2. 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
In 3Q09, Embraer delivered 57 jets compared to 48 jet deliveries in 2Q08, including 29 jets to the commercial aviation, five Legacy 600 and 22 Phenom 100 to the executive aviation, and one EMBRAER 190 to the defense segments.
Net revenues for 3Q09 totaled around US$ 1,25 billion, compared with the US$ 1,55 billion of 3Q08, basically due to a different product mix consisted of more Phenom jets and less commercial jets and Legacy’s. The gross margin for 3Q09 totaled 18.8%, a decrease from the 21.7% gross margin for 3Q08, mainly due to the reduction of net revenues, affecting the dilution of the Company’s fixed costs. In the comparison of the first nine months of 2008, with the first nine months of 2009, net revenues reduced by near 15% because of the deferrals and cancellations of deliveries already reported by the Company. In the same period, the reduction of the gross margin was not so steep as the revenues decline due to the efficiency gains achieved and the adjustment in the Company’s cost structure.
SG&A expenses continued its trend of reduction, dropping almost 22%, from US$ 159 million in 3Q08 to US$ 124 million, due to the decrease in variable selling expenses and the productivity gains achieved during the period by the implementation of the P3E Program.
Income from operations totaled US$ 68 million in 3Q09, compared to US$ 101 million recorded for the same period last year. The operating margin for 3Q09 was 5.5% compared to 6.5% in 3Q08. in the comparison of the first three quarters of the year, both income from operations and operating margins presented improvements, and that was basically achieved due to productivity gains, and the adjustments in the Company’s cost structure.
Net income presented stable levels at US$ 58 million both in the third quarter of 2009 and 2008. The net margin was 4.6% in 3Q09, compared to 3.7% in 3Q08.
Trade accounts receivable and customer commercial financing totaled a little above US$ 1 billion in 3Q09, representing stability in comparison with 2Q09.
During 3Q09, inventories decreased to US$ 2,7 billion, compared to roughly US$ 2,9 billion in 2Q09. This decrease is a result from the negotiation program with Embraer’s supply chain started in the beginning of the year.
On September30, 2009, Embraer’s total debt was US$2,0 billion, compared to US$1,8 billion on June 30, 2009. The Company’s cost of capital decreased from 7.99% to 7.8% for portion of the indebtedness in reais, and from 4.95% to 3.88% for the portion in foreign currency.
On September 30, 2009, the Company’s net cash position was US$ 71 million, a US$ 19 million increased compared to the end of 2Q09.
After delivering more than 600 E-Jets, the Company’s firm order backlog totaled, at the end of the third quarter, 295 aircraft of this family.
Total firm order backlog totaled US$ 18.6 billion at September 30 2009, for the commercial, executive and defense segments.
