This presentation discusses forward-looking statements and the inherent risks and uncertainties involved with them. It notes that forward-looking statements are based on current expectations and projections about future events, and that actual results could differ from those stated or implied in the forward-looking statements. The presentation also provides an overview of Embraer's business strategies including diversifying its business across commercial, executive and defense segments. It highlights Embraer's focus on the 70-110 seat aircraft market and introduces its E-Jet family as the next component in the evolution of the commercial aviation industry.
2. Forward Looking Statement
This presentation includes forward-looking statements or statements about events or
circumstances which have not occurred. We have based these forward-looking statements
largely on our current expectations and projections about future events and financial trends
affecting our business and our future financial performance. These forward-looking
statements are subject to risks, uncertainties and assumptions, including, among other
things: general economic, political and business conditions, both in Brazil and in our
market.
The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,”
“expects” and similar words are intended to identify forward-looking statements. We
undertake no obligations to update publicly or revise any forward-looking statements
because of new information, future events or other factors. In light of these risks and
uncertainties, the forward-looking events and circumstances discussed in this presentation
might not occur. Our actual results could differ substantially from those anticipated in our
forward-looking statements.
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
4. Fundamentals
Aeronautical Industry Fundamentals
High Technology
Qualified People
Global Presence
CUSTOMER
SATISFACTION
Cash Intensiveness
Backbone of our
entrepreneurial action
Flexibility
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
6. Business Diversification
Expected Sales Breakdown
In five years
Commercial
70% Corporate
Jets
30% Customer
Service
Defense
Current Sales Breakdown
3Q03
Defense
13%
Corporate
12%
Customer Comercial
Serviçes 65%
10%
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
7. Product Diversification
70’s 80’s 90’s 00’s
BRASÍLIA LEGACY
BRASÍLIA (EMB 120)
ERJ 145
BANDEIRANTE (EMB 120)
ERJ 145 XR
(EMB 110/111) ERJ 145
ERJ 140 ERJ 135
ERJ 135
EMB 321 EMBRAER 170
EMBRAER 175
EMB 326 ERJ 140
EMBRAER 190
EMBRAER 195
AMX AMX
AEW&C/ RS/ MP
EMB 121 AEW&C/ RS/ MP
AMX-T
TUCANO AL X Mirage 2000 BR ?
AL X
(EMB 312) (EMB 314)
(EMB 314)
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8. Custommer Diversification
Civil & Defense Aircraft flying in 58 countries on 5 continents
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
9. Recent Geographic Diversification
Q Acquisition of the assets of Celsius Aerotech
Q JV in China
Q Plans for an assembly line in Jacksonville, FL -
USA
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11. Market Evolution - USA
Share of US Domestic Passenger Enplanements
100%
5% 9% 13% 16%
3%
7%
80% 16%
19%
60%
91%
40% 84%
71%
65%
20%
0%
1980 1990 2000 2002
Majors Low Cost/New Entrants Regionals
Source: AvStat Associates, Inc. analysis of U.S. DOT data.
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
12. Market Evolution - Europe
Share of Intra-European RPKs
100%
14% 17% 17% 17% 18% 17% 19% 19%
1%
80% 1% 1% 2% 4% 5% 8% 8%
60%
40% 86% 82% 82% 81% 79% 78% 73% 73%
20%
0%
1995 1996 1997 1998 1999 2000 2001 2002
Majors Low Cost Regionals
Low Cost: easyJet + Go + Ryanair
Source: AEA, ERA, ATI
2002 Low Cost Data Estimated
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13. An Industry in Transition
• Fundamental Correction – Not a Traditional Cycle
• Decreasing Average Fare Values
• Decreasing Capacity (USA)
• Increasing Low Cost Carrier Critical Mass
• Increasing Regional Jet Critical Mass
• Pressure on Existing Worldwide Airline Model
• Major USA Airlines trying to re-invent themselves
• Regional affiliates strongly being used as defensive tools
(point-to-point X hub and spoke)
• Low cost carriers also being inserted in the current “major”
airline model
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14. Components of Current Airline Model
Full Service
> 65 years old
> 65 years old
Regional Jets Low Cost
Carriers
< 10 years old
< 10 years old < 35 years old
< 35 years old
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15. Sustaining Regional Jet Growth
1. Turboprop Substitution
• Productivity improvements
• Passenger jet preference
2. Frequency, Frequency . . .
3. Optimization of Old and
Inefficient Narrowbody
Services
• Rightsizing aircraft capacity
with demand
• Long & thin routes
• New market opportunities
• Profit potential
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16. Regional Jet Networks - USA
Jan 1995 – 76 Routes
Jan 2003 – 1874 Routes
Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)
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17. Regional Jet Networks - Europe
Jan 1995 – 104 Routes
Jan 2003 – 1072 Routes
Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)
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18. Responding to Market Needs
37 Seats
44 Seats
50 Seats
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19. The Low Cost Model
• Route Structure
• Point-to-Point Networks / Medium-Haul Flights
• High frequencies / High load factors
• Simplified (adequate) on board service
• New airplanes / Good safety track record
• Fare Structure
• Simplified Fare Structures (regular coach fare, limited discounted coach fare)
• Low fares Stimulating Demand
• Cost Leadership
• Smart Wage Structures / Partnership with Employees / High productivity
• High Utilization of Assets
• Lean Structure and Operation / Low Overheads / Flexibility and agility
• Low Distribution Costs
• New Frontiers
• Penetration into new (thinner) markets
• Single fleet type no longer a sacred cow
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20. Low Cost Networks - USA
Jan 1995 – 336 Routes
Jan 2003 – 944 Routes
Source: BACK OAG (Southwest, Jetblue, Airtran and Frontier)
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21. Low Cost Networks - Europe
Jan 1995 – 18 Routes
Jan 2003 – 374 Routes
Source: BACK OAG (Ryanair, easyjet, Buzz and GO)
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22. LCC Next Steps...
...increase capacity to match market growth,
or/and expand their air services to secondary city pairs
Regional
Jet Model
RASK
Traditional Main
Line Full Service Model
Low Cost
Model
Capacity
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23. Beyond the Current Model...
.... Natural Growth, or Capacity Rightsizing,
There is a need for adding another component
Regional
Jet Model
RASK
Traditional Main
Line Full Service Model
E - Jet
Model Low Cost
Model
Capacity
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24. The Next Step in Industry Transition
Introducing a 4th Component...
• Natural evolution of
50 seat market
• Tapping an existing gap
Full Service
E- Jets • Replacing old & inefficient
narrow bodies
(70-110 seats)
(70-110 seats)
> 65 years old
> 65 years old • Low risk for demand
stimulation
• New market opportunities
(range)
Regional Jets Low Cost
• Enhancing services
Carriers (frequency)
< 10 years old
< 10 years old < 35 years old
< 35 years old • Blurring the line between
regional and mainline
operations
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25. Introducing the E- Jets
Seat Capacity
160
Narrow Body Large
120 Aircraft E xperience
E ntertainment
80 EMBRAER 170/190 Family E asy
E nhance
50 Seat
40 37 - 44 Seat ERJ 145 E xpress
ERJ 135/140
30 Seat E verywhere
Tprops
E xcellence
200 400 600 800 1000 1200 1400 . . .
E xceptional
Stage Length (nm)
E nvironment
E mbraer
Engineering Ergonomics Economics Efficiency
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26. The Need for 70-110 Seat Jets in the USA
34% of flights
depart with loads
appropriate
for 100-110 seat
27% of flights depart aircraft
with loads appropriate
Percentage of Total Departure
17% 17%
for 70-80 seat aircraft
14%
13%
9%
8%
7%
4% 4%
3%
2% 2%
<50 50 60 70 80 90 100 110 120 130 140 >150
Source: Back (US DOT T100 Jan-Sep 2002) Passengers per Departure
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27. Market Opportunities - Global
Replacement of Ageing Aircraft
Fleet in Service (61-120 seat segment - Dec/2002)
500
453
689 aircraft with more than 20 years
400 372 (34 % of total fleet in service)
330
Number of Aircraft
304
300 277
208
200
108
100
0
0-5 6 - 10 11 - 15 16 - 20 21 - 25 26 - 30 >30
Aircraft Age (Years)
Source: Fleet PC (Scheduled Airlines, Active in Service and All Passenger Configuration)
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28. E-conomics – Aircraft Commonality
Fleet Management Flexibility and Load Factor Optimization
70 – 78 Seats
78 – 86 Seats
98 - 106 Seats
108 – 118 Seats
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29. E-conomics – Profitable by Design
USA Environment
*Based on Total Operating Cost
BREAK-EVEN* PROFIT
500 sm for EMBRAER 170/175
600 sm for EMBRAER 190/195
EMBRAER 170
78 seat
40 PAX (51%) 38 PAX
EMBRAER 175
86 seats
44 PAX (51%) 42 PAX
EMBRAER 190
106 seats
57 PAX (54%) 49 PAX
EMBRAER 195
118 seats
62 PAX (53%) 56 PAX
*Based on Total Operating Costs; Average OW net fare 500 sm USD 90; 600 sm USD 98
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30. Everything you expect…
… in a First Class cabin
• Single seat ü
• Seat comfort ü
• Catering ü
• Stowage ü
• Partition ü
• Exclusive lavatory ü
• Exclusive environment ü
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31. Nothing you don’t like
… in an Economy cabin
• Middle seat X
• Limited baggage space X
• Single lavatory X
• Narrow aisle X
• Cramped seating X
• Limited catering capabilities X
• “Cattle” feeling X
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32. E-fficiency – Range from Dallas
EMBRAER 170
EMBRAER 175
EMBRAER 190
EMBRAER 195
FAR Domestic Reserves
Taxi allowance
14 minutes
Air Maneuvers
3 minutes
Cruise
ISA
Wind
85% Annual Reliability
Pax Weight & Baggage
90.7 kg (200 lb)
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33. E-fficiency – Range from Paris
EMBRAER 170
EMBRAER 175
EMBRAER 190
EMBRAER 195
JAR OPS Reserves
Taxi allowance
14 minutes
Air Maneuvers
3 minutes
Cruise
ISA
Wind
85% Annual Reliability
Pax Weight & Baggage
90.7 Kg (200 lb)
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34. Filling an Untapped Market
Regional
Jet Model
Traditional Main
Line Full Service Model
E - Jet
Model Low Cost
Model
New Embraer
New Embraer
E-Jet family
E-Jet family
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36. A crowded and oversegmented marketplace
Legacy $20,8M
Chal 604
$24,9M
F2000EX $23,8M
Chal 800
$27,1M
G 200 $20,2M
G 3 0 0 $ 2 5 , 5M
Lear 40 $ 7,7M
G 1 5 0 $ 1 2 , 5M Chal300 $17,4M
G 400 $32,5M
Safire$1M S J- 3 0 $ 5 , 5 M CJ3 $6,0M Lear45 $10,3M G 100 $11,8M F 50EX $20,0M G LOB Exp$44,4M
G LOB 5000$33,5M
Premier $5,6M Lear 31 $6.6M L 45XR $10,8M Lear 60 $12,7M F 7X $35,8M BBJ1 $52M
F 2000 $22,6M
Eclipse$850K
CJ1 $4,0M B 400A $6,6M Encore $7,6M 800XP $13,0M Horiz $18,0M F 900C $30,4M G 5 0 0 $ 3 7 , 5M BBJ2 $65M
M ustang $2,3M
CJ2 $5,2M Bravo $5,7M Excel $10,2M S overeign $13,5M F900EX $34,3M G 550 $45,8M ACJ $47M
Cit X $19,4M
PRE ENTRY ENTRY LIGHT MID LIGHT MID SIZE SUPER MID SIZE LARGE U-L O N G-R A N G E GLOBAL
Prices as in BC&A May03
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37. Current Competitive Environment
SUPER MID SIZE
Chal 604 $24,9M
LARGE
Chal 8 0 0 $ 2 7 , 1 M
Legacy $20,8M
MID SIZE F 50EX $20,0M
G 3 0 0 $ 2 5 , 5M
G 1 5 0 $ 1 2 , 5M
F2000EX $23,8M
G 100 $11,8M F 2000 $22,6M
G 400 $32,5M
Lear 60 $12,7M GLOB 5000$33,5M
Horiz $18,0M
G 200 $20,2M
F 900C $30,4M
800XP $13,0M
F900EX $34,3M
Chal300 $17,4M Cit X $19,4M
S overeign $13,5M
Prices as in BC&A May03
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38. Legacy - A New, Breakthrough Concept
Q Based on a proven airplane platform (ERJ 135),
with almost 700 aircraft in operation
Q Represents value for customers
üComfort
üPerformance
üCost Efficiency
üReliability
Q Best cost benefit alternative
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39. Legacy Executive - interior
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40. Supermidsize category
23‘8”
Challenger 300 (7,22m)
Horizon 25‘
(7,62m)
24‘6”
G200 (7,46m)
42’6”
(12,94m)
ft 10 20 30 40 50
m 3 6 9 12 15
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
41. Large category
26‘4”
Falcon 2000 (8,01m)
41’
G400 (12,49m)
42’6”
(12,94m)
ft 10 20 30 40 50
m 3 6 9 12 15
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
42. Legacy Shuttle - Interior
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
43. Fractional Ownership Program with Flight Options
• Introduction in the US market - Thanksgiving 2003
• Showcase for the Legacy in this booming market segment
S/N 412 S/N 462
S/N 495 S/N 528
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44. Area of operation: U S
Owner: Raytheon
2002 Total shares sold market- share: 24%
Fleet* a n d B a c k l o g
Segment Manufacturer Equipment # ACFT Avg Age Backlog
Entry Cessna CitationJet 11
Entry Raytheon Premier I 71
Light Cessna Citation II 6
Light Raytheon Beechjet 400 75 12
Midlight Cessna Citation III 11
Midlight Cessna Citation V 6
Midlight Raytheon Hawker 450 50
Midsize Raytheon Hawker 700 1
Midsize Raytheon Hawker 800 39
Supermidsize Dassault Falcon 50 7
Supermidsize Raytheon Horizon 27
Large Bombardier Challenger 601 11
Large Gulfstream IV 2
Total 169 9 160
* P l u s u n d i s c l o s e d a m o u n t of C i t a t i o n X i n t h e f l e e t
S o u r c e s : A M S T A T , A i r c l a i m s (t h r o u g h M L y n c h)
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46. Airline Market Forecast 2004-2023
W o r l d D e l i v e r i e s b y S e g m e n t - Jets
Segment 2004 - 2 0 1 3 2014 - 2 0 2 3 2004 - 2 0 2 3
30 - 60 1,150 1,450 2,600
61 – 90 1,300 1,600 2,900
91 – 120 1,250 1,700 2,950
TOTAL 3,700 4,750 8,450
W o r l d ( 3 0- 1 2 0 s e a t s e g m e n t ) : 8 ,6 1 0 j e t s ( U S $ 1 8 0 billion)
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47. Airline Market Forecast 2004-2023
30 - 1 2 0 S e a t s : 8 , 4 5 0 J e t s
U S A ,, C a n a d a
USA Canada
& C a r iib b e a n
& Car bbean E u r o p e ,,
Europe C h iin a
Ch na
4,740
4,740 M iid d lle E a s tt
M dd e Eas 635
635
56% & Africa
& Africa 8%
1,970
1,970
Latin
Latin
23%
A s iia
As a
A m e r iic a
Amer ca
Pacific
Pacific
625
625
480
480
7% 6%
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
48. Corporate Aircraft Demand 10- year Forecast
EMBRAER Jul03 TEAL May03
Forecast Int'l Jun03 Honeyw ell Jun03
Rolls-Royce Jun03 Average TRB Jun03
1000
8,078
900 Supermidsize = 1,250 units 6,833
6,900
800
6,525
# of Aircraft
6,535
700
6,181
600
500
400
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USEDu r c e : TEMBRAER’S 0 3 v i a CONSENT.
s o WITHOUT R B J u n WRITTEN R R
49. Corporate Market New Segments
Revenue Forecast per Prod. Category ENTRY LIGHT M-LIGHT
M-SIZE SUPER-MIDSIZE LARGE
Accumulated Revenue Composition
(2003-2012) ULTRA-LONG RANGE GLOBAL
16.000 GLOBAL E N T R Y
LIGHT
5% 4%
ULTRA- 6%
LONG
M-LIGHT
RANGE
5%
20%
14.000 M-SIZE
15%
12.000
LARGE
SUPER-
22%
MIDSIZE
10.000 23%
US$ million
8.000
6.000
4.000
2.000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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51. ERJ 145 Family Orderbook
(as of September 30 t h , 2003) Firm
Firm Options Total Deliveri e s
Backlog
ERJ 135 121 6 127 104 17
ERJ 140 94 20 114 74 20
ERJ 145 665 465 1,130 509 156
Total 880 491 1,371 687 193
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52. EMBRAER 170/190 Family Orderbook
(as of September 30 t h , 2003) Firm Options Total
EMBRAER 170 120 128 248
EMBRAER 190 110 150 260
EMBRAER 195 15 30 45
Total 245 308 553
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54. Employees
Number of Employees
12,803
12,227
11,048
10,334
8,302
6,737
6,087 4,494
4,319
3,849
94 95 96 97 98 99 00 01 02 Oct 03
April / 97: minimum of 3,200 people
BRAZIL 11,976* AUSTRALIA 09 CHINA 1 32
USA 482 EUROPE 19 4 SINGAPORE 10
* ELEB employees included
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55. Qualified People
Educational Levels
College
Undergraduate
s 0%
3
4%
65% Graduates
1%
High School Masters or PhD
Graduates
25% of the employees are engineers
Current as of 2002
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
56. Foccus on Trainnnig
More than US$ 81.5 million invested in
training and development in the last 4 years
US$ million
21 24.5
18 18
1999 2000 2001 2002
In–house courses:
• 18 - month graduate course in Aeronautical Engineering
• 2 - year MBA course focused on international trade
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57. Comunity
Social & Comunity foccus on Education
Eng. Juarez Wanderley High
School developed for 600
students
Implementing several programs
including the Action Plan concept
in public schools benefiting more
than 34,000 students
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
58. Health & Environment
Environment
ISO 14001 Certificate
(Mar/2002)
Health & Security
Certification OHSAS 18001
(Mar/2002)
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
59. Dow Jones Sustainabilly Index
Nominated for the third consecutive year
For the DOW JONES SUSTAINABILITY WORLD INDEX
Recognignition of its corporate policy
sustainabilly through:
Creation of Shareholder Value -
Medium & Long Term
Social & Environment
responsability
Corporate Governance
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
61. Jet Deliveries
Units
41
30 30 30
28
23
20
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
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62. Net Sales & Gross Margin
US$ Million
1000 40%
39.9% 39.7%
39.2% 39.3% 39.1%
750 36.5%
798 38,1%
500 581 567
590 489
557 439
250
0 30%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
63. Revenue Breakdown
Sales per S e g m e n t Sales per Market
Third Quarter 2003 Third Quarter 2003
Defense
Brazil
13% 6%
Corporate
12%
Customer Comercial Foreing
Serviçes 65% Market
10% 94%
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64. S G & A and Others Expenses
US$ Million
150 18.1% 21%
15.2% 15.5% 15.5% 15.1% 18%
120
13.0% 13.0% 15%
124
90 12%
85 86
60 76 76 76 79 9%
6%
30
3%
- 0%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
SG&A and Others SG&A , Others (% of Net Sales)
Note: SG&A includes Profit Sharing and does not include R & D
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
65. Research & Development
US$ Million
60 9.1% 8.9% 10%
7.4% 7.2% 7.3%
51 8%
40 46
41 5.1% 42 6%
39
5.8% 36
30 4%
20
2%
- 0%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
R&D R&D (% of Net Sales)
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
66. Income from Operations
US$ Million
400 25%
20.3%
19.1%
17.3% 17.9% 20%
17.0%
200
12.3% 15%
142 11.3%
97 119 111
83 70 49
0 10%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
67. Net Income & Margin
US$ Million
150 15%
12.2%
9.7%
9.0%
100
68 7.0%
6.2%
77 44 4.4%
50 37 41
19
5
0.9%
0 0%
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
69. Trade Accounts Receivable
US$ Million
981
913
790
736
707
326
247
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
N o t e : I n t h e s hor t -t e r m
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
70. Inventories
US$ Million
1111
995 992 1005 1013
946
865
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
N o t e : I n t h e s hor t -t e r m
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
71. Net Cash ( Debt )
US$ Million
360
217
104
39 43
(178)
(212)
1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
72. Loans Breakdown
B a n k D e b t - U S $ 1 , 0 5 9 . 7 million
S e p t e m b e r 30, 2003
Currency Breakdown Debt Maturity
US$
34%
Long
Short
Term
Term
49%
51%
R$
66%
• Considering Currency Swaps
• Loan Average Maturity: 2 years and 2 months
• Average R$ debt cost: 18.9% p.a. (83.2% of CDI)
• Average US$ debt cost: 4.9% p.a.
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
74. PP&E and R&D
U S $ million
180
158.6
160
PP&E 143.8
140
R&D 127.7 125.8
120 114.2
99.6
100
80 69.6
60.1
60
44.1
40
18.8
20
0
1999 2000 2001 2002 Sep. 03
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
75. Reduced Production Cycle
Flexibility incorporated into the production line allowed an
increase in efficiency and decrease in production lead time
Lead Time in Months
8,0
6,0 6,0
5,5
4,9 5,0
3,7 3,5
1996 1997 1998 1999 2000 2001 2002 Sep.
03
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
76. Revenues per Employee
Brazilian GAAP
(US$ thousand)
350
307
300
247 254
242
250
227
200 185
150
100
91
50
0
1996 1997 1998 1999 2000 2001 2002
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
77. Investments Forecast
U S $ million 03 Original 03 Actual 2004 2005
R&D Total 167 140 174 119
- Commercial Aviation 126 100 139 72
- Corporate Aviation 14 20. 16 27
- Others 27 20 19 20
Defence 53 48 42 54
Productivity and PP&E 58 33 64 81
TOTAL 278 221 280 254
D e f e n c e I n v e s t m e n t s a r e f u n d e d b y t h e i r c o n t r a c t s a n d a r e n o t i nc l u d e d
in the R&D expenses, but in Cost of Sales and Services.
(*) Does not include new program & Acquisitions
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
79. Backlog
In 3Q03 - US$ 27.6billion in total orders,
including US$ 10.4 billion in firm orders
US$ billion
30
27.6
27.1
25 Options 24.1
23.4
22.2
Firm Orders
20 19.2
17.7 16.8 17.2
12.7
12.7
15
13.2
11.3
11.3
10
5 4.1 11.4 10.7 10.3 10.4
3.0 9.0 7.9
1.2 6.4
3.0 4.1
0
1.2
1996 1997 1998 1999 2000 2001 2002 1Q03 2Q03 3Q03
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
80. Jet Deliveries
Jet Deliveries
160 161 160 170
131
96 102
59
32
4
1996 1997 1998 1999 2000 2001 2002 2003 E 2004 E 2005 E
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
81. Deliveries Forecast
160 expected deliveries for 2004 and 170 for 2005
12%
12% 15%
15%
35%
35%
37%
37%
53%
53% 48%
48%
2004
2004 2005
2005
ERJ 145 Family
ERJ 145 Family E M B R A E R 1 7 0 F a m iilly
EMBRAER 170 Fam y Corporate
Corporate
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.