Analyst of National Bank--Cameron Doerksen saidQ4/23 update Pending NYC order a big win for NFI At the end of Q3, NFI’s backlog sat at 9,556 firm orders and options worth $6.6 billion with another 1,834 equivalent units (EUs) worth of awards pending. In late December, the New York City MTA recommended the approval of two new transit bus orders for NFI’s New Flyer subsidiary that have the potential to increase the backlog ~30%. NFI therefore has the backlog to ramp bus production through 2025, but also has solid visibility beyond 2025 with orders expected to remain strong. Pricing improving significantly Average pricing in NFI’s backlog was up ~20% y/y in Q3 and we expect it will move even higher driven by a higher percentage of ZEB orders as well as the competitive environment improvements, notably the exit of Nova Bus from the U.S. market. The pending New York City transit bus orders further solidify our view that pricing is moving meaningfully higher with the 40-ft. ZEB unit price up 22.7% from the last order two years ago and the 60-ft. diesel price up 42.2% from the last order in 2018. Cash flow improvements could be coming NFI management noted in the fall that it had joined a Biden Administrationsupported American Public Transportation Association (APTA) taskforce that was working to standardize payment terms in public transit bus contracts in the U.S. If successful, the changes could ultimately lead to a faster cash collection cycle for transit bus OEMs with the potential introduction of upfront cash deposits and/or milestone payments. Maintain OP, target increased to C$19.00 NFI needs to execute on its production ramp and there remain lingering risks around supply chain improvement, but with demand for buses continuing to be very strong and pricing in backlog improving significantly, we believe financial results will trend much more positively in 2024 and through 2025, which we believe will support further upside to the share price. Our new target is C $19.00, up from C$18.00 previously as we increase our 2025 estimates.