New Flyer Announces Fourth Quarter 2011 Orders and Backlog

The low order activity for both Q4 2011 and Fiscal 2011 resulted mainly from the reduction in industry orders for heavy-duty buses due to transit agencies experiencing budget constraints and deferring purchases of new buses. Management estimates that the industry as a whole initiated new order solicitations for approximately 5,700 EUs during 2011, however, less than 25% of these solicitations resulted in awards being made in the year. As stated over the past 24 months, new order activity has been down due primarily to the US economic challenges and management estimates that the volume of new industry orders in 2011 was approximately 30% of the 2010 industry orders.

The American Public Transit Association (“APTA”) has reported that the average age for US heavy-duty buses has risen from six to eight years, which management believes should create demand for replacement buses in the near future. The Canadian Urban Transit Association (“CUTA”) has reported the average age of heavy-duty buses has reduced from 10 years to eight years, maintaining a relatively flat replacement cycle. Canadian transit agencies continue to maintain and replace fleets and are expected to continue.

New bus orders from U.S. transit agencies are dependent on both federal government funding and the state and local capital and operating budgets.

• U.S. federal funding has remained unchanged over the past two years as the funding bill has been extended since 2009. The current extension expires in
  March 31, 2012 and while Congress will work through January and February on a new reauthorization bill, APTA believes that it is highly likely the current
  bill will be extended once again and at current funding levels. The broader debate continues among Congress, the Senate and the Department of Transportation regarding the funding size and term for a new bill.
• While state and local budgets remain challenged, there have been some positive signs recently. According to the Nelson Rockefeller Institute, preliminary data indicates that state tax collections for the third quarter of 2011 increased 7.3% over the previous year. State tax collections comprise of personal income tax and sales tax, both of which have increased for seven quarters, and corporate income taxes have increased for the past five quarters. Overall state tax revenues have recovered to pre-recession levels.  Although these budgets are driven by tax revenue, there is a lag before any improved economic activity translates into new bus orders.

Also on a positive note, ridership in both Canada and the United States has also begun to improve. CUTA reported that ridership for all modes of public transportation increased by 4.9% in the first half of 2011 compared to the first half of 2010. In addition, eight of the nine Canadian transit agencies that are members of APTA reported increased ridership in the third quarter of 2011 compared to the same period in 2010. In the United States, APTA reported that overall transit ridership in 2011 increased by 2.03% compared to the prior year and that bus ridership specifically increased by 1.43%. While the largest increases were experienced by the smaller cities, the fourth quarter of 2011 was the first quarter since 2008 in which cities with populations greater than two million people experienced an increase in bus ridership.

At the end of Q4 2011, there were approximately 13,300 EUs in New Flyer’s new potential pipeline or bid universe for heavy-duty transit buses, a healthy increase from the approximately 11,400 EUs reported at the end of the third quarter of 2011 (“Q3 2011”). The pipeline is expected to remain volatile as customers manage through fleet replacement planning and deal with budget uncertainty. The pipeline consists of bids in process, bids submitted and solicitations expected to be released by transit agencies. In 2011, there was an increase of in-house bid activity of roughly 50% in the second half of the year compared to bid activity in the first half of the year. This increase is a result of expected solicitations being released in the period by some large transit agencies seeking replacement and expansion buses, but have not yet been awarded.

New Flyer’s aftermarket business experienced growth in order in-take (customer purchase orders) in Q4 2011 compared to both Q3 2011 and the fourth quarter of 2010 (“Q4 2010”). Aftermarket order in-take has increased by approximately 18% and 22% compared to Q3 2011 and Q4 2010, respectively. Fiscal 2011 order in-take has increased by approximately 7% compared to total order activity in the fiscal year 2010. During Fiscal 2011, New Flyer sold 190 of the 226 used buses taken in trade under the City of Ottawa bus purchase contract in 2010. The first 20 buses were sold to private and public transit operators and during Q4 2011 the Company sold 170 of the used buses to a bus remanufacturer/distributor at slightly above book value. The remaining used buses have been retained, as New Flyer is currently negotiating the sale of the buses to certain interested parties. Management decided to sell the 170 buses to avoid further maintenance and storage costs as the market for used buses proved to be very limited. The international market did express considerable interest, but differences in specifications, emissions, fuel standards and restrictive import laws are some of the issues that created barriers to international sales. The U.S. and Canadian markets proved not to be an active market for
the sale of used buses.

The total backlog at the end of Q4 2011 was 7,097 EUs, a decrease of 8.1% from the backlog at the end of Q3 2011. The firm portion of the total backlog at the end of Q4 2011 was 1,476 EUs, compared with 1,785 EUs at the end of Q3 2011. The value of the order backlog at the end of Q4 2011 was $3.0 billion, compared with $3.3 billion at the end of Q3 2011. This reduction in total backlog was not unexpected, nor inconsistent with current market conditions or management’s expectations.
New Flyer’s current backlog consists of the following mix of products, with clean propulsion vehicles representing approximately 68% of the total:

	Firm EUs	Option EUs	Total
40 foot and under buses	866	2,697	3,563
60 foot buses	610	2,924	3,534
Total	1,476	5,621	7,097

At the beginning of Fiscal 2011 the backlog included options for 1,294 EUs that would have expired in 2011 if not exercised. The actual number of options that expired in Fiscal 2011 was 463 EUs, the remaining options either being exercised by customers or extended to future years. The options included in the total backlog will expire, if not exercised, as follows:

Expiry Year	Remaining Option EUs
2012	1,693
2013	2,782
2014	510
2015	520
2016	26
2017	90
Total	5,621

Deliveries in Q4 2011 were 470 EUs, an improvement of 28 EUs from the previous quarter. Fiscal 2011 deliveries of 1,811 EUs have decreased from the 2,023 EUs delivered during the prior year. The Company’s backlog permitted New Flyer to sustain production at an average rate of 36 EUs per production week in 2011 and, based on current forecasts, management expects to remain at this average rate per production week in fiscal 2012.

Having reviewed last year’s data, management now estimates that heavy-duty bus manufacturers delivered approximately 5,150 EUs in 2011, which improves New Flyer’s
market share for 2011 to approximately 35%, or an increase of 1% from its estimated market share of 34% for 2010.

NOTE: All dollar amounts are stated in US currency based on an exchange rate of US $1.00 = CAD $1.017 to calculate the value of the Canadian contracts in this release.

About New Flyer

New Flyer is the leading manufacturer of heavy-duty transit buses in Canada and the United
States. The Company’s three manufacturing facilities – in Winnipeg, MB; St. Cloud, MN;
and Crookston, MN – are all ISO 9001, ISO 14001 and OHSAS 18001 certified. The
Company currently operates a parts fabrication facility in Elkhart, IN and four parts
distribution centers in Winnipeg, MB; Erlanger, KY; Fresno, CA and Brampton, ON.
With a skilled workforce of over 2,000 employees, New Flyer is a technology leader, offering
the broadest product line in the industry, including drive systems powered by clean diesel,
LNG, CNG and electric trolley as well as energy-efficient diesel-electric hybrid vehicles. All
products are supported with an industry-leading, comprehensive parts and service network.
Further information is available on New Flyer’s web site at www.www.newflyer.com.
The common shares of New Flyer are traded on the Toronto Stock Exchange (“TSX”) under
the symbol NFI and the income deposit securities are traded on the TSX under the symbol
NFI.UN.

Forward-Looking Statements This press release may contain forward-looking statements relating to expected future events and financial and operating results of New Flyer and New Flyer Industries Canada ULC (“NFI ULC”) that involve risks and uncertainties. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and economic conditions of and funding availability for transit agencies to purchase buses, parts and services and exercise options and the other risks and uncertainties discussed in the materials filed with the Canadian securities regulatory authorities and available on SEDAR
at www.sedar.com. Due to the potential impact of these factors, New Flyer and NFI ULC disclaim any intention or obligation to update or revise any forward-looking statements, wether as a result of new information, future events or otherwise, unless required by applicable law.

For further information, please contact:
New Flyer Industries Inc.
Glenn Asham
Chief Financial Officer
Tel: 204-224-1251