- Morgan Stanley held an aerospace and defense conference on September 19, 2002 which Embraer President Maurício Botelho presented at - Embraer highlighted its strengths including being a leading aircraft manufacturer with a global customer base and $23.8 billion in backlog - The company discussed focusing on commercial, executive, and defense aircraft segments as well as aftermarket services - Embraer aims to diversify geographically and across business segments through organic growth and opportunities

1. Morgan Stanley
Aerospace & Defense
Conference
Sep. 19,2002
Maurício Botelho
President & CEO

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 press release
might not occur. Our actual results could differ substantially from those anticipated in our
forward-looking statements.
2

3. Company
Highlights

4. Company Highlights
QOne of the leading Aircraft
Manufactures
QPremier and strong global customer
base - high market share
QUS$ 23.8 Billion in Total Backlog
QStrong global long-term partners
4

5. Embraer Business
The aerospace business
is supported by 5 pillars High Technology
Qualified People
Global Business
Cash Intensiveness
Flexibility
And the backbone of our entrepreneurship is
achieving customer satisfaction
5

6. High
Technology

7. High Technology
The Virtual Reality Center
Provides visualization of
the aircraft structure and
systems during the
project phase, using 3D
electronic models.
Reduces the
development cycle.
7

8. High Technology
Digital Mock-Up EMBRAER 170
8

9. High Technology
Digital Mock-Up ERJ 145
9

10. Qualified
People

11. Qualified People
25% of the almost 12,000 employees, are engineers
Educational Levels
PhDs
0.2% Undergraduates
29.3%
High School Graduates
64.5% 4.7%
Masters
1.3%
11

12. Qualified People
More than US$ 60 million
invested in training and qualification
in the last 3 years.
21 24,5
18
1999 2000 2001
12

13. Global
Business

14. Global Business
Civil & Defense Aircraft flying in 58
countries in 5 continents.
14

15. Global Business
Current Fleet of Regional Aircraft
ERJ Operators
Turboprop Operators
Europe
285 aircraft
40 customers
North America
920 aircraft Asia
35 customers Pacific
60 aircraft
20 customers
Latin America
& Caribbean Africa &
260 aircraft Middle East
85 customers 55 aircraft
10 customers
15

16. Global Business
Operations in Brazil, United States, Europe, Asia and Australia
USA UK
Weybridge
Dallas China
Nashville
Atlanta
France Beijing
Palm Beach Gardens Le Bourget
Fort Lauderdale
Singapore
Singapore
Brazil
Gavião Peixoto
Botucatu
Australia
Melbourne
São José dos Campos
16

17. Cash
Intensiveness

18. Capital Intensiveness
(Investments - US$ millions) 334
296
262 239 227
213 224
147
104 122
98 81
142
1.sem
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Product Development Realized
40% Projected
60%
Increase in Productivity
Figures in Brazilian Gaap
18

19. Flexibility

20. Flexibility
Embraer has the agility and flexibility
to adjust its production in
accordance with market demand. 600th
May 2002
500th
Sep 2001
400th
Mar 2000
300th
Aug 2000
200th
Dec 1999
ERJ 135/145 100th
Deliveries Dec 1998
# of Months 24 12 8 7 6 8
20

21. Flexibility
Flexibility incorporated into the production line allowed an
increase in efficiency and decrease in production lead time
Lead Time in Months
8,0
6,0 6,0
5,5
4,9 5,0
3,8
1996 1997 1998 1999 2000 2001 7M02
21

22. Flexibility
Delivery Forecast
160 161
145
135
96
59
32
4
1996A 1997A 1998A 1999A 2000A 2001A 2002E 2003E
22

23. Flexibility
Embraer presents one of the highest "revenue per employee"
in the industry.
Revenue per employee
US$ thousand 307
247 254 254
242
172
101
1996 1997 1998 1999 2000 2001 1H02
23

24. Corporate
Growth
Strategy

25. Growth-Oriented Company
Strategic Focus
1995 – 1998 1999 – 2001
• Expand market share through:
• Turnaround
• Expansion of the ERJ145 family
• Regain credibility and development of the
EMBRAER 170 family
• Develop the Regional Jet Market
• Development of the Business Jet
• Profitability Family
• Access to global capital markets
• Profitability
25

26. Growth Strategy
QRevenue diversification:
QGeographic
QBusiness Segments
Q Geographic diversification of assets
QOrganic growth and other opportunities
26

27. Revenue Diversification
Expected Sales Breakdown
In five years
Commercial
70% Corporate
Jets
30% Customer
Service
Defense
Current Sales
Breakdown
FY2001
Commercial Parts and
87% Services
6%
Corporate
3%
Defense
4%
27

28. Revenue Diversification
Geographic Diversification
3500
3000
2500
2000
1500
1000
500
0
1999 2000 2001
Americas Europe Brazil Others
28

29. Backlog
US$23.8 billion in total orders,
including US$ 10.1 billion in firm orders
$30,0
$25,0
$20,0
$12,7 $12,7 $13,7
$15,0
$11,3
$10,0
$5,0 $11,4 $10,7 $10,1
$1,2 $6,4
$3,0 $4,1
$0,0
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, June 30,
1996 1997 1998 1999 2000 2001 2002
Firm Orders Options
Annual Growth 150% 36.7% 56.1% 78.1% (6.1)% 1.7%
29

30. Growth
Opportunities

31. Regional
Jet
Market

32. Growth Opportunities
QRising US regional enplanements:
passenger preference
QRegional traffic growth: turboprop
replacement & longer range of RJs
QScope Clauses flexibilization
QNew generation of 70-110 jets vs ageing
fleet
QRightsizing capacity vs demand
32

33. US Regional Enplanements Increasing
Passenger U.S. Regional Airlines
Enplanements (Millions) % of Domestic Traffic
1,000 Regional
Major
800
600
400
200
14%
12%
3% 7%
0
1970 1985 2000 2010F
Source: RAA, FAA
33

34. Airline Market - USA
Domestic ATA Regional RAA
34% 34%
32%
27%
23%
RPM Growth - Yr/Yr % Change
17% 18%
14% 15%
13%
9% 7% 6%
5% 5%
2% 2% 3% 2%
-1% 1% 0%
-3% -1% -3% -2% -2%
-6%
-10%
-7% -8% -7% -7%
-12% -11%
-13%
-18%
-21%
-23%
-33%
Year 2001
Jan/01
Jun/01
Jan-02
May
Aug
Dec/01
May
Jun-02
Oct
Apr
Apr
Sep
Nov
Mar
Jul
Mar
Jul
Feb
Feb
Source: Top Regionals, RAA, ATA
34

35. Wide Seat Capacity Gap
”
es
us
37 – 50 Cla 104 +
104 +
ope
“Sc
37 – 70 112 +
112 +
50 70 to 109 +
109 +
110 Seats
50 – 70 116 +
116 +
50 97 +
97 +
44 – 50 78 +
78 +
25 50 75 100 125 150 175+
Seating Capacity
35

36. Market Opportunities - USA
Ageing 100-seat fleet to be replaced
Fleet in Service (91-120 seat segment - Jan/2002)
180
250 aircraft with
160 more than 20 years
140 (33% of total fleet in
Number of Aircraft
service)
120
100
80 161
147 146
60 128
40 91
74
20
15
0
0-5 6-10 11-15 16-20 21-25 26-30 31-35
Source: BACK
Aircraft Age (Years)
36

37. No artificial constraints in Europe
44 – 66 131 +
131 +
50 – 70 109 +
109 +
70 to
37 – 80 103 +
103 +
110 seats
37 – 85 112 +
112 +
50 - 80 108 +
108 +
50 – 111 110 +
110 +
50 +
50 +
25 50 75 100 125 150 175+
Source: BACK Seating Capacity
37

38. Market Opportunities - Europe
Fleet in Service (Jan/2002)
Turboprop Jet
900
800
Number of Aircraft
Rightsizing
700 Turboprop
capacity vs.
600
276 Replacement
demand
500
400
728
300
498
200 132 418
100 151
0
30-60 61-90 91-120 121-150
Seat Segment
Source: BACK
38

39. Filling the Seat Capacity Gap
Seat Capacity
160
Narrow Body Large
120 Aircraft
EMBRAER 170/190
80
50 Seat
37 - 44 Seat ERJ 145
40
ERJ 135/140
30 Seat
Tprops
0
200 400 600 800 1000 1200 1400
Stage Length (nm)
39

40. ERJ 145 Family Orderbook
Firm Options Deliveries Firm
Total
Backlog
ERJ 135 132 46 178 89 43
ERJ 140 174 45 219 42 132
ERJ 145 577 314 891 428 149
Total 883 405 1,288 559 324
(as of June 30th, 2002)
40

41. EMBRAER 170/190 Family Orderbook
Firm Options Total
EMBRAER 170 82 130 212
EMBRAER 195 30 72 102
Total (*) 112 202 314
(*) Does not include Jet Airways and Alitalia.
(as of June 30th, 2002)
41

42. Corporate
Jet
Market

43. Legacy – New Entrant
QA niche player
QBased on a consolidated airframe, with
more than 600 aircrafts in operation
QRepresents value for customers:
üComfort, performance, cost efficiency
and reliability
43

44. Value and Comfort
Supermidsize price for the comfort of a large bzj
Falcon 2000
G IV SP
ft 10 20 30 40 50
m 3 6 9 12 15
44

45. Legacy Orderbook
Firm Options Deliveries Firm
Total
Backlog
Legacy Executive 39 35 74 2 37
Legacy Shuttle 25 50 75 - 25
EMB 135/145 7 6 13 7 -
Total 73 94 167 9 62
As of June 2002
45

46. Defense
46

47. Defense Growth Strategy
Q Market the existing programs to
other Air Forces
QDevelop new technology
QExplore synergies with our strategic
partners (Dassault, Thales, Snecma
and EADS)
47

48. Defense Products
Intelligence,
Systems
Training Surveillance & Combat Transport
& Services Reconnaissance
Integrated ALX / Super Tucano EMB 145 AEW&C ALX / Super Tucano EMB 135/145
Ground Command
& Control
Integrated
AMX-T EMB 145 MP / ASW AMX / AMX-T Legacy
Systems
Data-Link Systems EMB 145 AGS F-5 BR EMB 120K
48

49. Customer
Services
49

50. Customer Service Growth Strategy
QService a global growing fleet
QExpand geographical reach
QTotal Care Solutions
50

51. Financial Results
US GAAP

52. Jet Deliveries
Units
200
160 161
160 145
135
120 96
80 60
32
40
4
0
1996 1997 1998 1999 2000 2001 2002E 2003E
Figures in US GAAP 52

53. Jet Deliveries - Quarterly
Units
60
42 44
41
40 34
30 30
20
0
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02
Figures in US GAAP 53

54. Net Sales & Gross Margin
US$ Million
6,000 50%
39% 39% 40%
40%
31% 31%
4,000 27% 28%
2,927 30%
2,762
1,837 20%
2,000 1,354 1,556
1,147
764 10%
0 0%
1997 1998 1999 2000 2001 1H01 1H02
Figures in US GAAP 54

55. Revenue Breakdown
Sales per Segment Sales per Market
2Q02 2Q02
Europe
19%
Corporate Brazil
7% 3%
Commercial
83%
Customer
Services &
Others
7%
USA
Defense 78%
3%
Figures in US GAAP 55

56. EBIT
US$ Million
1,600 30%
22% 23%
20%
1,200 19%
17% 20%
13%
800 651
6% 462
368 363 10%
400 216
172
49
0 0%
1997 1998 1999 2000 2001 1H01 1H02
Figures in US GAAP 56

57. EBITDA
US$ Million
1,600 30%
24% 25%
21% 21%
1,200 18%
20%
14%
800 698
9% 493
393 384 10%
400 193 243
71
0 0%
1997 1998 1999 2000 2001 1H01 1H02
Figures in US GAAP 57

58. Net Income
US$ Million
600 15%
13%
12% 11% 12%
11% 12%
400 9%
321 328
9%
235
184 6%
200 145
105
0.4% 3%
3
0 0%
1997 1998 1999 2000 2001 1H01 1H02
Figures in US GAAP 58

59. Loans Breakdown
Bank Loans - US$ 532.6 million
June 30, 2002
Currency Breakdown Debt Maturity
R$ Debt
27%
Short Term
40%
Long Term
60%
Mainly US$
73%
• Considering Currency Swaps • Average Maturity: 2.8 years
• Average R$ debt cost: 14.7% p.a.
• Average US$ debt cost: 4.1% p.a.
Figures in US GAAP 59

60. Net Cash (Debt)
US$ Million
1,200
733
800
360
400
0
(22)
(400) (249)
(415) (333)
(800)
1997 1998 1999 2000 2001 June 30,
02
Figures in US GAAP 60