[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S/A
ANNOUNCES 3rd QUARTER 2002 RESULTS.
Unless otherwise indicated, the company's operational and financial information
is based on consolidated figures in Brazilian reais in accordance with the
corporate law accounting method.
Sao Jose dos Campos, November 13, 2002 - Embraer (BOVESPA: EMBR3, EMBR4) (NYSE:
ERJ) one of the leading world commercial aircraft manufacturers, registered in
the first nine months of 2002 net sales of R$ 4,860.6 million and net income of
R$ 530.6 million, equivalent to earnings per share of R$ 0.74548. The order
backlog totaled US$ 22.6 billion, comprising US$ 9.6 billion in firm orders and
US$ 13.0 billion in options.
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3rd Quarter Highlights
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o Net sales for the 3rd Quarter of 2002 (3Q02) were R$1,976.2 million, 27.0%
higher than the net sales in the 2nd quarter of 2002 (2Q02).
o EBITDA - Earnings before interest, taxes, depreciation and amortization in
3Q02 were R$ 675.9 million, 57.4% higher than the R$ 429.5 million in 2Q02.
The EBITDA margin in 3Q02 was 34.2%, compared with 27.6% in 2Q02.
o Net income in 3Q02 was R$ 187.8 million, equivalent to earnings per share
of R$ 0.26380.
o A total of 30 jets were delivered in the 3rd quarter: 28 jets to the
commercial market and 2 Legacy.
o On July 24, 2002, Embraer delivered the first three aircraft to the
Brazilian Air Force that will be used in the Amazon Surveillance System
(SIVAM). This delivery was comprised of two EMB 145 SA (AEW&C - Airborne
Early Warning and Control) and one EMB 145 RS - Remote Sensing. In total,
the Brazilian Air Force is expected to receive eight aircraft up to the
third quarter of 2003, including five EMB145 SA and three EMB 145 RS.
o On July 5, 2002 and on August 30, 2002, the Legacy business jet was granted
certification from the European Joint Aviation Authorities (JAA) and from
the US Federal Aviation Administration (FAA).
o On September 3, 2002, the ERJ 145 XR, an extra long-range version of the
ERJ 145 family, was granted certification from the Brazilian Centro Tecnico
Aerospacial (CTA). This new version received certification from the FAA on
October 22, 2002.
o On September 11, 2002, Embraer was selected, for the second consecutive
year, to be a part of the Dow Jones Sustainability Index (DJSI). The Dow
Jones Global Index is composed of the 2,500 largest companies, which are
ranked based on their social, environmental and economic performance.
Embraer was one of the 310 companies selected and was named the global
leader in the aerospace sector.
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1
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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Income Statement
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The following table sets forth a comparative analysis of Embraer's main
consolidated financial indicators for 2Q02, 3Q01, 3Q02 and the accumulated
results for the first nine months of 2001 and 2002.
Stated in millions of Reais, except%, number of shares and earnings per share
Income Statement 2nd Quarter 3rd Quarter Nine months of
Data 2002 2001 2002 2001 2002
Net sales 1,556.1 1,970.6 1,976.2 5,413.7 4,860.6
Gross profit 650.5 869.9 975.7 2,335.7 2,128.6
Gross margin (%) 41.8 44.1 49.4 43.1 43.8
Operating expenses (248.9) (252.7) (330.9) (641.6) (802.1)
Profit sharing (15.6) (2.5) (16.6) (61.1) (47.3)
Income from operations 386.0 614.7 628.2 1,633.0 1,279.2
Operating Margin (%) 24.8 31.2 31.8 30.2 26.3
Depreciation & amortization 43.5 44.4 47.7 136.5 128.2
EBITDA 429.5 659.1 675.9 1,769.5 1,407.4
EBITDA margin (%) 27.6 33.4 34.2 32.7 29.0
Financial income (expenses), net 3.7 59.9 52.3 162.3 63.8
Monetary & exchange variations, net (193.3) (315.9) (465.2) (626.2) (683.2)
Other non-operating revenues (1.3) (23.0) (1.5) (33.1) (3.2)
Pre-tax Profit 195.1 335.7 213.8 1,136.0 656.6
Income Tax & Social Contribution (26.7) (82.6) (24.6) (323.3) (121.4)
Minority Interests (1.9) (0.7) (1.4) (3.1) (4.6)
Net Income 166.5 252.4 187.8 809.6 530.6
Net margin (%) 10.7 12.8 9.5 15.0 10.9
Number of shares at 711,345,093 621,312,874 711,722,224 621,312,874 711,722,224
end of period (million) 0.23406 0.40635 0.26380 1.30304 0.74548
Net Sales, Cost of Goods Sold and Gross Margin
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The net sales for 3Q02 totaled R$ 1,976.2 million, or 0.3% higher than the 3Q01
net sales of R$ 1,970.6 million. Therefore cumulative sales in the first nine
months of 2002 totaled R$ 4,860.6 million, 10.2% lower than the R$ 5,413.7
million in the same period of 2001. Embraer's net sales in 3Q02 remained in line
with net sales in 3Q01, since despite the low number of jet deliveries in 3Q02
in comparison with 3Q01, sales in the defense market increased during 3Q02 from
R$102.2 million in 3Q01 to R$186.1 million in 3Q02. The increased sales in the
defense area were principally related with deliveries of aircraft for government
transport and the recognition of revenues derived from the "aerial surveillance
and reconnaissance" segment.
33 jets were delivered to the regional market in 3Q02, of which 18 ERJ 145 and
10 ERJ 140. In addition to the deliveries to the regional market, two Executive
Legacy aircraft were delivered, one to the corporate market and one to the
defense market. The first three aircraft for the Amazon Surveillance System -
SIVAM - were delivered to the defense market. 2 EMB 145 AEW&C and 1 EMB 145 RS
units were delivered. In 3Q01 a total of 41 jets and 1 EMB 120 were delivered.
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2
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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Deliveries Nine months of
By Market 3Q01 4Q01 1Q02 2Q02 3Q02 2001 2002
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Commercial
ERJ 135 7 2 1 - - 25 1
ERJ 145 22 15 18 18 18 89 54
ERJ 140 8 14 10 10 10 8 30
EMB 120 1 - - - - 2 -
Defense
EMB 135 4 2 - - - 5 -
Legacy - - - - 1 - 1
EMB 145 - 1 1 - 3 - 4
Corporate
Legacy - - - 2 1 - 3
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Total 42 34 30 30 33 129 93
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In addition to deliveries of jets, net sales include revenues from sales of
spare parts and customer services and sales to the defense market. In 3Q02, the
commercial aviation segment represented 76.3%, defense aviation 9.4%, corporate
aviation 3.7% and customer services 10.6% of total net sales.
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Net Sales by 2nd Quarter 3rd Quarter
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Segment 2002 2001 2002
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R$ % R$ % R$ %
Commercial Aviation 1,236.5 79.4% 1,623.0 82.3% 1,506.8 76.3%
Defense Aviation 71.3 4.6% 102.2 5.2% 186.1 9.4%
Corporate Aviation 108.5 7.0% 110.0 5.6% 73.8 3.7%
Customer Services and Other
related business 139.8 9.0% 135.4 6.9% 209.5 10.6%
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Total 1,556.1 100,0% 1,970.6 100.0% 1,976.2 100.0%
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The cost of goods sold (COGS) was R$ 1,000.4 million in 3Q02, or 9.1% below the
R$ 1,100.7 million recorded in the same quarter of the prior year. In 3Q02, the
gross margin was 49.4%, compared with 44.1% recorded in 3Q01.
The reduction in COGS was due to the slower rhythm of deliveries in 3Q02 in
relation to 3Q01. It was also affected by the accounting revision of expenses
related with technology and miscellaneous support, which up to 2001 were
classified as COGS but as from 1Q02 were classified as administrative expenses
(see "administrative and selling expenses")
The main reason for the increase in gross margin was the impact of the exchange
variation between the date of purchase of the components and raw materials,
generally imported and dollar-denominated, and the corresponding delivery date
of the aircraft. In 3Q02 the real devalued by 36.9% against the dollar, whilst
in 3Q01 the devaluation was 15.9%.
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3
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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Administrative and Selling Expenses
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Administrative and selling expenses were R$ 294.6 million in 3Q02, 39.1% higher
than the R$ 211.8 million recorded in 3Q01.
Selling expenses increased by 17.7% from R$157.4 million in 3Q01 to R$185.2
million in the same period of 2002. This increase was a result of the increase
in product warranty from R$20.5 million in 3Q01 to R$33.5 million in 3Q02. This
increase was due to the devaluation of the real against the dollar, since the
expense is paid in dollars. A provision for incurred but not yet reported (IBNR)
losses for the financial guarantees provided by Embraer to its customers in the
amount of R$ 13.3 million are also included in this line item. (See "recent
events").
Administrative expenses in 3Q02 totaled R$109.4 million, corresponding to a
101.1% increase compared with R$54.4 million for the same period of the prior
year. The increase in administrative expenses is a consequence of revising the
classification of certain expenses that up to 2001 were included as the cost of
goods sold, and as from 1Q02 were classified as administrative expenses. In 3Q02
this revision represented an additional R$24.7 million, referring to expenses
related with information technology and various kinds of support. There was also
an increase in outsourced services from R$7.6 million in 3Q01 to R$17.0 million
in 3Q02. Other administrative expenses increased from R$1.9 million in 3Q01 to
R$18.1 million in 3Q02, principally as a result of the structuring expenses of
Embraer Aircraft Holding Inc. - EAH, created in January 2002.
Consolidated administrative and selling expenses include the expenses of
subsidiaries located abroad. In addition to the factors mentioned above, these
expenses were also affected by the currency devaluation of 45.8% when comparing
3Q01 with 3Q02.
Other Operating Income (Expenses), net
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Other net operating expenses were R$37.2 million in 3Q02, compared to an expense
of R$ 41.0 million in the same period of the prior year. Other operating income
increased from R$10.8 million to R$32.4 million. This increase was a result of
income obtained from insurance claims and reimbursement of expenses.
The increase in other operating income was offset by the increase in other
operating expenses from R$ 51.8 million in 3Q01 to R$69.6 million in 3Q02. This
increase was due to additional expenditure on preliminary development studies
for projects related with the new Embraer jet family and also an increase in
training and professional development expenses.
Profit-sharing
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The Profit-sharing Program is linked to the action plan and meeting operational
goals, in addition to dividends paid to Embraer shareholders. The provision of
R$16.6 million made in 3Q02 was based on the distribution of interest on
shareholders' equity during the period and is subject to the above-mentioned
criteria.
Income from Operations
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In 3Q02, the income from operations before financial income (expenses) including
employee profit sharing and equity in unconsolidated subsidiary was R$628.2
million,
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4
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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2.2% higher than the R$614.7 million in the equivalent period of 2001. As a
result, Embraer achieved operating margins of 31.8% in 3Q02 and 31.2% in 3Q01.
EBITDA
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Earnings before interest, taxes, depreciation and amortization in 3Q02 were
R$675.9 million, representing a 34.2% margin on net sales compared with R$659.1
million for 3Q01 and an EBITDA margin of 33.4%.
The increase in the EBITDA margin in 3Q02 compared with the equivalent period of
the prior year is a consequence of the increased gross margin during the period.
Financial Income (Expenses), net
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In 3Q02, Embraer's net financial income was R$52.3 million, without considering
the distribution of interest on shareholders' equity to company shareholders and
monetary and exchange variations, which were 12.7% lower than the income of
R$59.9 million obtained in 3Q01, principally as a result of financial
structuring expenses, which increased from R$0.1 million in 3Q01 to R$7.4
million in 3Q02. The increases in financial structuring expenses were
compensated by a reduction in interest and commissions on financing, which fell
from R$34.6 million in 3Q01 to R$26.8 million in 3Q02.
Net monetary and exchange variations increased from an expense of R$315.9
million in 3Q01 to an expense of R$465.2 million in the equivalent period of
2002. This result is due to a 36.9% devaluation in 3Q02 compared with a
devaluation of 15.9% in 3Q01.
Non-operating Income (Expense), net
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In 3Q02, net non-operating expenses totaled R$1.5 million compared with an
expense of R$23.0 million in 3Q01. This reduction occurred because in 3Q01
Embraer made a provision of R$18.9 million for the write-off of deferred charges
on investments made to develop and produce the tanks, fuel systems and landing
gear of the S-92 Helibus helicopter developed by Sikorsky.
Income Tax
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In 3Q02, the provision for income tax and social contribution, net of deferred
income tax, totaled R$24.6 million, compared with R$82.6 million registered in
the equivalent period of the prior year. This reduction occurred as a result of
recognizing a credit of R$59.5 million in 3Q02, due to the effect of the
currency devaluation on the balance of deferred income tax and social
contribution related with temporary differences.
Net Income
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Finally, Embraer's net income in 3Q02 of R$187.8 million was lower than net
income for the equivalent period of 2001 of R$252.5 million. The net margin in
3Q02 was 9.5%, compared with the 12.8% margin obtained in the equivalent period
of 2001.
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5
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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Financial Management
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On September 30, 2002, Embraer's cash and cash equivalents were R$2,961.2
million. On the same date indebtedness totaled R$2,115.3. Therefore the company
had a net cash position of R$845.9 million.
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Balance Sheet June 30, September 30,
and other data 2002 2002
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In R$ million
Cash and cash equivalents 2,537.9 2,961.2
Accounts receivable - total 567.5 1,052.7
Inventories 2,467.7 2,767.8
Total assets 8,330.5 10,606.7
Bank debt 1,514.7 2,115.3
Total liabilities 8,330.5 10,606.7
Net cash (debt) 1,023.2 845.9
Shareholders' equity 2.686.8 2,811.5
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Indebtedness
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During the last year the company extended its indebtedness profile and as a
result on September 30, 2002, 54.5% of total Embraer indebtedness was related to
long-term financing, compared with 40.5% at the end of 2Q02 and 38.5% in 1Q02.
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Maturity Schedule June 30,2002 September 30, 2002
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R$ thousand
2003 139,214 129,836
2004 260,545 344,046
2005 121,810 238,383
2006 89,986 201,325
2007 to 2009 1,246 239,800
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Total Long-term 612,801 1,153,390
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Embraer has decided to swap its Japanese yen and US dollar denominated debt to
R$-related interbank interest rates (CDI). Therefore, out of the total foreign
currency indebtedness of R$2,025.3 million, 51.9% or R$ 1,050.3 million is
indexed in R$ (CDI). Considering the conversion of these debts into R$, of the
total company indebtedness of R$ 2,115.3 million, 46.1% or R$ 975.0 million
refers to foreign currency borrowing with a weighted average cost of 5.0% per
annum. The remaining R$ 1,140.3 million, equivalent to 53.9% of the total debt,
is financed in Brazilian currency at an average weighted interest rate of 15.5%
per annum, equivalent to 86.8% of the CDI.
Cash
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Since the company has more than 97% of revenues denominated in US dollars and a
firm order backlog of US$9.6 billion, Embraer has a natural hedge for its
operations.
Of the total cash and cash equivalents balance of R$2,961.2 million, 68.0%
comprises investments in reais and the remaining 32.0% in foreign currency,
primarily in US dollars. The Embraer cash investment strategy is based on
prospects of future investments, which are mostly denominated in Reais.
The cash balance does not include the net balance of R$130.5 million for the net
hedge provision as of September 30, 2002.
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6
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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Accounts Receivable and Inventories
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Total accounts receivable increased from R$567.5 million on June 30, 2002 to
R$1,052.7 million on September 30, 2002. This increase is due to the bridge
loans obtained to finance six aircraft delivered during the quarter.
Inventories increased from R$2,467.7 million on June 30 to R$2,767.8 million on
September 30. This increase was related with the development of the EMBRAER 170,
which currently has six prototypes carrying out the flight certification
campaign, in addition to the effect of the currency devaluation on raw materials
inventories at subsidiaries located abroad and new materials purchases made at a
higher exchange rate during the quarter.
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Investments in R&D Development (R&D)
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Research and Development (R&D)
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In 3Q02 R$ 108.3 million was invested, totaling R$ 208.4 million invested in the
first nine months of this year on the development of new products, principally
development of the new EMBRAER 170/190 jet family, and also on the maintenance
and improvement of existing models. Total investments during 2002 remained
practically stable compared with the total invested in the first nine months of
2001 of R$201.0 million.
Productivity and Improvements in Industrial Capacity
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$ 43.7 million was invested in 3Q02, totaling R$ 141.3 million invested in the
first nine months of the year, in improving the company's industrial capacity,
including improvements and modernization of industrial and engineering
processes, machinery and equipment. Total investments made during 2002 were
22.5% lower when compared with the total invested during the first nine months
of 2001 of R$174.1 million.
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Supplementary Information in US GAAP
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Also on this date Embraer disclosed the 3Q02 results in accordance with
generally accepted accounting principals in the United States (US GAAP). We
present below selected consolidated results in accordance with US GAAP in US$.
Net revenues in 3Q02 totaled US$ 580.6 million and gross profit returned was US$
228.1 million with a gross margin of 39.3%. The operating profit for the period
totaled US$111.0 million, with an operating margin of 19.1%. The EBITDA for the
period was US$125.2 million and the EBITDA margin 21.6%. Pre-tax income was US$
105.6 million (18.2% of net revenues). Income tax and social charges totaled US$
64.7 million, representing an effective rate of 61.3%. The net loss for the
period totaled US$ 40.6 million (7.0% of net revenues).
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New Orders and Backlog
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Commercial Aviation Market
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At the end of 3Q02, orders for commercial aircraft totaled 989, comprising a
firm order backlog of commercial products with a balance of 402 aircraft to be
delivered, which reflects a healthy demand for the Company's current models and
new products. The
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7
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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total of options were 555 units resulting in a total of 1,544 aircraft ordered
since the initiation of the ERJ jet family program.
ERJ 135/140/145 Jet Family
The family of 37, 44 and 50 seat regional jets comprises the ERJ 135/140/145
models respectively. The commonality ratio, of approximately 96%, between
models, enables the same ground support equipment to be used by customers
operating the aircraft, as well as the same pilot certification and standardized
maintenance procedures, providing customers with significant operating and
maintenance efficiencies.
The extra long-range version of the highly successful ERJ 145 regional jet
family, ERJ 145 XR, was granted its certificate of airworthiness by the
CTA-Centro Tecnico Aeroespacial (Aerospace Technical Center) on September 3,
2002. Federal Aviation Administration (FAA) certification for the aircraft was
granted on October 22, 2002, for US operation.
The ERJ 145 XR has 99% commonality of structure, parts and systems with the
other aircraft in the ERJ 145/135/140 family. It also features the latest
improvements introduced to the ERJ 145/135/140 family as a result of the
operational experience gained in more than four years of airline operations
worldwide. Enhanced performance capability of the ERJ 145 XR includes a 2,000
nautical mile range, maximum takeoff weight of 53,130 pounds, and improved, twin
Rolls-Royce AE3007A1E engines with an additional 7% of take-off thrust.
The launch customer of the ERJ 145 XR, ExpressJet Airlines (formerly Continental
Express), already received 8 aircraft immediately after certification.
ExpressJet will take delivery of the first 18 aircraft this year and will begin
service with the new model in early November. ExpressJet holds a total of 104
firm orders and 100 purchase options for the ERJ 145 XR. Currently the carrier
operates 30 ERJ 135 and 140 ERJ 145.
At the end of the 3rd quarter of 2002 the order backlog for the ERJ 135/140/145
family for the regional market totaled 877 firm orders, of which 587 have been
delivered, and 353 options. These amounts include cancellations from an African
customer, which occurred during this quarter.
The New Family of EMBRAER 170/190 Jets
The 70 seat capacity EMBRAER 170, and the 98 and 108 seat capacity EMBRAER 190
and 195 were launched in June of 1999. Also the 78 seat capacity EMBRAER 175 was
officially launched on October 29, 2001 during the rollout ceremony of the
EMBRAER 170.
Six pre-series EMBRAER 170 aircraft are taking part in an aggressive development
and certification program. The first EMBRAER 170 recorded its maiden flight on
February 19 of this year, only 32 months after the official launching of the
EMBRAER 170/190 program in June of 1999. Less than five months later another
four aircraft have made their maiden flights. The development and certification
program is being developed using six test aircraft and two structural test rigs.
Embraer envisions the certification of the aircraft by the end of 2Q03, followed
by delivery of the first aircraft to the launch customer SWISS, from
Switzerland.
Even before the maiden flight of the EMBRAER 170 prototype, Embraer had already
accumulated 112 firm orders and 202 purchase options for this new jet family,
ordered by important international airlines and leasing operators.
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8
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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Corporate Aviation Market
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The Legacy is a corporate jet developed based on the successful ERJ 135 regional
jet platform. Launched on July 26, 2000 at the Farnborough Air Show in England,
the Legacy is available in executive, corporate and authority transport
versions. The Legacy received official certification from the CTA - Centro
Tecnico Aeroespacial (Aerospace Technical Center) on December 10, 2001, on July
5, 2002 from the Joint Aviation Authorities (JAA) and on August 23, 2002 from
the Federal Aviation Administration (FAA).
During 3Q02, Embraer received two new firm orders for the Legacy from two US
customers.
The Corporate Aviation order backlog reached a total of 164 aircraft at
September 30, 2002, consisting of 73 firm orders and 91 options, of which 10
aircraft have been delivered.
Aircraft Ordered during the Period:
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Firm
Orders 3Q01 4Q01 1Q02 2Q02 3Q02
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Commercial
ERJ 135/140 22 8 - 15 -
ERJ 145 1 - - 7 -
EMBRAER 170 2 - - - -
Corporate & Defense
Legacy/EMB 135 13 25 - 1 2
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Total 38 33 - 23 2
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Defense Market
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On June 24, 2002 the Brazilian Civil Aviation Authority issued Supplemental Type
Certificates (STC) for the R-99A and R-99B aircraft manufactured by Embraer for
the Brazilian Air Force (FAB). Both models are part of the Amazon Surveillance
System (SIVAM) project.
One month after certification of these aircraft, Embraer delivered the first
three aircraft that will be part of the Sivam, to FAB. The aircraft, two EMB 145
SA (AEW&C - Airborne Early Warning and Control) and one EMB 145 RS (Remote
Sensing) models are part of a total order of eight aircraft to be delivered up
to the third quarter of 2003 for the SIVAM Program, of which five will be EMB
145 SA and three will be EMB 145 RS type.
The aircraft from Embraer are a fundamental part of the SIVAM Program that will
provide precision surveillance and monitoring of some 5.2 million square
kilometers of the Amazon. The EMB 145 SA, dubbed the R 99-A by FAB, will be
responsible for performing air surveillance missions and monitoring air traffic,
even aircraft flying at very low altitudes. It is equipped with the
state-of-the-art Ericsson Erieye Radar.
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9
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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The EMB 145 RS, called the R 99-B by FAB, will perform data collection on the
ground characteristics and this information will benefit the areas of bio mass
analysis and exploitation, providing full monitoring of any ground and river
movement within the Amazon. Its sophisticated array of sensors, including a
modern SAR (Synthetic Aperture Radar), Multi-Spectral Scanner and Forward
Looking Infra Red, allows for perfect and complete monitoring, even under the
dense vegetation of the forest.
In addition to the surveillance aircraft, SIVAM will also employ the ALX
turboprop, a lightweight training and attack aircraft. One of the advantages of
the new model, based on the Tucano, is that, even without its own radar system,
it can be monitored by the EMB 145 AEW&C and allows these turboprops to
intercept unauthorized aircraft. The FAB has already ordered 76 Super Tucano
aircraft, and has options to purchase an additional 33. Embraer will begin
delivery of the ALX to FAB at the end of 2003.
Backlog
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The Embraer firm order backlog at the end of the 3rd Quarter of 2002 was US$ 9.6
billion, which together with options, reached US$ 22.6 billion. The following
chart shows the order backlog at the end of each quarter:
[OBJECT OMITTED]
Firm orders in backlog
US$ billion
3Q01 4Q01 1Q02 2Q02 3Q02
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Firm order backlog 11.2 10.7 10.3 10.1 9.6
Options 12.7 12.7 12.8 13.7 13.0
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Total 23.9 23.4 23.1 23.8 22.6
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Investor Relations
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In 3Q02, the Embraer preferred stock depreciated by 13.3%, reaching a value per
share of R$ 13.00 on September 30, 2002. During the same period the average
daily volume traded on the Sao Paulo Stock Exchange (BOVESPA) was R$ 9.7
million. The common stock depreciated by 15.3% in the quarter, and closed the
quarter with a value of R$ 11.75 per share and an average daily trading volume
of R$ 2.2 million. In the same period the Ibovespa index fell by 22.6%.
The ADSs trading on the New York Stock Exchange (NYSE) fell by 37.8% during the
quarter and were quoted at US$ 13.3 per ADS at the end of the quarter. The
average daily trading volume for the period totaled 315 thousand ADSs,
equivalent to a financial volume of US$ 5.5 million. In the same period, the Dow
Jones index fell by 17.9%
The Board of Directors of the company approved the distribution of interest on
shareholders' equity for the 3rd quarter totaling R$ 66.3 million.
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10
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
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Dividends & Interest on Date of Total Value per share in R$
Shareholders' Equity (In thousands)
In 2002 Distribution R$ Common Preferred
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Interest - 1st Quarter 03/19/02 58,910 0.07777 0.08554
Interest - 2nd Quarter 06/14/02 59,530 0.07859 0.08644
Interest - 3rd Quarter 09/13/02 66,300 0.08740 0.09613
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TOTAL - 184,740 0.24376 0.26811
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Recent Events
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ERJ 145 XR Certification:
- -------------------------
Please see new orders and Backlog - ERJ 135/140/145 Jet Family.
New ERJs to be Flown for Delta Connection on Florida Routes
- -----------------------------------------------------------
On October 22, 2002, Embraer delivered to Chautauqua Airlines the first ERJ 145
aircraft from a firm order of 22 jets (fifteen ERJ 135s and seven ERJ 145s)
ordered in June 2002. The event took place at Embraer's headquarters in Sao Jose
dos Campos, Brazil. This delivery was a result of the agreement between Delta
Air Lines and Chautauqua Airlines, in which Chautauqua will fly ERJs in Florida
under the Delta Connection brand.
Financial Support for Sales
- ---------------------------
According to existing sales contracts, Embraer may have to repurchase a number
of our aircraft. The price per aircraft of any required repurchase is less than
the original purchase price of the aircraft. However, in some cases, the price
per aircraft is higher than our current estimate of the market value of the
relevant aircraft type in future years (based on internal and external aircraft
valuations, including information developed from the sales of similar aircraft
in the secondary market). If we are required to repurchase all of the relevant
aircraft under our repurchase obligation, which covers the period from 2003 to
2007, we could be required to pay up to approximately US$500 million for these
aircraft. Based on our current estimates and these third-party appraisals, we
believe that we could sell most repurchased aircraft in the market for a price
at least equal to the repurchase price.
At September 30, 2002, approximately 4.2% of our firm orders for regional jets,
including aircraft that have already been delivered, were subject to trade-in
options. These options provide that the repurchase price can be applied to the
price of an upgraded model or any of our other aircraft. The repurchase price is
determined in the
- --------------------------------------------------------------------------------
11
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
manner discussed above for regional jets and as a percentage of original
purchase price for our corporate jets. Based on the Company's current estimates
and third-party appraisals, management believes that any potential aircraft
accepted under trade-in could be sold in the market without material gain or
loss.
The Company has also guaranteed directly or indirectly a minimum residual value
for some of its aircraft, including aircraft that have already been delivered.
These guarantees run in favor of certain customers or providers of financing to
customers. In accordance with the Company policy and based on third-party
appraisals, this guaranteed minimum residual value does not exceed the appraisal
value of each aircraft delivered on the date of sale. The value of the guarantee
typically ranges from 18% to 25% of the sales price in the 10th to 15th year
after the year of delivery. In light of the volatility the of the airline
industry and resulting impact on the credit risk of airlines and our current
estimate of future market value of aircraft, the Company recorded a provision of
R$ 13.3 million to cover its current estimated exposure of the financial
guarantees related to the aircraft delivered through September 30, 2002. The
Company may be required to add to this provision as we reassess our estimated
exposure on a quarterly basis.
Faced with the current economic climate in the airline industry and a
deterioration in the credit risks of airlines, Embraer has created two dedicated
and specialized teams: one to manage its exposure under these various repurchase
and guarantee obligations and the other to manage any repurchased aircraft and
provide financial assistance to potential buyers of these aircraft.
Each of these specialized teams will operate under newly created subsidiaries.
Embraer Spain Holding Co. SL - ESH was incorporated in Spain, which in turn
formed ECC Investment Switzerland, AG and ECC Leasing Co., Ltd. ECC Investment
then formed ECC Insurance and Financial Co. Ltd, a captive insurance company
that insures Embraer's financial guarantees for clients or financial agents on
aircraft sales structures. Also as a subsidiary of ESH, on September 18, the ECC
Leasing Co. Ltd. was formed for the commercialization of used aircraft received
as trade-in or put options/walk-aways obligations.
For additional information please contact:
Embraer - Empresa Brasileira de Aeronautica S/A
Anna Cecilia Bettencourt
(55 12) 3927 1216
acecilia@embraer.com.br
- -----------------------
Gustavo Poppe
(55 12) 3927 1106
gustavo.poppe@embraer.com.br
Milene Petrelluzzi
(12) 3927 3054
milene.petrelluzzi@embraer.com.br
- ---------------------------------
- --------------------------------------------------------------------------------
12
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This document 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;
expectations of trends in the industry; our investment plans; our capacity to
develop and deliver products on the previously agreed dates; and existing and
future government regulations.
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
13
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A
CONSOLIDATED BALANCE SHEETS - CORPORATE LAW
(In thousands R$)
ASSETS
As of September 30, As of June 30,
------------------------------------------
2002 2002
------------------------------------------
Unaudited Unadited
CURRENT ASSETS
Cash and cash equivalent 2,961,239 2,537,912
Trade accounts receivables 878,319 449,750
Allowance for doubtfull accounts (96,674) (71,019)
Recoverable taxes 39,818 36,825
Deferred income 345,446 253,416
Other receivables 909,962 497,259
Inventories 2,767,803 2,467,715
Prepaid expenses 72,365 44,037
------------------------------------------
Total Current Assets 7,878,278 6,215,895
------------------------------------------
NON CURRENT ASSETS
Trade accounts receivables 174,384 117,768
Recoverable taxes 3,894 3,259
Compulsory loans, guarantee and other deposits 611,667 366,413
Other receivables 48,912 15,228
Deferred income taxes 155,887 141,098
Prepaid expenses 67,447 53,402
Assets available for sale 121,461 53,879
------------------------------------------
Total Non Current Assets 1,183,652 751,047
------------------------------------------
PERMANENT ASSETS
Investments 18,059 12,639
Property, plant & equipment 873,552 799,815
Deferred charges 653,147 551,079
------------------------------------------
Total Permanent Assets 1,544,758 1,363,533
------------------------------------------
TOTAL ASSETS 10,606,688 8,330,475
------------------------------------------
- --------------------------------------------------------------------------------
14
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A
CONSOLIDATED BALANCE SHEETS - CORPORATE LAW
(In thousands R$)
LIABILITIES AND SHAREHOLDER'S EQUITY
As of September 30, As of June 30,
------------------------------------------
2002 2002
------------------------------------------
Unaudited Unadited
NON CURRENT LIABILITIES
Loans 961,921 901,933
Suppliers 1,194,269 778,783
Accounts payable 202,469 117,045
Customer's advances 1,306,145 1,006,068
Taxes and social charges payable 550,867 468,446
Accrued taxes on income 98,519 49,688
Dealers and sales agent 2,074 1,613
Accrued liabilities 847,120 574,348
Dividends 103 377
Interest on Capital 28,255 53,682
Deferred income tax 8,528 4,587
------------------------------------------
Total Current Liabilities 5,200,270 3,956,570
------------------------------------------
LONG TERM LIABILITIES
Loans 1,153,390 612,801
Accounts payable 920,450 669,707
Customer's advances 390,289 274,990
Long term portion of refinance taxes 46,224 48,083
Accrued liabilities 26,534 24,864
Deferred income tax 35,329 34,976
------------------------------------------
Total Long Term Liabilities 2,572,216 1,665,421
------------------------------------------
MINORITY INTEREST 22,656 21,676
------------------------------------------
SHAREHOLDER'S EQUITY
Capital 1,647,283 1,646,827
Capital reserve 126,123 123,295
Legal reserve 118,060 118,060
Statutory reserve 574,246 574,246
Retained earnings 345,834 224,380
------------------------------------------
Total Shareholder's Equity 2,811,546 2,686,808
------------------------------------------
TOTAL LIABILITIES 10,606,688 8,330,475
------------------------------------------
- --------------------------------------------------------------------------------
15
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A.
CONSOLIDATED STATEMENTS OF INCOME - CORPORATE LAW
(In thousands R$)
------------------------------------------------------------------
Three months ended Nine months ended
September 30, SePtember 30,
------------------------------------------------------------------
2001 2002 2001 2002
------------------------------------------------------------------
Unaudited Unaudited
SALES
Gross Sales
Domestic market 53,281 57,124 127,884 146,216
Foreign market 1,923,913 1,948,332 5,371,516 4,776,840
Sales deductions (6,561) (29,279) (85,678) (62,445)
------------------------------------------------------------------
NET SALES 1,970,633 1,976,177 5,413,722 4,860,611
------------------------------------------------------------------
COST OF SALES (1,100,702) (1,000,448) (3,078,025) (2,732,018)
------------------------------------------------------------------
GROSS PROFIT 869,931 975,729 2,335,697 2,128,593
------------------------------------------------------------------
OPERATING INCOME (EXPENSES)
Aministrative (54,409) (109,398) (158,137) (254,479)
Selling (157,426) (185,158) (408,331) (422,287)
Other expenses, net (40,959) (37,218) (75,571) (126,424)
Equity in unconsolidated subsidiary 107 843 476 1,090
Profit sharing (2,564) (16,596) (61,140) (47,299)
INCOME FROM OPERATIONS BEFORE ------------------------------------------------------------------
FINANCIAL INCOME (EXPENSES) 614,680 628,202 1,632,994 1,279,194
------------------------------------------------------------------
FINANCIAL INCOME (EXPENSES)
Interest expense (48,320) (55,818) (122,969) (151,818)
Interest income 108,253 108,141 285,281 215,643
Monetary & exchange variations, net (315,876) (465,195) (626,217) (683,168)
INCOME FROM OPERATIONS AFTER ------------------------------------------------------------------
FINANCIAL INCOME (EXPENSES) 358,737 215,330 1,169,089 659,851
------------------------------------------------------------------
NON OPERATING INCOME (EXPENSE), NET (22,967) (1,490) (33,055) (3,197)
------------------------------------------------------------------
INCOME BEFORE TAX 335,770 213,840 1,136,034 656,654
------------------------------------------------------------------
INCOME TAX & SOCIAL CONTRIBUTION (82,578) (24,580) (323,327) (121,428)
------------------------------------------------------------------
INCOME AFTER TAX 253,192 189,260 812,707 535,226
------------------------------------------------------------------
MINORITY INTEREST (720) (1,506) (3,110) (4,652)
------------------------------------------------------------------
NET INCOME 252,472 187,754 809,597 530,574
------------------------------------------------------------------
TOTAL SHARES OUTSTANDING AT PERIOD END 621,312,874 711,722,224 621,312,874 711,722,224
EARNINGS PER SHARE AT THE END ------------------------------------------------------------------
OF EACH PERIOD (in R$) 0.40635 0.26380 1.30304 0.74548
------------------------------------------------------------------
- --------------------------------------------------------------------------------
16
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A.
CONSOLIDATED STATEMENTS OF CASH FLOW - CORPORATE LAW
(In thousands R$)
---------------------------------------------------------------------
Three months ended September 30, Nine months ended September 30,
2001 2002 2001 2002
---------------------------------------------------------------------
Unaudited Unaudited
OPERATING ACTIVIT IES
Net income 252,472 187,754 809,597 530,574
Non cash Items - -
Depreciation and amortization 44,374 47,637 136,521 128,160
Allowance for doubtfull accounts 12,616 25,656 25,541 41,543
Provision for inventories (obsolescence) 1,650 17,254 9,279 58,132
Gain (loss) on permanent asset disposals 495 1,451 125 6,958
Write off of deferred charges 18,713 2,295 18,980 3,856
Write off of deferred income (28) - (36) -
Provision forlosses 10,425 30 27,891 3,337
Deferred income and social contribution
taxes (25,055) (102,525) (2,513) (145,512)
Interest on loans, tax installments and
debentures 24,132 13,421 61,349 51,134
Reserve for (reversal of) contingencies - 848 201 844
Monetary and exchange variations, net 209,202 362,470 326,718 638,651
Translation adjustments on consolidated
foreign investments (39,051) (108,398) (65,806) (160,349)
Equity in unconsolidated subsidiary (107) (844) (476) (1,091)
Minority interest 720 1,506 3,110 4,652
---------- -------- ---------- -------
Total operating activities 510,558 448,554 1,350,481 1,160,889
CHANGES IN CURRENT ASSETS AND LIABILIT IES
Accounts receivables (1,020,291) (428,569) (1,474,117) 563,001
Inventories (489,953) (317,341) (1,136,171) (454,840)
Prepaid expenses (16,950) (28,328) (18,513) (16,379)
Deferred and recoverable taxes 1,652 (2,993) (27,228) (3,839)
Other receivables (52,059) (412,703) (65,902) (774,376)
Suppliers 148,138 415,485 694,075 578,553
Taxes and social charges payable (22,239) 48,832 6,774 (13,773)
Accrued Iiabiilities 34,811 272,773 132,039 335,095
Customer's advances 331,725 300,077 407,819 424,386
Taxes payable 40,825 104,599 89,941 271,814
Other 19,541 85,885 42,255 58,965
---------- -------- ---------- -------
Total changes in current assets and
liabilities (1,024,800) 37,715 (1,349,028) 968,607
- --------------------------------------------------------------------------------
17
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A.
CONSOLIDATED STATEMENTS OF CASH FLOW - CORPORATE LAW
(In thousands R$)
---------------------------------------------------------------------
Three months ended September 30, Nine months ended September 30,
2001 2002 2001 2002
---------------------------------------------------------------------
Unaudited Unaudited
CHANGES IN NON CURRENT ASSETS AND LIABILIT
IES
Accounts receivables (49,759) (56,616) (67,605) (57,277)
Recoverable taxes (6,537) (635) (2,937) 2,074
Other receivables (3,800) 267,378 7,184 354,353
Assets for sale - (67,582) - (121,461)
Prepaid expenses - (14,045) - (50,890)
Accounts payable 57,019 89,618 108,601 175,117
Customer's advances (160,322) 115,299 50,089 142,948
Accrued liabilities 55 822 (90) 705
Taxes payable (1,096) (2,204) (3,296) (4,466)
Minority interest 158 (526) 617 (1,648)
---------- ---------- ---------- ----------
Total changes In non current assets and
liabilities (164,282) 331,509 92,563 439,455
Net cash provided by operating activities (678,524) 817,781 94,016 2,568,951
---------- ---------- ---------- ----------
INVESTING ACTIVITIES
Sale of property, plant and equipment (174) (628) 698 327
Compulsory loans (2,537) (245,255) (5,394) (306,025)
Additions to property, plant and equipment (65,532) (43,694) (174,080) (141,269)
Additions to deferred charges (75,029) (118,984) (200,972) (241,835)
Additions to investments (697) - (1,647) (1,014)
---------- ---------- ---------- ----------
Net cash used in investing activities (143,969) (408,561) (381,395) (689,816)
---------- ---------- ---------- ----------
FINANCING ACTIVITIES
Loans repaid (660,560) (542,255) (2,047,068) (2,002,315)
New loans obtained 1,095,493 627,865 2,728,702 1,428,319
Payment of refinanced taxes (1,134) (20,705) (3,377) (23,016)
Guarantee deposits (14,807) (120,377) (36,063) (124,708)
Dividends and interest on capital paid (164,903) (92,001) (353,210) (309,991)
Grant for investments from risk sharing
partners 16,555 161,125 33,806 373,252
Capital increase - 456 3,058 1,445
Debentures paid - - (3,108) -
---------- ---------- ---------- ----------
Net cash provided (used In) financing
activities 270,644 14,108 322,740 (657,014)
---------- ---------- ---------- ----------
Net Increase In cash and cash equivalents (551,849) 423,328 35,361 1,222,121
Cash and cash equivalents, beginning of the
period 2,912,789 2,537,911 2,325,579 1,739,118
---------- ---------- ---------- ----------
Cash and cash equivalents, end of the period 2,360,940 2,961,239 2,360,940 2,961,239
========== ========== ========== ==========
- --------------------------------------------------------------------------------
18
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A
BACKLOG AS OF SEPTEMBER 30, 2002
- - ERJ 145:
- ----------------------------------------------------------------------------------------------------
Customer Country Firm Option Deliveries Firm Order
Backlog
- ----------------------------------------------------------------------------------------------------
Air Caraibes Guadalupe 2 0 2 0
- ----------------------------------------------------------------------------------------------------
Air Moldova Moldavia 0 2 0 0
- ----------------------------------------------------------------------------------------------------
Alitalia Italy 14 7 9 5
- ----------------------------------------------------------------------------------------------------
American Eagle USA 56 17 56 0
- ----------------------------------------------------------------------------------------------------
Axon Airlines Greece 3 0 3 0
- ----------------------------------------------------------------------------------------------------
British Midland UK 11 5 9 2
- ----------------------------------------------------------------------------------------------------
British Regional UK 23 3 23 0
- ----------------------------------------------------------------------------------------------------
Brymon UK 7 14 7 0
- ----------------------------------------------------------------------------------------------------
Cirrus Germany 1 0 1 0
- ----------------------------------------------------------------------------------------------------
Continental Express USA 245 100 141 104
- ----------------------------------------------------------------------------------------------------
Swiss Switzerland 25 15 25 0
- ----------------------------------------------------------------------------------------------------
ERA Spain 2 0 2 0
- ----------------------------------------------------------------------------------------------------
KLM Exel Netherlands 2 2 2 0
- ----------------------------------------------------------------------------------------------------
LOT Poland 16 0 14 2
- ----------------------------------------------------------------------------------------------------
Luxair Luxembourg 9 2 9 0
- ----------------------------------------------------------------------------------------------------
Mesa USA 36 45 32 4
- ----------------------------------------------------------------------------------------------------
Portugalia Portugal 8 0 8 0
- ----------------------------------------------------------------------------------------------------
Proteus France 18 8 11 7
- ----------------------------------------------------------------------------------------------------
Regional Airlines France 17 0 14 3
- ----------------------------------------------------------------------------------------------------
Rheintalflug Austria 4 4 3 1
- ----------------------------------------------------------------------------------------------------
Rio-Sul Brazil 16 0 16 0
- ----------------------------------------------------------------------------------------------------
Sichuan Airlines China 5 0 5 0
- ----------------------------------------------------------------------------------------------------
Skyways AB Sweden 4 11 4 0
- ----------------------------------------------------------------------------------------------------
Trans States USA 12 0 12 0
- ----------------------------------------------------------------------------------------------------
Wexford USA 45 67 38 7
- ----------------------------------------------------------------------------------------------------
Total 581 302 446 135
- ----------------------------------------------------------------------------------------------------
- - ERJ 135:
- ----------------------------------------------------------------------------------------------------
Customer Country Firm Option Deliveries Firm Order
Backlog
- ----------------------------------------------------------------------------------------------------
American Eagle USA 40 0 40 0
- ----------------------------------------------------------------------------------------------------
British Midland UK 4 0 2 2
- ----------------------------------------------------------------------------------------------------
City Air Sweden 2 1 2 0
- ----------------------------------------------------------------------------------------------------
Continental Express USA 30 0 30 0
- ----------------------------------------------------------------------------------------------------
Pan Europeenne France 1 0 1 0
- ----------------------------------------------------------------------------------------------------
Proteus France 6 0 6 0
- ----------------------------------------------------------------------------------------------------
Regional Airlines France 3 0 3 0
- ----------------------------------------------------------------------------------------------------
Regional Air Lines Morocco 1 5 0 1
- ----------------------------------------------------------------------------------------------------
SA Airlink South Africa 20 0 5 15
- ----------------------------------------------------------------------------------------------------
Wexford USA 15 0 0 15
- ----------------------------------------------------------------------------------------------------
TOTAL 122 6 89 33
- ----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
19
[EMBRAER LOGO] Earnings Release - 3rd quarter 2002
- --------------------------------------------------------------------------------
- - ERJ 140:
- ----------------------------------------------------------------------------------------------------
Customer Country Firm Option Deliveries Firm Order
Backlog
- ----------------------------------------------------------------------------------------------------
American Eagle USA 139 25 37 102
- ----------------------------------------------------------------------------------------------------
Midwest Express USA 20 20 0 20
- ----------------------------------------------------------------------------------------------------
Wexford USA 15 0 15 0
- ----------------------------------------------------------------------------------------------------
TOTAL 174 45 52 122
- ----------------------------------------------------------------------------------------------------
- - EMBRAER 170:
- ----------------------------------------------------------------------------------------------------
Customer Country Firm Option Deliveries Firm Order
Backlog
- ----------------------------------------------------------------------------------------------------
Swiss Switzerland 30 50 0 30
- ----------------------------------------------------------------------------------------------------
GECAS USA 50 78 0 50
- ----------------------------------------------------------------------------------------------------
Air Caraibes Guadalupe 2 2 0 2
- ----------------------------------------------------------------------------------------------------
Total 82 130 0 82
- ----------------------------------------------------------------------------------------------------
- - EMBRAER 195:
- ----------------------------------------------------------------------------------------------------
Customer Country Firm Option Deliveries Firm Order
Backlog
- ----------------------------------------------------------------------------------------------------
Swiss Switzerland 30 50 0 30
- ----------------------------------------------------------------------------------------------------
GECAS USA 0 22 0 0
- ----------------------------------------------------------------------------------------------------
Total 30 72 0 30
- ----------------------------------------------------------------------------------------------------
Legacy Executive:
- ----------------------------------------------------------------------------------------------------
Customer Country Firm Option Deliveries Firm Order
Backlog
- ----------------------------------------------------------------------------------------------------
SWIFT USA 24 25 0 24
- ----------------------------------------------------------------------------------------------------
Undisclosed USA 17 10 3 14
- ----------------------------------------------------------------------------------------------------
TOTAL 41 35 3 38
- ----------------------------------------------------------------------------------------------------
Legacy Shuttle & EMB 135 - Corporate Market:
- ----------------------------------------------------------------------------------------------------
Customer Country Firm Option Deliveries Firm Order
Backlog
- ----------------------------------------------------------------------------------------------------
Undisclosed USA 6 6 6 0
- ----------------------------------------------------------------------------------------------------
Conoco USA 1 0 1 0
- ----------------------------------------------------------------------------------------------------
Indigo USA 25 50 0 25
- ----------------------------------------------------------------------------------------------------
TOTAL 32 56 7 25
- ----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
20