2004 - Presentation Made In Canada With Canaccord Capital

Canada
Analyst &
Investors
Meeting

March 2004
Canada

Forward Looking Statement

T h i s p r e s e n t a t i o n i n c l u d e s f o r w a r d-l o o k i n g s t a t e m e n t s o r s t a t e m e n t s a b o u t e v e n t s o r
circumstances which have not occurred. W e h a v e b a s e d t h e s e f o r wa r d-l o o k i n g s t a t e m e n t s
largely on our current expectations and projections about future events and financial trends
affecting our business and our future financial performance. T h e s e f o r w a r d-l o o k i n g
statements are subject to risks, uncertainties and assumptions, including, among other
things: g e n e r a l e c o n o m i c , p o l i t i c a l a n d b u s i n e s s c o n d i t i o n s , b o th in Brazil and in our
market.
T h e w o r d s “ b e l i e v e s ,” “ m a y , ” “ will,” “ e s t i m a t e s ,” “ c o n t i n u e s ,” “ a n t i c i p a t e s ,” “i n t e n d s , ”
“ e x p e c t s” a n d s i m i l a r w o r d s a r e i n t e n d e d t o i d e n t i f y f o r w a r d-l o o k i n g s t a t e m e n t s . We
u n d e r t a k e n o o b l i g a t i o n s t o u p d a t e p u b l i c l y o r r e v i s e a n y f o r w a r d-l o o k i n g s t a t e m e n t s
b e c a u s e o f n e w i n f o r m a t i o n , f u t u r e e v e n t s o r o t h e r f a c t o r s . I n li g h t o f t h e s e r i s k s a n d
u n c e r t a i n t i e s , t h e f o r w a r d-l o o k i n g e v e n t s a n d c i r c u m s t a n c e s d i s c u s s e d i n t h i s p r e s e n t a t i o n
might not occur. Our actual results could differ substantially from those anticipated in our
f o r w a r d-l o o k i n g s t a t e m e n t s .

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

Fundamentals

Aeronautical Industry Fundamentals

High Technology

Qualified People

Global Presence
CUSTOMER
SATISFACTION
Cash Intensiveness
Backbone of our
entrepreneurial action
Flexibility


Airline Market
Status, Trends
and Outlook

Market Evolution - U S A

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.


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%

86% 82% 82%
40% 81% 79% 78% 73% 73%

20%

0%

1995 1996 1997 1998 1999 2000 2001 2002

Majors Low Cost Regionals
L o w C o s t : e a s y J e t + Go + Ryanair

2002 Low Cost Data Estimated
Source: AEA, ERA, ATI


An Industry in Transition

• F u n d a m e n t a l C o r r e c t i o n – N ot a Traditional C y c l e

• D e c r e a s i n g A v e r a g e F a re V a l u e s

• Decreasing Capacity (USA)

• Increasing L o w C o s t C a r r i e r Critical M a s s

• Increasing Regional Jet Critical Ma s s

• P r e s s u r e o n E x i s t i n g W o r l d w i d e Airline M o d e l

• Major USA Airlines trying to re-i n v e n t t h e m s e l v e s

• Regional affiliates strongly being used as defensive tools
(point-to-p o i n t X h u b a n d s p o k e )

• Low cost carriers also being inserted in the current “major”
airline model

Responding to Market Needs

37 Seats

44 Seats

50 Seats

50 Seats ( 2 , 0 0 0 n m r a n g e )


Low Cost Networks - U S A

Jan 1995 – 336 Routes

S o u r c e : BACK OAG ( S o u t h w e s t, Jetblue, Airtran and Frontier )

Low Cost Networks - Europe

Jan 1995 – 18 R o u t e s


S o u r c e : BACK OAG ( R y a n a i r, easyjet, Buzz and G O )


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

Regional
Jet Model
Traditional Main
Line Full Service Model
R

Low Cost
A

Model

Capacity
S


Beyond the Current Model...

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

Regional
Jet Model
Traditional Main
R

E - Jet
Model Low Cost
A

Model

Capacity
S


T h e N e e d f o r 7 0- 1 1 0 S e a t J e t s i n t h e U S A

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
S o u r c e: B a c k ( U S D O T T 1 0 0 J a n - S e p 2 0 0 2 ) Passengers per Departure

Market Opportunities - Global

R e p l a c e m e n t o f A g e i n g A ircraft
Fleet in Service ( 61- 120 seat segment - Dec/2002)

500
453
689 aircraft with more than 20 y e a r s
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)

S o u r c e : F l e e t P C ( S c h e d u l e d A i r l i n e s , A c t i v e i n S e r v i c e a n d A l l P a s s e n g e r C o n f i g u r a t i o n)


E- conomics – Aircraft Commonality

Fleet Management Flexibility and Load Factor Optimization

70 – 7 8 S e a t s

78 – 8 6 S e a t s

98 - 1 0 6 S e a t s

108 – 1 1 8 S e a t s


Cross Section

Large Baggage Highest
Mockup
Compartment Volume / Pax


Cross Section Comparison

EMBRAER 170/190

E- conomics – Profitable by Design
USA Environment
*Based on Total Operating Cost
B R E A K-EVEN* PROFIT
500 s m for EMBRAER 170/175

600 s m 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 s m USD 90; 600 s m USD 98

Filling an Untapped Market

Regional
Jet Model
Traditional Main

E - Jet
Model Low Cost
Model

New Embraer
New Embraer
E-Jet family
E-Jet family


Roll Out – EMBRAER 190


EMBRAER 190 RollOut Ceremony

Feb 9t h , 2004


EMBRAER 190 1 s t Flight

March 12th , 2004


Market Forecast 2004-2023

World Deliveries by Segment - Jets

Segment 2004 - 2013 2014 - 2023 2004 - 2023

30 - 6 0 1,150 1,450 2,600

61 – 9 0 1,300 1,600 2,900

91 – 1 2 0 1,250 1,700 2,950

TOTAL 3,700 (*) 4,750 8,450

(*) Open demand à approximately 2,900 a/c

W o r l d ( 3 0- 1 2 0 s e a t s e g m e n t ) : 8 ,4 5 0 j e t s ( U S $ 1 8 0 billion)

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
23%
Latin
Latin A s iia
As a
A m e r iic a &
Amer ca & Pacific
Pacific
C a r iib b e a n
Car bbean
480
480
625
625 6%
7%


ERJ 145 Family Orderbook

(as of December 31s t , 2003) Firm
Firm Options Total Deliveri e s
Backlog

ERJ 135 122 7 129 105 17

ERJ 140 94 20 114 74 20

ERJ 145 675 475 1,150 531 144

Total 891 502 1,393 710 181


EMBRAER 170/190 Family Orderbook

(as of December 31s t , 2003) Firm Options Total

EMBRAER 170 120 125 245

EMBRAER 190 110 150 260

EMBRAER 195 15 30 45

Total 245 305 550


Corporate
Aircraft Market
Status, Trends
and Outlook

Corporate Aviation : a crowded market place

Legacy $21,2M

G 3 0 0 $ 2 5 , 5M

F2000EX $23,8M
G 3 5 0 $ 2 7 , 5M

G 400 $32,5M
G 200 $20,2M

Lear 40 $ 7,7M G 1 5 0 $ 1 3, 5 M Chal300 $17,4M G 4 5 0 $ 3 3 , 0M

SJ30 $5,5M CJ3 $6,0M Lear45 $10,3M G 100 $11,8M F 50EX $20,0M G LOB 5000$33,5M G LOB Exp$44,4M

Premier $5,6M Lear 31 $6.6M L 45XR $10,8M Lear 60 $12,7M F 2000 $22,6M Chal 6 0 4 $ 2 4 , 9 M F 7X $35,8M BBJ1 $52M

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

CJ2 $5,2M Bravo $5,7M ExXLS $10,2M S overeign $13,5M Cit X $19,4M F900EX $34,3M G 550 $45,8M ACJ $47M

ENTRY LIGHT MID LIGHT MID SIZE SUPER MID SIZE LARGE U L O N G R A N G E GLOBAL

Note: Prices - B C & A M a y 0 3
Except for G 350

Legacy Competitive Environment

G 1 5 0 $ 1 3,5 M

G350 $27,5M G300 $25,5M

G 1 0 0 $ 1 1,8 M F 2000 EX $23,8M LEGACY $21,2M

G450 $33,0M G400 $32,5M

L e a r 6 0 $ 1 2,7 M
Chal 300 $17,4M G 200 $20,2M

Chal 604 $24,9M Glob5000 $33,5M
800 XP $13,0M F 2000 $22,6 M F 50 EX $20,0M

Sovereign $ 1 3, 5 M Citation X $19,4M Horizon $18,0 M F900EX $34,3M F900C $30,4M

MID SIZE SUPER M I D- S I Z E LARGE

Note: Prices - B C & A M a y 0 3
Except for G 350


Legacy - A New, Breakthrough Concept

Based on a proven airplane platform, The Legacy
Family provides the ideal balance of comfort,
performance and cost in three versions:
• Executive
• Shuttle
• Shuttle HC


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


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


Market Forecast

E m b r a e r Forecast (10yrs): 6,525 aircraft

Category Deliveries
Super Mid- S i z e 1,250
Large 900
M i d- S i z e 975
Other segments 3,400

GLOBAL GLOBAL ENTRY
ULTRALONG 2% ENTRY 5% 4% LIGHT
R A N G E 9% 15% 6%
ULTRALONG MIDLIGHT
RANGE 5%
20%
L A R G E 12%

LIGHT MIDSIZE
15%
15%

SUPER MIDLIGHT
21% LARGE
MIDSIZE 10% 22%
S U P E R 23%
M I D S I Z E1 6 % MIDSIZE

Deliveries Share Revenue Share

Defense Market Product Line

SUPER TUCANO A M X- T F -5 B R M2000 BR

ERJS/LEGACY EMB 145 AEW&C EMB 145 RS/AGS E M B 1 4 5 M P / A S W ( P- 9 9 )


International leading position for Special
Mission Aircraft


U.S. A r m y

ACS – Aerial Common Sensor
RC-12
Replacement of the R C-12
and R C-7 by a single and
more capable platform

RC-7

EMBRAER is teamed with
Lockheed Martin for the
A C S Program


U.S. Navy

Replacement of the EP-3 Aries II

The U.S. Navy joined
the U.S. Army’s A C S
Program in July 2003

E M B R A E R i s teamed with
Lockheed Martin for the EP- 3
Replacement Program


Backlog
US$ billion

28.1

Options 24.1 23.4
Firm Orders 22.2

17.7 17.5
12.7 12.7
13.2

11.3

4.1 11.4 10.7 10.6
9.0
3.0 6.4
1.2 4.1
3.0
1.2

1996 1997 1998 1999 2000 2001 2002 2003


Jet Deliveries

170
160 161 160

131

96 101

59

32

4

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


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


Global Presence

Operations in Brazil, United States, Europe, Asia and Australia

USA
Nashville China
Palm Beach Gardens
Fort Lauderdale
France Beijing
Le Bourget Harbin

Singapore
Singapore
Brazil
Gaviã o Peixoto
Botucatu
Australia
Melbourne
Sã o José d o s C a m p o s


Roll-o u t C e r e m o n y
First Chinese made ERJ-145

D e c 1 6 th , 2 0 0 3

Employees

12.941
12.227
11.048
10.334

8.302 This Year:
6.737 780
Employees
4.494
3.849

1996 1997 1998 1999 2000 2001 2002 2003

BRAZIL 12.086 AUSTRALIA 09 CHINA 165

USA 482 EUROPE 189 Singapore 10


Foccus on Training

More than US$ 96 million invested in
training and development in the last 5 years
US$ million

21 25
18 18
14

1999 2000 2001 2002 2003

In–house courses:

• 18 - month graduate course in Aeronautical Engineering

• 2 - year MBA course focused on international trade


Health & Environment

Environment
ISO 14001 Certificate
(Mar/2002)

Health & Security
Certification OHSAS 18001
(Mar/2002)


Delivery of jets

160 161

131

101
96

59

32

4

1996 1997 1998 1999 2000 2001 2002 2003


Net Revenues and Gross Margin
US$ million
39.6% 39.4%

32,0% 37.7%
32,0%
28,3%
2,927.0
2,762.2
2,525.8
2,143.5
1,837.3
1,353.5

1998 1999 2000 2001 2002 2003

77% 36% 50% 6% -1 4 % -1 5 %
Annual
Variation


Net Revenue per Segment and Market

REVENUES PER SEGMENT GEOGRAPHIC BREAKDOWN
FY2003 FY 2003

Brazil
5%

Customer
Commercial Services and
Aviation other related
69% business
8%

Executive
Aviation Exports
11%
95%

Defense
Aviation
12%


Income from Operations
US$ million
22.3%
20.0%
18.6%
16.7%
651.4

12.7%
462.1 469.6 12.8%
368.0
274.9

171.7

1998 1999 2000 2001 2002 2003

Annual
250% 114% 26% 41% -2 8 % -4 1 %
Variation


Net Income
US$ million
12.8%
11.6%
11.2%

10.7% 320.7 328.4 8.8%

234.5 222.6
6.3%
145.3 136.0

1998 1999 2000 2001 2002 2003
Annual
Variation 4,618% 61% 37% 2% -3 2 % -3 9 %


Debt

T o t a l D e b t of US$1,043.7 million
Brazilian Currency
24%

Foreign Currency
76%

Considering Currency Swaps:
Average cost in R$ = 16.7% pa (76.5% CDI)
Average cost in US$ = 4.6 % pa


Debt Maturity
In US$ million

Short Term
50%
Long Term
50%

517
101
1044 105
115
206

Total Short Term 2005 2006 2007 2008 on

Loan Average Maturity : 2 years and 2 months


Net Cash (Debt) Position
US$ million

733

222
104 43

-22
(212) (178)
-333
-415

1998 1999 2000 2001 2002 Mar.31, June Sep.31, Dec.31,
2003 31,2003 2003 2003


Short-term Trade Accounts Receivable
US$ million

981
913
790
736

597

356

160
117

1999 2000 2001 2002 Mar.31,2003 June 30, Sep. 30, Dec. 31,
2003 2003 2003


Inventories
US$ million

1127 1173
1038 1021 1029
880
773
616

1999 2000 2001 2002 Mar. 31, June 30, Sep. 30, Dec. 31,
2003 2003 2003 2003


Capex and
Productivity


PP&E & R&D
US$ million

173.2
PP&E 158.5
143.8
R&D
114.2 113.7 111.0

69.6 64.8
60.1

18.8

1999 2000 2001 2002 2003


Planned Investments

US$ million 2004 2005

R&D Total 174 119

- Commercial Aviation 139 72

- Corporate Aviation 16 27

- Others 19 20

Defence 42 54

Productivity and PP&E 64 81

TOTAL 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 are n o t i n c l u d e d
in the R & D e x p e n s e s, b u t in C o s t o f S a l e s a n d S e r v i c e s.


2004 - Presentation Made In Canada With Canaccord Capital

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