (C$)
$20.48
=> Assume 1.30 FX rate
Our analysis in the exhibit above though assumes current industry demand but
we believe that this could peak-out at 6,500 EUs. If we assume that level of
industry deliveries and New Flyer maintains it market share, all else equal, this
would add another ~$2.75/share in value.
3. Free Cash Flow Stepping Up

When we look out into 2016, we are forecasting New Flyer will generate $1.00 in
FCFPS with the companys FCF yield having hovered this year between 5.5%7.5%. We derive our FCF estimate as we forecast ~$70 million in operating cash
flow and ~$15 million of capex next year. This compares to ~$0.60 in FCFPS
back in 2014. We view New Flyer as a good FCF story given that it is a low
capex business resulting in a higher FCF conversion rate as it expands its margin
profile.
Taking our 2016 FCFPS estimate and using the FCF yield range of 5.5%7.5% would infer a value for New Flyer of ~C$17.50 to ~C$23.50
assuming the current C$/US$ exchange rate.
We believe in the improving FCF profile will allow New Flyer to pursue a dividend
growth model (raised the dividend by 6% to C$0.62 when it released Q1/15
results) and pursue acquisitions in the aftermarkets space. While the company
has a 48% market share in the concentrated heavy duty bus segment, the
aftermarkets industry is much more fragmented. We view this opportunity
positively given the higher margins and lower cyclicality associated with
aftermarkets.
276
Exhibit 3. Opportunities To Consolidate Aftermarkets Segment
4. Industry Fundamentals Look Good

With the improving U.S. economy, we have a constructive outlook on the heavy
duty bus market. As we have seen over the past number of quarters, the total
bid universe of EUs remains high, but more interestingly, we have seen a stepup in the total active bids New Flyer is working on. We believe this is a good
barometer for potential future orders, especially given New Flyers position as
the dominant supplier.
Exhibit 4. Transit Demand Improving
Total Bid Universe (EUs)
Total Active Bids (EUs)

25,000
9,000
8,000
20,000
7,000
6,000
15,000
5,000
4,000
10,000
3,000
2,000
5,000
1,000
Q2/15
Q1/15
Q4/14
Q3/14
Q2/14
Q1/14
Q4/13
Q3/13
Q2/13
Q1/13
Q2/15
Q1/15
Q4/14
Q3/14
Q2/14
Q1/14
Q4/13
Q3/13
Q2/13
0
Q1/13
Taking Up Estimates
New Flyer provided the following guidance:
New Flyer believes pricing in certain types of bus competitions has
normalized and expects that bus margins realized during 2015 will be, on
average, higher than those realized during 2014.
277
During the first week of July 2015 there were no scheduled assembly line
entries (vacation time). This resulted in a reduction of ~35 EUs being
entered into production. New Flyer expects an average line entry rate of
~50 EUs per available production week for 2015.
New Flyer expects the core aftermarket parts revenue growth at ~5% in
2015. The aftermarket revenue generated from CTA mid-life upgrade
program ended as of June 2015, which represented 18.6% of the total
aftermarket revenue during H1/15
We have increased our earnings estimates for New Flyer primarily to reflect
increased margin assumptions.
Summary Of Changes
2015E
2016E
Before
After
Before
After
EUs
2,496
2,476
-0.8%
2,500
2,500
0.0%
Revenue
1,253
1,205
-3.8%
1,250
1,231
-1.5%
EBITDA
64
72
12.5%
69
80
15.9%
Revenue
332
326
-1.8%
321
310
-3.4%
EBITDA
60
61
1.7%
58
58
0.0%
Bus Manufacturing
Aftermarkets
Source: CIBC World Markets Inc.
Our 2015 and 2016 EBITDA estimates increase to $133 million (from $124
million) and $138 million (from $127 million) respectively. We raised our price
target to $19.50 from $16.50 as we use an 8x EV/EBITDA multiple on our 2016
estimate. We increased our price target multiple by 0.5 points to reflect the
increasing contribution from aftermarkets.
Record Q2 Results
New Flyer reported a solid set of Q2/15 results. While revenue of $375 million
(up 8.2% Y/Y) was lower than our estimate of $388 million (consensus of $380
million), adjusted EBITDA came in at $39 million, up 45.3% Y/Y, and versus our
estimate of $32 million and consensus of $31 million. The main variance versus
our EBITDA estimate was higher margins in bus manufacturing, attributed to
favorable sales mix and the cost savings achieved from the restructuring
(i.e. transitioning the NABI bus to Xcelsior). While we saw New Flyers bus
inventory increase by 63 EUs during the quarter, thus negatively impacting
working capital, the company noted that it expects to reduce the excess bus
inventory by year end.
Bus Manufacturing: Q2/15 Bus Manufacturing revenue was $286 million, up
7.5% Y/Y, and versus our estimate of $297 million. While the company reported
a higher average selling price per EU, up 5.3% Y/Y to ~$481,000, this was
below our estimate of ~$500,000, with the company delivering 594 units (prereleased), up 2.1% Y/Y. Bus manufacturing EBITDA during the quarter was $22
million, up from $14 million last year, and versus our estimate of $16 million
primarily reflecting higher margins (up ~2.2 pts Y/Y to 7.8% and versus our
estimate of 5.3%).
278
Aftermarkets: Aftermarkets revenue was $89 million, up 28.3% Y/Y, and

versus our estimate of $91 million. Excluding the CTA mid-life overhaul
program, revenue was $72 million, essentially flat Y/Y in the core
business. EBITDA for the quarter was $17 million, up 28.3% Y/Y and versus our
estimate of $16 million with margins slightly better than expected reflecting
more favorable product mix.
Order Conversion Update: Recall, in its Q2/15 orders and backlog press
release, New Flyer noted there were new firm and option orders of 1,238 EUs
that were pending from customers where approval of the award has been made
but purchase documentation had not yet been received. In regard to these
pending rewards, New Flyer has now received contracts for 513 EUs, which will
be included in the Q3/15 backlog.
Price Target And Key Risks

We derive our C$19.50 price target by applying an ~8x EV/EBITDA multiple to
U.S. economy.

costs.
279

F2013
Q1/F14
Q2/F14
Q3/F14
Q4/F14
F2014
Q1/F15
Q2/F15
Q3/F15E
Q4/F15E
F2015E
F2016E
Rev enue
$1,199,424
$323,865
$346,484
$360,762
$419,989
$1,451,100
$380,301
$375,012
$371,444
$404,970
$1,531,727
$1,541,809
Cost of Sales
$1,078,657
$293,851
$309,256
$326,482
$383,228
$1,312,817
$340,674
$326,581
$332,129
$362,982
$1,362,366
$1,364,847
Gross Profit
$120,767
$30,014
$37,228
$34,280
$36,761
$138,283
$39,627
$48,431
$39,315
$41,988
$169,361
$176,962
SGA
$26,082
$10,348
$10,262
$8,583
$1,725
$30,918
$8,213
$9,240
$9,286
$10,124
$36,863
$38,545
EBITDA
$94,685
$19,666
$26,966
$25,697
$35,036
$107,365
$31,414
$39,191
$30,029
$31,863
$132,498
$138,416
Amortization
$28,001
$7,718
$8,131
$10,012
$9,976
$35,837
$9,507
$9,845
$9,841
$9,753
$38,946
$37,782
FX loss (gain)
$118
$802
$387
$226
$132
$0
($1,455)
$688
$0
$0
($767)
$0
Operating Earnings
$66,566
$11,146
$18,448
$15,459
$24,928
$69,981
$23,362
$28,658
$20,188
$22,111
$94,318
$100,634
Unrealized FX Loss
$2,146
$380
($1,000)
$117
($317)
$0
$1,914
($829)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$15,457
$762
$6,685
$2,561
$9,353
$19,361
$3,209
$4,846
$0
$0
$8,055
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
EBIT
$48,963
$10,004
$12,763
$12,781
$15,892
$51,440
$18,239
$24,641
$20,188
$22,111
$85,178
$100,634
$8,749
$2,257
$2,257
$2,203
$2,180
$8,897
$2,334
$2,200
$2,409
$2,409
$9,635
$9,673
Accretion In Carry ing Value Of Long-Term Debt
$2,208
$540
$549
$565
$575
$2,229
$584
$598
$598
$598
$2,378
$2,392
Other Interest And Bank Charges (Recov ered)
$2,857
$823
$1,190
$713
$795
$3,521
$726
$602
$600
$600
$2,528
$2,400
Fair Market Value Adjustment On Cross-Currency Interest Rate Sw ap
$532
($314)
$377
($785)
($53)
($775)
$487
($310)
$0
$0
$0
$0
Interest Ex pense
$14,346
$3,306
$4,373
$2,696
$3,497
$13,872
$4,131
$3,090
$3,607
$3,607
$14,434
$14,375
EBT
$34,617
$6,698
$8,390
$10,085
$12,395
$37,568
$14,108
$21,551
$16,581
$18,504
$70,744
$86,260
Income Tax Ex pense
$7,856
$1,214
$4,827
($160)
$4,968
$10,849
$3,253
$9,181
$5,286
$5,671
$23,392
$23,808
Net Income
$26,761
$5,484
$3,563
$10,245
$7,427
$26,719
$10,855
$12,370
$11,295
$12,832
$47,352
$62,451

Unusuals
280
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Prior
$31.4A
$32.1E
$29.7E
$31.0E
$124.2E
2015 Current
$31.4A
$39.2A
$30.0E
$31.9E
$132.5E
2016 Prior
--
--
--
--
$126.9E
2016 Current
--
--
--
--
$138.4E
281

10
282

Abbreviation
Rating
Description
SO
Sector Outperformer
SP
Sector Performer
SU
NR
Not Rated
Restricted
Stock Ratings
O
Overweight
Market Weight
Underweight
NA
None

(as of 07 Aug 2015)
Count
Percent
155
42.6%
164
45.1%
36
9.9%
2.2%
Restricted

Restricted
Count
Percent
147
94.8%
156
95.1%
31
86.1%
100.0%

(as of 07 Aug 2015)
Count
Percent
100.0%
Restricted
Count
Percent
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Restricted
0.0%

11
283
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
05/08/2015
07/15/2015
12
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
14.69
15.77
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
15.75
16.50
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
284
Legal Disclaimer
and recommendations expressed herein constitute judgments as of the date of this report and are
13
285

subject to change without notice.
14
286
Canada Edition
July 23, 2015

New Flyer Industries jumps 24% in
2015, outperforming 86% of the
market
company by market cap, jumped CAD3.12 (or 23.5%) year
Fig 1: Stock Summary

52-Week Range
CAD11.78-CAD16.61
Sector
Auto
Market Cap
CAD909.7 million (US$698.7
to date in 2015 to close at CAD16.39. This means the stock

has outperformed 86% of Canada-listed stocks in 2015.
million)
Shares Outstanding
55,505,604
YTD, this is a relative price increase of 26%. The average
ISIN
CA64438T4019
daily volume of 80,581 shares so far in 2015 was 1.3 times the
PermID
1-4295861010
average daily volume in 2014. In 2015 the market cap has
89
Compared with the S&P/TSX 60 Index which has fallen 2.5%
jumped CAD248.6 million (US$190.9 million).
Fig 2: Financial Summary

Year ended
Dec 2014
Dec 2013
Dec 2012
Sales (USD)
1.2B
949.2M
664.3M
Pretax (USD M) 31.9
27.4
7.7
Net (USD M)
22.7
21.2
7.1
EPS (CAD)
0.5303
0.5398
0.2169

following:
In the last three months the stock has hit a new 52week high nine times, pointing to a significant uptrend;
also, the number of rises outnumbered falls 32:31 or
1.03:1.
"An earnings-to-price yield of at least twice the triple-A
bond"; the stock's earning yield of 3.2% is 2.1 times the
triple-A bond yield of 1.5%.
26-day EMA.
bond yield of 1.5%.
indicator.
It is beating 84% of the market the past 6 months.
Fig 3: Global Rank out of 45,084

stocks
Description
Value
Rank
Quartile
MCap (US$)
698.7M
9572
Top
Total Assets (US$)
1B
8518
Top
Revenue (US$)
1.2B
5208
Top
Net Profit (US$)
22.7M
9622
Top
Return on Equity %
5.7
17592
Second
Net Profit Margin %
1.8
21811
Second
Price Earnings
30.9
16162
Second
PV$1000 (1Year) US$*
1,133.4
12198
Second
US$* Change (1Year) %
9.0
12208
Second
Rel Strength 6 Mo (US$)
75
11284
Second
* 1 year ago CAD 1 equalled USD 0.931

Jul 23, 2015: CAD 1 equals USD 0.768
Page 1
287
Canada Edition
Analysis
Bullish Signals
of 84 which means it is beating 84% of the market.
Also, the relative strength percentile is rising at 84 for 6
months, 89 for 3 months and 90 for 1 month.
The Price/MAP 200 of 1.18 for New Flyer Industries is
higher than the Price/MAP 200 for the S&P/TSX 60 Index
of 0.5.
high nine times, pointing to a significant uptrend.
In the past 200 days this ratio has exceeded 1.18 just
thrice suggesting a resistance level. The stock is trading
CAD94.
Fig 4: Present Value of CAD1000


ago:
Fig 5: Present Value of USD1000

3 years Multiplier in USD = 1.9x

Avg annual cpd gr rate (CAGR) in USD = 24.4 %
Undervaluation:
yield of 1.54%.
3 years Multiplier in CAD = 2.5x

Avg annual cpd gr rate (CAGR) in CAD = 34.9 %

bond yield of 1.5%.
Page 2
288
Canada Edition
[pass mark >=5 ]:
Fig 6: Bullish Indicators and Rank

in Market
Description
Value
Rank In Market
Price/MAP50
1.06
In Top 9%
Price/MAP200
1.18
In Top Quartile
CAD1.6 billion
(US$1.2 billion)
In Top Quartile
MCap
US$698.7 million
In Top Quartile
Turnover in Quarter
CAD91.9 million
In Top Quartile
84
In Top Quartile
Annual Revenue
Relative Strength
(6M)

margin of safety.
The Enterprise Value/EBITDA multiple of 11.5 compares
unfavourably with sector average of 6.5.
ROE
Profit
Margin
Asset
Turnover
Equity
Multiplier
Current
Year
5.7
1.8
1.2
2.5
Previous
Year
5.8
2.2
1.0
2.5
Fig 7: Bearish Indicators and Rank

in Market
Description
Bearish Signals
suggests the climb might be peaking.
The stock is overbought according to the Williams % R
indicator of -14.3.
The Stochastic indicator of 90.0 has broken through the
overbought line of 80; this indicates the price is close to
its 14-day high and is likely to revert to a downtrend.
Value
Rank In Market
Return on Assets
[ROA] %
2.2
In Bottom Quartile
EBITDA Margin %
6.4
In Bottom Quartile
Price Earnings
30.8
In Bottom Quartile
Net Profit Margin %
1.8
In Bottom Quartile
Overvaluation:
P/E of 13.5.

benchmark of 5.
Page 3
289
Canada Edition

Volatility
The stock traded between a 52-week low of CAD11.78 and a
high of CAD16.61. The average daily volatility of 2.0% places
the stock in the 3rd quartile in the market meaning it is mildly
volatile.
Fig 8: Price High Low Close
PVCAD1,000
Trailing Qtr
Trailing Yr
Trailing 3 Yrs
CAD1,153
CAD1,357
CAD2,475
Auto sector
937
918
1,944
S&P/TSX 60
Index
933
974
1,273
NFI
Fig 10: Turnover Rate & Turnover

Period
Fig 11: Trailing 3 months

Turnover
US$70.6 million
Volume
6,017,334
1.2
Fig 9: Shareholder Returns

Trailing quarter: The stock rose 32 times (50.8% of the time)
and fell 31 times (49.2% of the time). The aggregate volume
was 1.2 times average trading of 6.9 million shares. The value
of CAD1,000 invested 3 months ago is CAD1,153 [vs 933 for
the S&P/TSX 60 Index], including a capital gain of CAD142
and dividend reinvested of CAD11.
Trailing 12 Months: The stock rose 132 times (52.6% of the
time), fell 112 times (44.6% of the time) and was unchanged 7
times (2.8% of the time). The value of CAD1,000 invested a
year ago is CAD1,357 [vs 974 for the S&P/TSX 60 Index],
including a capital gain of CAD305 and dividend reinvested
of CAD52.
Page 4
290
Canada Edition

Fig 12: Weekly Price Volume
Dynamics (Last 12 Weeks)
Fig 15: YTD Comparison Stock

Sector Index (%)

Untraded
Fig 13: Price/Moving Avg Price

[P/MAP200]
Fig 14: Trailing Price Change %

Price Change %
Quarter
Year
3 Years
NFI
14.22
30.55
138.07
Auto
-6.3
-8.23
94.42
S&P/TSX 60 index
-6.7
-5.25
27.34
Page 5
291
Canada Edition
Fig 16: Year-on-Year Comparison (Trailing year - ended 30 Jun)

2015
2014
2013
2012
Price 30 Jun (CAD)
15.48
11.95
10.7
6.31
% Price Change
29.5
11.7
69.5
Avg Daily Volume
77,767
58,123
56,320
84,534
VWP (CAD)
13.73
10.97
8.89
6.34
Turnover Period
2 yrs 8 mo
3 yrs 4 mo
3 yrs 3 mo
Price Range (CAD)
11.78 - 15.8
9.55 - 12.12
6.21 - 10.81
Index Change %
-2.1
24.5
4.8
Relative Price Change %
31.6
-12.8
64.7
5.05 - 8.09
In the past 3 years average daily volume has jumped 38.1% from 56,320 shares to 77,767 shares. Turnover period has
decreased from 3 years 3 months to 2 years 8 months. This indicates a larger number of speculators on the share register,
making a long-term investment less safe.
Fig 17: Price Volume Trend: Trailing Quarter
Page 6
292
Canada Edition
Fig 18: Stock v Index (Trailing Year)
Fig 19: Fibonacci Retracement
Page 7
293
Canada Edition
Ranking
Fig 20: Global Peer Group Analysis (all figures in USD)
Name
Relative Str.
(6 mo)
MCap
PV $1000
(1 yr)
Revenue
Net Profit
Total Assets
Changchun Eurasia Group
55
742.5M
1,631.7
1.9B
48.1M
2.1B
SAF-Holland
75
738.2M
1,103.7
1B
35.5M
717.9M
Otokar Otobus Karoseri Sanayi
30
728.4M
1,228.7
454.5M
26.9M
457.6M
New Focus Auto Tech Holdings
99
708.4M
2,193.6
232.9M
(7M)
191.3M
75
698.7M
1,133.4
1.2B
22.7M
1B
TSRC
28
689.6M
592.1
1B
36.5M
1.1B
DaikyoNishikawa Corporation
77
688.7M
1,958.3
879M
35.2M
798.9M
Wheels India
71
684.7M
1,640.3
284.6M
4.7M
195.3M
Kirloskar Oil Engines
62
649.1M
1,074.1
387.9M
28M
290.6M
Global Peer Group Analysis (continued)

Code
Country
Last Price
P/E
P/S
600697
CN
CNY28.99
15.2
0.4
SFQ
DE
EUR14.82
20.6
0.7
12.4
108.3
7.4
OTKAR
TR
TRY82.90
32.4
1.7
19.3
181.6
25.0
00360
HK
HKD1.46
3.0
20.3
62.0
39.7
NFI
CA
CAD16.39
30.8
0.6
29.2
1.3
2103
TW
TWD26.10
20.0
0.7
1.6
79.8
43.2
4246
JP
JPY4,700.0
19.6
0.8
2.5
56.5
3.8
WHEELS
IN
Rs1,244.80
2.2
11.4
19.2
22.5
KIRLOSENG
IN
Rs285.90
1.7
3.3
4.8
11.4
23.2
P/Book
Turnover
Rate (%)
% Disc to 52w Hi
30.1
Fig 21: Recent Analyst Recommendations

Date
Brokerage
Action
Past Rating
Current Rating
20-Jul-2015
Canaccord Genuity
Boost Price Target
Buy
16-Jul-2015
CIBC
Boost Price Target
Sector Perform
16-Jun-2015
BMO Capital Markets
Lower Price Target
Market Perform
Page 8
294
Canada Edition
Ranking (continued)
Fig 22: Rising Relative Strength
Sector Sorting
For Company searches, or for sorting by stocks and
variables, an interactive version of today's Table is
available here
Page 9
295
Canada Edition
Company Overview and Regulatory Announcements

Activities

Operation.
Hon. Brian Tobin

Chairman
Glenn Asham
CFO
Paul Soubry
President
Industry Group
Economic Sector
Consumer Cyclicals
Business Sector
Stock BUZZ
Adam Gray
Director
John Marinucci
Director
Phyllis Cochran
Director
here
Issued Capital
Krystyna Hoeg
Director

capitalisation is CAD909.7 million (US$698.7 million). It is
V. James Sardo
Larry Edwards
Colin Pewarchuk
Company Secretary
Annual Meetings
Dividends
July 15: New Flyer Industries announces dividend
5.17c per share. The record date is July 31, 2015 and it is
June 15: New Flyer Industries announces dividend

5.17c per share. The record date is June 30, 2015 and it is
payable on July 15, 2015.
May 15: New Flyer Industries announces dividend

5.17c per share. The record date is May 29, 2015 and it is
payable on June 15, 2015.
Page 10
296
Canada Edition

January 28: New Flyer Industries announces dividend

5.0c per share. The ex dividend date is January 28, 2015 and
it is payable on February 16, 2015.
November 26 2014: New Flyer Industries announces

dividend
5.0c per share. The ex dividend date is November 26, 2014
and it is payable on December 15, 2014.
October 29 2014: New Flyer Industries announces

dividend
5.0c per share. The ex dividend date is October 29, 2014 and
it is payable on November 17, 2014.
September 26 2014: New Flyer Industries announces

dividend
5.0c per share. The ex dividend date is September 26, 2014
and it is payable on October 15, 2014.
August 27 2014: New Flyer Industries announces

dividend
5.0c per share. The ex dividend date is August 27, 2014 and it
is payable on September 15, 2014.
July 28 2014: New Flyer Industries announces dividend

5.0c per share. The ex dividend date is July 29, 2014 and it is
Performance
and Backlog
[News Story]
Source: TMX Group
March 18: New Flyer Announces Fourth Quarter and

Fiscal Year 2014 Results
Fiscal 2014 revenue, Adjusted EBITDA and net earnings were
$1.45 billion, $107.4 million and $26.7 million, respectively,
compared to the same measures in Fiscal 2013 of $1.20
billion, $94.7 million and $26.8 million, respectively.
Estimated bus market share of EUs delivered for Fiscal 2014
was approximately 48%, an increase from 43% for Fiscal 2013.
Press Releases
July 15: New Flyer Announces Second Quarter 2015
Orders and Backlog
activity and backlog update for the second fiscal quarter
ended June 28, 2015 ("Q2 2015").
Bus Deliveries, Order Activity, and Option Expiry
New Flyer delivered 594 equivalent units ("EUs") in Q2 2015, an
increase of 12 EUs compared to 582 EUs in the second fiscal
quarter ended June 29, 2014 ("Q2 2014").
<a
href='http://tmx.quotemedia.com/article.php?newsid=76764
906&qm_symbol=NFI'>Read more...</a>
Source: TMX Group
July 10: New Flyer to announce 2015 second quarter

August 7, 2015
July 08: Orange County Awards New Flyer Contracts for

218 Xcelsior Buses
[News Story]WINNIPEG, July 8th, 2015 /CNW/ - (TSX: NFI) (TSX:
NFI.DB.U). New Flyer of America Inc., a subsidiary of New Flyer
Industries Inc ("New Flyer" or the "Company"), the leading
and Canada, announced today that Orange County
Transportation Authority ("OCTA") has approved two
contracts to purchase 218 (234 equivalent units or "EUs")
Xcelsior compressed natural gas (CNG) heavy-duty buses.
June 30: Seattle's King County Metro Exercises Options

for 138 New Flyer Xcelsior Buses
[News Story] WINNIPEG, June 30, 2015 (TSX: NFI) (TSX:
and Canada, announced today that King County Metro of
Seattle, Washington has exercised options for an additional
138 (235 equivalent units or "EUs") heavy-duty transit buses in
a variety of configurations including; 40 and 60-foot Xcelsior
diesel, diesel-electric hybrid buses and electric-trolleys.
Page 11
297
Canada Edition

May 21: Community Transit exercises options for 29

New Flyer Xcelsior(Registered) buses

[News Story]WINNIPEG, May 21, 2015 (TSX: NFI) (TSX: NFI.DB.U)

New Flyer of America Inc., a subsidiary of New Flyer Industries
Inc. ("New Flyer" or the "Company"), the leading
and Canada, announced today that Community Transit in
Everett, Washington exercised options for 29 heavy-duty 40foot and 60-foot Xcelsior(Registered) clean diesel buses (39

Share Units
819 shares worth CAD12,596. The transaction date was June
26, 2015. The shares last traded at CAD15.17.

Share Units


June 12: Honolulu Awards New Flyer a Contract for up

to 20 60-foot Xcelsior Transit Buses
WINNIPEG, June 12, 2015 (TSX: NFI) (TSX: NFI.DB.U) New Flyer
of America Inc., a subsidiary of New Flyer Industries Inc. ("New
announced today that Oahu Transit Services Inc., located in
Honolulu, Hawaii awarded New Flyer a contract for up to 20
heavy-duty 60-foot, clean diesel transit buses (40 equivalent
units or "EUs").
May 22: Dallas Exercises Options For 63 Additional New

Flyer Buses
[News Story] WINNIPEG, May 22, 2015 /CNW/ - (TSX: NFI) (TSX:
and Canada, announced today that the Dallas Area Rapid
Transit "(DART)" has exercised options for 17 40-foot NABI LFW
and 46 duty 40-foot New Flyer Xcelsior compressed natural
gas ("CNG") buses.
May 07: New Flyer Announces First Quarter 2015 Orders

and Backlog
[News Story] WINNIPEG, April 14, 2015 /CNW/ - (TSX:NFI)
activity and backlog update for the first fiscal quarter ended
March 29, 2015 ("Q1 2015").
May 07: Events Calendar: New Flyer to announce 2015

first quarter results on May 6, 2015 and hold conference
call on May 7, 2015
WINNIPEG, April 14, 2015 /CNW/ - (TSX:NFI) (TSX:NFI.DB.U)
release its 2015 first quarter results on Wednesday May 6,
2015.


buses.
Page 12
298
Canada Edition

March 14: Las Vegas awards New Flyer a contract for

up to 305 Xcelsior(Registered) buses

[News Story] WINNIPEG, March 13, 2015 /CNW/ - (TSX: NFI)

that the Transportation Commission of Southern Nevada
("RTC") has awarded New Flyer a contract for up to 305 (425
equivalent units or "EUs") heavy-duty 40-foot and 60-foot
Xcelsior(Registered) compressed natural gas ("CNG") buses.

April 01: New Flyer's Winnipeg Bargaining Unit

Collective Bargaining Agreement Extension
[News Story]WINNIPEG, March 31, 2015 /CNW/ - (TSX: NFI)
that the Company and members of the UNIFOR main
collective bargaining unit at New Flyer's Winnipeg facility are
continuing negotiations towards a new collective bargaining
agreement.
April 01: New Flyer's Winnipeg, Manitoba Union to Hold

Ratification Vote on New Collective Agreement
[News Story]WINNIPEG, April 1, 2015 (TSX: NFI) (TSX: NFI.DB.U)
and the United States announced today that the Company
and the UNIFOR main collective bargaining unit at New
Flyer's Winnipeg facility have reached a tentative new threeyear collective bargaining agreement.
March 18: Events Calendar: New Flyer to Announce

2014 Year-End Results on March 18, 2015 and Hold
Conference Call on March 19, 2015
WINNIPEG, March 3, 2015 /CNW/ - (TSX:NFI) (TSX:NFI.DB.U)
release its 2014 fiscal year-end results on Wednesday March
18, 2015.
Page 13
299
Canada Edition
Glossary
Capital Gain/Loss from n Years Ago to n-1 Years Ago:
Current Ratio:
Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)
Current Assets/Current Liabiliites (times)
Dividend Yield:
Earnings Yield:
Dividend Per Share/Share Price (%)
Earnings Per Share/Share Price (%)
Moving Average Price (n periods) (Fig 6, 13):
PVCAD1000 (Fig 9, 4, 5):
Sum of Prices for each Period/Number of Periods
Present value of CAD1000 invested 1 year/'n' years ago
Price Close/Moving Avg Price (Fig 6, 13):
Price/Earnings (Fig 21, 3, 7):
Latest Price/Moving Average Price
Share Price/Earnings Per Share (times)
Price/NTA (Fig 21):
Price/Sales (Fig 21):
Closing Share Price/Net Tangible Assets Per Share (times)
Share Price/Sales Per Share (times)
Relative Price Change (Fig 16):
Relative Strength (n-th Period) (Fig 1, 6, 22, 3, 20):
Today's Relative price change with respect to Benchmark Index
Price close today/Price close 'n' periods ago, then ranked by

percentile within the entire market.
Return on Assets (Fig 7):
Return on Equity (Shareholders' Funds) (Fig 3):
Net Profit/Total Assets (%)
Net Profit/Net Assets (%)
Turnover (Fig 6, 11):
Turnover Period (Fig 10, 16):
Last Price * Volume
Time Period required for trading all Outstanding Shares
Turnover Rate (Fig 21, 10):
Volume Index (Fig 11):
Canadian dollar value of annual trading volume as a percentage of

market capitalisation
Number of shares traded in the period/Average number of shares

traded for the period
Volume Weighted Price (VWP) (Fig 16):

The Volume Weighted Price (VWP) is the summation of turnover
divided by total volume in the same period.
BuySellSignals Financial Research provides equity research on over 48,000 companies listed in
more than 90 countries and 120 markets across the world. BuySellSignals believes that every
stock has a story to tell and that this story changes every day. To capture this story,
BuySellSignals offers the latest pertinent and comprehensive information so that investors can
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For any enquiries, please email: feedback@buysellsignals.com
Disclaimer: While this document is based on information sources which are considered reliable, it has been prepared without consideration of
your specific investment objectives, financial situation or needs, so you should carry out your own analysis or seek professional investment
advice before an investment decision is made. The document contains unbiased, independent equities data from BuySellSignals (AFS Licence
222756), who provide round the clock data on every stock and sector. BuySellSignals is not a broker, and does not have an executing,
corporate advisory or investment banking function. BuySellSignals, its directors, employees and consultants do not represent, warrant or
guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.
The data is sourced from annual reports and company releases and may not be fully up to date. It should be used as a guide only.
Page 14
300

Auto Components


20 July 2015
BUY
unchanged
PRICE TARGET
from C$16.00
Price (17-Jul)
Ticker
C$16.50
NFI-TSX
52-Week Range (C$):

Avg Daily Vol (M) :
Market Cap (C$M):
Dividend /Shr (C$):
Website:
FYE Dec
Q2/15 Adjustments: Minor changes from reported

C$17.00
12.04 - 16.55
0.08
916
0.62
3.7
62.0
6.8
210.9
www.newflyer.com
2014A
2015E
2016E
2017E
1.18
1.18
0.5
1.37
1.30
0.4
1.62
1.52
0.4
1.72
1.61
0.4
FCF /Shr (C$)

Previous
Payout Ratio (x)
1,451 1,592 1,598 1,637

1,451 1,561 1,580
1,618
6
14
14
0
Sales (US$M)
Previous
ROIC (%)
Quarterly FCF /
Shr
2014A
2015E
2016E
2017E
Q1
Q2
Q3
Q4
0.19
0.22A
0.44
0.47
0.29
0.39
0.42
0.44
0.32
0.38
0.38
0.41
0.38
0.38
0.37
0.40
17
16
Maintain BUY for solid dividend yield, potential value from surplus capital generation
We continue to recommend that investors BUY NFI for a solid investment return from a
nice dividend yield and projected share price appreciation plus upside potential from
deployment of surplus capital. We expect NFI to generate significant free cash ($3.88/
share in the next 3 years), which could be used to generate additional shareholder value.
We project a solid 6.8% and 22.7% one-year and two-year implied investment returns,
respectively, including a solid 3.7% annual dividend yield.
We benchmarked our orders and backlog forecasts to the reported data in the quarter.
We lowered our Q2/15 deliveries by 5%, but increased total firm backlog by 26% on
stronger-than-expected new firm orders. However, we do not read too much into it as
deliveries and orders are volatile on quarterly basis. The rest of our forecast was little
changed, other than a small reduction in 2015 deliveries.
2015 guidance suggests EBITDA improvement
NFI bus line entry guidance of 50 bus equivalent units (EUs), down 1 EU from previous
guidance suggests a low single-digit increase in bus deliveries in 2015. We expect
a slight increase in bus EBITDA/EU guidance, implying an 12% increase in bus
manufacturing EBITDA in 2015. The Aftermarket outlook is mixed, with core Aftermarket
sales expected to increase about 5%, but the one-off Chicago Transit Authority midlife extension project ended in mid-2015. We expect improved Aftermarket margins in
2015 based on current trends. Net, we expect this to translate into about 20% stronger
Aftermarket EBITDA. We expect the bus manufacturing and Aftermarket changes to net
to a 34% increase in consolidated EBITDA.
FCF takes a step back likely
We expect NFIs FCF to be quite negative in Q2/15 due to a 63 EU increase in
inventories. This and the 1 EU decrease in line entry rate are reportedly mostly due to the
switchover of the Anniston plant to NFIs Excelsior product.
15
14
13
12
Jul-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
Feb-15
Dec-14
Oct-14
Nov-14
Sep-14
Aug-14
11
NFI
Source:FactSet

Mid-term forecast relatively unchanged, target boosted on weak CAD

Our mid-term forecast is relatively unchanged as the Q2/15 developments do not appear
to have lasting implications. Our target was boosted C$1.00 to C$17.00 due to the
weaker CAD.
Unchanged valuation methodology
We maintain our valuation multiple at 7.5x EV/NTM EBITDA (or 7.5x Q1/16E EV /Q2/16E
- Q1/17E EBITDA), given that the stock has traded in this range for some time (average
of 7.5x over the past 60 months).
301

Q2/15 relatively unchanged on reported

data
data. Deliveries came in slightly below our expectations, but aftermarket revenues
look stronger than we expected. Net, our adjustments resulted in very slightly stronger
EBITDA.
We note the large increase in inventories resulted in a large decrease in our FCF
expectations in Q2/15, but we expect NFI to recover from this over the remainder of
2015. We have witnessed this pattern in the past.
Remainder of our forecast is unchanged

We do not believe the Q2/15 data has implications for our mid-term forecast.
with Figure 6.
Buy unchanged Target Price C$17.00 from C$16.00 | 20 July 2015
Auto Components 2
302

Dividend/share (C$)
% change
% change
EBITDA
EBITDA margin
2015E
New
Old
Fc s t
Fc s t
0.608 0.608
4%
4%
2016E
New
Old
Fc s t
Fc s t
0.620 0.620
2%
2%
2017E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2018E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2019E
New
Old
Fc s t
Fc s t
0.620 0.620
0%
0%
2014
0.59
n.m.
Q 1/15
0.15
0%
0.71
#N/A
0.55
97%
(0.89)
n.m.
0.33
n.m.
1.28
79%
1.24
73%
1.27
-1%
1.21
-2%
1.41
11%
1.32
9%
1.45
3%
1.36
3%
1.48
2%
1.40
2%
82%
27%
-17%
46%
48%
49%
49%
51%
44%
47%
43%
45%
42%
44%
1,451
21%
380
17%
393
14%
398
15%
1,592
10%
1,561
8%
1,598
0%
1,580
1%
1,637
2%
1,618
2%
1,676
2%
1,657
2%
1,714
2%
1,698
2%
91
6.3%
30
7.8%
31
8.0%
30
7.6%
123
7.7%
120
7.7%
124
7.8%
123
7.8%
132
8.1%
131
8.1%
134
8.0%
133
8.1%
137
8.0%
136
8.0%
Payout ratio
Revenue
% change
Q 2/15E
New
Old
Fc s t
Fc s t
0.152 0.152
4%
4%
46
(0)
65
24
20
19
18
17
17
16
16
16
16

Bus revenue/unit
Bus EBITDA/unit
Aftermarket EBITDA
2,437
465
24
50
572
508
26
17
594
508
26
16
625
508
26
14
2,486
508
26
60
2,447
508
26
58
2,535
511
27
56
2,500
511
27
56
2,584
514
29
57
2,548
514
29
57
2,634
517
29
58
2,596
517
29
58
2,679
520
29
59
2,648
520
29
59
New orders (units)

2,263
2,102
392
1,922
864
2,192
685
1,982
2,486
2,102
2,447
2,102
2,535
2,102
2,500
2,102
2,584
2,102
2,548
2,102
2,634
2,102
2,596
2,102
2,679
2,102
2,648
2,102
11.8%
11.9%
10.8%
10.5%
11.7%
11.7%
12.2%
12.2%
12.3%
12.3%
12.3%
12.3%
1.235
1.230
1.300
1.230
1.300
1.230
1.300
1.230
1.300
1.230
1.300
1.230
Return on capital
1
5.2%
1.104
7.6%
1.242
Auto Components 3
303

Forecast outlook

likely
NFI reduced guidance of line entry rates of 50 EUs/week from 51 EUs/week, largely
due to challenges related to the switchover of the Anniston facility to the Excelsior
bus. This implies a roughly 2% increase in deliveries in 2015 over 2014.
orders.
2015 bus margins expected to increase slightly

We expect slightly improved bus manufacturing margins, as measured by EBITDA/EU,
based on current trends. However, we continue to expect bus manufacturing margins
to remain well below pre-2011 levels as competition levels appear to have increased
despite a decrease in the number of competitors.

NFI continues to implement its $20 million program to consolidate it bus line-up into
Anniston, Al. to Excelsior production. This conversion is expected to generate lower

that this is not a capital-intensive project as it mainly focusses on business

NFI has experienced four years of significant cash outflows from NCWC. Q2/15
inventory developments look like another step back on this metric.
However, we believe the company was on the path to improve this situation as
inventories and receivables were coming down.
We believe NFI could be positioned for material cash generation from NCWC in H2/15
Future value enhancement coming on the agenda

As noted above, NFI appears to be positioned for improved FCF in coming years.
Accordingly, NFI should have the potential to consider shareholder value improvement
initiatives in coming years.
NFI emphasized that its focus is on its operational improvement projects this year
(Projects United and Convergence).
NFI has noted that value creation activities could include acquisitions or investments
in the bus industry or adjacent markets or direct shareholder value actions, which we
Auto Components 4
304

take to mean share buybacks and/or dividend increases. Indeed, NFI increased its
dividend 10.6% to C$0.62/year from C$0.585/year coincident with its Q1/15 results
release.
Auto Components 5
305

Valuation
range.
names (Figure 5).
Auto Components 6
306

Mar k et
Cur .
Eq ui ty Pr i ce :
Cur .
Year
Jul . 17, 2015
Di v.
2015
$16. 50
$0. 61
Di v.
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M )
EPS
3. 7%
$1. 37
4. 3%
De b t/
P/E
Gr o wth
Ca p ('15- '17)
44. 4%
$849 $1. 09 15. 2 31. 6%
3. 6%
67. 9%
15. 6 39. 4%
8. 8%
Chorus Aviation
2015
$6.65
$0.48
7.2%
$1.01
47.5%
$813 $0.86
7.7
92.3%
13.3%
Davis + Henderson
2014
$41.51
$1.28
3.1%
$2.19
58.4%
$4,382 $2.61
15.9
41.2%
9.3%
Westshore Terminals
2014
$31.19
$1.32
4.2%
$1.25
105.3%
$2,316 $1.90
16.4
0.0%
2.6%
Cineplex Galaxy
2015
$48.66
$1.56
3.2%
$1.86
84.0%
$3,069 $2.15
22.7
32.1%
15.3%
(average of 7.5x over the past 60 months). We think our target multiple is well
argument.
Auto Components 7
307


EBITDA
1-year
t arget
126.2
2-year
t arget
132.6
Multiplier
EV
7.5
946.8
(121.8)
825.0
7.5
994.3
(84.7)
909.6

62.0
13.30
17.00
62.0
14.67
19.00

0.62
17.62
1.24
20.24
6.8%
22.7%

3.6%
9.7%
3.3%
9.1%

2.1%
8.1%
FCFPS C$
1.65
1.73

We boosted our target price C$1.00 to C$17.00 on a relatively unchanged forecast

but weaker CAD (which boosted our translated target price).
We maintain our BUY rating as the 2-year projected return is more than 20%. Our
current target and estimated dividend currently produces a 6.8% one-year implied
investment return (including a 3.7% dividend yield).
Auto Components 8
308

F ree cash
Interest paid
Interest expense
Income taxes paid
Free cash flow
Exchange rate
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
28.7
(4.6)
4.0
(3.1)
2.1
(13.7)
(0.5)
(4.3)
1.3
0.8
(0.7)
(0.2)
9.8
1.252
12.3
8.1
(39.0)
59.4
3.5
(3.5)
7.6
(7.6)
(0.7)
(2.0)
0.8
(0.7)
17.7
1.235
21.9
8.4
48.3
(29.6)
3.5
(3.5)
8.8
(8.8)
(0.7)
(2.0)
0.8
(0.7)
16.1
1.300
20.9
8.6
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5

0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.22
0.15
0.39
0.15
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
40.8
(22.1)
3.1
(3.1)
8.8
(8.8)
(0.7)
(2.0)
0.8
(0.7)
16.1
1.300
20.9
8.6
78.8
3.1
14.1
(13.2)
27.3
(39.0)
(2.4)
(10.3)
1.3
3.1
(3.0)
(0.2)
59.7
1.300
76.0
33.8
72.3
7.2
11.9
(11.9)
32.8
(32.8)
(2.6)
(8.0)
3.1
(3.0)
69.0
1.300
89.7
34.4
79.3
4.8
11.5
(11.5)
36.3
(36.3)
(2.6)
(8.0)
3.1
(3.0)
73.5
1.300
95.6
34.4
81.5
4.0
11.1
(11.1)
37.7
(37.7)
(2.6)
(8.0)
3.1
(3.0)
75.0
1.300
97.5
34.4
83.1
4.0
10.7
(10.7)
39.1
(39.1)
(2.6)
(8.0)
3.1
(3.0)
76.6
1.300
99.6
34.4
55.5
55.5
55.5
55.5
55.5
55.5
55.5
0.38
0.16
0.38
0.16
1.37
0.61
1.62
0.62
1.72
0.62
1.76
0.62
1.79
0.62
Auto Components 9
309

Incom e statem ent
Revenues
EBITDA
Other
Other expenses
Pre-tax income
Income taxes
Net Income (loss)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
865.3 1,199.4
(810.2) ######
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
380.3
(352.1)
1.5
29.7
(9.5)
(1.9)
0.0
0.0
18.2
(2.3)
(0.7)
(0.5)
(0.6)
0.0
14.1
(3.3)
10.9
393.3
(361.8)
0.0
31.4
1.1
0.0
0.0
0.0
32.5
(2.3)
(1.1)
0.0
0.0
0.0
29.1
(9.6)
19.5
414.6
(383.4)
0.0
31.1
1.0
0.0
0.0
0.0
32.1
(2.3)
(1.2)
0.0
0.0
0.0
28.6
(10.8)
17.8
2015E
2016E
2017E
2018E
2019E
404.3 1,592.4 1,598.0 1,636.8 1,676.4 1,714.1

(373.7) (1,471.1) (1,473.7) (1,504.9) (1,541.9) (1,577.1)
0.0
1.5
0.0
0.0
0.0
0.0
30.6
122.8
124.3
131.9
134.5
137.0
0.9
(6.4)
4.3
5.5
6.4
7.0
0.0
(1.9)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
31.5
114.4
128.7
137.4
140.8
144.0
(2.3)
(9.3)
(9.3)
(9.3)
(9.3)
(9.3)
(0.8)
(3.8)
(2.6)
(2.2)
(1.8)
(1.4)
0.0
(0.5)
0.0
0.0
0.0
0.0
0.0
(0.6)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
28.4
100.2
116.7
125.9
129.7
133.3
(10.7)
(34.4)
(40.7)
(44.2)
(45.7)
(47.0)
17.7
65.8
76.0
81.7
84.1
86.3
0.75
0.63
(0.10)
0.58
0.87
0.26
0.15
0.19
0.28
0.15
0.29
(0.01)
0.15
0.32
(0.04)
0.15
0.38
0.49
0.59
1.18
0.71
0.15
0.22
0.55
0.15
0.39
(0.89)
0.16
0.38
0.90
0.16
0.38
0.74
0.61
1.37
1.28
0.62
1.62
1.27
0.62
1.72
1.41
0.62
1.76
1.45
0.62
1.79
1.48
52.3
58.9
55.5
55.6
55.7
55.7
55.6
55.8
62.0
62.0
62.0
60.4
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
17.4%
16.6%
0.0%
7.8%
13.5%
37.2%
4.0%
8.0%
14.9%
17.1%
6.0%
7.5%
-3.7%
-1.1%
6.0%
7.6%
9.7%
16.0%
4.0%
7.7%
0.3%
18.0%
1.9%
7.8%
2.4%
6.5%
0.0%
8.1%
2.4%
2.1%
0.0%
8.0%
2.2%
2.1%
0.0%
8.0%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
7.6%
11.8%
11.3%
11.5%
10.8%
11.7%
12.2%
12.3%
12.3%
Bus revenues
Bus sales growth
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
290.7
14.7
15.9%
5.1%
572
508
26
26
301.9
15.4
13.6%
5.1%
594
508
26
27
340.6
17.4
22.2%
5.1%
670
508
26
28
330.3
16.9
-1.9%
5.1%
650
508
26
26
1263.5
64.5
11.6%
5.1%
2,486
508
26
26
1296.0
68.4
2.6%
5.3%
2,535
511
27
27
1328.8
74.9
2.5%
5.6%
2,584
514
29
29
1362.4
76.4
2.5%
5.6%
2,634
517
29
29
1393.7
77.7
2.3%
5.6%
2,679
520
29
29
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
89.6
16.7
22.8%
18.6%
91.4
16.0
13.3%
17.5%
74.0
13.7
-9.8%
18.5%
74.0
13.7
-11.2%
18.5%
329.0
60.1
3.1%
18.3%
302.0
55.9
-8.2%
18.5%
308.0
57.0
2.0%
18.5%
314.0
58.1
1.9%
18.5%
320.4
59.3
2.0%
18.5%

EBITDA/sales
ROC
Segm ented data
Auto Components 10
310

Balance sheet
Cash
Accounts receivable
Inventories
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
7.6
186.9
232.0
3.5
0.1
0.0
0.0
430.0
Capital assets
Deferred charges
Intangible assets
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
64.3
0.0
539.1
67.9
0.0
0.0
1,101.4
65.5
0.0
544.5
67.9
0.0
0.0
1,151.2
Bank indebtedness
Deferred revenue
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
226.5
0.0
23.0
35.0
1.6
13.0
18.6
317.6

Long-term debt
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
0.9
2.9
105.5
201.0
2.2
13.9

Share capital
Retained earnings
CAPEX
Net debt
Book value / unit
0.0
480.8
(136.8)
0.0
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
0.0
594.5
(141.8)
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
0.0
594.7
(137.5)
2015E
2016E
2017E
2018E
2019E
21.1
204.4
223.1
3.8
0.1
0.0
0.0
452.4
21.1
204.4
223.1
3.8
0.1
0.0
0.0
452.4
55.0
196.3
226.7
3.6
0.1
0.0
0.0
481.6
95.6
201.1
230.3
3.7
0.1
0.0
0.0
530.8
138.5
206.0
233.8
3.8
0.1
0.0
0.0
582.1
182.8
210.9
237.4
3.9
0.1
0.0
0.0
635.1
66.7
0.0
549.8
67.9
0.0
0.1
1,144.7
67.8
0.0
555.2
67.9
0.0
0.1
1,143.4
67.8
0.0
555.2
67.9
0.0
0.1
1,143.4
62.7
0.0
576.6
67.9
0.0
0.2
1,189.1
58.9
0.0
598.0
67.9
0.0
0.3
1,255.9
56.0
0.0
619.4
67.9
0.0
0.4
1,325.9
54.0
0.0
640.8
67.9
0.0
0.5
1,398.3
43.8
218.7
0.0
23.0
35.0
1.6
13.0
17.8
352.8
7.6
236.0
0.0
23.0
35.0
1.6
13.0
17.1
333.1
0.0
230.0
0.0
23.0
35.0
1.6
13.0
16.3
318.8
0.0
230.0
0.0
23.0
35.0
1.6
13.0
16.3
318.8
0.0
220.2
0.0
23.0
35.0
1.6
13.0
14.2
307.0
0.0
224.9
0.0
23.0
35.0
1.6
13.0
13.2
310.7
0.0
230.5
0.0
23.0
35.0
1.6
13.0
12.2
315.2
0.0
236.1
0.0
23.0
35.0
1.6
13.0
11.2
319.8
0.9
2.9
107.5
201.0
2.2
13.9
0.9
2.9
109.5
201.0
2.2
13.9
0.9
2.9
111.5
201.0
2.2
13.9
0.9
2.9
111.5
201.0
2.2
13.9
0.9
2.9
119.4
201.0
2.2
13.9
0.9
2.9
127.3
201.0
2.2
13.9
0.9
2.9
135.2
201.0
2.2
13.9
0.9
2.9
143.1
201.0
2.2
13.9
(0.0)
190.2
279.4
3.7
0.1
0.0
0.0
473.2
0.0
594.7
(124.8)
(0.0)
205.0
251.3
3.9
0.1
0.0
0.0
460.2
0.0
594.7
(113.6)
0.0
594.7
(102.6)
0.0
594.7
(102.6)
0.0
594.7
(53.0)
0.0
0.0
0.0
594.7
2.2
594.7
59.8
594.7
119.6
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,101.4
1,151.2
1,144.7
1,143.4
1,143.4
1,189.1
1,255.9
1,325.9
1,398.3
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
5.5
119.4
5.5
178.8
5.5
149.2
5.5
127.1
21.9
127.1
12.0
134.3
12.1
139.0
12.2
143.0
12.3
147.0
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
210.9
2.1x
8.24
23.8x
262.3
2.4x
8.47
24.2x
226.1
1.9x
8.67
25.1x
197.4
1.6x
8.87
24.1x
197.4
1.6x
8.87
24.2x
163.6
1.3x
9.76
24.5x
122.9
0.9x
10.75
26.9x
80.0
0.6x
11.79
29.2x
35.7
0.3x
12.87
31.2x
Auto Components 11
311

Net income
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
10.9
4.2
5.3
0.0
0.0
3.4
0.0
1.9
0.0
0.7
(0.8)
0.4
(2.0)
24.1
4.6
28.7
19.5
4.3
(5.4)
0.0
0.0
2.0
0.0
0.0
0.0
0.7
(0.8)
0.0
0.0
20.3
(59.4)
(39.0)
17.8
4.3
(5.4)
0.0
0.0
2.0
0.0
0.0
0.0
0.7
(0.8)
0.0
0.0
18.7
29.6
48.3
Investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(4.3)
(4.3)
(5.5)
(5.5)
Financing
Share issuance
Dividends
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.7)
(34.1)
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
17.7
4.4
(5.4)
0.0
0.0
2.0
0.0
0.0
0.0
0.7
(0.8)
0.0
0.0
18.7
22.1
40.8
65.8
17.2
(10.7)
0.0
0.0
9.4
0.0
1.9
0.0
3.0
(3.1)
0.4
(2.0)
81.9
(3.1)
78.8
76.0
17.1
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
79.5
(7.2)
72.3
81.7
15.9
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
84.0
(4.8)
79.3
84.1
15.0
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
85.5
(4.0)
81.5
86.3
14.4
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
87.1
(4.0)
83.1
(5.5)
(5.5)
(5.5)
(5.5)
(20.8)
(20.8)
(12.0)
(12.0)
(12.1)
(12.1)
(12.2)
(12.2)
(12.3)
(12.3)
43.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.8)
37.0
(36.2)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(42.8)
(7.6)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(14.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(26.7)
(54.2)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.5)
(26.5)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
(0.2)
0.0
0.0
0.0
(0.2)
0.0
0.0
0.0
0.0
Net cash flow

1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
(9.9)
17.5
7.6
(7.6)
7.6
0.0
0.0
(0.0)
0.0
21.1
(0.0)
21.1
3.7
17.5
21.1
33.9
21.1
55.0
40.7
55.0
95.7
42.9
95.7
138.5
44.3
138.5
182.9
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
24.4
(44.5)
42.8
35.3
58.0
60.3
67.2
69.3
70.8
Auto Components 12
312

Investment risks
Auto Components 13
313


which is in-line with NFIs trading range in the past 60 months.
Rating
Coverage Universe
IB Clients
#
%
%
Buy
604
59.57%
31.13%
Hold
319
31.46%
13.79%
Sell
40
3.94%
5.00%
Speculative Buy
51
5.03%
52.94%
1014*
100.0%
relevant issuer.
Risk Qualier
Auto Components 14
314


H:C$7.25
08/13/12
H:C$8.00
09/19/12
H:C$8.25
11/14/12
H:C$8.75
01/11/13
H:C$9.25
01/29/13
H:C$9.75
02/06/13
H:C$10.00
03/25/13
H:C$10.25
04/18/13
B:C$11.25
06/24/13
H:C$11.75
08/07/13
H:C$11.25
11/07/13
B:C$12.00
01/15/14
B:C$12.50
03/23/14
18
16
14
12
10
8
6
H:C$11.50
05/11/14
Oct 2012
H:C$11.75
06/24/14
Jan 2013
H:C$12.00
07/16/14
Apr 2013
B:C$14.00
08/06/14
Jul 2013
H:C$14.00
11/09/14
Oct 2013
B:C$12.50
12/12/14
Jan 2014
H:C$14.00
01/12/15
Closing Price
Apr 2014
B:C$15.00
03/19/15
Jul 2014
Oct 2014
Jan 2015
Apr 2015
Jul 2015
B:C$16.00
05/11/15
Target Price
Online Disclosures
General Disclosures
Auto Components 15
315

account.
Inc.
Auto Components 16
316


regulated by ASIC.
Auto Components 17
317
COMPANY UPDATE
NFI | TSX
$15.77
Rating: Outperform
Total Return: 21.2%
Yield: 3.9%
July 16, 2015
Q2/15 Orders and Backlog Update; Pipeline Continues to

Grow as New Orders Remain Strong

C$15.84 / C$12.04
3.9%
Dividend Yield:
55.5 (basic)
Q2/15, delivering 594 equivalent units (EU) as compared to 582 EU in Q2/14 and our
estimate of 678 EU. WIP in the quarter increased to 447 EU, up 63 EU from previous
quarter and 73 EU from our estimates. The increase is attributable to the transition of
NABI to the Xcelsior platform at the Aniston facility and we expect the impact should
be temporary.
55.5 (fd)
C$874.7

Float ($mm)
33.6
93.2
$212.1
$932.9

(FYE Dec 31)
2014
Revenue ($mm)
2015e
2016e
$1,451.1 $1,599.9 $1,711.2
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
2014
$19.7
$107.4
$131.2
$149.5
$0.65
$0.87
$1.13
Q2
Q3
Q4
$27.0
$25.7
$35.0
2015
$31.4
$31.1e
$32.7e
$36.0e
2016
$38.3e
$36.7e
$35.4e
$39.1e
Adjusted FD EPS
2014
Q1
$0.10
Q2
Q3
Q4
$0.16
$0.15
$0.24
2015
$0.20
$0.18e
$0.23e
$0.26e
2016
$0.29e
$0.27e
$0.26e
$0.30e

$15
Volume ('000)
1000
Last Sale Price
$10
800
600
400
$5
200
$0
0
Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15

Managing Director
647.776.8246
Strong Book to Bill Indicative of Solid H2/15 Results: Book to bill ratio in
Q2/15 was 1.45x, above our estimate of 1.1xs. In Q2/15, NFI received new firm orders
for 318 EU valued at $136.7mm with options for 213 EU valued at $98.0mm. Options
for 546 EU valued at $280.2mm were converted to firm orders. We note the company
did not book 1,238 EU of new orders (firm and options) where NFI has already received
approval however purchase documentation is pending. New Flyers active bid universe
increased to 7,571 EU, up 7% sequentially. Backlog at Q2/15 was 7,011 EU worth
$3.49bn versus 7,193 EU ($3.57bn) in Q1/15 and 7,372 EU ($3.54bn) in Q4/14.
Decline in Aftermarket Orders Expected: The company reported a 6.8% y/y
decrease in gross orders as a result of the expiry of the Chicago Transit Authority (CTA)
mid-life upgrade program where NFI supported the refurbishment of 1,028 buses. On a
sequential quarter basis, gross parts ordered decreased 0.7% while parts shipments were
up 13.5% as compared to Q2/14, which was stronger than our expectations.
Estimate Changes: Management reduced guidance for the average line entry rate to
approximately 50 EU/ production week as compared to 51 EU previously reflecting the
lower H1/15 average rate implying a production increase in H2/15 to approximately
54EU/week. We expect shipments remain consistent with the release of units in
inventory. Our 2015e and 2016e EBITDA move to $131.2mm from $130.9mm and
$149.5mm from $149.4mm. With the strong order intake expected to be formally
recorded in Q3/15 and a robust environment, we believe a discussion around
production rates may become topical. For reference an increase in 2016 production rates
to 56EU/week would increase our 2016e EBITDA to $156.4mm.
Maintain Outperform and C$18.50 Target: Overall, we believe New Flyer will
continue to benefit from a strong demand environment. We maintain our Outperform
rating and our 12-month target price of C$18.50. Our target price is based on a blend of
a 14.0x earnings and 7.0x EBITDA multiple of the four quarters ending Q4/16 reflecting
our 12-month forward valuation period as well as an exchange rate of C$1.22/$US .

647.776.8245
318
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DIVERSIFIED
INDUSTRIES
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: [INDUSTRY
]

Current Valuations
Unit Price (C$)
$15.77
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
10.9x
8.2x
8.3x
6.7x
7.0x
5.9x
Peer Average
14.7x
18.6x
13.2x
14.0x
11.1x
10.8x
Income Statement
2014
2015e
2016e
2014
2015e
2016e
Revenues
Bus Manufacturing
Aftermarket
Revenue
Margin
Adjusted EBITDA
Margin
Amortization
Operating Earnings
EBT

Non-operating, non-recurring items affecting FCF
Free Cash Flow
1,132,066 1,294,477 1,414,167

319,034 305,404 296,999
1,451,100 1,599,881 1,711,165
22.0%
19.1%
17.4%
57,374
72,617
90,116
5.1%
5.6%
6.4%
49,991
58,598
59,400
15.7%
19.2%
20.0%
86,457 129,461 149,516
6.0%
8.1%
8.7%
107,365 131,215 149,516
7.4%
8.2%
8.7%
35,837
39,818
37,392
50,620
89,643 112,124
37,568
73,313
99,354
Free cash flow (C$)

per Share
FCF Yield
92,829
$1.67
10.6%
82.8%
Taxes
Net Income
10,849
26,719
25,159
48,154
36,761
62,593

Reported FD EPS
Adjusted FD EPS
$0.48
$0.65
$0.87
$0.87
$1.13
$1.13

Cash Yield
2014
2015e
2016e
21.0%
13.4%
2.7%
10.3%
22.2%
33.5%
7.0%
13.9%
29.1%
Growth
Revenue
Adjusted EBITDA
Adjusted FD EPS
FX Assumptions
EOP CAD/USD Rate
Leverage
Net Debt (EOP)
2014
2015e
2016e
0.9057
0.9050
0.8004
0.7874
0.7953
0.8130

Trend Average Weekly Line Entry Rate (EU)
Trend
2014
2015e
2016e
229,034
2.1x
33.6%
195,660
1.5x
29.2%
171,641
1.2x
26.2%

$5.0
Trend
45,823 78,345 108,643

35,255 18,642 (1,073)
81,078 96,987 107,570
(1,766) (1,812) (1,812)
(10,889) (16,931) (13,890)
15,398
1,486
(154)
(162)
83,667 79,568 91,867
99,425 115,489
$1.79
$2.08
11.4%
13.2%
7.1%
16.2%
2014
2015e
2016e
32,457
35.0%
33,928
34.1%
34,413
29.8%
$0.585
3.7%
$0.611
3.9%
$0.620
3.9%
2014
2015e
2016e
2,437
464.5
23.5
49.2
0.9x
20.7%
2,547
508.2
28.5
50.9
1.2x
9.5%
2,650
533.6
34.0
52.0
1.0x
16.5%
Trend
Trend

Firm
Option
2020, 11%
2015, 14%
$4.0
2016, 12%
$3.0
2019, 23%
$2.0
$1.0
2017, 11%
$0.0
Q109 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15
2018, 29%

319
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DIVERSIFIED
INDUSTRIES
COVERAGE
: [INDUSTRY
]

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Average
Rating &
Target
TSX:NFI
OP (C$18.50)
BOVESPA:POMO4
NR
TSX: WJX
NR
TSX: AFN
NR
TSX: SPB
NR
GBX
NR
OSK
NR
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
CUB
NR
Trading
Local
Currency Price
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
15.77
2.53
20.37
46.11
12.77
46.04
40.98
4.31
12.23
55.73
23.25
19.67
5.64
13.07
45.97
Market
Cap ($m m )
875.5
2,028.6
406.9
660.3
1,617.7
1,353.6
3,205.1
147.7
835.4
2,919.9
626.2
1,603.1
540.3
270.5
1,235.8
EPS
EV
Net
Debt
($m m )
2014
2015e
213.2
1,200.3
252.0
165.9
933.6
316.0
845.3
(6.7)
210.3
(259.4)
(49.2)
4,419.0
220.9
195.6
(55.7)
885.3
3,257.1
658.9
826.3
2,551.3
1,780.2
4,050.4
140.9
1,045.7
2,660.5
577.0
6,055.1
823.1
516.1
1,180.4
0.65
0.25
2.46
0.31
0.45
4.62
3.49
0.03
0.88
3.55
1.61
-5.07
0.03
0.00
2.47
0.87
0.21
1.95
2.88
0.85
6.16
3.89
0.08
1.18
3.99
1.62
1.04
0.02
0.00
2.66
P/E
EBITDA
2016e 2014 2015e 2016e

1.13
0.27
2.23
3.85
1.20
6.32
4.33
0.23
1.24
4.58
1.90
2.42
0.06
0.00
2.87
18.6x
7.8x
8.3x
NM
28.3x
10.0x
11.7x
NM
13.9x
15.7x
14.4x
NM
NM
NM
18.6x
14.7x
14.0x
9.5x
10.5x
16.0x
15.0x
7.5x
10.5x
NM
10.4x
14.0x
14.4x
18.8x
NM
NM
17.3x
13.2x
10.8x
7.2x
9.1x
12.0x
10.7x
7.3x
9.5x
19.2x
9.8x
12.2x
12.3x
8.1x
NM
NM
16.0x
11.1x
EV/EBITDA
2014
2015e
2016e
2014
2015e
2016e
Price
to BV
ROIC
ROE
107.4
268.8
82.4
63.4
282.4
257.4
591.2
9.4
160.7
298.8
65.8
331.0
69.0
25.9
119.3
131.2
291.1
83.5
93.9
304.0
457.3
615.2
10.6
198.9
344.1
68.3
650.1
79.1
0.0
138.2
149.5
376.3
92.4
115.1
329.0
473.2
647.8
16.2
198.3
392.0
81.2
852.0
94.4
0.0
157.4
8.2x
12.1x
8.0x
13.0x
9.0x
6.9x
6.9x
14.9x
6.5x
8.9x
8.8x
18.3x
11.9x
19.9x
9.9x
10.9x
6.7x
11.2x
7.9x
8.8x
8.4x
3.9x
6.6x
13.3x
5.3x
7.7x
8.4x
9.3x
10.4x
NM
8.5x
8.3x
5.9x
8.7x
7.1x
7.2x
7.8x
3.8x
6.3x
8.7x
5.3x
6.8x
7.1x
7.1x
8.7x
NM
7.5x
7.0x
1.5x
1.3x
1.4x
2.9x
2.9x
2.0x
1.7x
0.9x
2.2x
2.8x
3.0x
NM
2.1x
NM
1.7x
2.0x
5.1%
3.6%
9.3%
8.4%
6.9%
18.1%
10.0%
0.5%
11.4%
17.8%
19.4%
13.7%
2.9%
NA
6.6%
9.5%
7.0%
12.7%
16.4%
(0.2%)
(0.5%)
34.7%
13.6%
0.2%
17.9%
20.1%
21.5%
NM
0.7%
NM
5.2%
11.5%

As of July 16, 2015. All figures in millions, unless otherwise noted.
320

NFI
C$15.77
Rating:
Outperform
12 Month Target:
C$18.50
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
63%
25%
Sector Perform
25%
13%
Underperform
2%
0%
Speculative
1%
0%
Restricted
2%
50%
Not Rated
5%
0%
Tender
3%
0%
100%
20%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
321
Direct
__________________________________________________________________________________________________________

George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial
Dave Mowat
President & CEO
780 408 7181
dmowat@atb.com
Ian Wild
403 974 5127
iwild@atb.com
E&P- Domestic
Jeremy McCrea, CFA, Analyst
Klazina van den Berg, Associate
403 539 8617

403 539 8587
403 539 8615
403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
jmccrea
kvandenberg
porourke
ysiddiqi
nlupick
kgordey
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
Jason Sawatzky, Analyst
Mark Westby, Associate
403 539 8620

403 539 8596
403 539 8591
dbenner
jsawatzky
mwestby
647 776 8246

647 776 8245
cmurray
smodwal
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
All Sectors
403 539 8607
vhoa
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Cheryl Polan
Jon Varley
Michael Capobianco
647 776 8244

647 776 8235
647 776 8231
cpolan
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Matt Colucci
403 539 8597
mcolucci

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Jesse Hardage
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

403 539 8628
647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
jhardage
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
322
Price: Cdn$16.26
July 16, 2015
Headline: Backlog Update Light But Pending Orders Prompt Price Target
Road & Rail

Cdn$16.26
NFI (T)
Outperform
Stock Rating:
(Unchanged)
Cdn$18.00
Target:
(Was $16.50)
Average
Risk Rating:
Backlog Momentum Prompts Target Price

Increase
(Unchanged)
Est. Total Return
14.5%
Stock Data:
Cash Yield
3.8%
10.7%
52-w eek High-Low
$16.46-$12.04
Bloomberg/Reuters:
NFI CN/ NFI.TO
Forecasts: DEC YE
Revenue (USmln)
Company Update
2014a
2015e
HIGHLIGHTS
2016e
$1,451.1 $1,522.6 $1,602.5
EBITDA (USmln)
$86.5
$114.7
DCPS ($US)
$1.06
$1.03
$125.3
$1.30
Dividend
$0.58
$0.60
$0.62
Payout Ratio
49%
48%
40%
DC Yield
7.2%
7.7%
9.6%
EV/EBITDA
10.5x
9.5x
8.8x
P/DCPS
13.8x
13.0x
10.5x
Financial Data
55.5
$902.5
Cash
Net Debt
$17.5
$223.0
20%
1.8x
Demand for new buses remains positive

Q2/15 order flow totalled 531 equivalent units (EUs) valued at
US$235 mln (60% firm / 40% options), just behind NBF
expectations (610 EUs / US$308 mln) but ahead of last year
(476 EUs / US$191 mln in Q2/14). More importantly, NFI
indicated an additional 1,238 EUs of new firm and option orders
were pending from customers where approval had been
granted but documentation not yet received. When booked (we
assume Q3) this amount of order activity represents ~19% of
existing backlog, is NFIs best quarter in over two years, and
builds upon the momentum realized the past two quarters
(1,021 & 1,325 new EUs awarded Q1/15 & Q4/14,
respectively).
Backlog largely status quo
NFIs total backlog (firm and option) was down modestly to
7,011 EUs (vs. 7,193 Q1/15, -2.5% q/q), valued at US$3.49
billion (vs. $3.57 bln). NFI successfully converted options for
546 EUs in Q2, the largest quarter since 2011 and well ahead of
the ~200 LTM quarterly average. Only 119 EUs expired in the
Q, and NFIs exposure to options going unused remains
relatively muted near-term (remainder of 2015: 557, 2016: 577,
2017: 540, 2018-on: ~3k).
Bid universe remains strong
NFI indicated that submitted bids/proposals awaiting customer
action was 7,571 units at the end of Q2, the highest over the
last seven quarters (reflecting the Q3 wins). The estimated
overall bid universe was up ~7% sequentially to 20.7k (from
19.4k) reinforcing the favorable demand environment.
Aftermarkets declines in-line with NBF expectations
Q2 aftermarkets orders were down 6.8% y/y reflecting the
winding down of the CTA contract, this already reflected in our
forecasts (avg. aftermarkets EBITDA -12% y/y the NTM).
Maintain Outperform; Target price to $18.00 (was $16.50)

Company Profile:
(NFI-TSX) is the leading manufacturer of heavy-duty transit
buses in North America, as well as a comprehensive
provider of aftermarket parts and services.
Stock Performance

Associate:
Endri Leno - (416) 869-8047
endri.leno@nbc.ca
Kyle Stanley - (416) 507-8108
kyle.stanley@nbc.ca
323
Page 2
Investment Summary
While Q2s order activity was below the robust 1k+ realized each of the previous two
quarters, the 1.2k pending that we assume will be booked Q3 supports our view that NFIs
order flow outlook remains positive (as does the bid universe provided by management,
which is at a healthy 20.7k). With backlog positioned to grow to approximately four years of
average production, and NFI benefitting from improved profitability following the economic
downturn, the company is one of the better positioned TSX diversified yield equities in terms
of earnings momentum. This contributes to a ~1x higher target valuation (from 8.5x 2016e
EV/EBITDA to 9.5x and from 10.5x P/CF to 11.5x) prompting an $18 target price. This is
more in-line with TSX diversified yield peers, which average ~10x forward EV/EBITDA and
~12.5x P/CF. Reiterate Outperform.
324
Page 3
DISCLOSURES:
exchanges.
325
Page 4
Additional company related disclosures for New Flyer Industries Inc.

6
National Bank Financial Inc. or an affiliate has a non-investment banking services related relationship during the past 12 months.
7
The issuer is a client, or was a client, of National Bank Financial Inc. or an affiliate within the past 12 months.
326

(NFI-TSX)
Rating:
Market Perform
Target Price:
Price (15-Jul):
$16.00
$15.77
Total Return: 5%
July 16, 2015
Bert Powell, CFA
416-359-5301

bert.powell@bmo.com
Adel Kanso
adel.kanso@bmo.com
416-359-6193
Q2/15 Deliveries Below Expectations; Activity Impacted by Product Rationalization

Initiatives
NFI Q2/15 deliveries were up 2% y/y to 594 equivalent units (EUs). New bus orders (firm & options) were 531 EUs, up
from 476 EUs y/y. New firm orders were up to 318 EUs from 81 EUs during the same period last year. Management
reduced the build rate per production week to 50 EUs from 51 EUs for fiscal 2015. Q2/15 aftermarket shipments increased
13.5% y/y.
Total backlog decreased 2% q/q to $3.49 billion (7,011 EUs) mainly due to lower options orders and 546 options being
converted into firm backlog. Total backlog data doesnt include 1,238 EUs of new bus orders that are still pending as New
Flyer awaits purchase documentation from customers.
Q2/15 Results Conference Call: Friday August 7, 2015 at 8:00 am; Tel: 1.888.231.8191 or 1.647.427.7450 (code:
82990013).
Our View:
Deliveries were 11% below expectations due to higher than expected work-in-progress (WIP) ending inventory level.
WIP was up 16% q/q to 447 EUs. Q2/15 production levels were mainly impacted by the platform rationalization plans.
NFI expects to reduce the WIP in the second half of the year as they complete operational initiatives.
Firm EU order backlog increased 14% sequentially to 2,192 EUs, but is down 1.6% y/y, and is still below annual
production capacity of 2,500 EUs.
Aftermarket shipments were 3.5% above expectations. We expect NFI to continue to grow its product support
operations and partially offset the expiry of the CTA mid-life upgrade program in June 2015. We would expect
negative aftermarket revenue growth in 2016 with the expiry of the CTA program, mitigated somewhat by continued
organic growth.
Based on lower than expected bus deliveries we would expect overall results to reflect miss. Prior to the Q2/15 order
and backlog update we anticipate Adj. EBITDA to be $31.8 million, in line with mean estimates.
Without an increase in production schedule to drive revenue, NFI remains a cost story. We remain confident in the
companys ability to execute on its platform rationalization plan, which is expected to improve bus manufacturing
margins, and view the WIP issues this quarter as transitory.
Flash Page 1
327

Target Price
Share Price
Quarterly Price
18
14
14
12
12
10
10
18
16
16
14
14
12
12
10
10
2) Mkt
6
1) NR
4
4
600
600
400
400
300
300
400
400
200
200
200
200
100
100
0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Revenue / Share
Price / Revenue
300
1.0
200
2013
2014
2015

200
200
0.5
100
-200
2013
0.0
Price / Earnings
2014
2015
-200
400
200
0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
0.58
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
26.7
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
16.5
0.62
4.2
4.0
>100
10.3
1.5
ROE
%
3
6
6
NFI - Rating as of 3-Aug-12 = Mkt
Date
29-Oct-12
Rating Change
Mkt to NR
Share Price
$7.75
3-Jul-13
NR to Mkt
$11.14

Last Price ( July 15, 2015): $15.77

Flash Page 2
328
report.
12 months.
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
42.0%
21.9%
53.3%
41.9%
54.3%
54.6%
Hold
Market Perform
53.5%
14.4%
44.8%
53.3%
44.4%
40.0%
Sell
Underperform
4.4%
7.4%
1.9%
4.7%
1.3%
5.4%
*
**
***
****
*****
Flash Page 3
329

For
Other
Important
Disclosures
on
the
stocks
discussed
in
this
report,
please
go
to
BMO
Capital
Markets
Equity
Research
is
available
via
our
website
Conflict Statement
conflicts
of
interest
in
connection
with
investment
research
which
is
available
at
General Disclaimer
Additional Matters
Nesbitt Burns Inc.
Flash Page 4
330


A member of BMO
Financial Group
Flash Page 5
331

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
EARNINGS UPDATE
j

Q2 Deliveries In Line With Expectations
But Aftermarket Continues To Outperform
What's The Event
NFI reported Q2 deliveries that were in line with expectations, but
aftermarket division continues to outperform. With this note, we
have tweaked our estimates higher and raised our price target to
C$16.50 from C$15.75, but maintain our SP rating.
NFI reported in-line Q2 deliveries of 594 EUs, up 12 EUs Y/Y, and
versus our expectations of 600 EUs. New bus orders in the quarter
totaled 531 EUs, but there were 1,238 EUs of new firm and option
orders that are pending from customers where approval had been
made, but NFI had yet to receive purchase documentation. As such,
we expect these orders to be officially added to the backlog in the
coming months. Order activity in the quarter included new firm
orders for 318 EUs (valued at $137M), new option orders for 213
EUs (valued at $98M), and options for 546 EUs converted to firm
orders (valued at $280M). Overall, NFI's backlog totaled 7,011 EUs
(valued at $3.6B) of which 2,192 EUs were firm orders. The
company's book-to-bill ratio on a TTM basis was 121%.
We remain favourable on the fundamentals for the heavy duty bus
market reflecting an improving U.S. economy and re-fleeting
opportunities. While there is some uncertainty around the U.S.
Government attempting to put through a multi-year funding model
for public transportation, we would expect the current funding model
to be extended another year. NFI noted that the total number of
active EU bids was 7,571, up 7% Q/Q, with the total bid universe at
the end of Q2 sitting at 20,698 EUs, up 1,317 EUs Q/Q.
July 15, 2015

Capital Equipment
SECTOR PERFORMER
MARKET WEIGHT
Stock Rating:
Sector Weighting:
NFI-TSX (7/15/15)
C$16.50
C$15.77
Key Indices:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Float
Dividend/Div Yield
Fiscal Year Ends
Book Value
2015 ROE (E)
LT Debt
Net AssetEquity
Value
Common
EBITDA ($mln)
Current
Prior
Estimates (Dec.
(Dec. 31)
31)
Valuation
EV/EBITDA-Curr
EV/EBITDA-Prior
Toronto
NM
C$12.04-C$15.80
55.5M
36.5M Shrs
38,000
C$875.2M
C$0.62 / 3.9%
December
$8.23 per Shr
9.0%
$140.9M
$457.0M
Yes
2013
$94.7A
2014
$107.4A
2015
$124.2E
$122.2E
2016
$126.9E
$124.7E
11.4x
10.1x
8.7x
8.9x
8.5x
8.7x
NFI did adjust its line rate to average ~50 EUs/week for 2015, down
from ~51 EUs. We suspect this reflects relatively weak demand for
NFI's Midibus platform, but this was a lower-margin product.
Overall, we do not view this tweak to the line rate as a major issue.
As well, NFI's work-in-process at the end of Q2 was 447 EUs, up 63
EUs Y/Y as the company transitions its Anniston, AL facility to the
Xcelsior platform. The WIP is expected to decline in H2 as this
restructuring is complete.
Company Description
www.newflyer.com
Continued on page 3
15-136893 2015
where applicable.
332
Q2 Deliveries In Line With Expectations But Aftermarket Continues To Outperform - July 15, 2015
Sector Performer
NFI-TSX
7/15/15
Capital Equipment
Sector Weighting:
C$15.77
C$16.50

Market Weight

EV/EBITDA Multiples
2014A
2015E
2016E

10.1x
9.9x
8.7x
8.1x
8.5x
7.0x
10.2x
8.9x
7.6x
Manufacturers
P/E Multiples
2014A
2015E
2016E
Investment Thesis

19.0x
15.1x
14.0x
20.0x
18.8x
14.9x
13.9x
12.0x
11.9x
Manufacturers
2013A
2014A
2015E
2016E
EBITDA Margin
7.9%
7.4%
7.8%
8.1%
Company Profile
Current Ratio
1.1x
1.1x
1.3x
1.3x
Debt/Equity
Debt/Total Capital
51.3%
33.9%
53.1%
34.7%
42.0%
29.6%
51.5%
34.0%
Income Statement
2013A
2014A
2015E
2016E

$991.2
$215.0
$1,132.1
$319.0
$1,252.7
$332.1
$1,250.0
$321.3
$1,199.4
$1,078.7
$1,451.1
$1,312.8
$1,584.8
$1,422.3
$1,571.3
$1,405.1
Gross Profit
$120.8
$138.3
$162.5
$166.2
EBITDA
EBIT
$94.7
$49.0
$107.4
$51.4
$124.2
$89.2
$126.9
$98.2
EBT
Net Income
$34.6
$26.8
$37.6
$26.7
$74.3
$54.6
$83.9
$62.4
Balance Sheet
Q1/15A
Cost of Sales
Current Assets
430
Total Assets
Current Liabilities

Aftermarket
Operations
22%

United States
84%
Bus Operations
78%
1,101
318
Total Liabilities
Canada
16%
644
457

3,000
$350
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
0
2007
2008
2009
2010
2011
Revenues ( $ Millions)
2012
2013
Deliveries(EUs)
2014
$ Millions
$1,200,000
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2009
2010
2011
2012
$50
$0
2007
2008
2013
2014
Source: Bloomberg, Company reports and CIBC World Markets Inc.
333
As we have seen the past several quarters, NFIs aftermarkets division continues
to exceed expectations. While gross orders declined 7% Y/Y with the wind-down
of the CTA contract, shipments were up 14% Y/Y and up 1% Q/Q. We
anticipated shipments to be up modestly Y/Y as we expected the wind down of
the CTA contract to be more of a headwind. NFI continues to illustrate its ability
to expand its aftermarkets operations, which is a higher-margin business.
We tweaked our estimates modestly to account for better aftermarkets
performance. Our 2015E and 2016E EBITDA increase to $124M and $127M
respectively. Our Q2E EBITDA increases to $32M from $30M and up from $27M
last year. NFI is scheduled to report Q2 results on Aug. 6 with a call on Aug. 7
(dial in number is 888-231-8191).
Our price target increases to $16.50 from $15.75 reflecting our increased
estimates and weaker C$. We maintain our SP rating. We continue to have a
favourable outlook on NFI given its improving FCF profile which we believe can
be deployed to M&A (aftermarkets industry is fragmented) and towards growing
the dividend.

We derive our C$16.50 price target by applying a ~7.5x EV/EBITDA multiple to
our 2016 EBITDA estimate (we use current net debt). Our target multiple is in
U.S. economy.

Competition: Several established players, including Gillig and Volvo Bus
Corporation (VOLVBST), are continually battling New Flyer for market share.
Recently, several international firms entered the North American bus market;
however, the 60% content Buy American rules should limit the potential
impact from international competitors.
costs.
334
335
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Prior
$31.4A
$30.3E
$28.9E
$30.2E
$122.2E
2015 Current
$31.4A
$32.1E
$29.7E
$31.0E
$124.2E
2016 Prior
--
--
--
--
$124.7E
2016 Current
--
--
--
--
$126.9E
336

Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc.:
Stock Prices as of 07/15/2015:
Volvo AB (VOLVB-ST, [SEK]114.30, Not Rated)
337

Abbreviation
Rating
Description
SO
Sector Outperformer
SP
Sector Performer
SU
NR
Not Rated
Restricted
Stock Ratings
O
Overweight
Market Weight
Underweight
NA
None

(as of 15 Jul 2015)
Count
Percent
158
43.1%
163
44.4%
38
10.4%
1.9%

Restricted
Count
Percent
150
94.9%
155
95.1%
Restricted
33
86.8%
100.0%

(as of 15 Jul 2015)
Count
Percent
0.0%
100.0%
0.0%
Restricted
0.0%
Count
Percent
0.0%
100.0%
0.0%
Restricted
0.0%

338
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
05/08/2015
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
14.69
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
15.75
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
339
Legal Disclaimer
340

10
341
RESEARCH ALERT
NFI | TSX
$15.17
Rating: Outperform
June 30, 2015

Managing Director
Large Contract Wins Drives 2015 Book to Bill Above 1.0x

at Mid-Year
MassDOT Board Approval: The Massachusetts Department of Transportation

approved a contract for 325 new replacement buses for the Massachusetts Bay
Transportation Authority (MBTA) fleet. Under the contract valued at $222.2mm,
New Flyer will deliver 325 40-foot Low Floor Hybrid and Compressed Natural Gas
(CNG) buses beginning July 2016 with all buses expected to be in service by 2017.
The new buses will replace the existing fleet of CNG buses nearing the end of their
12-year service life. We expect a formal announcement from the company in the
near-term once all documentation is finalized. The contract is expected to be
financed with 80% Federal Formula funds and the remainder with MBTA Revenue
Bond funds. MBTA is also expected to participate in the detailed design review
process with New Flyer.
King County Metro Exercises Options: King County Metro of Seattle,

Washington exercised options valued at approximately $130mm for 138 buses or
252 equivalent units (EU) consisting of a mix of 40-foot and 60-foot buses with
diesel, diesel-electric and electric-trolley propulsions systems all on the companys
Xcelsior platform.
Contract with Detroit Department of Transportation: New Flyer announced that

the company has been awarded a contract to supply 10 60-foot Xcelsior Diesel
buses to the Detroit Department of Transportation (DDOT). No further information
regarding the contract was provided.
Order Intake Rate Double of Production Year to Date: We estimate these new
contract wins take booked production for the year to 107% of anticipated production
assuming an annual average run rate of 51 EUs/ week with only half the year
complete. Overall, we expect the company to continue to win new contracts even as
it continues to integrate both its manufacturing and aftermarket segments. Should
this pace of bookings continue, we believe it likely a review of production rates may
be necessary. We expect the companys moderating balance sheet and
improvements in return on invested capital to be supportive of share price
appreciation.
647.776.8246

647.776.8245
342
2015 YTD Orders and Booked Production

Date Announced
2015 YTD Orders
30-Jun-15
29-Jun-15
29-Jun-15
22-Jun-15
12-Jun-15
01-Jun-15
28-May-15
26-May-15
26-May-15
26-May-15
22-May-15
21-May-15
20-May-15
14-May-15
13-May-15
13-May-15
01-May-15
09-Apr-15
09-Apr-15
08-Apr-15
13-Mar-15
10-Mar-15
10-Mar-15
03-Mar-15
26-Feb-15
18-Feb-15
18-Feb-15
06-Feb-15
03-Feb-15
21-Jan-15
09-Jan-15
08-Jan-15
Transit Authority
Midi
King County Metro (Seattle)

Detroit Department of Transportation
Massachusetts Bay Transportation Authority (MBTA)
Le Group Transbus
Oahu Transit Services Inc.
Grand River Transit
RTD of Denver
Low er Rio Grande Valley Development Council
City & Council of Honolulu
Temiskaming Shores
Dallas Area Rapid Transit (DART)
Community Transit (Everett, WA)
Clark County (Portland, Washington, Vancouver, OR)
San Diego (MTS)
Greate Attleboro Taunton RTA
Martha's Vineyard RTA
New York City
Minnesota
Milw aukee County Transit System
Califorinia Energy Commission
Transportation Commission of Southern Nevada
City of London
Capital District Transportation Authority (CDTA)
Santa Monica
Nassau County
Halifax
St. Albert
Lane Transit
Hamilton
New York City
Orange County
San Francisco
Total - YTD
40'
24
Firm
60'
114
10
325
2
14
0
10
0
18
15
10
2
63
19
10
10
13
3
4
72
20
28
1
35
9
20
9
2
7
52
9
5
45
202
26
903
7
18
75
61
414
EU
252
20
325
2
20
14
36
15
20
2
63
39
20
26
3
4
72
40
28
1
75
27
4
14
52
9
5
14
36
195
202
122
1,757
40'
Option
60'
EU
10
20
47
150
47
100
18
58
13
10
200
465
163
304
350
36
58
26
10
526
1,073
Annual Run Rate (51 EUs/w eek)

YTD Booked Production
Booked Production/ Annual Run Rate
Total
Buses
138
10
325
2
20
14
18
15
10
2
63
29
10
13
3
4
72
20
75
1
305
18
20
7
110
9
5
20
18
120
212
424
2,112
EU
Propulsion
Clean
252 Diesel, Hybrid, Trolley
20
Clean Diesel
325
CNG
2
Clean Diesel
40
Clean Diesel
14
Clean Diesel
36
Clean Diesel
15
20
Clean Diesel
2
63
CNG
39
Clean Diesel
20
Diesel-Hybrid
26
CNG
3
Diesel
4
Diesel
72
40
Clean Diesel
75
Clean Diesel
1
Fuel Cell
425
CNG
27
Clean Diesel
40 Clean Diesel / Hybrid
14
CNG
110
CNG
9
Clean Diesel
5
Clean Diesel
40
Hybrid
36
CNG
195
Clean Diesel
212
CNG
648
Hybrid
2,830
Notes
option exercise, $130mm value
30'
valued at US$17mm
30'
35', via Giradin
17 NABI LFW, 40 Xcelsior
option exercise
new customer
30'
30'
supplementary to Jan 2014 aw ard
exercised options
3-year options
w / HYG, SIE $1.7mm contract
5 year options
included in Q4/14 backlog
2,652
2,830
106.7%
Figure 1 2015 YTD Orders and Booked Production

343

NFI
C$15.17
Rating:
Outperform
12 Month Target:
C$18.50
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
60%
25%
Sector Perform
24%
10%
Underperform
2%
0%
Speculative
1%
0%
Restricted
4%
40%
Not Rated
6%
0%
Tender
2%
0%
100%
19%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
344
Direct
__________________________________________________________________________________________________________

George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial
Dave Mowat
President & CEO
780 408 7181
dmowat@atb.com
Ian Wild
403 974 5127
iwild@atb.com
E&P- Domestic
403 539 8617

403 539 8587
403 539 8615
403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
jmccrea
kvandenberg
porourke
ysiddiqi
nlupick
kgordey
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
John Gibson, Associate
403 539 8620

403 539 8594
403 539 8596
403 539 8591
dbenner
jgibson
jsawatzky
mwestby
647 776 8246

647 776 8245
cmurray
smodwal
Agriculture
647 776 8240

647 776 8254
pprattas
spattillo
All Sectors
403 539 8607
vhoa
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Cheryl Polan
Jon Varley
Michael Capobianco
647 776 8244

647 776 8235
647 776 8231
cpolan
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Matt Colucci
403 539 8597
mcolucci

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Jesse Hardage
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

403 539 8628
647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
jhardage
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
mhennebery
345

(NFI-TSX)
June 15, 2015
Bert Powell, CFA
416-359-5301

bert.powell@bmo.com
Stock Rating:
Market Perform
Industry Rating: Outperform
Alan Kanso
alan.kanso@bmo.com
Operational Improvements Remain on Track;

Dividend Increase Signals Confidence in Outlook
Price (12-Jun)
Target Price
416-359-6193
$15.50
$16.00
52-Week High
52-Week Low
$15.80
$12.04

Earnings/Share
1.5
16
1.0
14
Event
12
We are updating our estimates for New Flyer (NFI) as the company
continues to execute on its operational improvement initiatives for bus
production.
0.5
10
0.0
8
-0.5
6
4
-1.0
Volume (mln)
Impact & Analysis

We are updating our estimates for NFI and making only modest changes
after a strong start to the year. Mix can have an impact on any given quarter,
so we are inclined to use our annual expectations as our guide. We remain
confident in the companys ability to execute on its platform rationalization
plan to improve bus manufacturing margins. 2015 is a transition year for
NFI as the company moves to a common bus platform and works off the
balance of low margin contracts booked during the global financial crisis.
Product rationalization and cost reduction initiatives are expected to be
completed in the second half of the year. We expect EBITDA per bus to
increase toward the $28k range in 2016, up from $26k in 2015. This implies
a 6% EBITDA margin on the bus business. We also expect NFI to continue
to grow its product support operations and partially offset the expiry of the
CTA mid-life upgrade program in mid-2015. We believe the dividend
increase signals NFIs confidence in its outlook and underlying cash flow.

We continue to rate NFI Market Perform. Our target price is revised to
C$16.00 from C$16.50 mainly due to CAD/USD exchange rate fluctuations
(target price in U.S. dollars is unchanged at US$13.00 based on 7.0x 2016E
EBITDA). This implies ~4% dividend yield.
Changes
Annual EPS
2015E $0.74 to $0.83
2016E $0.96 to $1.00
Annual CFPS
2015E $1.45 to $1.59
2016E $1.54 to $1.56
0
400
400
200
200
2012
2013
2014
2015
Last Data Point: June 12, 2015
(FY-Dec.)
EPS
P/E
CFPS
P/CFPS
Rev. ($mm)
EV ($mm)
EBITDA ($mm)
EV/EBITDA
2013A
$0.49
2014A
$0.48
2015E
$0.83
18.7x
2016E
$1.00
15.5x
$0.95
$1.46
$1.59
9.7x
$1.56
9.9x
$1,199
$839
$95
8.8x
$1,451
$1,000
$91
10.9x
$1,505
$1,049
$120
8.7x
Quarterly EPS
2013A
2014A
2015E
Q1
$0.08
$0.10
$0.20a
Q2
$0.03
$0.06
$0.23
Dividend
Book Value
Shares O/S (mm)
Float O/S (mm)
Wkly Vol (000s)
Net Debt ($mm)
$0.62
$8.24
55.5
43.9
378
$218
Yield
Price/Book
Mkt. Cap (mm)
Float Cap (mm)
Wkly $ Vol (mm)
Next Rep. Date
$1,495
$990
$123
8.0x
Q3
$0.14
$0.18
$0.20
Q4
$0.23
$0.13
$0.20
4.0%
1.6x
$860
$680
$5.2
August (E)
(11.1%), Mawer (9.8%)
2015E: $0.75; 2016E: $1.02
Quarterly EPS
Q2/15E $0.20 to $0.23
Q3/15E $0.17 to $0.20
Q4/15E $0.23 to $0.20
Target Price
$16.50 to $16.00
346
BMO Capital Markets
Revised Estimates
(US$ millions, except per share data)
Actual
BMO Estimates
Previous Estimates
Mean Estimates
Bus Manufacturing
2014
1,132
2015
1,179
2016
1,190
2015
1,175
2016
1,181
y/y%
15.0%
4.1%
1.0%
3.8%
0.5%
319
326
305
335
352
48.4%
2.2%
-6.4%
5.0%
5.0%
Revenue
1,451
1,505
1,495
1,510
1,532
1,558
1,616
y/y%
21.0%
3.7%
-0.6%
4.1%
1.5%
8.6%
3.8%
Cost of Sales (Exc. D&A)

Gross Profit (Exc. D&A)
1,277
174
1,305
200
1,297
198
1,315
195
1,333
199
% of Revenue
12.0%
13.3%
13.2%
12.9%
13.0%
81
81
75
81
77
66
y/y%
SG&A
Bus Manufacturing
y/y%
y/y%
57
65
71
62
5.1%
5.5%
6.0%
50
57
52
53
56
2015
2016
15.7%
17.4%
17.0%
Adjusted EBITDA
107
119
123
114
122
121
130
% of Revenue
7.4%
7.9%
8.2%
7.6%
8.0%
7.8%
8.0%
36
38
31
40
32
51
80
92
75
90
81
99
3.5%
5.3%
6.2%
4.9%
5.9%
5.2%
6.1%
14
38
13
67
9
83
14
61
11
80
2.6%
4.4%
5.5%
4.0%
5.2%
11
21
27
20
26
29%
31%
33%
33%
33%
$0.79
$1.11
Depreciation and Amortization

EBIT
% of Revenue

EBT
% of Revenue
Income Tax Expense

Tax Rate
Net Income
% of Revenue
EPS - Basic
EPS - Fully Diluted
27
46
56
41
53
1.8%
3.1%
3.7%
2.7%
3.5%
$0.48
$0.45
$0.83
$0.78
$1.00
$0.94
$0.74
$0.70
$0.96
$0.91
Source: BMO Capital Markets, Thomson One
Page 2 June 15, 2015
347
BMO Capital Markets

New Flyer Industries Inc. (NFI-TSX)
Year end: Decem ber
In millions of US$
Bus Manufacturing
y/y%
y/y%
Revenues
y/y%
Cost of Sales
% of revenues
Gross profit
% of revenues
% of revenues
% of net revenues
EBITDA
% of revenues
% of revenues
% of revenues
Other income
EBIT
% of revenues
% of revenues
EBT
% of revenues
Income taxes
Net incom e
% of revenues
WA Fully diluted Shares O/S (millions)
Adjusted EBITDA
% of revenues
2012
2013
2014
Q1
2015E
Q2E
Q3E
2015E
2016E
746.9
-7.1%
118.4
5.0%
865.3
-5.6%
791.5
91.5%
73.8
8.5%
43.1
5.0%
(2.8)
-0.3%
57.8
6.7%
8.3
1.0%
16.0
1.8%
8.3
25.2
2.9%
15.2
1.8%
10.0
1.2%
0.7
7%
9.3
1.1%
$0.21
$0.21
984.4
31.8%
215.0
81.7%
1,199.4
38.6%
1,078.7
89.9%
120.8
10.1%
69.5
5.8%
0.1
0.0%
79.1
6.6%
9.6
0.8%
18.4
1.5%
2.1
49.0
4.1%
14.3
1.2%
34.6
2.9%
7.9
23%
26.8
2.2%
$0.52
$0.49
1,132.1
15.0%
319.0
48.4%
1,451.1
21.0%
1,312.8
90.5%
138.3
9.5%
81.3
5.6%
1.5
0.1%
91.3
6.3%
15.4
1.1%
20.5
1.4%
4.0
51.4
3.5%
13.9
1.0%
37.6
2.6%
10.8
29%
26.7
1.8%
$0.48
$0.45
290.7
15.9%
89.6
22.8%
380.3
17.4%
340.7
89.6%
39.6
10.4%
20.9
5.5%
(1.5)
-0.4%
29.7
7.8%
4.2
1.1%
5.3
1.4%
1.9
18.2
4.8%
4.1
1.1%
14.1
3.7%
3.3
23%
10.9
2.9%
$0.20
$0.18
308.8
16.2%
88.7
10.0%
397.5
14.7%
353.8
89.0%
43.7
11.0%
21.5
5.4%
0.0
0.0%
31.8
8.0%
4.5
1.1%
5.0
1.3%
0.0
22.3
5.6%
3.1
0.8%
19.2
4.8%
6.3
33%
12.8
3.2%
$0.23
$0.22
295.8
6.1%
73.2
-10.8%
369.1
2.3%
329.9
89.4%
39.2
10.6%
19.6
5.3%
0.0
0.0%
29.5
8.0%
4.8
1.3%
5.0
1.4%
0.0
19.6
5.3%
3.0
0.8%
16.6
4.5%
5.5
33%
11.1
3.0%
$0.20
$0.19
283.5
-15.8%
74.4
-10.8%
357.9
-14.8%
319.2
89.2%
38.7
10.8%
19.0
5.3%
0.0
0.0%
29.4
8.2%
4.7
1.3%
5.0
1.4%
0.0
19.7
5.5%
2.9
0.8%
16.9
4.7%
5.6
33%
11.3
3.2%
$0.20
$0.19
1,178.9
4.1%
325.9
2.2%
1,504.8
3.7%
1,343.5
89.3%
161.2
10.7%
80.9
5.4%
(1.5)
-0.1%
120.3
8.0%
18.2
1.2%
20.3
1.4%
1.9
79.9
5.3%
13.1
0.9%
66.8
4.4%
20.6
31%
46.1
3.1%
$0.83
$0.78
1,190.2
1.0%
305.0
-6.4%
1,495.3
-0.6%
1,328.2
88.8%
167.1
11.2%
74.8
5.0%
0.0
0.0%
123.3
8.2%
15.0
1.0%
16.0
1.1%
0.0
92.3
6.2%
9.3
0.6%
83.0
5.5%
27.4
33%
55.6
3.7%
$1.00
$0.94
52.3
60.9
7.0%
61.9
94.7
7.9%
62.0
107.4
7.4%
62.0
31.4
8.3%
62.0
31.8
8.0%
62.0
29.5
8.0%
62.0
29.4
8.2%
62.0
122.0
8.1%
62.0
123.3
8.2%
Q4E
Source: BMO Capital Markets, Companys Reports
CASH FLOW STATEMENT

In millions of US$
2012
2013
2014
Q1
2015E
Q2E
Q3E
Q4E
2015E
2016E
Net income
Other
27
27
11
13
11
11
46
56
24
(6)
1
29
(24)
5
28
(11)
9
53
(23)
30
36
(1)
20
81
(35)
46
10
1
3
24
5
29
10
0
0
22
7
30
10
0
0
21
(10)
11
10
0
0
21
2
23
38
1
2
88
4
92
31
0
0
87
11
97
Share repurchases
Other
45
(2)
0
(34)
0
(4)
4
13
(2)
114
(29)
0
(2)
93
5
(2)
0
(30)
0
(3)
(29)
(27)
(0)
0
(7)
0
0
(34)
0
(1)
0
(7)
0
0
(7)
(13)
(1)
0
(7)
0
0
(20)
(10)
(1)
0
(7)
0
0
(17)
(50)
(2)
0
(27)
0
0
(79)
(50)
(2)
0
(28)
0
0
(80)
Dispositions of property, plant and equipment
Other
Change in Cash
(11)
0
0
(0)
(11)
2
0
10
10
(15)
(102)
0
(6)
(123)
0
1
11
12
(11)
0
0
(0)
(11)
(0)
6
12
17
(4)
0
0
(0)
(4)
(0)
(10)
17
8
(9)
0
0
0
(9)
0
14
8
21
(3)
0
0
0
(3)
0
(12)
21
9
(3)
0
0
0
(3)
0
3
9
12
(18)
0
0
(0)
(18)
(0)
(5)
17
12
(10)
0
0
0
(10)
0
7
12
19
348
BMO Capital Markets
BALANCE SHEET
In millions of US$
2012
2013
2014
Q1
2015E
Q2E
Q3E
Q4E
2015E
2016E
Cash
Accounts receivable
Inventories
Other
11
113
125
5
254
12
230
183
8
433
17
212
230
6
465
8
187
232
4
430
21
197
233
4
455
9
195
217
4
425
12
193
210
4
419
12
193
210
4
419
19
186
209
4
418
Fixed assets
Intangible assets
Unused ITC
Goodw ill
Other
Total Assets
42
326
65
357
202
49
23
897
212
55
14
1,136
64
332
0
213
62
0
1,136
64
326
0
213
68
0
1,101
69
321
0
213
68
0
1,125
66
316
0
213
68
0
1,089
64
311
0
213
68
0
1,075
64
311
0
213
68
0
1,075
59
295
0
213
68
0
1,053

Deferred revenue
Other
151
23
7
40
9
230
213
58
26
35
3
334
233
41
32
40
8
354
226
23
35
13
20
318
245
23
35
13
20
336
217
23
35
0
20
296
210
23
35
0
20
289
210
23
35
0
20
289
213
23
35
0
20
291

Future income taxes
Long term debt
Other
Total Liabilities
9
122
186
0
6
553
0
115
225
0
6
681
1
108
207
0
13
683
1
106
208
0
12
644
1
106
208
0
12
662
1
106
208
0
11
621
1
106
198
0
11
604
1
106
198
0
11
604
1
106
148
0
9
554
474
(130)
897
588
(133)
1,136
588
(136)
1,136
589
(131)
1,101
589
(125)
1,125
589
(121)
1,089
589
(117)
1,075
589
(117)
1,075
589
(89)
1,053
Share capital
Retained earnings
349
BMO Capital Markets

Target Price
Share Price
Quarterly Price
18
14
14
12
12
18
16
16
14
14
12
12
10
10
10
10
2) Mkt
6
1) NR
4
4
600
600
400
400
300
300
400
400
200
200
200
200
100
100
0
2012
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Revenue / Share
Price / Revenue
300
1.0
200
2013
2014

200
200
0.5
100
-200
2012
0.0
Price / Earnings
2013
-200
2014
400
200
0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
0.48
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
32.8
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
>100
10.2
16.5
0.62
4.2
4.0
1.5
ROE
%
3
6
6
NFI - Rating as of 21-Jun-12 = Mkt
1
2
Date
29-Oct-12
3-Jul-13
Rating Change
Mkt to NR
NR to Mkt
Share Price
$7.75
$11.14

Last Price ( June 2, 2015): $15.56

350
BMO Capital Markets
report.
past 12 months.
Distribution of Ratings (March 31, 2015)
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
43.7%
18.6%
58.2%
42.7%
55.5%
54.1%
Hold
Market Perform
51.4%
10.4%
38.5%
52.1%
41.9%
40.5%
Sell
Underperform
4.9%
9.4%
3.3%
5.2%
2.6%
5.5%
*
**
***
351
BMO Capital Markets

For
Other
Important
Disclosures
on
the
stocks
discussed
in
this
report,
please
go
to
BMO
Capital
Markets
Equity
Research
is
available
via
our
website
General Disclaimer
Additional Matters
Nesbitt Burns Inc.
352
BMO Capital Markets

FDIC), BMO Ireland Plc, and Bank of Montreal (China) Co. Limited and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC) and

A member of BMO
Financial Group
353

Auto Components


11 May 2015
BUY
unchanged
PRICE TARGET
from C$15.00
Price (8-May)
Ticker
Q1/15: good quarter, dividend bump, forecast

increase on margins
C$16.00
C$14.69
NFI-TSX
52-Week Range (C$):

Avg Daily Vol (M) :
Market Cap (C$M):
Dividend /Shr (C$):
Website:
FYE Dec
FCF /Shr (C$)
Previous
Payout Ratio (x)
11.53 - 14.90
0.08
815
0.62
4.2
62.0
13.1
210.9
www.newflyer.com
2014A
2015E
2016E
2017E
1.18
1.18
0.5
1.30
1.37
0.5
1.52
1.46
0.4
1.61
1.55
0.4
1,451 1,561 1,580 1,618

1,451 1,460 1,450
1,479
6
14
14
0
Sales (US$M)
Previous
ROIC (%)
Quarterly FCF /
Shr
2014A
2015E
2016E
2017E
Q1
Q2
Q3
Q4
0.19
0.22A
0.41
0.44
0.29
0.38
0.39
0.41
0.32
0.35
0.36
0.38
0.38
0.35
0.36
0.38
15.5
15
14.5
14
13.5
13
Continue to recommend BUYing for improving margins, aftermarket growth

We recommend BUYing NFI to benefit from balanced growth and income.
The company is driving top-line growth in its aftermarket business and we think bus
production should increase modestly after 2015. Margins should also help as a result of
the companys product line streamlined program and continuous improvement.
Net we expect growth and margin expansion to drive low- to mid-single digit EBITDA
growth and there could be some upside to our forecast.
We think solid growth plus an attractive dividend yield (4.2%) will result in attractive
investment returns (13.1%) from the current share price level. Accordingly, we continue
to recommend BUYing NFI shares.
Upside surprise in Q1/15 on sales and margins
NFI adjusted EBITDA of $31.4 million was much better than our and consensus mean
estimates of $26.3 million.
Surprises included much better than expected aftermarket sales and margins. These
look sustainable and we boosted our forecast on these items.
More improvements expected; could provide upside potential to our forecast
NFI continues to progress through its product rationalization process. This should
be completed in 2015 and it is anticipated to generate a $12.2 million annual profit
benefit. We think this could provide some upside to our bus margin forecast, although
competitive pressures could erode some of this benefit, so we have been cautious about
building too much benefit from this program.
NFI is also driving good profit improvement and sales growth in its aftermarket business.
It is difficult to get a line on the sustainable rate of improvement, so again, we have
taken a cautious approach in our forecast for these items.
Dividend increased; we expect more
NFI boosted its dividend 10.6% to an annual rate of C$0.62, up from C$0.585. We
expect NFI to raise its dividend as EBITDA increases. We think increases could be timed
to NFIs AGM.
12.5
12
11.5
Apr- 15
May- 15
Mar- 15
Jan- 15
Feb- 15
Dec- 14
Oct- 14
Nov- 14
Sep- 14
Jul- 14
Aug- 14
Jun- 14
11
NFI
Source: FactSet


60 months.
354


implications
stronger than expected aftermarket sales and margins and also from a small upside
surprise on bus margins (Figure 1).
Figure 1: Q1/15: Better than expected on stronger than expected aftermarket sales and margins
Q 1/15
0.15
EPS (C$)
0.15
0.19
0.22
0.16
0.34
0.14
Q 1/14
0.15
Q 4/14
0.10
0.19
0.13
0.15
0.38
Payout ratio
66%
43%
77%
38%
291
260
251
337
Aftermarket revenue
Revenue
90
380
80
340
349
73
324
420
EBITDA
EBITDA margin
31.4
8.3%
26.3
7.7%
26.3
7.5%
19.7
6.1%
83
35.0
8.3%
(5)
572
572
554
680

Aftermarket EBITDA
508
26
16.7
455
25
12.0
453
14
11.9
495
11.9
392
1,922
392
1,922
886
2,608
2,102
New orders (units)

34
759
Return on capital
7.6%
6.2%
3.9%
6.1%
1.24
1.23
1.10
1.14
Strong aftermarket sales performance

Core aftermarket revenues (i.e., excluding revenues from the soon-to-be-completed
CTA bus mid-life overhaul project) increased 10% to $73.1 million. NFI has been
working on improving its aftermarket business for a considerable time to enable it to
take advantage of its industry-leading installed bus market share. This appears to be
bearing fruit on both a sales and a margin basis.
The Q1/15 aftermarket revenue performance set a significantly higher quarterly core
aftermarket revenue run rate than we expected. Accordingly, we boosted our
aftermarket revenue forecast.
Aftermarket margins surprisingly good

As noted above, aftermarket margins appear to be benefiting from the companys
business process improvement initiatives.
Again, these results look sustainable and we have built some of the upside surprise
into our forecast. We have not built all of the improvement into our forecast as there is
a fair bit of volatility in quarterly results and we dont want to overshoot on our
expectations.
Buy unchanged Target Price C$16.00 from C$15.00 | 11 May 2015
Auto Components 2
355

Bus operations roughly as expected

equivalent unit (EU) of $25,700 was close to our expectation and in line with
managements guidance that 2015 bus margins should be better than 2014 levels.

likely
NFI continues to guide to line entry rates of 51 EUs/week. Market prospects suggest
fairly stable demand for the foreseeable future. NFI believes there is pent-up demand,
but continuing government finance limitations seem to be limiting the ability of
customers to increase orders.

needs. NFI expects 2-3 year pay back through cost reductions and synergies and a
$12.2 million annual profit pick up.

that this is not a capital-intensive project as it mainly focuses on business
NCWC has improved

NFI has experienced four years of significant cash outflows from NCWC. The company
generated $4.6 million of cash from working capital in Q1/15, mainly on reduced
accounts receivable.
We are currently modeling NCWC to be neutral to cash generation in 2015 as NCWC
normalizes, followed by modest cash outflows from NCWC after 2015 related to
modest growth.
Auto Components 3
356

Forecast boosted on aftermarket sales and

margin forecast increases
We increased our aftermarket sales and margin assumptions based on the Q1/15
upside surprises. Both look sustainable, although we have only taken a portion of the
margin upside surprise into our forecast for conservatism (due to the volatility of
quarterly results).
We also adjusted our bus volume assumptions modestly lower, as we believe our
previous seasonal factors were too high. Finally we slightly increased our bus margin
assumption for 2015, given the slight upside surprise on this line item in Q1/15.
Net, the aftermarket increases were much larger than the net bus reductions,
resulting in a 6-8% increase in our EBITDA forecast.
with Figure 7.
Auto Components 4
357

Dividend/share (C$)
% change
% change
EBITDA
EBITDA margin
2015E
New
Old
Fc s t
Fc s t
0.608 0.585
4%
0%
2016E
New
Old
Fc s t
Fc s t
0.620 0.585
2%
0%
2017E
New
Old
Fc s t
Fc s t
0.620 0.585
0%
0%
2018E
New
Old
Fc s t
Fc s t
0.620 0.585
0%
0%
2019E
New
Old
Fc s t
Fc s t
0.620 0.585
0%
0%
2014
0.59
n.m.
Q 1/15
0.15
0%
0.71
#N/A
0.55
97%
0.33
n.m.
0.50
n.m.
1.24
73%
1.56
119%
1.21
-2%
1.12
-28%
1.32
9%
1.28
14%
1.36
3%
1.32
3%
1.40
2%
1.34
2%
82%
27%
46%
29%
49%
38%
51%
52%
47%
46%
45%
44%
44%
44%
1,451
21%
380
17%
398
15%
394
14%
1,561
8%
1,460
1%
1,580
1%
1,450
-1%
1,618
2%
1,479
2%
1,657
2%
1,511
2%
1,698
2%
1,541
2%
91
6.3%
30
7.8%
30
7.6%
29
7.3%
120
7.7%
111
7.6%
123
7.8%
117
8.0%
131
8.1%
124
8.4%
133
8.1%
126
8.3%
136
8.0%
128
8.3%
18
20
17
16
16
16
16
16
Payout ratio
Revenue
% change
Q 2/15E
New
Old
Fc s t
Fc s t
0.152 0.146
4%
0%
46
(0)
(5)
20
(6)

Bus revenue/unit
Bus EBITDA/unit
Aftermarket EBITDA
2,437
465
24
50
572
508
26
17
625
508
26
14
701
455
25
11
2,447
508
26
58
2,578
455
25
46
2,500
511
27
56
2,578
458
27
47
2,548
514
29
57
2,614
461
29
48
2,596
517
29
58
2,652
464
29
49
2,648
520
29
59
2,688
467
29
50
New orders (units)

2,263
2,102
392
1,922
685
1,982
729
1,950
2,447
2,102
2,578
2,102
2,500
2,102
2,578
2,102
2,548
2,102
2,614
2,102
2,596
2,102
2,652
2,102
2,648
2,102
2,688
2,102
Return on capital
1
5.2%
1.104
7.6%
1.242
11.9%
1.230
7.3%
1.250
10.5%
1.230
6.8%
1.245
11.7%
1.230
7.7%
1.250
12.2%
1.230
8.7%
1.250
12.3%
1.230
9.2%
1.250
12.3%
1.230
9.8%
1.250
Auto Components 5
358

VALUATION
range.
names (Figure 5).
Auto Components 6
359

Eq ui ty Pr i ce :
Mar k et
Cur .
M a y . 10,
Cur .
Year
2015
Di v.
2015
$14. 69
$0. 59
Di v.
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M )
EPS
4. 0%
$1. 37
4. 4%
De b t/
P/E
Gr o wth
Ca p ('15- '17)
42. 6%
$816 $0. 64 22. 9 33. 5%
5. 7%
68. 2%
17. 5 39. 0%
8. 8%
Chorus Aviation
2015
$6.06
$0.48
7.9%
$1.01
47.5%
$732 $0.72
8.5
88.4%
12.9%
Davis + Henderson
2014
$41.12
$1.28
3.1%
$2.19
58.4%
$4,341 $2.68
15.4
41.2%
9.3%
Westshore Terminals
2014
$33.45
$1.32
3.9%
$1.25
105.3%
$2,484 $1.84
18.2
0.0%
2.1%
Cineplex Galaxy
2015
$48.53
$1.57
3.2%
$1.79
87.4%
$3,061 $2.14
22.6
32.1%
14.0%
argument.
Auto Components 7
360


EBITDA
1-year
t arget
125.2
2-year
t arget
131.5
Multiplier
EV
7.5
939.3
(121.1)
818.2
7.5
986.2
(86.1)
900.2

62.0
13.20
16.00
62.0
14.52
18.00

0.62
16.62
1.24
19.24
13.1%
31.0%

3.9%
9.7%
3.4%
9.0%

2.2%
8.0%
FCFPS C$
1.54
1.62

We have maintained our rating at BUY, given the attractive implied one-year
investment return. Our current target and estimated dividend currently produces a
16.0% one-year implied investment return (including a 4.3% dividend yield).
Auto Components 8
361

F ree cash
Interest paid
Interest expense
Income taxes paid
Free cash flow
Exchange rate
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
28.7
(4.6)
4.0
(3.1)
2.1
(13.7)
(0.5)
(4.3)
1.3
0.8
(0.7)
(0.2)
9.8
1.252
12.3
8.1
22.3
(2.5)
3.0
(3.0)
7.3
(7.3)
(0.7)
(2.0)
0.8
(0.7)
17.2
1.230
21.2
8.4
16.7
1.6
3.0
(3.0)
8.6
(8.6)
(0.7)
(2.0)
0.8
(0.7)
15.7
1.230
19.3
8.6
13.3
5.1
3.0
(3.0)
8.6
(8.6)
(0.7)
(2.0)
0.8
(0.7)
15.7
1.230
19.3
8.6
81.0
(0.4)
13.1
(12.2)
26.5
(38.2)
(2.4)
(10.3)
1.3
3.1
(3.0)
(0.2)
58.5
1.230
72.1
33.8
73.2
5.8
11.9
(11.9)
32.5
(32.5)
(2.6)
(8.0)
3.1
(3.0)
68.4
1.230
84.2
34.4
78.7
4.7
11.5
(11.5)
35.9
(35.9)
(2.6)
(8.0)
3.1
(3.0)
72.9
1.230
89.6
34.4
80.9
3.9
11.1
(11.1)
37.3
(37.3)
(2.6)
(8.0)
3.1
(3.0)
74.3
1.230
91.4
34.4
82.6
3.9
10.7
(10.7)
38.7
(38.7)
(2.6)
(8.0)
3.1
(3.0)
76.0
1.230
93.5
34.4
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5

0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.22
0.15
0.38
0.15
0.35
0.16
0.35
0.16
1.30
0.61
1.52
0.62
1.61
0.62
1.65
0.62
1.68
0.62
Auto Components 9
362

Incom e statem ent
Revenues
EBITDA
Other
Other expenses
Pre-tax income
Income taxes
Net Income (loss)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
865.3 1,199.4
(810.2) ######
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
380.3
(352.1)
1.5
29.7
(9.5)
(1.9)
0.0
0.0
18.2
(2.3)
(0.7)
(0.5)
(0.6)
0.0
14.1
(3.3)
10.9
397.6
(367.4)
0.0
30.3
1.1
0.0
0.0
0.0
31.3
(2.3)
(0.7)
0.0
0.0
0.0
28.3
(9.3)
19.0
391.6
(361.7)
0.0
29.9
1.0
0.0
0.0
0.0
31.0
(2.3)
(0.7)
0.0
0.0
0.0
27.9
(10.6)
17.4
2015E
2016E
2017E
2018E
2019E
391.6 1,561.2 1,580.1 1,618.3 1,656.7 1,698.0

(361.7) (1,442.9) (1,456.7) (1,487.4) (1,523.4) (1,561.9)
0.0
1.5
0.0
0.0
0.0
0.0
29.9
119.8
123.4
130.9
133.4
136.1
0.9
(6.4)
4.3
5.5
6.4
7.0
0.0
(1.9)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
30.9
111.4
127.7
136.4
139.7
143.1
(2.3)
(9.3)
(9.3)
(9.3)
(9.3)
(9.3)
(0.7)
(2.8)
(2.6)
(2.2)
(1.8)
(1.4)
0.0
(0.5)
0.0
0.0
0.0
0.0
0.0
(0.6)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
27.9
98.2
115.8
124.8
128.6
132.3
(10.5)
(33.6)
(40.4)
(43.8)
(45.2)
(46.7)
17.3
64.6
75.4
81.0
83.4
85.7
0.75
0.63
(0.10)
0.58
0.87
0.26
0.15
0.19
0.28
0.15
0.29
(0.01)
0.15
0.32
(0.04)
0.15
0.38
0.49
0.59
1.18
0.71
0.15
0.22
0.55
0.15
0.38
0.33
0.16
0.35
0.22
0.16
0.35
0.15
0.61
1.30
1.24
0.62
1.52
1.21
0.62
1.61
1.32
0.62
1.65
1.36
0.62
1.68
1.40
52.3
58.9
55.5
55.6
55.7
55.7
55.6
55.8
62.0
62.0
62.0
60.4
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
17.4%
16.6%
0.0%
7.8%
14.8%
32.9%
4.0%
7.6%
8.6%
7.9%
6.0%
7.6%
-6.7%
-8.5%
6.0%
7.6%
7.6%
10.1%
4.0%
7.7%
1.2%
16.6%
1.9%
7.8%
2.4%
6.5%
0.0%
8.1%
2.4%
2.0%
0.0%
8.1%
2.5%
2.3%
0.0%
8.0%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
7.6%
11.9%
11.7%
11.5%
10.5%
11.7%
12.2%
12.3%
12.3%
Bus revenues
Bus sales growth
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
290.7
14.7
15.9%
5.1%
572
508
26
26
317.6
16.3
19.5%
5.1%
625
508
26
27
317.6
16.3
14.0%
5.1%
625
508
26
28
317.6
16.3
-5.6%
5.1%
625
508
26
26
1243.7
63.5
9.9%
5.1%
2,447
508
26
26
1278.1
67.5
2.8%
5.3%
2,500
511
27
27
1310.3
73.9
2.5%
5.6%
2,548
514
29
29
1342.7
75.3
2.5%
5.6%
2,596
517
29
29
1377.6
76.8
2.6%
5.6%
2,648
520
29
29
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
89.6
16.7
22.8%
18.6%
80.0
14.0
-0.8%
17.5%
74.0
13.7
-9.8%
18.5%
74.0
13.7
-11.2%
18.5%
317.6
58.1
-0.5%
18.3%
302.0
55.9
-4.9%
18.5%
308.0
57.0
2.0%
18.5%
314.0
58.1
1.9%
18.5%
320.4
59.3
2.0%
18.5%

EBITDA/sales
ROC
Segm ented data
Auto Components 10
363

Y e ars e nde d De c. 3 1 ($ m illio ns)
Balance she e t
Cash
Accounts receivable
Inventories
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
7.6
186.9
232.0
3.5
0.1
0.0
0.0
430.0
17.5
192.3
218.8
3.7
0.1
0.0
0.0
432.3
21.8
193.7
218.8
3.6
0.1
0.0
0.0
437.9
Capital assets
Deferred charges
Intangible assets
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
64.3
0.0
539.1
67.9
0.0
0.0
1,101.4
65.5
0.0
544.5
67.9
0.0
0.0
1,110.3
Bank indebtedness
Deferred revenue
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
226.5
0.0
23.0
35.0
1.6
13.0
18.6
317.6

Long-term debt
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
0.9
2.9
105.5
201.0
2.2
13.9

Share capital
Retained earnings
CAPEX
Net debt
Book value / unit
0.0
480.8
(136.8)
0.0
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
0.0
594.5
(141.8)
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
0.0
594.7
(137.5)
2015E
2016E
2017E
2018E
2019E
22.6
198.0
218.8
3.6
0.1
0.0
0.0
443.0
22.6
198.0
218.8
3.6
0.1
0.0
0.0
443.0
55.7
199.7
222.3
3.7
0.1
0.0
0.0
481.4
94.3
204.5
225.8
3.8
0.1
0.0
0.0
528.4
135.0
209.4
229.3
3.9
0.1
0.0
0.0
577.6
177.4
214.6
232.8
3.9
0.1
0.0
0.0
628.7
66.7
0.0
549.8
67.9
0.0
0.1
1,122.4
67.8
0.0
555.2
67.9
0.0
0.1
1,134.0
67.8
0.0
555.2
67.9
0.0
0.1
1,134.0
62.7
0.0
576.6
67.9
0.0
0.2
1,188.8
58.9
0.0
598.0
67.9
0.0
0.3
1,253.5
56.0
0.0
619.4
67.9
0.0
0.4
1,321.3
54.0
0.0
640.8
67.9
0.0
0.5
1,391.9
0.0
222.1
0.0
23.0
35.0
1.6
13.0
17.8
312.4
0.0
222.6
0.0
23.0
35.0
1.6
13.0
17.1
312.2
0.0
222.6
0.0
23.0
35.0
1.6
13.0
16.3
311.4
0.0
222.6
0.0
23.0
35.0
1.6
13.0
16.3
311.4
0.0
224.1
0.0
23.0
35.0
1.6
13.0
14.2
310.9
0.0
228.8
0.0
23.0
35.0
1.6
13.0
13.2
314.6
0.0
234.4
0.0
23.0
35.0
1.6
13.0
12.2
319.1
0.0
240.3
0.0
23.0
35.0
1.6
13.0
11.2
324.0
0.9
2.9
107.5
201.0
2.2
13.9
0.9
2.9
109.5
201.0
2.2
13.9
0.9
2.9
111.5
201.0
2.2
13.9
0.9
2.9
111.5
201.0
2.2
13.9
0.9
2.9
119.4
201.0
2.2
13.9
0.9
2.9
127.3
201.0
2.2
13.9
0.9
2.9
135.2
201.0
2.2
13.9
0.9
2.9
143.1
201.0
2.2
13.9
0.0
594.7
(125.3)
0.0
594.7
(114.9)
0.0
594.7
(104.6)
0.0
594.7
(104.6)
0.0
594.7
(57.1)
0.0
594.7
(4.1)
0.0
0.0
594.7
51.3
594.7
109.0
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,101.4
1,110.3
1,122.4
1,134.0
1,134.0
1,188.8
1,253.5
1,321.3
1,391.9
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
5.5
119.4
5.5
117.0
5.5
118.5
5.5
123.6
21.9
123.6
12.0
129.4
12.1
134.1
12.2
138.0
12.3
141.9
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
210.9
2.1x
8.24
23.8x
201.0
1.8x
8.46
24.5x
196.7
1.7x
8.64
23.7x
195.9
1.6x
8.83
23.3x
195.9
1.6x
8.83
23.7x
162.8
1.3x
9.69
24.2x
124.2
0.9x
10.64
26.6x
83.5
0.6x
11.64
28.8x
41.1
0.3x
12.68
30.9x
Auto Components 11
364

Net income
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2014
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
10.9
4.2
5.3
0.0
0.0
3.4
0.0
1.9
0.0
0.7
(0.8)
0.4
(2.0)
24.1
4.6
28.7
19.0
4.3
(5.4)
0.0
0.0
2.0
0.0
0.0
0.0
0.7
(0.8)
0.0
0.0
19.9
2.5
22.3
17.4
4.3
(5.4)
0.0
0.0
2.0
0.0
0.0
0.0
0.7
(0.8)
0.0
0.0
18.3
(1.6)
16.7
Investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(4.3)
(4.3)
(5.5)
(5.5)
Financing
Share issuance
Dividends
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(6.7)
(34.1)
Q1 /1 5 Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
17.3
4.4
(5.4)
0.0
0.0
2.0
0.0
0.0
0.0
0.7
(0.8)
0.0
0.0
18.3
(5.1)
13.3
64.6
17.2
(10.7)
0.0
0.0
9.4
0.0
1.9
0.0
3.0
(3.1)
0.4
(2.0)
80.6
0.4
81.0
75.4
17.1
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
78.9
(5.8)
73.2
81.0
15.9
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
83.4
(4.7)
78.7
83.4
15.0
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
84.8
(3.9)
80.9
85.7
14.4
(21.4)
0.0
0.0
7.9
0.0
0.0
0.0
3.0
(3.1)
0.0
0.0
86.5
(3.9)
82.6
(5.5)
(5.5)
(5.5)
(5.5)
(20.8)
(20.8)
(12.0)
(12.0)
(12.1)
(12.1)
(12.2)
(12.2)
(12.3)
(12.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.9)
(6.9)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(7.0)
(7.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(7.0)
(7.0)
0.0
(27.0)
0.0
0.0
(0.5)
0.0
0.0
0.0
(27.5)
(55.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(28.0)
(28.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(28.0)
(28.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(28.0)
(28.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(28.0)
(28.0)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
(0.2)
0.0
0.0
0.0
(0.2)
0.0
0.0
0.0
0.0
Net cash flow

1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
(9.9)
17.5
7.6
10.0
7.6
17.5
4.2
17.5
21.8
0.8
21.8
22.6
5.1
17.5
22.6
33.2
22.6
55.8
38.6
55.8
94.3
40.7
94.3
135.1
42.3
135.1
177.4
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
24.4
16.8
11.2
7.8
60.3
61.2
66.6
68.7
70.3
Auto Components 12
365

Investment risks
Auto Components 13
366


Rating
Coverage Universe
IB Clients
#
%
%
Buy
575
57.73%
32.00%
Hold
338
33.94%
16.27%
Sell
38
3.82%
2.63%
Speculative Buy
45
4.52%
55.56%
996*
100.0%
relevant issuer.
Risk Qualier
Auto Components 14
367


B:C$7.25
06/05/12
H:C$7.25
08/13/12
H:C$8.00
09/19/12
H:C$8.25
11/14/12
H:C$8.75
01/11/13
H:C$9.25
01/29/13
H:C$9.75
02/06/13
Jul 2012
Oct 2012
Jan 2013
Apr 2013
Jul 2013
Oct 2013
H:C$11.50
05/11/14
H:C$11.75
06/24/14
H:C$12.00
07/16/14
H:C$10.00
03/25/13
H:C$10.25
04/18/13
B:C$11.25
06/24/13
H:C$11.75
08/07/13
H:C$11.25
11/07/13
B:C$12.00
01/15/14
16
14
12
10
8
6
B:C$12.50
03/23/14
B:C$14.00
08/06/14
H:C$14.00
11/09/14
B:C$12.50
12/12/14
Closing Price
Jan 2014
H:C$14.00
01/12/15
Apr 2014
Jul 2014
Oct 2014
Jan 2015
Apr 2015
B:C$15.00
03/19/15
Target Price
General Disclosures
Auto Components 15
368

in Canada. Canadian clients wishing to effect transactions in any designated investment discussed should do so through a qualified
salesperson of Canaccord Genuity Corp. in their particular province or territory.
account.
Inc.
entities that publish research and Canaccord Genuity Singapore Pte. Ltd who are an exempt financial adviser under section 23(1)(d) of
or institutional investor as defined under section 4A of the Securities and Futures Act It is not intended to be distributed or passed on,
Person: Tom Gunnersens tel # is +852 3919 2561) in respect of any matters arising from, or in connection with, the [analyses or
report].
This research is distributed in Hong Kong by Canaccord Genuity (Hong Kong) Limited who is licensed by the Securities and Futures
this report can contact Canaccord Genuity (Hong Kong). Ltd. (Contact Person: Tom Gunnersens tel # is +852 3919 2561) in respect of
any matters arising from, or in connection with, the research.
Auto Components 16
369

regulated by ASIC.
Auto Components 17
370
COMPANY UPDATE
NFI | TSX
$14.32
Rating: Outperform
(previously $17.50)
Total Return: 26.5%
Yield: 4.2%
May 8, 2015
Aftermarket Margins Jump Demonstrating Sustainable

Improvement

C$14.90 / C$11.53
4.3%
Dividend Yield:
55.5 (basic)
55.5 (fd)
C$794.3

Float ($mm)
33.6
82.0
$212.1
$866.6

(FYE Dec 31)
2014
Revenue ($mm)
2015e
2016e
$1,451.1 $1,597.8 $1,710.8
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
$107.4
$130.9
$149.4
$0.65
$0.87
$1.13
Q2
Q3
Q4
2014
$19.7
$27.0
$25.7
$35.0
2015
$31.4
$33.1e
$31.3e
$35.1e
2016
$38.0e
$36.9e
$35.8e
$38.8e
Q2
Q3
Q4
$0.16
$0.15
$0.24
Adjusted FD EPS
2014
Q1
$0.10
2015
$0.20
$0.20e
$0.21e
$0.25e
2016
$0.29e
$0.28e
$0.26e
$0.30e

$15
Volume ('000)
800
Last Sale Price
$349.6mm, $25.3mm and $0.16.
Boosting Dividend Shows Confidence in Outlook: The company announced an
increase in annual dividend rate from C$0.585 to C$0.62 effective for dividends
declared subsequent to May 6, 2015, an increase of 6.0%. Management was hesitant to
disclose any specific metrics related to the increase, however we believe it indicates an
expectation of continuing financial improvement. On the conference call, the company
disclosed that review of the dividend has become a more of a regular process at the
board level, which we believe is constructive for future increases in line with earnings
growth.
Estimate Changes Driven by Aftermarket Margin Expansion: The most
impactful item in the quarter was the remarkably strong EBITDA margin in aftermarket
at 18.6%, which is significantly stronger than the company's recent performance over the
past several quarters. Management explained that the improvement came about as a
result of a number of concerted efforts with the ongoing integration of the various
components of the aftermarket business. Our estimate changes stem from our revised
expectation for margin performance for the companys aftermarket business, where we
have increased margin expectations to 19.1% (+286bps) and 20.0% (+300bps)
respectively. Our 2015e EBITDA increases to $131.3mm (+7.8%) while our 2016e
EBITDA increases by 9.0% to $151.0mm.
600
$10
$5
400
200
$0
0
May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15

Managing Director
647.776.8246

647.776.8245
Maintain Outperform; Increasing Target to C$18.50: While guidance and the

companys outlook for the remainder of 2015 remained consistent the step jump in
aftermarket margins, which we believe are sustainable, leads us to increase estimates.
We believe the introduction of the higher dividend is an indication in managements
confidence that continuous improvement activities should lead to improved financial
performance which coupled with a 4.3% yield offers an attractive return. We believe as
the company completes integration of both the manufacturing and aftermarket segments
of the business that there are a number of opportunities to drive improvements in return
on invested capital, which we believe could drive the next leg of share price
appreciation. We maintain our Outperform rating and are increasing our 12-month target
price to C$18.50 from C$17.50. Our target price is based on a blend of a 15.0x earnings
and 7.0x EBITDA multiple of the four quarters ending Q4/16 reflecting our 12-month
forward valuation period as well as an exchange rate of C$1.22/$US.
371
I NSTITUTIONAL
EQUITY
R ESEARCH:
DIVERSIFIED
INDUSTRIES
INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES

Current Valuations
Unit Price (C$)
$14.32
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
11.3x
8.5x
7.6x
Peer Average
16.1x
13.6x
12.1x
8.2x
6.7x
5.9x
18.0x
13.6x
10.5x
Incom e Statem ent
2014
2015e
2016e
2015e
2016e
Trend
Revenues
Bus Manufacturing
Aftermarket
Revenue
1,132,066 1,292,952 1,414,167

319,034
303,118
294,666
1,451,100 1,596,071 1,708,833
2014
45,823
78,432 114,728
35,255
18,073
81,078
96,504 107,236
(1,766)
(1,812)
(7,492)
(1,812)
22.0%
19.0%
17.2%
57,374
72,378
90,108
5.1%
5.6%
6.4%
49,991
58,151
58,933
15.7%
19.2%
20.0%
86,457
128,775
149,041
6.0%
8.1%
8.7%
107,365
130,529
149,041
per Share
7.4%
8.2%
8.7%
Amortization
35,837
39,818
37,392
Operating Earnings
50,620
88,958
111,649
EBT
37,568
72,628
98,880
2014
2015e
2016e
Taxes
10,849
24,905
36,585
32,457
33,928
34,413
Net Income
26,719
47,723
62,294
35.0%
34.0%
29.9%
Reported FD EPS
$0.48
$0.86
$1.12
Adjusted FD EPS
$0.65
$0.87
$1.12
Cash Yield

Margin
Adjusted EBITDA
Margin
2014
2015e
2016e
Revenue
21.0%
10.0%
7.1%
Adjusted EBITDA
Adjusted FD EPS
FX Assum ptions
13.4%
2.7%
2014
0.9057
0.9050
21.6%
32.3%
2015e
0.7916
0.7813
14.2%
29.6%
2016e
0.7945
0.8130
Trend
2014
2015e
2016e
Trend
229,034
195,271
167,270
2.1x
1.5x
1.2x
33.6%
29.2%
25.7%
EOP CAD/USD Rate

Leverage
Net Debt (EOP)

$5.0
(10,889) (16,931) (13,890)

1,486
(154)
(162)
Free Cash Flow
83,667
79,085
91,533
Free cash flow (C$)
92,829
99,885 115,200
$1.67
$1.80
$2.08
FCF Yield
11.7%
12.6%
14.5%
82.8%
7.6%
15.3%
Grow th
Trend
Trend
$0.585
$0.611
$0.620
4.1%
4.3%
4.3%
2014
2015e
2016e
2,437
2,544
2,650

464.5
23.5
49.2
0.9x
508.2
28.5
50.9
1.0x
533.6
34.0
52.0
1.0x
20.7%
11.0%
17.7%
Trend
Trend

Firm
Option
2020, 8%
2015, 18%
$4.0
2019, 21%
$3.0
2016, 11%
$2.0
$1.0
2017, 11%
$0.0
Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315
2018, 31%

372
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
: [INDUSTRY
]
Q1/15 Results Well Ahead of Expectations

EPS of $380.3mm, $31.4mm and $0.20. The results were well ahead of our expectations for
revenue, Adjusted EBITDA and Adjusted FD EPS of $363.2mm, $27.8mm and $0.15 versus
consensus estimates of $349.6mm, $25.3mm and $0.16.
Q1/15
Q1/14
y/y
Growth
Q4/14 y/y
Growth
572
508.2
25.8
554
452.9
14.0
3.2%
12.2%
84.1%
7.1%
0.4%
5.9%
3,568.8
3,689.5
(3.3%)
(7.2%)
Operating Segments
Bus Manufacturing
Revenue
EBITDA
290,711
14,734
5.1%
5.3%
250,889
7,751
3.1%
3.3%
15.9%
90.1%
2.0%
2.0%
7.5%
11.6%
0.4%
0.5%
89,590
16,680
18.6%
72,976
11,915
16.3%
22.8%
40.0%
2.3%
22.6%
24.6%
0.2%
380,301
31,414
10,855
323,865
19,666
5,484
17.4%
59.7%
97.9%
10.2%
(4.9%)
(45.9%)
$0.20
$0.20
$0.10
$0.10
97.8%
105.5%
(46.0%)
(18.0%)

Aftermarket
Revenue
EBITDA
EBITDA Margin
Total
Revenue
Adjusted EBITDA
Reported Net Income
Reported
Adjusted
Items of Note
The company announced an increase in annual dividend rate from C$0.585 to C$0.62
effective for dividends declared subsequent to May 6, 2015, an increase of 6.0%.
Management was hesitant to disclose any specific metrics related to the increase, however we
believe it indicates an expectation of continuing financial improvement. On the conference
call, the company disclosed that review of the dividend has become a more of a regular
process at the board level, which we believe is constructive for future increases in line with
earnings growth.
NFI reported a 15.9% y/y increase in bus manufacturing revenue at $290.7mm as a result of
increased deliveries and higher average selling price. The company realized a price of
$508.2k/EU during the quarter, 12.2% higher than previous quarter. We highlight the
companys historical revenue per EU in the graph below. We note the overall positive trend in
373
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
: [INDUSTRY
]
pricing although are mindful of the fact that sales mix can materially impact the average
price/EU during the quarters.

The companys aftermarket revenue increased to $89.6mm (+22.8% y/y) as a result of higher
volume associated the Chicago Transit Authority (CTA) contract. We note excluding the CTA
mid-life overhaul program, the companys aftermarket revenue for Q1/15 was $73.1mm, up
10.1% from Q1/14, which was stronger than expected.
Adjusted EBITDA margin in bus manufacturing was weaker than we had expected at 5.1% of
revenue or $25.8k/EU compared to our estimate for a 5.5% margin and $27.6K/EU, although
we note quarters can be lumpy. The most impactful item in the quarter however, was the
remarkably strong EBITDA margin in aftermarket at 18.6%, which is significantly stronger
than the company's recent performance over the past several quarters and our 15.7% estimate,
made more surprising by the mix of CTA contract work, which we estimate is several
percentage points lower in margin. In discussions with management on the companys
conference call we were left with the impression that the underlying performance of the core
aftermarket business was very strong at 19.5%, assuming an approximate 5% reduction for
CTA contract work. Management explained that the improvement came about as a result of a
number of concerted efforts with the ongoing integration of the various components of the
aftermarket business.
During the quarter, the companys liquidity position increased to $90.3mm compared to
$73.2mm in Q4/14 as a result of increased cash flows from operating activities attributable to
change in non-cash working capital. The company reported a decrease in accounts receivables
and an increase in income taxes payable offset by a decrease in deferred revenue and accounts
payable.
NFI announced the member of the UNIFOR main collective bargaining unit at the companys
Winnipegs facility had ratified a new three year collective bargaining agreement through
March 31, 2018 replacing the previous agreement that expired on March 31, 2015
Management maintained the Q2/15 date for the completing the transition of NABI bus
product lines to Xcelsior platform at the Anniston facility. In the last quarter, the company
had guided to $20.0mm in capex and direct operating costs of which $4.4mm of costs were
incurred this quarter and NFI invested $4.8mm in capex. The company has revised upwards
the cost reductions and synergies from to $12.2mm (from $11.9mm) in annualized cost
savings. NFI realized a final $0.2mm credit in Q1/15 related to investment tax credits. NFI
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continues to target an average corporate entry line rate of ~51EU per production week.
although we note that production rates may vary during the quarter. Order intake is expected
to remain strong with management describing the demand environment as "robust". The
primary change to our estimates stems from our revised expectation for margin performance
for the companys aftermarket business, where we have increased margin expectations to
19.1% and 20.0% respectively. Our 2015e EBITDA increases to $131.3mm (+7.8%) while
our 2016e EBITDA increases by 9.0% to $151.0mm.
Revenue
Bus Manufacturing
Aftermarket
Revenue
ACC Old Estim ates

2015e
2016e
ACC New Estim ates

2015e
2016e
Change
2015e
2016e
1,281,330 1,397,547
295,968 291,698
1,577,298 1,689,245
18.8%
17.3%
1,292,952 1,414,167
309,279 304,635
1,602,231 1,718,801
19.3%
17.7%
0.9%
4.5%
1.6%
54 bps
1.2%
4.4%
1.7%
46 bps
EBITDA
Margin
73,812
5.8%
47,968
16.2%
121,780
7.7%
89,036
6.4%
49,589
17.0%
138,625
8.2%
72,378
5.6%
58,958
19.1%
129,582
8.1%
90,108
6.4%
60,927
20.0%
151,035
8.8%
(1.9%)
(16) bps
22.9%
286 bps
6.4%
37 bps
1.2%
0 bps
22.9%
300 bps
9.0%
58 bps
Adjusted EBITDA
Margin
121,780
7.7%
138,625
8.2%
131,336
8.2%
151,035
8.8%
7.8%
48 bps
9.0%
58 bps
Operating Earnings
EBT
82,046
68,794
102,644
90,307
89,764
73,434
113,643
100,873
9.4%
6.7%
10.7%
11.7%
Net Incom e
Reported FD EPS
Adjusted FD EPS
43,340
$0.78
$0.78
56,893
$1.02
$1.02
48,231
$0.87
$0.88
63,550
$1.14
$1.14
11.3%
11.3%
12.1%
11.7%
11.7%
11.7%
66,392
89,226
(26,436)
62,223
108,679
99,719
(12,599)
86,552
78,107
97,072
(16,931)
79,653
116,126
108,639
(13,890)
92,937
17.6%
8.8%
(36.0%)
28.0%
6.9%
8.9%
10.3%
7.4%
Free cash flow (C$)

per Share
FCF Yield
75,168
$1.35
9.3%
103,853
$1.87
12.9%
96,048
$1.73
11.9%
111,520
$2.01
13.8%
27.8%
27.8%
259 bps
7.4%
7.4%
95 bps

32,471
43.2%
$0.59
32,471
31.3%
$0.59
33,928
35.3%
$0.61
34,413
30.9%
$0.62
4.5%
(787) bps
4.5%
6.0%
(41) bps
6.0%
215,997
1.8x
0.3x
145,345
1.1x
0.2x
196,538
1.5x
0.3x
168,803
1.2x
0.3x
(9.0%)
(15.6%)
(7.0%)
16.1%
7.7%
10.8%
2,554
501.7
28.9
51.1
1.0x
0.0%
2,653
526.8
33.6
52.0
1.0x
19.6%
2,544
508.2
28.5
50.9
1.0x
0.0%
2,650
533.6
34.0
52.0
1.0x
19.6%
(0.4%)
1.3%
(1.6%)
(0.4%)
(0.1%)
0 bps
(0.1%)
1.3%
1.3%
(0.1%)
0.0%
0 bps
Free Cash Flow

Free Cash Flow
Leverage
Net Debt (EOP)

375
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We note our valuation is sensitive to the multiple applied to estimates. We believe as the
company completes integration of both the manufacturing and aftermarket segments of the
business that there are a number of opportunities to drive improvements in return on invested
capital, which we believe could drive the next leg of share price appreciation. In decomposing
multiples a number of factors play into our fair value assessment including the companys
long-term growth rate (low), cost of capital (moderate), tax rate (typical), level of capital
intensity and required reinvestment (extremely low a <1% of revenue) leaving the remaining
key driver being the return on capital. A more efficient balance sheet, utilizing less capital in
the form of working capital, a different capital mix or higher operating earnings all can
contribute to improvements in total returns. In Figure 4, we show our estimate of the
companys ROIC on a trailing basis, where we believe we are at an inflection point which
ultimately could result in higher multiples. We estimate trailing ROIC was 5.1% at Q1/15.
Trailing Return on Invested Capital
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Q1/07 Q1/08 Q1/09 Q1/10 Q1/11
Figure 4 Trailing Return on Invested Capital
Q1/12
Q1/13
Q1/14
Q1/15
Q1/16
The impact of higher multiples on fair value estimates is shown in Figure 5. While we
currently value NFI at a 7.0x EBITDA multiple, we note peers currently trade at 8.5x on
2015e and 7.6x on 2016e.
% Variance
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
134,485
141,957
149,428
156,899
164,371
6.50x
7.00x
7.50x
8.00x
8.50x
$14.90
$16.38
$17.86
$19.33
$20.81
$15.97
$17.53
$19.09
$20.65
$22.21
$17.04
$18.68
$20.32
$21.96
$23.60
$18.10
$19.83
$21.55
$23.28
$25.00
$19.17
$20.98
$22.78
$24.59
$26.40

While guidance and the companys outlook for the remainder of 2015 remained consistent the
step jump in aftermarket margins, which we believe are sustainable, leads us to increase
estimates. We believe the introduction of the higher dividend is an indication in
managements confidence that continuous improvement activities should lead to improved
financial performance which coupled with a 4.3% yield offers an attractive return. We
maintain our Outperform rating and are increasing our 12-month target price to C$18.50 from
C$17.50. Our target price is based on a blend of a 15.0x earnings and 7.0x EBITDA multiple
of the four quarters ending Q4/16 reflecting our 12-month forward valuation period as well as
an exchange rate of C$1.22/$US.
376
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]

Ticker
Rating &
Target

TSX:NFI
OP (C$18.50)
Marcopolo S.A.
BOVESPA:POMO4
NR
Wajax Corporation
TSX: WJX
NR
TSX: AFN
NR
Superior Plus Corp.
TSX: SPB
NR
GBX
NR
Oshkosh Corporation
OSK
NR
Spartan Motors Inc.
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
Cubic Corporation
CUB
NR
Average
Trading Local
Market
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
14.32
2.95
24.84
50.27
13.90
63.25
52.54
4.35
14.73
59.99
20.99
29.62
6.59
11.72
48.03
794.9
2,387.7
416.8
663.0
1,754.3
1,669.4
4,109.2
149.1
1,000.4
3,202.9
565.3
2,413.6
550.4
242.5
1,290.1
Net
Debt
EV
($mm)
2014
EPS
2015e
213.2
1,200.3
252.0
132.3
933.6
386.4
845.3
(6.7)
210.3
(248.3)
(7.9)
4,349.0
311.1
197.1
(114.7)
875.3
3,616.2
668.8
795.3
2,687.9
2,149.0
4,954.5
142.2
1,210.7
2,954.6
557.3
6,796.6
913.5
439.6
1,175.7
0.65
0.25
2.46
0.31
0.45
4.62
3.49
0.03
0.88
3.55
1.61
(5.07)
0.03
0.00
2.77
0.87
0.23
2.04
3.26
0.88
6.28
4.18
0.08
1.18
4.01
1.60
1.82
0.07
0.00
2.93
P/E
2016e 2014 2015e 2016e
1.13
0.29
2.44
4.01
1.19
0.00
4.55
0.23
1.24
4.60
1.86
2.95
0.07
0.00
3.31
18.0x
9.7x
10.1x
NM
30.8x
13.7x
15.1x
NM
16.8x
16.9x
13.0x
NM
NM
NM
17.3x
16.1x
13.6x 10.5x
10.6x 8.3x
12.2x 10.2x
15.4x 12.5x
15.8x 11.7x
10.1x NM
12.6x 11.5x
NM
19.3x
12.4x 11.9x
15.0x 13.1x
13.1x 11.3x
16.3x 10.0x
NM
NM
NM
NM
16.4x 14.5x
13.6x 12.1x
2014
EBITDA
2015e
2016e
2014
EV/EBITDA
2015e
2016e
Price
to BV
ROIC
ROE
107.4
268.8
82.4
63.4
282.4
257.4
591.2
9.4
160.7
298.8
65.8
331.0
69.0
25.9
128.8
130.9
315.1
84.3
98.8
308.8
433.3
651.0
10.6
198.7
345.8
69.3
756.7
88.3
0.0
142.0
149.4
401.5
93.0
117.4
328.9
0.0
679.0
16.2
199.1
389.5
79.8
904.6
89.7
0.0
155.7
8.2x
13.5x
8.1x
12.5x
9.5x
8.3x
8.4x
15.1x
7.5x
9.9x
8.5x
20.5x
13.2x
17.0x
9.1x
11.3x
6.7x
11.5x
7.9x
8.0x
8.7x
5.0x
7.6x
13.4x
6.1x
8.5x
8.0x
9.0x
10.4x
NM
8.3x
8.5x
5.9x
9.0x
7.2x
6.8x
8.2x
NM
7.3x
8.8x
6.1x
7.6x
7.0x
7.5x
10.2x
NM
7.6x
7.6x
1.4x
1.5x
1.7x
3.2x
3.1x
3.1x
2.2x
0.9x
2.6x
3.1x
2.8x
NM
3.4x
0.0x
1.6x
2.2x
5.1%
3.6%
9.3%
8.4%
6.9%
16.9%
10.0%
0.5%
11.4%
17.9%
19.9%
9.2%
2.5%
NA
6.9%
9.2%
7.0%
12.7%
16.4%
2.0%
(0.5%)
35.9%
13.6%
0.2%
17.9%
20.2%
22.4%
NM
1.3%
NM
9.3%
12.2%

As of May 7, 2015. All figures in millions, unless otherwise noted.
377

NFI
C$14.32
Rating:
Outperform
12 Month Target:
C$18.50
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
63%
26%
Sector Perform
24%
14%
Underperform
2%
0%
Speculative
1%
0%
Restricted
2%
0%
Not Rated
6%
0%
Tender
2%
0%
100%
20%
Total

average.
average.
average.
material.
principal or agent.

Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
378
INITIATING COVERAGE: [INDUSTRY]
Direct
__________________________________________________________________________________________________________

George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial
Dave Mowat
President & CEO
780 408 7181
dmowat@atb.com
Ian Wild
403 974 5127
iwild@atb.com
E&P- Domestic
403 539 8617

403 539 8587
403 539 8615
403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
jmccrea
kvandenberg
porourke
ysiddiqi
nlupick
kgordey
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8596
403 539 8591
dbenner
jgibson
jsawatzky
mwestby
647 776 8246

647 776 8245
cmurray
smodwal
Agriculture
John Chu, CFA, Senior Analyst
647 776 8236

647 776 8254
jchu
spattillo
All Sectors
403 539 8607
vhoa
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Cheryl Polan
Jon Varley
Michael Capobianco
647 776 8244

647 776 8235
647 776 8231
cpolan
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Matt Colucci
403 539 8597
mcolucci

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Jesse Hardage
Edward Otto
Greg Smiddy
Alex Athanasopoulos
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

403 539 8628
647 776 8223
403 539 8595
647 776 8072
403 539 8614
403 539 8609
647 776 8224
pstables
jhardage
eotto
gsmiddy
aathanasopoulos
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
Ellen McKane, Client and Market Coordinator
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
emckane
379
Price: Cdn$14.15
May 7, 2015
Headline: Robust Start to 2015 + 6% Dividend Increase

Road & Rail

Cdn$14.15
NFI (T)
Outperform
Stock Rating:
(Unchanged)
Cdn$15.50
Target:
(Unchanged)
Robust Start to 2015 + 6% Dividend Increase
Average
Risk Rating:
(Unchanged)
Est. Total Return
13.9%
Stock Data:
Cash Yield
4.4%
9.5%
52-w eek High-Low
$14.90-$11.53
Bloomberg/Reuters:
NFI CN/ NFI.TO
Forecasts: DEC YE
Revenue (USmln)
Q1/15 Review
2014a
2015e
$86.5
$111.2
$121.9
DCPS ($US)
$1.06
$1.05
$1.24
Dividend*
$0.58
$0.60
$0.62
Payout Ratio
49%
46%
39%
DC Yield
8.3%
8.9%
10.5%
9.4x
9.2x
8.2x
12.0x
11.2x
9.5x
EV/EBITDA
P/DCPS
2016e
$1,451.1 $1,495.8 $1,613.2
EBITDA (USmln)
HIGHLIGHTS
Financial Data
55.5
$785.4
Cash
Net Debt
$17.5
$223.0
22%
2.1x

Company Profile:
(NFI-TSX) is the leading manufacturer of heavy-duty transit
buses in North America, as well as a comprehensive
provider of aftermarket parts and services.
Top line and EBITDA ahead of NBF and Street

NFI reported Q1/15 revenue of US$380 mln (vs. US$353 mln
est. & US$324 mln in Q1/14), adj. EBITDA of US$31.4 mln (vs.
US$23.2 mln est. & US$ 19.7 mln Q1/14) and DCPS of
US$0.20 reflecting a 65% payout ratio (vs. US$0.21/57% est. &
US$0.17/76% Q1/14). Results were similarly ahead of
consensus US$350 mln top line and US$26 mln EBITDA.
Bus manufacturing ASP & profitability outpace forecasts
Bus manufacturing revenue was US$291 mln (vs. US$273 mln
est. & US$251 mln Q1/14) and adj. EBITDA US$14.7 mln (vs.
US$11.5 mln est. & US$7.8 mln Q1/14). The outperformance
was led by a favourable product mix which resulted in: 1) record
average selling prices of US$508k/unit (vs. US$465k est. &
US$453k Q1/14); and 2) better-than-expected adj. EBITDA
margins (5.1% vs. 4.2% est. & 3.1% Q1/14), aided by improved
contract economics and ongoing cost-savings initiatives.
Aftermarkets continues to impress
Contribution from the aftermarkets portfolio was also above
forecast, with revenue of US$90 mln (vs. US$80 mln est. &
US$73 mln Q1/14) and adj. EBITDA of US$16.7 mln (vs.
US$12 mln est. & US$11.9 mln Q1/15). Both of these results
represent record levels, as was Q1s 18.5% EBITDA margins
(16.5% the next closest). Continued favourable industry
fundamentals, NFI leveraging the breadth generated by its
NABI and Orion acquisitions and ongoing benefits from the CTA
midlife overhaul program are all behind the outperformance.
Dividend to $0.62/year from $0.585 (still a ~40% payout)
Reiterate Outperform
We will update our forecasts after Thursdays 8 a.m. EST cc
(888.231.8191), in the interim reiterating an Outperform rating.
NFI is one of the few remaining higher quality TSX diversified
yield equities not trading at frothy multiples, our $15.50 target
price implying a relatively conservative 8.5x 2016e EV/EBITDA
and 10.5x P/CF (peers averaging 10x & 13x, respectively).

Associates:
Endri Leno - (416) 869-8047
endri.leno@nbc.ca
Kyle Stanley - (416) 507-8108
kyle.stanley@nbc.ca
380
Page 2
DISCLOSURES:
exchanges.
381
Page 3
Additional company related disclosures for New Flyer Industries Inc.

6
National Bank Financial Inc. or an affiliate has a non-investment banking services related relationship during the past 12 months.
7
The issuer is a client, or was a client, of National Bank Financial Inc. or an affiliate within the past 12 months.
382
May 6, 2015
Industrial Products
(NFI-TSX)
Bert Powell, CFA
Stock Rating:
Stock Price:
Target Price:
Market Perform
$14.15
$16.50
416-359-5301

bert.powell@bmo.com
Alan Kanso
alan.kanso@bmo.com
416-359-6193
Q1/15 Results Above Expectations; 6% Increase in Dividends

New Flyer (NFI) reported Q1/15 adjusted EPS of $0.22, above our expectations of $0.13 and the Mean estimate of $0.15.
Adjusted EPS excluded about $1.4 million of one-time items mainly related to the costs associated with strategic initiatives.
Total revenue was up 17.4% y/y to $380 million, above our expectations of $367 million. Bus deliveries were up 3% y/y to
572 equivalent units (EUs), while the average EU selling price was up 12% y/y to $508k.
Adjusted EBITDA, excluding ITCs, was up 67% y/y to $31.2 million, above our expectations of $24 million and the Mean
estimate of $26 million. The adjusted EBITDA margin was up 240 bps y/y to 8.2%, above our expectations of 6.6%.
NFI increased annual dividends by 6% to C$0.62 per share, yielding ~4.4% based on current share price.
Conference call details: Thursday, May 7 at 8:00 a.m. ET; Tel: 1-888-231-8191 or 647-427-7450.
Our View:
Results were above expectations mainly due to higher margins in both the bus manufacturing and aftermarket
segments. Average bus price of $508k was up 12% y/y and we believe would have been as a result of better mix. We
expected higher bus manufacturing margins in 2015 relative to prior year due to higher margin backlog and operational
efficiencies, but performance this quarter was above expectations. We will wait for commentary from the conference
call to see if this is more of a timing issue or if margins can remain at these levels.
The 23% y/y growth in aftermarket sales was mainly driven by increased volumes from the CTA mid-life overhaul
program, which is expected to continue until June 2015. Excluding this program, aftermarket sales were up by 10% y/y.
Margin improvement was mainly due to product mix.
We believe the increase in dividend signals NFIs confidence in its underlying cash flow, although we expected the
dividend to remain flat to provide NFI more flexibility with respect to the next leg of its growth.
We would expect New Flyer to improve margins as the expiring tax credits will be more than offset by operating
efficiencies and platform rationalization savings over the next two years.
Flash Page 1
383
Q1/15 Variance Analysis

US$ millions except per share data
Estimate
Q1/15
Actual
Q1/15
Variance
Actual
Q4/14
Actual
Q1/14
Q/Q
% Chg
Y/Y
% Chg
Bus Manufacturing
286.3
80.3
290.7
89.6
4.4
9.3
336.6
83.4
250.9
73.0
-13.6%
7.5%
15.9%
22.8%
Revenues
366.6
380.3
13.7
420.0
323.9
-9.4%
17.4%
Cost of Sales
% of revenues
322.8
88.1%
331.2
87.1%
8.4
-1.0%
373.3
88.9%
286.1
88.3%
-11.3%
15.8%
-180 bps
-130 bps
Gross Profit
% of revenues
43.8
11.9%
49.1
12.9%
5.3
1.0%
46.7
11.1%
37.7
11.7%
5.0%
180 bps
30.1%
130 bps

% of revenues
Foreign Exchange (gains) Losses
19.8
5.4%
0.0
20.9
5.5%
(1.5)
1.1
0.1%
(1.5)
20.1
4.8%
0.1
18.8
5.8%
0.8
3.9%
11.2%
70 bps
-1202.3%
-30 bps
-281.4%
EBITDA
% of revenues
24.0
6.5%
29.6
7.8%
5.7
1.3%
26.5
6.3%
18.1
5.6%
11.9%
150 bps
63.6%
220 bps
ITCs
Other
Adjusted EBITDA
% of revenues
$0
$0
24.1
6.6%
$0.2
$1.6
31.4
8.2%
0.0
1.6
7.2
1.7%
$5.6
$3.9
35.9
8.6%
$1.0
$0.6
19.7
6.1%
-12.7%
-30 bps
59.5%
220 bps
Depreciation of Property and Equipment

% of revenues
4.5
1.2%
4.5
1.2%
0.0
0.0%
4.6
1.1%
2.9
0.9%
-2.1%
54.1%
10 bps
30 bps
Amortization of Intangible Assets

% of revenues
Unrealized FX loss
5.0
1.4%
0.0
5.0
1.3%
1.9
0.0
0.0%
1.9
5.4
1.3%
(0.3)
4.8
1.5%
0.4
-7.7%
0 bps
-703.8%
3.7%
-20 bps
403.7%
EBIT
% of revenues
Other Expense
14.5
4.0%
3.4
0.0
18.2
4.8%
4.1
0.0
3.7
0.8%
0.7
0.0
16.8
4.0%
4.4
(0.9)
10.0
3.1%
3.3
0.0
8.5%
80 bps
-6.4%
-100.0%
82.3%
170 bps
25.0%
#DIV/0!
EBT
% of revenues
11.1
3.0%
14.1
3.7%
3.0
0.7%
13.3
3.2%
6.7
2.1%
6.0%
110.6%
50 bps
160 bps
Income Taxes
Tax Rate as % of EBT
3.7
33.0%
3.3
23.1%
(0.4)
-9.9%
5.0
37.3%
1.2
18.1%
-34.5%
168.0%
Net Income
% of revenues
7.4
2.0%
10.9
2.9%
3.4
0.8%
8.3
2.0%
5.5
1.7%
30.2%
90 bps
97.9%
120 bps
$0.13
$0.20
$0.06
$0.13
$0.10
46.1%
97.8%
$0.13
$0.18
$0.04
$0.12
$0.10
44.6%
80.7%
WA Shares Outstanding (fully diluted)
55.5
55.5
0.0
55.5
55.5
0.0%
0.1%

% of revenues
% of revenues
Adjusted EBITDA
% of revenues
11.5
4.0%
12.7
15.8%
24.1
6.6%
14.7
5.1%
16.7
18.6%
31.4
8.3%
3.3
1.1%
4.0
2.8%
7.3
1.7%
23.2
6.9%
11.9
14.2%
35.0
8.3%
7.8
3.1%
11.9
16.3%
19.7
6.1%
-36.4%
-180 bps
40.7%
440 bps
-10.3%
-10 bps
90.1%
200 bps
40.0%
230 bps
59.7%
220 bps
Adjusted EPS (Fully Diluted)
$0.13
$0.22
$0.08
$0.20
$0.11
7.7%
103.2%
Source: BMO Capital Markets estimates and company reports.
Flash Page 2
384

Target Price
Share Price
Quarterly Price
18
14
14
12
12
10
10
18
16
16
14
14
12
12
10
8
10
3) Mkt
6
2) NR
41) Mkt
400
400
300
300
200
200
100
100
Revenue / Share
Price / Revenue
500
400
400
300
300
200
200
100
100
1.0
200

500
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
300
2012
2013
2014

200
200
0.5
100
-200
0.0
Price / Earnings
2012
2013
-200
2014
400
200
0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
0.48
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
30.1
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
>100
9.9
16.5
0.59
4.2
4.1
1.4
ROE
%
3
6
6
NFI - Rating as of 24-May-12 = R
1
2
3
Date
5-Jun-12
29-Oct-12
3-Jul-13
Rating Change
R to Mkt
Mkt to NR
NR to Mkt
Share Price
$6.59
$7.75
$11.14

Last Price ( May 5, 2015): $14.17

Flash Page 3
385
report.
12 months.
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
43.7%
18.6%
58.2%
42.7%
55.5%
54.1%
Hold
Market Perform
51.4%
10.4%
38.5%
52.1%
41.9%
40.5%
Sell
Underperform
4.9%
9.4%
3.3%
5.2%
2.6%
5.5%
*
**
***
****
*****
Flash Page 4
386

For
Other
Important
Disclosures
on
the
stocks
discussed
in
this
report,
please
go
to
BMO
Capital
Markets
Equity
Research
is
available
via
our
website
Conflict Statement
conflicts
of
interest
in
connection
with
investment
research
which
is
available
at
General Disclaimer
Additional Matters
Nesbitt Burns Inc.
Flash Page 5
387


A member of BMO
Financial Group
Flash Page 6
388

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
EARNINGS UPDATE
j

Bus Fundamentals Showing Improving
Signs
What's The Event
New Flyer's Q1 results were better than expected. Revenue was
$380 million, up 17% Y/Y, and versus our estimate of $339 million
(consensus $349 million). Adjusted EBITDA was $31 million, up 60%
Y/Y, and versus our estimate of $25 million (consensus $26 million).
Main variance was higher average selling price in Bus Manufacturing
and better margin performance in Aftermarkets. New Flyer increased
its annual dividend rate by ~6% to $0.62.
Implications
New Flyer has positioned itself over the past few years to fully
leverage improving transit fundamentals having consolidated the
market. And we are starting to see the fruits of this strategy a few
quarters sooner than we had expected. While mix has an impact,
New Flyer's average selling price per EU looks like it found a floor
and has now posted two quarters of sequential improvement.
Similarly, EBITDA per EU has also bounced off the lows from earlier
in 2014. As well, aftermarkets EBITDA margin of 19% in Q1 was the
highest level for over two years. With the company having moved
through its low-margin backlog, an improving demand outlook
levered to an improving U.S. funding environment, and increasing
customer demand for specialized equipment, the pricing and margin
profile for New Flyer is improving.
May 7, 2015
Capital Equipment
SECTOR PERFORMER
MARKET WEIGHT
Stock Rating:
Sector Weighting:
NFI-TSX (5/7/15)
C$15.75
C$14.32
Key Indices:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Float
Dividend/Div Yield
Fiscal Year Ends
Book Value
2015 ROE (E)
LT Debt
Net AssetEquity
Value
Common
EBITDA ($mln)
Current
Prior
Estimates (Dec.
(Dec. 31)
31)
Valuation
EV/EBITDA-Curr
EV/EBITDA-Prior
Toronto
NM
C$11.53-C$14.90
55.5M
36.5M Shrs
38,000
C$794.8M
C$0.62 / 4.3%
December
$8.23 per Shr
9.0%
$140.9M
$457.0M
Yes
2013
$94.7A
2014
$107.4A
2015
$122.2E
$111.4E
2016
$124.7E
$119.4E
10.6x
9.3x
8.2x
9.0x
8.0x
8.4x
Looking ahead, the main focus for the company remains on

restructuring its bus manufacturing operations to integrate the NABI
acquisition, which is expected to yield cost savings and boost
margins. The transition is on target to be complete in H2/15. New
Flyer expects to invest ~$20 million in direct operating costs and
capex. As of Q1, New Flyer incurred ~$4 million of costs and
invested ~$5 million in capital expenditures with annualized savings
expected to be $12 million once fully implemented.
What's Changed
We adjusted our estimates to account for better pricing and
margins, bringing forward some of the improvements we expected
in H2/15 and 2016. Our 2015 and 2016 EBITDA increase to $122
Company Description
million and $125 million respectively. Our price target increases to
C$15.75 from C$15.00 and we maintain our Sector Performer rating. heavy-duty transit buses supplying transit authorities in Canada and the U.S.
www.newflyer.com
15-135928 2015
where applicable.
389
Bus Fundamentals Showing Improving Signs - May 07, 2015
NFI-TSX
5/7/15
Capital Equipment
Sector Weighting:
EV/EBITDA Multiples
Manufacturers
P/E Multiples
Manufacturers
2013A
Sector Performer
C$14.32
C$15.75

Market Weight
2014A
2015E
2016E
9.3x
9.9x
10.2x
8.2x
8.1x
8.9x
8.0x
7.0x
7.6x
2014A
2015E
2016E
Investment Thesis
17.2x
20.0x
18.8x
14.4x
14.9x
13.9x
13.1x
12.0x
11.9x
bus ridership numbers (reflecting the cost advantage of taking bus transit versus driving and
modestly declining unemployment rate), and public transit being a more green option.
2014A
2015E
2016E
7.9%
1.1x
51.3%
33.9%
2013A
7.4%
1.1x
53.1%
34.7%
2014A
7.8%
1.3x
42.2%
29.7%
2015E
8.0%
1.3x
52.0%
34.2%
2016E

Cost of Sales
Gross Profit
EBITDA
EBIT
EBT
Net Income
$991.2
$215.0
$1,199.4
$1,078.7
$120.8
$94.7
$49.0
$34.6
$26.8
$1,132.1
$319.0
$1,451.1
$1,312.8
$138.3
$107.4
$51.4
$37.6
$26.7
$1,255.7
$319.1
$1,574.8
$1,414.5
$160.3
$122.2
$85.7
$70.8
$51.8
$1,250.0
$310.7
$1,560.7
$1,397.0
$163.7
$124.7
$96.0
$81.7
$60.6
Balance Sheet
Q1/15A
EBITDA Margin
Current Ratio
Debt/Equity
Debt/Total Capital
Income Statement
Current Assets
Total Assets
Current Liabilities
Total Liabilities
430
1,101
318
644
457
Company Profile

Aftermarket
Operations
22%
Canada
16%

$350
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
2009
2010
2011
2012
2013
Deliveries(EUs)
2014
$ Millions
3,000
2008
United States
84%
Bus Operations
78%
$1,200,000
2007
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2008
2009
2010
2011
2012
$50
$0
2007
2013
2014
390
Q1/15 Recap
New Flyers (NFI-SP) Q1 results were better than expected. Revenue during the
quarter was $380 million, up 17% Y/Y, and versus our estimate of $339 million
and consensus of $349 million. Adjusted EBITDA was $31 million, up 60% Y/Y,
and versus our estimate of $25 million (consensus at $26 million). The main
variance was higher average selling price in Bus Manufacturing due to more
favorable sales mix, as well as better margin performance in Aftermarkets.
Additionally, New Flyer increased its annual dividend rate by ~6% to $0.62 from
$0.585 previously reflecting its strong free cash flow profile.
Bus Manufacturing: Q1/15 Bus Manufacturing revenue was $291 million, up
16% Y/Y, and versus our estimate of $252 million, driven by increased deliveries
(pre-released) and higher average selling price per EU, with the former being
the main variance versus our estimate. New Flyers average selling price was
~$508,000, up 12% Y/Y, and versus our estimate of ~$440,000, with the
company delivering 572 units, up 3.2% Y/Y. Bus manufacturing EBITDA during
the quarter was $15 million, up from $8 million last year, and versus our
estimate of $12 million.
Aftermarkets: Aftermarkets revenue was $90 million, up 23% Y/Y, and versus
our estimate of $87 million. Excluding the CTA mid-life overhaul program,
revenue was $73 million, representing an increase of 10% in the core business.
EBITDA for the quarter was $17 million, up 40% Y/Y, and versus our estimate of
$13 million as margins came in better than we had expected, attributed to
improved aftermarket parts market fundamentals and more favorable product
mix.
Restructuring Bus Manufacturing: Looking ahead, the main focus for New
Flyer remains on restructuring its bus manufacturing operations to integrate the
NABI acquisition, which is expected to yield cost savings and boost margins. The
transition is on target to be complete in H2/15. As noted previously, New Flyer
expects to invest ~$20 million in direct operating costs and capital expenditure
by utilizing operating cash flow and current credit facilities. As of Q1/15, New
Flyer incurred ~$4 million of costs and invested ~$5 million in capital
expenditures with current annualized savings expected to be $12 million once
fully implemented.
Exhibit 1. Q1/15 Review
Q1/F15
in $Mln Unless Noted
Q1/F14A
Q4/F14A
CIBC
Actual
Y/Y %
Q/Q %
554
680
572
572
3.2%
-15.9%
323.9
420.0
338.5
380.3
17.4%
-9.4%
250.9
336.6
251.7
290.7
15.9%
-13.6%
Aftermarket Operations Revenues
73.0
83.4
86.8
89.6
22.8%
7.5%
19.7
35.0
25.0
31.4
59.8%
-10.3%
7.8
23.2
11.6
14.7
90.1%
-36.4%
11.9
11.9
13.5
16.7
40.0%
40.7%
Total Revenue
Total EBITDA
Adjusting Estimates
New Flyer reiterated its production rate guidance and expects the average line
rate to be ~51 EUs in 2015. In addition, management anticipates that increased
391
bus margins for 2015 will substantially mitigate the loss to EBITDA from the
companys investment tax credits, which have been fully utilized as of Q1/15
($11.7 million of ITCs realized in 2014 and realized final $0.2 million in Q1).
We had adjusted our estimates as we raised our selling pricing per EU to
~$500,000 (up ~10% from what we were modeling before) with EBITDA per EU
of ~$26,000-$28,000 (up ~$1,500 per EU from previous forecast). In addition,
we raised our Aftermarkets EBITDA margin by ~100 bps to ~17.5%. We
essentially brought forward some of the improvements we had expected to occur
later on. Overall, our 2015 and 2016 EBITDA increase to $122 million and $125
million, respectively. Our price target increases to $15.75 from $15.00 and we
maintain our Sector Performer rating.
2015
2016
Before
After
Before
After
2,502
2,502
2,500
2500
Total Revenues ($Mln)
$1,443.9
$1,574.8
$1,453.7
$1,560.7
$1,127.6
$1,255.7
$1,125.0
$1,250.0
Average EU Selling Price ($000)
$450.7
$501.9
$450.0
$500.0
Aftermarket Operations Revenues ($Mln)
$316.3
$319.1
$328.7
$310.7
$111.4
$122.2
$119.4
$124.7
Bus Manufacturing EBITDA ($Mln)
$60.2
$63.9
$65.3
$68.8
Margin (%)
5.3%
5.1%
5.8%
5.5%
Bus Manufacturing EBITDA per EU ($000)
$24.1
$25.5
$26.1
$27.5
Aftermarket Operations EBITDA ($Mln)
$51.2
$56.8
$54.2
$55.9
Margin (%)
16.2%
17.8%
16.5%
18.0%
Bus Manufacturing Revenues ($Mln)
Total EBITDA ($Mln)

our 2016 EBITDA estimate. Our target multiple is in line with New Flyers
historical trading range given the longer-term positive impact of heavy-duty bus
demand and the companys leverage to an improving U.S. economy.

392
costs.
F2013
Q1/F14
Q2/F14
Q3/F14
Q4/F14
F2014
Q1/F15
Q2/F15E
Q3/F15E
Q4/F15E
F2015E
F2016E
Revenue
$1,199,424
$323,865
$346,484
$360,762
$419,989
$1,451,100
$380,301
$382,266
$393,434
$418,770
$1,574,771
$1,560,660
Cost of Sales
$1,078,657
$293,851
$309,256
$326,482
$383,228
$1,312,817
$340,674
$342,413
$354,747
$378,141
$1,414,520
$1,396,975
Gross Profit
$120,767
$30,014
$37,228
$34,280
$36,761
$138,283
$39,627
$39,853
$38,687
$40,629
$160,251
$163,685
SGA
$26,082
$10,348
$10,262
$8,583
$1,725
$30,918
$8,213
$9,557
$9,836
$10,469
$38,075
$39,017
EBITDA
$94,685
$19,666
$26,966
$25,697
$35,036
$107,365
$31,414
$30,297
$28,851
$30,160
$122,176
$124,669
Amortization
$28,001
$7,718
$8,131
$10,012
$9,976
$35,837
$9,507
$7,258
$7,317
$7,272
$31,355
$28,654
FX loss (gain)
$118
$802
$387
$226
$132
$0
($1,455)
$0
$0
$0
$0
$0
Operating Earnings
$66,566
$11,146
$18,448
$15,459
$24,928
$69,981
$23,362
$23,038
$21,534
$22,888
$90,821
$96,014
Unrealized FX Loss
$2,146
$380
($1,000)
$117
($317)
$0
$1,914
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$15,457
$762
$6,685
$2,561
$9,353
$19,361
$3,209
$0
$0
$0
$3,209
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
EBIT
$48,963
$10,004
$12,763
$12,781
$15,892
$51,440
$18,239
$23,038
$21,534
$22,888
$85,698
$96,014
$8,749
$2,257
$2,257
$2,203
$2,180
$8,897
$2,334
$2,409
$2,409
$2,409
$9,635
$9,673
$2,208
$540
$549
$565
$575
$2,229
$584
$584
$584
$584
$2,336
$2,336
$2,857
$823
$1,190
$713
$795
$3,521
$726
$600
$600
$600
$2,526
$2,400
$532
($314)
$377
($785)
($53)
($775)
$487
$0
$0
$0
$0
$0
Interest Expense
$14,346
$3,306
$4,373
$2,696
$3,497
$13,872
$4,131
$3,593
$3,593
$3,593
$14,909
$14,319
EBT
$14,108
$19,445
$17,941

Unusuals
$34,617
$6,698
$8,390
$10,085
$12,395
$37,568
$19,295
$70,789
$81,696
Income Tax Expense
$7,856
$1,214
$4,827
($160)
$4,968
$10,849
$3,253
$5,345
$5,042
$5,317
$18,957
$21,070
Net Income
$26,761
$5,484
$3,563
$10,245
$7,427
$26,719
$10,855
$14,100
$12,899
$13,978
$51,833
$60,626
$0.81
$0.11
$0.18
$0.18
$0.30
$0.83
$0.24
$0.25
$0.23
$0.25
$0.99
$1.09
393
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Prior
$25.0E
$27.8E
$25.4E
$33.3E
$111.4E
2015 Current
$31.4A
$30.3E
$28.9E
$30.2E
$122.2E
2016 Prior
--
--
--
--
$119.4E
2016 Current
--
--
--
--
$124.7E
394

395

Abbreviation
Rating
Description
SO
Sector Outperformer
SP
Sector Performer
SU
NR
Not Rated
Restricted
Stock Ratings
O
Overweight
Market Weight
Underweight
NA
None

(as of 07 May 2015)
Count
Percent
152
41.6%
165
45.2%
38
10.4%
2.5%

Restricted
Count
Percent
146
96.1%
161
97.6%
Restricted
34
89.5%
100.0%

(as of 07 May 2015)
Count
Percent
0.0%
100.0%
0.0%
Restricted
0.0%
Count
Percent
0.0%
100.0%
0.0%
Restricted
0.0%

396
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
397
Legal Disclaimer
Exchange and a Member of the Canadian Investor Protection Fund, (b) in the United Kingdom, CIBC World Markets plc,
which is regulated by the Financial Services Authority (FSA), (c) in Australia to wholesale clients only, CIBC Australia
Ltd, a company regulated by the ASIC with AFSL license number 240603 and ACN 000 067 256, and (d) in Japan, CIBC
World Markets (Japan) Inc., a registered Type 1 Financial product provider with the registration number Director General
of Kanto Finance Bureau #218 (collectively, CIBC World Markets) and (e) in the United States either by (i) CIBC World
Markets Inc. for distribution only to U.S. Major Institutional Investors (MII) (as such term is defined in SEC Rule 15a-6)
or (ii) CIBC World Markets Corp., a member of the Financial Industry Regulatory Authority (FINRA). U.S. MIIs receiving
this report from CIBC World Markets Inc. (the Canadian broker-dealer) are required to effect transactions (other than
negotiating their terms) in securities discussed in the report through CIBC World Markets Corp. (the U.S. broker-dealer).
contained herein are not intended for the use of private investors in the United Kingdom. Such investors will not be able
to enter into agreements or purchase products mentioned herein from CIBC World Markets plc. The comments and views
2 Queens Road Central, Hong Kong (telephone number: +852 2841 6111). Orders for Hong Kong listed securities will be
10
398

11
399
Canada Edition
Thursday, April 30, 2015

New Flyer Industries jumps 26.4%
in trailing year, outperforming 87%
of the market
company by market cap, jumped CAD2.99 (or 26.4%)
in the trailing 12 months to April 30, 2015 to close at
CAD14.32. This means the stock has outperformed
87% of Canada-listed stocks in the same period.
Compared with the S&P/TSX 60 Index which has risen
5.8% over the same period, this is a relative price
increase of 20.5%. Average daily volume of 70,281
shares in the trailing year was 1.2 times average daily
volume in the previous year. In the trailing 12 months
the market cap has jumped CAD219.5 million
(US$181.2 million).

following:
In the last three months the stock has hit a new 52week high seven times, pointing to a significant
uptrend.
26-day EMA.
bond yield of 1.6%.
indicator.
In the last three months the number of rises
Stock Summary
52-Week Range
CAD11.20-CAD14.90
Sector
Auto
Market Cap
CAD794.8 million (US$656.3

million)
Shares Outstanding
55,505,604
ISIN
CA64438T4019
68
Financial Summary
Year ended
Dec 2014
Dec 2013
Dec 2012
Sales (USD)
1.4B
1.2B
867.9M
Pretax (USD M) 35.8
33.5
10
Net (USD M)
25.4
25.9
9.3
EPS (CAD)
0.5303
0.5398
0.2169
MCap: A Historical Perspective

Share Price (CAD)
Market Cap (US$)
Last Traded
May 01
14.3
653.9 million
1 Year ago
11.3
521.9 million
2 Years ago
9.4
469.5 million
3 Years ago
7.3
337.2 million
Page 1
400
Canada Edition
Analysis
Bullish Signals
suggests the stock continues to push for new highs.
of 73 indicating it has outperformed 73% of the market.
The Price/MAP of 1.08 for NFI is higher than the
Price/MAP for the S&P/TSX 60 Index of 0.4.
high seven times, pointing to a significant uptrend.
In the past 200 days this ratio has exceeded 1.08, 99
times suggesting further upside. The stock is trading
CAD59.
PV1000 (3 years) CAD

ago:
PV1000 (3 years) USD
3 years USD Multiplier = 1.7x

Avg annual cpd gr rate (CAGR) in USD = 18.9 %
Undervaluation:
yield of 1.58%.
3 years CAD Multiplier = 2.1x

Avg annual cpd gr rate (CAGR) in CAD = 27.3 %
Page 2
401
Canada Edition
Note
% Growth Y.O.Y, Revenue & Net Profit

The price is equal to its 1-month volume weighted
average price of CAD14.27.
Beta & Standard Deviation (SD)

The Beta of this stock is 0.6. A Beta lower than 1 suggests this is
a low risk, low return stock with volatility less than that of the
market.
SD is a statistical measure of deviation from the mean. The SD
of 1.2% gives it a percentile rank of 18 meaning that 18% of
stocks in the Canadian market are less volatile than this
stock.
Bearish Signals:
bond yield of 1.6%.
[pass mark >=5 ]:
Bullish Indicators and Rank in Market:

Description
Value
Rank In Market
Annual Revenue
CAD1.6 billion
(US$1.3 billion)
In Top Quartile
Turnover in Quarter
CAD71 million
In Top Quartile
US$656.3 million
In Top Quartile
Price/MAP200
1.08
In Top Quartile
Price/MAP50
1.02
In Top Quartile
Price to Sales
0.5
In Top Quartile
Volatility %
1.3
In Top Quartile
MCap
Overvaluation:
P/E of 11.8.

benchmark of 5.
margin of safety.
The Enterprise Value/EBITDA multiple of 10.4 compares
unfavourably with sector average of 6.1.
Page 3
402
Canada Edition
ROE
Profit
Margin
Asset
Turnover
Equity
Multiplier
Current
Year
5.7
1.8
1.2
2.5
Previous
Year
5.8
2.2
1.0
2.5
Peer Comparison Revenue Growth (%)
Bearish Indicators and Rank in Market:

Description
Value
Rank In Market
Return on Assets
[ROA] %
2.2
In Bottom Quartile
Price Earnings
26.9
In Bottom Quartile
EBITDA Margin %
6.4
In Bottom Quartile
Net Profit Margin %
1.8
In Bottom Quartile
%Prem To Vol Wtd

Price
0.3
In Bottom 7%
Stock v Index (Trailing Year)
Turnover Rate & Turnover Period
YTD Comparison Stock Sector Index
Trailing 3 months
Turnover
US$58.6 million
Volume
5,026,467
1.2
Page 4
403
Canada Edition
Slipping Relative Strength
Price/Moving Avg Price [P/MAP200]
Weekly Price Volume Dynamics (Last 12

Weeks)

Untraded
Page 5
404
Canada Edition
Price Volume Trend: Trailing Quarter
Year on Year Comparison (Trailing year - ended 30 Apr)

2015
2014
2013
2012
Price 30 Apr (CAD)
14.32
11.28
9.37
7.28
% Price Change
26.9
20.4
28.7
Av Daily Volume
70,276
58,916
49,160
46,162
VWP (CAD)
13.21
10.88
8.61
6.47
Turnover Period
4 months
3 months
3 months
Price Range (CAD)
11.2 - 14.9
9.27 - 11.51
6.03 - 10.2
Index Change %
5.8
17.9
1.6
Relative Price Change

%
21.1
2.6
27.1
5.05 - 8.09
Peer Group Analysis

Name
Last Price
Relative
strength
(6-months)
MCap (USD) PV $1000

(1 yr)
Revenue
(USD)
Net Profit
(USD)
Total Assets
(USD)
Martinrea
International
CAD12.05
65
853.2M
1,053
3B
58.6M
1.7B
AutoCanada
CAD39.95
18
808.5M
621
1.8B
43.7M
1.1B
Uni-Select
CAD42.0
90
741M
1,307
1.8B
50.1M
1.2B
CAD14.32
73
656.3M
1,208
1.3B
24.3M
1.1B
Exco Technologies
CAD15.35
89
535.3M
1,616
302.8M
25.2M
239M
Airboss of America
CAD15.64
92
297M
1,994
304.8M
13.7M
188.9M
Westport
Innovations
CAD5.46
29
289M
366
130.6M
(149.6M)
337.7M
Page 6
405
Canada Edition
Recent Analyst Recommendations

Date
Brokerage
Action
Past Rating
Current Rating
20-Mar-2015
BMO Capital Markets
Boost Price Target
Market Perform
20-Mar-2015
Canaccord Genuity
Upgrade
Hold
Buy
19-Mar-2015
National Bank Financial
Boost Price Target
Outperform
Page 7
406
Canada Edition
Tuesday, May 05, 2015
Company Overview
Activities
Operation.
Business Sector
Utilities
Economic Sector
Utilities
Ranking
New Flyer Industries is placed 264/2250 in BSS News Bites's
ranking of Canadian performers in the past year, a percentile
ranking of 87%.
Regulatory Announcements
Key Developments
This award is supplementary to the January 2014 contract
announcement for 276 heavy-duty 40-foot
Xcelsior(Registered) clean diesel powered buses and will
replace vehicles that have reached the end of their useful
life.
NYCT and MTA Bus Company (together, "MTA") comprise the
largest transit agency in North America with over 5,700 transit
buses in their fleet of which approximately 1,000 or 17% are
New Flyer buses.
Financial Results
and Backlog
[News Story]
Source: TMX Group
Key Developments
buses.
The contract contains a firm order for 28 XD40 buses with
options for an additional 47 over the next three years.

Sixteen of the option XD60 buses (32 EUs) were exercised by
Metro Transit and four option XD60 buses (8EUs) were
exercised by Maple Grove, a named agency within the
Metropolitan Council contract.
The current five-year contract allows Metro to purchase up to
171 diesel and/or diesel-hybrid 60-foot Xcelsior heavy-duty
transit buses (342 EUs).
AGM date
Dividend
Page 9
407
Canada Edition
Company Overview (continued)

Key Developments
The CEC's Alternative and Renewable Fuel and Vehicle
Technology Program is a competitive grant program that
provides funding towards innovative transportation and fuel
technologies to help California meet its energy, clean air,
and climate-change goals.
Stock BUZZ
here
Sector Sorting
For Company searches, or for sorting by stocks and
variables, an interactive version of today's Table is
available here
Issued Capital
capitalisation is CAD794.8 million (US$656.3 million). It is
Page 10
408
Canada Edition
Tuesday, May 05, 2015

Brian Tobin
Independent Chairman
Paul Soubry
CEO & President & Director
Glenn Asham
CFO
Brian Tobin
Independent Chairman
Paul Soubry
CEO & President & Director
John Marinucci
Colin Pewarchuk
Company Secretary
Patricia Jacobsen
V. James Sardo
Wayne McLeod
Glenn Asham
CFO
Larry Edwards
Page 11
409
Canada Edition
BuySellSignals Financial Research provides equity research on

over 48,000 companies listed in more than 90 countries and 120
markets across the world. BuySellSignals believes that every
stock has a story to tell and that this story changes every day. To
capture this story, BuySellSignals offers the latest pertinent and
comprehensive information so that investors can make wellinformed investment decisions.
BuySellSignals publishes equity research reports on each stock, sector and index daily
to capture the latest market movements and sentiments. BuySellSignals eschews hot
tip or headline investing in favour of high-quality, ultra-current, targeted technical
and fundamental information including specific bullish and bearish signals for each
stock. Insights that will guide you to the investments that are hard to find in todays
hyperactive mainstream markets.
Disclaimer: While this document is based on information sources which are considered reliable, it has been
prepared without consideration of your specific investment objectives, financial situation or needs, so you should
carry out your own analysis or seek professional investment advice before an investment deci-sion is made. The
document contains unbiased, independent equities data from BuySellSignals (AFS Licence 222756) and News Bites
Pty Ltd, who provide round the clock data on every Australian stock and sector. Neither BuySellSignals nor News
Bites are brokers, and neither have an executing, corporate advisory or investment banking function. BuySellSignals
and News Bites Pty Ltd, its directors, employees and consultants do not represent, warrant or guarantee, expressly
or impliedly, that the information contained in this document is complete or accurate.
The data is sourced from annual reports and company releases and may not be fully up to date. It should be used
as a guide only.
Page 12
410
COMPANY UPDATE
NFI | TSX
$14.52
Rating: Outperform
Total Return: 24.6%
Yield: 4.0%
April 15, 2015
Slow Start to the Year but Expect Production to Pick Up

Q1/15. The company delivered 572 equivalent units (EU), up 3.2% y/y but below our
649 EU estimate. The WIP for the quarter was 384 EU, up 26 EU from the previous
quarter and 20 EU above our estimate for 364 EU for Q1/15. The total firm orders and
options for the quarter stood at 1,020 EU.

C$14.90 / C$11.20
4.0%
Dividend Yield:
55.5 (basic)
55.5 (fd)
C$805.4

Float ($mm)
33.6
79.6
$229.0
$868.0

(FYE Dec 31)
2014
Revenue ($mm)
2015e
2016e
$1,451.1 $1,577.3 $1,689.2
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
$107.4
$121.8
$138.6
$0.65
$0.78
$1.02
Q2
Q3
Q4
2014
$19.7
$27.0
$25.7
$35.0
2015
$27.8e
$31.6e
$29.8e
$32.6e
2016
$34.5e
$34.4e
$33.8e
$35.9e
Q2
Q3
Q4
Adjusted FD EPS
Q1
2014
$0.10
$0.16
$0.15
$0.24
2015
$0.15e
$0.20e
$0.20e
$0.23e
2016
$0.25e
$0.25e
$0.25e
$0.27e

$15
Volume ('000)
800
Last Sale Price
600
$10
$5
400
200
$0
0
Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15

Managing Director
647.776.8246

647.776.8245
Quarterly Deliveries Down But Expect Improvement: The company reported a

TTM book to bill ratio of 0.72x, lower than our estimate of 0.86x on a TTM basis. The
company received new firm orders for 235 EUs valued at $102.6mm with options for
785 EUs, valued at $360.2mm. New Flyer also reported that options for 157 EUs, valued
at $68.3mm were converted to firm orders. No option EU expired in Q1/15. We note
unit revenue for new firm and converted options at ~$436.7K/EU was below our
estimates for $515.4K/EU. Backlog at the end of Q1/15 was 7,193 EU valued at $3.57bn
as compared to 7,683 EU ($3.69bn) at the end of Q1/14. The company has an additional
494 EU of new firm orders and options pending from customers where approval has not
been granted and thus, not included in the backlog. We note the companys order
pipeline continues to show strength. While New Flyers bid universe decreased by 9.7%
q/q, the total number of active EU were up 338 EU (5%) from Q4/14 to 7,067 EU.
Strong Aftermarket Growth Continues: The aftermarket parts business showed
strong growth during the quarter, partially offset by the slowdown of sales for the
Chicago Transit Authority mid-life upgrade program which is expected to be complete
in Q2/15. While gross parts orders decreased 6.1% as compared to Q1/14, parts
shipments increased 22.6% y/y. On a sequential quarter basis, gross parts ordered
decreased 23.5% while parts shipments were up 6.7% as compared to Q4/14.
Estimate Changes: We note management has maintained guidance for a corporate
average line entry rate of approximately 51 EU/ production week. As such, we expect
the lower than estimated number of deliveries in Q1 to be solely a timing issue with
production picking up in H2/15. Overall, our estimates move only slightly with no
material impact on our valuation. Our total revenue estimates for 2015 decreases by
0.1% to $1.58bn with no material change in 2016 estimates. Our EBITDA margins for
2015 and 2016 remain relatively stable as compared to previous estimates.
Maintain Outperform and C$17.50 Target: Overall, we remain confident of New
Flyers growth and margin improvement story, especially with the rationalization of the
NABI bus line to Xcelsior and cost synergies from a common IT platform in the
aftermarket business. We maintain our Outperform rating and our 12-month target price
of C$17.50. Our target price is based on a blend of a 15.0x earnings and 7.0x EBITDA
multiple of the four quarters ending Q4/16 reflecting our 12-month forward valuation
period as well as an exchange rate of C$1.25/$US.
411
I NSTITUTIONAL
EQUITY
R ESEARCH:
DIVERSIFIED
INDUSTRIES
INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES

Current Valuations
Unit Price (C$)
$14.52
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
11.2x
8.2x
7.2x
Peer Average
16.0x
13.3x
11.7x
8.0x
7.1x
6.2x
17.8x
14.9x
11.4x
2014
2015e
2016e
2015e
2016e

Incom e Statem ent
2013
Trend
Revenues
2013
2014
29,979
45,823
66,392 108,679
Bus Manufacturing
984,425 1,132,066 1,281,330 1,397,547
22,988
35,255
22,834
(8,960)
Aftermarket
214,999
52,967
81,078
89,226
99,719
(2,003)
(1,766)
(568)
(568)
Revenue
319,034
295,968
291,698
1,199,424 1,451,100 1,577,298 1,689,245
17.9%
22.0%
18.8%
17.3%
56,776
57,374
73,812
89,036
Non-operating, non-recurring items affecting FCF
5.8%
5.1%
5.8%
6.4%
(20,951) (10,889) (26,436) (12,599)
31,036
49,991
47,968
14.4%
15.7%
79,110
6.6%
15,276
15,398
49,589
192
(154)
16.2%
17.0%
Free Cash Flow
45,481
83,667
62,223
86,552
86,457
121,780
138,625
6.0%
7.7%
8.2%
Free cash flow (C$)
47,334
92,972
75,168 103,853
94,685
107,365
121,780
138,625
per Share
$0.92
$1.68
$1.35
7.9%
7.4%
7.7%
8.2%
FCF Yield
Amortization
28,001
35,837
39,734
35,981
Operating Earnings
51,109
50,620
82,046
102,644
EBT
34,617
37,568
68,794
90,307
7,856
10,849
25,454
33,413
Net Income
26,761
26,719
43,340
56,893
Reported FD EPS
$0.52
$0.48
$0.78
$1.02
Adjusted FD EPS
$0.64
$0.65

Margin
Adjusted EBITDA
Margin
Taxes
$0.78
$1.02
2013
2014
2015e
2016e
Revenue
38.6%
21.0%
8.7%
7.1%
55.7%
108.7%
2013
0.9714
0.9414
13.4%
2.7%
2014
0.9049
0.9050
13.4%
19.3%
2015e
0.8290
0.8264
13.8%
31.3%
2016e
0.8333
0.8403
Trend
2013
2014
2015e
2016e
Trend
226,479
229,034
215,997
145,345
2.4x
2.1x
1.8x
1.1x
33.2%
33.6%
31.5%
23.4%
Adjusted EBITDA
Adjusted FD EPS
FX Assum ptions
EOP CAD/USD Rate
Leverage
Net Debt (EOP)
6.3%
Grow th
Trend
108.3%
11.5%
$1.87
9.3%
12.9%
83.1% (19.2%)
38.2%
2013
2014
2015e
2016e
30,255
32,457
32,471
32,471
63.9%
$0.585
34.9%
$0.585
43.2%
$0.585
31.3%
4.0%
4.0%
4.0%
4.0%
2013
2014
2015e
2016e
2,191
2,437
2,554
2,653

449.3
25.9
43.8
1.2x
464.5
23.5
49.2
0.9x
501.7
28.9
51.1
1.0x
526.8
33.6
52.0
1.0x
18.8%
20.7%
0.0%
19.6%
Trend
$0.585
Cash Yield

$5.0
Trend
Trend

Firm
Option
2020, 8%
2015, 18%
$4.0
2019, 21%
$3.0
2016, 11%
$2.0
$1.0
2017, 11%
$0.0
Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315
2018, 31%

412
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
: [INDUSTRY
]

Ticker
Marcopolo S.A.
Wajax Corporation
Superior Plus Corp.
Oshkosh Corporation
Spartan Motors Inc.
Cubic Corporation
Average
Rating &
Target
TSX:NFI
OP (C$17.50)
BOVESPA:POMO4
NR
TSX: WJX
NR
TSX: AFN
NR
TSX: SPB
NR
GBX
NR
OSK
NR
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
CUB
NR
Trading
Local
Currency Price
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
14.52
2.50
24.97
50.25
14.66
63.15
48.43
4.98
14.10
62.23
20.94
27.96
6.85
11.80
50.22
Market
Cap ($m m )
806.0
2,115.2
419.0
662.8
1,850.2
1,666.7
3,784.3
169.5
963.1
3,322.5
563.9
2,278.3
572.1
244.2
1,348.9
EPS
EV
Net
Debt
($m m )
2014
2015e
229.5
1,227.4
201.0
132.3
986.3
386.4
779.0
(23.3)
186.4
(248.3)
(7.9)
4,349.0
311.1
197.1
(114.7)
859.8
3,366.0
619.9
795.0
2,836.5
2,146.4
4,563.3
146.1
1,149.5
3,074.2
556.0
6,661.3
935.2
441.3
1,234.5
0.65
0.25
2.46
0.31
0.45
4.62
3.49
0.03
0.88
3.55
1.61
-5.07
0.03
0.00
2.82
0.78
0.23
2.26
3.26
1.01
6.28
4.13
0.11
1.13
3.92
1.60
1.75
0.07
0.00
3.06
P/E
EBITDA
2016e 2014 2015e 2016e

1.02
0.29
2.55
4.02
1.19
0.00
4.36
0.34
1.20
4.63
1.86
2.95
0.08
0.00
3.26
17.8x
8.0x
10.2x
NM
32.5x
13.7x
13.9x
NM
16.1x
17.5x
13.0x
NM
NM
NM
17.8x
16.0x
14.9x
8.6x
11.0x
15.4x
14.5x
10.1x
11.7x
NM
12.5x
15.9x
13.1x
16.0x
NM
NM
16.4x
13.3x
11.4x
6.9x
9.8x
12.5x
12.3x
NM
11.1x
14.6x
11.7x
13.4x
11.3x
9.5x
NM
NM
15.4x
11.7x
EV/EBITDA
2014
2015e
2016e
2014
2015e
2016e
Price
to BV
107.4
268.8
82.4
63.4
282.4
257.4
591.2
9.4
160.7
298.8
65.8
331.0
69.0
25.9
128.8
121.8
313.3
88.7
99.8
304.9
433.3
640.4
15.9
188.4
341.7
69.3
761.6
91.2
0.0
142.0
138.6
400.1
96.0
117.8
327.5
0.0
657.8
28.5
193.1
0.0
79.8
922.6
94.1
0.0
155.7
8.0x
12.5x
7.5x
12.5x
10.0x
8.3x
7.7x
15.5x
7.2x
10.3x
8.5x
20.1x
13.5x
17.0x
9.6x
11.2x
7.1x
10.7x
7.0x
8.0x
9.3x
5.0x
7.1x
9.2x
6.1x
9.0x
8.0x
8.7x
10.3x
NM
8.7x
8.2x
6.2x
8.4x
6.5x
6.7x
8.7x
NM
6.9x
5.1x
6.0x
NM
7.0x
7.2x
9.9x
NM
7.9x
7.2x
1.5x
1.4x
1.7x
3.2x
3.4x
3.1x
2.0x
1.0x
2.5x
3.3x
2.8x
NM
3.5x
0.0x
1.7x
2.2x

As of April 14, 2015. All figures in millions, unless otherwise noted.
413

NFI
C$14.52
Rating:
Outperform
12 Month Target:
C$17.50
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
61%
27%
Sector Perform
25%
13%
Underperform
2%
0%
Speculative
1%
0%
Restricted
4%
20%
Not Rated
6%
0%
Tender
2%
0%
100%
20%
Total

average.
average.
average.
material.
principal or agent.
1100, 888 3rd Street SW

Calgary, Alberta T2P 5C5
Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
414
Direct
__________________________________________________________________________________________________________

George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial
Dave Mowat
President & CEO
780 408 7181
dmowat@atb.com
Ian Wild
403 974 5127
iwild@atb.com
E&P- Domestic
403 539 8617

403 539 8587
403 539 8615
403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
jmccrea
kvandenberg
porourke
ysiddiqi
nlupick
kgordey
tmatthews
cerana
403 539 8606

403 539 8598
dlever
whallett
Oilfield Services
403 539 8620

403 539 8594
403 539 8596
403 539 8591
dbenner
jgibson
jsawatzky
mwestby
Alex Athanasopoulos, Associate
647 776 8246

647 776 8245
647 776 8072
cmurray
smodwal
aathanasopoulos
Agriculture
647 776 8236

647 776 8254
jchu
spattillo
All Sectors
403 539 8607
vhoa
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Cheryl Polan
Jon Varley
Michael Capobianco
647 776 8244

647 776 8235
647 776 8231
cpolan
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
1100, 888 - 3rd Street SW
Calgary AB Canada T2P 5C5
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Matt Colucci
403 539 8597
mcolucci

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Jesse Hardage
Greg Smiddy
Edward Otto
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

403 539 8628
403 539 8595
647 776 8223
403 539 8614
403 539 8609
647 776 8224
pstables
jhardage
gsmiddy
eotto
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
emckane
415
April 15, 2015

Industrial Products
(NFI-TSX)
Bert Powell, CFA
Stock Rating:
Stock Price:
Target Price:
Market Perform
$14.52
$16.50
416-359-5301

bert.powell@bmo.com
Alan Kanso
alan.kanso@bmo.com
416-359-6193
Q1/15 Deliveries Below Expectations; Recent Bus Orders Mainly Driven by Fleet
Replacement Plans
New Flyer Q1/15 deliveries were up 3% y/y to 572 equivalent units (EUs). New bus orders (firm & options) were 1,020
EUs, up from 559 EUs y/y. New firm orders declined 38% y/y to 235 EUs while option orders increased to 785 EUs from
179 EUs during the same period last year. The company also had options for 157 EUs converted into firm orders during the
quarter. Management expects the build rate of 51 EUs per week, which includes the production of MiDi buses, to remain
stable in 2015. New Flyer aftermarket parts shipment increased 22.6% relative to the same period last year.
Total backlog increased 5% quarter over quarter to $3.57 billion (7,193 EUs), driven by an increase in option orders. Total
backlog data doesnt include 494 EUs of new bus orders that are still pending as New Flyer awaits purchase documentation
from customers.
Q1/15 Results Conference Call: Wed. May 6, 2015, at 8:00 a.m.; Tel: 1.888.231.8191 or 1.647.427.7450.
Our View:
Bus deliveries during the quarter were 7% below expectations due to a lower production rate and higher-than-expected
work in progress inventory levels. Parts shipments were above expectations.
Based on lower-than-expected bus deliveries, we would expect Q1/14 EBITDA to be biased downward. We expect
Q1/15 adj. EBITDA to be around $25 million (6.9% EBITDA margin), while the Mean estimate is about $26 million.
Total backlog continues to increase while firm orders have declined 9% quarter over quarter. The book-to-bill ratio was
about 119% y/y, mainly driven by option orders.
The increase in bus orders has mainly been driven by customers fleet replacement plans. We havent yet seen a strong
catalyst that indicates strength in demand for heavy-duty transit buses for New Flyer.
We would expect New Flyer to improve margins as the expiring tax credits will be more than offset by operating
efficiencies and platform rationalization savings over the next two years.
Flash Page 1
416

Target Price
Share Price
Quarterly Price
18
14
14
12
12
10
10
18
16
16
14
14
12
12
10
8
10
3) Mkt
6
2) NR
4 1) Mkt
400
400
300
300
200
200
100
100
Revenue / Share
Price / Revenue
500
400
400
300
300
200
200
100
100
1.0
200

500
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
300
2012
2013
2014

200
200
0.5
100
-200
0.0
Price / Earnings
2012
2013
-200
2014
400
200
0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
FYE
(Dec.)
EPS
$
2011
2012
2013
2014
0.81
0.22
0.49
0.48
Range*:
Current*
0.48
P/E
Hi - Lo
9.5
40.5
24.2
29.4
6.4
23.6
15.9
21.6
40.5
6.4
29.6
DPS
$
Yield%
Hi - Lo
Payout
%
BV
$
P/B
Hi - Lo
0.86
0.59
0.59
0.59
16.5 11.2
11.3 6.6
7.5 4.9
5.7 4.2
>100
>100
>100
>100
8.2
7.7
8.1
8.1
0.9
1.2
1.5
1.7
0.6
0.7
1.0
1.3
1.7
0.6
>100
10.3
16.5
0.59
4.2
4.2
1.4
ROE
%
3
6
6
NFI - Rating as of 3-May-12 = Mkt
1
2
3
Date
5-Jun-12
29-Oct-12
3-Jul-13
Rating Change
R to Mkt
Mkt to NR
NR to Mkt
Share Price
$6.59
$7.75
$11.14

Last Price ( April 14, 2015): $14.52

Flash Page 2
417
report.
12 months.
Methodology: Our $16.50 target price is based on ~6.8x our 2016E EBITDA.
Rating
BMOCM US
BMOCM US
BMOCM US
BMOCM
BMOCM
Starmine
Category
BMO Rating
Universe*
IB Clients**
IB Clients***
Universe****
IB Clients*****
Universe
Buy
Outperform
43.7%
18.6%
58.2%
42.7%
55.5%
54.1%
Hold
Market Perform
51.4%
10.4%
38.5%
52.1%
41.9%
40.5%
Sell
Underperform
4.9%
9.4%
3.3%
5.2%
2.6%
5.5%
*
**
***
****
*****
Flash Page 3
418

For
Other
Important
Disclosures
on
the
stocks
discussed
in
this
report,
please
go
to
BMO
Capital
Markets
Equity
Research
is
available
via
our
website
Conflict Statement
conflicts
of
interest
in
connection
with
investment
research
which
is
available
at
General Disclaimer
Additional Matters
Nesbitt Burns Inc.
Flash Page 4
419


A member of BMO
Financial Group
Flash Page 5
420

Auto Components


15 April 2015
Company Update
BUY
unchanged
C$15.00
PRICE TARGET
unchanged
Price (15-Apr)
Ticker
Q1/15 Adjustments: Minor changes from reported

C$14.70
NFI-TSX
52-Week Range (C$):

Avg Daily Vol (M) :
Market Cap (C$M):
Dividend /Shr (C$):
Website:
11.20 - 14.90
0.08
816
0.59
4.0
62.0
6.0
227.8
www.newflyer.com
FYE Dec
FCF /Shr (C$)
Payout Ratio (x)
Sales (US$M)
ROIC (%)
2014A
1.18
0.5
1,451
6
2015E
1.37
0.4
1,460
8
2016E
1.46
0.4
1,450
9
2017E
1.55
0.4
1,479
0
Quarterly FCF /
Shr
2014A
2015E
2016E
2017E
Q1
Q2
Q3
Q4
0.19
0.34
0.39
0.41
0.29
0.38
0.40
0.42
0.32
0.32
0.34
0.36
0.38
0.34
0.33
0.36
15.5
15
14.5
14
13.5
13
12.5
12
11.5
11
Apr- 15
Mar- 15
Jan- 15
Feb- 15
Dec- 14
Oct- 14
Nov- 14
Sep- 14
Jul- 14
Aug- 14
Jun- 14
May- 14
10.5
NFI
Source: FactSet

Maintain BUY for solid dividend yield, potential value from surplus capital generation.
We continue to recommend that investors BUY NFI for a solid investment return from a
nice dividend yield and projected share price appreciation plus upside potential from
deployment of surplus capital.
We expect NFI to generate significant free cash ($3.96/share in the next 3 years), which
could be used to generate additional shareholder value.
We project a solid 6.0% and 23.6% one-year and two-year implied investment returns,
respectively, including a solid 4.0% annual dividend yield.
We benchmarked our orders and backlog forecasts to the actual/reported data in the
quarter.
We lowered our Q1/15 deliveries by 10%, and reduced total firm backlog by 10% on
lower-than-expected new firm orders. However, we do not read too much into it as
deliveries and orders are volatile on quarterly basis. The rest of our forecast was little
changed.
2015 guidance suggests EBITDA improvement
NFI bus production guidance of 51 bus equivalent units (EUs) suggests a mid-single-digit
increase in bus deliveries in 2015. NFI guided to flat bus EBITDA/EU guidance, implying
an increase in bus manufacturing EBITDA in 2015.
The Aftermarket outlook is mixed, with core Aftermarket sales expected to increase
about 5%, but the one-off Chicago Transit Authority mid-life extension project is expected
to end in mid-2015. Net, we expect this to translate into slightly lower Aftermarket
EBITDA.
We expect the bus manufacturing and Aftermarket changes to net to a modest increase
in consolidated EBITDA.
FCF looks set to improve
We believe NFI may be positioned for better FCF in 2015 and beyond. We expect cash
from operations to remain quite positive. Capex is likely to increase on a temporary basis
in 2015 due to NFIs product rationalization program. But, working capital looks like it
may finally stop being a large use of cash.
Net, we think this combination positions NFI for strong FCF, which positions the company
for shareholder enhancement initiatives such as business growth and return of capital to
investors.
Unchanged valuation
We maintain our valuation at 7.5x EV/NTM EBITDA (or 7.5x Q4/16E EV / Q1/17E Q4/17E EBITDA), which is in line with the companys trading range in the past 60
months. Our target was unchanged due to the relatively unchanged forecast.
421

Company Update
Q1/15 cut modestly on reported data

data. Deliveries came in slightly below our expectations. Consequently, adjusting our
forecast for the actual data resulted in slightly lower Q1/15 results.
Remainder of our forecast is unchanged

We do not believe the Q1/15 data has forecast implications. We expect the lowerthan-expected Q1/15 deliveries to be picked up in the rest of the year and for future
years to be unaffected by the Q1/15 shortfall.
with Figure 6.
Buy unchanged Target Price C$15.00 unchanged | 15 April 2015
Auto Components 2
422

Company Update
Dividend/share (C$)
% change
Free cash flow/share (C$)
% change
Payout ratio
Revenue
% change
EBITDA
EBITDA margin
Q 1/15E
New
Old
Fc s t
Fc s t
0.146 0.146
0%
0%
2015E
New
Old
Fc s t
Fc s t
0.585 0.585
0%
0%
2016E
New
Old
Fc s t
Fc s t
0.585 0.585
0%
0%
2017E
New
Old
Fc s t
Fc s t
0.585 0.585
0%
0%
2018E
New
Old
Fc s t
Fc s t
0.585 0.585
0%
0%
2019E
New
Old
Fc s t
Fc s t
0.585 0.585
0%
0%
2014
0.59
n.m.
Q 4/14
0.15
0%
1.18
#N/A
0.38
34%
0.34
77%
0.36
90%
1.37
16%
1.37
16%
1.46
6%
1.46
7%
1.55
6%
1.55
6%
1.58
2%
1.58
2%
1.61
2%
1.61
2%
50%
38%
43%
40%
43%
43%
40%
40%
38%
38%
37%
37%
36%
36%
1,451
21%
420
11%
340
5%
369
14%
1,460
1%
1,460
1%
1,450
-1%
1,450
-1%
1,479
2%
1,479
2%
1,511
2%
1,511
2%
1,541
2%
1,541
2%
91
6.3%
26
6.3%
26
7.7%
28
7.6%
111
7.6%
111
7.6%
117
8.0%
117
8.0%
124
8.4%
124
8.4%
126
8.3%
126
8.3%
128
8.3%
128
8.3%
(9)
(11)
(6)
(3)
20
18
16
16
16
16
16
16
46

Bus revenue/unit
Bus EBITDA/unit
Aftermarket EBITDA
2,437
465
24
50
680
495
34
12
572
455
25
12
635
455
25
12
2,578
455
25
46
2,578
455
25
46
2,578
458
27
47
2,578
458
27
47
2,614
461
29
48
2,614
461
29
48
2,652
464
29
49
2,652
464
29
49
2,688
467
29
50
2,688
467
29
50
New orders (units)

2,263
2,102
759
2,102
392
1,922
645
2,112
2,578
2,102
2,578
2,102
2,578
2,102
2,578
2,102
2,614
2,102
2,614
2,102
2,652
2,102
2,652
2,102
2,688
2,102
2,688
2,102
Return on capital
1
5.2%
1.104
6.1%
1.136
6.2%
1.230
6.8%
1.230
6.8%
1.245
6.8%
1.245
7.7%
1.250
7.7%
1.250
8.7%
1.250
8.7%
1.250
9.2%
1.250
9.2%
1.250
9.8%
1.250
9.8%
1.250
Auto Components 3
423

Company Update
Forecast outlook

likely
NFI continues to guide to line entry rates of 51 EUs/week. This implies a roughly 5-6%
increase in deliveries in 2015 over 2014. The company has sold 80% of its 2015
production slots, roughly the same level as it had sold at this time last year.
orders.
2015 bus margins expected to be flat

NFI expects to improve core bus manufacturing margins from on-going profit
improvement actions and better mix. However, these gains are expected to be offset
by lower investment tax credits (ITCs) in 2015. NFI realized $11.7 million of ITC
benefit in 2014, but it had almost completely exhausted its ITC pool by the end of
2014.
NFI noted that industry competition dynamics seem unlikely to help margins through
better pricing. While the industry has consolidated down to three players, they remain
extremely competitive. Management noted that number 2 competitor, Gillig, is in the
process of building a new larger-capacity facility. This would seem likely to keep the
order environment quite competitive, given that the market is not growing very quickly.


that this is not a capital-intensive project as it mainly focusses on business

NFI has experienced four years of significant cash outflows from NCWC. The company
finally looks set to improve this situation as inventories are coming down and
receivables should decline as cash from the bulge of recent deliveries is collected.
We believe NFI could be positioned for material cash generation from NCWC in 2015
Future value enhancement coming on the agenda

As noted above, NFI appears to be positioned for improved FCF in coming years.
Accordingly, NFI should have the potential to consider shareholder value improvement
initiatives in coming years.
Auto Components 4
424

Company Update
NFI emphasized that its focus is on its operational improvement projects this year
(Projects United and Convergence). However, management also noted that a
considerable part of its Q4/14 board meeting on March 19, 2015 was spent on
considering future value improvement actions.
NFI noted that value creation activities could include acquisitions or investments in
the bus industry or adjacent markets or direct shareholder value actions, which we
take to mean share buy backs and/or dividend increases.
Auto Components 5
425

Company Update
VALUATION
range.
names (Figure 5).
Auto Components 6
426

Company Update
Ma r k e t
Cur .
Eq ui ty Pr i ce :
Cur .
Y e a r A p r . 15, 2015
Di v .
2015
$14. 16
$0. 59
Co nse nsus A v e r a ge
Di v .
EB I TDA
Cur .
Pa y o ut
Ca p .
Cur .
Y i e l d F CF PS
r a ti o
($M)
EPS
4. 1%
$1. 37
4. 5%
42. 6%
De b t/
P/E
$778 $0. 64 22. 1 33. 5%
67. 7%
Gr o wth
Ca p ('15- '17)
5. 7%
17. 1 39. 0% #V A LU E!
Chorus Aviation
2015
$6.06
$0.48
7.9%
$1.01
47.5%
$731 $0.72
8.5
Davis + Henderson
2014
$39.69
$1.28
3.2%
$1.65
77.6%
$3,429 $2.71
14.7
88.4%
12.9%
Westshore Terminals
2014
$31.25
$1.32
4.2%
$1.65
80.0%
$2,320 $1.81
17.2
0.0%
2.6%
Cineplex Galaxy
2015
$49.29
$1.56
3.2%
$1.71
91.0%
$3,108 $2.14
23.0
32.1%
13.1%
41.2% #VALUE!
(average of 7.5x over the past 60 months). We think our target multiple is well
argument.
Auto Components 7
427

Company Update

EBITDA
Multiplier
EV
1-year
t arget
116.7
7.5
875.4
(111.1)
764.3
62.0
12.33
2-year
t arget
123.8
7.5
928.7
(81.4)
847.3
62.0
13.66
15.00
17.00

0.59
1.17
15.59
18.17
6.0%
23.6%

3.9%
9.7%
3.4%
9.1%

2.6%
8.4%
FCFPS C$
1.46
1.55

We maintain our target price of C$15.00 on a relatively unchanged forecast.

We maintain our BUY rating as the 2-year projected return is more than 20%. Our
current target and estimated dividend currently produces a 6.0% one-year implied
investment return (including a 4.0% dividend yield).
Auto Components 8
428

Company Update
F ree cash
Interest paid
Interest expense
Income taxes paid
Free cash flow
Exchange rate
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2 0 1 4 Q1 /1 5 E Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
5.5
24.0
17.1
(14.6)
6.5
(12.8)
(2.4)
(4.0)
0.7
7.3
(1.8)
2.2
27.8
0.001
27.8
33.1
30.0
23.0
10.9
(11.6)
19.0
(23.8)
(2.0)
(13.8)
1.2
6.0
8.7
(2.8)
(1.5)
0.2
43.4
1.039
45.1
30.7
17.5
(7.9)
3.8
(3.1)
4.4
(3.4)
(0.4)
(3.3)
0.4
2.1
(0.7)
0.0
9.5
1.109
10.6
8.1
1.1
18.9
3.8
(3.4)
4.4
(8.2)
(0.3)
(1.5)
0.2
0.1
(0.7)
0.4
14.7
1.085
15.9
8.1
0.5
21.8
1.8
(2.9)
1.6
(4.1)
(0.5)
(1.9)
0.0
0.2
0.8
(0.7)
(0.4)
16.3
1.097
17.9
8.1
26.9
2.5
2.2
(3.0)
1.5
(11.2)
(0.6)
(1.7)
2.8
0.5
(0.6)
(0.6)
(0.1)
18.6
1.136
21.1
8.1
45.8
35.3
11.6
(12.4)
12.0
(26.8)
(1.8)
(8.4)
0.6
3.1
3.5
(2.6)
(0.6)
(0.2)
59.1
1.104
65.5
32.5
32.6
(14.6)
3.0
(3.0)
5.4
(5.4)
(0.7)
(2.0)
0.5
(0.6)
15.2
1.230
18.7
8.1
30.2
(10.6)
3.0
(3.0)
6.3
(6.3)
(0.7)
(2.0)
0.5
(0.6)
16.8
1.250
21.0
8.1
22.8
(5.8)
2.9
(2.9)
7.5
(7.5)
(0.7)
(2.0)
0.5
(0.6)
14.2
1.250
17.8
8.1
14.2
3.5
2.9
(2.9)
7.9
(7.9)
(0.7)
(2.0)
0.5
(0.6)
15.0
1.250
18.7
8.1
99.7
(27.5)
11.8
(11.8)
27.2
(27.2)
(2.6)
(8.0)
2.0
(2.4)
61.2
1.245
76.2
32.5
67.6
8.3
11.5
(11.5)
29.7
(29.7)
(2.6)
(8.0)
2.0
(2.4)
64.9
1.250
81.1
32.5
75.6
4.4
11.1
(11.1)
33.1
(33.1)
(2.6)
(8.0)
2.0
(2.4)
69.0
1.250
86.2
32.5
77.6
3.5
10.7
(10.7)
34.5
(34.5)
(2.6)
(8.0)
2.0
(2.4)
70.1
1.250
87.6
32.5
78.8
3.5
10.4
(10.4)
35.7
(35.7)
(2.6)
(8.0)
2.0
(2.4)
71.3
1.250
89.1
32.5
44.4
51.9
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5
55.5

0.63
0.75
0.87
0.58
0.19
0.15
0.29
0.15
0.32
0.15
0.38
0.15
1.18
0.59
0.34
0.15
0.38
0.15
0.32
0.15
0.34
0.15
1.37
0.59
1.46
0.59
1.55
0.59
1.58
0.59
1.61
0.59
Auto Components 9
429

Company Update
Incom e statem ent
Revenues
EBITDA
Other
Other expenses
Pre-tax income
Income taxes
Net Income (loss)
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
2 0 1 4 Q1 /1 5 E Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
865.3 1,199.4
(810.2) ######
2.8
(0.1)
57.8
79.1
(24.3)
(28.0)
(1.4)
(2.1)
(1.4)
0.0
(5.5)
0.0
25.2
49.0
(11.9)
(8.7)
(2.7)
(2.9)
0.8
(0.5)
(2.8)
(2.2)
0.0
0.0
10.0
34.6
(0.7)
(7.9)
9.3
26.8
323.9
(305.0)
(0.8)
18.1
(7.7)
(0.4)
0.0
0.0
10.0
(2.3)
(0.8)
0.3
(0.5)
0.0
6.7
(1.2)
5.5
346.5
(322.3)
(0.4)
23.8
(8.1)
1.0
0.0
(3.9)
12.8
(2.3)
(1.2)
(0.4)
(0.5)
0.0
8.4
(4.8)
3.6
360.8
(337.6)
(0.2)
22.9
(10.0)
(0.1)
0.0
0.0
12.8
(2.2)
(0.7)
0.8
(0.6)
0.0
10.1
0.2
10.2
420.0 1,451.1
(393.4) (1,358.3)
(0.1)
(1.5)
26.5
91.3
(10.0)
(35.8)
0.3
0.8
0.0
0.0
(0.9)
(4.8)
15.9
51.4
(2.2)
(8.9)
(0.8)
(3.5)
0.1
0.8
(0.6)
(2.2)
0.0
0.0
12.4
37.6
(5.0)
(10.8)
7.4
26.7
340.3
(314.0)
0.0
26.3
(9.9)
0.0
0.0
0.0
16.4
(2.3)
(0.7)
0.0
0.0
0.0
13.4
(3.4)
9.9
394.0
(365.2)
0.0
28.8
(10.0)
0.0
0.0
0.0
18.8
(2.3)
(0.6)
0.0
0.0
0.0
15.8
(4.3)
11.5
352.7
(325.4)
0.0
27.3
(10.1)
0.0
0.0
0.0
17.2
(2.3)
(0.6)
0.0
0.0
0.0
14.3
(5.5)
8.8
2015E
2016E
2017E
2018E
2019E
373.1 1,460.0 1,449.9 1,479.5 1,510.5 1,540.9

(344.7) (1,349.2) (1,333.2) (1,355.6) (1,384.6) (1,413.0)
0.0
0.0
0.0
0.0
0.0
0.0
28.4
110.8
116.7
123.8
125.9
127.9
(10.1)
(40.1)
(39.7)
(38.2)
(37.2)
(36.4)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
18.3
70.7
77.0
85.6
88.7
91.6
(2.3)
(9.3)
(9.3)
(9.3)
(9.3)
(9.3)
(0.6)
(2.5)
(2.2)
(1.8)
(1.4)
(1.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
15.4
58.9
65.5
74.5
78.0
81.2
(5.9)
(19.2)
(21.7)
(25.1)
(26.4)
(27.7)
9.5
39.7
43.8
49.4
51.6
53.5
0.75
0.63
(0.10)
0.58
0.87
0.26
0.15
0.19
0.28
0.15
0.29
(0.01)
0.15
0.32
(0.04)
0.15
0.38
0.49
0.59
1.18
0.71
0.15
0.34
0.54
0.15
0.38
0.50
0.15
0.32
0.35
0.15
0.34
0.18
0.59
1.37
1.56
0.59
1.46
1.12
0.59
1.55
1.28
0.59
1.58
1.32
0.59
1.61
1.34
52.3
58.9
55.5
55.6
55.7
55.7
55.6
62.0
62.0
62.0
62.0
62.0
62.0
62.0
62.0
62.0
-6.6%
-0.4%
-30.6%
6.7%
38.6%
38.4%
-21.5%
6.6%
32.1%
26.8%
0.0%
5.6%
30.0%
56.0%
0.0%
6.9%
16.8%
36.0%
0.0%
6.4%
10.9%
34.4%
0.0%
6.3%
21.0%
36.0%
0.0%
6.3%
5.1%
76.7%
0.0%
7.7%
13.7%
31.8%
0.0%
7.3%
-2.2%
-0.5%
0.0%
7.7%
-11.2%
-11.5%
0.0%
7.6%
0.6%
16.3%
0.0%
7.6%
-0.7%
6.5%
0.0%
8.0%
2.0%
6.3%
0.0%
8.4%
2.1%
1.6%
0.0%
8.3%
2.0%
1.7%
0.0%
8.3%
3.9%
5.3%
3.9%
5.9%
4.8%
6.1%
5.2%
6.2%
7.3%
6.8%
7.2%
6.8%
7.7%
8.7%
9.2%
9.8%
Bus revenues
Bus sales growth
Deliveries
Revenue/unit
EBITDA/unit
LTM EBITDA/unit
753.9
42.0
-7.0%
5.6%
1,656
455
25
25
984.4
63.6
30.6%
6.5%
2,191
449
29
29
250.9
7.8
20.7%
3.1%
554
453
14
27
265.8
13.9
23.5%
5.2%
582
457
24
28
278.7
12.6
11.2%
4.5%
621
449
20
26
336.6
23.2
7.5%
6.9%
680
495
34
24
1132.1
57.4
15.0%
5.1%
2,437
465
24
24
260.3
14.3
3.7%
5.5%
572
455
25
26
319.0
17.5
20.0%
5.5%
701
455
25
26
286.7
15.8
2.8%
5.5%
630
455
25
27
307.1
16.9
-8.8%
5.5%
675
455
25
25
1173.0
64.5
3.6%
5.5%
2,578
455
25
25
1180.7
69.6
0.7%
5.9%
2,578
458
27
27
1205.1
75.8
2.1%
6.3%
2,614
461
29
29
1230.5
76.9
2.1%
6.3%
2,652
464
29
29
1255.3
78.0
2.0%
6.2%
2,688
467
29
29
119.1
19.6
2.6%
16.4%
215.0
31.0
80.6%
14.4%
73.0
11.9
95.4%
16.3%
80.7
13.1
57.1%
16.2%
82.0
13.1
40.7%
16.0%
83.4
11.9
22.6%
14.2%
319.0
50.0
48.4%
15.7%
80.0
12.0
9.6%
15.0%
75.0
11.3
-7.0%
15.0%
66.0
11.6
-19.6%
17.5%
66.0
11.6
-20.8%
17.5%
287.0
46.4
-10.0%
16.1%
269.2
47.1
-6.2%
17.5%
274.4
48.0
1.9%
17.5%
280.0
49.0
2.0%
17.5%
285.6
50.0
2.0%
17.5%

EBITDA/sales
ROC
Segm ented data
Auto Components 10
430

Company Update
Balance sheet
Cash
Accounts receivable
Inventories
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
11.2
113.5
124.7
4.7
0.0
0.0
0.0
254.1
11.9
230.3
183.3
7.7
0.0
0.0
0.0
433.2
14.2
201.0
207.7
6.6
0.0
1.6
0.0
431.1
4.3
146.3
246.4
5.7
0.0
3.2
0.0
406.0
8.7
164.1
267.4
4.6
0.1
3.4
0.0
448.2
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
17.5
212.1
230.0
4.4
0.7
0.8
0.0
465.4
Capital assets
Deferred charges
Intangible assets
Total assets
42.0
0.0
528.5
72.6
0.0
0.0
897.2
64.8
0.0
568.9
68.9
0.0
0.0
1,135.9
65.5
0.0
564.1
67.6
0.0
1.1
1,129.4
65.4
0.0
556.1
65.7
0.0
0.5
1,093.7
65.2
0.0
550.7
65.0
0.0
0.0
1,129.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
63.8
0.0
544.5
62.4
0.0
0.0
1,136.1
Bank indebtedness
Deferred revenue
0.0
150.8
0.0
19.2
20.1
1.9
40.0
6.8
238.8
0.0
212.9
0.0
57.6
26.1
1.3
35.0
1.5
334.4
0.0
225.5
0.0
55.4
25.1
1.1
30.0
0.5
337.6
0.0
204.5
0.0
47.7
25.1
1.3
30.0
1.8
310.3
0.0
227.1
0.0
36.8
28.7
1.7
45.0
3.9
343.2
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
233.1
0.0
40.8
32.3
1.6
40.0
6.1
353.8
0.0
203.6
0.0
40.8
32.3
1.6
40.0
5.3
323.6
0.0
216.7
0.0
40.8
32.3
1.6
40.0
4.5
335.9
0.0
214.5
0.0
40.8
32.3
1.6
40.0
3.8
333.0
0.0
234.9
0.0
40.8
32.3
1.6
40.0
3.0
352.5
0.0
234.9
0.0
40.8
32.3
1.6
40.0
3.0
352.5
0.0
217.5
0.0
40.8
32.3
1.6
40.0
1.0
333.2
0.0
222.2
0.0
40.8
32.3
1.6
40.0
(0.0)
336.9
0.0
227.8
0.0
40.8
32.3
1.6
40.0
(1.0)
341.5
0.0
233.5
0.0
40.8
32.3
1.6
40.0
(2.0)
346.2

Long-term debt
9.0
2.3
122.2
177.7
2.0
1.2
0.2
1.8
114.8
198.6
2.5
28.3
0.0
1.6
113.2
199.1
2.2
22.1
0.0
2.7
112.2
199.6
2.6
16.5
0.6
3.4
110.5
200.0
1.8
17.4
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
108.5
200.5
1.7
14.7
1.0
3.2
106.5
200.5
1.7
14.7
1.0
3.2
104.5
200.5
1.7
14.7
1.0
3.2
102.4
200.5
1.7
14.7
1.0
3.2
100.4
200.5
1.7
14.7
1.0
3.2
100.4
200.5
1.7
14.7
1.0
3.2
92.4
200.5
1.7
14.7
1.0
3.2
84.4
200.5
1.7
14.7
1.0
3.2
76.3
200.5
1.7
14.7
1.0
3.2
68.3
200.5
1.7
14.7

Share capital
Retained earnings
CAPEX
Net debt
Book value / unit
0.0
0.0
480.8
(136.8)
593.3
(138.2)
0.0
593.6
(140.0)
0.0
593.8
(143.9)
0.0
594.1
(141.8)
0.0
594.5
(141.8)
2 0 1 4 Q1 /1 5 E Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
0.0
594.5
(141.8)
37.9
179.5
218.6
3.6
0.7
0.8
0.0
441.0
56.1
190.5
208.8
4.1
0.7
0.8
0.0
461.0
66.9
182.1
208.8
3.7
0.7
0.8
0.0
463.0
69.1
205.0
208.8
3.9
0.7
0.8
0.0
488.3
2015E
2016E
2017E
2018E
2019E
69.1
205.0
208.8
3.9
0.7
0.8
0.0
488.3
98.8
191.0
212.0
3.6
0.7
0.8
0.0
506.9
136.3
195.7
215.2
3.7
0.7
0.8
0.0
552.5
175.7
200.6
218.4
3.8
0.7
0.8
0.0
600.0
216.2
205.5
221.6
3.9
0.7
0.8
0.0
648.7
64.8
65.7
66.6
67.4
67.4
61.4
56.9
53.7
51.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
539.0
533.6
528.2
522.8
522.8
501.1
479.4
457.7
436.0
62.4
62.4
62.4
62.4
62.4
62.4
62.4
62.4
62.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(0.1)
(0.2)
(0.3)
(0.4)
(0.4)
(0.8)
(1.2)
(1.6)
(2.0)
1,107.1 1,122.5 1,119.9 1,140.4 1,140.4 1,130.9 1,150.0 1,172.1 1,196.3
0.0
594.5
(138.5)
0.0
594.5
(133.5)
0.0
594.5
(131.2)
0.0
594.5
(128.2)
0.0
594.5
(128.2)
0.0
594.5
(110.3)
0.0
594.5
(86.9)
0.0
0.0
594.5
(61.3)
594.5
(33.8)
897.2
1,135.9
1,129.4
1,093.7
1,129.1
1,136.1
1,136.1
1,107.1
1,122.5
1,119.9
1,140.4
1,140.4
1,130.9
1,150.0
1,172.1
1,196.3
10.8
46.0
15.4
123.2
3.5
110.5
1.8
122.7
2.5
143.1
2.8
135.7
10.7
135.7
5.5
121.1
5.5
110.5
5.5
104.7
5.5
108.2
21.9
108.2
12.0
116.4
12.1
120.8
12.2
124.3
12.3
127.9
210.7
3.6x
7.75
21.8x
224.7
2.8x
8.77
22.4x
217.6
1.4x
8.18
19.9x
229.3
1.5x
8.11
21.2x
241.5
2.5x
8.15
22.1x
227.8
2.5x
8.15
26.0x
227.8
2.5x
8.16
22.6x
207.3
2.1x
8.21
21.2x
189.1
1.8x
8.30
24.2x
178.3
1.6x
8.35
21.3x
176.1
1.6x
8.40
22.3x
176.1
1.6x
8.40
22.3x
146.4
1.3x
8.72
22.5x
108.9
0.9x
9.14
25.0x
69.5
0.6x
9.60
27.3x
29.0
0.2x
10.10
29.4x
Auto Components 11
431

Company Update
Net income
Other
2012
2013
Q1 /1 4
Q2 /1 4
Q3 /1 4
Q4 /1 4
9.8
8.3
16.0
0.0
0.0
1.5
0.0
1.4
1.4
3.6
(7.3)
(2.2)
(2.9)
29.5
(24.0)
5.5
26.8
9.6
18.4
0.0
0.0
17.5
0.0
2.1
0.0
2.8
(8.7)
0.1
(15.6)
53.0
(23.0)
30.0
5.5
2.9
4.8
0.0
0.0
2.2
0.0
0.4
0.0
0.7
(2.1)
3.3
(8.0)
9.6
7.9
17.5
3.6
3.3
4.8
0.0
0.0
4.8
0.0
(1.0)
0.0
0.7
0.0
4.4
(0.6)
19.9
(18.9)
1.1
10.2
4.6
5.4
0.0
0.0
2.4
0.0
0.1
0.0
0.7
(0.8)
(3.4)
3.1
22.3
(21.8)
0.5
7.4
4.6
5.4
0.0
0.0
14.9
0.0
(0.3)
0.0
0.6
(0.5)
(3.4)
0.7
29.3
(2.5)
26.8
26.7
15.4
20.5
0.0
0.0
24.3
0.0
(0.8)
0.0
2.6
(3.5)
0.8
(4.9)
81.1
(35.3)
45.8
9.9
4.5
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
0.6
(0.5)
0.0
0.0
17.9
14.6
32.6
11.5
4.6
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
0.6
(0.5)
0.0
0.0
19.6
10.6
30.2
8.8
4.6
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
0.6
(0.5)
0.0
0.0
17.0
5.8
22.8
Investing
(10.8)
(11.0)
(15.4)
(122.5)
(3.5)
(3.6)
(1.8)
(1.8)
(2.5)
(2.6)
(2.8)
(2.9)
(10.7)
(10.9)
(5.5)
(5.5)
(5.5)
(5.5)
Financing
Share issuance
Dividends
0.0
103.2
0.0
(62.4)
(2.4)
0.0
0.0
0.0
(34.0)
4.3
0.0
12.6
0.0
0.0
(2.0)
0.0
0.0
111.7
(29.3)
93.0
0.0
(3.9)
0.0
0.0
(0.4)
0.0
0.0
0.0
(7.4)
(11.6)
0.0
(1.7)
0.0
0.0
(0.3)
0.0
0.0
0.0
(7.4)
(9.4)
0.0
15.0
0.0
0.0
(0.6)
0.0
0.0
0.0
(7.5)
6.9
0.0
(7.4)
0.0
0.0
(0.5)
0.0
0.0
0.0
(7.2)
(15.1)
0.0
2.1
0.0
0.0
(1.8)
0.0
0.0
0.0
(29.5)
(29.2)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.6)
(6.6)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.5)
(6.5)
2 0 1 4 Q1 /1 5 E Q2 /1 5 E Q3 /1 5 E Q4 /1 5 E
2015E
2016E
2017E
2018E
2019E
9.5
4.7
5.4
0.0
0.0
(2.0)
0.0
0.0
0.0
0.6
(0.5)
0.0
0.0
17.7
(3.5)
14.2
39.7
18.4
21.7
0.0
0.0
(8.0)
0.0
0.0
0.0
2.4
(2.0)
0.0
0.0
72.2
27.5
99.7
43.8
18.0
21.7
0.0
0.0
(8.0)
0.0
0.0
0.0
2.4
(2.0)
0.0
0.0
75.9
(8.3)
67.6
49.4
16.5
21.7
0.0
0.0
(8.0)
0.0
0.0
0.0
2.4
(2.0)
0.0
0.0
80.0
(4.4)
75.6
51.6
15.5
21.7
0.0
0.0
(8.0)
0.0
0.0
0.0
2.4
(2.0)
0.0
0.0
81.1
(3.5)
77.6
53.5
14.7
21.7
0.0
0.0
(8.0)
0.0
0.0
0.0
2.4
(2.0)
0.0
0.0
82.3
(3.5)
78.8
(5.5)
(5.5)
(5.5)
(5.5)
(21.9)
(21.9)
(12.0)
(12.0)
(12.1)
(12.1)
(12.2)
(12.2)
(12.3)
(12.3)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.5)
(6.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(6.5)
(6.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.1)
(26.1)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.0)
(26.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.0)
(26.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.0)
(26.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(26.0)
(26.0)
2.2
0.2
0.0
0.4
0.0
(0.5)
(0.2)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Net cash flow

1.0
10.1
11.2
0.7
11.2
11.9
2.3
11.9
14.2
(9.9)
14.2
4.3
4.7
4.3
9.1
8.4
9.1
17.5
5.6
11.9
17.5
20.5
17.5
37.9
18.2
37.9
56.1
10.8
56.1
66.9
2.2
66.9
69.1
51.7
17.5
69.1
29.7
69.1
98.8
37.5
98.8
136.3
39.4
136.3
175.7
40.5
175.7
216.2
Free cash flow
(5.4)
(92.5)
13.9
(0.8)
(2.1)
24.0
34.9
27.1
24.7
17.3
8.7
77.8
55.6
63.5
65.4
66.5
Auto Components 12
432

Company Update
Investment risks
Auto Components 13
433

Company Update

Rating
Coverage Universe
IB Clients
#
%
%
Buy
578
58.32%
33.04%
Hold
326
32.90%
18.10%
Sell
40
4.04%
0%
Speculative Buy
47
4.74%
59.57%
991*
100.0%
relevant issuer.
Risk Qualier
Auto Components 14
434

Company Update

H:C$7.25
04/25/12
B:C$7.25
06/05/12
H:C$7.25
08/13/12
H:C$8.00
09/19/12
H:C$8.25
11/14/12
H:C$8.75
01/11/13
H:C$9.25
01/29/13
H:C$9.75
02/06/13
H:C$10.00
03/25/13
H:C$10.25
04/18/13
B:C$11.25
06/24/13
H:C$11.75
08/07/13
H:C$11.25
11/07/13
16
14
12
10
8
6
B:C$12.00
01/15/14
Jul 2012
B:C$12.50
03/23/14
Oct 2012
H:C$11.50
05/11/14
Jan 2013
H:C$11.75
06/24/14
Apr 2013
H:C$12.00
07/16/14
Jul 2013
B:C$14.00
08/06/14
Oct 2013
H:C$14.00
11/09/14
Closing Price
Jan 2014
B:C$12.50
12/12/14
Apr 2014
H:C$14.00
01/12/15
Jul 2014
Oct 2014
Jan 2015
Apr 2015
B:C$15.00
03/19/15
Target Price
General Disclosures
Auto Components 15
435

Company Update
in Canada. Canadian clients wishing to effect transactions in any designated investment discussed should do so through a qualified
salesperson of Canaccord Genuity Corp. in their particular province or territory.
account.
Inc.
entities that publish research and Canaccord Genuity Singapore Pte. Ltd who are an exempt financial adviser under section 23(1)(d) of
or institutional investor as defined under section 4A of the Securities and Futures Act It is not intended to be distributed or passed on,
Person: Tom Gunnersens tel # is +852 3919 2561) in respect of any matters arising from, or in connection with, the [analyses or
report].
This research is distributed in Hong Kong by Canaccord Genuity (Hong Kong) Limited who is licensed by the Securities and Futures
this report can contact Canaccord Genuity (Hong Kong). Ltd. (Contact Person: Tom Gunnersens tel # is +852 3919 2561) in respect of
any matters arising from, or in connection with, the research.
Auto Components 16
436

Company Update
regulated by ASIC.
Auto Components 17
437

Kevin Chiang, CFA
1 (416) 594-7198
Khaled Omar
1 (416) 956-6807
COMPANY UPDATE
j

Q1/15 Orders In-line With Expectations
But Aftermarkets Continues To Shine
What's The Event
NFI reported its Q1 orders and backlog and it was generally in line
with expectations. The company delivered 572 EUs, up from 554
EUs last year, and versus our estimate of 570 EUs. Overall bus
orders in the first quarter totalled 1,020 EUs, consisting of 235 firm
EUs (valued at $102.6M) and new options of 785 EUs (valued at
$360.2M) including options for 157 EUs converted to firm orders
valued at $68.3M. There were also 494 EUs of new orders approved
by customers, but pending purchase documentation; so we expect
this will officially enter the backlog in the near-term. NFI's book-tobill ratio on a TTM basis was 119%. We continue to see a modestly
improving bid environment with NFI reaffirming its 2015 line entry
rate of 51 EUs/week. While NFI's bid universe declined to 19,381
EUs in Q1, down 2,075 EUs Q/Q, its total active EUs came in at
7,067 EUs, up 5% Q/Q and the highest level since Q3/13.
In aftermarkets, NFI continued to show solid growth. While gross
parts orders in Q1 declined by 6.9% Y/Y, reflecting the slowdown of
sales for the CTA mid-life upgrade program as it approaches
completion in Q2, parts shipments increased by 23.5% Y/Y, and up
6.7% Q/Q versus our expectations of a modest sequential decline.
April 14, 2015

Capital Equipment
SECTOR PERFORMER
MARKET WEIGHT
Stock Rating:
Sector Weighting:
NFI-TSX (4/14/15)
C$15.00
C$14.52
Key Indices:
3-5-Yr. EPS
Gr. Rate (E)
52-week
Range
Shares Outstanding
Float
Dividend/Div Yield
Fiscal Year Ends
Book Value
2015 ROE (E)
LT Debt
Net AssetEquity
Value
Common
EBITDA ($mln)
Current
Estimates (Dec.
(Dec. 31)
31)
Valuation
EV/EBITDA-Curr
Toronto
NM
C$11.20-C$14.90
55.5M
36.5M Shrs
38,000
C$805.9M
C$0.59 / 4.1%
December
$8.32 per Shr
9.0%
$140.7M
$462.0M
Yes
2013
$94.7A
2014
$107.4A
2015
$111.4E
2016
$119.4E
10.9x
9.6x
9.2x
8.6x
From a funding perspective, NFI continues to highlight an improving

environment. The Omnibus Appropriations and Continuing
Resolution extends transit funding through Q3/15 and results in fullyear funding of $10.7B, up $167M Y/Y. The Grow America Act
extends funding through 2021 and increases the overall
authorization level to $478B. Our main concern is that the proposal
calls for the Buy America requirements to increase U.S. content
requirements for transit buses from 60% currently to 100% in 2019.
While the general sense in the transit industry is that a 100% U.S.
content rule will not pass because it is not viewed as being practical
(i.e. transit supply chains are not equipped for 100% U.S. content
rules), there is obvious political support for this proposal.
Valuation
We tweaked our Q1 estimates as we actualize NFI's order activity
and aftermarkets revenue growth. Our EBITDA increases by $1M to
$25M, up 27% Y/Y. NFI reports Q1 results on May 6 (refer to Exhibit
1). Our 2015E and 2016E EBITDA are unchanged as we reshape the
completion of the CTA contract. Maintain our SP rating and C$15 PT.
Company Description
www.newflyer.com
15-135425 2015
where applicable.
438
Q1/15 Orders In-line With Expectations But Aftermarkets Continues To Shine - April 14, 2015
Sector Performer
NFI-TSX
4/14/15
Capital Equipment
Sector Weighting:
EV/EBITDA Multiples
Manufacturers
P/E Multiples
Manufacturers
2013A
EBITDA Margin
Current Ratio
Debt/Equity
Debt/Total Capital
Income Statement
Cost of Sales
Gross Profit
EBITDA
EBIT
EBT
Net Income
Balance Sheet
C$14.52
C$15.00
Market Weight
2014A
2015E
2016E
9.6x
9.9x
11.0x
9.2x
8.3x
8.7x
8.6x
6.9x
7.8x
2014A
2015E
2016E
Investment Thesis
17.5x
20.6x
18.3x
16.6x
17.1x
13.7x
14.3x
12.6x
11.6x
2014A
2015E
2016E
7.9%
1.1x
51.3%
33.9%
2013A
7.4%
1.1x
53.1%
34.7%
2014A
7.7%
1.3x
40.9%
29.0%
2015E
8.2%
1.3x
50.5%
33.6%
2016E
$991.2
$215.0
$1,199.4
$1,078.7
$120.8
$94.7
$49.0
$34.6
$26.8
$1,132.1
$319.0
$1,451.1
$1,312.8
$138.3
$107.4
$51.4
$37.6
$26.7
$1,127.6
$316.3
$1,443.9
$1,296.4
$147.5
$111.4
$82.1
$67.8
$48.6
$1,125.0
$328.7
$1,453.7
$1,298.0
$155.7
$119.4
$90.5
$76.2
$56.2
Q4/14A
Current Assets
Total Assets
Current Liabilities
Total Liabilities

465
1,136
354
683
453
Company Profile
Canada
16%

$350
$1,000,000
2,500
$300
$800,000
2,000
$250
$600,000
1,500
$200
$400,000
1,000
$200,000
500
$0
0
2009
2010
2011
2012
2013
Deliveries(EUs)
2014
$ Millions
3,000
2008
United States
84%
Bus Operations
78%
$1,200,000
2007

Aftermarket
Operations
22%
$319
$215
$150
$100
$83
$96
$108
$106
$116
$119
2009
2010
2011
2012
$50
$0
2007
2008
2013
2014
439
Exhibit 1. Q1/15 Preview

Q1/15 - Preview ($ Mln Unless Noted)
Q1/F14A
Q4/F14A
Q1/F15E
Y/Y %
Q/Q %
554
680
572
3.2%
-15.9%
Total Revenue
$324
420.0
$339
4.5%
-19.4%
$251
336.6
$252
0.3%
-25.2%
Aftermarket Operations Revenues
$73
83.4
$87
18.9%
4.1%
$20
35.0
$25
27.3%
-28.5%
$8
23.2
$12
49.4%
-50.0%
$12
11.9
$13
13.0%
13.5%
Total EBITDA

We derive our C$15.00 price target by applying a ~7.5x EV/EBITDA multiple to
our 2016 EBITDA estimate. We use the current debt level in our calculation. Our
target multiple is in line with New Flyers historical trading range given the
longer-term positive impact of heavy-duty bus demand and the companys
leverage to an improving U.S. economy.

costs.
440

F2013
Q1/F14
Q2/F14
Q3/F14
Q4/F14
F2014
Q1/F15E
Q2/F15E
Q3/F15E
Q4/F15E
F2015E
F2016E
Revenue
$1,199,424
$323,865
$346,484
$360,762
$419,989
$1,451,100
$338,521
$352,266
$355,034
$398,070
$1,443,891
$1,453,745
Cost of Sales

$1,078,657
$293,851
$309,256
$326,482
$383,228
$1,312,817
$305,021
$315,658
$320,806
$354,867
$1,296,351
$1,297,998
Gross Profit
$120,767
$30,014
$37,228
$34,280
$36,761
$138,283
$33,501
$36,608
$34,228
$43,203
$147,540
$155,747
SGA
$26,082
$10,348
$10,262
$8,583
$1,725
$30,918
$8,463
$8,807
$8,876
$9,952
$36,097
$36,344
EBITDA
$94,685
$19,666
$26,966
$25,697
$35,036
$107,365
$25,038
$27,802
$25,352
$33,252
$111,443
$119,403
Amortization
$28,001
$8,131
$10,012
$9,976
$35,837
$7,341
$29,337
$28,900
FX loss (gain)
$7,718
$7,274
$7,334
$7,389
$118
$802
$387
$226
$132
$0
$0
$0
$0
$0
$0
$0
Operating Earnings
$66,566
$11,146
$18,448
$15,459
$24,928
$69,981
$17,764
$20,468
$17,963
$25,911
$82,106
$90,504
Unrealized FX Loss
$2,146
$380
($1,000)
$117
($317)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$15,457
$762
$6,685
$2,561
$9,353
$19,361
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
EBIT
$48,963
$10,004
$12,763
$12,781
$15,892
$51,440
$17,764
$20,468
$17,963
$25,911
$82,106
$90,504
$8,749
$2,257
$2,257
$2,203
$2,180
$8,897
$2,409
$2,409
$2,409
$2,409
$9,635
$9,673
$2,208
$540
$549
$565
$575
$2,229
$575
$575
$575
$575
$2,300
$2,300
$2,857
$823
$1,190
$713
$795
$3,521
$600
$600
$600
$600
$2,400
$2,400
$532
($314)
$377
($785)
($53)
($775)
$0
$0
$0
$0
$0
$0
Interest Expense
$14,346
$3,306
$4,373
$2,696
$3,497
$13,872
$3,584
$3,584
$3,584
$3,584
$14,335
$14,283
EBT
$34,617
$6,698
$8,390
$10,085
$12,395
$37,568
$14,180
$16,884
$14,379
$22,327
$67,771
$76,221
Income Tax Expense
$7,856
$1,214
$4,827
($160)
$4,968
$10,849
$4,041
$4,823
$4,309
$5,968
$19,141
$20,024
Net Income
$26,761
$5,484
$3,563
$10,245
$7,427
$26,719
$10,139
$12,061
$10,070
$16,359
$48,630
$56,197
$0.81
$0.11
$0.18
$0.18
$0.30
$0.83
$0.18
$0.22
$0.18
$0.29
$0.88
$1.01

Unusuals
441
1 Qtr.
2 Qtr.
3 Qtr.
4 Qtr.
Yearly
2013 Current
$15.4A
$18.1A
$24.4A
$36.8A
$94.7A
2014 Current
$19.7A
$27.0A
$25.7A
$35.0A
$107.4A
2015 Current
$25.0E
$27.8E
$25.4E
$33.3E
$111.4E
2016 Current
--
--
--
--
$119.4E
442

443

Abbreviation
Rating
Description
SO
Sector Outperformer
SP
Sector Performer
SU
NR
Not Rated
Restricted
Stock Ratings
O
Overweight
Market Weight
Underweight
NA
None

(as of 14 Apr 2015)
Count
Percent
Count
Percent
151
41.8%
162
44.9%
146
96.7%
157
37
10.2%
34
96.9%
91.9%
Restricted
10
2.8%
Restricted
10
100.0%

(as of 14 Apr 2015)
Count
Percent
0.0%
100.0%
0.0%
Restricted
0.0%
Count
Percent
0.0%
100.0%
0.0%
Restricted
0.0%

444
Date
12/13/2012
01/10/2013
01/25/2013
02/05/2013
03/01/2013
05/10/2013
06/21/2013
07/15/2013
08/07/2013
10/15/2013
11/08/2013
04/15/2014
05/11/2014
07/16/2014
08/06/2014
03/19/2015
Change Type
Closing Price
8.38
8.80
9.95
9.72
10.30
9.86
10.30
11.13
11.54
11.07
10.94
11.20
11.82
12.85
13.17
13.92
Rating
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
SP
Price Target
8.50
8.75
10.00
10.50
11.00
10.00
11.00
11.50
12.00
12.50
12.00
12.25
12.50
13.00
14.00
15.00
Coverage
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
Kevin Chiang, CFA
445
Legal Disclaimer
Exchange and a Member of the Canadian Investor Protection Fund, (b) in the United Kingdom, CIBC World Markets plc,
which is regulated by the Financial Services Authority (FSA), (c) in Australia to wholesale clients only, CIBC Australia
Ltd, a company regulated by the ASIC with AFSL license number 240603 and ACN 000 067 256, and (d) in Japan, CIBC
World Markets (Japan) Inc., a registered Type 1 Financial product provider with the registration number Director General
of Kanto Finance Bureau #218 (collectively, CIBC World Markets) and (e) in the United States either by (i) CIBC World
Markets Inc. for distribution only to U.S. Major Institutional Investors (MII) (as such term is defined in SEC Rule 15a-6)
or (ii) CIBC World Markets Corp., a member of the Financial Industry Regulatory Authority (FINRA). U.S. MIIs receiving
this report from CIBC World Markets Inc. (the Canadian broker-dealer) are required to effect transactions (other than
negotiating their terms) in securities discussed in the report through CIBC World Markets Corp. (the U.S. broker-dealer).
contained herein are not intended for the use of private investors in the United Kingdom. Such investors will not be able
to enter into agreements or purchase products mentioned herein from CIBC World Markets plc. The comments and views
2 Queens Road Central, Hong Kong (telephone number: +852 2841 6111). Orders for Hong Kong listed securities will be
446

10
447
COMPANY UPDATE
NFI | TSX
$14.11
Rating: Outperform
Total Return: 28.2%
Yield: 4.1%
April 2, 2015
Notes from Montreal

Positive Tone from Meetings: We had the opportunity to host institutional investor
meetings with senior management of New Flyer Industries Inc., including the
companys President and CEO, Mr. Paul Soubry and the CFO, Mr. Glenn Asham in
Montreal early this week, subsequent to the company reporting Q4/14 results. We found
the tone positive on the companys outlook and expectations for 2015.

C$14.44 / C$11.20
4.1%
Dividend Yield:
55.5 (basic)
55.5 (fd)
C$782.6

Float ($mm)
39.7
52.5
$229.0
$849.9

(FYE Dec 31)
2014
Revenue ($mm)
2015e
2016e
$1,451.1 $1,579.3 $1,689.2
EBITDA ($mm)
FD EPS
EBITDA ($m m )
Q1
$107.4
$121.8
$138.6
$0.65
$0.78
$1.02
Q2
Q3
Q4
2014
$19.7
$27.0
$25.7
$35.0
2015
$29.9e
$30.9e
$29.2e
$31.8e
2016
$34.5e
$34.4e
$33.8e
$35.9e
Q2
Q3
Q4
Adjusted FD EPS
Q1
2014
$0.10
$0.16
$0.15
$0.24
2015
$0.18e
$0.19e
$0.19e
$0.22e
2016
$0.25e
$0.25e
$0.25e
$0.27e

$15
Volume ('000)
800
Last Sale Price
600
$10
$5
400
200
$0
0
Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15

Managing Director
647.776.8246
Focus on Integration: Management continues to see the focus in 2015 being the
integration of the NABI facility in Anniston, Alabama and the transition to the Xcelsior
product line. The integration is expected to be complete in Q3/15, with the last of the
legacy NABI product delivered. Management expects to spend approximately $20mm
for the changeover with $3.1mm spent in 2014 and $7.0mm expected in Q1/15,
primarily in capital investments to complete the integration. Guidance is for annualized
savings from the streamlining of $11.9mm, or less than a 2 year payback on the
investment, which is an increase from a two to three year payback initially projected
when announced. Savings come from a variety of purchasing, inventory and overhead
synergies. We were left with the impression that savings above the identified $11.9mm
are likely as management continues to refine the integration plan. Similarly, the
aftermarket business remains in a period of transition as the company completes a
systems upgrade for the NFI parts business and adds the Orion parts database and
transitions NABIs parts aftermarket business to a common information system platform
with integration expected to be complete in Q1/16.
Still Considering Value Enhancing Activities: Management remains focused on
shareholder returns with a more stable outlook and solid financial position. Expectations
are the companys revolver will continue to be used to manage working capital
fluctuations, with operating cash flow used for minimal capital spending, dividends and
debt repayment. Management continues to review adjacent markets and vertical
integration opportunities as well as further acquisitions in aftermarket, although noted
that remaining opportunities would be smaller tuck-in transactions. Barring
acquisitions, management indicated the board would continue to review the dividend
policy on a regular basis as well as share repurchases.
Maintain Outperform; Target to C$17.50: Overall, we believe New Flyer will
continue to demonstrate improved margin and earnings generation in 2015 and 2016
through the combination of internal improvements, the conversion of the Anniston
facility to the Xcelsior platform, the integration of the aftermarket business to a common
IT infrastructure and an improved quality in backlog. We maintain our Outperform
rating and our 12-month target price of C$17.50. Our target price is based on a blend of
a 15.0x earnings and 7.0x EBITDA multiple of the four quarters ending Q4/16 reflecting
our 12-month forward valuation period as well as an exchange rate of C$1.25/$US.
647.776.8245
448
I NSTITUTIONAL
EQUITY
R ESEARCH:
DIVERSIFIED
INDUSTRIES
INITIATING
COVERAGE
: DIVERSIFIED
INDUSTRIES

Current Valuations
Unit Price (C$)
$14.11
EV/EBITDA
2014
2015
2016
Price/Earnings
2014
2015
2016
Peer Average
11.1x
7.8x
8.1x
6.8x
7.2x
6.0x
Peer Average
15.7x
17.1x
13.2x
14.3x
11.6x
10.9x
2014
2015e
2016e
2014
2015e
2016e
Income Statement
Revenues
Bus Manufacturing
Aftermarket
Revenue
Margin
Adjusted EBITDA
Margin
Amortization
Operating Earnings
EBT
2013
2013
984,425 1,132,066 1,283,336 1,397,547

214,999 319,034 295,968 291,698
1,199,424 1,451,100 1,579,305 1,689,245
17.9%
22.0%
18.7%
17.3%
56,776
57,374
73,799
89,036
5.8%
5.1%
5.8%
6.4%
31,036
49,991
47,968
49,589
14.4%
15.7%
16.2%
17.0%
79,110
86,457 121,767 138,625
6.6%
6.0%
7.7%
8.2%
94,685 107,365 121,767 138,625
7.9%
7.4%
7.7%
8.2%
28,001
35,837
39,734
35,981
51,109
50,620
82,033 102,644
34,617
37,568
68,781
90,307
Free cash flow (C$)

per Share
FCF Yield
47,334
$0.92
6.5%
108.3%
Taxes
Net Income
7,856
26,761
10,849
26,719
25,449
43,332
33,413
56,893

Reported FD EPS
Adjusted FD EPS
$0.52
$0.64
$0.48
$0.65
$0.78
$0.78
$1.02
$1.02

Cash Yield
Growth
Revenue
Adjusted EBITDA
Adjusted FD EPS
FX Assumptions
EOP CAD/USD Rate
Leverage
Net Debt (EOP)
2013
2014
2015e
2016e
38.6%
55.7%
108.7%
21.0%
13.4%
2.7%
8.8%
13.4%
19.2%
7.0%
13.8%
31.3%
2013
2014
2015e
2016e
0.9714
0.9414
0.9049
0.9050
0.8290
0.8264
0.8333
0.8403

Trend Average Weekly Line Entry Rate (EU)
Trend
2013
2014
2015e
2016e
226,479
2.4x
33.2%
229,034
2.1x
33.6%
208,384
1.7x
30.8%
139,597
1.1x
22.7%
Firm
Option
Trend

29,979 45,823 74,005 106,804
22,988 35,255 15,213 (7,086)
52,967 81,078 89,218 99,719
(2,003) (1,766)
(568)
(568)
(20,951) (10,889) (26,436) (12,599)
Non-operating, non-recurring items affecting FCF 15,276 15,398
192
(154)
Free Cash Flow
45,481 83,667 62,214 86,552

$5.0
92,972 75,106 103,853

$1.68
$1.35
$1.87
11.9%
9.6%
13.3%
83.1% (19.3%)
38.3%
2013
2014
2015e
2016e
30,255
63.9%
32,457
34.9%
32,471
43.2%
32,471
31.3%
$0.585 $0.585
4.1%
4.1%
$0.585
4.1%
$0.585
4.1%
2013
2014
2015e
2016e
2,191
449.3
25.9
43.8
1.2x
18.8%
2,437
464.5
23.5
49.2
0.9x
20.7%
2,558
501.7
28.9
51.2
1.1x
12.9%
2,653
526.8
33.6
52.0
1.0x
17.4%
Trend
Trend

2015, 20%
2019, 20%
$4.0
$3.0
2016, 13%
$2.0
$1.0
2018, 35%
$0.0
Q108 Q308 Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314
2017, 12%

449
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
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]
Marketing Highlights from Montreal

We had the opportunity to host institutional investor meetings with senior management of
New Flyer Industries Inc., including the companys President and CEO, Mr. Paul Soubry and
the CFO, Mr. Glenn Asham in Montreal early this week, subsequent to the company reporting
Q4/14 results. We found the tone positive on the companys outlook and expectations for
2015. We summarise our key takeaways below.
Management continues to see the focus in 2015 being the integration of the NABI facility
in Anniston, Alabama and the transition to the Xcelsior product line. The integration is
expected to be complete in Q3/15, with the last of the legacy NABI product delivered.
All production from Q4/15 forward is expected to be from the Xcelsior platform. Existing
customers either agreed to earlier delivery of the NABI product or in some cases agreed
to switch to the Xcelsior platform. Management expects to spend approximately $20mm
for the changeover with $3.1mm spent in 2014 and $7.0mm expected in Q1/15, primarily
in capital investments to complete the integration. Management displayed a number of
exhibits showing the progress made to date, which gives us some confidence on the state
of the initiative. Guidance is for annualized savings from the streamlining of $11.9mm, or
less than a 2 year payback on the investment, which is an increase from a two to three
year payback initially projected when announced. Savings come from a variety of
purchasing, inventory and overhead synergies. We were left with the impression that
savings above the identified $11.9mm are likely as management continues to refine the
integration plan.
Similarly, the aftermarket business remains in a period of transition as the company

completes a systems upgrade for the NFI parts business and adds the Orion parts database
and transitions NABIs parts aftermarket business to a common information system
platform with integration expected to be complete in Q1/16. Having the entire
aftermarket parts business on a common platform is expected to drive a number of
margin and working capital synergies allowing for more optimal stocking levels both in
terms of quantity across the system and location as well as improved working capital
needs. Management estimated the aftermarket business currently carries approximately
$75mm in inventory today, which is estimated to turn approximately 2.5x per year.
Management believes with the implementation of the common IT platform they could see
turns increases to 4.0x or better, which would represent both higher sales and lower
inventory levels.
For 2015, the company has approximately 83% of available slots sold out, holding some
slots open in order to facilitate option conversions and near-term sales from customers
with more urgent delivery needs. Management continues to see heathy demand as
measured by the bid universe which has continued to expand through 2014. Expected
annual demand is forecast to remain in the ~5,100 EU range through 2015 and 2016 with
management indicating that transit authorities continue to order in smaller more frequent
batches, leveling out industry variability. Management expects NFI likely retains an
approximate 50% market share over the coming years, similar to the 48% recorded in
2014.
The expectation is to continue to run production at approximately 51 equivalent units per

week for 2015. Management indicated that they expect maximum production from
existing facilities is likely 60 EU / week with the addition of some variable labour, but
continue to be cautious on the impact a changing production rate has on employees and
the supply chain.
450
R ESEARCH:
DIVERSIFIED
INDUSTRIES
COVERAGE
: [INDUSTRY
]
New Flyer Heavy Duty Bus Bid Universe
Figure 1 New Flyer Heavy Duty Bus Bid Universe

The competitive dynamics of the industry are not expected to change significantly with
management continuing to indicate pricing is continuing to normalize. Both Nova Bus
and Gillig continue to be more rational actors, although management indicated they
continue to see price remaining one of the primary drivers of new wins. Gillig is currently
expanding its production facilities reducing some capacity constraints. Management
continues to actively work to improve its cost profile through the operational excellence
program and the integration of NABI, as it believes cost reduction is the more likely lever
of margin expansion in bus manufacturing margins than price increases.
The company continues to see demand for the all-electric bus design with a larger tender
this year expected from Long Beach, CA for with 10 to 15 EU of firm orders and
approximately 40 units in options. New competitors BYD and Proterra continue to
penetrate the space, however the market size to date is small. Current programs in
Winnipeg and Chicago are progressing well and have afforded a number of product
development opportunities. Management continues to believe having a standardized
design of chassis, with a range of propulsion options offers the best total value and
quality to operators.
US Federal funding for transit, which currently supports 80% of the capital cost of
acquisition under the 12-year/500,000 mile rule continues to be an area of discussion in
the US Congress. The US Administration released its new proposal for transit funding,
calling for a substantial increase in spending to approximately $17bn annually from the
current $10.7bn level. Both we and management remain sceptical that this proposal as it
stands is passed, expecting a new funding bill or an extension of existing legislation at
current levels plus inflation. The Administration bill is similar to one put forward last
fiscal year, which also called for an increase in US content to 100% over time. This level
of content remains an industry issue as major suppliers to the industry for major drive
train, propulsion, HVAC and other accessories all have global supply chains typically
supporting not just transit bus but also truck industries, which have demand orders of
magnitude larger than the transit bus industry making it unlikely that supplier could or
would change.
451
R ESEARCH:
DIVERSIFIED
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]
The company continues to have labour relations that management described as positive.
One concern that emerged during meetings was the expiry of the companys agreement
with its Union in Winnipeg as of March 31, 2015. Last evening, the company announced
a tentative three-year agreement with a ratification vote set for April 11, which we expect
should pass.
Management continues to remain focused on shareholder returns with a more stable

outlook and solid financial position. Expectations are the companys revolver will
continue to be used to manage working capital fluctuations, with operating cash flow
used for minimal capital spending (maintenance capital is expected to run ~$10mm per
year), dividends and debt repayment. Management continues to review adjacent markets
and vertical integration opportunities as well as further acquisitions in aftermarket,
although noted that remaining opportunities would be smaller tuck-in transactions.
Barring acquisition opportunities presenting themselves, management indicated the board
would continue to review the dividend policy on a regular basis including normal or
special dividends as well as share repurchases. We believe share repurchases are unlikely
given liquidity issues around the companys common shares. The companys US$
denominated debentures would be redeemable should share prices exceed US$12.50 per
share.
Overall, we believe New Flyer will continue to demonstrate improved margin and earnings
generation in 2015 and 2016 through the combination of internal improvements, the
conversion of the Anniston facility to the Xcelsior platform, the integration of the aftermarket
business to a common IT infrastructure and an improved quality in backlog. We maintain our
Outperform rating and our 12-month target price of C$17.50. Our target price is based on a
blend of a 15.0x earnings and 7.0x EBITDA multiple of the four quarters ending Q4/16
reflecting our 12-month forward valuation period as well as an exchange rate of C$1.25/$US.
452
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]

Ticker
Rating &
Target

TSX:NFI
OP (C$17.50)
Marcopolo S.A.
BOVESPA:POMO4
NR
Wajax Corporation
TSX: WJX
NR
TSX: AFN
NR
Superior Plus Corp.
TSX: SPB
NR
GBX
NR
Oshkosh Corporation
OSK
NR
Spartan Motors Inc.
SPAR
NR
WNC
NR
THO
NR
WGO
NR
NAV
NR
TSX: STB
NR
BLBD
NR
Cubic Corporation
CUB
NR
Average
Trading Local
Market
CAD
BRL
CAD
CAD
CAD
USD
USD
USD
USD
USD
USD
USD
CAD
USD
USD
14.11
2.37
23.87
51.23
14.22
58.65
48.34
4.93
14.13
62.97
20.94
28.81
6.84
9.93
51.27
783.2
1,932.5
400.5
675.3
1,794.7
1,553.2
3,812.5
167.8
970.3
3,362.0
563.9
2,347.6
571.3
205.5
1,445.0
Net
Debt
EV
($mm)
2014e
EPS
2015e
229.5
1,227.4
201.0
132.3
986.3
370.9
779.0
(23.3)
186.4
(248.3)
(7.9)
4,349.0
311.1
197.1
(114.7)
832.2
3,183.3
601.5
807.5
2,781.0
2,000.3
4,591.5
144.4
1,156.7
3,113.7
556.0
6,730.6
934.4
402.6
1,330.6
0.65
0.25
2.46
0.31
0.45
4.62
3.49
0.03
0.88
3.55
1.61
(5.07)
0.03
0.00
2.82
0.78
0.23
2.29
3.26
1.01
5.71
4.16
0.11
1.13
4.01
1.62
1.79
0.07
0.00
3.06
P/E
2016e 2014e 2015e 2016e
1.02
0.29
2.57
4.02
1.17
0.00
4.37
0.34
1.20
4.65
1.89
2.95
0.08
0.00
3.26
17.1x
7.5x
9.7x
NM
31.5x
12.7x
13.8x
NM
16.1x
17.7x
13.0x
NM
NM
NM
18.2x
15.7x
14.3x 10.9x
8.1x
6.5x
10.4x 9.3x
15.7x 12.8x
14.0x 12.1x
10.3x NM
11.6x 11.1x
NM
14.5x
12.5x 11.8x
15.7x 13.5x
13.0x 11.1x
16.1x 9.8x
NM
NM
NM
NM
16.8x 15.7x
13.2x 11.6x
2014e
EBITDA
2015e
2016e
2014e
EV/EBITDA
2015e
2016e
Price
to BV
ROIC
ROE
107.4
268.8
82.4
63.4
282.4
257.4
591.2
9.4
160.7
298.8
65.8
331.0
69.0
25.9
129.0
121.8
313.3
88.9
99.8
304.9
409.8
646.6
15.9
188.6
341.7
68.7
761.6
91.2
0.0
142.5
138.6
400.1
96.0
117.8
325.4
0.0
657.7
28.5
193.3
0.0
79.8
922.8
94.1
0.0
155.7
7.8x
11.8x
7.3x
12.7x
9.8x
7.8x
7.8x
15.3x
7.2x
10.4x
8.5x
20.3x
13.5x
15.5x
10.3x
11.1x
6.8x
10.2x
6.8x
8.1x
9.1x
4.9x
7.1x
9.1x
6.1x
9.1x
8.1x
8.8x
10.2x
NM
9.3x
8.1x
6.0x
8.0x
6.3x
6.9x
8.5x
NM
7.0x
5.1x
6.0x
NM
7.0x
7.3x
9.9x
NM
8.5x
7.2x
1.5x
1.3x
1.6x
3.2x
3.3x
3.0x
2.0x
1.0x
2.5x
3.3x
2.8x
NM
3.5x
0.0x
1.8x
2.2x
5.4%
4.0%
10.0%
8.4%
7.2%
13.6%
10.2%
0.4%
10.8%
17.9%
19.9%
9.2%
2.5%
NA
6.9%
9.0%
5.9%
14.0%
16.6%
2.0%
10.4%
30.2%
14.7%
0.6%
17.1%
20.2%
22.4%
NM
1.3%
NM
9.3%
12.7%

As of April 1, 2015. All figures in millions, unless otherwise noted.
453

NFI
C$14.11
Rating:
Outperform
12 Month Target:
C$17.50
Issuer
N
explain:
issuer?
past 12 months?
Rating System
Ranking
% IB
Distribution
Clients
Outperform
65%
27%
Sector Perform
26%
12%
Underperform
2%
0%
Speculative
0%
0%
Restricted
2%
0%
Not Rated
2%
0%
Tender
2%
0%
100%
21%
Total

average.
average.
average.
material.
principal or agent.
1100, 888 3rd Street SW

Calgary, Alberta T2P 5C5
Tel: 403 539 8600
TD Tower
Tel: 403 539 8600
(USA) Inc. at 403-539-8600.
454
Direct
__________________________________________________________________________________________________________

George FJ Gosbee
Chairman & CEO
403 539 8601

President
647 776 8250
ATB Financial
Dave Mowat
President & CEO
780 408 7181
dmowat@atb.com
Ian Wild
403 974 5127
iwild@atb.com
E&P- Domestic
403 539 8617

403 539 8587
403 539 8615
403 539 8626
403 539 8592
403 539 8635
403 539 8621
403 539 8581
jmccrea
kvandenberg
porourke
ysiddiqi
nlupick
kgordey
tmatthews
cerana
403 539 8606
dlever
Oilfield Services
403 539 8620

403 539 8594
403 539 8596
403 539 8591
dbenner
jgibson
jsawatzky
mwestby
Wojtek Nowak, CFA, Analyst
Alex Athanasopoulos, Associate
647 776 8246

647 776 8245
647 776 8240
647 776 8072
cmurray
smodwal
wnowak
aathanasopoulos
Agriculture
647 776 8236

647 776 8254
jchu
spattillo
All Sectors
403 539 8607
vhoa
__________________________________________________________________________________________________________
Institutional Sales
Calgary
Kerk Hilton
403 539 8608
khilton
Toronto
Adam Carlson
Jamie Riff
Tim Miller
647 776 8250

647 776 8242
647 776 8233
647 776 8237
psarachman
acarlson
jriff
tmiller
__________________________________________________________________________________________________________
Calgary
Tate Pinder
Shane Dungey
403 539 8613

403 539 8605
tpinder
sdungey
Toronto
Cheryl Polan
Jon Varley
Michael Capobianco
647 776 8244

647 776 8235
647 776 8231
cpolan
jvarley
mcapobianco
__________________________________________________________________________________________________________
Investment Banking
CALGARY
1100, 888 - 3rd Street SW
Calgary AB Canada T2P 5C5
403 539 8600 Main
403 539 8575 Fax
TORONTO
647 776 8230 Main
647 776 8248 Fax
George Gosbee
403 539 8601
ggosbee

Jason Caldarelli
647 776 8243
jcaldarelli

Gurdeep Gill, CFA
Mark Reynolds, CFA
403 539 8618

403 539 8619
ggill
mreynolds
Oilfield Services
Matt Colucci
403 539 8597
mcolucci

Jeff Fallows, CFA
647 776 8221
jfallows
All Sectors
Patrick Stables
Jesse Hardage
Greg Smiddy
Edward Otto
Yi Huang
Blake Eshleman
Tyler Press
403 539 8604

403 539 8628
403 539 8595
647 776 8223
403 539 8614
403 539 8609
647 776 8224
pstables
jhardage
gsmiddy
eotto
yhuang
beshleman
tpress
__________________________________________________________________________________________________________

Amy Trynor, P.Eng.
Kelly Wylie
403 539 8622

403 539 8616
403 539 8623
403 539 8589
lkende
balexander
atrynor
kwylie
__________________________________________________________________________________________________________
Private Wealth
403 539 8634

403 539 8611
403 539 8603
403 539 8632
dlush
vkrb
tokuszko
emckane
455

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Table of Contents

NEW FLYER INDUSTRIES-INITIATING COVERAGE

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES-INITIATING COVERAGE

NEW FLYER INDUSTRIES-INITIATING COVERAGE

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

These reports were compiled using a product of Thomson Reuters

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES-INITIATING COVERAGE

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

These reports were compiled using a product of Thomson Reuters

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES-INITIATING COVERAGE

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

These reports were compiled using a product of Thomson Reuters

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

These reports were compiled using a product of Thomson Reuters

NEW FLYER INDUSTRIES-INITIATING COVERAGE

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES-INITIATING COVERAGE

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES

NEW FLYER INDUSTRIES-INITIATING COVERAGE

These reports were compiled using a product of Thomson Reuters

INSTITUTIONAL EQUITY RESEARCH: DIVERSIFIED INDUSTRIES

New Flyer Industries Inc.

Notes from Toronto

Financial Metrics (US$)

Market Capitalization ($mm):

3-Month Avg. Daily Volume ('000):

(FYE Dec 31)