New Flyer Industries (NFI.UN)Annual General Meeting

2010 CEO UpdatePaul Soubry

Toronto ���� May 12, 2011

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Forward Looking Statements: Our remarks and answers to your questions today may contain forward-looking statements relating to New Flyer Industries Inc.and related companies or to the environment in which they operate, which are based on their operations, estimates, forecasts and projections. These statementsare not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond New Flyer’s control. A number of importantfactors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forthin New Flyer’s Annual Information Form. New Flyer assumes no obligation to update or revise any forward-looking statements to reflect new events orcircumstances, except as required by applicable securities laws. All figures discussed today are in U.S. dollars unless otherwise noted.

� #1 Heavy Duty Transit Bus manufacturer (34% share) & Parts Provider (16% share) in Can and US

• Market Innovation leader offering the widest range of products and green propulsion options.• 3 manufacturing plants (in Manitoba and Minnesota) with Fabrication plan in Elkhart, IN• 3 Parts Distribution Centers (Manitoba, California, Kentucky) and 2 Service Centers (Arnprior & NY)• Successful and experienced Executive Leadership team with significant Operational Excellence and

LEAN expertise

� The industry’s largest order Backlog ($3 548B at Mar 31 11) allowing for longer term perspective

A Proud History. A Bright Future.Established in Winnipeg in 1930

� The industry s largest order Backlog ($3.548B at Mar 31-11) allowing for longer term perspective

• Transit is an essential service. Continued urbanization trends in congested cities. Increased green. • Transit Buses are largely a replacement business having a targeted life of 12-18 years. • Bid Universe of over 13,000 units (Bid Universe = Bids awaiting decision + Bids in Process + Bids

Coming to market)

� Yield oriented investment . Current Dividend/Interest Yield of approx 11%

• IPO in 2005 on TSX. • Income Deposit Security (IDS) is a stapled security. NFI is an IDS (not an Income Trust). • Payout Ratio since IPO averages <80%. Distributions paid for 66 consecutive months.

2

Low Floor (LF)

Transit’s Broadest Product OfferingMore lengths… propulsion types… styling options.

Low Floor Restyle (LFR)

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Propulsion Options: Clean Diesel, Gas or Diesel Electric Hybrid, Electric Trolley, CNG/LNG, Hydrogen Fuel Cell

LFA/Bus Rapid Transit (BRT) Xcelsior

Over 110 ‘next generation’ Buses delivered 652 Excelsior’s ordered from 25 different customers

L h C t B t ON

60’ Xcelsior Prototype Currently in Testing Phase

40 on order from 2 customers.First production order starts in H2-11

Improved:

• Exterior Styling• Passenger Experience

� Accessibility� Larger Windows� More seats

• Driver Experience� Improved controls� Instrument Panel

• Maintenance Access

Reduced:

• Weight (approx 10%)• Noise Levels• Operating Costs• Emissions

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Launch Customer Brampton, ON

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North America’s #1 Market Share in Bus & Parts

New Flyer delivered 34% of the Heavy Duty Transit buses in 2010

New Flyer has a 16% share of Bus Spare Parts Market

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5Source: New Flyer Database & Management Estimates

16%

9%

9%4%

5%

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A broad and diversified Customer BaseOver 30,000 buses delivered with 22,000 still in operation

NF maintains relationships with 273 transit authorities, including 21 of the 25 largest

Average key customer relationship approximately 14 years; 89% repeat sales

4,000

5,000

6,000

7,000���

Source: Metro Magazine/Management Dtaabase

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0

1,000

2,000

3,000

Other OEMs New Flyer

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% Percentage of New Flyer Buses

*New customer as of 2010; delivery expected to begin in late 2011

Significant improvement in OperationsChange Management for sustainable processes

Warehouse Elimination

Real Time Shop Floor DataAutomated Consumable Control

Tool Shadow Boards

Measures of Performance

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Shop Floor Transformation

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Operating with a broader Business DefinitionFollowing a roadmap for Production Innovation and Optimization

To Deliver the Best Bus

On time, on Spec and on Budget

Latest Technology with Superior

Quality

To Deliver the Best Bus Value and Support for Life

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Price-Quality

Alignment

Data, Parts and services

Buses are designed for

12-18 years life

With an Expanded Customer Support offering“It’s not JUST about the bus”

Consigned Kits

ReliabilityUsed Buses

2010 landmark contract with Ottawa

• Trade-in of 226 mid-life Used Buses• Build of 308 new D60LFR buses• Installation of SmartBus technology• Reliability Engineering services• Parts Kit Consignment• LEAN Consulting/Training• Extended warranty• Local Service/Warranty Center

Service TrainingPubs

Parts

Kits

Engineering

Service Ctr

Buses

TrainingArnprior Service Center added in Q1-10

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The Bus

New Flyer deliveries maintained at over 2,000/yrTotal New Flyer Backlog over 8,700 EU’s ($3.68B) at Dec 31

New Flyer Bus Deliveries (EU’s)

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2844 2498 2082 1897

4271 3124

4072

70336908

6815

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2000

4000

6000

8000

10000

12000

2005 2006 2007 2008 2009 2010

Firm & Option Backlog (Equivalent Units)

Option

Firm

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2010 Year in Review

Sales: $984M (10.6% lower than 2009)

Deliveries: 2023 EU’s (2,257 in 2009)2010 was a 52 week period compared to 53 in 2009

Adjusted EBITDA: $97.1M (2.9% lower than 2009)Bus down 4.1% Aftermarket up 1 3%Aftermarket up 1.3%

Distributable Cash: C$73.3M (7.3% less than 2009)

Payout Ratio: 78.5% (72.8% in 2009)

In Compliance: With all Debt and Credit covenants.

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� Operational Excellence transformation to Reduce Costs and Inventory• Company wide 5S completed and commenced Value Stream Mapping. • Quality systems redesign delivering build improvement, productivity increase (+8%) and overtime reduction (-5%)• Designed and launched New Flyer Institute for training and development. Technical and Leadership• Formalized Strategic Sourcing team for cost reduction and alternate supply development• Reduced personnel by over 100 in last 4 months

� EBITDA enhancement through Strategic Initiatives• Acquiring and Developing IP (eg. Acquired TCB in 2010 to offer New Flyer Stanchions and Lights)• Life Cycle Roadmap in process (eg. SmartBus, Service Contracts, Vendor Managed Inventories)

Competing in a Challenging MarketInvesting to compete and grow

e Cyc e oad ap p ocess (eg S a t us, Se ce Co t acts, e do a aged e to es)• Opened NY and Ottawa Services Centers to manage warranty and campaign costs. Now adding service revenue.• Exhaustive Make-Buy assessment in process. Commenced facility rationalization efforts.

� EBITDA through Product Excellence and Focus• Migrating complete product portfolio to next generation platform (Xcelsior) by 2013. • 35’ & 40’ Xcelsior production launched in 2010. 60’ prototype in testing• From ‘Customization’ to ‘Configuration’. Faster and more accurate engineering. Reference Buses now in use.

� Enablers:• Investigating and exploring other products and international markets• Product Lifecycle Management (PLM) implementation on schedule. • Enterprise Risk Management (ERM) design and Implementation in process• Employee Satisfaction and Engagement (84% of employees completed 2010 survey)

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SALES Adj EBITDA

1720

2424

80

100

120

8396

108

106

800

1000

1200

New Flyer Performance (US$) Demonstrated growth since IPO in 2005

Parts

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63

45

78 73 76 73

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2005 2006 2007 2008 2009 2010

537 540

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2005 2006 2007 2008 2009 2010

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Focused on FundamentalsThroughput, WIP Reduction & EBITDA Generation

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In Compliance with Covenants

Leverage Ratios (Debt to Adjusted EBITDA)

Fixed Charge Coverage (Adjusted EBITDA less Capex and current taxes over debt service)

3 0

4.0

5.0

6.0

ed E

BIT

DA

Covenant reset at Credit Renewal

2.00

Covenants were set in 2005 to allow for issuance of IDS

to redeem Class B&C

16 16

-

1.0

2.0

3.0

2008 2009 Q1

2009 Q2

2009 Q3

2009 2010 Q1

2010 Q2

2010 Q3

2010 Q4

Deb

t /

Ad

just

e

Senior Leverage Total Leverage

Senior Leverage Covenant Total Leverage Covenant

1.00

1.50

2008 2009 Q1

2009 Q2

2009 Q3

2009 2010 Q1

2010 Q2

2010 Q3

2010 Q4

Fixed Charge Coverage Dividend Suspension

Interest Deferral Fixed charge covenant

Current Debt Structure:IDS Debt ($C) $261MBachelor Bonds ($C) $ 43MTerm Loan ($US) $ 90MRevolver $ 0M

Payout Ratio has averaged 80% since IPONew Flyer has paid 66 consecutive months of distributions

� Current Yield approx 11.3%� IDS distribution paid monthly at an effective

annual rate of C$1.17 (since Jul-07). � New Flyer is a Corporate issuer and therefore

not impacted by 2011 SIFT rules (ie. no conversion required).

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Each NFI.UN IDS unit consists of:

One common share of New Flyer Industries Inc.

C$ 5.53 principal amount of 14% Subordinated Notes

* CAW went on strike in 2006 in Winnipeg for approx 4 weeks

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NA HD Transit Bus Deliveries (EU’s) are cyclicalHowever US Federal transit funding has continued

5

10

US Fed

Funds ($ m

illions) (E

U's)

1000

2000

3000

4000

5000

6000

7000

Deliveries (E

U's)

TEA 21 SAFETEA-LU Extension Cdn/US Deliveries

2010-11 ForecastDelivery Range

Can/US Deliveries

US Federal Funding

01998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011

0Source: US Federal filings, Management Estimates

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� US Transit market experiencing in turbulence. Current US funding bill extended to Sept 2011 (at 2010 levels). No clarity on 6-yr Authorization Bill. Concern in certain US local jurisdictions over securing annual operating funds.

� Both Market Bus Deliveries and Parts Markets were down in 2010. Expect to continue in 2011.� Resulting in significant pricing pressure. Two competitors (with facilities both in Canada and US) experiencing

substantial work reductions. A third has extended shutdown.

Positive Factors

� Increased Urbanization. Congested cities.� Push for green and cleaner propulsion� Aged fleet in Can/US averaging more than mid-point life� Unemployment has leveled off. That combined with rising

fuel costs should help stabilize ridership in the US. � Ridership is rising slightly in Canada

Challenges

� Cyclical industry� Fare Box only generates 30-70% of operating costs for the

Transit Agencies� General state of the economy could impact on ridership

going forward.� Reduced State/Province revenue collections adds pressure

to Transit Authority operating budgets

Bid Universe remains above 12,000 EU’sExpecting 2011 opportunities to be primarily fleet replacements

2008 2009 2010

Data not tracked

continuously Pre 2009

Forecast 9813 EUs

Bids in Progress 828 EUs

Bids Submitted 1848 EUs

Pipeline Subtotal 12489 EUs

Options in Process 977 EUs

Total Pipeline 13466 EUs

as of March 31, 2011

• 2008 was the peak of the HD Transit Bus order cycle.

Several multi-year procurements were awarded.

• Stimulus funding helped in H1-2010

• Some significant fleet replacement competitions expected

in H2-2011 (LA, SEPTA, Montreal, TTC, Baltimore, etc.)19

Sales: $214.3M (down 11.8% over Q1-10)

Deliveries: 468 EU’s (453 in Q1-10)

Adjusted EBITDA: $22.0M (4.8% higher than Q1-10)Bus up 12.7% Aftermarket down 13.0%

Distributable Cash: C$14 3M (2 5% lower than Q1-10)

Q1-11 Performance Highlights

Distributable Cash: C$14.3M (2.5% lower than Q1-10)

Payout Ratio: 101.1% (99.2% in Q1-10)

In Compliance: With all Debt and Credit covenants.

It’s challenging Times, but we’re not sitting still:

1. Appointed Dealers: Girardin (Quebec and Canadian Private) & National Bus Sales (US Private)2. Engaged an international bus agents on used bus resale opportunities3. Closed first 2 customer orders for used Ottawa buses. Delivery started in Q2-114. Announced plans to open Ontario Parts Distribution Center in H2-115. Launched electric bus development initiative with Manitoba Government, Red River College, Mitsubishi6. Invested $1M in Q1-11 exploring strategic alternatives/structure/acquisition opportunities

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