2 nd QUARTER - 2001 Earnings Release Unless otherwise indicated, the company's operational and financial information is based on consolidated figures in Brazilian reais according to the corporate law accounting method. The amounts expressed in US dollars (except for the data presented according to US GAAP) were obtained using an average rate (R$ 2.2888 for the 2nd quarter of 2001, R$2.1524 for the first six months of 2001, R$1.8030 for the 2nd quarter of 2000 and R$1.7882 for the first six months of 2000) or the commercial dollar rate for the end of the corresponding periods (R$ 2.3049 for June 30, 2001 and R$ 2.1616 for March 31, 2001), depending on whether they refer to the income statement or the balance sheet data, respectively. The data according to US GAAP was translated using the US dollar rate at the end of the period (R$2.3049). São José dos Campos, August 13, 2001 - Embraer - Empresa Brasileira de Aeronáutica S/A (BOVESPA: EMBR3, EMBR4) (NYSE: ERJ), the fourth largest commercial aircraft manufacturer based on 2000 net sales and largest Brazilian exporter in 2000, closed the first six months of 2001 with net income of R$ 557.1 million, being 164.8% higher than net income returned for the same period of 2000. Embraer’s order backlog at the end of the first six months of 2001 totaled US$ 23.5 billion, of which US$ 10.7 billion were firm orders and US$ 12.8 billion were options. 2 nd Quarter Highlights • Accumulated net sales for the first six months of 2001 reached R$ 3,443.1 million, equivalent to US$ 1,599.7 million and 55.1% higher than net sales for the same period of the prior year. • EBITDA - Earnings before interest, taxes, depreciation and amortization for the first six months of 2001 was R$1,110.5 million, equivalent to US$ 515.9 million, being 115.3% higher than EBITDA for the first six months of 2000. • Accrued net income for the first six months of 2001 increased 164.8% as compared to income for the same period of 2000. • The company Skyway Airlines, based in Milwaukee, Wisconsin (US), signed a letter of intent to purchase 20 ERJ 140 jets and 20 options for the same aircraft. • During the 44 th Paris Air Show held in June 2001 in France, Embraer announced sales of a wide range of its aircraft families. • On June 18, 2001, during the 44 th Paris Air Show, Embraer and ATR, the leading company in turboprop aircraft, announced AEROChain, an e -commerce portal focused on commercial relationships with the companies’ customers and suppliers.
Transcript
2nd QUARTER - 2001 Earnings Release
Unless otherwise indicated, the company's operational and financial information is based on consolidated figures in Brazilian reais according to the corporate law accounting method. The amounts expressed in US dollars (except for the data presented according to US GAAP) were obtained using an average rate (R$ 2.2888 for the 2nd quarter of 2001, R$2.1524 for the first six months of 2001, R$1.8030 for the 2nd quarter of 2000 and R$1.7882 for the first six months of 2000) or the commercial dollar rate for the end of the corresponding periods (R$ 2.3049 for June 30, 2001 and R$ 2.1616 for March 31, 2001), depending on whether they refer to the income statement or the balance sheet data, respectively. The data according to US GAAP was translated using the US dollar rate at the end of the period (R$2.3049). São José dos Campos, August 13, 2001 - Embraer - Empresa Brasileira de Aeronáutica S/A (BOVESPA: EMBR3, EMBR4) (NYSE: ERJ), the fourth largest commercial aircraft manufacturer based on 2000 net sales and largest Brazilian exporter in 2000, closed the first six months of 2001 with net income of R$ 557.1 million, being 164.8% higher than net income returned for the same period of 2000. Embraer’s order backlog at the end of the first six months of 2001 totaled US$ 23.5 billion, of which US$ 10.7 billion were firm orders and US$ 12.8 billion were options.
2nd Quarter Highlights
• Accumulated net sales for the first six months of 2001 reached R$ 3,443.1 million, equivalent to US$ 1,599.7 million and 55.1% higher than net sales for the same period of the prior year.
• EBITDA - Earnings before interest, taxes, depreciation and amortization for the first six months of
2001 was R$1,110.5 million, equivalent to US$ 515.9 million, being 115.3% higher than EBITDA for the first six months of 2000.
• Accrued net income for the first six months of 2001 increased 164.8% as compared to income
for the same period of 2000.
• The company Skyway Airlines, based in Milwaukee, Wisconsin (US), signed a letter of intent to purchase 20 ERJ 140 jets and 20 options for the same aircraft.
• During the 44th Paris Air Show held in June 2001 in France, Embraer announced sales of a wide range of its aircraft families.
• On June 18, 2001, during the 44th Paris Air Show, Embraer and ATR, the leading company in turboprop aircraft, announced AEROChain, an e-commerce portal focused on commercial relationships with the companies’ customers and suppliers.
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Economic and Financial Performance
The following table sets forth a comparative analysis of the principal economic and financial indicators for the second quarters of 2001 and 2000 and the first six months of 2001 and 2000.
Income Statement 1st Quarter 2nd Quarter 1st Six Months Data 2001 2000 2001 2000 2001
Net income 218,7 112,9 62,6 338,4 147,9 210,4 117,7 557,1 258,8 Net margin (%) 14,3 9,5 9,5 17,6 17,6 9,5 9,5 16,2 16,2
Net sales increased 61.5%, from R$ 1,187.4 million for the 2nd quarter of 2000 to R$ 1,918.2 million for the same period of 2001. This increase in net sales is due to increased deliveries of the ERJ 145/135 family of regional jets. In the second quarter of 2001, 44 aircraft were delivered for the regional market, including 39 ERJ 145, 4 ERJ 135 and one ERJ-120 Brasília, in addition to one aircraft for the defense market - one ERJ 135 to the Belgian government, which will be used for transporting authorities. During the same period of 2000, 38 jets of the ERJ 135/145 family were delivered, including 24 ERJ 145 and 14ERJ 135, and one AMX was delivered for the defense market.
Therefore, total net sales increased 55.1%, from R$2,219.9 million for the first six months of 2000 to R$ 3,443.1 million for the first six months of 2001. During the first six months of 2001, a total of 67 ERJ 145 and 18 ERJ 135 aircraft were delivered, totaling 85 jets of the ERJ 135/145 family and one EMB 120 – Brasília for the regional market and one aircraft for the defense market - one ERJ 135,, as compared to deliveries of 48 ERJ 145 and 23 ERJ 135 for the regional market and one ERJ 135 to the Greek government and one AMX to the Brazilian government during the first six months of 2000.
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Deilveries 1st Quarter 2nd Quarter 1st Six Months By Market 2000 2001 2000 2001 2000 2001
In addition to aircraft deliveries, the composition of Embraer's net revenues includes the sale of spare parts and services rendered by Embraer and its subsidiaries in Brazil and abroad, as well as light aircraft produced by Neiva.
Total 1,187.4 100.0 1,918.2 100.0 2,219.9 100.0 3,443.1 100.0
The cost of products sold by Embraer increased 23.3%, from R$850.4 million for the second quarter of 2000 to R$ 1,048.8 million for the second quarter of 2001. (in comparison with a 61.5% increase in net revenues). The cost of products sold increased 24.4%, from R$ 1,584.7 million for the first six months of 2000 to R$1,970.7 million for the first six months of 2001..
Therefore, Embraer returned a gross margin of 45.3% in the second quarter of 2001, compared with 28.4% returned for the same period of 2000. This increase is a result of productivity gains obtained throughout the year 2000, together with the impact of the US dollar/real exchange rate variation between the date of purchase of components and raw materials, generally imported and quoted in dollars, and the corresponding delivery date of the aircraft. In the second quarter alone, the US dollar appreciated 6.6%.
In the accrued figure for 2001, the gross margin was 42.8%, showing an increase of 14.2% as compared to the 28.6% figure recorded for the same period of the prior year.
Operating expenses, including profit-sharing and before financial expenses and revenues, increased 79.4%, from R$ 151.8 million for the second quarter of 2000 to R$ 272.5 million for the same period of 2001.
In the periods compared, administrative expenses increased from R$ 34.5 million for the second quarter of 2000 to R$ 66.8 million for the second quarter of 2001 and selling expenses increased from R$ 78.0 million for the second quarter of 2000 to R$ 133.6 million for the second quarter of 2001.
The increase in selling expenses over the period is directly attributable to the increase in the number of aircraft delivered, the creation of a sales area focused on the executive jet market, the consolidation of the
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sales offices located in China (Beijing) and Singapore, as well as sales and marketing efforts related to the ERJ 135/140/145 and ERJ 170/190 regional jet families, defense aircraft and jets for the corporate market.
The increase in administrative expenses was principally due to the hiring of more employees in order to adjust Embraer’s administrative structure to its increased production and global expansion.
The Variable Remuneration Program, in which employee profit sharing is established according to a performance appraisal of each employee/team, is linked to income from operations and the distribution of dividends to Embraer shareholders. As a result, the provision made in the second quarter of 2001 for profit sharing was based on the distribution of interest on shareholders' equity during the period and the expectation of dividend distribution for the first six months of 2001.
In the second quarter of 2001, operating profit before financial revenues and expenses, including the provision for employee profit sharing, was R$ 597.0 million, more than twice the R$ 185.1 million figure returned for the same period of 2000. Therefore Embraer achieved operating margins of 31.1% and 15.6% for the second quarters of 2000 and 2001, respectively.
Operating profit for the first six months of 2001, increased 182.0%, from R$361.1 million for the first six months of 2000 to R$ 1,018.3 million for the first six months of 2001. The operating margins were 29.6% and 16.3% for the first six months of 2000 and 2001, respectively.
Cash generation measured by the EBITDA - Earnings before interest, taxes, depreciation and amortization for the second quarter of 2001 was R$ 645.1 million, corresponding to an increase of 196.1% as compared to the same period of 2000. Similarly, the EBITDA margin increased substantially, from 18.3% for the second quarter of 2000 to 33.6% for the second quarter of 2001.
EBITDA for the first six months of 2001 increased 159.2%, from R$ 428.5 million for the first six months of 2000 to R$ 1,110.5 million for the same period of 2001.
In the second quarter of 2001, net financial revenue (expense), without taking into account the effects of the distribution of interest on Embraer shareholders' equity and monetary and exchange rate variations effects, increased from an expense of R$ 12.6 million for the first quarter of 2000 to a revenue of R$ 55.7 million for the same period of 2001. This reversal can be attributed to a reduction in financial expenses and an increase in financial revenues. Financial revenues grew significantly, from R$ 32.1 million for the first quarter of 2000 to R$ 100.0 million for the same period of 2001. The result described above is basically due to the increase in cash availability and short-term financial investments during the period.
Taking into account net monetary and exchange rate variations, the net financial revenue (expense) increased from an expense of R$ 47.7 million for the second quarter of 2000 to an expense of R$ 149.9 million for the same period of 2001. This result is due to the 6.6% devaluation of the real against the US dollar during the second quarter of 2001, compared to a devaluation of 3.0% of the real against the US dollar during the second quarter of 2000. Since liabilities linked to the US dollar (advances from customers and suppliers and bank indebtedness) were greater than the assets tied to the US dollar, the exchange rate effects gave rise to this increase.
A similar effect occurs when taking into account accrued net monetary and exchange rate variations over the first six months of 2000 and 2001. Embraer’s net financial revenue (expense) increased from expenses of R$50.0 for the first six months of 2000 to expenses of R$ 310.3 million for the same period of 2001.
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Due to the facts described above, Embraer’s net income increased 199.8%, from R$112.9 million for the second quarter of 2000 to R$ 338.4 million for the same period of 2001. Earnings per share for the second quarter of 2001 were R$ 0.545 (equivalent to US$ 0.952 per ADS) taking into account the exercise of subscription warrants occurred in May 2001. Therefore, in the accrued figure for the first six months of 2001, net income increased 164.8%, from R$210.4 million for the first six months of 2000, to R$ 557.1 million for the same period of 2001.
Financial Management
As of June 30, 2001, the Company's cash position totaled R$ 2,912.8 million. On the same date total indebtedness was R$ 1,307.6 million, of which R$ 1,200.4 million, equivalent to 91.8% of total indebtedness, was indexed in foreign currency and 22.4% was related with long-term debt. At the end of the first six months of 2001, the Company had a net cash position of R$ 1,605.2
Balance Sheet June 30, March 31, and Other Data 2001 2001
During the first six months of 2001, R$125.9 million (US$ 54.6 million) were invested in the maintenance and improvement of current products and research and development for other new products. An additional R$ 114.0 million (US$ 49.5 million) were invested in the company's industrial facilities, including improvement and modernization of industrial and engineering processes, machinery and equipment.
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Selected information - US GAAP
Finacial, Balance Sheet 1st. Quarter 2nd Quater 1st. Half and Other Selected Data 2001 2001 2000 2001
The ERJ 145 is a twin-engined regional jet with capacity to carry up to 50 passengers, which has been attending to the increasing demand from regional airlines for an economic aircraft offering speed and comfort.
On April 17, 2001, the UK airline British Midland confirmed one additional option for the ERJ 145, totaling 11 firm orders and 5 options for this aircraft.
Currently, 355 ERJ 145 aircraft are operating with 24 airlines in 17 different countries.
The ERJ 135 is a 37-seat regional jet using the same platform as the ERJ 145, and manufactured on the same assembly line as the ERJ 145. The ERJ 135 has 96% of equipment commonality in relation to parts and components of the ERJ 145, enabling the same ground support equipment to be used by customers using both types of aircraft, as well as the same pilot certification and standardized maintenance procedures.
During the second quarter of 2001, Embraer concluded negotiations with two more French airlines, Occitania and Pan Européene, representing two firm orders and two options for the ERJ 135.
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The ERJ 140 is a 44-seat regional jet launched on November 30, 1999, to offer our customers greater flexibility of aircraft selection. Developed from the ERJ 135 aircraft, the new ERJ 140 is alsopart of the ERJ 135/145 regional jet family, with 96% commonality of parts and components used by the family, providing our customers with significant operational and maintenance benefits.
The ERJ 140 made its maiden flight in June 2000 and the first delivery was made in July 2001, as planned.
In April 2001, Skyway Airlines based in Milwaukee, Wisconsin (US), signed a letter of intent to purchase 20 ERJ 140 jets. This order also envisages an equal number of options and the possibility to include some ERJ 135 and ERJ 145 aircraft in the total order.
During the 44th Paris Air Show, new orders from the companies Chautaqua and Trans States Airlines for ERJ 140 jets were announced. The negotiation will be part of an operating agreement between the two companies and American Airlines.
The agreement with Chautauqua Airlines will involve the confirmation of 28 options held by the company on the ERJ 145 aircraft and the inclusion of 25 new options for the ERJ 140.. Chautaqua Airlines is owned by investment funds organized and managed by Wexford Capital LLC.
Transtates Airlines placed a new order for ten ERJ 140 jets and 25 additional options.
Since Embraer’s policy is to only include in its backlog firm orders arising fromsigned contracts, the Skyway, Chautaqua and Transtates orders are not being included in the backlog, since they are still pending finalization of the contract or the conclusion of operating agreements.
The ERJ 170 and ERJ 190 make up the new Embraer regional jet family. The ERJ 170 will be a regional jet for 70 passengers. The ERJ 190 will include two regional jets, the ERJ 190-100 for 98 passengers and the ERJ 190-200 for 108 passengers. Development of this new family of regional jets continues strictly on schedule. The first deliveries of the ERJ 170 are planned for December 2002, whilst deliveries of the ERJ 190-200 will begin in July of 2004.
In June 2001, during the Le Bourget Aerospace Fair, the Brazilian airline TAM signed a letter of intent to purchase up to 100 ERJ 190-200 jets. The document envisages a minimum of 25 firm orders and enables conversion to other models and versions of the new ERJ 170/190 regional jet family. Since this is a letter of intent, the order was not included in Embraer’s backlog.
• Corporate Aviation Market
The Legacy is an executive aircraft, developed based on the ERJ 135 regional jet platform. The Legacy will be available in executive, corporate and government transportation versions. The maiden flight of the executive version of the Legacy took place on March 31, 2001.
During the 44th Paris Air Show, various sales contracts for the Legacy executive jet were announced, totaling 8 aircraft, including the first order by a Latin American client. The launch customer for the Legacy in the Latin American market is an important financial institution based in São Paulo.
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Aircraft Ordered during the Period:
Firm Orders 1st Quarter 2nd Quarter 1st Six Months
Therefore, Embraer’s backlog at the end of the first six months of 2001 totaled US$ 23.5 billion, of which US$ 10.7 billion were firm orders and US$ 12.8 billion wereoptions. The total of orders received and still conditional, as described above, is US$ 5.0 million.
• Customer Services Market
In June 2001, during the LeBourget Fair in France, Embraer and ATR announced AEROChain, which is an e-commerce portal focused on improving commercial relations with the companies' customers and suppliers. The new venture is expected to be totally implemented by the 2nd quarter of 2002, but more than US$ 4.1 million in quotations and US$ 1.9 million in sales were already recorded between January and April this year, as part of a test period involving certain clients and the CIS (Customer Integration System), Embraer’s current Internet arm.
KPMG Consulting, Inc. will supply the integration and project management services, which will incorporate a selection of Oracle computer programs, including Oracle Exchange
Embraer decided to join forces with other world market leaders instead of setting up a wholly-owned subsidiary. The new venture will represent investments estimated at US$ 21.0 million, to be assumed by Embraer and ATR.
AEROChain will be based in the United States and its commercial structure will be made available to customers and the partner/supplier community through various functions, such as commerce, supply chain management, MRO (Maintenance, Repair and Overhaul) techniques and technical services. Embraer alone will involve 550 suppliers and 170 potential clients.
Investor Relations
Conversion of subscription warrants: On May 3, 2001, BNDES Participações S.A.-BNDESPAR exercised all its subscription warrants that were coupled to Embraer’s debentured issued on July 1, 1998. BNDESPAR exercised 7,393,800 subscription warrants, resulting in the issuance of 73,938,000 new Embraer preferred shares, at the price of R$ 2.47685 per share. According to item 4.27 of clause four of the deed of offering of the debentures,
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the price of the shares issued as a result of the exercise of the subscription warrants was paid up by BNDESPAR through the “accord and satisfaction” to Embraer of the 73,938 debentures that had been issued simultaneously with the subscription warrants.
In June 2001, Embraer’s shareholders: Cia. Bozano, Bozano Holdings Ltd., Fundação Sistel de Seguridade Social, Caixa de Previdência dos Funcionários do Banco do Brasil - PREVI and BNDES Participações S.A. – BNDESPAR concluded a secondary offering of Embraer pr eferred shares in the Brazilian and international markets , in in which a total amount of 77.1 million shares were sold, equivalent to US$ 750.0 million.
Of this total, 7.7 million shares were sold in the Brazilian market at a unit price of R$ 23.25, and 69.4 million shares were offered in the international market, represented by 17,352 thousand ADSs (American Depositary Shares), each ADS representing four preferred shares, at the unit price of US$ 38.90 per ADS.
After the secondary offering, the free floa t of Embraer preferred shares changed from 37.48% to 58.5%, of which 13.1% of the shares were traded on the São Paulo Stock Exchange and 45.4% were traded on the New York Stock Exchange (NYSE).
In the second quarter of 2001, Embraer’s preferred shares appreciated 5.40%, reaching R$ 22.66per share on June 29, 2001, with an average daily trading volume of R$7.2 million. The common shares appreciated 12.75% during the same period, reaching a quotation of R$ 17.26per share on June 29, 2001. The average daily trading volume of the common shares was R$ 7.2million. During the same period, the São Paulo stock exchange Ibovespa index appreciated 0.84%.
Over the first six months of 2001 Embraer’s preferred shares appreciated 24.51%, with an average daily trading volume of R$ 5.4million. The common shares appreciated 44.61% over the same period, and the average daily volume traded of the shares was R$ 5.8million. During the same period, the São Paulo stock exchange Ibovespa index fell 4.59%.
In the second quarter of 2001, the ADS’s appreciated 3.03 %, ending the quarter quoted at US$ 39,05, with an average daily trading volume of 306,927thousand ADSs, equivalent to a financial volume of US$ 12.3 million
The price of the ADSs on the NYSE since the initial offering on July 21, 2000, at the initial price of US$ 18.50, has appreciated 111.08%, with an average trading volume of 276,944thousand ADSs, equivalent to a financial volume of US$ 9.2 million.
In the first six months of 2001, Embraer’s Board of Directors approved the distribution of interest on shareholders' equity inthe total amount of R$ 75.3 million:
Interest on Shareholders' Equity (JCP) Total Distributed Per share in R$ In 2001 In R$ thousand ON PN
Recent Developments Signing of the contract for the sale of the ALX to the Brazilian Air Force (FAB)
On August 8, 2001, Embraer signed a contract with the Brazilian Air Force (FAB) for the supply of 76 ALX (Light Attack Aircraft), a version of the Super Tucano, plus 23 options. The new aircraft, in single and two-seater configurations, is expected to be used for training and operational missions in the Amazon region and Embraer expects first deliveries to be made in 2003.
The FAB selected the ALX because currently it is the multiple-mission aircraft with the best performance for training and operational missions, in addition to combining cost, benefits and qualities.
The full version of the financial statements is available from the Company's web site, www.embraer.com.br .
For additional information contact: Embraer - Empresa Brasileira de Aeronáutica S/A
Anna Cecilia Bettencourt Milene Petrelluzzi (55 12) 345 1106 (55 12) 345 3054 [email protected][email protected] This documents 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 press release might not occur. Our actual results could differ substantially from
those anticipated in our forward-looking statements.
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EMBRAER - EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
CONSOLIDATED BALANCE SHEETS
Expressed in thousands Reais – Corporate Law
A S S E T S:
June 30,
2001 March 31,
2001 CURRENTS ASSETS: Cash and cash equivalents 2,912,789 2,527,916 Trade accounts receivables 796,299 510,781 Allowance for doubtful accounts (41,374) (32,787) Recoverable taxes 37,624 15,945 Deferred income tax and social contribution
197,889 229,602
Other receivables 54,060 50,798 Inventories 1,760,151 1,427,548 Prepaid expenses 18,371 18,749 ------------- ------------- Total Current Assets 5,735,809 4,748,552 ------------- ------------- NON CURRENT ASSETS Trade accounts receivablesr 62,308 51,250 Recoverable taxes 905 510 Compulsory loans, guarantees and other deposits
13,900 13,318
Other receivables 96,651 77,203 Deferred income taxes and social Contribution
165,953 164,346
------------- ------------- Total Non-Current Assets 339,717 306,627 ------------- ------------- INVESTMENTS Investments 9,908 8,952 Property, plant and equipment 623,225 564,996 Deferred charges 345,674 296,793 ------------- ------------- Total Permenet Assets 978,807 870,741 ------------- ------------- Total Assets 7,054,333 5,925,920 ======== ========
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EMBRAER - EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
CONSOLIDATED BALANCE SHEETS
Expressed in thousands Reais – Corporate Law
L I A B I L I T I E S
June 30,
2001 March 31,
2001 CURRENT LIABILITIES : Loans 1,014,389 734,212 Suppliers 1,067,112 946,946 Accounts payable 145,985 147,300 Customers’ advances 643,131 637,298 Taxes and social taxes payable 196,940 170,463 Income tax and social contribution payable 107,060 74,893 Dealers and sales agents 2,331 2,186 Accrued liabilities 456,024 375,961 Dividends 153,481 73,524 Interest on shareholders’ capital 36,622 29,792 Accrued interest on debentures - 2,748 Deferred income tax 902 1,263 -------------- ------------- Total Current Liabilities 3,823,977 3,196,586 -------------- ------------- LONG TERM LIABILITIES: Loans 293,226 173,946 Accounts payable 349,413 320,079 Customers’ advances 369,182 176,249 Long term refinanced taxes 51,069 51,778 Accrued liabilities 28,138 28,614 Debentures - 181,655 Deferred income taxes 47,801 46,250 -------------- ------------- Total Long-Term Liabilities 1,138,829 978,571 -------------- ------------- DEFERRED INCOME 475 449 -------------- ------------- MINORITY INTERESTS 18,839 17,570 -------------- ------------- SHAREHOLDERS’ EQUITY Capital 940,235 808,984 Capital reserve 103,590 39,120 Legal reserve 62,135 62,135 Revenue reserve 637,633 637,633 Retained earnings 328,620 184,872 -------------- ------------- Total Shareholders’ Equity 2,072,213 1,732,744 -------------- ------------- Total Liabilities 7,054,333 5,925,920 ======== ========
------------- ------------- -------------- ------------- FINANCIAL INCOME (EXPENSE): Interest expense (44,716) (76,124) (44,298) (74,649) Interest income 32,067 53,635 100,035 177,028 Monetary and exchange variations, net (47,734) (50,045) (149,914) (310,341) ------------- ------------- -------------- ------------- INCOME FROM OPERATIONS AFTER
FINANCIAL INCOME (EXPENSES)
124,707
288,556
502,850
810,352 ------------- ------------- -------------- ------------- NON OPERATING INCOME (EXPENSE),
NET
23,697
23,978
(4,983)
(10,088) ------------- ------------- -------------- ------------- INCOME BEFORE TAXES AND
MINORITY INTERESTS
148,404
312,534
497,867
800,264 ------------- ------------- -------------- ------------- DEFERRED INCOME TAX AND SOCIAL
CONTRIBUTION (34,960) (101,531)
(158,413)
(240,749) ------------- ------------- -------------- ------------- NET INCOME AFTER TAXES 113,444 211,003 339,454 559,515 ------------- ------------- ------------- ------------- MINORITY INTEREST (576) (576) (1,052) (2,390) -------------- ------------- -------------- -------------
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NET INCOME 112,868 210,427 338,402 557,125 ======== ======= ======== ========
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EMBRAER - EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
CASH FLOW - CONSOLIDATED
Expressed in thousands Reais – Corporate Law
June 30,
2001 June 30,
2000 OPERATING ACTIVITIES: Net Income for the period 557,125 210,427 Adjustements to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 92,147 67,360 Allowance for doubtful accounts 12,925 4,081 Loss on permanent asset disposals (370) 1,105 Write-off deferred charges 267 735 Reversal of deferred income (8) - Provisions for losses 17,466 6,174 Deferred income and social contribution taxes 22,542 4,348 Interest on loans, tax installments and debentures
37,217
44,203
Reserve for (reversal of) contingencies 201 (73) Monetary and exchange variations, net 117,516 15,781 Equity in unconsolidated subsidiary (369) (219) Minority interest 2,390 576 Translations adjustments on consolidated foreign investments
---------- ----------- 256,845 (550,585) ---------- ----------- Net cash provided by operating activities 772,540 749,440 ====== ====== Investment activities:
Sale of property, plant and equipment 872 8 Compulsory loans (2,857) 1,130 Additions to property plant and equipment (114,049) (45,492) Additions to deferred charges (125,943) (26,455) Other (950) -
----------- ---------- Net cash used in investing activities (242,927) (70,809) ======= ====== Financing activities:
Loans repaid (1,386,508) (746,639) New loans obtained 1,633,209 548,968 Payment of refinanced taxes (2,243) (2,909) Guarantee deposits (21,256) (2,615) Dividends paid (115,893) (78,346) Interest on capital paid (72,414) (19,487) Debêntures paid (3,108) (3,029) Grant for investments from risk sharing partners
17,251
-
Fiscal incentives 5,501 - Capital increase 3,058 - ----------- ----------- Net cash provided (used in) financing activities 57,597 (304,057) ======= ======= Net increase in cash and equivalents 587,210 374,574 Cash and equivalents, beginning of the period 2,325,579 548,155 ------------ -------------- Cash and equivalents, end of the period 2,912,789 922,729 ======= ========
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EMBRAER - EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
CONSOLIDATED BALANCE SHEETS
Expressed in thousands Reais – US GAAP
A S S E T S
June 30, 2001
March 31, 2001
CURRENT ASSETS: Cash and cash equivalents 2,912,789 2,599,709 Trade accounts receivable 754,925 491,569 Inventiries 1,889,237 1,627,165 Other 307,286 324,365
------------ ----------- Total Current assets 5,864,237 5,042,808
Total Long Term Liabilities 1,240,553 1,102,454 DEFERRED INCOME 475 461 MINORITARY INTEREST 24,022 21,171 SHAREHOLDERS’ EQUITY
2,123,575
1,728,867
------------ ----------- Total Liabilities 7,097,306 6,181,637
======= =======
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EMBRAER - EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
INCOME STATEMENT - CONSOLIDATED
Expressed in thousands Reais – US GAAP
30 June, 2001
June, 30 2000
NET SALES 3,528,707 2,505,528 COST OF SALES (2,384,553) (1,680,829) ------------- ------------- GROSS PROFIT 1,144,154 824,699 ------------ ----------- OPERATING EXPENSES: Selling and administrative expenses (347,167) (229,916) Other expenses, net (24,199) (39,451) Research and development expenses (111,184) (24,317) Profit sharing (58,576) (40,078) ----------- ---------- INCOME FROM OPERATIONS BEFORE FINANCIAL INCOME (EXPENSES)
603,028
490,937
----------- --------- Financial income (expenses), net (10,571) (85,322) ---------- --------- INCOME FROM OPERATIONS AFTER FINANCIAL INCOME (EXPENSES)
592,457
405,615
Non operating income (expense), net 4,855 39,224 --------- --------- INCOME BEFORE INCOME TAX 597,312 444,839 Income tax provision (260,401) (137,329) Minority interest (2,439) (6,919) --------- --------- NET INCOME 334,472 300,591 ====== ======
20
EMBRAER - EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
CASH FLOW - CONSOLIDATED
Expressed in thousands Reais – US GAAP
June 30,
2001 March 31,
2001 OPERATING ACTIVITIES: Net income for the period 334,472 163,955 Itens que não afetam o caixa:
Depreciation and amortization 46,143 25,184 Allowance for doubtful account 11,693 4,046 Loss on permanent assets (314) (16) Write-off deferred charges 267 - Reversal on deferred income (8) (3) Provisions for losses 19,722 10,814 Deferred income and social contribution taxes 115,538 48,139 Interest on loans, tax installments and
debentures
34,860
15,898 Reserve for (reversal of) contingencies 710 416 Monetary and exchange variations, net 77,220 65,170 Equity in unconsolidated subsidiary (369) - Minority interest 2,439 110 Translations adjustments on consolidated foreign investments (26,755) (15,849) Cumulative translations adjustments 181,098 116,005
--------- -------- 243,070 45,913 ---------- --------- Net cash provided by operating activities 672,167 471,509 ====== ====== Investments activities:
Sale of property, plant and equipment 872 80 Compulsory loans (2,379) (2,179) Additions to property, plant and equipment (251,681) (142,456) Additions to deferred charges (217) (223) Aditions to investments (3,378) (1,974)
--------------- ------------ Net cash used in investing activities (256,783) (146,752) ========= ======= Financing activities:
Loans repaid (1,402,260) (912,749) New loans obtained 1,674,983 844,496 Payment of refinanced taxes (2,306) (1,159) Guarantee deposits (21,256) (6,879) Dividends paid (121,185) (45,508) Interest on shareholders’ capital (74,452) (37,360) Debêntures paid (3,166) - Grant for investments from risk sharing partners 17,682 8,525
Capital increase 3,088 - ------------ ------------ Net cash provided (used in) financing activities 71,128 (150,634) ======= ======= Net increase in cash and equivalents 486,512 174,123 Cash and equivalents, beginning of the period 2,426,277 2,425,586 ------------ ------------ Cash and equivalents, end of period 2,912,789 2,599,709 ======= =======
22
EMBRAER - EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
BACK LOG AS OF JUNE 30, 2001 - ERJ 145:
Firm Order Customer Country Firm Order Option Deliveries
Backlog
Air Moldova Moldova 2 2 0 2
Alitália Italy 8 13 8 0
American Eagle USA 56 17 56 0
Axon Airlines Greece 4 2 3 1
British Midland UK 11 5 9 2
British Regional UK 23 3 19 4
Brymon UK 7 14 7 0
Cirrus Germany 1 0 1 0
Continental Express USA 225 100 91 134
Crossair Switzerland 25 15 15 10
ERA Spain 2 0 2 0
KLM Exel Nertherlands 3 2 2 1
LOT Poland 16 0 13 3
Luxair Luxembourg 9 2 9 0
Mesa USA 36 64 18 18
Portugália Portugal 8 0 8 0
Proteus France 13 0 11 2
Regional Airlines France 15 0 13 2
Rheintalflug Austria 3 5 3 0
Rio-Sul Brazil 16 15 16 0
Sichuan Airlines China 5 0 4 1
Skyways AB Sweden 4 11 4 0
Trans States USA 12 0 12 0
Wexford USA 45 45 29 16
Total 549 315 353 196
- ERJ 135:
Firm Order Customer Country Firm Order Option Deliveries
Backlog
American Eagle USA 40 0 40 0
British Midland UK 4 0 0 4
City Air Sweden 2 1 1 1
Continental Express USA 50 0 27 23
Occitania France 1 1 0 1
Pan Européenne France 1 1 0 1
Proteus France 10 15 6 4
Regional Airlines France 5 0 3 2
Regional Air Lines Marocco 5 5 0 5
SA Airlink South Afica 30 40 2 28
TOTAL 148 63 79 69
- ERJ 140:
Firm Order Customer Country Firm Order Option Deliveries
Backlog
American Eagle USA 139 25 0 139
23
TOTAL 139 25 0 139
- ERJ 170:
Customer Country Firm Order Option Firm Order Backlog
Crossair Switzerland 30 50 30
GECAS USA 50 78 50
Regional Airlines France 10 5 10
Total 90 133 90
- ERJ 190:
Customer Country Firm Order Option Firm Order Backlog
Crossair Switzerland 30 50 30
GECAS USA 0 22 0
Total 30 72 30
Legacy:
Firm Order Customer Country Firm Order Option Deliveries
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