The document provides financial and operational results for Embraer for the third quarter and first nine months of 2000. Some key points:
- Net income for the third quarter was R$398.6 million, 114.5% higher than the same period in 1999. Net sales for the first nine months reached a record US$2 billion.
- Order backlog at the end of the third quarter was R$42.3 billion, with R$20.2 billion in firm orders.
- Embraer launched its new Legacy jet and signed contracts worth US$4.3 billion at the Farnborough Air Show in July.
- Production increases drove a 49.4% rise
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Embraer Reports Record Sales and Profits in 3rd Quarter 2000
1. 3rd QUARTER - 2000
Earnings Release
The company's consolidated operational and financial results are based on corporate law
accounting and all figures are given in Brazilian Reais, except where otherwise indicated.
Figures (excluding the US GAAP data) in Reais were converted into US dollars using the
average rate (R$ 1.8144 for the 3rd quarter and R$ 1.7966 for the first three quarters) or
the final commercial rate (R$ 1.80 for June and R$ 1.8437 for September 2000), for the
Income Statement and Balance Sheet respectively, for the corresponding periods. The US
GAAP data were converted using the U.S. dollar exchange rate at the end of the period
presented (R$1.8437).
Embraer - Empresa Brasileira de AeronĂĄutica S/A (BOVESPA: EMBR3, EMBR4)(NYSE:
ERJ), the fourth largest commercial aircraft manufacturer in the world and largest Brazilian
exporter, ended the third quarter of this year with an order backlog of R$ 42.3 billion (US$ 22.9
billion), of which R$ 20.2 billion (US$ 10.9 billion) in firm orders and R$ 22.1 billion (US$ 12.0
billion) in options. Net income was R$ 398.6 million, 114.5% higher than the net income for the
first three quarters of 1999.
3rd Quarter Highlights
⢠The net sales for the three quarters of 2000 reached US$ 2.0 billion a record in
Embraerâs history
⢠On July 21, Embraer took another step towards increasing the company's presence on
the world market by listing its ADSs on the New York Stock Exchange.
⢠In July 2000, Embraer launched its latest product: the Legacy. Derived from the ERJ
135, the Legacy will be available in three versions: executive, corporate and for
government authority transport. The companyâs first contract for the sale of the Legacy
with Swift Aviation, a US company, was announced on the launching day. Swift Aviation
ordered 50 units of the new Legacy, 25 were firm orders and 25 were options.
⢠During the Farnbourgh Air Show, Embraer announced the development of the ERJ 145
XR an extra long range version of its 50-seat ERJ 145 jet. At the same time, the
Company signed a contract with Continental Express for the supply of 75 firm orders and
100 options of the ERJ 145 XR.
⢠At the Farnborough Air Show held in July 2000 Embraer announced contracts worth a
total of US$ 4.3 billion.
⢠The 300th aircraft of the ERJ family was delivered in August 2000 to British Regional
Airlines.
⢠In September 2000, American Eagle announced its intention to purchase 66 ERJ 140s.
â˘
⢠During the European Regional Airlines (ERA) association meeting held in September
2000, Embraer announced new orders and customers for regional jets.
1
2. Economic-Financial Performance
Continuous reductions in the production cycle and in the number of man-hours employed on
production, in addition to productivity gains and enhanced allocation of direct and indirect
resources, has enabled Embraer to increase income throughout the last 13 quarters.
Our comparative analysis of the principal economic and financial indicators for the equivalent
periods of 1999 and 2000 follows.
Statement of Income
3rd Quarter of Nine months ended September 30,
Data 1999 2000 1999 2000
In millions except for % and per share data
R$ R$ US$ R$ R$ US$
Total net sales 1,048.2 1,389.7 765.9 2,415.8 3,609.6 2,009.1
Gross profit 328.4 470.9 259.5 698.5 1,114.2 620.2
Gross Margin (%) 31.3 33.9 33.9 28.9 30.9 30.9
Operating Expenses (*) 100.7 150.6 83.0 240.2 432.9 241.0
Operating Income 227.7 320.3 176.5 458.3 681.3 379.2
Operating Margin (%) 21.7 23.0 23.0 19.0 18.9 18.9
Depreciation &
Amortization 36.9 40.6 22.3 102.9 107.7 59.4
EBITDA 264.6 360.9 198.8 561.2 789.0 438.6
EBITDA Margin (%) 25.2 26.0 26.0 23.2 21.9 21.9
Net Income 87.0 188.2 103.7 185.8 398.6 221.9
Earnings per Share 0.18088 0.34632 0.19086 0.38612 0.73355 0.40830
(*) Including employee profit sharing
Net sales for the 3rd quarter of 2000 were R$ 1,389.7 million, 32.6% higher than the same period
of 1999. With this quarterly revenue together with productivity gains, Embraer recorded a gross
margin of 33.9%, exceeding the figure for the same period of 1999 by 2.6%. As 98% of
Embraerâs revenues are related to exports and part of its production cost are based on import of
parts and equipments, and considering the productions cycle of an aircraft is 5.1 months, the
rd
valuation of the exchange rate of the US dollar by 2.4% during the 3 quarter of 2000 was
beneficial for the Companyâs gross margin during the period.
Net Sales increased from R$ 2,415.8 million during the first nine months of 1999 to R$ 3,609.6 in
the same period of 2000, as increase of 49.4%. This increase is a result of the increased pace of
production, which enabled Embraer to deliver 116 aircraft of the ERJ 145/135 family during the
first nine months of this financial year, against deliveries of 60 ERJ 145, 8 ERJ 135 and 7 EMB
120 BrasĂlia during the same period of the prior year. 44 aircraft of the same family were
delivered in the 3rd-quarter alone, a 46.7% increase in deliveries compared to the 3rd quarter of
1999, when 30 jets were delivered.
Net Sales by segment Nine months ended September 30,
Em milhĂľes 1999 2000
R$ % R$ US$ %
Regional 2,060.6 85.3 3,225.4 1,795.3 89.4
Defense 154.0 6.4 138.4 77.0 3.8
Parts, services & others 201.2 8.3 245.8 136.8 6.8
Total 2.415.8 100 3,609.6 2.009.1 100
The increase in the pace of production also resulted in a 22.2% increase in sales of parts,
services and other, from R$ 201.2 million during the first nine months of 1999 to R$ 245.8 million
in the same period of 2000.
2
3. The decrease of 10.1% in net sales in the defense market, from R$ 154.0 million during the first
nine months of 1999, against the accumulated figure of R$ 138.4 million for 2000, is principally
due to the fact that some orders that the Company obtained in the latest years have not yet been
finalized with an agreement.
In the 3rd quarter of 2000, the company achieved an operating margin of 23.0% before financial
expenses and revenues and including profit sharing. This result is substantially the same
compared to the same period of 1999, which was 21.7%. During the first nine months of 2000,
the Companyâs operating margin of 18.9%, practically at the same level as in 1999.
Consolidated accumulated net income for 2000 was R$ 398.6 million, 114.5% higher than for the
same period of 1999, when Embraerâs net income was R$ 185.8 million. In the 3rd quarter of
2000, the Companyâs net income of R$ 188.2 million, improving on the 3rd quarter of 1999 by
116.2%.
EBITDA (earnings before interest, taxes, depreciation and amortization) in the 3rd quarter of
2000 were R$ 360.9 million, a 36.4% increase over the prior year. EBITDA for the first nine
months of 2000 was R$ 789.0 million, an increase of 40.6% over the same period of 1999.
Embraer has been increasing its financial performance and results over each quarter of 2000,
reaching a history record for the Company of US$ 2.0 billion in accumulated net sales during the
first nine months of 2000.
Quarterly % Change %
1Q00 2Q00 3Q00
Performance Change
In Millions of R$
Net sales 1,032.5 1,187.4 15.0 1,389.7 17.0
Gross profit 300.4 343.0 14.2 470.9 37.3
Operational profit 176.0 185.1 5.2 320.3 73.0
Net income 97.5 112.9 15.8 188.2 66.7
As of September 30, 2000, the Company's cash position was R$ 1,104.7 million and its total
indebtedness was R$ 905.1 million, of which R$ 785.4 million or 86.8% of the total indebtedness
was tied to foreign currencies. At the end of the first nine months of 2000, the Company
recorded a net cash surplus of R$ 199.6 million. As of September 30, 2000 there was an
improvement in the Companyâs liquidity as compared to the figures at June 30, 2000.
This improvement is a result of the conclusion of the Companyâs global offering, with total
proceeds to the Company of R$ 439.8 million (equivalent to US$ 244.2 million). Of this amount,
R$ 17.7 million was paid for the underwriting commissions and posted as financial expenses.
These funds will be used by the Company for the capital expenditure requirements, principally
related with the development of the new ERJ 170/190 regional jet family.
Balance Sheet Data and Other June 30 September 30
Information 2000 2000
In millions.
R$ US$ R$ US$
Cash & cash equivalents 922.7 512.6 1.104.7 599.2
Total bank indebtedness 989.0 549.4 905.1 490.9
Net cash (Indebtedness) (66.3) (36.8) 199.6 108.3
Shareholders' equity 817.5 454.2 1.424.7 772.7
3
4. The adjustment of the company's capital structure to funding requirements has resulted in a
reduction in borrowing costs. At the end of September 2000, the average borrowing cost without
considering exchange variations was Libor + 1.45%, compared with Libor + 1,8% in June 30,
2000.
Capital Expenditure - R&D and Productivity
Investments totaled R$ 58.8 million (US$ 31.9 million) was invested during the first nine months
of 2000 in maintenance and improvement of current programs and in the research and
development of new programs.
A further R$ 76.7 million (US$ 41.6 million) was invested in the Company's industrial capacity
(improvement and modernization of industrial and engineering processes), infrastructure plans
and productivity.
Selected information - according to US GAAP
Income and balance sheet data plus 3rd Quarter of Nine months ended
other selected information 2000 September 30, 2000
R$ US$ R$ US$
In Millions
Net Sales 1,421.4 770.9 3,791.8 2,056.6
Gross Profit 516.2 280.0 1,296.4 703.2
Administrative and selling expenses 119.1 64.6 336.6 182.6
Income before financial expenses 346.6 188.0 811.1 439.9
Depreciation e amortization 14.0 7.6 46.7 25.3
EBITDA 360.6 195.6 857.8 465.3
Net income 182.3 98.9 466.7 253.1
Property, plant & equipment 493.4 267.6 493.4 267.6
Shareholdersâ equity 1,511.3 819.7 1,511.3 819.7
Total capital expenditure 121.8 66.1 121.8 66.1
New Orders, Deliveries and Backlog
rd
During the 3 quarter of 2000, contracts with new and existing Embraer customers were signed
for the sale of 263 units of the ERJ 145/140/135 jet family, of which 160 were firm orders and
103 were options. Over the first nine months of the year, the Company signed sales contracts
with 10 customers (two new customers â Air Moldova and Air Caraibes) totaling 343 firm orders
for regional jets.
Aircraft Ordered during the Period:
Firm 3rd Quarter of Nine months ended
September 30,
Orders 1999 2000 1999 2000
In units
Regional
ERJ 135 1 85 6 109
ERJ 145 1 75 97 184
ERJ 170 - - 40 50
ERJ 190-200 - - 30 -
Executive
ECJ 135 - Legacy - 25 - 25
4
5. The Legacy (Embraer Corporate Jet, ECJ 135) was introduced during the Farnborough Air
Show held in England at the end of July. The first contract was announced with Swift Aviation, a
US company. Swift Aviation purchased 50 aircraft, 25 of which were firm orders and 25 were
options. The Greek Air Force is the first customer for the government authority transportation
version, purchasing one unit.
In order to satisfy market needs, the Company announced the development of the ERJ 145 XR,
an extra long-range version of the 50-seat ERJ 145 jet. This aircraft will be equipped with
winglets and will have an operating range of around 2,000 nautical miles (3,700 km). The maiden
flight of the ERJ 145 XR is planned for the first quarter of 2001 and first deliveries should be
made in the second quarter of 2002.
At the same time, the Company signed a contract with Continental Express, a US company, for
the supply of 75 firm orders and 100 options for the new ERJ 145 XR model. However only 64
units were considered as effective sales, since 11 of the 75 aircraft ordered were conversions
from the ERJ 145 LR to the XR version.
Confirmations of contractual options by the Austrian company Rheintalflug and also City Airlines
of Sweden (one ERJ 145 and one ERJ 135 respectively) were also announced during the
Farnborough Air Show. In addition, American Eagle confirmed 18 contractual options for the
ERJ 135.
In September was announced American Eagle´s decision to purchase 66 ERJ 140 was
announced. The purchased represented the confirmation and conversion of 66 ERJ 135 options.
Also during the same month, a contract was signed with Air Moldova for two ERJ 145 firm
orders and two options, and with Air Caraibes from Guadalupe, for two ERJ 145 firm orders.
Negotiations were also finalized with Trans States for the inclusion of three ERJ 145 firm orders
in the existing contract, with Alitalia, from Italy, for the confirmation of two ERJ 145 options, and
with LOT, of Poland, for an additional ERJ 145.
In addition, during the European Regional Airlines â ERA meeting held at Interlaken in
Switzerland, Embraer signed letters of intent with the airlines Axon Airlines of Greece, Regourd
Aviation â Aquitaine, Pan Europeene Air Services of France and Regional Air Lines based in
Casablanca, Morocco, for the total sal of 24 aircraft of the ERJ 145/135 family, of which 13
e
were firm orders and 11 were options.
Between June and September, 34 ERJ 145 and 10 ERJ 135 aircraft were delivered, which when
added to the 48 ERJ 145 and 24 ERJ 135 delivered in the first half of the year, brought the total
number of aircraft delivered to 19 different customers by the end of the 3rd quarter of 2000 to 82
ERJ 145 and 34 ERJ 135. In September, Embraer delivered 17 aircraft (13 ERJ 145 and 4 ERJ
135), with an average production cycle of 5.1 months.
Aircraft Deliveries during the period:
3rd Quarter of Nine months of ended
September 30,
Deliveries 1999 2000 1999 2000
In Units
Commercial
ERJ 135 8 10 8 34(*)
ERJ 145 22 34 60 82
EMB 120 3 - 7 -
(*) Includes one ERJ 135 unit delivered to the Greek Government
5
6. Embraerâs order backlog at the end of the 3rd quarter of 2000 was R$ 42.3 billion (US$ 22.9
billion), of which R$ 20.2 billion (US$ 10.9 billion) were firm orders and R$ 22.1 billion (US$12.0
billion) were options. The regional aviation segment alone is responsible for a backlog of R$ 38.7
billion (US$ 21.0 billion), of which R$18.9 billion (US$ 10.3 billion) were firm orders.
Investor Relations
On July 21, Embraer took another step towards increasing the Company's presence on the world
market with its offering on the New York Stock Exchange of American Depositary Shares -
ADS - level III, with ticker symbol ERJ.
This US offering was part of a global offering in Brazil and abroad and consisted of a primary
offering by Embraer of 52,800,000 preferred shares and a secondary offering of 31,200,00
preferred shares by Cia Bozano Simonsen, Sistel, Previ and BNDES Participaçþes, totaling
84,000,000 preferred shares. In the total global offering, 8,400,000 shares were sold on the SĂŁo
Paulo Stock Exchange (Bovespa) at a price of R$ 8.33, and the remaining 75,600,000 shares on
the NYSE, through the issue of 18.9 million ADSs (each ADS representing 4 preferred shares)
at a price equivalent to US$ 18.50 per ADS.
On July 28, 2000, the coordinators of the global offering exercised their option and purchased
from the selling shareholders an additional 12,600,000 preferred shares represented by 3.15
million ADSs.
In order to take part in the overallotment, BNDES Participaçþes exercised 105,700 subscription
warrants, resulting in the issue of 1,057,000 new preferred shares. After the global offering the
Companyâs subscribed capital now consists of 543,409,874 shares, of which 242,544,448 are
common shares and 300,865,426 are preferred shares.
During the meeting of the board of directors held in the 3rd quarter of 2000, the distribution of
interest on shareholders' capital to Embraerâs shareholders was approved, in the amount of R$
27.7 million, R$ 0.05314 for each preferred share and R$ 0.04831 for each common share.
During the first nine months of the year, the Embraerâs preferred stock appreciated 73.0%, from
R$ 8.15 per share on December 31, 1999 to R$ 14.10 per share on September 30, with an
average daily trading volume of R 3.9 million. The common stock appreciated by 40.2% over
$
the same period, from R$ 9.00 per share on December 31, 1999 to R$ 12.62 per share on
September 30. The average daily trading volume of this stock was R$ 3.1 million. During the
same period the Ibovespa index fell by 6.8%.
Analyzing the performance of the ADSs on the NYSE since the offering on July 21 at the issue
price of US$ 18.50 per ADS, the stock appreciated 67.6% to September 30, with an average
daily volume of 405.2 thousand ADSs over the same period.
Recent Developments
Order from the Belgian Ministry of Defense
On October 26, 2000, Embraer announced that it had won the tender to supply four aircraft to the
Belgian Ministry of Defense, of which two were 37-seat ERJ 135 and two were 50-seat ERJ
145 units. The contract value is around US$ 78 million and deliveries are scheduled to in April
2001. The aircraft will be used to transport government officials. The interior configuration of the
aircraft is yet to be defined by the Belgian government.
Belgian is not the first European country to use Embraer jets to transport government officials.
The combination of comfort, range and low cost of the Companyâs aircraft has already attracted
orders from the Greek government for the same purpose, and has drawn the attention of various
other European countries.
6
7. This contract further consolidates Embraer's position in the international defense market.
Embraerâs increasing market share is also due to products introduced last year, such as the EMB
145 AEW&C early-warning aircraft, in addition to the EMB 145 MP maritime patrol version,
already chosen by the Greek and Mexican governments, respectively. In addition, the AMX-T,
which is a modernized version of the AMX, was selected by the Venezuelan government and the
ALX, a version of the Super Tucano, was contracted by the Brazilian Air Force.
Accounts Receivables
Between October and November 2000 Continental Express and BNDES âThe Brazilian
Development Bank finalized the negotiations and executed an agreement related to the financing
of some Embraer regional jets purchased by Continental Express. As a result, Embraer received
a portion of the resources from the sale of such aircraft, which resources had been accounted in
June 2000 as long term receivables.
The detailed financial statements are available at www.embraer.com
For additional information, please contact:
Embraer - Empresa Brasileira de AeronĂĄutica S/A
Anna Cecilia Bettencourt Milene Petrelluzzi
(55 12) 345 1106 (55 12) 345 3054
acecilia@embraer.com.br milene.petrelluzzi@embraer.com.br
The press release 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 markets; managementâs expectations and estimates concerning our
future financial performance, financing plans and programs, and the effects of competition; successful development and
marketing of the ERJ 170/190 regional jet family; our level of debt; anticipated trends in our industry; our expenditure
plans; inflation and devaluation; our ability to develop and deliver our products on a timely basis; and existing and future
governmental regulation].
The words âbelieves,â âmay,â âwill,â âestimates,â âcontinues,â âanticipates,â âintends,â âexpectsâ 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.
7
8. EMBRAER - EMPRESA BRASILEIRA DE AERONĂUTICA S/A
CONSOLIDATED BALANCE SHEETS
Expressed in thousands of Brazilian reais - Corporate Law
June 30 September 30
A S S E T S 2000 2000
CURRENT ASSETS:
Cash and cash equivalents 922,729 1,104,680
Trade accounts receivable 291,089 1,448,774
Allowance for doubtful accounts (24,122) (24,750)
Recoverable taxes 31,563 32,586
Income tax and social contribution on tax credits 88,688 106,959
Other receivables 26,551 50,739
Inventories 1,153,992 1,035,435
Prepaid expenses 6,950 20,955
------------- -------------
Total Current Assets 2,497,440 3,775,378
------------- -------------
NON-CURRENT ASSETS:
Trade accounts receivable 721,478 12,373
Recoverable taxes 3,551 2,112
Tax Incentive â FINAM 3,173 4,195
Compulsory loans and guarantee deposits 5,779 5,667
Other receivable 82,810 90,926
Income tax and social contribution on tax credits 177,432 149,693
------------- -------------
Total Non-Current Assets 994,223 264,966
------------- -------------
PERMANENT ASSETS:
Investments 6,351 6,792
Property, plant and equipment 396,019 417,271
Deferred charges 255,564 257,143
------------- -------------
Total Permanent Assets 657,934 681,206
------------- -------------
Total Assets 4,149,597 4,721,550
======== ========
8
9. EMBRAER - EMPRESA BRASILEIRA DE AERONĂUTICA S/A
CONSOLIDATED BALANCE SHEETS
Expressed in thousands of Brazilian reais - Corporate Law
June 30 September 30
LIABILITIES 2000 2000
CURRENT LIABILITIES:
Loans 854,207 760,701
Suppliers 610,996 528,206
Accounts payable 75,629 118,534
Customersâ advances 519,850 619,075
Taxes and social charge payable 116,226 130,829
Income tax and social contribution payable 30,587 77,959
Dealers and sales agents 390 1,055
Accrued liabilities 173,950 176,891
Dividends 108,042 46,199
Accrued interest on debentures 688 871
-------------- --------------
Total Current Liabilities 2,490,565 2,460,320
-------------- --------------
LONG TERM LIABILITIES:
Loans 134,749 144,386
Accounts payable 241,970 255,274
Customersâ advances 201,461 163,032
Long term portion of refinanced taxes 55,360 57,437
Accrued liabilities 24,427 29,076
Debentures 171,645 173,501
-------------- --------------
Total Long-Term Liabilities 829,612 822,706
-------------- --------------
DEFERRED INCOME 419 390
-------------- --------------
MINORITY INTEREST 11,508 13,466
-------------- --------------
SHAREHOLDERSâ EQUITY:
Capital 367,453 808,983
Capital reserves 16,363 21,519
Legal reserve 28,766 28,766
Income reserve 313,563 313,563
Retained earnings 91,348 251,837
-------------- --------------
Total Shareholdersâ Equity 817,493 1,424,668
-------------- --------------
Total Liabilities 4,149,597 4,721,550
======== ========
9
10. EMBRAER - EMPRESA BRASILEIRA DE AERONĂUTICA S/A
CONSOLIDATED STATEMENT OF INCOME
Expressed in thousands of Brazilian reais - Corporate Law
1999 2000
Third quarter Nine months Third quarter Nine months
GROSS SALES:
Sales -
Domestic market 111,005 188,693 30,123 87,680
Foreign market 940,489 2,235,784 1,409,710 3,617,934
Sales taxes and deductions (3,292) (8,661) (50,135) (95,980)
----------- ------------- ------------- -------------
NET SALES 1,048,202 2,415,816 1,389,698 3,609,634
COST OF SALES (719,793) (1,717,364) (918,846) (2,495,417)
----------- ------------- ------------- -------------
GROSS PROFIT 328,409 698,452 470,852 1,114,217
----------- ------------- ------------- -------------
OPERATING EXPENSES:
Administrative (25,121) (60,177) (37,756) (102,253)
Selling (71,750) (165,950) (85,740) (229,917)
Other income (expense), net (2,632) (2,011) (23,464) (61,560)
Equity in unconsolidated subsidiary (1,276) (1,068) 158 377
Profit sharing 116 (11,040) (3,798) (39,522)
----------- ------------- ------------- -------------
INCOME FROM OPERATIONS (EXPENSES) BEFORE
FINANCIAL EXPENSES 227,746 458,206 320,252 681,342
----------- ------------- ------------- -------------
FINANCIAL INCOME (EXPENSE):
Interest expense (34,081) (103,450) (54,881) (131,005)
Interest income 18,891 70,977 41,518 95,153
Monetary and exchange variations, net (109,547) (262,804) (22,890) (72,935)
----------- ------------- ------------- -------------
INCOME FROM OPERATIONS AFTER FINANCIAL
INCOME (EXPENSES) 103,009 162,929 283,999 572,555
NON-OPERATING INCOME (EXPENSE), NET (170) 625 (1,635) 22,343
----------- ------------- ------------- -------------
INCOME BEFORE INCOME TAX 102,839 163,554 282,364 594,898
PROVISION FOR INCOME TAX AND SOCIAL
CONTRIBUTION (15,794) 22,256 (92,301) (193,832)
----------- ------------- ------------- -------------
NET INCOME AFTER TAXES 87,045 185,810 190,063 401,066
MINORITY INTEREST - - (1,869) (2,445)
------------- ------------ ------------ --------------
NET INCOME 87,045 185,810 188,194 398,621
======= ======= ======= ========
10
11. EMBRAER - EMPRESA BRASILEIRA DE AERONĂUTICA S/A
STATEMENT OF CASH FLOW - CONSOLIDATED
Expressed in thousands of Brazilian reais - Corporate Law
3rd. Quarter of 9 Months of 2000
2000
Operating activities:
Net income for the year 188.194 398.621
Adjustments to reconcile net income to net cash
Depreciation and amortization 40.380 107.740
Allowance for doubtful accounts 629 4.710
Loss (gain) on permanent asset disposals 781 1.886
Write-off of deferred charges 1.503 2.238
Write-off of deferred income tax (680) (680)
Provision for losses 1.498 7.672
Deferred income taxes and social contribution tax 9.604 13.952
Interest on loans, tax installments and debentures 16.559 60.762
Reserve for (reversal of) contingencies (32) (105)
Monetary and exchange variation 25.663 41.444
Equity in unconsolidated subsidiary (158) (377)
Exchange variation of consolidated subsidiary (1.634) (2.048)
------------- -------------
282.307 635.815
Changes in current assets and liabilities - (954.758) (8.817)
Changes in noncurrent assets and liabilities- 691.850 141.841
------------- -------------
Net cash provided by (used in) operating 19.399 768.839
activities
Investing activities:
Additions to property, plant and equipment (31.177) (76.669)
Additions to deferred charges (32.335) (58.790)
Others 1.511 2.649
------------- -------------
Net cash used in investing activities (62.001) (132.810)
Financing activities:
Loans (paid) obtained (121.198) (318.869)
Payment of refinanced taxes (1.681) (4.590)
Guarantee deposits (4.797) (7.412)
Dividends and interest on capital paid (86.894) (184.727)
Payment of debentures (701) (3.730)
Capital Increase 454.365 454.365
Capital Reserve 6.232 6.232
Debentures Capitalization (20.773) (20.773)
------------- -------------
Net cash provided by (used in) financing 224.553 (79.504)
activities
------------- -------------
Net increase in cash and equivalents 181.951 556.52 5
Cash and equivalents, beginning of the period - 548.155
------------- -------------
Cash and equivalents, end of the period 181.951 1.104.680
11
12. EMBRAER - EMPRESA BRASILEIRA DE AERONĂUTICA S/A
BACKLOG AT SEPTEMBER 30, 2000
- ERJ 135:
Firm
Customers Country Firm Option Deliveries Backlog
American Eagle U.S.A. 179 31 26 153
City Air Sweden 2 1 1 1
Continental Express U.S.A. 50 0 15 35
Proteus France 13 15 4 9
Regional Airlines France 5 0 3 2
TOTAL 249 47 49 200
- ERJ 145:
Firm
C u stomers Country Firm Option Deliveries
Backlog
Air Caraibes Guadalupe 2 0 0 2
Air Moldova Moldavia 2 2 0 2
AlitĂĄlia Italy 8 13 5 3
American Eagle U.S.A. 50 17 50 0
British Midland U.K. 10 10 6 4
British Regional U.K. 23 3 16 7
Brymon U.K. 7 14 5 2
Cirrus Germany 1 0 1 0
Continental Express U.S.A. 225 100 77 148
Crossair Switzerland 25 15 7 18
ERA Spain 2 0 2 0
KLM Exel Holland 3 2 1 2
LOT Poland 16 0 7 9
Luxair Luxemburg 9 2 7 2
Mesa U.S.A. 36 64 8 28
PortugĂĄlia Portugal 8 0 8 0
Pro teus France 10 0 4 6
Regional Airlines France 15 0 10 5
Rheintalflug Austria 3 5 2 1
Rio -Sul Brazil 15 15 15 0
Sichuan Airlines China 5 0 1 4
Skyways AB Sweden 4 11 4 0
Trans States U.S.A. 12 0 9 3
Wexford U.S.A. 45 45 13 32
Total 536 318 258 278
- ERJ 170:
Firm
Customer Country Firm Option Back Log
Crossair Switzerland 30 50 30
GECAS U.S.A. 50 78 50
Regional Airlines France 10 5 10
Total 90 133 90
- ERJ 190:
Firm
Customer Country Firm Option Back Log
Crossair Switzerland 30 50 30
GECAS U.S.A. 0 22 0
Total 30 72 30
Legacy:
Firm
Customer Country Firm Option Back Log
Swift U.S.A. 25 25 25
Total 25 25 25
12