Presentation of 4Q05 and FY2005 Results

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Presentation of 4Q05 and FY2005 Results

  1. 1. 4Q05 and FY2005 Earnings Results EMBRAER Maurício Botelho President & CEO April 3, 2006 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. 1
  2. 2. 2005 Highlights Record Net Revenues Record Net Income In US$ millions In US$ millions 3,830 3,441 446 2,144 380 136 2003 2004 2005 2003 2004 2005 2005 Highlights Net Cash Order Backlog In US$ Billions In US$ millions 360 17.5 17.5 222 13.6 10.6 10.1 10.4 22 2003 2004 2005 2003 2004 2005 Firm Orders Options 2
  3. 3. Embraer New Capital Structure Main Benefits to the Company • Financing of the Company’s expansion programs through the equity capital markets and the use of convertible instruments • The current capital structure does not allow the Company to issue new shares without additional capital injection by the current controlling shareholders which for different reasons is unfeasible , thus limiting the Company’s flexibility for financing its growth in the equity capital markets • Creation of an acquisition currency for potential expansions in the international markets • The enhancement of the Company’s valuation multiples and increase in liquidity in both the domestic and international markets would allow for potential expansion through acquisitions • The increase in liquidity and better market perception of the Company would reflect positively on its share price in the stock exchange • The improvement in Company’s corporate governance and transparency, in addition to the possible listing in the “Novo Mercado”, could create additional demand for the stock from institutional investors including the local pension funds 3
  4. 4. Shareholders Protection Mechanisms Mechanism Description Number of valid votes per • The maximum allowed votes per shareholder or group of shareholde rs acting shareholder or group of shareholders as one, including brokers acting on behalf of one or more ADS holders, will be acting in a concerted manner will be limited to 5% of the total shares of the Company limited to 5% of the total shares of • The mechanism above will affect only the shareholders ’ political rights (e.g., the Company voting rights), not being applicable to economic rights Mandatory delisting tender offer • Shareholders who acquire or become holders of more than 35% of the Company’s capital would be required to launch a delisting tender offer, under conditions established in Embraer´s bylaws, and Brazilian laws • The tender offer is conditioned upon the Brazilian Government authorization, subject to suspension of voting rights Voting rights limitation to foreign • The total number of foreign votes will be limited to 40% (forty percent) of total shareholders valid votes in each General Shareholders` Meeting, corresponding to 2/3 of total votes of Brazilian Shareholders Mandatory ownership disclosure • Percentage ownership must be disclosed whenever a shareholder reaches a 5% threshold and every 5% increment thereafter Monitoring Committee to follow • The CFO will monitor the Company’s ownership and the compliance of the changes in ownership shareholders` protection mechanisms to disclose potential violations of the company’s bylaws New Capital Structure 738.611.820 Common (Voting) Shares CIA BOZANO 9.87 PREVI 16.42 OTHERS NYSE 39.34 SISTEL 7.35 BOZANO HOLDINGS 1.20 OTHERS BOVESPA BNDESPAR 6.32 11.66 EUROPEAN GROUP 7.50 BRAZILIAN GOVERNMENT 0.32 4
  5. 5. Highlights - Commercial Aviation Delivery of the first EMBRAER 175 aircraft to Air Canada The first EMBRAER 190 is delivered to launch customer JetBlue Highlights– Commercial Aviation 99 New Orders (94 E-jets e 5 ERJ 145) 5
  6. 6. Highlights – Commercial Aviation Embraer Market Share 30 to 60 seats 46% 61 a 90 seats 36% 91 a 120 seats 57% 30 a 120 seats 46% As of Dec. 31, 2005 Based on total number of aircraft delivered and in backlog EMBRAER 170/190 Family Order Book Firm Firm Orders Options Total Deliveries Backlog EMBRAER 170 198 114 312 92 106 EMBRAER 175 22 - 22 14 8 EMBRAER 190 191 217 408 12 179 EMBRAER 195 29 31 60 - 29 Total 440 362 802 118 322 (4th Quarter, 2005) 6
  7. 7. ERJ 145 Family Order Book Firm Firm Orders Options Total Deliveries Backlog ERJ 135 123 2 125 108 15 ERJ 140 94 20 114 74 20 ERJ 145 677 157 834 667 10 Total 894 179 1,073 849 45 (4th Quarter, 2005) Highlights - Business Jet Market Launch of the Phenom 100 e Phenom 300 7
  8. 8. Phenom™ 100 Main Features • Built to operate within typical airline schedules of aproximately 2,000 cicles per year • Minimum downtime for inspections • Ease of maintenance • High reliability • The largest cabin, baggage capacity and speed in its class. • High Speed Cruise: 380 ktas • Prodigy™Avionics based on Garmin G-1000 System. • Engines: Pratt & Whitney PW&C 617F • Interior designed by BMW DesignWorksUSA • Entry in Service: Mid 2008 Phenom™ 100 – Competitive Analysis Phenom™ 100 Eclipse 500 Mustang Adam 700 CJ1 (Entry Level Jet) 8
  9. 9. Phenom™ 300 Main Features • Built to operate within typical airline schedules of aproximately 2.000 cicles per year; • Minimum downtime for inspections • Ease of maintenance • High reliability • The largest range and baggage compartment in its class. • High Speed Cruise: 450 kt • Integrated Prodigy™Avionics Systembased on Garmin G-1000. • Engines: Pratt & Whitney PW&C 535E • Interior designed by BMW DesignWorksUSA • Entry in Service: Mid 2009 Phenom™ 300 – Competitive Analysis Layout Configuration Comparison Phenom 300TM CJ2+ Bravo CJ3 Encore 9
  10. 10. Highlights – Business Jet Market Legacy 600 New Features: ü Expansion of the operational envelope for high altitude airports (9,500 feet abouve sea level) ü Increase of the operational ceiling to 41,000 feet ü Incorporation of high-speed global connection (Wi-Fi) Highlights – Defense Market • Brazilian Air Force exercises options for 23 Super Tucano light attack aircraft • Government of Colombia places na order for 25 Super Tucanos • Embraer delivers five Legacy 600 configured for authority transportation to the Government of India 10
  11. 11. Highlights – Customer Services • Embraer acquired OGMA - Indústria Aeronáutica de Portugal S.A.- one of the largest maintenance, repair and overhaul (MRO) facilities in Europe • Expansion of Embraer Aircraft Maintenance Services, our MRO facility in Nashville, TN • New MRO facility in Gavião Peixoto, Brazil Highlights – Industrial Operations Delivery of the 900th jet of the ERJ 145 family Delivery of the 100th E-jet, only 19 months after Embraer delivered its first EMBRAER 170 11
  12. 12. Highlights – Industrial Operations The EMBRAER 175 receives Transport Canada Civil Aviation (TCCA) certification and first deliveries are made to Air Canada The EMBRAER 190 receives CTA, FAA and TCCA certification and the first aircraft are delivered to JetBlue, Copa and Air Canada Highlights- Industrial Operations • Aircraft manufactured in 2005: • 77 E-jets • 43 ERJ 145 • 17 Legacy 600 • 36 Super Tucanos • 7 F-5BR • 27 Ipanemas • Delivery of the first upgraded F-5BR fighter jet to the Brazilian Air Force 12
  13. 13. Investor Relations Phone: + 5512 3927-1216 investor.relations@embraer.com.br www.embraer.com.br 13

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