page 46 Bombardier Inc. Annual Report 2003-04 2004, compared to $424 million (including $264 million for program tooling) for the year ended January 31, 2003. Interest expense totalled $270 million for the year ended January 31, 2004, compared to $319 million for the year ended January 31, 2003. This decrease is mainly attributable to lower average net assets. Interest expense includes interest charges arising on certain sales incentive liabilities recorded at the present value of the estimated future pay- ments upon initial recognition. As a result, EBT before special items amounted to $262 million, or 2.3% of seg- mented revenues, for fiscal year 2004, compared to negative EBT before special items of $33 million for the previous fiscal year. Depreciation and amortization amounted  to $442 million (including $270 million for pro- gram tooling) for the year ended January 31, Operating expenses amounted to $571 million for the year ended January 31, 2004, compared to $610 million for the preceding fiscal year. This decrease is mainly due to the impact of  a lower effective exchange rate for the U.S. dollar, as well as cost reduction initiatives.  Cost of sales amounted to $9.8 billion for the year ended January 31, 2004, compared to $10.0 billion for the year ended January 31, 2003. As a result, the segmented margin was $1.5 billion or 13.7% of revenues for fiscal year 2004, compared to $1.3 billion or 11.7% of rev- enues the previous year. This increase in the margin is mainly due to higher business and regional aircraft deliveries, partially offset by additional sales incentive costs. This increase was offset by a lower effective exchange rate for the U.S. dollar, which had a negative impact of approximately $130 million. Bombardier Aerospace’s segmented revenues amounted to $11.3 billion for each of the years ended January 31, 2004 and 2003. Manufac- turing revenues amounted to $8.6 billion for the year ended January 31, 2004, compared to $8.5 billion for the preceding fiscal year. The increase in deliveries of business and regional aircraft was partially offset by lower deliveries of wide-body aircraft interiors, and a lower effective exchange rate for the U.S. dollar  compared to the Canadian dollar, which had  a negative impact of approximately $485 mil- lion. Service revenues amounted to $1.5 billion  for each of the years ended January 31, 2004 and 2003. Higher spare parts revenue was  offset by the negative impact of a lower  effective exchange rate for the U.S. dollar of approximately $135 million. Other revenues totalled $1.2 billion for each of the years  ended January 31, 2004 and 2003. Pre-owned aircraft deliveries were higher in the current fiscal year compared to the previous fiscal year. $^{(1) }$Includes revenues from Defence Services, spare parts, the Bombardier Flexjet program’s service activities,  and product support activities. $^{(2)}$Includes mainly sales of pre-owned aircraft. $^{(3)}$Includes selling, general and administrative and research and development expenses. Bombardier Aerospace Analysis of results 2004 2003 Segmented revenues Manufacturing $8 , 571 $8 , 531 Services (1) 1,539 1,517 Other (2) 1,197 1,246 11,307 11,294 Cost of sales 9,762 9,974 Operating expenses (3) 571 610 Depreciation and amortization 442 424 Interest expense 270 319 11,045 11,327 EBT before special items 262 (33) Special items 28 (1,311) EBT $ 290 $(1,344) Revenues and EBT margin before special items (BILLIONS OF CDN$) F02 F03 11.3 F04 11.3 2.3% 16 12 8 4 0 Revenues EBT % 12.3 5.9% (0.3)%