2005* ConferêNcia Santander Janeiro 2005 (DisponíVel Somente Em InglêS)

SantanderConference

January 2005Cancun

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


High Technology

Qualified People

Global Presence

Flexibility

Cash Intensiveness

Fundamentals

Aeronautical Industry Fundamentals

CUSTOMER SATISFACTION

Backbone of our entrepreneurial action


Qualified People

More than US$ 85 million invested intraining and development in the last 5 years

In–house courses:

• 18 month graduate course in Aeronautical Engineering

US$ million

11

21

18

6.2

13.5

24.5

1999 2000 2001 2002 2003 1H04


Number of Employees

BRAZIL 13,799*

USA 465 CHINA 179*

SINGAPORE 19EUROPE 186

Qualified People

April / 97: 3,200 employees

12,227

6,087 4,319 4,4946,737

11,048

8,302

3,849

1994 1995 1996 1997 1999 2000 2001 2002

10,334

1998

12,941

2003 Nov 04

14,648

* ELEB and China Joint Venture employees included


Global Presence

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

BrazilGavião Peixoto

BotucatuSão José dos Campos

USANashville

JacksonvilleFort Lauderdale

FranceLe Bourget

ChinaBeijingHarbin

AustraliaMelbourne

SingaporeSingapore


Commercial Aircraft Deliveriesas required by market demand

Flexibility

4

32

59

96

160 161

131

101

148 145 145

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E 2006E


Business Diversification

Sales by Segment

2004E

Corporate; 4%

Defense; 12%

Customer Services & Others; 6%

Commercial;78%

2005E

Corporate; 6%

Defense; 17%

Customer Services & Others; 7%

Commercial ; 70%


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


AMX-TAEW&C/ RS/ MP

AL X(EMB 314)

Mirage 2000 BR ?

AMX

ERJ 145 XR


Customer Diversification

Civil & Defense Aircraft flying in 58 countries on 5 continents

EMBRAER 170/175/190/195

ERJ 135/140/145


90’s - 4 Risk Sharing Partners

350 Suppliers

ROLLS ROYCEHONEYWELLTRW – LUCASGOODRICHLIEBHERRHAMILTON SUNDSTRAND

SONACA Bélgica• Central Fuselage I• Tail Cone I• Pilon

ENAER Chile• Vertical Fin,• Estabilizador Horiz• Elevator

C & D USA• Interior- Passengers Cabine- Bagage Claim

GAMESA Spain• MLG Portas• Wings, Naceles

- Sonaca - Leading Edges- INS - Naceles

PARKERTHALESSIERRACINEATON

SystemsSystems PartnersPartners

Partners – ERJ 145 Family


GAMESAEmpennages &Rear Fuselage

EMBRAER( LEADER)KAWASAKI / SONACAWing, Stub, Control Surfaces& Pylon

EMBRAERForwardFuselage

Wing to Fuselage FairingEMBR0AER / AKROS GE

Engine/ Nacelles

HAMILTONSUNDSTRAND

Tail Cone &APU

LATECOERECenterFuselage III

LATECOERECenter Fuselage

EMBRAER / AKROSCenter Fuselage II

Electrical System

Systems partners:

HAMILTON SUNDSTRAND

Air Management

PARKER HydraulicsFlight ControlsFuel System

C & D Interiors

LIEBHERR Landing Gear

HONEYWELL Avionics

00’s - 16 Risk Sharing Partners

22 Suppliers

Partners – EMBRAER 170/190 Family

Airline Market Status, Trends

and Outlook


Share of US Domestic RPM

8 5 %7 8 %

6 9 %

5 2 %

3 % 5 % 8 %1 9 %1 2 %

1 7 %2 2 %

2 9 %

0 %

2 0 %

4 0 %

6 0 %

8 0 %

1 0 0 %

1 9 9 5 2 0 0 0 2 0 0 3 2 0 1 4 F

M a j o r s L o w C o s t s R e g i o n a l s

...

Source: WATS, Embraer

US Airline Industry Evolution


U.S Passenger Yields Down Sharply from 2000

• Airlines were forced to drop fares in order to stimulate demand.

• In addition, the more recent growth in low cost carriers and real-time availability of fare information on the Internet has led to a dramatic shift in customer purchasing habits – passenger expect fair fares.

US Domestic Yields: Down Forever?


Financial losses decreasing due to the pursue of cost reductions and efficiency gains

- 1 0 0 0 0

- 8 0 0 0

- 6 0 0 0

- 4 0 0 0

- 2 0 0 0

0

2 0 0 0

4 0 0 0

6 0 0 0

2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 1 H 2 0 0 4

N e t w o r k R e g i o n a l L o w C o s t(US$ millions)

Source: Form41

US Airline Industry Operating Results


US: Majors and Regionals Performance

2Q20042Q2003

• Regional airlines still considered as a very useful defensive tool by Majors due to lower trip costs and ability to maintain market presence while reducing capacity.

• Regional airlines with profitable operation and increasing their market share.

Source : BTS (2nd Qtr 2004)

Domestic Operating Margin (%)

- 3 0 %

- 2 0 %

- 1 0 %

0 %

1 0 %

2 0 %

A m e r i c a n C o n t i n e n t a l D e l t a N o r t h w e s t U n i t e d U S A i r w a y s

MAJOR

- 1 5 %- 1 0 %

- 5 %0 %5 %

1 0 %1 5 %2 0 %

A C A E x p r e s s J e t A m e r i c a n E a g l e C o m a i r S k y w e s t

REGIONAL


0

2 0 0

4 0 0

6 0 0

8 0 0

1 . 0 0 0

1 . 2 0 0

1 . 4 0 0

1 . 6 0 0

2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 E 2 0 0 5 F 2 0 1 4 F

M a j o r s L o w C o s t s R e g i o n a l s

US Domestic RPM (Billion)

...

Source: WATS, Embraer

US Traffic Recovering Slowly


• 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


37 Seats

44 Seats

50 Seats

50 Seats (2,000 nm range)

Responding to Market Needs


There are currently 5244 TPs in Active Service Worldwide

TP<201304%

TP3588028%

TP5072323%

TP7038212%

TP20104533%

TP<2026713%

TP20154475%

TP35754%

TP501427%

TP70161%

Scheduled Flights(3160 TPs)

Non-Scheduled Flights(2084 TPs)

Opportunities for Turbo-Prop Substitution


- Typical European airline OEW

- Full PAXPassengers at 90.7 kg (200 lb)

- Cruise at LRC

- Airport Temp. at 20.5ºC / ISA+5.5ºC (85% Summer)

- 85% Summer Winds

- JAR OPS Reserves100 nm alternate

ERJ 135

ERJ 135: Steep Approach Capable (London City Airport)

Still Air Range: 600 nm

Opportunities for New Route Development


ERJ 145 Family Worldwide Fleet SR and CR

SR=98.95% (15 min. delay)

CR=99.73% (completion)

Schedule Reliability & Completion Rate12 Months Moving Average

REF.SEP/2004


70 – 78 Seats

78 – 86 Seats

98 - 106 Seats

108 – 118 Seats

Engineering Ergonomics Economics Efficiency

The E- Jets Family


? Common pilot type rating

? High level of commonality of system components

? 100% cockpit commonality

? 100% of flying qualities commonality due to the Fly-by-Wire system

EMBRAER 170

EMBRAER 175

95%

EMBRAER 190

EMBRAER 195

95%

85%

Family Commonality


EMBRAER 195

EMBRAER 190

EMBRAER 175

EMBRAER 170

2001 2002 2003 20042000 2005

2Q/06

3Q/05

4Q/04

Fev/04

20061999

Simultaneous Development

Type Certification


*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 Cost

500 sm for EMBRAER 170/175

600 sm for EMBRAER 190/195

Profitable by Design


DMC Comparison

Cost-effective use of new technologies results in very competitive direct maintenance costs (DMCs)

GO 14/Nov/02

Maintenance Cost Comparison

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

E170 E175 E190 E195 CRJ700 CRJ900 B717 B737-600 A318

DM

C/F

H (%

)


MA 15/Mar/04

Maintenance Checks IntervalThe EMBRAER 170/190 family has the longest maintenance checks intervals in the

industry.

Note: Values in FH estimated according to the downtime periods for each aircraft further maintenance plan documentAssumptions: 2,500 FH/year; 1.33 FH/FC; 0.5 AH/FH (APU)


E 170 (31")

E 175 (31")

CRJ 700 (31")

CRJ 900 (31")

-10%

-5%

0%

5%

10%

15%

-10% -5% 0% 5% 10% 15%

COC per trip

CO

C p

er A

SM

USA Environment

Cash Operating Cost Comparison (COC)

• The EMBRAER 170 offers equivalentcash operating costs per trip and an11% advantage in cash operatingcosts per seat-mile over the CRJ 700 – while flying 11% more passengersfarther and in more comfort !

• The EMBRAER 175 offers a 6% advantage in cash operating costs per trip and per seat-mile versus the CRJ 900 – flying the same number of passengers in much greater comfortand operating in more challengingairports.

* Cash Operating Cost: Crew, fuel, directmaintenance, landing fees, aiplane handling fees

500 sm tripIn summary, in a Regional Carrieroperating / economic environment:

EC 07/Jun/04

COC* per trip versus COC per seat-mile


E 195 (32")

E 190 (32") A318 (32")B717 (32")

B737-600 (32")

-10%

-5%

0%

5%

10%

15%

-10% -5% 0% 5% 10% 15%

COC per trip

CO

C p

er A

SM

USA Environment

Cash Operating Cost Comparison (COC)

• The EMBRAER 195 offers cashoperating costs per trip lower than itscompetitors – 8% when compared to the B717 and up to 12% when compared to the A318. These big advantages are further enhanced by a cost per seat-mile 2% to 5% below the competitor airplanes.

• The EMBRAER 190 offers cashoperating costs per trip 12% lowerthan the nearest competitor airplane(B717). At the same time, the 190 can offer equivalent seat-mile costs.

600 sm trip

* Cash Operating Cost: Crew, fuel, directmaintenance, landing fees, aiplane handling fees

In summary, in a Low Cost Carrieroperating / economic environment:

EC 07/Jun/04

COC* per trip versus COC per seat-mile


4 8 13 13 8 7 5 2 220150

5

10

15

20

25

50 60 70 80 90 100 110 120 130 140 >150

%35% of flights

depart with loads appropriate for

90-110 seat aircraft

25% of flights depart with loads

appropriate for 70-80 seat

aircraft

Excess capacity translates into wasted

seats, higher operating costs, andgreater potential for

unprofitability

Source: Back (US DOT T100)

USA - Opportunities for Right Sizing


COPY

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.Source: BACK -Fleet PC (Scheduled Airlines , Active in Service and All Passenger Configuration)

Replacement of Ageing AircraftWorld Fleet in Service (100+seat segment - Dec/2003)

387

524

380

262

199241

315

0

100

200

300

400

500

600

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

Aircraft Age (Years)

Nu

mb

er o

f A

ircr

aft

848 aircraft with more than 20 years (37% of total fleet in service)

Need for Replacing Old Jets – Global


58%

27%

10%4%

1%

0 - 0,5 0,5 - <2 2 - < 5 5 - <10 >=10

Average Daily Frequency

City

Pai

rs

Rightsizing and Frequency IncreaseAverage Daily Frequency by City-pair (World)

Source: OAG (Feb/2004) Routes operated by Jet Aircraft from 91 to 180 seats up to 2000 nm

9392 city pairs with less than 2 average daily

frequencies

Opportunities for Enhancing Market Presence


Seat Capacity

25 50 75 100 125 150 175+

B75

7

B73

7

B73

7

B73

7

B75

7

A31

9

A32

0

B75

7

A32

0

MD

80B

737

A32

0

B73

7A

319

MD

80

B75

7

B73

7

A32

0

A31

9

B75

7

B73

7

B75

7

B73

7

MD

80

B73

7

70 to110 Seats

70 to110 Seats

Seat Capacity Gap - USA

Sco

pe

Cla

use

s

THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.Source: Back Fleet PC, Feb 2004, only jets

25 50 75 100 125 150 175+

Seating Capacity

49 – 2574949 –– 257257

103 – 261101033 –– 261261

48 – 7048 48 –– 7070 110 – 291111010 –– 291291

50 – 705050 –– 7070 92 – 3909292 –– 390390

37 – 793737 –– 7979 96 – 5689696 –– 568568

808080 103 – 426101033 –– 426426

95 – 4019595 –– 40140149 – 784949 –– 7878

70 to110 Seats

70 to110 Seats

No Artificial Constraints in Europe


RA

SK

Capacity

Traditional MainLine Full Service Model

Regional Regional JetJet ModelModel

Low CostModel

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

LCC Next Steps...


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

E - JetModel

Regional Jet Model

Traditional MainLine Full Service ModelR

AS

K

Capacity

Low CostModel

Beyond the Current Model...

Competitive

Environment


30Y30Y 50Y50Y 70Y70Y 90Y90Y 110Y110Y 130Y130Y

Scope

PotentialNew Entrants

Embraer Commercial Jets Unique Position


ERJ 135ERJ 135

ERJ 140ERJ 140

ERJ 145 and 145XRERJ 145 and 145XR

CRJ200 / 440CRJ200 / 440

328JET328JET

?

30-60 Seat Jet Competitors


45%42% 44%45%46%

50%

7%

17%

32%43%

52%

93%

83%

67%

51%54%51%

45%

49% 50%

4% 5%4%6%5%

0%

20%

40%

60%

80%

100%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

EMBRAER BOMBARDIER AVCRAFTSource:

Embraer

Market Share Evolution (30-60 pax)

50%

45%

PossibleACA cancelation

of 34 CRJ200


ARJ21ARJ21

CRJ900CRJ900



CRJ700CRJ700

RRJRRJ?

61-90 Seat Segment Competitors

?


21%

28%33% 36%

16% 19%

72%

53%

49%52%

87%

64%67%

14%

32% 30%27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

EMBRAER BOMBARDIER FAIRCHILD DORNIERSource:

Embraer



B717B717



B737-600B737-600

A318A318ARJ21ARJ21

RRJRRJ

??

91-120 Seat Segment Competitors


0% 0% 0% 0%

7%7%6%

25%

7%

73%66%

61%

67%

100%

59%55%

26%32%

26%

20%16%

31%

14%

0%

20%

40%

60%

80%

100%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

EMBRAER BOEING AIRBUSAs of 2nd

Quarter 2004Source:

Embraer


Airline Market

Forecast


Worldwide Jet Deliveries by Capacity Segment

30 to 12030 to 120--seat segment value = US$ seat segment value = US$ 170170 billionbillion

Embraer Market Forecast 2005-2024

4,600

1,750

1,550

1,300

2015 - 2024

7,800

3,000

2,850

1,950

2005- 2024

3,200TOTAL

1,25091 – 120

1,30061 – 90

65030 - 60

2005 - 2014Segment

4,600

1,750

1,550

1,300

2015 - 2024

7,800

3,000

2,850

1,950

2005- 2024

3,200TOTAL

1,25091 – 120

1,30061 – 90

65030 - 60

2005 - 2014Segment


AsiaPacific

471

6%

China6358%

Africa &Middle East

177

3%

USA, Canada& Caribbean

4,165

53%

30 - 120 Seats: 7,800 Jets

Europe1,319

17%

LatinAmerica

538

7%

CIS4956%

Market Forecast 2005-2024


30 - 60 Seats: 1,950 Jets


1,320

68%

Europe124

6%China

190

10%Latin

America85

4%Africa &

Middle East37

3%

AsiaPacific

704%

CIS1246%



61- 90 Seats: 2,850 Jets


1,315

46%

Europe600

22%China

245

9%Latin

America175

6%

Africa &Middle East

92

2%

AsiaPacific

2158%

CIS2087%



91-120 Seats: 3,000 Jets


1,530

51%

Europe592

20%China

200

7%Latin

America278

9%

Africa &Middle East

49

2%

AsiaPacific

1866%

CIS1655%


EMBRAER 170

Entry Into Service


EMBRAER 170 EIS Statistics

Operators 4

Aircraft in Service 37

Flight hours 29,165

Flight Cycles 21,567

Operating Summary – from March 5th to October 24th

PR13/Oct/04

LOTLOT AlitaliaAlitaliaUSAirwaysUSAirways UnitedUnited


SR = 97.7

CR = 99.5

90

91

92

93

94

95

96

97

98

99

100

M J J A S O

Schedule ReliabilityCompletion Rate

EMBRAER 170 EIS Statistics

Last 6 Months Schedule Reliability and Completion Rate

Commercial Backlog


103

66

20

17

FirmBacklog

7981237336901Total

618998314684ERJ 145

741142094ERJ 140

1061252123ERJ 135

DeliveriesTotalOptionsFirm(as of 4th Quarter, 2004)

ERJ 145 Family Orderbook


EMBRAER 170 / 190 Family Orderbook

15---15EMBRAER 175

297

15

155

112

FirmBacklog

46755427343Total

-352015EMBRAER 195

-385230155EMBRAER 190

46335177158EMBRAER 170

DeliveriesTotalOptionsFirm(as of 4th Quarter, 2004)

Corporate Aircraft Market Status, Trends

and Outlook


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

Legacy - A New, Breakthrough Concept


Legacy Family – Executive


Legacy Family – Shuttle


Super-midsize 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)


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)


40 aircraft, 11 countries, the right choice

The world has discovered the Legacy


Changing the expectations for a Business Jet

99% dispatchreliability

Over 120 hours per month in fractional operations

Exceptional passenger acceptance

Image building up in the market

Reliability


Higher Productivity @ Lower cost leading to Greater value

Price vs. Productivity Index

Challenger 300

HorizonG200

Legacy

Falcon 2000

200

220

240

260

280

300

320

340

360

15.00020.00025.00030.00035.000

Price US$ x 1,000

Pro

du

ctiv

ity

Ind

ex [

(Sp

eed

x C

abin

Vo

lum

e x

Ran

ge)

/TO

FL

] x

1,00

0

BETTER

A Differentiated Value for Customers


Promises made ... results delivered

2000

Announcement

2001

Maiden Flight

2002

Certification

CTA FAA JAA CIS

EnhancementsNew Interior

2003

Range(weight reduction)

(aerodynamics improvement)

2004

MaintenancePlan

Program Landmarks

Corporate Aircraft Market

Forecast(2005-2014)


2,430 aircraft in target segment

Embraer Market Forecast

5,130

945

1,485

Deliveries(aircraft)

Embraer Forecast (Embraer Forecast (20052005--20142014): ): 77,5,56060 aircraft aircraft -- US$ 130 billionUS$ 130 billion

71.3Other

28.5Large

30.0Super Midsize

Revenues(US$ bi)

Category

Revenues (cumulative)Deliveries (cumulative)

Very Light6%

Entry13%

Light11%

Mid light14%

Mid Size13%

Large13%

Ultra Long range9%

Global2%

Super midsize18%

Entry4%

Light4%

Mid Size10%

Large22%

Very Light1%

Global6%

Mid light8%

Ultra Long range22%

Super midsize

18%

Defense Market


Super Tucano

AMX/AMX-T

F-5 BR

Mirage 2000 BR

Super Tucano

AMX-T

Training Systems

EMB 145 AEW&C

EMB 145 MP/ASW

EMB 145 RS/AGS

EMB 135/145

Legacy

EMB 120K

Integrated Ground Command and Control

Integrated Systems

Data-Link

Defense Market Products

CombatTrainingIntelligence,

Surveillance andReconnaissance

TransportSystems & Services

Integrated Market Approach


Super Tucano

High-performance evolution of the proven EMB 312 Tucano

State-of-the-art systems and advanced avionics

Optimized for advanced training and operational applications in hostile environments

Can operate from unprepared runways, during day or night


AMX-T

Advanced and fighter lead-in training aircraftDeveloped by Embraer for modern Training / Combat

requirementsBaseline avionics architecture commonality with the Super

Tucano


Special Mission Aircraft

SEASEA

AIRAIR

GROUNDGROUNDISRIntelligenceSurveillance

Reconnaissance


EMB 145 AEW&C

The AEW&C (Airborne Early Warning & Control) is equipped with a state-of-the-art Air Surveillance Radar, Command, Control & Communication System and Data-Link

A perfect blend of Embraer’s proven, reliable and economic ERJ 145 platform


EMB 145 RS/AGS

An advanced asset capable of providing real-time imagery and electronic intelligence over ground objectives

It features an advanced Synthetic Aperture Radar (SAR), for day or night and all-weather imagery of the ground over large areas, plus other sophisticated sensors


P-99

New generation aircraft for missions ranging from Maritime Patrol to complex and demanding Anti-Surface and Anti-Submarineoperations

Features a maritime and ground surveillance radar, plus other sophisticated sensors like FLIR and Data-Link


ACS – Aerial Common Sensor

Embraer, part of the Lockheed Martin team, will provide its ERJ 145 platform for the U.S. Army’s next-generation battlefield surveillance system

Backlog & Delivery Forecast


0,6 1,23 4,1

6,4

11,4 10,7 9 10,6 10,1

11,3

12,7 12,713,2

17,5 17,5

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

In 4th Quarter 2004 - US$ 27.6 billion in total orders, including US$ 10.1 billion in firm orders

Backlog

US$ billion

Firm Orders Options

1.23.0

4.1

17.7

24.1 23.422.2

28.1 27.6

0.6


Deliveries Forecast

4

32

59

96

160 161

131

101

148 145 145

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E 2006E


Deliveries Forecast Breakdown

Corporate Aircraft includes corporate authority transportation

60%

36%

15%

31%

50%73%

9% 14% 12%

2004 2005 2006

ERJ 145 Family EMBRAER 170 Family Corporate Aircraft

Financial Data


Controlling Shareholders

60%European Group20%

Brazilian Govt0.8%

Bovespa19.2%

Embraer Voting Capital

0.8%Brazilian Govt.

19.2%Bovespa

20% European GroupDassault Aviation 5.67%Thales 5.67%EADS 5.67%Snecma 3%

60% Controlling ShareholdersPREVI (Pension Fund) 20% SISTEL (Pension Fund) 20% Bozano Group 20%

Ordinary Shares: 242.544.448 33.77%

As of November 30th, 2004


Embraer Preferred Shares

Preferred Shares 475.620.289 66.23%

As of November 30th, 2004

NYSE56%

Bovespa34.4%

BNDES9.6%


Dividends

228

404

327

195

42149.8%

36.1%

27.2%

36.1%43.3%

0

100

200

300

400

500

2000 2001 2002 2003 9M040%

10%

20%

30%

40%

50%

60%

Dividends Pay Out Ratio

R$ million


764

1,837

1,354

2,486

2,144

2,526

2,9272,762

1997 1998 1999 2000 2001 2002 2003 9M04

US$ million

Net Revenue

Q 98% of sales are exports (9M04)

Sales by Segment - 9M04

7%Customer Services &

Others

4%Corporate

Market

11%Defense Market

78%Airline Market


Income from Operations

US$ million

49

172

368

462

651

470

275

402

1997 1998 1999 2000 2001 2002 2003 9M04


US$ million

Net Income

3

145

235

321 328

223

136

297

1997 1998 1999 2000 2001 2002 2003 9M04


Inventories

US$ Million

1,158 1,258 1,2311,390

1,111

3Q03 4Q04 1Q04 2Q04 3Q04


Accounts Receivables

US$ Million

981

356 465 472703

3Q03 4Q03 1Q04 2Q04 3Q04


Accounts Receivables

US$ Million

Others = Defense + Customer Services

886

190 271 315 514

95

166 194 157 189

3Q03 4Q03 1Q04 2Q04 3Q04

Commercial Airline Market Others


Bank Debt - US$ 1,169.2 million

September 30, 2004

Loans Breakdown

Debt MaturityCurrency Breakdown

Considering Swap effects; from US$ and Yen to R$Cost of Local Currency = 12.4Cost of Foreing Currency = US$ variation + 3.9% p/a

• Loan Average Maturity: 2 years and 11 months

Local Currency

7%

Foreign Currency

93%

Short Term37%

Long Term63%


1,169

454

41119

274

281

Total Short Term 2005 2006 2007 2008 - 2015

Short Term37%

Long Term63%

Short and Long-Term Loans


Net Cash (Debt)

US$ Million

(178)

222 178304

220

3Q03 4Q03 1Q04 2Q04 3Q04


Return on Assets (Brazilian GAAP)

-25%

-12%

-3%

8%

15% 15% 17%12%

5%

95 96 97 98 99 00 01 02 03


Return on Equity (Brazilian GAAP)

-93%

-14%

35%58% 55%

41%17%

-169%

74%

95 96 97 98 99 00 01 02 03


Revenue per Employee

US$ thousandsBrazilian GAAP

75101

172

242 247

307

254227

172

236

1995 1996 1997 1998 1999 2000 2001 2002 2003 3Q04


Off-Balance Sheet Exposure

(67)(14)Provisions & Liabilities Recorded

(392)(362)Mutually Exclusive Exposure

1,2971,422Off Balance Sheet Exposure

1,6501,748Estimated proceeds from performance guarantees and underlying assets

627624RVGs

1,2291,175Financial Guarantees

20032002US$ million

The maximum potential payments represent the “worst-case scenario,” and do not necessarily reflect the expected results by the Company.

Estimated proceeds from performance guarantees and underlying assets represent the anticipated values of assets the Company could liquidate or receive from other parties to offset its payments under guarantees.

Source: 20 F note 34


634

2,476

2,007

1,173

1,692

264

2,7022,897

2,396

1,510

1,302

881

220469

1,2201,843

1,178 1.039705

44 165292

514

1,1751,0541,352

1996 1997 1998 1999 2000 2001 2002 2003 Oct 04

Exports

Embraer accounted for 3.44% of Brazilian exports until September 2004Largest Brazilian exporter in 1999, 2000 and 2001

(*)Source: Foreign Trade Department Secex.

As of October, 2004

US$ million

Export Import Trade Balance

(*) (*) (*)(*) (*)


Hedging Strategy

• Firm backlog of US$10.1 billion

• 93% revenues in US$

• 83% of R&D and PP&E investments in R$

• 37% of total cash disbursements in R$

Main Objective of the Hedging Strategy

Optimize the Natural Hedge of the Cash Flow


Balance Sheet

21% 13% 18% 12% 16% 12% 14% 14%

79% 87% 82% 88% 84% 88% 86% 86%

Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities

12/31/2003 03/31/2004 06/30/2004 09/31/2004

Other Currencies US$

US GAAP


Balance Sheet

21% 12% 18% 12% 16% 11% 14% 13%

79% 88% 82% 88% 84% 89% 86% 87%

Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities

12/31/2003 03/31/2004 06/30/2004 09/31/2004

Other Currencies US$

US GAAPIncludes Derivatives

Investments


US$ million

PP&E and R&D – Cash Flow

Gross R&D amounts

111

64

44

70

158173

136143

114100

0

20

40

60

80

100

120

140

160

180

200

2000 2001 2002 2003 2004 E

PP&E

R&D


US$ million

Cash Contribution – Risk Sharing Partners

--

2 4 6 1 41 1 0 7

7 2

2 4

2 8

-

5 0

1 0 0

1 5 0

2 0 0

2 5 0

3 0 0

T o t a l 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 E 2 0 0 5 E 2 0 0 6 E 2 0 0 7 / 2 0 1 0 E


Investments Forecast

R&D Total

- Commercial Aviation

- Corporate Aviation

- Others

Defence

20062005

119

89

11

19

88

66

37

12

17

38

Productivity and PP&E 77 59

TOTAL 284 163

US$ million

Defense investments are funded by their contracts and are not included in R&D expenses but in Cost of Sales and Services.

Does not include new programs

Sales Finance


Aerospace Sector Support*

ECA’s - Export Credit Agencies

•US-EXIM & EU-ECA’s: commercial aircraft more than 70 seats•EDC commercial aircraft of 50-70-90 seats•BNDES: commercial aircraft 30-50 seats

US$ Billion

Source: US-Exim - Competitiveness Report 2001/2002EDC Annual Report 2000/2001/2002/2003

4.55.0

2.9

3.5

6.3

2.6

5.8

2.7

4.2

2.7 2.7

5.9

2.4

3.0

2.2

2.6

1.8

1.01.4

0.6 0.7

1.95(a)

0

1

2

3

4

5

6

7

1998 1999 2000 2001 2002 2003

US-EXIM EU-ECA's EDC BNDES

(a) Direct and indirect disbursement


Market 76.1%

BNDES 23.9%

Total Regional Jets delivered: 106 (through Sep/04)Total amount exported: US$ 2.05 BillionTotal amount financed by BNDES: US$ 490 Million

ERJ 145 Family* and EMBRAER 170 Financing Methods – Year 2004

* Includes Corporate and Authority Transportation


Market 55.6%

BNDES 44.4%

Total Regional Jets delivered: 847 (through Sep/04)Total amount exported: US$ 14.46 BillionTotal amount financed by BNDES: US$ 6.42 Billion

ERJ 145 Family* and EMBRAER 170 Financing Methods

* Includes Corporate and Authority Transportation

Investor RelationsDepartment

Phone: (55 12) 3927 [email protected]

www.embraer.com.br

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