2005* Embraer Day Financial Presentation (DisponíVel Apenas Em InglêS)

CorporateGovernance

Bovespa19.2%

BrazilianGovt.* 0.8%

European Group20%

ControllingShareholders

60%

October, 2005

0.8% Brazilian Govt.* 20% European GroupDassault Aviation 5.67%Thales 5.67%EADS 5.67%Snecma 3%

60% Controlling ShareholdersPREVI (Banco do Brasil Pension Fund) 20%SISTEL (Former Telebrás Pension Fund) 20%Bozano Group 20%

19.2% Bovespa

Ordinary Shares: 242,544,448 (34.0%)

* Includes one golden share

Embraer Voting Capital

October, 2005

NYSE59.8%

Bovespa31.2%

BNDES9.0%

Preferred Shares: 478,290,684 (66.0%)

Embraer Preferred Shares

• Board of Directors Composition:

Six representatives indicated by the Controlling Shareholders, plus the CEO;

Two representatives indicated by the Employees;

Two representatives of the minority shareholders;

Two governament representatives.

• Active Board of Directors & Permanent Fiscal Board acting as an Audit Commitee.

Corporate Governance

Audit Comitee – Conselho Fiscal

• Composed of five independent members including one financial expert

• Elected in a annual general shareholders’ meeting

• Makes financial reporting recommendations to management and the board

• Responsible for handling whistleblower complains

• Oversees the relationship between managers and external auditors


QCorporate Governance ActionsTrading policyDisclosure PolicyRisk managementCode of Ethics & ConductDisclosure Comitee

AccountabilityBrazilian Gaap & US Gaap Simultaneously


Dividends

US$ Million

10468

204

139

47%

54%

47%

50%

2002 2003 2004 9M05

Dividends Pay-Out Ratio

5.47 4.58 3.79 4.00Yield (Gross)

Differences between Brazilian GAAP

& US GAAP

Commercial Airline & Corporate SegmentsRevenues are generally recognized as deliveries are made

DefenseDefense segment operates in a business environment that differs from the Airline and Business Jet market segments. The main differences are:

• Long-term contracts • Products are customized according to customer needs• Quantities and selling prices are generally fixed at the

beginning of the program• Revenues are recognized under percentage-of-

completion method.

Revenue Recognition – BR Gaap & US Gaap

Commercial Aircraft & Executive Aircraft Segments

BR GAAPR&D capitalized as a deferred assetAmortization based on total serial production

US GAAPNo program accountingCost as incurred

Cost Recognition – BR Gaap & US Gaap

Defense contract accounting

Long-term contract accounting requires management to estimate the total contract cost. These costs consist of designing, engineering, manufacturing and entryinto service.

Total estimated contract costs include:Raw materialSupplier componentsDirect Labor, including engineeringManufacturing overhead

Estimated total Revenue topercent of complete x price = be recognized to date

Revenue to be - Revenue recognized = Current periodRecognized to date in prior periods revenue

Defense Revenue and Costs

Defense Revenue and CostsDefense contract accounting

Contract monitoring and related adjustments:

Review is made on a quartely basis

As part of these reviews, additional revenues arising from changeorder requests and additional cost from over spending are identifiedand reflected in a revised contract margin.

The effect of any revision is accounted for by way of a cumulativecatch-up adjustment to margin

Physical progress

Percent of complete = Costs incurred to dateMost recent estimate of total cost

BR GAAPü Non monetary items no longer indexed by the UFIR (adjusted to

current purchasing power)ü There is no functional currency concept

US GAAPü Functional Currency is the US$ (SFAS 52)ü Non Monetary items (Assets and Liabilities) are accounted in

historical US$ values

Translation Effects (R$ x US$)

BR GAAPü Assets revaluation at market value is allowedü Since 1996 interest capitalization is not accounted

US GAAPü Interest capitalization over Long-term assets construction

(SFAS 34)ü Capitalization of assets acquired through capital leases

(SFAS 13)

PP&E

BR GAAPüCapitalization of expenses will be amortized over futurefiscal yearsüDeferral of pre-operation costs

US GAAPüR&D expense accounted as incurred in the incomestatement üPre-operation costs are not deferred

Deferred Assets

BR GAAPüOperating leases are accounted as rent

US GAAPüOperating lease concept explained by SFAS 13

Operating Lease for capital goods

BR GAAP

ü No CVM or IBRACON specific rule

ü Accounted by the accrual method

US GAAP

ü SFAS 133 in use since 2001

üGains and losses recognized during the period

ü Fair value of derivatives is mandatory

Derivatives

BR GAAPü Differences between accounting and fiscal records

US GAAPü All BR GAAP and US GAAP accounting diferences are considered

to calculate the deferred income tax

13.8%

27.4%

9M05

20.8%29.8%26.6%30.6%24.2%BR GAAP

45.6%

2002

25.8%

2003

22.7%40.3%26.8%US GAAP

200420012000

Effective Tax Rates

Effective Tax Rate

R$ thousands 9M05Income before taxes 685,828

Nominal expense 34% tax rate 233,182

Permanent additions 64,879

Permanent exclusions (1,526)

Interest on Shareholders Equity (34%) (112,817)

Other items 3,863

Total expenses 187,581

Effective tax rate 27,4%

Effective Tax Rate – BR GAAP

US$ thousands 9M05Income before taxes 344,678

Nominal expense 34% tax rate 117,191

Permanent additions 1,660

Permanent exclusions (1,123)

Interest on Shareholders Equity (34%) (47,362)

Other items (22,836)

Total expenses 47,530

Effective tax rate 13,8%

Effective Tax Rate – US GAAP

2,069 - 200

-18

-456

-10 -15 155 12

1,508

-29

-

500

1,000

1,500

2,000

2,500

BR GAAP TranslationEffects

Inventories Deferred Assets(R&D)

Derivatives fairValue

Fin 45 OperacionalLease

Adjusments

Deferred IncomeTaxes

Others USGAAP

Shareholders Equity(09/30/05)US$ Million

Period end exchange rate

Reconciliation between BR & USGAAP

- 196

290 11 -12 -94

- 134 -36 392

-

50

100

150

200

250

300

350

400

BR GAAP Exchanges rateeffect

TranslationEffects

Inventories Deferred Assets(R&D)

Derivatives fairValue

Deferred IncomeTaxes

Others USGAAP

Net Income(9M05)

US$ MillionAverage exchange rate

Reconciliation between BR & USGAAP

BR GAAP

ü No specific rule applies

ü Disclosure under notes to consolidated financial statements is mandatory

US GAAP

ü Since 01/01/2003 guarantees given to third parties are measuredat fair value and recognized on income (FIN 45)

ü In both Gaaps, IBNR (incurred but not reported) accounts for problable losses through the ECC Insurance

Financial Guarantees

Some of the sales transactions are structured financings through which an SPE purchases the aircraft, pays the full purchase price on delivery or at the conclusion of the sales financing structure, and leases the related aircraft to the ultimate customer.

BR GAAP

•New CVM 408/2004 rule to be applied in 2004

• Standartization towards IASB international rules and FIN 46

•US GAAP

•Accounted as collateralized accounts receivable and non-recourse and recourse debt

•Starting in 2004 FIN 46 and FIN 46R becomes effective and basic consolidation conditions were maintained

•Before 2004 other rules were used for SPE consolidation

SPEs Consolidation

Source: 20 F note 8

Off-Balance Sheet Exposure

(98)(67)Provisions & Liabilities Recorded(418)(392)Mutually Exclusive Exposure*

2,0301,397Off Balance Sheet Exposure

2,0381,650Estimated proceeds from performance guarantees and underlying assets

836627RVGs1,7101,230Maximum Financial Guarantees

20042003US$ million

The maximum potential payments represent the “worst-case scenario,” and do not necessarily reflect the expected results by the Company.

Estimated proceeds from performance guarantees and underlying assets represent the anticipated values of assets the Company could liquidate or receive from other parties to offset its payments under guarantees.

*The residual value guarantees can only be exercised if the financial guarantees have expired withouthaving been triggered and therefore have not been combined to calculate the maximum exposure

Source: 20 F note 34

Off Balance Sheet Exposure

Repurchase Options (Put Options)

• Provide the customer with the right to sell the aircraft back to the Company in the future according to defined pricing rules.

• These put options may become exercisable at various times • Can be exercised at the customer’s sole discretion. • The put price per aircraft is less than the original sales price of the

aircraft and less than management’s estimation for the future market value of the aircraft during the exercise period as assessed at the date of sale.

Put obligations:

As of December 2003 US$ 500 million

As of September 30, 2005 US$ 0 million


Trade-in options

Provide a customer with the right to trade-in existing aircraft upon the purchase of a new aircraft. The trade in price per aircraft is less than the original sales price of the aircraft and less than management’s estimation for the future market value of the relevant aircraft.

6 Commercial jets are subject to trade-in

§ Of the total 898 firm orders and 228 options signed for the ERJ 145 family since 1996, only 7 were trade-ins of EMB 120s (Brasilia).

§ Of the total 412 firm orders and 373 options signed for the EMBRAER 170/190 family since 1999, only 6 included trade-in options.


Provisioning of financial guarantees and RVGs

In order to cover the exposure related to financial guarantees, a provision is recorded at the time of the delivery.

Use of sophisticated models to measure the provision:

• External appraisals of expected aircraft value• Credit ratings of the airlines companies• Current and future market outlook• Aircraft expected availability level in the market

Financial Guarantees & RVGs

Sales Finance

A Complex and Time Consuming Operation

§ Airlines order aircraft in advance and take deliveries over several years.

§ Option Contract: Customer has the right to exercise option and is not required to purchase aircraft. Options may be exercised up to 18 months prior to delivery.

ãFirm Order

$ $ $ $ ...

Q1 ...+ + + +

Financing

Delivery

Time

<---------- 20 months --------> <-------------- 6 years (average) ------------>

Down-paymentä

Deposits

+ + +5%$ 5%$ 5%$

18m 12m 6m

Aircraft Financing

Amount Exported: US$ 17.79 billionAmount Financed by BNDES: US$ 7.67 billionRegional Aircraft Delivered: 1039*

Financing Source (1995 – 3Q 2005)

* Including Executive and Defense Market:• EMB 120: 55• ERJ 145 Family: 832• Legacy 600: 49• Defense: 12• EMBRAER 170/190 Family: 91

BNDES 43%

Market 57%

Total Regional Aircraft Delivered: 1039 (up to 3Q 2005)

Financing Methods

At Sight6%

Tax Lease46%

Bridge2%

Operating Lease5%

Finance Lease5%

Straight Finance36%

Ø Operating Lease (True Lease):

• It is a rental for a pre-settled period of time

• Purchase Option must be at market value at the end of the lease term• It is an off-balance sheet transaction to Lessee Commonly used by start-up and/or weak credit companies.

Ø Finance Lease (Capital Lease):

• It is a finance transaction (full pay-out structure)

• The purchase option is a guaranteed residual value• It is an on-balance sheet transaction to Lessee (USGAAP)

Ø Straight Loan:

• Financing provided by the lender direct to the airline

Type of financing

Ø Leveraged Lease (Tax Lease)

• Involves at least three parties: Lessor, Lessee, Lender

• Non-recourse debt against lessor

• Equity investor contributes 20% of a/c value

• Transfer of fiscal benefits to the lessee, resulting in lower monthlypayments

• Equity Investor benefits from 100% accelerated depreciation and deduction of interest expense

Type of financing

EETC – Enhanced Equipment Trust Certificate• Type of financing used by airlines to capture resources by issuing

bonds backed by the aircraft

• Bonds are issued in tranches (A, B, C...);

• Each tranche has a specific Loan to value, and different liquidationguarantees (aircraft) in case of default

• Tranches B, C...have higher interest rates and carry on more risk

• Bonds are backed by the aircraft

• EETC’s give airlines with lower credit rates an opportunity to capture resources at lower cost

• EETC’s can be optmimized and combined with other financingstructures such as leveraged leases

Type of financing – Capital Markets

FONTE: Citigroup

Amount US$ Billion

Source: Citigroup

EETC issuance increased steadily from the first transaction in 1994 through the peak in 2001 before dropping off in 2002 & 2003

0 , 5 1 0 , 4 7 0 , 4 9 0 , 3 10 , 7 50 , 7 6 0 , 9 9

1 , 6 1

2 , 6 9

3 , 7 2

5 , 0 1

8 , 1 3

1 0 , 3 7

3 , 2 8

1 , 3 1 1 , 2 8

3 , 2 5

1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 F

U S A i r l i n e sN o n - U S A i r l i n e s

EETC – Annual volume of new issues (1994~2005)

Risk Management

EMBRAER Capital (ECC) - Structure

ECC Leasing Co. Ltd.(Ireland)Leasing

ECC Insurance & Financial Co. Ltd.(Cayman Islands)Captive Insurance

ECC Investiment Switzerland, AG(Switzerland)

Holding

Embraer Spain Holding Co. SL(Spain)Holding

EMBRAER S.A.(Brazil)

Manufacturer

EFL – Embraer Financial Limited.(Cayman Islands)

ECC Insurance Company




Holding



Manufacturer

Mission:• Assures the payment of contingent losses that Embraermay face related to Embraer’s financial guarantees;


Insurance Outline:

• IRB transaction approval:

• $ 406 MM premium payments over the next five

years covering all financial guarantees associated with

deliveries within such period

• Regulated by Cayman Islands Monetary Authority

• Initial Capital in Insurance $ 2,6 MM

• Insurance policy issued associated with aircraft

deliveries up to Sept.05:• $ 168.5 MM premium payments for obligations• $ 70,5 MM in IBNR losses• New declarations and endorsements quarterly (new premiums)

ECC Leasing Company




Holding



ManufacturerMission:• Manage and remarket a portfolio of aircraft that Embraer acquires through trade-ins and exercised put options;• Remarketing service provider for third-parties in connection with sales campaign.


• Embraer is NOT allowed to lease NEW aircraft without specific Board approval for such transactions;• Business sense: any transaction has to

accomplish a set of tests and rules, as follows:• Gross margin test;• Net margin test• Cash flow test; and• Title transfer rule.

• All new sale that may involve a TRADE-IN transaction in the

Commercial and Executive Aviation sectors shall be driven through

ECC Leasing/DAA for negotiations purposes.

• Prospective customers shall be jointly approached by Sales Team and

ECC Leasing/DAA in order to construct a trustful relationship with

Embraer and ECC Leasing.

ECC Leasing involvement in Embraer’stransactions

Asset Management (DAA) is responsible for all administration and technical issues related to Embraer’s portfolio of pre-owned aircraft.

ECC Leasing Company Ltd (ECC Leasing) was incorporated in Dublin(Ireland) on September 19th, 2002.

Main goal :• Manage the asset of Embraer pre-owned aircraft.• Acquire pre-owned aircraft in trade-in to support the new aircraft sales.• Repossess pre-owned aircraft in events of default by Lessee.• Manage remarketing obligations assumed by Embraer before lenders or

leasing companies.• Search for potential airlines on the market to acquire or lease the aircraft

from ECC Leasing portfolio.• Manage activities of appraisal, acquisition, leasing and remarketing of

pre-owned aircraft.

ECC Leasing main goal

• The purchase price of a pre-owned aircraft (“trade-in”) shall not be higher than the gross margin amount of the new aircraft sold by Embraer.ü If there is any positive difference, it shall be carried by the new aircraft

sales as an additional concession.ü It is prohibited cash flow shortage.

• New aircraft shall only be purchased by ECC Leasing/DAA if there is a substantive, specific and unanimous Board approval for such purchase or if such purchase is done through a third party company partnership.

• ECC Leasing/DAA can purchase “pre-series” aircraft, model EMBRAER 170, 175, 190 and 195 from Embraer for 70% its market price.

General Directives from ECC Leasing Board

Asset Management Remarketing Activities

7 ex-RioSul EMB 120sold to FAB

based on FMV in 2004/05

4 Legacy 600 leased to Flight OptionsBased on FMV in 2003

4 ex-RioSul ERJ 145 sold to FAB basedon FMV in 2004

2 ex-INDIGO ERJ 135 converted into 37pax and leased toChautauqua based on FMV in 2004

2 ex-Bral ERJ 145leased to TSA

based on FMV in 2003


2 ex-LOT ERJ 145 leased to FlyAir


2 EMBRAER 170 Pre-Seriesleased to Paramount


1 ex-LOT ERJ 145Advanced negotiations

with potential customers

2 ex-RioSul ERJ 145On-going negotiations

2 ERJ 145 Pre-Series leased to TSA



3 ex-RioSul ERJ 145sold to FAB


5 ex-RioSul ERJ 145Leased to Aerolitoral


1 ex-RioSul ERJ 145sold to DPF


Financial Results

Jet Deliveries

40 42

30 30

41

3Q04 4Q04 1Q05 2Q05 3Q05

Net Revenue by Segment

9M05

Defense Aviation 12%

Airline Market 72%

Business Jet Market 6%

Customer Services and Others 10%

Customer Services and Others 7%Business Jet

Market 4%

Airline Market 78%

Defense Aviation 11%

9M04

937 954763 812

1,064

33.2%28.1%

31.4%35.1%37.6%

3Q04 4Q04 1Q05 2Q05 3Q05

US$ million

2,144

3,4412,640

2,5262,9272,762

1837.31,353.5

38%34%

31%32.0% 32%

40% 39%

28.2%

1998 1999 2000 2001 2002 2003 2004 9M05

Net Revenues and Gross Margin – US GAAP

2,434

1,9352,036

2,734 2,647

32.2% 33.5%30.8%

24.5%

18.6%

3Q04 4Q04 1Q05 2Q05 3Q05

R$ million

1,570

3,347

5,099

6,8917,748

6,571

10,231

6,40628.3% 28.6%31.1%

41.6%44.6%

35.8%33.3%

24.2%

1998 1999 2000 2001 2002 2003 2004 9M05

Net Revenues and Gross Margin – BR GAAP

US$ Million

127 142 12599

167

13.6%14.9%

16.3%

12.2%

15.7%

3Q04 4Q04 1Q05 2Q05 3Q05

462651

470265

544390

17%

22%

19%

12%

16% 15%

2000 2001 2002 2003 2004 9M05

Income from Operations- US GAAP

462 465

328

141183

16.9%17.6%

16.1%

7.3% 7.5%

3Q04 4Q04 1Q05 2Q05 3Q05

R$ million

247 6251,027

1,9282,167

1,2431,740

652

10.1%

17.0%15.7%

18.7%20.1%

28.0% 28.0%

18.9%

1998 1999 2000 2001 2002 2003 2004 9M05

Income from Operations – BR GAAP

In US$ Millions 9M05 % of Sales % in US$*Net Sales 2,640 ~92%COGS 1,817 69% ~85%Gross Profit 822 45%Selling Expenses 178 22% ~80%SG&A 139 78% ~20%R&D 62 45% ~20%Other 18 29% ~20%

* Approximate amounts

Income Statement - Currency Breakdown

BR GAAP

The 21.3% Brazilian real appreciation against the U.S. dolar YoY impacted revenues and costs of goods sold as 95% of net revenues and 85% of COGS are denominated in U.S. dolars.

18.4%34,6%26,4% GROSS MARGIN(0,32)(0.03)(0.19)US$ DIFFERENCE

454 943511 GROSS PROFIT

2;64(1,980)2.97 (1,791)2.65(1.423) COGS

2.32

AverageUS$/R$

2,434

3T05

2.94

AverageUS$/R$

2,734

3T04

2.46

AverageUS$/R$

1,935

2T05

NET REVENUE

(R$ MM)

US GAAP

As only 15% of our COGS are denominated in reais and our functional currency is the US dolar, the impact of exchange rate fluctuations is much smaller.

Exchange Rate Impact – BR GAAP

Net Income – US GAAP

US$ Million

114

8397

83110

10.4%10.2%

12.6%12.1%

8.7%

3Q04 4Q04 1Q05 2Q05 3Q05

321 328

223

136

380

290

11%11%

6%

17%

11%

9%

2000 2001 2002 2003 2004 9M05

3 9 72 8 2 2 3 5

1 6 789

1 4 . 5 %

1 0 . 7 %1 1 . 5 %

8.6%

3 . 7 %

3Q04 4Q04 1Q05 2Q05 3Q05

R$ million

Net Income – BR GAAP

587 402

1.256

412132 6451,101 1,179

8.40%

15.2%

16.0%

12.6%12.3%

8.9%

12.3%

7.6%

1998 1999 2000 2001 2002 2003 2004 9M05

Balance Sheet

189 157250 251 302

514 529

607 654 488

3Q04 4Q04 1Q05 2Q05 3Q05

US$ MillionR$ million

US GAAP BR GAAP

Others Commercial Airl ine Market

575246

554 615

1,4771,444

1,451

695

1,584 1,182

3Q04 4Q04 1Q05 2Q05 3Q05

Outros Mercado de Aviação Comercial

Accounts Receivable Breakdown

US$ Million

Inventories

1,390 1,4281,570

1,7361,601

3Q04 4Q04 1Q05 2Q05 3Q05

R$ Million

US GAAP BR GAAP

4,1554,070

4,373

4,588

4,053

3Q04 4Q04 1Q05 2Q05 3Q05

US$ Million

Net Cash (Debt) Position

R$ Million

US GAAP BR GAAP

629

34180

-457 -552

3Q04 4Q04 1Q05 2Q05 3Q05

220

22

-167-229

97

3Q04 4Q04 1Q05 2Q05 3Q05

Total Debt of US$ 1,700.6 Million

• Average cost in R$ = 12.3%p/a

• Average cost in US$ =5.5% p/a

Loans

Long-Term Loan Average Maturity: 3 years and 3 months

Brazilian Currency

11%

Foreign Currency

89%

Long Term 66%

Short Term 34%

US$ million

2010

1,700

577

68340

279

203

127 108

Total Short Term 2006 2007 2008 2009 2010 Beyond

Loans Maturity

US$ 180 million Syndicated Loan

Proceeds to complete the end-stage launch program of

the EMBRAER 170/190 family. A Loan: US$35 million Final Maturity: 12 years Tranche B1: US$ 60 million Final Maturity: 10 years Tranche B2: US$ 85 million Final Maturity: 8 years Total B Loan: US$ 145 million

5 years and 5 months average maturity 6M libor + 2.9% weighted interest rate

IFC Syndicated Loan

Hedging Strategy

• Firm backlog of US$10.4 billion

• 92% revenues in US$

• 80% of R&D and PP&E investments in R$

• 37% of total cash disbursements in R$

Main Objective of the Hedging Strategy

Optimize the Natural Hedge of the Cash Flow

Balance Sheet

US GAAP

18% 18% 15% 16% 19% 14% 19%

82% 78% 82% 85% 84% 81% 86% 81%

22%

Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities

12/31/2004 03/31/2005 06/30/2005 09/30/2005

R$ US$

Balance Sheet

US GAAPIncludes Derivatives

18% 18% 15% 16% 18% 14% 19%

82% 78% 82% 85% 84% 82% 86% 81%

22%

Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities

12/31/2004 03/31/2005 06/30/2005 09/30/2005

R$ Other Currencies

Investments

Investment Forecast

Defense investments are funded by their contracts and are notincluded in R&D expenses but in Cost of Sales and Services.

In US$ Millions

2007E

New Previous New Previous New

R&D Total 140 119 194 66 188Commercial Aviation 96 89 88 37 54Executive Aviation 15 11 70 12 87Others 29 19 36 17 47

Defense 31 88 18 38 21Productivity and PP&E 59 77 72 59 62

2005E 2006E

US$ Million

PP&E and R&D – Cash Flow

Gross R&D amounts

111

6450 59

726270

158173

153140

194 188

143

114100

2000 2001 2002 2003 2004 2005E 2006E 2007E

PP&E R&D

US$ million

-

246

11

1923

70

1081

14

Total

2001

2002

2003

2004

2005E

2006E

2007E

2008/2010E

Contributions from Risk Sharing Partners

Attachments

Financial Guarantees

• Provided in the form of guarantees of lease payments, to mitigate default-related losses.

• Mainly issued for the benefit of the customers financing agent.

• Exercised when customers do not meet their payment obligations during the term of the financing.

• Collateralized by the aircraft.

Upon an event of default, the Company usually is the agent for the guaranteed party for the refurbishment and remarketing of the underlying aircraft. The Company may be entitled to a fee for such remarketing services.Typically a claim under the guarantee shall be made only upon surrender of the underlying aircraft for remarketing

Financial GuaranteeA

/CV

AL

UE

/ R

emai

nin

gB

alan

ce

Debt or forecasted loss

Aircraft Value

(1 - % FLD) x RemainingBalance

Risk Exposure

BACK

Residual Value Guarantees (RVGs)

Provide a third party with a specific guaranteed asset value at the end of the financing agreement

In the event of a decrease in market value of the aircraft, the Company shall bear the difference between the specific guaranteed amount and the actual fair market value

In order to benefit from the guarantee, the guaranteed party has to make the aircraft meet tight specific return conditions


In the event both guarantees are issued for the same aircraft, the residual value guarantees can only be exercised if the financialguarantees have expired without having been triggered, and therefore, are mutually exclusive.


Time

Airc

raft

Val

ue

Aircraft MarketValue

RVG

% RVG x Aircraft Value

Exercise

window

Exposure

RVG Risk

Documents

2005* Embraer Day Financial Presentation (DisponíVel Apenas Em InglêS)