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Page 1: Santander Conference - Cancun

Investors Presentation

Page 2: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

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.

Forward Looking Statement

Page 3: Santander Conference - Cancun

Building a Global

Competive Company

Page 4: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

High Technology

Qualified People

Global Presence

Flexibility

Cash Intensiveness

Fundamentals

Aeronautical Industry Fundamentals

CUSTOMER SATISFACTION

Backbone of our entrepreneurial action

Page 5: Santander Conference - Cancun

Towards Growth &

Diversification

Page 6: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Business Diversification

Expected Sales BreakdownIn five years

CorporateJets

CustomerService

Defense

Commercial70%

30%

Customer Serviçes

10%

Corporate12%

Defense13%

Comercial65%

Current Sales Breakdown3Q03

Page 7: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Product Diversification

70’s 90’s 00’s80’s

BANDEIRANTE(EMB 110/111)

TUCANO(EMB 312)

BRASÍLIA(EMB 120)

ERJ 145

AEW&C/ RS/ MP

ERJ 135

EMB 326

EMB 321

EMB 121

AMX

BRASÍLIA(EMB 120)

ERJ 140

AL X(EMB 314)

LEGACY

ERJ 145

ERJ 135

ERJ 140

EMBRAER 170EMBRAER 175

EMBRAER 190EMBRAER 195

AMX-TAEW&C/ RS/ MP

AL X(EMB 314)

Mirage 2000 BR ?

AMX

ERJ 145 XR

Page 8: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Custommer Diversification

Civil & Defense Aircraft flying in 58 countries on 5 continents

Page 9: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

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

Page 10: Santander Conference - Cancun

Airline Market Status, Trends

and Outlook

Page 11: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Share of US Domestic Passenger Enplanements

Source: AvStat Associates, Inc. analysis of U.S. DOT data.

91%84%

71% 65%

7%16%

19%

5% 9% 13% 16%3%

0%

20%

40%

60%

80%

100%

1980 1990 2000 2002

Majors Low Cost/New Entrants Regionals

Market Evolution - USA

Page 12: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Share of Intra-European RPKs

86% 82% 82% 81% 79% 78% 73% 73%

8%

14% 17% 17% 17% 18% 17% 19% 19%

8%1%

1% 1% 2% 4% 5%

0%

20%

40%

60%

80%

100%

1995 1996 1997 1998 1999 2000 2001 2002

Majors Low Cost Regionals

Source: AEA, ERA, ATI2002 Low Cost Data Estimated

Low Cost: easyJet + Go + Ryanair

Market Evolution - Europe

Page 13: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

• 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

An Industry in Transition

Page 14: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Full Service

> 65 years old

Full Service

> 65 years old

Regional Jets

< 10 years old

Regional Jets

< 10 years old

Low Cost

Carriers

< 35 years old

Low Cost

Carriers

< 35 years old

Components of Current Airline Model

Page 15: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

3. Optimization of Old and Inefficient NarrowbodyServices

• Rightsizing aircraft capacity with demand

• Long & thin routes

• New market opportunities

• Profit potential

1. Turboprop Substitution• Productivity improvements

• Passenger jet preference

2. Frequency, Frequency . . .

Sustaining Regional Jet Growth

Page 16: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)

Jan 1995 – 76 Routes

Jan 2003 – 1874 Routes

Regional Jet Networks - USA

Page 17: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Jan 1995 – 104 Routes

Jan 2003 – 1072 Routes

Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)

Regional Jet Networks - Europe

Page 18: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

37 Seats

44 Seats

50 Seats

Responding to Market Needs

Page 19: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

• 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

• 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

The Low Cost Model

• New Frontiers• Penetration into new (thinner) markets

• Single fleet type no longer a sacred cow

Page 20: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Jan 1995 – 336 Routes

Jan 2003 – 944 RoutesSource: BACK OAG (Southwest, Jetblue, Airtran and Frontier)

Low Cost Networks - USA

Page 21: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Source: BACK OAG (Ryanair, easyjet, Buzz and GO)

Jan 1995 – 18 Routes

Jan 2003 – 374 Routes

Low Cost Networks - Europe

Page 22: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

RASK

Capacity

Traditional Main Line Full Service Model

Regional Regional Jet ModelJet Model

Low CostModel

...increase capacity to match market growth, or/and expand their air services to secondary city pairs

LCC Next Steps...

Page 23: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

.... Natural Growth, or Capacity Rightsizing,There is a need for adding another component

E - Jet Model

Regional Jet Model

Traditional Main Line Full Service ModelRA

SK

Capacity

Low CostModel

Beyond the Current Model...

Page 24: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Full Service

> 65 years old

Full Service

> 65 years old

Regional Jets

< 10 years old

Regional Jets

< 10 years old

Low Cost

Carriers

< 35 years old

Low Cost

Carriers

< 35 years old

E- Jets

(70-110 seats)

E- Jets

(70-110 seats)

• Natural evolution of50 seat market

• Tapping an existing gap

• Replacing old & inefficient narrow bodies

• Low risk for demand stimulation

• New market opportunities (range)

• Enhancing services(frequency)

• Blurring the line between regional and mainline operations

Introducing a 4th Component...

The Next Step in Industry Transition

Page 25: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

EMBRAER 170/190 Family

Seat Capacity

120

160

40

80

Stage Length (nm)

200 400 600 800 1000 1200 1400 . . .

30 Seat Tprops

50 SeatERJ 145

Narrow Body Large Aircraft

37 - 44 Seat ERJ 135/140

E xperience

E ntertainment

E asy

E nhance

E xpress

E verywhere

E xcellence

E xceptional

E nvironment

E mbraer

Engineering Ergonomics Economics Efficiency

Introducing the E- Jets

Page 26: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

34% of flights depart with loads

appropriate

for 100-110 seat aircraft27% of flights depart

with loads appropriate

for 70-80 seat aircraft

Passengers per Departure<50<50 5050 100100 140140

17%

3%

2%

4%

9%

14%

17%

13%

8%7%

4%

2%

Per

cent

age

of

Tota

l Dep

artu

re

6060 7070 8080 9090 110110 120120 130130 >150>150Source: Back (US DOT T100 Jan-Sep 2002)

The Need for 70-110 Seat Jets in the USA

Page 27: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Replacement of Ageing AircraftFleet in Service (61-120 seat segment - Dec/2002)

Source: Fleet PC (Scheduled Airlines, Active in Service and All Passenger Configuration)

372

208

108

277

330

453

304

0

100

200

300

400

500

0 - 5 6 - 10 11 - 15 16 - 20 21 - 25 26 - 30 >30

Aircraft Age (Years)

Nu

mb

er o

f A

ircr

aft

689 aircraft with more than 20 years

(34 % of total fleet in service)

Market Opportunities - Global

Page 28: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

70 – 78 Seats

78 – 86 Seats

98 - 106 Seats

108 – 118 Seats

Fleet Management Flexibility and Load Factor Optimization

E-conomics – Aircraft Commonality

Page 29: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

*Based on Total Operating Costs; Average OW net fare 500 sm USD 90; 600 sm USD 98

USA Environment

EMBRAER 170 78 seat

EMBRAER 17586 seats

EMBRAER 190106 seats

EMBRAER 195118 seats

PROFITBREAK-EVEN*

40 PAX (51%) 38 PAX

44 PAX (51%) 42 PAX

57 PAX (54%) 49 PAX

62 PAX (53%) 56 PAX

*Based on Total Operating Cost500 sm for EMBRAER 170/175

600 sm for EMBRAER 190/195

E-conomics – Profitable by Design

Page 30: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

… in a First Class cabin

• Single seat ü

• Exclusive environment ü

ü• Partition

ü• Stowage

ü• Catering

ü• Seat comfort

ü• Exclusive lavatory

Everything you expect…

Page 31: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

… in an Economy cabin

• Middle seat X

X• Cramped seating

X• Narrow aisle

X• Single lavatory

X• Limited baggage space

X• Limited catering capabilities

• “Cattle” feeling X

Nothing you don’t like

Page 32: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

EMBRAER 190

EMBRAER 170

EMBRAER 195

EMBRAER 175

FAR Domestic Reserves

Taxi allowance14 minutes

Air Maneuvers3 minutes

CruiseISA

Wind85% Annual Reliability

Pax Weight & Baggage90.7 kg (200 lb)

E-fficiency – Range from Dallas

Page 33: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

JAR OPS Reserves

Taxi allowance14 minutes

Air Maneuvers3 minutes

CruiseISA

Wind85% Annual Reliability

Pax Weight & Baggage 90.7 Kg (200 lb)

EMBRAER 190

EMBRAER 170

EMBRAER 195

EMBRAER 175

E-fficiency – Range from Paris

Page 34: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

E - Jet Model

New EmbraerE-Jet family

New EmbraerE-Jet family

Regional Regional Jet ModelJet Model Traditional Main

Line Full Service Model

Low CostModel

Filling an Untapped Market

Page 35: Santander Conference - Cancun

Corporate Aircraft Market Status, Trends

and Outlook

Page 36: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Lear45 $10,3M G L O B E x p $ 4 4 , 4 M

F 7 X $ 3 5 , 8 M

G 500 $ 3 7 , 5M

G 550 $ 4 5 , 8 M

G 400 $ 3 2 , 5 M

G L O B 5 0 0 0 $ 3 3 , 5 M

Chal 604 $ 2 4 , 9 M

F 9 0 0 C $ 3 0 , 4 M

F 9 0 0 E X $ 3 4 , 3 M

G 2 0 0 $ 2 0 , 2 M

C h a l 3 0 0 $ 1 7 , 4 M

F 5 0 E X $ 2 0 , 0 M

F 2 0 0 0 $ 2 2 , 6 M

H o r i z $ 1 8 , 0 M

C i t X $ 1 9 , 4 M

G 1 0 0 $ 1 1 , 8 M

L e a r 6 0 $ 1 2 , 7 M

8 0 0 X P $ 1 3 , 0 M

L 4 5 X R $ 1 0 , 8 M

E n c o r e $ 7 , 6 M

E x c e l $ 1 0 , 2 M

Lear 31 $6 .6M

B 4 0 0 A $ 6 , 6 M

B r a v o $ 5 , 7 M

C J 1 $ 4 , 0 M

C J 2 $ 5 , 2 M

P r e m i e r $ 5 , 6 M

S J- 3 0 $ 5 , 5 M

S o v e r e i g n $ 1 3 , 5 M A C J $ 4 7 M

B B J 2 $ 6 5 M

B B J 1 $ 5 2 M

L A R G E U - L O N G - R A N G EL I G H T M I D L I G H TE N T R Y M I D S I Z E S U P E R M I D S I Z E G L O B A L

M u s t a n g $ 2 , 3 M

P R E E N T R Y

E c l i p s e $ 8 5 0 K

S a f i r e $ 1 M

G 300 $ 2 5 , 5M

G 150 $ 1 2 , 5MLear 40 $ 7 ,7M

C J 3 $ 6 , 0 M

F 2 0 0 0 E X $ 2 3 , 8 M

L e g a c y $ 2 0 , 8 M

Chal 800 $ 2 7 , 1 M

Prices as in BC&A May03

A crowded and oversegmented marketplace

Page 37: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Current Competitive Environment

G 400 $ 3 2 , 5 M

G L O B 5 0 0 0 $ 3 3 , 5 M

C h a l 6 0 4 $ 2 4 , 9 M

F 9 0 0 C $ 3 0 , 4 M

F 9 0 0 E X $ 3 4 , 3 M

G 2 0 0 $ 2 0 , 2 M

C h a l 3 0 0 $ 1 7 , 4 M

F 5 0 E X $ 2 0 , 0 M

F 2 0 0 0 $ 2 2 , 6 M

H o r i z $ 1 8 , 0 M

C i t X $ 1 9 , 4 M

G 1 0 0 $ 1 1 , 8 M

L e a r 6 0 $ 1 2 , 7 M

8 0 0 X P $ 1 3 , 0 M

S o v e r e i g n $ 1 3 , 5 M

L A R G E

M I D S I Z E

SUPER MID SIZESUPER MID SIZE

G 300 $ 2 5 , 5MG 150 $ 1 2 , 5M

F 2 0 0 0 E X $ 2 3 , 8 M

L e g a c y $ 2 0 , 8 M Chal 8 0 0 $ 2 7 , 1 M

Prices as in BC&A May03

Page 38: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Legacy - A New, Breakthrough Concept

QQ Based on a proven airplane platform (ERJ 135), Based on a proven airplane platform (ERJ 135), with almost 700 aircraft in operationwith almost 700 aircraft in operation

QQ Represents value for customersRepresents value for customers

üüComfort Comfort

üüPerformancePerformance

üüCost EfficiencyCost Efficiency

üüReliabilityReliability

QQ Best cost benefit alternativeBest cost benefit alternative

Page 39: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Legacy Executive - interior

Page 40: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Supermidsize category

10 20 30 40 50ft

m 3 6 9 12 15

Challenger 30023‘8”(7,22m)

25‘(7,62m)

Horizon

G20024‘6”(7,46m)

42’6”(12,94m)

Page 41: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Large category

10 20 30 40 50ft

m 3 6 9 12 15

Falcon 200026‘4”(8,01m)

G40041’(12,49m)

42’6”(12,94m)

Page 42: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Legacy Shuttle - Interior

Page 43: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Fract ional Ownership Program with Fl ight Opt ions

S/N 462S/N 412

S/N 495 S/N 528

• Introduction in the US market - Thanksgiving 2003• Showcase for the Legacy in this booming market segment

Page 44: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Area of operation: US

Owner: Raytheon

2002 Total shares sold market-share: 24%

Fleet* and Backlog

S e g m e n t Manufac tu re r Equ ipment # ACFT Avg Age Backlog

Entry Cessna CitationJet 11Entry Raytheon Premier I 71Light Cessna Citation II 6Light Raytheon Beechjet 400 75 12Midlight Cessna Citation III 11Midlight Cessna Citation V 6Midlight Raytheon Hawker 450 50Midsize Raytheon Hawker 700 1Midsize Raytheon Hawker 800 39Supermidsize Dassault Falcon 50 7Supermidsize Raytheon Horizon 27Large Bombardier Challenger 601 11Large 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 ta t i on X i n the f lee 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)

Page 45: Santander Conference - Cancun

EmbraerMarket

Forecast

Page 46: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

World (30-120 seat segment): 8 ,610 jets (US$180 bill ion)

4,750

1,700

1,600

1,450

2014 - 2023

8,450

2,950

2,900

2,600

2004 - 2023

3,700TOTAL

1,25091 – 120

1,30061 – 90

1,15030 - 60

2004 - 2013Segment

World Del iver ies by Segment - Jets

Airline Market Forecast 2004-2023

Page 47: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

AsiaPacific

480

6%

AsiaPacific

480

6%

China

635

8%

China

635

8%

USA, Canada& Caribbean

4,740

56%

USA, Canada& Caribbean

4,740

56%

30 - 120 Seats: 8,450 Jets

Europe,

Middle East

& Africa

1,970

23%

Europe,

Middle East

& Africa

1,970

23%LatinAmerica

625

7%

LatinAmerica

625

7%

Airline Market Forecast 2004-2023

Page 48: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Corporate Aircraft Demand 10-year Forecast

400

500

600

700

800

900

1000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

# o

f A

irc

raft

EMBRAER Jul03 TEAL May03Forecast Int'l Jun03 Honeyw ell Jun03Rolls-Royce Jun03 Average TRB Jun03

8,078

6,900

6,535

6,181

6,833

6,525

s o u r c e : T R B J u n 0 3 v i a R R

Supermidsize = 1,250 units

Page 49: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Revenue Forecast per Prod. Category

0

2 . 0 0 0

4 . 0 0 0

6 . 0 0 0

8 . 0 0 0

1 0 . 0 0 0

1 2 . 0 0 0

1 4 . 0 0 0

1 6 . 0 0 0

2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2

US

$ m

illi

on

E N T R Y LIGHT M-L IGHT

M-SIZE SUPER-MIDSIZE L A R G E

U L T R A - L O N G R A N G E G L O B A LA c c u m u l a t e d R e v e n u e C o m p o s i t i o n

( 2 0 0 3 - 2 0 1 2 )

ENTRY

4% LIGHT

6%

M-LIGHT

5%

LARGE

22%

GLOBAL

5%

SUPER-

MIDSIZE

23%

ULTRA-

LONG

RANGE

20%M-SIZE

15%

Corporate Market New Segments

Page 50: Santander Conference - Cancun

Commercial Backlog

Page 51: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

193

156

20

17

Firm

Backlog

6871,371491880Total

5091,130465665ERJ 145

741142094ERJ 140

1041276121ERJ 135

DeliveriesTotalOptionsFirm(as of September 30 t h, 2003)

ERJ 145 Family Orderbook

Page 52: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

260150110EMBRAER 190

553308245Total

453015EMBRAER 195

248128120EMBRAER 170

TotalOptionsFirm(as of September 30 t h, 2003)

EMBRAER 170/190 Family Orderbook

Page 53: Santander Conference - Cancun

Social Responsibility

Page 54: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Number of Employees

A p r i l / 9 7 : m i n i m u m o f 3 , 2 0 0 p e o p l e

12,227

6,0874,319 4,494

6,737

11,048

8,302

3,849

9 4 9 5 9 6 9 7 9 9 0 0 0 1 0 2

10,334

9 8

12,803

BRAZIL 11,976*

USA 482

CHINA 1 32

SINGAPORE 10EUROPE 19 4

AUSTRALIA 09

O c t 0 3

Employees

* E L E B e m p l o y e e s i n c l u d e d

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3 0 %

4 %

1 %

6 5 %

Qualified People

Educational Levels

25% of the employees are engineersCurrent as of 2002

College Undergraduate

s

High SchoolGraduates

Graduates

Masters or PhD

Page 56: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Foccus on Trainnnig

More than US$ 81.5 mill ion invested intraining and development in the last 4 years

21 1824.5

18

1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

In–house courses:

• 18 - month graduate course in Aeronautical Engineering

• 2 - year MBA course focused on international trade

US$ million

Page 57: Santander Conference - Cancun

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Comunity

Social & Comunity foccus on Educat ion

Eng. Juarez Wanderley High School developed for 600students

Implementing several programs including the Action Plan concept in public schools benefit ing more than 34,000 students

Page 58: Santander Conference - Cancun

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Health & Environment

EnvironmentISO 14001 Certificate

(Mar/2002)

Health & SecurityCertification OHSAS 18001

(Mar/2002)

Page 59: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Dow Jones Sustainabilly Index

Recognignit ion of its corporate policy sustainabil ly through:

Creation of Shareholder Value -Medium & Long Term

Social & Environmentresponsabil ity

Corporate Governance

Nominated for the third consecutive yearFor the DOW JONES SUSTAINABILITY WORLD INDEX

Page 60: Santander Conference - Cancun

3rd Quarter Results

US Gaap

Page 61: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Jet Deliveries

Units

23

28

20

41

303030

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

Page 62: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

US$ Million

Net Sales & Gross Margin

7 9 8

4 8 95 6 7

4 3 95 5 7

5 8 15 9 0

3 8 , 1 %3 6 . 5 %

3 9 . 9 % 3 9 . 2 % 3 9 . 3 % 3 9 . 1 %3 9 . 7 %

0

250

500

750

1000

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

30%

40%

Page 63: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Sales per Segment

Third Quarter 2003

Sales per Market

Third Quarter 2003

Revenue Breakdown

Customer

Serviçes

10%

Corporate

12%

Defense

13%

Comercial

65%

Foreing

Market94%

Brazil6%

Page 64: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

US$ Million

SG&A and Others Expenses

Note: SG&A includes Profit Sharing and does not include R&D

8576 76 76

86 79

124

18.1%

15.1%15.5%15.5%

13.0%13.0%15.2%

-

30

60

90

120

150

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

0%

3%

6%

9%

12%

15%

18%

21%

SG&A and Others SG&A , Others (% of Net Sales)

Page 65: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

US$ Million

Research & Development

41

30

4246

36

51

39

8.9%9.1%

7.3%7.2%

5.1%

7.4%

5.8%

-

20

40

60

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

0%

2%

4%

6%

8%

10%

R & D R&D (% o f Net Sa les )

Page 66: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

US$ Million

Income from Operations

142

83 4970119 11197

11.3%12.3%

17.0%17.9%

19.1%20.3%

17.3%

0

200

400

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

10%

15%

20%

25%

Page 67: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Net Income & Margin

44

519

774137

68

4.4%

12.2%

6.2% 7.0%

9.7% 9.0%

0.9%0

5 0

1 0 0

1 5 0

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

0 %

1 5 %

US$ Million

Page 68: Santander Conference - Cancun

Balance Sheet Highlights

Page 69: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Trade Accounts Receivable

US$ Million

707

247

326

736

913

790

981

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

Note: In t h e short -term

Page 70: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Inventories

Note: In t h e short -term

995 992946

865

1111

1013 1005

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

US$ Million

Page 71: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Net Cash (Debt)

US$ Million

39

360

217

104

(212)

43

(178)

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

Page 72: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Bank Debt - US$ 1,059.7 million

September 30, 2003

Loans Breakdown

Debt MaturityCurrency Breakdown

• Considering Currency Swaps• Average R$ debt cost: 18.9% p.a. (83.2% of CDI)• Average US$ debt cost: 4.9% p.a.

• Loan Average Maturity: 2 years and 2 months

Long

Term

49%

Short

Term

51%

US$

34%

R$

66%

Page 73: Santander Conference - Cancun

Investments & Productivity

Page 74: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

US$ million

PP&E and R&D

125.8

44.1

127.7

143.8

114.2

60.1

158.6

99.6

69.6

18.8

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 4 0

1 6 0

1 8 0

1999 2000 2001 2002 Sep. 03

PP&E

R & D

Page 75: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

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 6,05,5

4,9 5,0

3,7 3,5

1996 1997 1998 1999 2000 2001 2002 Sep.

03

Reduced Production Cycle

Page 76: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

91

185

242 247

307

254

227

0

5 0

1 0 0

1 5 0

2 0 0

2 5 0

3 0 0

3 5 0

1996 1997 1998 1999 2000 2001 2002

Revenues per Employee

(US$ thousand)

Brazi l ian GAAP

Page 77: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Investments Forecast

R&D Tota l

- Commercial Aviation

- Corporate Aviation

- Others

Defence

200403 Original

167

126

14

27

53

174

139

16

19

42

Product iv i ty and PP&E 58 64

T O T A L 278 280

US$ million

Defence Investments are funded by the i r contracts and are not inc luded

in the R&D expenses, but in Cost of Sales and Services.

2005

119

72

27

20

54

81

254

03 Actual

140

100

20.

20

48

33

221

(*) Does not include new program & Acquis i t ions

Page 78: Santander Conference - Cancun

Backlog & Delivery Forecast

Page 79: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

In 3Q03 - US$ 27.6billion in total orders, including US$ 10.4 billion in firm orders

Backlog

US$ bi l l ion

10.410.37.99.0

10.711.4

6.44.13.0

1.2

17.216.8

11.3

13.212.712.7

11.3

0

5

1 0

1 5

2 0

2 5

3 0

1996 1997 1998 1999 2000 2001 2002 1 Q 0 3 2 Q 0 3 3 Q 0 3

Options

Firm Orders

1.23.0

4.1

17.7

24.123.4

22.2

19.2

27.1 27.6

Page 80: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Jet Deliveries

Jet Deliveries

432

59

96

160 161131

102

160 170

1996 1997 1998 1999 2000 2001 2002 2003 E 2004 E 2005 E

Page 81: Santander Conference - Cancun

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.

Deliveries Forecast

53% 48%

37%

12% 15%

35%

2004 2005

ERJ 145 Family EMBRAER 170 Family Corporate

53% 48%

37%

12% 15%

35%

2004 2005

ERJ 145 Family EMBRAER 170 Family Corporate

160 expected deliveries for 2004 and 170 for 2005