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.
4. Highlights
One of the world’s major commercial
aircraft manufacturers
Significant market share
Global customer base
Renamed international partners
Excellent financial performance
Brazil’s largest exporter in 1999, 2000
and 2001
5. Global Presence
Parent Company São José dos Campos
Venezuela
Venezuela
Colombia
Colombia
Peru
Peru
BRAZIL
Bolivia
Bolivia
Pac ific Oc ea n
Pac ific Oc ea n
Pa rag uay
Pa rag uay
Atlantic Oc ean
Atlantic Oc ean
Chile
Chile
Sã o P a ul o
Sã o P a ul o
Argentina
Argentina
Located in São José dos Campos, Brazil
Urugua yy
Urugua
Designs and manufactures aircraft for the commercial,
defense and corporate markets and provides after-sales
support
Floor space: 3.05 million sq.ft
Number of employees in São José dos Campos: 10,464
6. Global Presence
Embraer Eugênio de Melo São José dos Campos
Venezuela
Venezuela
Colombia
Colombia
Peru
Peru
BRAZIL
Bolivia
Bolivia
Pac ific Oc ea n
Pac ific Oc ea n
Pa rag uay
Pa rag uay
Atlantic Oc ean
Atlantic Oc ean
Chile
Chile
Sã o P a ul o
Sã o P a ul o
Argentina
Argentina
Urugua yy
Urugua
Located in Eugênio de Melo, a district of São José dos Campos
This unit has a total area of 3.6 million sq. ft., of which 527.050 sq.ft.
are industrial buildings used in the development and manufacturing of
tooling equipment, piping, as well as for performing welding, milling and
wire looming operations
7. Global Presence
Embraer Gavião Peixoto Gavião Peixoto
Venezuela
Venezuela
Colombia
Colombia
Peru
Peru
BRAZIL
Bolivia
Bolivia
Pac ific Oc ea n
Pac ific Oc ea n
Pa rag uay
Pa rag uay
Atlantic Oc ean
Atlantic Oc ean
Chile
Chile
Sã o P a ul o
Sã o P a ul o
Argentina
Argentina
Located in Gavião Peixoto, Brazil Urugua yy
Urugua
Manufacturing facility that will host the final assembly activities
of the company´s corporate and defense aircraft, as well as a
runway for flight tests
Site area: 4.12 million sq.ft.
Number of employees: 329
Start-up of operations in October 2001
8. Global Presence
Operations in Brazil, USA, Europe, Asia and Austrália
EUA GB
Weybridge
Nashville China
Atlanta
Palm Beach Gardens
França Beijing
Le Bourget Harbin
Fort Lauderdale
Cingapura
Brasil Cingapura
Gavião Peixoto
Botucatu
Austrália
Melbourne
São José dos Campos
9. Number of Employees
12,607
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 Sept 03
April / 97: minimum of 3,200 people
BRAZIL 11,779* AUSTRALIA 09 CHINA 126
USA 484 EUROPE 199 SINGAPORE 10
* ELEB employees included
11. Revenue Diversification
Current Sales Expected Sales Distribution
Distribution In Five Years
FY2002
Commercial
83% Commercial
70%
30%
Defense
5%
Customer
Corporate Services
Aviation 6%
6%
Corporate Customer Defense
Jets Service
19. Airline Market
Trends and
Outlook
Orlando José Ferreira Neto
Director of Market Intelligence
20. Regional Airline Market
Scheduled airline services (aircraft from 19 up to 120 seats):
Fleet in Service
Capacity share % by region
Turboprop 730
Regional Jet 616
Turboprop 1244
Regional Jet 1293
North
North Europe
Europe Turboprop 12
America
America
26% Regional Jet 55
54% China
China
1%
Latin
Latin Africa &
Africa &
America
America Middle East
Middle East Asia/
Asia/
& Caribbean
& Caribbean Pacific
Pacific
9% 4%
Turboprop
Regional Jet
348
168
6%
Turboprop 532
Turboprop 181
Regional Jet 94
Regional Jet 66
Total Fleet Turboprop 3047
6262 Regional Jet 2292
2402
Source: OAG (Jan/2003), Fleet PC (Dec/2002)
21. 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.
23. Airline Market - USA
71%
Domestic ATA Regional RAA
RPM Growth - Yr/Yr % Change
41%
37%
34%
32% 34% 31%
27% 29% 28%
23%
18% 20%
17% 15%
13% 14% 13% 14%
9% 7%
5% 6% 5%
2% 2% 1%0% 3% 2% 2%
-3% -1% -1% -3% -2% -2% -2%
-6% -7% -7% -7%
-10% -7% -11% -8%
-13% -12%
-18%
-21%
-23%
-33%
Apr
Apr
Year 2001
Year 2002
Aug
Aug
Jul
Jul
Oct
Oct
Mar
Mar
Jun/01
Jan/01
May
Nov
Dec/01
jan/02
May
jun/02
Nov
Dec
Feb
Sep
Feb
Sep
Source: Top Regionals, RAA, ATA
24. Airline Market - Europe
Intra European+Domestic AEA Regional ERAA
18%
15%
RPK Growth - Yr/Yr % Change
13% 13% 13%
12%
10% 10% 9%
9% 9% 8% 8% 9%
8% 8% 8%
7% 6% 6% 6%
6%
4% 4% 5%
5%
4%
5%
4% 4% 4% 4% 4%
4%
2%
0,3%
-1%
-3% -2%
-5% -5%
-6%
-7%
-9% -9% -9% -9% -10%
-12% -12%
-13%-13%
Oct
Oct
Jun/01
Nov
Jun/02
Nov
Apr
Apr
Aug
Aug
Jul
Jul
Jan/01
May
Dec/01
Year 2001
Jan/02
May
Dec
Year 2002
Mar
Mar
Feb
Sep
Feb
Sep
Source: ERAA, AEA
25. Industry in Transition after Sep 11th
Rightsizing Capacity vs. Demand: Routes Transferred to RJs
Jet Replacement
Turboprop Replacement
Source: Back OAG (American, Continental, Delta, United, and US Airways)
26. Industry in Transition after Sep 11th
Rightsizing Capacity vs. Demand: Routes Transferred to RJs
Jet Replacement
Turboprop Replacement
Source: Back OAG Air France, Alitalia and British Airways
27. US Domestic Yield Evolution
16
15
Yield (US¢/RPM)
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998 1999 2000 2001 2002 2003
Source:
28. 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 re-inventing themselves
• Regional affiliates strongly being used as defensive tools
(point-to-point X hub and spoke)
• Low cost carriers being inserted in the current airline model
29. 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
30. Regional Jet Networks - USA
Jan 1995 – 76 Routes
Jan 2003 – 1874 Routes
Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)
31. Regional Jet Networks - Europe
Jan 1995 – 104 Routes
Jan 2003 – 1072 Routes
Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)
32. High Frequency Services
From Manchester, UK Airlines: BD
To Edinburgh, UK
Date Jan/2003
Days Depart Arrive Eqp Stop Duration
xSaSu 7:00a MAN 07:55a EDI ER3 0 00:55
xSaSu 8:55a MAN 09:50a EDI ER4 0 00:55
xSaSu 12:15a MAN 01:15p EDI ER4 0 01:00
xSaSu 5:00p MAN 06:00p EDI ER4 0 01:00
xSaSu 7:55p MAN 08:50p EDI ER4 0 00:55
33. Jet Complement
From Düsseldorf, Germany Airlines: AZ
To Milan, Italy
Aircraft type: 50 seats Regional Jets January 2003
Origin Destination Range Eqp Days of Departure Arrival
(km) Operation
DUS MXP 644 MD80 daily 07:00a 08:35a
January 2002
DUS MXP 644 ERJ 145 daily 11:45a 01:20a
DUS MXP 644 ERJ 145 daily 04:10p 05:45p
DUS MXP 644 ERJ 145 daily 08:35p 10:10p
DUS MXP 644 A319 daily 07:00a 08:30a
January 2003
DUS MXP 644 A319 daily 11:45a 01:15p
DUS MXP 644 ERJ 145 daily 05:30p 07:05p
DUS MXP 644 ERJ 145 daily 07:45p 09:20p
34. Jet Replacement (Rightsizing)
From Birmingham, UK Airlines: BA
To Europe
Date Jan/2003
Orig Dest Duration Range Eqp Monthly Frequencies
Jan 02 Aug02 Jan03
BHX FRA 01:40 766 A319 49 47 0
ER4 56 26 76
BHX GLA 01:00 415 A319 127 114 0
ER4 54 58 57
BHX AMS 01:15 443 B737 4 43 0
RJ 95 61 84
BHX DUS 01:20 597 B737 79 74 0
ER4 26 33 29
BHX EDI 01:00 402 A319 149 152 0
ER4 32 0 34
36. Aircraft Commonality
ERJ’s share 95% parts, systems and training commonality within the
aircraft family
• Same engine (AE 3007) hardware
• Same systems and components
• Same ERJ crew type rating
• Common maintenance and training
procedures
• Common ground support equipment
The ERJ 135/140/145 Family Operators have
the necessary infrastructure to support
ERJ 145XR operations
FA 05/May/03
37. Interior – Cross-Section
3 abreast grants passengers their most desirable seat.
CRJ200 ERJ 145
17.3 in 17.3 in
(.44 m)
(.44 m) 73.0in 72.0 in
(1.85 m) 17.0 in
16.1 in (1.82 m)
(.43 m)
(.41 m)
99.5 in
(2.53 m) 83.0 in
(2.10 m)
ERJ 145 advantages:
Exclusive businessman’s dream premium single seats.
One additional inch in aisle width allows easier passenger access.
11% more cabin width per seat provides more shoulder clearance.
38. Field Performance
ERJ 135: Steep Approach Capable
Range from LCY 350 – 600 nm
Typical OEW
Typical Mission Reserves
A1/3 Engine
Pax @ JAR-OPS Rules
ISA
No wind
39. Operating Cost
Major airline industry economic analysts credit to the ERJ 145 the lowest
operational costs in the 50 seats category.
“Overall, the ERJ 145 has
the lowest per trip costs
(of all compared aircraft in
its class) ...”
AIRCRAFT ECONOMICS -
issue 47 - Jan/Feb 2000
As seen from the Aircraft Economics final comparison chart
the ERJ 145 has 8.8% lower DOC per trip than the CRJ200.
40. Operating Cost
Major airline industry economic analysts credit to the ERJ 145 the lowest
operational costs in the 50 seats category.
The ERJ 145 offers aircraft-
mile costs between 9% and
11% better than the CRJ.
AIRCRAFT COMMERCE
issue 6 - Jul/Aug 1999
The Aircraft Commerce magazine article confirms the operating costs
advantage of the ERJ 145 to be around 10% better than the CRJ200.
41. Operating Cost
Major airline industry economic analysts credit to the ERJ 145 the lowest
operational costs in the 50 seats category.
The ERJ 145 offers 7%
better aircraft-mile costs
than the CRJ200.
AIRCRAFT ECONOMICS
issue 61 - Jan/Feb 2002
Aircraft Economics magazine article credits again operating
costs advantage to the ERJ 145 over the CRJ200.
43. Introducing the ERJ 145 XR Version
ERJ 145 XR
2,000 nm Range
First Delivery
24th October 2002
Embraer’s answer to the market
request for longer range missions
FA 05/May/03
44. RJ Network – USA (Oct/2003)
< 2 Hours
2 to 3 Hours
> 3 Hours
Regional Jets Growth
Routes Jan - Oct 2003
< 2 Hours 9%
2 - 3 Hours 78%
> 3 Hours 68%
Total 23%
Source: Back OAG (ERJ 145/140/135, CRJ-100/200, 328Jet routes)
45. ERJ 145 XR Design Features
Reinforced fuselage structure
to allow higher design weights
AE3007A1E engine
Winglet
Supplementary fuel tank inside
wing to fuselage fairings
• increased range • lower fuel consumption
• better field performance • superior single engine ceiling
• improved hot & high operation • VMO, MMO and VFE increases
47. Range Capability from Denver
ERJ 145 Family offers
outstanding
performance from Hot &
High airports
1340 nm
ERJ 145 XR
Airp. temp. @ 28ºC
(85% summer reliability)
Airp. temp. @ 36ºC
(99% summer reliability)
FAR Reserves
Taxi allowance
.
14 minutes
Air Maneuvers
3 minutes
Long Range Cruise
Pax Weight & Baggage
90.7 kg (200 lb)
85% Annual Winds
BOW with thrust reverser
48. Design Weights
ERJ 145 LR is almost 6% better than CRJ200 in Structural Design Efficiency.
ERJ 145XR is 19% better than CRJ200 in SDE, leading therefore to lower
operating costs.
ERJ 145 XR ERJ 145 LR CRJ200 LR
Maximum Take Off Weight 24,100 kg 22,000 kg 24,041 kg
Maximum Landing Weight 20,000 kg 19,300 kg 21,319 kg
Maximum Zero Fuel Weight 18,500 kg 17,900 kg 19,958 kg
Basic Operating Weight 12,838 kg ¹ 12,361 kg ¹ 13,834 kg
Maximum Fuel Load 6,032 kg 5,187 kg 6,489 kg
Maximum Payload 5,662 kg 5,539 kg 6,124 kg
Maximum Useful Load 11,262 kg 9,639 kg 10,207 kg
Structural Design Efficiency ² 0.88 0.78 0.74
Standard Single Class Seating 50 50 6% better 50
¹ Includes reinforced cockpit door and all typical options such as
thrust reversers, navigation equipment, etc.
†
19% better
² Structural Design Efficiency = Max Useful Load / Basic
Operating Weight
49. Performance - Mission
Block Times and Block Fuels are about the same for all models.
400 nm sector ERJ 145 XR ERJ 145 LR CRJ200 LR
50 pax 50 pax 50 pax
Engines AE3007 A1E AE3007 A1 CF34-3B1
Block Time 80 min 80 min 80 min
ISA enroute, max pax @ 90.7 kg
14 min taxi, FAR reserves, 100 nm alternate
Block Fuel 1,309 kg 1,304 kg 1,315 kg
ISAenroute, max pax @ 90.7 kg
14 min taxi, FAR reserves, 100 nm alternate
Take Off Field Length 1,460 m 1,435 m 1,455 m
ISA, SL, max pax @ 90.7 kg
FAR reserves, 100 nm alternate
Landing Field Length 1,315 m 1,315 m 1,415 m
ISA, SL, max pax @ 90.7 kg
FAR reserves, 100 nm alternate
50. COC per Trip
ERJ 145 XR offers further advantages at no additional operating
cost with regard to LR version.
800
742
699 710
43
700 40
39
600
281 310
271
COC/Trip (US$)
500
400
300 155 155 155
200
234 234 234
100
0
ERJ 145 LR ERJ 145 XR CRJ200 LR
Economic Assumptions (USA)
Utilization 2,500 FH/year 50 seats 50 seats 50 seats
Fuel price 0.75 USD/USGal
Fuel density 6.7 lb/USGal CREW FUEL MAINTENANCE FEES
Crew Function of Block Time
Landing fees Function of MLW
Maintenance Period 5 years 500 sm sector
Maint, Labor 25.00 USD/MH
51. ERJ 145 XR Compared to CRJ 200 LR - SUMMARY
List Prices (K US$ - e.c. Dec 2002)
• ERJ 145 XR : 21,300
• CRJ 200 LR : 23,200
ERJ 145 XR
Performance
• Higher range @ 50 pax Range* CRJ200 LR
2,000 nm
• Better Hot & High performance
Range* * @ MTOW, LRC, 50 pax @ 90.7 kg.
Design 1,750 nm
• Lower Basic Operating Weight
• Better SDE (Structural Design Efficiency)
• More integrated systems
Operational Characteristics
• Lower approach speeds
• Better short field performance
Economics
• Better Operating Costs
52. ERJ 145 Family Positioning
US Domestic Passenger Demand
200
Passengers per Day Each Way
150
ERJ145ER ERJ145LR
100 ERJ145 XR
50
ERJ135 ER ERJ135 LR
0
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
Stage Length – Miles
Source: US DoT O&D data, 2Q, 2002, Embraer
56. The Need for 70-110 Seat Jets
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
57. Market Opportunities - Global
Rightsizing and Frequency Increase
Average Daily Frequency by City-pair
Routes operated by Jet Aircraft from 91 – 175 seats up to 2000 nm
5150 city pairs with less than
2 average daily frequency
33%
27%
20%
City Pairs
12%
7%
0 - 0,5 0,5 - <2 2-<5 5 - <10 >=10
Source: OAG (Jan/2003)
Average Daily Frequency
58. 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)
60. E-ngineering – 21 st Century Aircraft
Applying Technology . . .
…to create value to Customer
• Virtual reality tools • Reduced time to market
• On-board CMC • Reduced pilot workload
• Fly-by-wire • High strutural design efficiency
• Full redundant FADEC • Minimum down time (TAT, checks)
• Fully digital “quiet&dark” cockpit • Easy maintenance diagnosis
• Top systems/avionics integration • Low maintenance cost
• World-class parterships • Reduced fuel consumption
• Cross crew qualification (CCQ)
• Smart use of composite materials.
• Easy aircraft handling
• Optimized mission performance
• High schedule realiabilty.
61. E-rgonomics – Cabin Spaciousness
Two’s Company – Three’s a Crowd
Everyone gets a window or aisle seat.
62. Everything you expect…
… in a First Class cabin
• Single seat
• Seat comfort
• Catering
• Stowage
• Partition
• Exclusive lavatory
• Exclusive environment
63. Everything you DON’T expect…
… 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
64. 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
EC 05/May/03
65. 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)
66. E-fficiency – Field Performance
EMBRAER 170: The best field performer
Range from LCY 600 nm
Typical European OEW
Typical Mission Reserves
E5A1 Engine
Pax @ 90.7 kg (200 lb)
ISA
No wind
69. Market Forecast 2004-2023
30 - 120 Seats: 8,450 Jets
USA, Canada
USA, Canada
& Caribbean
& Caribbean Europe,
Europe, China
China
4,740
4,740 Middle East
Middle East 635
635
56% & Africa
& Africa 8%
1,970
1,970
Latin
Latin 23%
America Asia
Asia
America Pacific
Pacific
625
625 480
480
7% 6%
70. Market Forecast (Jets)
World (Total Deliveries)
External Sources
2004-2013 2014-2023 2004-2023
Sources 30-60 61-90 91-120 Total 30-60 61-90 91-120 Total Total
Airclaims 1794 1135 914 3843 1071 2428 1886 5385 9228
Bombardier 1677 1555 3232 2183 3152 5335 8567
Rolls-Royce 1394 1113 589 3096 1510 1799 932 4241 7337
Snecma 1786 805 899 3490 1867 904 1075 3846 7336
GE 1194 797 950 2941 1250 898 1134 3282 6223
Boeing 1337 562 1300 3199 1399 659 1554 3612 6811
Average 1530 995 930 3455 1547 1640 1316 4503 7958
Embraer 1150 1300 1250 3700 1450 1600 1700 4750 8450
Embraer forecast is more conservative when
compared to other forecast sources
71. Embraer Market Forecast 2004-2023
30 - 60 Seats: 2,600 Jets
USA, Canada
USA, Canada
& Caribbean
& Caribbean Europe,
Europe, China
China
1,870 (840 + 1030)
1,870 (840 + 1030) Middle East
Middle East 200
200
71% & Africa
& Africa 8%
355
355
Latin
Latin 14%
America Asia
Asia
America Pacific
Pacific
95
95 80
80
4% 3%
72. ERJ 145 XR Potential Market in 10 years
North America North America North America
30-60 Segment New Deliveries New Deliveries
Current Market Share Total 30-60 Segment
ERJ 145 XR Market Potential
5%
25% - 30% of total
840 to 1100 Aircraft ERJ 145 Family Deliveries
45%
380 to 500 100 to 150 Aircraft
50% ERJ 145 Family
210 to 300 Aircraft in 20 years
Embraer Bombardier Others