1. Management Report
As a result of constantly increasing production capacity, the figure of 12 regional jets
assembled in one month was achieved. In this quarter alone, 34 ERJ 145 and ERJ 135 regional
jets were produced and delivered, with an average production cycle of 5.5 months. This
performance enabled consolidated gross sales of R$ 1,052.2 million to be attained, of which
parent company exports were responsible for R$ 993.6 million, maintaining Embraer in the
forefront of Brazilian exporters.
The highlight in the commercial aviation market was the completion of negotiations with the
US company Chautauqua/Wexford, closing 35 firm orders and 45 options for the ERJ 145. In
addition, at the Aerospace Air Show held at Singapore in February, Continental Express, which
was the pioneer operator of the ERJ 145 in the US, increased its orders for Embraer Regional
Jets to 75 aircraft, of which 50 ERJ 145 and 25 ERJ 135. With this decision, Continental
Express has now placed 200 orders for the ERJ 145, of which 150 firm and 50 options, plus
another 75 orders for the ERJ 135, of which 50 firm and 25 options.
During this period, Crossair (Switzerland), Cirrus Airline (Germany), Brymon Airways
(Great Britain), KLM Exel (Holland) and Alitalia Express (Italy) received their first ERJ 145 units.
At the Singapore fair, highlighting the defense market, Embraer demonstrated an EMB-145
AEW&C version aircraft, which is being analyzed by the governments of various countries, has
already been selected by the Brazilian government to form part of the Amazon Surveillance
System and also by the Greek and Mexican governments.
The order backlog in March totaled a balance of R$ 31.8 billion (US$ 18.2 billion, of
which R$ 13.4 billion (US$ 7.6 billion) in firm orders.
With respect to Research and Development for new products, the following should be
highlighted: completion of the joint definition phase of the ERJ 170, with investment targets,
development costs, subcontracts and constitution of the investment fund in accordance with the
planned figures; the fuselage joint of the new ERJ 140 model was successfully achieved; and the
maiden flight of the remote sensing aircraft EMB145-RS01, to be deployed in the SIVAM
Amazon program.
In March, Embraer took part in the International Aeronautical and Space Fair - FIDAE
held at Santiago, Chile - and presented the EMB145-RS and EMB 145 AS aircraft, both used in
anticipated surveillance and warning systems in addition to the ERJ 135. At the same time various
demonstration flights of the regional jet ERJ 135 were made in Argentina and Uruguay, and also in
Chile . Directors, technicians and pilots of the main regional aviation companies of these countries
took part, plus authorities, press and regional aviation users.

2. Economic-Financial Performance
The accumulated gross sales for the first quarter of 2000 were R$ 1,052.2 million, 76.0%
up on the same period of 1999. When compared with the prior quarter ended December 1999,
gross revenues increased by 10.3%. Accumulated net income in this quarter was R$ 97.6 million,
546.4% up on the same period of 1999. When compared to the prior quarter before tax credits,
net income for the first quarter was 53.6% higher.
The gross margin of 28.5% was lower than the 30.5% figure for the first quarter of 1999,
mainly due to the devaluation of the real, which had a positive effect on the result for the period.
The following figure demonstrates that the continued growth in production volume and
deliveries has enabled a better utilization of physical and human resources, making possible cost
reductions by the rationalization of processes, reductions in production cycles and productivity
gains. This performance is reflected in the net income obtained over the last 11 consecutive
quarters.
Performance Indicators (accumulated, in 1st Quarter 1st Quarter 1st Quarter
R$ million) of 1998 of 1999 of 2000
Gross Operating Revenues 258.6 598.0 1052.2
Gross Profit 71.2 182.1 300.4
Gross Margin 27.5% 30.5% 28.5%
Net Income 21.7 15.1 97.6
EBITDA 63.2 155.9 230.2
EBITDA Margin 24.5% 26.1% 21.9%
Shareholders' Equity 367.4 433.0 794.3
Current Ratio 0.87 1.04 1.26
Earnings per Share 0.0045 0.0312 0.1993
The principal revenue components for the period were the invoicing of 24 ERJ 145 aircraft
and 10 ERJ 135 aircraft, with total sales of R$ 951.2 million.
The EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization which
reflects the performance of operational cash generation before the effect of net financial expenses,
tax and depreciation and amortization deductions, for the period was R$ 230.2 million,
representing a growth of 47.7% increased when compared with the same period of 1999 and
48.7% compared with the prior quarter.
The earnings per share of R$ 0.1993 represent a constant evolution over the periods
compared, reflecting the solidity of the fundamentals behind the Company's performance.
Structuring of the capital and borrowing has resulted in a reduction in funding costs, as shown by
the following indices calculated at the end of each period indicated, eliminating exchange rate
variations.

3. December 1998: Libor + 3.64%
December 1999: Libor + 2.15%
March 2000: Libor + 1.80%
Adjustment and control of the indebtedness profile has resulted in an improvement in the
current ratio, which has increased constantly from 1.04 in the first quarter of 1999 to 1.26 for the
current period.
Cash generation for the period was R$ 391.2 million, presently derived from realizing
incomings on deliveries plus those from progressive payments related with new contracts signed
during the period, leading to a final cash balance of R$ 660.6 million.
Sales
Gross revenues on aircraft invoice plus replacement parts and services carried out by the
parent company and subsidiaries in Brazil and abroad, when compared with the same periods of
the prior financial years, have recorded the progress demonstrated in the following figure,
separated for the domestic and foreign markets.
1200
GROSS REVENUES
R$ million 21.1 1052,2
1000 Domestic Mar.
Foreign Mar.
800
43.7 598,0
600
400
258,6
24.8
200
233.8 554.3 1,031.1
0
to Mar/98 to Mar/99 to Mar/2000
The proportion of exports on total revenues for the period was 98.4%, compared with
92.7% for the same period of 1999 and 90.4% for the same period of 1998. For the parent
company, the exports worth R$ 993.6 million corresponded to 94.7% of total sales worth R$
1,052.2 million.
Commercial Aviation Market
In the 21 to 40-seat segment, Embraer has the 37-seat regional jet denominated ERJ 135,
of which 25 aircraft were delivered. In the order book, orders from American Eagle and
Continental Express should be highlighted. At the end of the period, orders totaled 321 aircraft ,
of which 164 firm orders - 25 of these have already been delivered - and 157 options, as shown
in the following table:

4. Customer Country Firm Options Deliveries
Orders Order Backlog
American Eagle US 95 115 12 83
City Air Sweden 1 2 1 0
Continental Express US 50 25 9 41
Proteus France 13 15 - 13
Regional Airlines France 5 0 3 2
TOTAL 164 157 25 139
In the 41 to 60 seat segment, Embraer started production of the first ERJ 140 prototype,
which is an extended version of the ERJ 135 regional jet with a common component ratio with the
ERJ 135/145 family of more than 95%, and is planned to be concluded in due of this year. This
new jet will satisfy a demand of around 750 jet aircraft in this 44-seat category over the next ten
years.
The ERJ 145 regional jet with capacity of 50 passengers already has a fleet of 200 aircraft
in operation by 19 airlines.
The highlight of the period was the completion of negotiations with Chautauqua/Wexford,
resulting in the confirmation of the 20 options on the existing contract and signing of an addendum
for a further 15 firm orders and 45 options on the ERJ 145, convertible into ERJ 140 models .
The backlog for the ERJ 145 now totals 734 orders, of which 438 firm and 296 options,
as shown below:
Customer Country Firm Options Deliveries Order
Orders Backlog
Alitalia Italy 6 15 - 6
American Eagle US 50 17 50 0
British Midland United Kingdom 10 10 4 6
British Regional United Kingdom 23 2 15 8
Brymon United Kingdom 7 14 2 5
Cirrus Germany 1 0 1 0
Continental US 150 50 59 91
Express
Crossair Switzerland 15 25 2 13
ERA Spain 2 0 2 0
Intercanadian Canada 6 6 - 6
KLM Exel Holland 3 2 1 2
LOT Poland 6 6 3 3
Luxair Luxembourg 9 2 6 3
Mesa US 36 64 - 36
Portugália Portugal 8 0 8 0
Proteus France 10 0 2 8
Regional Airlines France 15 0 9 6
Rheintalflug Austria 2 6 1 1
Rio-Sul Brazil 15 15 15 0
Skyways AB Sweden 4 11 4 0
Trans States US 15 6 9 6
Wexford US 45 45 7 38
Total 438 296 200 238

5. In the 61 to 80 seat segment, Embraer products are represented by the ERJ 170, ERJ 190
100 and ERJ 190-200 jet family for 70, 98 and 108 passengers respectively, which were
received with great interest and enthusiasm by the market at the time of launching in 1999. The
joint design definition phase was concluded at São José dos Campos - SP -in March, with the
participation of engineers and technicians from all the partners in the programme. The
development programme for these aircraft continues to advance ahead of schedule, maintaining
the first planned deliveries of the ERJ 170 for December of 2002 and of the ERJ 190-200 for July
of 2004.
The total order for these two aircraft is shown below:
ERJ 170 orders:
Customer Country Firm Options Deliveries Order
Orders Backlog
Crossair Switzerland 30 50 - 30
Regional Airlines France 10 5 - 10
Total 40 55 - 40
ERJ 190-200 orders:
Customer Country Firm Options Deliveries Order
Orders Backlog
Crossair Switzerland 30 50 - 30
Total 30 50 - 30
In the 21 to 40-seat segment, Embraer has the EMB 120 Brasilia 30-seat turboprop
aircraft, with a total of 350 aircraft produced and operating successfully with 34 regional aviation
companies in 14 countries.
Defense Market
The EMB145-SA remote sensing aircraft and the EMB145-SA air surveillance model
ordered by the Brazilian government to operate as part of the Amazon Surveillance System
(SIVAM), continue in the development, fabrication and preparation of the systems integration and
testing phase. Under this contract, 3 EMB 145-SA and 5 EMB 145-RS aircraft will be
produced. Both variants are known as Airborne Early Warning and Control (AEW&C) and were
also selected by the Greek government, which ordered 4 units, and the Mexican government for
the supply of 7 units, of which 4 are for Maritime patrol duties.
An EMB145-RS aircraft was demonstrated at the Singapore Air Show held in February.
The program for the AMX-T aircraft, which is a derivative of the AM-X with modernized
avionics and is manufactured under an industrial cooperation agreement between Brazil and Italy,
was selected by the Venezuelan Air Force. The contract is under negotiation.
The EMB 314 Super Tucano aircraft in the ALX (Light Attack Aircraft) configuration,
powered by a 1600 SHP engine and equipped with advanced avionics, in the single-seater and
twin-seater versions, was developed to satisfy the requirements of the Brazilian Air Force and two
prototypes are ready in operation.
Executive Aviation Market

6. Embraer is concluding commercial and economic -financial feasibility studies to launch
products for the Executive Aviation Market, named the ECJ 135 and ECJ 170, based on the ERJ
135 and ERJ 170 jet platforms respectively. This initiative is a result of the recognition of market
potential due to the fact that multinational corporations are opting to use executive aircraft to
transport staff between branches and worksites, for visits by employees and managers to
customers, and also for transporting customers.
Embraer hopes to win a market share of between 10 and 15% of this segment through a
suitable strategy and product structuring and for this purpose has created a Vice-Presidency
exclusively dedicated to the Corporate Aviation Market venture
Customer Service Market
In order to understand, anticipate and satisfy customer requirements more effectively, a
Customer Service Vice-Presidency was also created at the beginning of this year. Through
operating units located in South America, North America, Europe in Australia, Embraer has made
teams equipped with the necessary resources available within a priority initiative to ensure
customers maximum efficiency in aircraft availability, both for commercial and military applications.
The Company is investing in the formation of decentralized stocks in order to reduce service
cycles to customers. As a compliment to this strategy, a replacement parts program operating
through a pool, in which part utilization is shared between a group of operators, has been
successfully offered to companies operating our aircraft.
Subcontract and General Aviation
Under contract to United Technologies Sikorsky Corporation (USA), Embraer is
proceeding with engineering development and processes for the subsequent fabrication of tank
structures and landing gear systems for the S-92 Helibus, a medium-sized twin-turbine helicopter
with a capacity for 19 passengers in the civil version.
The General Aviation business is managed by Neiva, a wholly-owned Embraer subsidiary.
This unit produces small aircraft for executive use and the Ipanema, used for crop spraying.
Neiva's holding in the Embraer group has been increased by contracting the supply of parts a
components for aircraft manufactured by Embraer.
Sales Financing
With respect to the dispute at the World Trade Organization - WTO involving the Brazilian
government with respect to the Brazilian Export Credits Program - PROEX and the Canadian
government, regarding the subsidies offered to the Canadian aeronautical industry, on November
19, 1999, the respective governments submitted to the WTO's dispute settlement mechanism the
modifications made by each country and the programs to comply with the organization’s decision.
Both countries declared that the modifications made by the other were unsatisfactory and
did not comply with the rules imposed by the WTO. As a result, a new panel was set up to
determine whether the WTO decisions were or were not implemented. The Brazilian government
has reinforced its intention on various occasions to honor the financing contracts assumed with
Embraer customers.

7. Organizational Development
During this period, Embraer implemented the first phase of the new corporate management
system using the SAP software at São José dos Campos. The system will be implemented in the
subsidiary companies abroad by August and at Neiva by November. Improvements to the
supplies, manufacturing and finance processes continue, in order to support the increased volume
production and provide modern management tools.
During the period, the consolidated headcount increased by 626 employees and in March
totaled 2,886 indirect employees (nonproductive activities) and 6,042 direct employees, totaling
8,928 overall.
Investments in R&D and Productivity
During the period, research and development on new programs, plus maintenance and
improvement of existing programs, received investments of R$ 40.1 million. The total investments
made on improving capacity and modernizing industrial processes, engineering and management
support was R$ 27.0 million. With this increase, expenditure on investments (R&D and
Productivity) totaled R$ 67.0 million.
The Virtual Reality Center (CRV) was officially introduced in February, which is a modern
interactive system to increase productivity in the development of new aircraft. The system is
currently being used to develop the ERJ 170 and ERJ 190 jets. Approximately R$ 2.9 million has
been invested in the project, which will substantially reduce development costs and lead times for
new projects.
Investors Relations
The company shares performed well in stock market. During this quarter, the preferred
stock appreciated by approximately 2.3% with a daily trading volume of R$ 1.37 million. The
common stock appreciated by 9.6%, with a daily volume of R$ 4.12 million. Over the same
period of analysis, the Ibovespa index appreciated by 4.2%.
As a result of increasing liquidity, as from May 2000 the Embraer preferred stock also
became part of the Bovespa index with a weight of 0.69%. These shares had already been
included in the preview of the Ibovespa theoretical portfolio as from January 2000. The weighting
of the common shares, which have formed part of the index since 1999, was revised upwards
from 1.5% to 1.84%.
During this quarter, 8,335,000 preferred shares were issued as a result of exercising
833,500 subscription warrants, which are coupledwith the 4th. issue of debentures. With the
conversion of the subscription warrants, Embraer's subscribed and paid-up capital is now made
up of 242,544,448 common shares, including the golden share, and 247,008,426 preferred
shares, totaling 489,552,874 shares.
Dividends were paid during the period relating to the income of the second half of 1999 to
an amount of R$ 86.6 million and the Board of Directors also approved the payment of interest on
own capital related to the first quarter of 2000 in the amount of R$ 19.6 million, paid from April
14, 2000.
Outlook

8. The credibility won by Embraer and analyses carried out on market and customer needs have
opened the way for the development of new products. This has occurred with the ERJ-170
regional jet in the 61 to 80-seat segment and with the 44-seat ERJ-140, and will shortly occur
with products for the executive aviation segment. We therefore see Embraer as an economically,
financially and commercially strong company, ready to continue its mission of offering customers
operationally economic, safe and comfortable products, generating jobs wherever it operates and
offering a satisfactory return to its employees, customers, suppliers, shareholders and society.
São José dos Campos, May 15, 2000
The Management

9. Consolidated Balance Sheets
R$ thousands
ASSETS 12/31/99 03/31/2000
CURRENT ASSETS 2,541,312 2,679,916
Cash and cash equivalents 548,155 660,619
Trade accounts receivable 557,407 654,194
Allowance for doubtful accounts (20,041) (22,534)
Recoverable taxes 30,050 34,857
Deferred income taxes 96,096 81,254
Other receivables 39,972 33,882
Inventories 1,281,058 1,227,529
Prepaid expenses 8,615 10,115
NONCURRENT ASSETS 266,708 263,446
Trade accounts receivable 26,831 26,568
Recoverable taxes 3,422 3,215
Compulsory loans and guarantee deposits 6,909 7,014
Other receivables 55,236 55,433
Deferred income taxes 174,310 171,216
PERMANENT ASSETS 652,895 647,117
Investments 6,106 6,079
Property, plant and equipment 370,792 380,492
Deferred charges 275,997 260,546
TOTAL ASSETS 3,460,915 3,590,479

10. R$ thousands
LIABILITIES AND SHAREHOLDERS’ EQUITY 12/31/1999 03/31/2000
CURRENT LIABILITIES 2,074,054 2,124,394
Loans 994,102 885,519
Suppliers 358,227 415,376
Accounts payable 52,649 106,742
Customers’ advances 390,401 439,059
Taxes and social charges payable 42,311 95,732
Accrued taxes on income 26,170 51,600
Dealers and sales agents 355 1,004
Accrued liabilities 121,217 118,373
Dividends 86,796 8,451
Debentures 1,826 2,538
LONG-TERM LIABILITIES 689,369 671,445
Loans 144,111 137,617
Suppliers - -
Accounts payable 38,579 59,938
Debentures 180,504 167,172
Customers’ advances 201,514 211,463
Long-term portion of refinanced taxes 86,376 54,394
Accrued liabilities 38,285 40,681
Deferred income tax - -
DEFERRED INCOME 386 374
SHAREHOLDERS’ EQUITY 697,106 794,266
Capital 354,619 367,453
Capital reserve 159 6,565
Legal reserve 28,766 28,766
Income reserve 313,562 313,562
Retained earnings (deficit) - 77,920
TOTAL LIABILITIES AND 3,460,915 3,590,479
SHAREHOLDERS’ EQUITY

11. Consolidated Statement of Income
R$ thousands
03/31/1999 03/31/2000
SALES:
Gross sales-
Domestic market 43,672 21,149
Foreign market 554,297 1,031,091
Sales taxes (3,036) (19,752)
Net sales 594,933 1,032,488
COST OF SALES (409,925) (732,091)
Gross profit 185,008 300,397
OPERATING EXPENSES:
Administrative (14,073) (30,000)
Selling (40,751) (66,140)
Other income (expenses), net (1,150) (22,486)
Equity in unconsolidated subsidiary - 123
Income from operations before financial expenses
129,034 181,894
FINANCIAL INCOME (EXPENSES):
Interest expenses (37,214) (51,048)
Interest income 23,342 21,568
Monetary and exchange variations, net (98,171) (2,311)
Income from operations after financial income
16,991 150,103
(expenses)
NONOPERATING INCOME (EXPENSE), NET (159) 281
INCOME BEFORE INCOME TAX 16,832 150,384
INCOME TAX (PROVISION) (1,706) (55,814)
INCOME TAX AND SOCIAL CONTRIBUTION ON - (10,757)
RECOVERABLE TAXES
INCOME BEFORE EMPLOYEE PROFIT SHARING 15,126 83,813
EMPLOYEE PROFIT SHARING - (5,894)

12. REVERSION OF INTEREST ON OWN CAPITAL - 19,640
NET INCOME 15,126 97,559