page 42 Bombardier Inc. Annual Report 2003-04 The following provides a discussion of the Corporation’s future exposure to currency fluctuations arising from the translation of self-sustaining foreign operations and from transactions in foreign currencies after giving effect to the above-mentioned changes. fluctuations on total costs does not have an immediate equivalent impact on income, since a significant portion of these costs are subject to program average cost accounting or included in aerospace program tooling and depreciated over a number of years. long-term contract inventories is not significant. Accordingly, a one-time currency adjustment of approximately $100 million US resulting from this upward revaluation will be reflected on the balance sheet as part of the deferred translation adjustment account presented in the consoli- dated statements of shareholders’ equity. The increase in these opening asset values will be expensed as inventories are consumed and aerospace program tooling is depreciated. The upward revaluation of program invento- ries and program tooling is expected to result in lower EBT of approximately $4 million US  for the first quarter of fiscal year 2005 and  $20 million US for fiscal year 2005. As of February 1, 2004, the functional currency for the operations in the aerospace segment will be the U.S. dollar. Therefore, currency  fluctuations arising from the translation of  foreign operations in the aerospace segment will no longer have an impact on the results of operations and on balance sheet items. In the transportation segment, the exposure to cur- rency fluctuations arising from the translation of most foreign operations will arise from the change in the value of the western European currencies relative to the U.S. dollar, rather than to the Canadian dollar. As a result of adopting the U.S. dollar as its reporting currency, all assets and liabilities as at February 1, 2004 will be translated from Canadian dollars to U.S. dollars at the current exchange rate at that date. Certain non- monetary assets, mainly program inventories and program tooling in the aerospace segment and long-term contract inventories in the trans- portation segment will be translated at higher exchange rates than the ones in effect when these assets were initially recognized on the consolidated balance sheets. Therefore, in the aerospace segment, open- ing program inventories and program tooling are approximately $35 million US and $65 mil- lion US higher than historical amounts. In the transportation segment, the effect on opening The Consolidated Financial Statements of Bombardier Inc. are prepared in accordance with Canadian generally accepted accounting prin- ciples (GAAP) and are expressed in Canadian dollars. The recreational products segment’s results are presented as discontinued opera- tions. The following table provides selected financial information for the last three fiscal years. Revenues and most of the costs in the aero- space segment and the Canadian operations of the transportation segment are denom- inated in U.S. dollars. However, certain costs, mainly salaries and manufacturing overhead costs, are denominated in Canadian dollars and in sterling pounds and are subject to cur- rency fluctuations. Under the Corporation’s foreign exchange policy, a significant portion  of these expected costs in foreign currencies are hedged for periods of up to two years. It is estimated that a 1% change in the value  of the Canadian dollar relative to the U.S. dollar  in the aerospace segment would impact fiscal year 2005 total costs by approximately $15 mil- lion US before giving effect to forward foreign exchange hedge contracts, and approximately $3 million US after giving effect to the out- standing forward foreign exchange hedge contracts. The impact of these currency  (MILLIONS OF CANADIAN DOLLARS,  EXCEPT PER SHARE AMOUNTS) 2004 2003 2002 Revenues from continuing operations $ 21,321 $ 21,189 $ 19,863 Loss from continuing operations (195) (709) (66) Net income (loss) (89) (615) 36 Earnings (loss) per share (0.07) (0.47) 0.01 Cash dividends declared per share: Class A Shares (Multiple Voting) 0.09000 0.18000 0.18000 Class B Shares (Subordinate Voting) 0.09156 0.18156 0.18156 Series 2 Preferred Shares 1.17128 1.19375 1.37500 Series 3 Preferred Shares 1.02675 0.68450 – Series 4 Preferred Shares 1.17188 1.39876 – Total assets – Bombardier 20,407 20,763 19,341 Total assets – BC 7,080 9,717 9,265 Financial liabilities: Short-term borrowings – Bombardier – 381 1,342 Short-term borrowings – BC 308 2,183 1,695 Long-term debt – Bombardier 2,781 3,099 2,075 Long-term debt – BC  5,293 5,827 5,777 Transactions in foreign currencies Selected annual information Translation of self-sustaining  foreign operations Effect of change in reporting currency