Morgan StanleyAerospace & Defense

Conference

Sep. 19,2002

Maurício BotelhoPresident & CEO

2

Forward Looking Statement

This presentation includes forward-looking statements or statements about events or circumstances which have not occurred. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: general economic, political and business conditions, both in Brazil and in our market. The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,”“expects” and similar words are intended to identify forward-looking statements. We undertake no obligations to update publicly or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press releasemight not occur. Our actual results could differ substantially from those anticipated in our forward-looking statements.

CompanyHighlights

4

Company Highlights

QQOne of the leading Aircraft One of the leading Aircraft ManufacturesManufactures

QQPremier and strong global customer Premier and strong global customer base base -- high market share high market share

QQUS$ 23.8 Billion in Total BacklogUS$ 23.8 Billion in Total Backlog

QQStrong global longStrong global long--term partners term partners

5

Embraer Business

The aerospace businessis supported by 5 pillars High Technology

Qualified People

Global Business

Flexibility

Cash Intensiveness

And the backbone of our entrepreneurship is achieving customer satisfaction

HighTechnology

7

High Technology

The Virtual Reality Center

Provides visualization of the aircraft structure and systems during the project phase, using 3D electronic models.

Reduces the development cycle.

8

Digital Mock-Up EMBRAER 170

High Technology

9

High Technology

Digital Mock-Up ERJ 145

QualifiedPeople

11

Qualified People

Educational Levels

25% of the almost 12,000 employees, are engineers

High School64.5%

PhDs0.2% Undergraduates

29.3%

Graduates4.7%

Masters1.3%

12

Qualified People

More than US$ 60 millioninvested in training and qualificationin the last 3 years.

21 24,518

1999 2000 2001

GlobalBusiness

14

Global Business

Civil & Defense Aircraft flying in 58 countries in 5 continents.

15

Global Business

Current Fleet of Regional Aircraft

Latin America& Caribbean260 aircraft85 customers

Africa & Middle East55 aircraft10 customers

AsiaPacific60 aircraft20 customers

Europe285 aircraft40 customers

North America920 aircraft35 customers

Turboprop Operators

ERJ Operators

16

USADallas

NashvilleAtlanta

Palm Beach Gardens Fort Lauderdale

Global Business

Operations in Brazil, United States, Europe, Asia and Australia

BrazilGavião Peixoto

BotucatuSão José dos Campos

FranceLe Bourget

UKWeybridge

ChinaBeijing

AustraliaMelbourne

SingaporeSingapore

CashIntensiveness

18

(Investments - US$ millions)

98 81122

147

104

1995 1997 1999

296

2001

213

20001996 1998 20042003 2005

334

262 239 224

2006

227

2002

142

1.sem

Realized

Projected

Increase in Productivity

Product Development

60%

40%

Capital Intensiveness

Figures in Brazilian Gaap

Flexibility

20

7

400thMar 2000

300thAug 2000

200thDec 1999

1224

100thDec 1998

ERJ 135/145Deliveries

500thSep 2001

68

600thMay 2002

86# of Months

Flexibility

Embraer has the agility and flexibility to adjust its production in accordance with market demand.

21

Flexibility

Flexibility incorporated into the production line allowed an increase in efficiency and decrease in production lead time

Lead Time in Months

8,0

6,0 6,05,5

4,9 5,0

3,8

1996 1997 1998 1999 2000 2001 7M02

22

Flexibility

Delivery Forecast

4

32

59

96

160 161

135145

1996A 1997A 1998A 1999A 2000A 2001A 2002E 2003E

23

Flexibility

Embraer presents one of the highest "revenue per employee" in the industry.

101

172

242 247

307

254 254

1996 1997 1998 1999 2000 2001 1H02

Revenue per employeeUS$ thousand

CorporateGrowthStrategy

25

Growth-Oriented Company

1995 1995 –– 19981998

•• TurnaroundTurnaround

•• Regain credibilityRegain credibility

•• Develop the Regional Jet MarketDevelop the Regional Jet Market

•• ProfitabilityProfitability

1999 1999 –– 20012001

•• Expand market share through:Expand market share through:•• Expansion of the ERJ145 family Expansion of the ERJ145 family and development of the and development of the

EMBRAER 170 familyEMBRAER 170 family•• Development of the Business Jet Development of the Business Jet FamilyFamily

•• Access to global capital marketsAccess to global capital markets•• Profitability Profitability

Strategic FocusStrategic Focus

26

Growth Strategy

QQRevenue diversification:Revenue diversification:

QQGeographicGeographic

QQBusiness SegmentsBusiness Segments

QQ Geographic diversification of assetsGeographic diversification of assets

QQOrganic growth and other opportunitiesOrganic growth and other opportunities

27

Revenue Diversification

Commercial87%

Defense4%

Corporate 3%

Parts and Services

6%

Current SalesBreakdown

FY2001

Expected Sales BreakdownIn five years

CorporateJets

CustomerService

Defense

Commercial70%

30%

28

Revenue Diversification

0

500

1000

1500

2000

2500

3000

3500

1999 2000 2001

Americas Europe Brazil Others

Geographic Diversification

29

US$23.8 billion in total orders,

including US$ 10.1 billion in firm orders

150% 36.7%Annual Growth 56.1% 78.1% (6.1)%

Backlog

$3,0$6,4

$11,4 $10,7 $10,1

$11,3

$12,7 $12,7 $13,7

$1,2 $4,1$0,0

$5,0

$10,0

$15,0

$20,0

$25,0

$30,0

Dec. 31,1996

Dec. 31,1997

Dec. 31,1998

Dec. 31,1999

Dec. 31,2000

Dec. 31,2001

June 30,2002

1.7%

Firm Orders Options

GrowthOpportunities

RegionalJetMarket

32

Growth Opportunities

QQRising US regional enplanements: Rising US regional enplanements: passenger preferencepassenger preference

QQRegional traffic growth: turboprop Regional traffic growth: turboprop replacement & longer range of RJsreplacement & longer range of RJs

QQScope Clauses flexibilizationScope Clauses flexibilization

QQNew generation of 70New generation of 70--110 jets vs ageing 110 jets vs ageing fleetfleet

QQRightsizing capacity vs demandRightsizing capacity vs demand

33

US Regional Enplanements Increasing

Source: RAA, FAA

U.S. Regional Airlines% of Domestic Traffic

PassengerEnplanements (Millions)

1970 1985 2000 2010F0

200

400

600

800

1,000

3% 7%12%

14%

RegionalMajor

34

-3% -1%

-1%

-3% -2%

-33%

-18%-13%

-6%

-12%-10% -7%

-11%-8% -7% -7%

17%

9% 7%2% 2% 1%

6%

13%

5%

14%

2%

15%18%

23%

34%32%

34%

27%

5%0%

3%

-21%

-2%

-23%

Jan

/01

Fe

b

Mar

Ap

r

May

Jun

/01

Jul

Au

g

Se

p

Oct

No

v

Dec

/01

Yea

r 20

01

Jan

-02

Fe

b

Mar

Ap

r

May

Jun

-02

Jul

RP

M G

row

th -

Yr/

Yr

% C

han

ge

Domestic ATA Regional RAA

Source: Top Regionals, RAA, ATA

Airline Market - USAAirline Market - USA

35

Seating Capacity25 50 75 100 125 150 175+

37 – 70 112 +112 +

50 109 +109 +

50 – 70 116 +116 +

37 – 50 104 +104 +

44 – 50 78 +78 +

50 97 +97 +

70 to 110 Seats

70 to 110 Seats

“Scope Clauses”

Wide Seat Capacity GapWide Seat Capacity Gap

36

250 aircraft withmore than 20 years(33% of total fleet inservice)

91

147 146128

74

15

161

0

20

40

60

80

100

120

140

160

180

0-5 6-10 11-15 16-20 21-25 26-30 31-35

Aircraft Age (Years)

Nu

mb

er o

f A

ircr

aft

Source: BACK

Fleet in Service (91-120 seat segment - Jan/2002)

Ageing 100-seat fleet to be replaced

Market Opportunities - USAMarket Opportunities - USA

37

25 50 75 100 125 150 175+

Seating Capacity

37 – 80 103 +103 +

37 – 85 112 +112 +

50 – 70 109 +109 +

44 – 66 131 +131 +

50 - 80 108 +108 +

110 +110 +50 – 111

50 +50 +

Source: BACK

No artificial constraints in EuropeNo artificial constraints in Europe

70 to110 seats

70 to110 seats

38

498

151

276

132 418

728

0

100

200

300

400

500

600

700

800

900

30-60 61-90 91-120 121-150

Seat Segment

Nu

mb

er o

f A

ircr

aft

Turboprop Jet

TurbopropTurbopropReplacementReplacement

Rightsizing Rightsizing capacity vs. capacity vs.

demanddemand

Fleet in Service (Jan/2002)

Source: BACK

Market Opportunities - EuropeMarket Opportunities - Europe

39

120

160

Seat Capacity

40

80

0

Stage Length (nm)

200 400 600 800 1000 1200 1400

30 Seat Tprops

50 SeatERJ 145

Narrow Body Large Aircraft

37 - 44 Seat ERJ 135/140

EMBRAER 170/190

Filling the Seat Capacity GapFilling the Seat Capacity Gap

40

324

149

132

43

FirmBacklog

5591,288405883Total

428891314577ERJ 145

4221945174ERJ 140

8917846132ERJ 135

DeliveriesTotalOptionsFirm

ERJ 145 Family OrderbookERJ 145 Family Orderbook

(as of June 30th, 2002)

41

314202112Total (*)

1027230EMBRAER 195

21213082EMBRAER 170

TotalOptionsFirm

EMBRAER 170/190 Family OrderbookEMBRAER 170/190 Family Orderbook

(as of June 30th, 2002)

(*) Does not include Jet Airways and Alitalia.

CorporateJetMarket

43

QQA niche playerA niche player

QQBased on a consolidated airframe, with Based on a consolidated airframe, with more than 600 aircrafts in operationmore than 600 aircrafts in operation

QQRepresents value for customers:Represents value for customers:

üüComfort, performance, cost efficiency Comfort, performance, cost efficiency and reliabilityand reliability

Legacy – New Entrant

44

Value and ComfortValue and Comfort

10 20 30 40 50ft

m 3 6 9 12 15

G IV SP

Falcon 2000

Supermidsize price for the comfort of a large bzj

45

Legacy Orderbook

As of June 2002

62

-

25

37

FirmBacklog

91679473Total

71367EMB 135/145

-755025Legacy Shuttle

2743539Legacy Executive

DeliveriesTotalOptionsFirm

46

Defense

47

Defense Growth Strategy

QQ Market the existing programs to Market the existing programs to other Air Forcesother Air Forces

QQDevelop new technology Develop new technology

QQExplore synergies with our strategic Explore synergies with our strategic partners (Dassault, Thales, Snecma partners (Dassault, Thales, Snecma and EADS)and EADS)

48

Defense Products

Systems & Services

IntegratedGround Command& Control

IntegratedSystems

Data-Link

Training

ALX / Super Tucano

Systems

AMX-T

Combat Transport

EMB 135/145

EMB 120K

Legacy

ALX / Super Tucano

F-5 BR

AMX / AMX-T

Intelligence, Surveillance &Reconnaissance

EMB 145 AEW&C

EMB 145 AGS

EMB 145 MP / ASW

49

CustomerServices

50

QQService a global growing fleet Service a global growing fleet

QQExpand geographical reachExpand geographical reach

QQTotal Care SolutionsTotal Care Solutions

Customer Service Growth Strategy

Financial ResultsUS GAAP

52

Units

Jet Deliveries

4

32

60

96

160 161

135145

0

40

80

120

160

200

1996 1997 1998 1999 2000 2001 2002E 2003E

Figures in US GAAP

53

Units

Jet Deliveries - Quarterly

42 44 4134

30 30

0

20

40

60

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02

Figures in US GAAP

54

US$ Million

Net Sales & Gross Margin

7641,354

1,8371,556

1,147

2,762 2,92727% 28%

31%

39% 40%39%

31%

0

2,000

4,000

6,000

1997 1998 1999 2000 2001 1H01 1H020%

10%

20%

30%

40%

50%

Figures in US GAAP

55

Europe19%

Brazil3%

USA78%

Sales per Segment

2Q02

Sales per Market

2Q02

Revenue Breakdown

Commercial83%

Defense3%

Customer Services &

Others7%

Corporate7%

Figures in US GAAP

56

US$ Million

EBIT

49172

368 363216

462651

6%

13%

20%23%

19%17%

22%

0

400

800

1,200

1,600

1997 1998 1999 2000 2001 1H01 1H02

0%

10%

20%

30%

Figures in US GAAP

57

EBITDA

US$ Million

71193

393493

698

384243

9%

14%

21% 21%25%24%

18%

0

400

800

1,200

1,600

1997 1998 1999 2000 2001 1H01 1H020%

10%

20%

30%

Figures in US GAAP

58

Net Income

US$ Million

3

145

235

321 328

184

105

9%

12%13%

11% 11%12%

0.4%

0

200

400

600

1997 1998 1999 2000 2001 1H01 1H020%

3%

6%

9%

12%

15%

Figures in US GAAP

59

Long Term60%

Short Term40%

R$ Debt27%

Mainly US$73%

Bank Loans - US$ 532.6 million

June 30, 2002

Loans Breakdown

Debt MaturityCurrency Breakdown

• Considering Currency Swaps• Average R$ debt cost: 14.7% p.a.• Average US$ debt cost: 4.1% p.a.

• Average Maturity: 2.8 years

Figures in US GAAP

60

Net Cash (Debt)

US$ Million

(249)(415) (333)

733

360

(22)

(800)

(400)

0

400

800

1,200

1997 1998 1999 2000 2001 June 30,02

Figures in US GAAP