UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-15102

EMBRAER S.A. (Exact name of Registrant as specified in its charter) EMBRAER Inc. (Translation of Registrant’s name into English) Federative Republic of Brazil (Jurisdiction of incorporation) Avenida Presidente Juscelino Kubitschek, 1909 14th and 15th floors – Torre Norte – São Paulo Corporate Towers 04543-907 São Paulo/SP – Brasil (Address of principal executive offices) Nelson Krahenbuhl Salgado Head of Investor Relations (55) 11 3040 9518 Investor relations department, (55) 11 3040 9518, [email protected] (Name, Telephone, E-mail and/or facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of each class: Name of each exchange on which registered Common shares, without par value (represented by, and traded only New York Stock Exchange in the form of, American Depositary Shares (evidenced by American Depositary Receipts), with each American Depositary Share representing four common shares) 5.150% Notes due 2022 of Embraer S.A. New York Stock Exchange 5.050% Guaranteed Notes due 2025 of Embraer Netherlands New York Stock Exchange Finance B.V. 5.40% Guaranteed Notes due 2027 of Embraer Netherlands New York Stock Exchange Finance B.V.

Securities registered or to be registered pursuant to Section 12(g) of the Act None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

Title of each class 6.375% Guaranteed Notes due 2020 of Embraer Overseas Ltd. Guaranteed by Embraer S.A.

Number of outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2018: 735, 482,105 common shares, without par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐ If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

☐ U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

1 TABLE OF CONTENTS

Page PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 7 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 7 ITEM 3. KEY INFORMATION 7 3A. Selected Financial Data and Other Data 7 3B. Capitalization and Indebtedness 11 3C. Reasons for the Offer and Use of Proceeds 11 3D. Risk Factors 11 ITEM 4. INFORMATION ON THE COMPANY 27 4A. History and Development of the Company 27 4B. Business Overview 30 4C. Organizational Structure 49 4D. Property, Plant and Equipment 49 ITEM 4A. UNRESOLVED STAFF COMMENTS 51 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 51 5A. Operating Results 52 5B. Liquidity and Capital Resources 67 5C. Research and Development, Patents and Licenses, etc. 71 5D. Trend Information 73 5E. Off-Balance Sheet Arrangements 78 5F. Tabular Disclosure of Contractual Obligations 80 5G. Safe Harbor 81 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 81 6A. Directors and Senior Management 81 6B. Compensation 86 6C. Board Practices 88 6D. Employees 90 6E. Share Ownership 91 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 91 7A. Major Shareholders 91 7B. Related Party Transactions 92 7C. Interests of Experts and Counsel 93 ITEM 8. FINANCIAL INFORMATION 93 8A. Consolidated Statements and Other Financial Information 93 8B. Significant Changes 98 ITEM 9. THE OFFER AND LISTING 99 9A. Offer and Listing Details 99 9B. Plan of Distribution 99 9C. Markets 99 9D. Selling Shareholders 102 9E. Dilution 102 9F. Expenses of the Issue 102

i ITEM 10. ADDITIONAL INFORMATION 102 10A. Share Capital 102 10B. Memorandum and Articles of Association 102 10C. Material Contracts 115 10D. Exchange Controls 116 10E. Taxation 117 10F. Dividends and Paying Agents 125 10G. Statements by Experts 125 10H. Documents on Display 125 10I. Subsidiary Information 125 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 125 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 130 12A. Debt Securities 130 12B. Warrants and Rights 130 12C. Other Securities 130 12D. American Depositary Shares 130

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 132 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 132 ITEM 15. CONTROLS AND PROCEDURES 132 ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT 133 ITEM 16B CODE OF ETHICS 133 ITEM 16C PRINCIPAL ACCOUNTANT FEES AND SERVICES 133 ITEM 16D EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 134 ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 134 ITEM 16F CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT 134 ITEM 16G CORPORATE GOVERNANCE 134 ITEM 16H MINE SAFETY DISCLOSURE 137

PART III

ITEM 17. FINANCIAL STATEMENTS 137 ITEM 18. FINANCIAL STATEMENTS 137 ITEM 19. EXHIBITS 137

ii INTRODUCTION

In this annual report, “Embraer,” “we,” “us,” “our” or the “Company” refer to Embraer S.A. and its consolidated subsidiaries. All references herein to the “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “US$,” “dollars” or “U.S. dollars” are to United States dollars. All references to the “Brazilian government” are to the federal government of Brazil.

Presentation of Financial and Other Data Financial Data Our audited consolidated financial statements as of December 31, 2018 and 2017 and for the years then ended (2018 audited consolidated financial statements) are included in this annual report.

In addition, our audited consolidated financial statements as of and for the year ended December 31, 2016 are also included elsewhere in this annual report.

Our consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.

The set of annual consolidated financial statements as of December 31, 2018, 2017 and 2016 includes the first year of adoption of standards IFRS 9—Financial Instruments and IFRS 15—Revenue from Contracts with Customers. The transition was applied retrospectively from January 1, 2016. Changes in the significant accounting practices applied as a result of the adoption, including the restatements figures for December 31, 2017 and 2016, and January 1, 2016, are described in Note 2.2.1 to the 2018 audited consolidated financial statements.

After analyzing Embraer S.A.’s operations and businesses on a standalone basis with regard to the applicability of International Accounting Standards, or IAS, 21—“The Effects of Changes in Foreign Exchange Rates,” particularly in relation to the factors involved in determining our functional currency, management concluded that Embraer S.A.’s functional currency is the U.S. dollar. This conclusion was based on an analysis of the following factors, as set forth in IAS 21: (i) the currency that most influences sales prices of goods and services; (ii) the currency of the country whose competitive forces and regulations most determine the sale prices of our goods and services; (iii) the currency that most influences the costs of providing goods and services; and (iv) the currency in which the funds for financial operations are largely obtained. Our audited consolidated financial statements included elsewhere in this annual report are presented in U.S. dollars, which is our presentation currency.

In our 2018, 2017 and 2016 consolidated financial statements, gains or losses resulting from the remeasurement of the monetary items and from foreign currency transactions have been reported in the consolidated statement of income as a single line item as foreign exchange gain (loss), net.

For certain purposes, including providing reports to our Brazilian shareholders, filing financial statements with the Comissão de Valores Mobiliários (Brazilian securities commission), or CVM, and determining dividend payments and other distributions and tax liabilities in Brazil, we have prepared, and will continue to be required to prepare, financial statements in accordance with Law No. 6,404 of December 15, 1976, as amended, or the Brazilian Corporate Law.

Other Data and Backlog In this annual report: • some of the financial data reflects the effect of rounding; • aircraft ranges are indicated in nautical miles; • one nautical mile is equal to approximately 1.15 ordinary or “statute” miles, or approximately 1.85 kilometers; • aircraft speeds are indicated in nautical miles per hour, or knots, or in Mach, which is a measure of the speed of sound; • the term “regional jet” refers to jet aircraft with 50-130 passenger seats—all of our regional jet aircraft are sold in the commercial aviation segment;

1 • the term “commercial aircraft” as it applies to Embraer, refers to our aircraft with up to 150 seats, which includes our regional jets; • the terms “entry-level jet” and “light jet” refer to executive jets that usually carry from four to eight passengers and up to nine passengers, respectively, that are designed for short take-off distances; • the term “medium cabin jet” refers to executive jets that usually carry up to 12 passengers and can cover distances ranging from 1,700 to 3,900 nautical miles; • the term “large jet” refers to executive jets that usually carry up to 19 passengers and can cover distances greater than 4,000 nautical miles; • the term “ultra-large jet” refers to executive jets that usually have longer ranges and over-sized cabin spaces and can carry up to 19 passengers; and • the term “executive jets,” as it applies to us, refers to our aircraft sold to companies, including fractional ownership companies, charter companies and air-taxi companies and high net-worth individuals.

We calculate our backlog as the sum of the contract values of all firm orders (i) for any aircraft that has not yet been delivered, (ii) for services and support contracts for all business units, including repair services and spare parts contracts for a period of more than one year, and (iii) for services and technologies contracted and not yet performed in our Defense and Security business. A firm order is a firm commitment from a customer, represented by a signed contract. Options to acquire aircraft are not considered as part of our backlog.

Special Note Regarding Forward-Looking Statements This annual report includes forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, principally in Items 3 through 5 and Item 11 of this annual report. We have based these forward-looking statements largely on our current expectations and projections about future events and industry and financial trends affecting our business. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: • general economic, political and business conditions in Brazil and in our other markets; • changes in competitive conditions and in the general level of demand for our products; • management’s expectations and estimates concerning our future financial performance, financing plans and programs, and the effects of competition; • the effects of customers canceling, modifying and/or rescheduling contractual orders; • the effect of changing priorities or reductions in the Brazilian government or international government defense budgets on our revenues; • continued successful development and marketing of the E-Jets family, including the development of the second generation, the E-Jets E2, our line of executive jets (including the Phenom 100EV, Phenom 300E, Lineage 1000E, Legacy 650E, Legacy 450, Legacy 500, Praetor 500 and Praetor 600) and our defense and security aircraft and services; • our level of indebtedness; • anticipated trends in our industry, including but not limited to the continuation of long-term trends in passenger traffic and revenue yields in the airline industry; • our short-and long-term outlook for the 70-150 seat commercial airline market; • our expenditure plans; • inflation and fluctuations in exchange rates; • the impact of volatile fuel prices and the airline industry’s response; • our ability to develop and deliver our products on a timely basis; • availability of sales financing for our existing and potential customers; • existing and future governmental regulation; 2 • our relationship with our workforce; and • other risk factors, including those set forth under “Item 3D. Key Information—Risk Factors.”

The words “believe,” “may,” “will,” “forecast,” “estimate,” “plan,” “continue,” “anticipate,” “intend,” “expect” and similar words herein are intended to identify forward-looking statements. We undertake no obligation 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 annual report might not occur. Our actual results and performance could differ substantially from those anticipated in our forward-looking statements. As a result of various factors, including those risks described in “Item 3D. Key Information—Risk Factors,” undue reliance should not be placed on these forward-looking statements.

EXPLANATORY NOTE Strategic Partnership with Boeing Overview In December 2017, Embraer and The Boeing Company, or Boeing, announced that the two companies were engaged in discussions regarding a potential strategic partnership. In July 2018, the two companies entered into a preliminary and non-binding memorandum of understanding establishing the basic premises for a potential strategic partnership involving certain of Embraer’s businesses. In December 2018, the board of directors of Embraer approved, in principle, the terms and conditions of the strategic partnership, subject to the approval by the Brazilian government, which holds the common share of special class issued by Embraer (golden share). The Brazilian government approved the Transaction (as defined below) in early 2019.

On January 24, 2019, Embraer Boeing and certain of their subsidiaries entered into the Master Transaction Agreement (as defined below) and certain other transaction agreements, pursuant to which, subject to certain approvals and other conditions precedent, a Brazilian subsidiary of Boeing will acquire a controlling stake in Embraer’s commercial aviation business unit and Embraer and Boeing or their respective subsidiaries will form a joint venture for the promotion and development of new markets and applications for the KC-390 multi-mission aircraft.

On February 26, 2019, the shareholders of Embraer approved the terms and conditions of the Transaction at an extraordinary general shareholders’ meeting. The consummation of the Transaction remains subject to (i) approval by antitrust authorities in Brazil, the United States and other applicable jurisdictions; and (ii) the satisfaction of other customary closing conditions.

Upon consummation of the strategic partnership, Embraer expects to benefit from Boeing’s broader scale, resources and market presence, including access to Boeing’s global supply, sales, marketing and service chain, which Embraer expects will enable it to benefit from high level efficiency, improving the competitiveness of its products and services in an industry environment of increasingly growing competition.

In addition, after the closing of the Transaction, Embraer expects to significantly reduce its indebtedness, which will cause Embraer to have a significantly stronger cash position. Management expects to propose to the shareholders an extraordinary dividend distribution, which amount will be determined taking into account the Transaction costs and purchase price adjustments, as well as the operating results of Embraer until the closing of the Transaction.

Upon the implementation of the Transaction, the Company will remain a Brazilian publicly-listed company, with shares listed on the Novo Mercado special segment of B3 S.A.—Brasil, Bolsa, Balcão and American Depositary Shares, or ADSs, listed on the New York Stock Exchange. The Brazilian government will continue to hold the rights deriving from its ownership of the common share of special class issued by the Company (golden share). Embraer will keep its business units related to executive aviation and defense and security and will continue to develop and operate them.

For risks relating to the Transaction, see “Item 3D. Risk Factors—Risks Relating to Embraer—The consummation of the strategic partnership with Boeing is subject to conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all. Failure to complete the proposed Transaction could adversely affect our business, financial condition and operating results and the trading price of our common stock and ADSs, “—Our strategic partnership with Boeing may not be implemented successfully or the implementation may be more difficult, time consuming or costly than expected,” and “—Although we expect that the strategic partnership with Boeing will result in synergies and other benefits to us, those benefits may not be realized fully or at all or may not be realized within the expected time frame.”

3 The Transaction The strategic partnership with Boeing comprises: (i) the separation and transfer, by Embraer, of assets, liabilities, properties, rights and obligations (subject to certain exceptions) related to the commercial aviation business unit to Yaborã Indústria Aeronáutica S.A., a Brazilian closely-held corporation that will conduct the commercial aviation business and perform services that are currently performed by Embraer (the “Commercial Aviation NewCo” or “Commercial Aviation JV”); (ii) the acquisition and subscription by Boeing Brasil Serviços Técnicos Aeronáuticos Ltda, a subsidiary of Boeing in Brazil (“Boeing Brazil”) of shares representing 80% of the Commercial Aviation NewCo’s share capital, so that Embraer and Boeing Brazil will hold, respectively, 20% and 80% of the total and voting share capital of the Commercial Aviation NewCo, pursuant to the terms of a master transaction agreement executed on January 24, 2019 by and among Embraer, Boeing, Boeing Brazil and the Commercial Aviation NewCo (the “Master Transaction Agreement”), and the execution by the same parties of a shareholders’ agreement that will govern the relationship of Embraer and Boeing Brazil as shareholders of the Commercial Aviation NewCo; (iii) the execution by Embraer or an affiliate thereof, Boeing or an affiliate thereof and/or the Commercial Aviation NewCo, as applicable, of operational agreements that will govern, among other matters, the provision of general and engineering services, intellectual property licensing, research and development, use and access of certain facilities, supply of certain products and components, and an agreement to maximize potential cost reduction opportunities in Embraer’s supply chain and the provision of certain support and maintenance services (the “Commercial Aviation JV Operational Agreements”); (iv) the formation of another joint venture between Embraer and Boeing (or any of their respective subsidiaries) for the promotion and development of new markets and applications for the multi-mission airplane KC-390, based on jointly identified opportunities, and development, manufacture and sales of the KC-390, in which joint venture Embraer or its subsidiary will hold the majority of the share capital (the “KC-390 NewCo” and “KC-390 JV”) and the execution by Embraer or its subsidiary and Boeing or its subsidiary, as applicable, of the Amended and Restated Limited Liability Company Agreement of the KC-390 NewCo; (the “Restated Limited Liability Company Agreement”); and (v) the execution, by Embraer or an affiliate thereof, Boeing or an affiliate thereof and/or the KC-390 NewCo, as the case may be, of certain operational agreements for the KC-390 NewCo, including supply, intellectual property licensing, engineering services and other services and support agreements, which main conditions are set forth in the Contribution Agreement (as defined below) and the final terms will be negotiated by the parties until the closing of the Transaction (“KC-390 JV Operational Agreements” and, together with items (i) through (iv) above, collectively, the “Transaction”).

Commercial Aviation JV: Master Transaction Agreement Pursuant to the terms and conditions of the Master Transaction Agreement, Embraer will contribute certain assets and rights related to its commercial aviation business to the Commercial Aviation NewCo and the Commercial Aviation NewCo will assume certain liabilities and obligations related to Embraer’s commercial aviation business (the “Contribution”) and, in exchange for the Contribution, the Commercial Aviation NewCo will issue common shares and redeemable preferred shares to Embraer. The Commercial Aviation NewCo’s redeemable preferred shares will have a liquidation preference, receive an annual fixed cumulative dividend payable at a 3.3% rate, be redeemable after two years from the date of issuance, and have no voting rights.

Subject to the conditions in the Master Transaction Agreement, upon consummation of the Transaction, Boeing Brazil will acquire 80% of the issued and outstanding common shares and redeemable preferred shares of the Commercial Aviation NewCo, through the subscription of new shares to be issued by the Commercial Aviation NewCo and the acquisition directly from Embraer of existing shares issued by the Commercial Aviation NewCo, at an aggregate value of approximately $4.2 billion (the “Estimated Value”). The Estimated Value is subject to adjustments customary for transactions of the same nature including for net debt and net working capital of the Commercial Aviation NewCo at the closing date of the Transaction.

4 Until the closing of the Transaction, both parties will conduct their respective businesses completely separate and independent of each other and Embraer will conduct its commercial aviation business in the ordinary course, consistent with past practice.

The foregoing description is only a summary of certain provisions of the Master Transaction Agreement and is qualified in its entirety by reference to the executed Master Transaction Agreement, a copy of which is filed as an exhibit to this annual report.

After the consummation of the Transaction, Commercial Aviation NewCo will be managed by a board of executive officers and a board of directors, and it will be controlled by Boeing Brazil, which will have the right to appoint all members of the management of the Commercial Aviation NewCo. Pursuant to the terms of a shareholders’ agreement to be entered into by Embraer and Boeing Brazil, Embraer will have the right to appoint an observer to participate in any meetings of the board of directors of the Commercial Aviation NewCo (or any committees formed by the board of directors) and the right to receive relevant information about the Commercial Aviation NewCo, subject to certain exceptions. In addition, Embraer will have veto rights relating to certain material matters.

The Commercial Aviation NewCo will also have an oversight committee composed of the same number of members appointed by Embraer and Boeing Brazil to discuss, review and monitor the performance of the activities governed by the Commercial Aviation JV Operational Agreements. Any changes to the guidelines of the oversight committee will only be approved with the affirmative vote of Embraer.

The shareholders’ agreement will provide for an anti-dilution policy and a mandatory minimum dividend policy. Subject to certain conditions, pursuant to the mandatory minimum dividend policy (i) until the fifth anniversary of the date of execution of the shareholders’ agreement, the Commercial Aviation NewCo shall determine the declaration and payment of dividends as set forth in its bylaws, which will provide for distribution of at least 25% of the remaining balance of adjusted net profits for the fiscal year, after the deductions provided for in Brazilian Corporate Law and amounts allocated to a contingencies reserve; and (ii) from and after the fifth anniversary of the date of the shareholders’ agreement, subject to certain exceptions, the Commercial Aviation NewCo shall declare and pay a minimum annual dividend equal to 50% of its retained earnings and net profits, adjusted as will be provided in the bylaws and subject to Brazilian Corporate Law.

For purposes of aligning the interests of the parties in the partnership resulting from the Transaction, the shareholders’ agreement will provide that, as a general rule, Embraer and Boeing Brazil will not be able to dispose of their respective shares issued by the Commercial Aviation NewCo for a period of ten years following the closing of the Transaction (“Lock-Up Period”), except for Embraer’s put option described below and the transfer of shares to companies of the same group. After the Lock-Up Period, certain rules for the transfer of shares will be applicable, including a right of first offer, tag-along and drag-along rights and a right of first refusal.

In addition, the shareholders’ agreement will provide for Embraer’s put option, exercisable at any time, for the sale to Boeing Brazil of all or any portion of the shares held by Embraer in the Commercial Aviation NewCo. Subject to certain parameters set forth in the shareholders’ agreement, the exercise price of the put option will be determined based on the purchase price to be paid by Boeing Brazil on the closing date of the Transaction, if exercised during the Lock Up Period, and fair value, as determined in accordance with the methodology set forth in the shareholders’ agreement, if exercised after the Lock Up Period.

Also, to enable mutual growth and stability of the businesses, the parties involved in the Transaction will enter into the Commercial Aviation JV Operational Agreements.

KC-390 Joint Venture The KC-390 NewCo will be EB Defense, LLC, a Delaware limited liability company incorporated by a subsidiary of Embraer (the “Embraer Member Entity”) and in which the Embraer Member Entity is currently the sole member. Embraer or the Embraer Member Entity will hold 51% and Boeing or a subsidiary of Boeing (the “Boeing Member Entity”) will hold 49% of the membership interests of EB Defense, LLC, in accordance with the Amended and Restated Limited Liability Company Agreement, to be entered into and become effective upon the closing of the Transaction. The agreed upon form of the Amended and Restated Limited Liability Company Agreement is attached as an exhibit to the Contribution Agreement, executed by and among EB Defense, LLC, the Boeing Member Entity, Boeing, the Embraer Member Entity, and Embraer, on January 24, 2019 (the “Contribution Agreement”).

5 The foregoing description is only a summary of certain provisions of the Contribution Agreement and is qualified in its entirety by reference to the copy of the executed Contribution Agreement, which is filed as an exhibit to this annual report.

The Restated Limited Liability Company Agreement will set forth the main terms that will govern the governance of KC-390 JV, including the following: (i) the KC-390 NewCo’s board of directors will be comprised of five members and the Embraer Member Entity will have the right to appoint four members (including the chairperson; and one of the directors appointed by Embraer Member Entity will be a designee of the Brazilian Air Force – FAB), and the Boeing Member Entity will have the right to appoint one member, (ii) the chief executive officer will be appointed by the Embraer Member Entity, and the chief financial officer will be appointed by the Boeing Member Entity; and (iii) certain matters will be subject to unanimous approval by the board of directors or by the members of the KC-390 NewCo.

Boeing, or the Boeing Member Entity and Embraer or the Embraer Member Entity will make contributions to the KC-390 NewCo in cash and in assets.

Also, in order to enable the closing of the KC-390 JV, the relevant parties will enter into the KC-390 JV Operational Agreements.

Corporate Structure As of the date of this annual report, the corporate structure (simplified) of Embraer is as follows:

6 Immediately after the closing of the Transaction, the simplified corporate structure of Embraer, the Commercial Aviation NewCo and of the KC-390 NewCo will be as follows:

PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable.

ITEM 3. KEY INFORMATION 3A. Selected Financial Data and Other Data The following tables present a summary of our selected financial data derived from our audited consolidated financial statements prepared in accordance with IFRS as issued by IASB as of the dates and for each of the periods indicated. The selected financial data as of and for the years ended December 31, 2018 and 2017 should be read together with our audited consolidated financial statements as of December 31, 2018 and 2017 for the year then ended and related notes thereto included elsewhere in this annual report. In addition, the selected financial data as of and for the years ended December 31, 2017 and 2016 should be read together with our audited consolidated financial statements as of and for the years ended December 31, 2017 and 2016 and related notes thereto included elsewhere in this annual report. For information on our segment results, see Note 37 to our 2018 audited consolidated financial statements.

7 Selected Financial Data

Year Ended December 31, Consolidated Statements of Income Data 2018 2017 2016 2015(1) 2014(1) Restated Restated (in US$ millions) Revenue 5,071.1 5,859.4 6,203.9 5,928.1 6,288.8 Cost of sales and services (4,303.1) (4,764.1) (4.982.0) (4,816.8) (5,038.3) Gross profit 768.0 1,095.3 1,221.9 1,111.3 1,250.5 Operating income (expense) Administrative (182.6) (179.1) (164.3) (182.0) (207.5) Selling (304.2) (315.9) (353.4) (361.6) (419.9) Research (46.1) (49.2) (47.6) (41.7) (47.1) Other operating income (expense), net (199.4) (210.4) (442.6) (194.2) (32.6) Equity in income (losses) of associates (0.4) 1.2 (0.3) (0.3) (0.1) Operating profit before financial result 35.3 341.9 213.7 331.5 543.3 Financial expense, net (171.5) (40.6) (37.5) (22.9) (24.5) Foreign exchange gain (loss), net — 6.6 4.4 27.6 (14.9) Profit (loss) before taxes on income (136.2) 307.9 180.6 336.2 503.9 Income tax (expense) (35.0) (27.9) (0.3) (255.4) (156.2) Net income (loss) for the period (171.2) 280.0 180.3 80.8 347.7 Attributable to: Owners of Embraer S.A. (178.2) 264.0 178.6 69.2 334.7 Noncontrolling interests 7.0 16.0 1.7 11.6 13.0

Year Ended December 31, Earnings per Share—Basic 2018 2017 2016 2015(1) 2014(1) Restated Restated (in US$, except for share data) Net income (loss) attributable to owners of Embraer S.A. (178.2) 264.0 178.6 69.2 334.7 Weighted average number of shares (in thousands) 734,065 734,264 735,571 730,205 733,677 Basic earnings per share—U.S. dollars (0.24) 0.36 0.24 0.09 0.46

Year Ended December 31, Earnings per Share—Diluted 2018 2017 2016 2015(1) 2014(1) Restated Restated (in US$, except for share data) Net income attributable to owners of Embraer S.A. (178.2) 264.0 178.6 69.2 334.7 Weighted average number of shares (in thousands) 734,065 734,264 735,571 730,205 733,677 Dilution for the issuance of stock options (in thousands)(2) — 545 1,690 3,364 3,786 Weighted average number of shares (in thousands) diluted 734,065 734,809 737,261 733,569 737,463 Diluted earnings per share (0.24) 0.36 0.24 0.09 0.45

(1) The consolidated financial information as of and for the years ended December 31, 2015 and 2014 has been derived from our historical financial statements but was not restated for the retrospective application of IFRS 9 and IFRS 15 as management cannot be provided this financial information without unreasonable effort or expense. (2) Refers to the effect of potentially dilutive shares.

8 As of December 31, Consolidated Statement of Financial Position Data 2018 2017 2016 2015(1) 2014(1) Restated Restated (in US$ millions) Cash and cash equivalents 1,280.9 1,270.8 1,241.5 2,165.5 1,713.0 Financial investments (current) 1,743.4 2,366.1 1,775.6 622.6 710.6 Inventories 2,507.0 2,148.7 2,496.4 2,314.6 2,405.3 Other current assets(2) 1,539.7 1,294.0 1,310.1 1,308.9 981.8 Property, plant and equipment, net 1,964.7 2,104.9 2,154.2 2,027.4 2,025.8 Intangible assets, net 1,898.8 1,882.4 1,664.6 1,405.4 1,260.9 Other long-term assets(3) 358.8 907.7 1,077.4 1,825.1 1,313.6 Total assets 11,293.3 11,974.6 11,719.8 11,669.5 10,411.0 Short-term loans and financing 179.3 388.9 510.3 219.4 89.7 Other current liabilities(4) 2,849.3 2,414.3 2,717.5 2,861.0 2,463.2 Long-term loans and financing 3,468.4 3,809.6 3,249.6 3,311.1 2,418.4 Other long-term liabilities(5) 856.2 1,184.3 1,306.0 1,434.3 1,574.9 Shareholders’ equity 3,845.7 4,064.1 3,844.0 3,741.8 3,764.8 Noncontrolling interests 94.4 113.4 92.4 101.9 100.0 Total shareholders’ equity 3,940.1 4,177.5 3,936.4 3,843.7 3,864.8 Total liabilities and shareholders’ equity 11,293.3 11,974.6 11,719.8 11,669.5 10,411.0

(1) The consolidated financial information as of and for the years ended December 31, 2015 and 2014 has been derived from our historical fina3ncial statements but was not restated for the retrospective application of IFRS 9 and IFRS 15 as management cannot be provided this financial information without unreasonable effort or expense. (2) Other current assets consist of: trade accounts receivable, net; derivative financial instruments; customer and commercial financing; collateralized accounts receivable; income tax and social contribution; contract assets, guarantee deposits and other assets. (3) Other long-term assets consist of: financial investments; derivative financial instruments; customer and commercial financing; collateralized accounts receivable; guarantee deposits; deferred income tax and social contribution; other assets and investments. (4) Other current liabilities consist of: trade accounts payable; non-recourse and recourse debt; other payables; contract liabilities, derivative financial instruments; taxes and payroll charges payable; income tax and social contribution; financial guarantee and residual value; dividends payable unearned income and provisions. (5) Other long-term liabilities consist of: non-recourse and recourse debt; other payables; contract liabilities; derivative financial instruments; taxes and payroll charges payable; deferred income tax and social contribution; financial guarantee and residual value; unearned income and provisions.

9 Year Ended December 31, Other Consolidated Financial Data 2018 2017 2016 2015(1) 2014(1) Restated Restated (in US$ millions) Net cash generated (used ) by operating activities 1,107.6 753.0 (6.6) 862.5 482.3 Net cash used in investing activities (523.1) (1,092.6) (993.5) (1,417.4) (671.5) Net cash generated (used) by financing activities (503.4) 369.5 8.9 1,224.0 333.3 Depreciation and amortization(2) 250.0 315.4 330.1 316.8 286.3

(1) The consolidated financial information as of and for the years ended December 31, 2015 and 2014 has been derived from our historical financial statements but was not restated for the retrospective application of IFRS 9 and IFRS 15 as management cannot be provided this financial information without unreasonable effort or expense. (2) Consists of: depreciation of property plant and equipment, amortization of intangible assets and realization contribution from suppliers.

The following tables present a summary of our operational data as of the dates and for the periods indicated.

Other Data

Year ended December 31, Other Data: Aircraft delivered: 2018 2017 2016 2015 2014 To the Commercial Aviation Market 90 101 108 101 92 EMBRAER 170 1 — — 2 1 EMBRAER 175 6779908262 EMBRAER 190 13 12 11 8 19 EMBRAER 195 5 10 7 9 10 EMBRAER 190-E2 4 — — — — To the Defense and Security Market 15 8 16 20 7 EMB 145 AEW&C/RS/MP 6 5 3 1 — EMB 312 Tucano/AL-X/ Super Tucano 9 3 13 19 7 To the Executive Jets Market 91 109 117 120 116 Legacy 600/650 4 7 9 12 18 Legacy 450/500 23 29 33 23 3 EMBRAER 145/170/190 Shuttle ————— Phenom 100 1118101219 Phenom 300 5354637073 Lineage 1000 —1233 To the General Aviation Market 18 16 2 19 38 Light Propeller Aircraft 18 16 2 19 38 Total delivered (in aircraft) 214 234 243 260 253

10 As of December 31, Other Data: Aircraft in backlog 2018 2017 2016 2015 2014 In the Commercial Aviation Market 368 435 450 513 459 EMBRAER 170 —1335 EMBRAER 175 204 103 104 169 172 EMBRAER 190 746565565 EMBRAER 195 3 5 12 19 7 EMBRAER 175 – E2 — 100 100 100 100 EMBRAER 190 – E2 43 74 85 77 60 EMBRAER 195 – E2 111 106 90 90 50 In the Defense and Security Market 76 73 64 74 65 EMB 145 AEW&C/RS/MP — — — — 1 EMB 312 Tucano/EMB 314/EP Super Tucano 8 14 7 14 8 LAS 156— 617 E99 55555 KC-390 28 28 28 28 28 VU-Y 34466 MFTS —15 F-39 15 15 15 15 — PHENOM 100 2———— In the Executive Jets Market 61 64 122 163 168 Legacy 450/500/600/650/Phenom 100/300/Lineage 1000/EMBRAER 170/190 Shuttle 61 64 122 163 168 Total backlog (in aircraft) 505 572 636 750 692 Total backlog (in US$ millions) 16,300.5 18,337.0 19,622.8 22,460.7 20,920.2

3B. Capitalization and Indebtedness Not applicable.

3C. Reasons for the Offer and Use of Proceeds Not applicable.

3D. Risk Factors Risks Relating to Embraer The consummation of the strategic partnership with Boeing is subject to conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all. Failure to complete the proposed Transaction could adversely affect our business, financial condition and operating results and the trading price of our common stock and ADSs. There can be no assurance that the Transaction will be consummated or that the consummation of the Transaction will occur in the timing estimated by Embraer. The consummation of the Transaction is subject to a number of conditions, some of which are beyond our control, including, among others, (i) approval by antitrust authorities in Brazil, the United States and other applicable jurisdictions, (ii) receipt of certain governmental authorizations and third party consents, (iii) absence of any law or order prohibiting the Transaction, and (iv) retention of certain key employees. The completion of the Transaction is also subject to various termination rights, including if the Transaction is not consummated by a certain date. There can be no assurance that the conditions to the closing of the Transaction will be satisfied or waived or, even if satisfied, that no event of termination will take place. In addition, we cannot assure that relevant antitrust authorities will approve the Transaction without imposing actions, conditions, limitations or restrictions in connection with their approval of the Transaction, which may jeopardize or delay completion of the Transaction, or allow the parties to terminate the Transaction.

11 Moreover, the consummation of the Transaction has been subject to various legal proceedings and challenges seeking to suspend the continuation of the consummation of the Transaction. For instance, there are four ongoing lawsuits seeking to prevent or delay the consummation of the Transaction: (1) class action No. 5017611-59.2018.4.03.6100, filed by Paulo Pimenta and others before the 24th Federal Civil Court of São Paulo, (2) public interest civil action No. 5031433-18.2018.4.03.6100, filed by the Confederação Nacional dos Trabalhadores Metalúrgicos and others before the 24th Federal Civil Court of São Paulo, (3) public interest civil action No. 5000804-27.2019.4.03.6100, filed by the Associação Brasileira de Investidores – ABRADIN before the 8th Federal Civil Court of São Paulo, and (4) public interest civil action No. 1000309-57.2019.4.01.3400, filed by the Partido Democrático Trabalhista – PDT before the 9th Federal Civil Court of the Federal District. Embraer has thus far been able to prevail and obtain decisions favorable to the continuation of the Transaction. However, the outcome of any such litigation is uncertain. Also, there can be no assurance that other legal proceedings will not be initiated with the purpose of suspending actions to consummate the Transaction nor that we will prevail in those proceedings. An adverse ruling in any such lawsuit could prevent or delay consummation of the Transaction and/or result in additional costs to us.

If the Transaction is not consummated, or its consummation takes longer than expected, or if certain conditions or restrictions are imposed by relevant antitrust authorities for the consummation of the Transaction, we may not realize the expected synergies and other benefits from the strategic partnership with Boeing, or our employees, suppliers or customers may lose focus on our business, cease doing business with us, or curtail their activities with us, which may materially and adversely affect our business and operations, financial condition or operating results, as well as the trading price of our common shares and ADSs. Failure to complete the Transaction for any reason could materially and adversely affect our business and the trading price of our common shares and ADSs in a number of other ways, including the following: • having to pay substantial costs relating to the Transaction, whether or not the Transaction is completed; • experiencing negative reactions from the financial markets, rating agencies or from our key business relationships, including our customers, suppliers and employees; • focusing on the Transaction instead of on pursuing other opportunities that could be beneficial, without realizing any of the benefits of having the Transaction consummated; and • reputational harm due to the adverse perception of any failure to successfully consummate the Transaction.

Our strategic partnership with Boeing may not be implemented successfully or the implementation may be more difficult, time consuming or costly than expected. We face challenges in the implementation of the strategic partnership with Boeing that are inherent to splitting the businesses, operations and workforces of our commercial aviation and other businesses, including the potential for unforeseen difficulties in segregating operations and systems and the costs related thereto. The segregation of our commercial aviation business from our other businesses and the contribution of the relevant assets and liabilities to the Commercial Aviation JV is complex, costly and time- consuming and may deviate our management’s focus and resources from our day-to-day operations. The difficulties of segregating the commercial aviation business from our other businesses include, among others: • difficulties in segregating the commercial aviation business’ operations and systems, including intellectual property and information technology assets; • challenges in obtaining the required licenses and governmental and third party authorizations, consents or approvals; • unforeseen costs; • difficulties in segregating and retaining key personnel; • challenges in keeping existing customers and suppliers; and • performance shortfalls as a result of the diversion of management’s attention caused by completing the Contribution.

12 If we are not able to segregate our commercial aviation business unit according to the timing and costs originally planned and there are unforeseen difficulties in the segregation process, our business and operations as well as the trading price of our shares and ADSs may suffer a material adverse effect.

Although we expect that the strategic partnership with Boeing will result in synergies and other benefits to us, those benefits may not be realized fully or at all or may not be realized within the expected time frame. We expect that the Commercial Aviation JV and the KC-390 JV, and the long-term Commercial Aviation JV Operational Agreements and the KC-390 JV Operational Agreements that we will enter into in connection with the Transaction, will generate synergies and other benefits to us, such as broader scale, resources and market presence, including access to Boeing’s global supply, sales, marketing and service chain, increased efficiency and competitiveness of our products and services. However, our ability to realize the anticipated benefits of the Transaction will depend, to a large extent, on the successful, timely and cost-effective implementation of these joint ventures and the performance of the Commercial Aviation JV Operational Agreements and the KC-390 JV Operational Agreements in a manner that facilitates growth opportunities and achieve the projected stand-alone cost savings and revenue growth trends identified by us. Factors that could affect this implementation include the following, among others: • the occurrence of unforeseen operational difficulties, especially considering the mutual operational dependency relationship that will result from the Transaction; • potential disagreements with Boeing; • difficulties in achieving anticipated synergies, business opportunities, and growth prospects from the strategic partnership; • unexpected costs; • challenges in sustaining the activities that we will conduct on a stand-alone basis; • potential loss of key employees; • potential changes to, or early termination of, the Commercial Aviation JV Operational Agreements; and • negative perception from the financial markets and rating agencies of the business and operations of Embraer post- Transaction.

We cannot assure you that the strategic partnership with Boeing, if consummated, will be successful and, therefore, we may not realize fully or at all or may realize over a longer period of time than initially anticipated the anticipated synergies and other benefits of the Transaction. In addition, the value of the Transaction may be reduced as a result of purchase price adjustments and post-closing indemnities. If we are unable to fully realized the anticipated benefits of the Transaction, or if the value of the Transaction is reduced for any reason, our business, results of operations and financial condition as well as the trading price of our common shares and ADSs may be materially and adversely affected.

A downturn in the commercial and executive aviation markets may reduce our sales and revenue, and, consequently, our profitability. We expect that a substantial portion of our sales will be derived from sales of commercial aircraft and executive jets. Historically, these markets have been cyclical due to a variety of factors that are both external and internal to the air travel industry, including general economic conditions.

Economic downturns in our industry may reduce air travel demand and corporate and personal spending, which may negatively impact our Commercial Aviation and Executive Jets businesses. Downturns may also lead to a decrease in the volume of financing available to our customers for aircraft purchases, particularly in the aforementioned segments. A continued downturn in general economic conditions could result in further reductions in air travel and decreased orders for our aircraft. Our customers could also defer or cancel their purchases of our aircraft. We cannot predict the magnitude or duration of the impact that the aforementioned events would not only have on the air transport industry as a whole and on our business in particular.

13 We depend on key customers. In our Commercial Aviation business, as of December 31, 2018, approximately 90% of our firm orders in backlog for the current EMBRAER 170/190 jet family were from the airlines Republic Airlines, American Airlines, United Airlines, Horizon/Alaska and two undisclosed customers. Moreover, our E-Jets E2 family backlog mainly comprises orders from the companies Azul, AerCap, AirCastle and Helvetic, which represent approximately 90% of our E-Jets E2 family orders. We believe we will continue to depend on a select number of key customers, and the loss of any one of them would significantly reduce our sales and market share.

Progressively, the commercial airline industry is seeking to reduce costs and increase efficiency, and is experiencing a consolidation process through mergers and acquisitions and alliances through code-sharing arrangements. Although it is expected that those consolidations and alliances may result in the creation of more stable and competitive airlines, they may also have the effect of reducing the number of existing and potential customers and, possibly, the number of aircraft purchases, which may adversely affect us.

Financial difficulties, restructurings and bankruptcy proceedings of customer airlines can have a material adverse effect on our results of operations and financial condition. In February 2016, Republic Airways Holdings, which by that time operated a fleet of 230 Embraer Commercial Aviation aircraft (of which 50 are of the ERJ145 family and 180 are E170/E175 models), filed for a Chapter 11 bankruptcy. As a result, we have provisioned a total of US$100.9 million to account for expected expenses related to obligations from financial guarantees offered to the main financing agent of the ERJ 140/145 aircraft, acquired by and delivered to this customer. As of December 31, 2018, the remaining obligation assumed in accounts payable was US$15.1 million. For further information on these provisions, see “Item 5E. Off-Balance Sheet Arrangements.”

In addition, delays in payment cycles by significant customers may adversely affect our cash position and working capital, as occurred in the past.

In the Executive Aviation segment, we have been increasingly relied on individual orders as the share of fleet orders in the backlog has been diminishing. The broad adoption of the Legacy and Phenom jets by fleet customers has in recent years driven the growth of our sales, backlog and deliveries, but fleet renewal demand has decreased and is expected to occur at a more moderate rate over a longer period as the current fleet ages.

In our Defense and Security business, the Brazilian government is our largest customer of defense aircraft products. Revenue from sales to the Brazilian government accounted for 48.1% of segment revenue for the year ended December 31, 2018. A decrease in defense investments by the Brazilian government due to budgetary constraints or other factors that are out of our control could decrease our Defense and Security revenue. We cannot assure you that the Brazilian government will continue to acquire defense products and services from us in the future at the same rate or at the same level.

Our aircraft sales are subject to cancellation and reschedule delivery provisions that may reduce our future income, profitability, backlog and cash flow. A portion of our aircraft firm orders is subject to significant contingencies before delivery. Prior to delivery, some of our purchase contracts may be terminated, or all or a portion of a particular firm order may be canceled, for different reasons, including (i) extended delays in delivering aircraft or failure to obtain certification of the aircraft or otherwise meet performance milestones and other requirements, (ii) the failure of a customer to honor its aircraft purchases or (iii) production rate shortfalls.

Our customers may also reschedule deliveries or cancel orders, particularly during an economic downturn. In 2018, we had income of US$35.4 million related to contractual fines paid by customers due to contract cancellations, compared to contractual fines income of US$2.4 million in 2017 and US$24.2 million in 2016. Material cancellations, delays or decreases in the number of aircraft delivered in any year would reduce our sales and revenue, and, consequently, our profitability, cash flow and backlog.

14 Some of our aircraft sales may be subject to financial and residual value guarantees and trade-in options that may require us to make significant cash disbursements. For certain aircraft sales contracts, we guarantee a portion of the financial value and the residual value for aircraft that we have already delivered. Financial guarantees are provided to financing parties to support a portion of the payment obligations of purchasers of our aircraft under their financing arrangements to mitigate default-related losses. These guarantees are secured by the financed aircraft.

Residual value guarantees typically ensure that, at the exercise date (between six and 19 years after the aircraft delivery date), the relevant aircraft will have a residual market value equal to a percentage of the original sale price. Most of our residual value guarantees are subject to a limitation (a “cap”) and, therefore, on average, our residual value guarantee exposure is limited to 11% of the original sale price. In the event of an exercise by a purchaser of its residual value guarantee, we will bear the difference, if any, between the guaranteed residual value and the market value of the aircraft at the time of exercise, limited to the cap.

Assuming all customers who are supported by off-balance sheet financial guarantees defaulted on their aircraft financing arrangements, and also assuming we were required to pay the full aggregate amount of outstanding financial and residual value guarantees and were unable to remarket any of the aircraft to offset our obligations, our maximum exposure would have been US$319.7 million (or US$182.7 million, net of provisions of financial guarantee of residual value and financial guarantee already recorded in the amount of US$137.0 million as reflected in Note 35.3 to our 2018 audited consolidated financial statements) under these guarantees as of December 31, 2018. As a result, we would be obligated to make substantial payments that may not be recoverable through proceeds from aircraft sales or leases, particularly if we are not able to remarket any of the aircraft to offset our obligations or financing defaults occur with respect to a significant portion of our aircraft. The value of the underlying aircraft is more likely to decrease and third parties are more likely to default during economic downturns. For further discussion see our exposure to these guarantees in Note 35 to our audited consolidated financial statements and “Item 5E. Off Balance Sheet Agreements.”

In addition, we sometimes provide trade-in options to our customers in purchase agreements for new aircraft. These options provide customers with the right to trade in aircraft upon the purchase and acceptance of a new aircraft. In 2018, we accepted 11 aircraft, with a total invoiced value of US$ 81.2 million, for trade-in pursuant to trade-in options, as compared to 23 aircraft, with a total invoiced value of US$114.0 million, in 2017 and 43 aircraft, with a total invoiced value of US$365.4 million, in 2016. In the aggregate, we are currently subject to trade-in options relating to eight aircraft, as a result of trade-ins tied to contractual obligations with customers and to their taking delivery of certain new aircraft. In addition, other aircraft may become subject to trade-in due to new sales agreements. The trade-in price is determined based on the new aircraft sold, as well as other factors, including a market value assessment performed by independent third party appraisers. We may be required to accept trade-ins at prices that could result in financial loss for us when we receive the aircraft.

We continuously re-evaluate our risk related to financial guarantees and trade-in obligations based on a number of factors, including the estimated future market value of our aircraft based on third-party appraisals, information on similar aircraft remarketing in the secondary market and the credit rating of the customers.

In 2018, 2017 and 2016, we recorded provisions and contract liabilities on financial guarantees and residual value guarantees of US$152.1, US$156.8 million and US$210.8 million (including provision for Chapter 11 filled by Republic Airways on US$15.1, US$ 30.8 million and US$ 41.6 million), respectively, related to exposure from financial guarantees offered to the main financing agent of the ERJ 140/145 aircraft, acquired by and delivered to this customer.

Any unexpected decrease in the market value of the aircraft covered by trade-in rights or financial guarantees would decrease our ability to recover the amounts payable to satisfy our obligations and cause us to incur additional charges to income. If we are required to pay amounts related to the guarantees, we may not have sufficient cash or other financial resources available to do so and may need to seek financing to fund these payments. We cannot assure you that the then-prevailing market conditions would allow us to resell or lease the underlying aircraft at its anticipated fair value or in a timely manner. Consequently, honoring our financial guarantee or trade-in obligations could require us to make significant cash disbursements in a given year, which, in turn, would reduce our cash flow in that year.

15 Any decrease in Brazilian government-sponsored customer financing, or increases in government-sponsored financing that benefits our competitors, may decrease the competitiveness of our aircraft. Traditionally, aircraft original equipment manufacturers, or OEMs, from time to time, have received support from governments through governmental export credit agencies, or ECAs, in order to offer competitive financing conditions to their customers, especially in periods of credit tightening from the traditional lending market.

Official government support may constitute unofficial subsidies causing market distortions, which may rise to disputes among governments at the World Trade Organization, or WTO. Since 2007, an agreement known as the Aircraft Sector Understanding, or ASU, developed by the Organization for Economic Co-operation and Development, or OECD, has provided guidelines for the predictable, consistent and transparent use of government-supported export financing for the sale or lease of civil aircraft, in order to establish a “level-playing field.” ECAs from signatory countries are required to offer terms and conditions no more favorable than those contained in the ASU’s base financial agreement when financing sales of aircraft that compete with those produced by the OEMs of their respective countries. The effect of the agreement is to encourage aircraft purchasers to focus on the price and quality of aircraft products offered by OEMs rather than on the financial packages offered by their respective governments.

The Brazilian ECA, Brazilian Social and Economic Development Bank (Banco Nacional de Desenvolvimento Econômico e Social), or BNDES, together with the Brazilian National Treasury Export Guarantee Fund, offer financing and export credit insurance to our customers under terms and conditions required by the ASU. Any reduction or restriction to the Brazilian export financing program, and any increase in our customers’ financing costs for participation in this program, above those provided in the ASU’s base financial agreement, may cause the cost-competitiveness of our aircraft to decline. Other external factors may also impact our competitiveness in the market, including, but not limited to, aircraft OEMs from countries which are not signatories to the ASU agreement offering attractive financing packages, or any new government subsidies supporting any of our major competitors.

From 2004 through 2018, approximately 30% of our Commercial Aviation deliveries was subject to official export credits. In 2017 and 2018, approximately 25% and 51%, respectively, of our Commercial Aviation deliveries were supported by the Brazilian export financing program. We cannot assure that the Brazilian government, for policy reasons or otherwise, will not reduce or discontinue this type of funding for the financing of our aircraft or that other sources of funding will be available to our customers. The loss or significant reduction of funds available to our customers, without an adequate substitute, could lead to a reduction in sales of our aircraft or to an increase of eventual aircraft financing arrangements.

We may face a number of challenges resulting from the development of new products and the possible pursuit of strategic opportunities and transactions. Our products require a high level of research, development and production expenditures. Our main ongoing project is the development of the E-Jets E2 family, comprising three new airplanes, the E175-E2, E190-E2, and E195-E2. We estimate our total investment in this project will be US$1.7 billion, net of contributions from suppliers, through 2021. In December 2016, we revised our projection of certification and entry into service of the E175 E2 jet from 2020 to 2021. This rescheduling is based on continued interest in the current generation E175 jet in the North American market and recent negotiations between the major US airlines and their respective pilot unions.

We cannot assure you that our products will be accepted by our customers and the market, and if any of our new products does not meet customer expectations or market demand, our business would be materially and adversely affected. In addition, as we continue to develop new products, we may need to reallocate existing resources and coordinate with new suppliers and risk-sharing partners. Finally, cost overruns and delays in the development and delivery of new products would materially and adversely affect us.

16 We may pursue strategic opportunities and transactions, just as we have in the past, including joint ventures, partnerships, acquisitions or divestitures. We may face a number of challenges, including difficulties in identifying appropriate partners, assimilating with or adjusting to our partners’ or targets’ operations and personnel, maintaining internal standards and controls, as well as the diversion of our management’s focus from our ongoing business. We cannot assure you that we will be able to meet these challenges and that our business o the trading price of our common shares or ADSs will not face disruptions as a result of such opportunities or transactions or the markets’ perception thereof.

We may be required to refund cash contributions in connection with the production or development of our aircraft if certain milestones for our aircraft are not reached. We have arrangements with our risk-sharing partners, pursuant to which they have contributed to us, in cash over the years, a total of US$1,365 million since the beginning of the development of the EMBRAER 170/190, Phenom 100/300, Legacy 450/500 jet families and the E2 jet family through December 31, 2018. Cash contributions would have to be refunded by us to the risk-sharing partners to the extent that we had failed to fulfill certain agreed-upon milestones. In 2018, we met all the required milestones, and as a result, the full amount of the cash contributions were nonrefundable.

Although, currently, no cash contributions from our risk-sharing partners are refundable, we may enter into similar arrangements, and if we are unable to meet certain milestones agreed upon with our risk-sharing partners, we may be required to refund cash contributions for which we have not established provisions.

We face significant international competition, which may adversely affect us. The worldwide commercial aircraft manufacturing industry is highly competitive. Along with the large international companies Boeing, Airbus SE, or Airbus, and Bombardier Inc., or Bombardier, we are one of the world’s leading manufacturers of commercial aircraft Additionally, Chinese, Russian and Japanese companies are developing regional jets and already have firm orders in backlog. Although we have attained a significant market share for our commercial aircraft products, we cannot assure you that we will be able to maintain our market share.

In order to remain competitive in the commercial aircraft manufacturing market in the long-term, we must continue to make technological, efficiency and performance enhancements to our aircraft. The competitive landscape has become increasingly aggressive, for example, in light of deals such as the Airbus acquisition of a majority stake in Bombardier’s C-Series Program, renamed A220s in July 2018.

In addition, as a relatively new entrant to the executive jets market, we face significant competition from companies with longer operating histories and established reputations in the industry. Some of our competitors in the executive jets market have a longer track record and a more established customer base. In addition, the level of pre-owned aircraft for sale, although improving, continues to pressure new aircraft demand in this segment and may impact the value of the used aircraft in our portfolio. We cannot assure you that we will increase our market share in the executive jets market segment, or that we will not experience a reduction in our current market share in this segment, especially taking into account a stable market demand scenario that we expect in 2019.

Protectionist and other measures adopted by the governments of specific countries could adversely and disproportionately affect us when compared to our main competitors. Our production is spread globally, with parts manufactured in one or more countries and assembled in another, and as a result any limitations to trade, including quotas, tariffs, subsidies or local content requirements, may increase our production costs and affect our capacity to compete in equal terms in the market for our products.

17 We work with a limited number of key suppliers. We do not manufacture all of the parts and components used in the production of our aircraft. Approximately 80% of the production costs in our Commercial Aviation and Executive Jets businesses consist of materials and equipment purchased from our risk-sharing partners and other major suppliers. Risk-sharing arrangements are those in which suppliers are responsible for the design, development and manufacture of major components or systems of our aircraft. In some cases, the aircraft are designed specifically to accommodate a particular component, which cannot be substituted by another manufacturer without significant delays and expense. In addition, there exist only a limited number of suppliers of certain key components of aircraft globally. We work closely with our main suppliers in order to mitigate any potential supply chain risk, but we cannot assure you that these risks, which could negatively and adversely affect our operating and financial performance, will not materialize.

Intellectual property violations may adversely affect us. We rely on patent, copyright, trademark and trade secret laws, and agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and products used in our operations. Despite these efforts to protect our intellectual property rights, any of our direct or indirect intellectual property rights could be challenged, invalidated or circumvented. In addition, although we believe that we lawfully comply with the intellectual property rights granted to others, we may be accused of infringement on occasion and could have claims asserted against us in the future. These claims could harm our reputation, lead to fines and penalties and prevent us from offering certain products or services. Any claims or litigation in this area, whether we ultimately win or lose, could be time-consuming and costly, hurt our reputation and/or require us to enter into licensing arrangements. We may not be able to enter into these licensing arrangements on acceptable terms. If any infringement brought against us is successful, an injunction may also be ordered against us to stop infringing the alleged rights, which could adversely affect us, our research and/or production.

Unauthorized access to, or release or violation of our, our customers’ or our business partners’ systems and data could cause a material adverse effect on our business and reputation. We, like all business organizations in the digital world, have been subject to a broad range of cyber threats, including attacks, with varying levels of sophistication. These cyber threats are related to the confidentiality, availability and integrity of our systems and data, including our customers’ confidential, classified or personal information. In addition, because we have access to certain information technology systems of some of our customers, our systems may be subject to attacks aimed at accessing, tampering with or exposing our customers’ systems and their data.

We maintain extensive technical security controls, policy enforcement mechanisms, monitoring systems and management oversight in order to address these threats. While these measures are designed to prevent, detect and respond to unauthorized activity in our systems, certain types of attacks, including cyber-attacks, which could have a material adverse effect on our business and reputation, may occur.

Furthermore, some of our business partners, such as our suppliers, have significant access to confidential and strategic information regarding our projects and engineering data. Many of these suppliers face similar security threats and any attacks on their systems could result in unauthorized access to our systems or data.

Any unauthorized access to, or release or violation of our systems and data or those of our customers or business partners could cause a material adverse effect on our business and reputation.

We may suffer from a lack of qualified personnel. From time to time, there is significant competition within the aviation industry for skilled personnel in general and engineers in particular. To the extent the competition re-emerges, we may be unable to recruit and retain the necessary number of highly skilled engineers and other personnel we require. Failure to coordinate our resources in a timely manner or to attract and retain skilled personnel could slow down our development efforts and cause delays in production and deliveries of our aircraft, which would adversely affect us.

18 We are subject to environmental, health and safety risks. Our products, as well as our manufacturing and service activities, are subject to environmental laws and regulations in each of the jurisdictions in which we operate. These laws regulate product performance or content, energy use, greenhouse gas emissions, air quality, water and noise pollution, hazardous substance management, human health risks arising from the exposure to hazardous or toxic materials and the remediation of soil and groundwater contamination.

In addition, environmental regulations related to climate change, including CO2 emissions standards adopted by the International Civi Aviation Organization, or the ICAO, in March 2017, are one of the main drivers of global aerospace industry research and development investments since they may affect customer preferences. We may incur additional costs to improve or create new compliance programs to meet environmental regulatory requirements. We currently have several comprehensive programs in place to reduce the effects of our operations on the environment. For further information, see “Item 4D. Information on the Company—Property, Plant and Equipment.”

Moreover, our services and products must comply with health and safety laws and regulations, as well as substances and preparations. We strive to maintain the highest quality standards and closely follow potential and confirmed changes in laws and regulations to adapt, redesign, redevelop, recertify or eliminate our products to remain compliant with those claims. Seizures of non-compliant products may occur and we may incur administrative, civil or criminal penalties. In the event of an accident or other serious incident involving a product, we may be required to conduct investigations and undertake remedial activities.

We benefit from certain tax and other government-granted benefits and the suspension, cancellation or non-renewal of those benefits would have a material adverse effect on us. Similarly to other Brazilian companies across multiple industries, we receive certain tax and other government-granted benefits, including incentives related to our export and research and development activities. For further information, see “Item 5A. Operating and Financial Review and Prospects—Operating Results—Brazilian Economic Environment—Tax Incentives.”

We cannot assure you that these incentives will be maintained or renewed or that we will be able to obtain new incentives. We could be materially adversely affected in the event our existing benefits are cancelled or not renewed.

Investigations by government authorities under the FCPA and other applicable anti-corruption laws may result in substantial fines and other adverse effects. On October 24, 2016 we finalized definitive agreements, or the Final Agreements, with the U.S. Department of Justice, or DOJ, and the U.S. Securities and Exchange Commission, or the SEC, for the settlement of criminal and civil violations of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or FCPA. We also finalized a term of undertaking (termo de compromisso e de ajustamento de conduta) or TCAC, with the Brazilian Federal Public Prosecutor’s Office (Ministério Público Federal), or MPF, and the Brazilian Securities and Exchange Commission, or the CVM, for the resolution of violations of certain Brazilian laws.

Under these settlements, in addition to paying a total of US$205.5 million to the SEC, DOJ and a Brazilian federal fund, we agreed to an external and independent monitorship for a period of three years. The monitorship period may be extended at the DOJ’s discretion depending on our compliance with the deferred prosecution agreement, or DPA. In February 2017, the United States authorities appointed the monitor, who has been preparing annual reports containing certain observations and recommendations to further improve our anti- corruption and compliance policies and procedures. If our monitor reports we are not in compliance with his recommendations or the terms of the Final Agreements, the latter could be terminated and we could be significantly and negatively affected. Additionally, the monitoring process could divert the efforts and attention of our management team from our ordinary business operations.

In addition, under the DPA the DOJ has agreed to defer prosecution for three years of the facts acknowledged by us that occurred between 2007 and 2011, after which period the charges will be dismissed with prejudice if we do not violate the terms of the DPA. If the DOJ determines that we have breached the DPA, the DOJ may commence prosecution or extend the term of the DPA for up to one year. Similarly, if we breach our obligations under the TCAC, it may also be terminated by the MPF and the CVM in which case we would be subject to sanctions. The criminal prosecution or sanctions could have a material adverse effect on our business, financial condition, results of operations, or cash flows.

19 Moreover, related proceedings and developments are ongoing and could result in additional fines and possibly other sanctions and adverse consequences, which may be substantial. We currently cannot estimate the costs, sanctions or other adverse consequences in connection with these proceedings, nor can we predict the manner in which any proceedings will be resolved. However, any costs, sanctions or other adverse consequences could be significant, and any resolution could have a material adverse effect on our business, financial condition, results of operations, or cash flows. We believe that there is no adequate basis at this time for estimating accruals or quantifying any contingency with respect to these matters.

For further information on these settlements, see “Item 8A. Financial Information—Consolidated Statements and Other Financial Information—Legal Proceedings—SEC/DOJ and Brazilian Public Prosecutor’s Investigations.”

Risks Relating to the Commercial Airline Industry Scope clause restrictions in airline pilot contracts may limit demand for commercial aircraft in the U.S. market. A key limiting factor in demand for regional jets is the existence of scope clauses contained in airline pilot contracts. These scope clauses are union-negotiated restrictions on the number and/or size of regional jets that a particular carrier may operate. Current scope clause restrictions, which are more prevalent in the United States, include restrictions on the weight of aircraft and number of 76 seat commercial aircraft in an airline’s fleet operated by regional carriers. As a result, our opportunities for near-term growth in the U.S. regional jets market in the 76 seat jet category may be limited. The continuation or further tightening of scope clauses could also lead some of our customers who have purchased options to acquire our commercial aircraft not to exercise those options. The next round of negotiations of scope clauses will begin on December 31, 2019, at which time restrictions may be reviewed. We cannot assure that current restrictions will be reduced, or that they will not be expanded, including by amending these scope clauses to cover larger-sized commercial aircraft. Furthermore, although scope clauses are less prevalent outside the United States, the same uncertainty is present in other regions, like Europe.

The supply of pilots to the airline industry may be limited. U.S. Federal Aviation Administration, or the FAA, regulations may negatively impact the supply of qualified pilot candidates eligible to be hired in the airline industry. A first officer in U.S. domestic operations must hold an airline transport pilot certificate and an aircraft type rating to fly the aircraft. An airline transport pilot certificate requires that a pilot be 23 years of age and have 1,500 hours total time as a pilot. Due to these requirements, there may be a growing scarcity of new entrant pilots who meet the experience qualifications, mainly affecting regional carriers which are the usual entry airlines for new pilots (major airlines are expected to hire many of their experienced pilots).

In order to mitigate this issue, certain airlines, for example American Airlines and Jet Blue especially in the United States, have adopted internal measures, including but not limited to creating professional pilot programs and providing financing alternatives. However, any inability to recruit, train and retain qualified pilots may materially affect our customers’ operations.

We are subject to stringent certification and regulatory requirements, which may adversely affect us. Our civil aviation products are subject to regulation in Brazil and in each jurisdiction where our customers are located. The aviation authority in Brazil, known as the National Civil Aviation Agency (Agência Nacional de Aviação Civil – ANAC), or the Brazilian Aviation Authority, as well as authorities in other countries in which our customers are located, most notably the FAA and the European Aviation Safety Agency, or the EASA, must certify our civil aviation products before we can deliver them to our customers. We cannot assure you that we will be able to obtain certification of our aircraft on a timely basis or at all. In addition, complying with the requirements of regulatory authorities can be both expensive and time-consuming. If we fail to obtain a required certification from an aviation authority for any of our aircraft, that aviation authority can prohibit the registration of that aircraft within its jurisdiction until certification has been obtained. Changes in government regulations and certification procedures could also delay our start of production as well as entry of a new product into a new market. Despite our continuous efforts to strictly observe and comply with all aviation certification and other regulatory requirements, we cannot predict how future laws or changes in the interpretation, administration or enforcement of those laws will affect us. We may be required to incur significantly more costs to comply with these laws and/or to respond to these changes.

20 Any accidents or catastrophic events involving our aircraft could adversely affect us. We believe that our reputation and the safety record of our aircraft are important selling points for our products. However, the safe operation of our aircraft depends to a significant degree on a number of factors largely outside our control, including our customers’ proper maintenance and repair of our aircraft and pilot skill. The occurrence of one or more accidents or catastrophic events involving one of our aircraft could adversely affect our reputation and future sales, as well as the market price of our common shares and the ADSs.

Risks Relating to Brazil Brazilian political and economic conditions have a direct impact on our business and the trading price of our common shares and ADSs. The Brazilian government has frequently intervened in the Brazilian economy and occasionally has made drastic changes in policy and regulations. The Brazilian government’s actions to control inflation and affect other policies and regulations have involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency exchange and remittance controls, devaluations, capital controls and limits on imports. Our business, financial condition, results of operations and the trading price of the common shares and the ADSs may be adversely affected by changes in policy or regulations at the federal, state or municipal level involving or affecting factors, such as: • interest rates; • currency fluctuations; • monetary policies; • inflation; • liquidity of capital and lending markets; • tax policies; • labor regulations; • energy and water shortages and rationing; and • other political, social and economic developments in or affecting Brazil.

Uncertainty over whether the Brazilian government will implement changes in policy, regulation or legislation creates instability in the Brazilian economy, increasing the volatility of the Brazilian securities markets. These uncertainties and other future developments in the Brazilian economy may adversely affect our activities, and consequently our operating results, and may also adversely affect the trading price of our common shares and ADSs. These factors are compounded as Brazil emerges from a prolonged recession after a period of a slow recovery, with only meager GDP growth in 2018. Additionally, the new president of Brazil, Jair Bolsonaro, took office on January 1, 2019. We cannot predict the policies or regulations that he may adopt or change during his term.

Since 2011, Brazil’s economy has been weak. The Gross Domestic Product, or GDP, growth rate was 1.1%% in 2018, 1.0% in 2017, compared to contraction rates of (3.6)% in 2016, (3.8) % in 2015, and GDP growth was 0.1% in 2014, 2.7% in 2013 and 1.8% in 2012 and 3.9% in 2011, compared to a GDP growth of 7.5% in 2010. In 2019, analysts forecast that the Brazilian GDP will grow 2.5%.

Our results of operations and financial condition have been, and will continue to be, affected by the growth rate of the Brazilian GDP. Developments in the Brazilian economy may affect Brazil’s growth rates and, consequently, the use of our products and services.

21 Political instability may adversely affect our business and results of operations, the price of our common shares and our debt instruments. Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected, and continue to affect, the confidence of investors and that of the public in general, resulting in economic downturn and heightened volatility of securities issued by Brazilian companies.

Brazilian markets have been experiencing heightened volatility due to uncertainties derived from the ongoing Lava Jato investigation, which is being conducted by the Federal Prosecutor’s Office, and its impact on the Brazilian economy and political environment. Certain members of the Brazilian government and of the legislative branch, as well as senior officers of large state-owned and private companies have been convicted of political corruption involving the acceptance of bribes by means of kickbacks on contracts granted by the government to several infrastructure, oil and gas and construction companies. Profits of these kickbacks allegedly financed the political campaigns of political parties that were unaccounted for or not publicly disclosed, and served to further the personal enrichment of the recipients of the bribery scheme. As a result, a number of senior politicians and officers of the major state-owned and private companies in Brazil, resigned or have been arrested and certain senior elected officials and other public officials are being investigated for allegations of unethical and illegal conduct identified during the Lava Jato investigation.

The ultimate outcome of the investigations related to the Lava Jato is uncertain, but they have already had an adverse impact on the image and reputation of the implicated companies, and on the general market perception of the Brazilian economy. We cannot predict whether the allegations will lead to further political and economic instability or whether new allegations against government officials will arise in the future. We cannot predict the outcome of any of these allegations nor their effect on the Brazilian economy. The development of those unethical conduct cases has affected and may continue to adversely affect our business, financial condition and results of operations and may adversely affect the trading price of our common shares and ADSs.

Inflation and government efforts to combat inflation may contribute significantly to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and, consequently, may adversely affect the market value of our common shares. Historically, Brazil has experienced high inflation rates. Inflation and certain actions taken by the Central Bank to curb it have had significant negative effects on the Brazilian economy. After the implementation of the Plano Real in 1994, the annual rate of inflation in Brazil decreased significantly, as measured by the National Broad Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), or IPCA. Inflation measured by the IPCA index was 3.8%, 3.0% and 6.3% in 2018, 2017 and 2016, respectively, and the tendency is stable or slightly increasing inflation for 2019.

Inflation and the Brazilian government’s measures to fight it, principally the Central Bank monetary policy, have had and may have significant effects on the Brazilian economy and us. Among the effects of such inflationary pressure is a rise in labor costs. Contracts in U.S. dollars, which represent the majority of our Executive Jets businesses, are adjusted for U.S. inflation, through the application of the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers index when delivery is not in the same year of the sale and depending upon the specific commercial terms negotiated in the contracts. While contracts in Brazilian real represent a small portion of the Executive Jets business, the same price adjustment mechanism concept applies using national index, typically the I-GPM. Major contracts in our Defense and Security business are adjusted for Brazilian inflation. If Brazil experiences high inflation again, our operating expenses and borrowing costs may increase, our operating and net margins may decrease and, if investor confidence decreases, the price of our common shares and ADSs may fall.

Tight monetary policies with high interest rates have restricted and may restrict Brazil’s growth and the availability of credit. Conversely, more lenient government and Central Bank policies and interest rate decreases have triggered and may trigger increases in inflation, and, consequently, growth volatility and the need for sudden and significant interest rate increases, which could adversely affect us. Increases in interest rates could adversely affect our ability to incur additional debt and increase the cost of service of debt, resulting in an increase in our financial costs, which may reduce our liquidity, thereby adversely affecting our ability to meet our financial obligations. As of December 31, 2018, approximately 13% of our cash and cash equivalents were indexed to the variation of the SELIC and CDI rates. Therefore, fluctuations in Brazilian interest rates and inflation may adversely affect us. On the other hand, a significant decrease in the CDI or inflation rates may adversely affect the revenue we receive from our financial investments.

22 Exchange rate volatility may adversely affect us. The Brazilian currency has, during the last decades, experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies. For example, the real was valued at R$1.67 per US$1.00 in August 2008. Following the onset of the crisis in the global financial markets with consequences for our businesses, the real depreciated 31.9% against the U.S. dollar and reached R$2.34 per US$1.00 at the end of 2008. In 2010, the real appreciated against the U.S. dollar, reaching R$1.661 per US$1.00 at the end of 2010. Since 2011, the real depreciated against the U.S. dollar, reaching R$3.9048 per US$1.00 at the end of 2015 with a 47.0% devaluation in 2015. In 2016, the real appreciated against the U.S. dollar, reaching R$3.2591 per US$1.00 as of December 31, 2016. In 2017, the real appreciated against the U.S. dollar in comparison to 2016, reaching R$3.3080 per US$1.00 as of December 31, 2017. In 2018, the real depreciated against the U.S. dollar in comparison to December 31, 2017, reaching R$3.8748 per US$1.00 as of December 31, 2018. There can be no assurance that the real will not depreciate further against the U.S. dollar.

Depreciation of the real against the U.S. dollar creates inflationary pressures in Brazil and causes increases in interest rates, which negatively affects the growth of the Brazilian economy as a whole, curtails access to foreign financial markets and may prompt government intervention, including recessionary governmental policies. Depreciation of the real against the U.S. dollar has also, including in the context of an economic slowdown, led to decreased consumer spending, deflationary pressures and reduced growth of the economy as a whole. On the other hand, appreciation of the real relative to the U.S. dollar and other foreign currencies could lead to a deterioration of the Brazilian foreign exchange current accounts, as well as dampen export-driven growth. Depending on the circumstances, either depreciation or appreciation of the real may materially and adversely affect us.

Although most of our revenue and debt is U.S. dollar-denominated, the relationship of the real to the value of the U.S. dollar, and the rate of depreciation of the real relative to the prevailing rate of inflation, may adversely affect us, mainly due to the following factors: • Approximately 30% of our total costs are incurred and denominated in reais. • Because taxes on income are largely determined and paid in reais based on our Brazilian tax books, the income tax expense line item of our statements of income, which has the U.S. dollar as our functional currency, is significantly impacted by appreciation of the real relative to the U.S. dollar to the extent we must record deferred taxes resulting from exchange rate fluctuations on the reported basis of our nonmonetary assets (mainly property, plant and equipment and intangible assets). If the real had devalued or appreciated by 10% against the U.S. dollar in relation to the actual exchange rate as of December 31, 2018, the deferred income tax expense would have been higher or lower by approximately US$148.2 million. For further information on the effects of the variation of the real against the U.S. dollar, see Note 26 to our 2018 audited consolidated financial statements • Depreciation of the real against the U.S. dollar or other currencies would reduce our real-denominated revenues from our Defense and Security business, when converted to the U.S. dollar as our functional currency. • Depreciations of the real relative to the U.S. dollar would also reduce the U.S. dollar value of distributions and dividends on our ADSs and may also reduce the market value of our common shares and ADSs. • Appreciation of the real against the U.S. dollar or other currencies increases the costs of our products when measured in U.S. dollars, and may result in a decrease in our margins.

As a result, we may be materially and adversely affected by exchange rate variations.

Developments and the perception of risk in other countries, especially other emerging markets, may adversely affect the market price of Brazilian securities, including our ADSs, our common shares and our debt instruments. The market value of securities of Brazilian issuers, including securities issued by us, may be affected by economic and market conditions in other countries, including the United States, European Union and Latin American countries and other emerging market countries. Although economic conditions in those countries may differ significantly from economic conditions in Brazil, investors’ reactions to developments in other countries may have an adverse effect on the market value of securities of Brazilian issuers. Crises elsewhere may diminish investor interest in securities of Brazilian issuers, including ours. This could adversely affect the trading price of our securities, and could also make it more difficult for us to access the capital markets and finance our operations in the future on acceptable terms, or at all.

23 Any further downgrading of Brazil’s credit rating could adversely affect the market price of our common shares, ADSs and debt instruments. Credit ratings affect investors’ perceptions of risk and, as a result, the yields required on debt issuances in the financial markets. Rating agencies regularly evaluate Brazil and its sovereign ratings, taking into account a number of factors including macroeconomic trends, fiscal and budgetary conditions, indebtedness and the prospect of change in these factors.

In September 2015, Standard & Poor’s lowered Brazil’s sovereign credit rating to below investment grade, from BBB-minus to BB-plus, citing, among other reasons, general instability in the Brazilian market caused by the Brazilian government’s interference in the economy and budgetary difficulties. Standard & Poor’s again downgraded Brazil’s credit rating in February 2016, from BB-plus to BB, and maintained its negative outlook on the rating, citing a worsening credit situation from the time of the September 2015 downgrade. In January 2018, Standard & Poor’s lowered its rating to BB-minus with a stable outlook in light of doubts regarding this year’s presidential election and pension reform efforts. In December 2015, Moody’s placed Brazil’s Baa3 ratings on review for a downgrade, citing negative macroeconomic trends and a deterioration of the government’s fiscal conditions. Subsequently, in February 2016, Moody’s downgraded Brazil’s ratings to below investment grade, to Ba2 with a negative outlook, citing the prospect for further deterioration in Brazil’s debt service in a negative or low growth environment, in addition to challenging political dynamics. Fitch also downgraded Brazil’s credit rating to BB-plus with a negative outlook in December 2015, citing the country’s rapidly expanding budget deficit and the worse-than-expected recession, and made a further downgrade in May 2016 to BB with a negative outlook, which it maintained in 2017 and downgraded to BB- in February 2018. As a result, the trading prices of debt and equity securities of Brazilian issuers were negatively affected.

Any further downgrade of Brazil’s credit ratings could heighten investors’ perception of risk and, as a result, increase the cost of debt issuance and adversely affect the trading price of our securities.

Risks Relating to Our Common Shares and ADSs If holders of our ADSs exchange the ADSs for common shares, they risk losing the ability to remit foreign currency abroad and Brazilian tax advantages. The Brazilian custodian for the common shares has obtained an electronic certificate of registration from the Central Bank permitting it to remit foreign currency abroad for payments of dividends and other distributions relating to the common shares or upon the disposition of the common shares. These remittances under an ADR program are subject to a specific tax treatment in Brazil that may be more favorable to a foreign investor if compared to remitting gains originated from securities directly acquired by the investor in the Brazilian regulated stock markets. Therefore, an investor who opts to surrender ADSs in exchange for the underlying common share may be subject to less favorable tax treatment on gains with respect to these investments.

Pursuant to CMN Resolution No. 4,373, in order for the investor to surrender ADSs for the purpose of withdrawing the common shares represented thereby, the investor is required to appoint a Brazilian financial institution duly authorized by the Central Bank of Brazil and CVM to act as its legal representative, who shall be responsible, among other things, for keeping and updating the investors’ certificates of registrations with the Central Bank of Brazil, which entitles registered foreign investors to buy and sell directly on the B3. These arrangements may require additional expenses from the foreign investor. Moreover, if the representatives fail to obtain or update the relevant certificates of registration, investors may incur additional expenses or be subject to operational delays which could affect their ability to receive dividends or distributions relating to the common shares or the return of their capital in a timely manner.

The custodian’s certificate of registration or any foreign capital registration directly obtained by the holders may be affected by future legislative or regulatory changes, and we cannot assure the holders that additional restrictions applicable to them, the disposition of the underlying common or preferred shares, or the repatriation of the proceeds from the process will not be imposed in the future.

24 The Brazilian government has veto power over the change in our corporate control, and of our name, trademark or corporate purpose and over the creation or alteration of our Defense and Security programs, and its interests could conflict with the interests of the holders of our common shares and ADSs. The Brazilian government holds one share of a special class of our common stock called a “golden share,” which carries veto power over our change of control, name, trademark or corporate purpose and over the creation or alteration of our Defense and Security programs (whether or not the Brazilian government participates in those programs). For example, (i) in 2010, we changed our corporate name to Embraer S.A. and altered our bylaws to allow us to enter the defense and security market, which required the approval of the Brazilian government and (ii) in 2019, the Brazilian government granted its approval for the strategic partnership between Embraer and Boeing. For further information on the Transaction, see the Explanatory Note on page 3 of this annual report. The Brazilian government may veto transactions that may be in the interest of the holders of our common shares or ADSs. We cannot assure you that we will be able to obtain approvals from the Brazilian government in the future to effect important corporate changes or transactions, or other important corporate changes that may be required.

Our bylaws contain provisions that could discourage our acquisition or prevent or delay transactions that you may favor. Our bylaws contain provisions that have the effect of avoiding the concentration of our common shares in the hands of a small group of investors to promote the dispersed ownership of those shares. These provisions require any shareholder or group of shareholders that acquires or becomes the holder of (i) 35% or more of the total shares issued by us or (ii) other rights over shares issued by us that represent more than 35% of our capital, to submit to the Brazilian government a request for making a public tender offer to purchase all of our shares on the terms specified in our bylaws. If the request is approved, the shareholder or group of shareholders must commence the public tender offer to purchase all of our shares within 60 days of the date of approval. If the request is refused, the shareholder or group of shareholders must sell all of their shares that exceed the 35% limit within 30 days, so that the holding of this shareholder or group of shareholders falls below 35% of our capital stock. These provisions may have anti-takeover effects and may discourage, delay or prevent a merger or acquisition, including transactions in which our shareholders might otherwise receive a premium for their common shares and ADSs. These provisions can only be altered or overridden with the approval of our board of directors and our shareholders in a shareholders’ meeting convened for this purpose and with the consent of the Brazilian government, as holder of the golden share.

Our bylaws contain provisions that limit the voting rights of certain shareholders, including non-Brazilian shareholders. Our bylaws contain provisions that limit the rights of a shareholder or group of shareholders, including brokers acting on behalf of one or more holders of ADSs, to exercise voting rights in respect of more than 5% of the outstanding shares of our capital stock at any general meeting of shareholders. See “Item 10B. Additional Information—Memorandum and Articles of Association—Description of Capital Stock—Voting Rights of Shares—Limitations on the Voting Rights of Certain Holders of Common Shares.”

Our bylaws also contain provisions that limit the right of non-Brazilian shareholders to exercise voting rights in respect of more than two-thirds of the voting rights that may be exercised by Brazilian shareholders present at any general meeting of shareholders. This limitation will effectively prevent our takeover by non-Brazilian shareholders and limit the ability of non-Brazilian shareholders to effect control over us. For further information on our voting rights, see “Item 10B. Additional Information—Memorandum and Articles of Association—Voting Rights of Shares—Limitation on the Voting Rights of Non-Brazilian Shareholders.”

25 The absence of a single, controlling shareholder or group of controlling shareholders may render us susceptible to shareholder disputes or other unanticipated developments. The absence of a single, controlling shareholder or group of controlling shareholders may create difficulties for our shareholders to approve certain transactions, because, among other things, the minimum quorum required by law for the approval of certain matters may not be reached. We and our shareholders may not be afforded the same protections provided by the Brazilian Corporate Law against abusive measures taken by other shareholders and, as a result, may not be compensated for any losses incurred. Any sudden and unexpected changes in our management, changes in our corporate policies or strategic direction, takeover attempts or any disputes among shareholders regarding their respective rights may adversely affect our business and results of operations.

Holders of ADSs may not be able to exercise their voting rights. Holders of ADSs may only exercise their voting rights with respect to the underlying common shares in accordance with the provisions of the deposit agreement governing our ADSs. Under the deposit agreement, ADS holders must vote the common shares underlying their ADSs by giving voting instructions to the depositary. Upon receipt of the voting instructions from the ADS holder, the depositary will vote the underlying common shares in accordance with these instructions. Otherwise, ADS holders will not be able to exercise their voting right unless they surrender the ADS for cancellation in exchange for the common shares.

Pursuant to our bylaws, the first call for a shareholders’ meeting must be published at least 30 days in advance of the meeting and the second call must be published at least 15 days in advance of the meeting. When a shareholders’ meeting is convened, holders of ADSs may not receive sufficient advance notice to surrender the ADSs in exchange for the underlying common shares to allow them to vote with respect to any specific matter. In addition, the depositary has no obligation to notify ADS holders of an upcoming vote or distribute voting cards and related materials to ADS holders, unless we specifically instruct the depositary to do so. If we ask the depositary to seek voting instructions from ADS holders, the depositary will notify ADS holders of the upcoming vote and will arrange to deliver proxy cards to those holders. We cannot assure you that ADS holders will receive proxy cards in time to allow them to instruct the depositary to vote the shares underlying their ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for an untimely solicitation of voting instructions. As a result, holders of ADSs may not be able to fully exercise their voting rights.

The relative illiquidity and volatility of the Brazilian securities markets may substantially limit the ability of holders of our common shares or the ADSs to sell the common shares underlying ADSs at the price and time they desire. Investing in securities, including our common shares or the ADSs, of issuers from emerging market countries, including Brazil, involves a higher degree of risk than investing in securities of issuers from more developed countries.

The Brazilian securities markets are substantially smaller, less liquid, more concentrated and more volatile than major securities markets in the United States and other jurisdictions, and are not as highly regulated or supervised as some other markets. The relatively small market capitalization and illiquidity of the Brazilian equity markets may substantially limit the ability of holders of our common shares or ADSs to sell the common shares or the ADSs at the price and time desired. For further information on the B3, see “Item 9C. Offer and Listing Details—Markets—Trading on the B3.”

26 In addition, we cannot assure you that the Transaction, if consummated, will not have an adverse effect on the liquidity of our common shares and ADSs in the market. For further information on the Transaction, see Explanatory Note on page 3 of this annual report.

Holders of our ADSs might be unable to exercise preemptive rights with respect to the common shares. Holders of our ADSs may not be able to exercise the preemptive rights relating to the common shares underlying their ADSs unless a registration statement under the Securities Act is effective with respect to those rights or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to the shares or other securities relating to these preemptive rights, and we cannot assure holders of our ADSs that we will file any registration statement. Unless we file a registration statement or an exemption from registration applies, holders of our ADSs may receive only the net proceeds from the sale of their preemptive rights by the depositary or, if the preemptive rights cannot be sold, the rights will lapse.

Judgments of Brazilian courts with respect to our common shares will be payable only in reais. If proceedings are brought in the courts of Brazil seeking to enforce our obligations in respect of the common shares, we will not be required to discharge our obligations in a currency other than reais. Under Brazilian exchange control limitations, an obligation in Brazil to pay amounts denominated in a currency other than reais may only be satisfied in Brazilian currency at the exchange rate, as determined by the Central Bank, in effect on the date the judgment is obtained, and those amounts are then adjusted to reflect exchange rate variations through the effective payment date. The then prevailing exchange rate may not provide non-Brazilian investors with full compensation for any claim arising out of or related to our obligations under the common shares or the ADSs.

ITEM 4. INFORMATION ON THE COMPANY 4A. History and Development of the Company Corporate History Embraer S.A. is a publicly-held corporation duly incorporated under the laws of Brazil with an indefinite term of duration. Our principal executive office is located at Avenida Presidente Juscelino Kubitschek, 1909, 14th and 15th floors—Torre Norte—São Paulo Corporate Towers, 04543-907, São Paulo State, Brazil. Our telephone number is 55-11-3040-9518, and our internet address is http://www.ri.embraer.com.br. Our agent for service of process in the United States is National Registered Agents, Inc., with offices at 875 Avenue of the Americas, Suite 501, New York, New York 10001.

Originally formed in 1969 by the Brazilian government, we became a publicly-held corporation in 1989 and were privatized in 1994. In the privatization process, the Brazilian government created the golden share, a special class of shares to ensure that the Brazilian government has certain veto rights, in particular regarding military programs.

In 2000, we registered with the SEC and listed our American Depositary Receipts in the New York Stock Exchange.

In 2006, we promoted a corporate restructuring process focused on simplifying our capital structure, which since then is comprised of only common shares, and we also joined a special listing segment of the B3 – Brasil, Bolsa, Balcão, or B3, known as Novo Mercado, enhancing our corporate governance standards. Since then we do not have a controlling shareholder or controlling shareholder group.

In 2010, our shareholders approved a change of our corporate name from “Embraer – Empresa Brasileira de Aeronáutica S.A.” to “Embraer S.A.,” as well as the addition of capabilities and the broadening of the scope of our defense business unit to allow this business unit to manufacture and trade equipment, materials, systems, software, accessories and components for the defense, security and energy industries, as well as to perform technical activities and services related to these areas. As a result, our bylaws were amended to reflect the addition of these activities to our corporate purposes.

In 2011 and 2012, we made acquisitions and entered into partnerships in the defense segment, including the acquisition of Atech Negócios em Tecnologias S.A. and Bradar Indústria S.A., or Bradar (which was merged into Embraer in 2018), Savis Tecnologias e Sistemas S.A. and Visiona Tecnologia Espacial S.A.

27 Strategic Partnership with Boeing On January 24, 2019, we entered into the Master Transaction Agreement and certain other transaction documents with Boeing and certain subsidiaries of Embraer or Boeing, pursuant to which a subsidiary of Boeing will acquire the controlling stake in Embraer’s commercial aviation business unit and Embraer or a subsidiary of Embraer and Boeing or a subsidiary of Boeing will form a joint venture for the promotion and development of new markets and applications for the KC-390 multi-mission aircraft. Embraer expects that the strategic partnership with Boeing will generate synergies and other benefits to Embraer. For further information on our strategic partnership with Boeing, see Explanatory Note on page 3 of this annual report.

Business Development We have grown from a government-controlled company established to develop and produce aircraft for the Brazilian Air Force into a publicly-held company that produces aircraft for commercial and executive aviation and for defense and security purposes and related services.

As part of our evolution, we have obtained, developed and enhanced our engineering and technological capabilities through our own development of products for the Brazilian Air Force and through joint product development with foreign companies on specific projects. We have applied these capabilities that we gained from our defense business to further develop our Commercial Aviation business.

Our first regional aircraft was the Bandeirante, a 19-passenger twin-engine non-pressurized turboprop aircraft initially designed to service the transport needs of the Brazilian Air Force. This aircraft was certified in 1973. The Bandeirante was followed by the EMB 120 Brasília, which was certified in 1985. The EMB 120 Brasília is a high performance, pressurized turboprop commercial aircraft seating up to 30 passengers and was designed to serve the longer routes and higher passenger traffic of the growing regional aircraft market. Drawing upon the design of the EMB 120 Brasília and the jet technology acquired in our development of the AM-X, a jet strike bomber for the Brazilian Air Force, we developed the ERJ 145 regional aircraft family, our first jet product for commercial use. This family comprises three aircraft, which seat up to 37, 44 and 50 passengers. The first member of the ERJ 145 family, the ERJ 145, was certified in 1996. We have expanded our jet product line with the development of the EMBRAER 170/190 jet family, which has the capacity to seat between 70 and 118 passengers and was designed to serve the aircraft market’s trend towards larger, higher volume and longer range jets. The first member of this family, the EMBRAER 170, was certified in February 2004, and its derivatives, the EMBRAER 175 and the EMBRAER 190, were certified in December 2004 and August 2005, respectively. The certification of the EMBRAER 195 was granted in June 2006. In June 2013, Embraer launched the second generation of its E-Jets family of commercial aircraft, the E-Jets E2, comprising three new aircraft, the E175-E2, E190-E2 and E195-E2. The E190-E2 entered into service in April 2018. The E195-E2 is slated to enter service in 2019 and the E175-E2 in 2021. Our Commercial Aviation business is our primary business, accounting for 46.5% of our revenue for the year ended December 31, 2018.

We developed a line of executive jets throughout time, first the Legacy 600, which was discontinued in 2016 to focus on the success of its longer-range successor, the Legacy 650, followed by the Phenom 100, an entry-level jet, and the Phenom 300, a light jet, both launched in 2005. The Lineage 1000, an ultra-large jet, was added in 2006 as the largest executive jet in our executive jets portfolio and an enhanced version was introduced in 2013, the Lineage 1000E. In 2008, we launched the Legacy 450 and Legacy 500, both medium cabin jets. In 2009, we presented the Legacy 650, a large executive jet that is positioned in our portfolio between the Legacy 500 and the Lineage 1000E. The Legacy 500 and the Legacy 450 entered into service in October of 2014 and December 2015, respectively. In 2016, we launched the Phenom 100EV and the Legacy 650E. In 2017, the Phenom 100EV entered into service and we also launched the Phenom 300E, an enhanced version of our Phenom 300, with a revolutionary interior design, which entered into in service in October 2017 with a demonstration aircraft. In our latest development, we introduced the new Praetor 500 midsize and Praetor 600 super-midsize business jets in 2018, during a company event in Orlando Executive Airport. The Praetor 600 is expected to be certified and enter service in the second quarter of 2019, followed by the Praetor 500 in the third quarter of 2019. Our Executive Jets business accounted for 21.8% of our revenue for the year ended December 31, 2018.

28 We are the leading supplier of defense aircraft for the Brazilian Air Force, based on number of aircraft sold, and have sold aircraft to armed forces in the U.S., Europe, Asia and Latin America. In the defense and security market, we offer a line of intelligence, surveillance and reconnaissance aircraft, services, systems and solutions, ground radar, transportation of authorities, tactical military transport and aerial refueling (KC-390), basic and advanced training and light attack and training aircraft (Super Tucano) and satellites solutions. Using our commercial aircraft platforms, we are able to offer a comprehensive range of aircraft dedicated to transportation of officials, medical evacuation and general transportation missions for the defense and security market. In the fourth quarter of 2018, we received the Type Certificate from the Brazilian Aviation Authority for the multi-mission airlift KC-390, evidencing that the project meets high standards of quality, which are the same used by the international air transport association. Additionally, in 2018, Embraer entered into a consortium with Thyssenkrupp Marine Systems, named Águas Azuis, to compete in a public bidding process for the construction of four Tamandaré class corvettes for the Brazilian Navy. In the second half of 2018, this consortium was shortlisted with three other bidders, and the result of the public bidding process is expected in the first half of 2019.

Our Defense and Security business accounted for 12.1% of our revenue for the year ended December 31, 2018. Revenues from sales to the Brazilian government accounted for 48.1% of the revenue for this segment for the year ended December 31, 2018. Moreover, we provide fuel systems, structural parts, and mechanical and hydraulic systems to Sikorsky Aircraft Corporation, or Sikorsky, a Lookheed Martin Company, for its production of helicopters. We provide to Sikorsky the services of development and manufacture of the landing gear, fuel system and fuel tanks for the S-92 and H-92 Helibus helicopters. We also act as a risk-sharing partner for Sikorsky. These contracts were renewed in 2015 and will expire in 2020. In addition, we developed Ipanema, a crop duster aircraft pursuant to specifications of the Brazilian Ministry of Agriculture. These aircraft are produced only on demand. Through December 31, 2018, we had delivered a total of 1,407 of these aircraft. Our Other Related businesses accounted for 0.3% of our revenue for the year ended December 31, 2018.

On December 20, 2016, we announced the creation of Embraer Services and Support, a business unit focused on services and customer support, which brings together capabilities that were previously allocated to each business area, and is responsible for developing solutions in support of current and new products and services, as well as for managing the associated processes and resources. This represents an opportunity to obtain greater operational efficiency and recurring revenues. Currently there are approximately 2,200 Embraer commercial aircraft and over 1,300 Embraer executive jets, as well as more than 800 defense aircraft, in operation. Over the next 20 years, we expect that an estimated 6,400 new jets (up to 150 seats) will be put into service. In business aviation, certain forecasts indicate that there may be more than 7,500 new jets placed into service over the next decade, not counting the commercialization of the pre-owned fleet. During 2017, the new business unit of Embraer Services and Support consolidated the services and customer support processes previously allocated to each of our business areas to identify synergies and quantify our expertise in our Commercial Aviation, Executive Jets and Defense and Security businesses regarding services and support. Since the first quarter of 2018, we have reported the Services and Support business as a separate segment in our financial statements. For further information, see Note 37.4 to our 2018 audited consolidated financial statements. Our Services and Support business accounted for 19.3% of our revenue for the year ended December 31, 2018. For a description of our capital expenditures, see “Item 5C. Operating and Financial Review and Prospects—Research and Development, Patents and Licenses, etc.—Capital Expenditures.

29 4B. Business Overview We are the leading manufacturer of jets up to 150 seats aircraft in the world, based on the number of deliveries during the period from 2004 to 2018, and we have a franchise footprint represented by our global customer base. Our focus is to achieve customer satisfaction with a range of products and services addressing the commercial airline, executive jets and defense and security markets. We have grown from a government-controlled company established to develop and produce aircraft for the Brazilian Air Force into a publicly-held company that produces aircraft for commercial and executive aviation, and for defense and security purposes and related services. We also produce, market and sell executive jets in the entry-level and light, medium cabin, large and ultra-large categories: the Phenom 100/300 family, the Legacy 450/500 family, the Praetor 500/600, the Legacy 650E and the Lineage 1000E, respectively. Providing high quality customer support is a key element of our customer focus and is critical to our ability to maintain customers with whom we have a long-term relationship. For the year ended December 31, 2018, we generated revenue of US$5,071.1 million, of which approximately 94% was U.S. dollar-denominated. Of our revenue in 2018, 46.5% was from our Commercial Aviation business, 21.8% was from our Executive Jets business, 12.1% was from our Defense and Security business 19.3% was from Services and Support business and 0.3% was from our Other Related businesses. As of December 31, 2018, we had a total firm order backlog of US$16.3 billion.

Our Strengths We believe that our primary strengths are:

Leading Commercial Aircraft Manufacturer with a Global Customer Base. Based on the number of aircraft delivered, we are the leading manufacturer of jets with up to 150 seats, with a strong global customer base. Around 170 airlines from over 80 countries are flying our commercial aircraft on five continents. Our customers include some of the largest and most significant network, regional and low cost carriers in the world.

Aircraft Design; Technology; Cost and Operating Efficiency. We conceive, develop and manufacture clean sheet design aircraft with cutting edge technology to provide our customers with reduced operating, maintenance and training costs due to the similarity and efficiency in design and the commonality of parts within a jet family. These similarities enable us to significantly reduce our design, development and production costs and pass these savings along to our customers in our competitive sales prices, reducing the development time of our aircraft. Our investment in innovative technologies, such as design for automation, enable us to increase operational efficiency by reducing engineering and production costs as well as lowering customers’ maintenance costs.

Strategic Risk-Sharing Partners. With respect to our commercial and business aircraft, we developed strategic relationships with key risk-sharing partners. These risk-sharing partners develop and manufacture significant portions of the systems and components of our aircraft with their own funds, thereby reducing our development expenses. These risk-sharing partners also fund a portion of our research and development expenses through direct contributions of cash or materials. These strategic relationships enable us to reduce our development expenses and risks, improve our operating efficiency, enhance the quality of our products and reduce the number of our suppliers, thereby providing us with flexibility of our production process.

Funded Development of Defense Products. Historically, development expenditures related to defense aircraft have been funded in large part by our customers, which in this business segment include the governments of different countries. These customers have had an important role in our engineering and industrial development. In addition, we use well-proven civil platforms as a solution for certain defense products.

Flexibility of Production to Meet Market Demands. We believe the flexibility of our production processes and our operating structure, including our risk-sharing partnerships, allow us to adjust our production in response to market demand.

Experienced and Highly Skilled Workforce. Our employees are experienced and highly skilled. As of December 31, 2018, engineers comprised approximately 31% of our workforce. Due to the high level of knowledge and skill of our employees, and our continuous training and incentive programs, we are able to efficiently pursue new programs and provide our customers with differentiated technical expertise and guidance.

High skilled engineering for Defense application. Our workforce is highly capable of understanding the customers’ requirements for our defense products and services portfolio and their operational needs, transforming it into flexible and lower lifecycle cost products with global applications. We also count with strong ability to engage with several stakeholders in partnerships, enabling the development of state-of-the-art of the defense and space solutions with reduced cycles.

30 Business Strategies With a view to continue growth of our business and increasing our profitability, we intend to continue to offer our customers cost- effective, high quality, and reliable aircraft and services. The key elements of our strategy are the following:

Continuing to Market Our Commercial Aircraft. We are fully committed to marketing our jets of up to 150 seats. As of December 31, 2018, we had more than 500 units in the ERJ 145 family and on almost 1,400 units in the EMBRAER 170/190 jet family in active service. We also made the first deliveries of four units 190-E2 jets. We expect the 195-E2 and the 175-E2 jets to enter into service in 2019 and 2021, respectively. We believe that market opportunities exist for the EMBRAER 170/190 jet family and for the new E2 family of jets, especially with airlines seeking to expand their fleet, increase their penetration in higher density markets and add longer routes. We also believe that our commercial jets will have opportunities with mainline and low-cost airlines that are right sizing their fleets to adjust capacity for low to mid-density markets and will provide us with significant opportunities to increase our competitiveness by offering a full range of jets of up to 150 seats to our customers.

Commitment to Investing in our Commercial Aviation Products. Our new generation of Commercial Aviation jets, the E2s, reinforce Embraer’s commitment to investing in its commercial aviation products as well as maintaining market leadership in the segment. The aircraft will have state-of-the-art engines, which, combined with new aerodynamically advanced wings, full fly-by-wire flight controls and improvements to other systems, will improve efficiency by delivering significant reductions in fuel burn, maintenance costs, emissions and external noise.

Strengthening Our Position in the Executive Jets Market. We believe that the executive jets market provides us with significant growth opportunities. We offer products in nearly all executive jet categories, from the entry-level to the ultra-large cabin class. We have developed the Phenom 100EV, an entry-level jet, the Phenom 300E, a light jet, Legacy 450 and Legacy 500, both medium cabin jets, the Legacy 650E, a large jet and the Lineage 1000E, an ultra large jet, and we are also currently developing the new Praetor 500 and Praetor 600, midsize and super-midsize jets, respectively. This portfolio represents one of the broadest in the industry. We have endeavored to understand and respond to market and customer needs, in an effort to continuously improve the product and customer support for our executive jets. In the last 13 years, we have introduced four clean sheet design aircraft to the market: Phenom 100, Phenom 300, Legacy 500 and Legacy 450. In 2018, once again, our customer support placed first in an independent, industry-leading survey, Professional Pilot, or ProPilot.

Continue to Pursue Market Niche Opportunities in the Defense and Space Market. We currently offer products for transportation, light attack, training, intelligence, surveillance and reconnaissance. With our products, we have been able to provide enhanced capabilities through a portfolio of defense-integrated solutions, meeting the needs of a wide range of governments to address their military assignments.

Continued Focus on Customer Satisfaction established and respected Services and Support. We believe that our focus on customer satisfaction is fundamental to our entrepreneurial success and our business strategy. Providing high quality customer support and services is a key element of our customer focus and it is critical to our ability to maintain long-term relationships with our customers and keep our products competitive in the market. As the number of our aircraft in operation continues to grow, and our business expands, we have further increased our commitment to providing our customers with an appropriate level of after-sale support, including technical assistance, training, maintenance, spare parts, product modifications and other related services. We own and manage several service centers, strategically located in various parts of the world. In addition, our customers can rely on several authorized third-party maintenance service centers around the world to comply with their maintenance needs. On December 20, 2016, we announced the creation of Embraer Services and Support. In 2017, the new business unit completed the consolidation of all services and customer processes previously allocated to each of our other business areas. Since the first quarter of 2018, we have reported the Services and Support business as a separate segment in our financial statements. For further information on our support and services network, see “—Business Development” and “—Services and Support.”

Continue to Motivate Our Employees and Improve Our Production Processes and Managerial Practices. We are constantly seeking to exceed our customers’ expectations. In order to achieve this goal, we must, on a daily basis, continuously seek to implement the most efficient production processes and best managerial practices. Because the success of our products and services is ultimately a combination of the contribution of our employees and the production processes we have developed over the years, we recognize that we must continue to motivate our employees and refine our production processes. To that effect, we have implemented, and intend to further develop, corporate programs based on a “lean manufacturing” philosophy, such as the Embraer Enterprise Excellence Program, or P3E.

31 Evolution in Business Management – Passion for Excellence and P3E Programs Launched in 2007, the Embraer Enterprise Excellence Program, or P3E, promotes excellence in corporate management, processes and products. P3E is comprised of four pillars: (i) the development of Embraer’s organizational culture; (ii) personnel development; (iii) continuous training; and (iv) the pursuit of excellence and efficiency in all processes.

Based on continuous improvement, P3E encompasses all of Embraer’s businesses, operating locations and processes. In addition, it generates value for stakeholders by connecting each area to value streams with resulting strategies. P3E uses the Kaizen concept as a tool to optimize processes with a particular focus on productivity gains and the elimination of waste.

In 2017, Embraer launched the Passion for Excellence Program with the goal of transforming Embraer into the best and most efficient aerospace and defense company in the world, creating value to our stakeholders. The transformation office, launched shortly thereafter, is a department that is responsible for the management of priority working areas and workstreams. The workstreams comprising this program are direct procurement, indirect procurement, design to value (DtV), inventory, engineering, manufacturing, services and support, support function, zero-based budget, organizational design, digital transformation, industrial intelligence, culture and investment forum.

In addition, our transformation office monitors project execution and adherence to expected results, while reinforcing the “lean manufacturing” and excellence concepts which have been fundamental to our Company’s management since the launch of P3E in 2007.

P3E is a valuable component of the Passion for Excellence Program, both of which are managed by our transformation office.

Commercial Aviation Business We design, develop and manufacture a variety of commercial aircraft. Our Commercial Aviation business is our primary business, accounting for 46.5% of our revenue for the year ended December 31, 2018.

Strategic Partnership with Boeing On January 24, 2019, we entered into the Master Transaction Agreement and certain other transaction documents with Boeing and certain subsidiaries of Embraer or Boeing, pursuant to which a subsidiary of Boeing will acquire the controlling stake in Embraer’s commercial aviation business unit and Embraer or a subsidiary of Embraer and Boeing or a subsidiary of Boeing will form a joint venture for the promotion and development of new markets and applications for the KC-390 multi-mission aircraft. For further information on our strategic partnership with Boeing, see Explanatory Note on page 3 of this annual report.

Following the consummation of the Transaction, Boeing will have control of the entity that will own the business of designing, developing, manufacturing, assembling, testing, certifying, marketing, selling, delivering, maintaining, sustaining and supporting, and providing aftermarket services for, commercial aircraft platforms and programs with structural capacity of 50 or more seats in an all-standard economy class configuration, including the ERJ, EMB 110, EMB 120, Ejet and E2 families, with end-to-end commercial aviation product development and support capability.

The consummation of the transaction remains subject to (i) approval by antitrust authorities in Brazil, the United States and other applicable jurisdictions; and (ii) the satisfaction of other conditions customary in similar transactions. For risks relating to the Transaction, see “Item 3D. Risk Factors—Risks Relating to Embraer—The consummation of the strategic partnership with Boeing is subject to conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all. Failure to complete the proposed Transaction could adversely affect our business, financial condition and operating results and the trading price of our common stock and ADSs, “—Our strategic partnership with Boeing may not be implemented successfully or the implementation may be more difficult, time consuming or costly than expected,” and “—Although we expect that the strategic partnership with Boeing will result in synergies and other benefits to us, those benefits may not be realized fully or at all or may not be realized within the expected time frame.”

32 Products We developed the ERJ 145 family, our 37-50-passenger twin jet-powered regional jet, introduced in 1996, to address the growing demand among regional airlines for medium-range, jet-powered aircraft. Until the launch of the EMBRAER 170/190 Jet Family, the ERJ 145 was our most important product, achieving great results and being responsible for consolidating our presence in the United States regional market. As of December 31, 2018, more than 500 ERJ 145 aircraft remained in service around the world.

EMBRAER 170/190 Jet Family The EMBRAER 170/190 jet family provides our customers four aircraft models in the regional passenger jet range. The EMBRAER 170 is a 70-78 seat jet and the EMBRAER 175 is a 78-88 seat jet, while the EMBRAER 190 is a 98-114 seat jet and the EMBRAER 195 is a 108-124 seat jet. The EMBRAER 170 was certified by the Brazilian Aviation Authority, the FAA, the Joint Aviation Authority of Europe (the former advisory organization that made certification recommendations to non-European Union national authorities), or the JAA, and the EASA in February 2004, and deliveries of the EMBRAER 170 began in March 2004. The EMBRAER 175 was certified by the Brazilian Aviation Authority in December 2004, by the EASA in January 2005 and by the FAA in August 2006. The EMBRAER 190 was certified by the Brazilian Aviation Authority in August 2005, by the FAA in September 2005 and by the EASA in June 2006. The EMBRAER 195 was certified by the Brazilian Aviation Authority in June 2006, by the EASA in July 2006 and by the FAA in June 2007.

We designed the EMBRAER 170/190 jet family to maximize the benefits of commonality. Aircraft in the family share approximately 86% of the same components. The high level of commonality in this jet family lowered our development expenses and shortened our development period. We believe that this commonality leads to significant savings to our customers in the form of easier training, less expensive parts and maintenance and lower operational costs. Due to differences in size and weight, the EMBRAER 170/190 jet family does not share the same wing design. This new regional jet family has engines fixed under its main wings—a design intended to enhance power, improve fuel economy and minimize turnaround times. All of the aircraft models of this family are powered by engines manufactured by General Electric Aircraft Engines and contain state-of-the-art avionics manufactured by Honeywell International Inc. (Aerospace).

The EMBRAER 170/190 jet family’s principal features are: • Performance. All four jets in the EMBRAER 170/190 jet family have a maximum cruising speed of Mach .82. The EMBRAER 170 and the EMBRAER 175 have maximum fully loaded ranges of 1,800 and 1,700 nautical miles, respectively, and each is available in the long-range version, with maximum fully loaded ranges of 2,100 and 2,000 nautical miles, respectively. The EMBRAER 190 and EMBRAER 195 have maximum fully loaded ranges of 1,800 and 1,500 nautical miles, respectively, and each is available in the long-range version with maximum fully loaded ranges of 2,400 and 2,200 nautical miles, respectively. • Ground servicing. The underwing engine design and the existence of four doors, two in the front and two in the back, provide for enhanced accessibility and efficiency of ground services. • Cabin and cargo space. We have enhanced passenger safety and comfort in the EMBRAER 170/190 jet family. The aircraft’s “double-bubble” design enables a four-abreast cabin, a wide aisle, greater interior space and headroom, and a larger baggage compartment than the regional jets of our competitors, including those regional jets that are in the development stage.

In June 2013, we launched the second generation of our E-Jets family of commercial aircraft, named the E-Jets E2, comprising three new aircraft, the E175-E2, E190-E2, and E195-E2. The E190-E2 entered service in April of 2018. The E195-E2 is slated to enter service in 2019 and the E175-E2 in 2021. We estimate our total investments in the new E-Jets E2 models to be US$1.7 billion, net of contributions from suppliers, through 2021.

The launch of the E2 advances our vision of offering leading-edge commercial aircraft with a capacity right-sized for 70 to 150 seats, seamless mainline comfort and performance for flexible and efficient utilization by regional, low-cost and network carriers. Our strategy is to offer all the benefits of a new design, but with the reliability of a mature platform and commonality with current generation E-Jets. We have continually invested in the E-Jets program, so that our customers can stay competitive with aircraft that have the lowest operating costs and the highest passenger appeal.

33 In a typical single-class layout, the E175-E2 was extended by one seat row, compared to the current generation E175, and will seat up to 90 passengers, while the E190-E2 is the same size as the E190, of up to 114 seats. The E195-E2, compared to the current E195, has grown by three seat rows and will accommodate up to 132 seats in a typical single class configuration or up to 146 seats in a high- density configuration.

In June 2015, two years after the launch of the program, we began to assemble the first of the E-Jets E2 family, an E190-E2, at our factory in São José dos Campos. We have already received the first sub-assemblies from suppliers in several countries.

In November 2015, the Pratt &Whitney PW1900G PurePower® Geared Turbofan™ (GTF) engine for the Embraer E190-E2 and E195-E2 aircraft successfully completed its first flight initiating the engine’s flight test program.

In February 2016, in a ceremony held at our plant in São José dos Campos, we presented the E190-E2. The E190-E2 made its first flight in May 2016. In March 2017, in a ceremony held at our plant in São José dos Campos, we presented the second model of E2 jet family, the E195-E2 that is scheduled to enter into service in 2019.

On March 9, 2017 we announced that Azul, the largest operator of the current generation E195s in the world, will be the launch operator of the E195-E2. Azul has 51 firm orders and 20 purchase rights for the E195-E2.

On February 28, 2018, in a ceremony held in São José dos Campos, we received a Type Certificate from the National Civil Aviation Agency, the FAA and EASA for the E190-E2, the first member of the E-Jets E2 family of commercial aircraft. It was the first time that an aircraft program with the level of complexity of the E2 received a type certificate from three major worldwide certification authorities simultaneously.

On April 4, 2018, in a ceremony held in São José dos Campos, we celebrated the delivery of the first aircraft E190-E2 to Widerøe, the largest regional airline of Scandinavia.

Customers We have a diverse, global customer base, mainly in the commercial airline market in Europe, the Middle East, Africa, Asia and the Americas. Our major customers for commercial aircraft include some of the largest regional, low-cost and mainline airlines in the world. As of March 20, 2019, our largest E-Jet customers by number of aircraft in service are Republic, Skywest, JetBlue, Azul, Mesa, Aeromexico, Compass Airlines, Envoy, Tianjin-HNA and KLM Cityhopper. In addition, as of December 31, 2018, almost 90% of our firm orders in backlog for the current EMBRAER 170/190 jet family are from the airlines Republic, American, United, Skywest, Horizon, and from an undisclosed customer. Moreover, our E-Jets E2 family backlog mainly comprises orders from the companies Azul, Aercap, Aircastle, Helvetic, and ICBC, which represent approximately 95% of our E-Jets E2 family orders.

We generally sell our commercial aircraft pursuant to contracts with our customers on a fixed-price basis, adjusted by an escalation formula. Our contracts generally include an option for our customers to purchase additional aircraft at a fixed price option, subject to the same escalation formula. In addition, our contracts include a product support package to cover the entry into service of our aircraft, as well as a general warranty for such aircraft. Other provisions for specific aircraft performance and design requirements are negotiated with our customers. In addition, some of our contracts contain cancellation provisions and trade-in options and financial and residual value guarantees. See “Item 3D. Key Information—Risk Factors—Risks Relating to Embraer—Some of our aircraft sales may be subject to financial and residual value guarantees and trade-in options that may require us to make significant cash disbursements” for a more detailed discussion of these provisions.

Sales and Marketing Our current marketing strategy is based upon our assessments of the worldwide commercial airline market and of the needs of our customers. We actively market our aircraft to international airlines and regional affiliates of major global airlines through our regional offices in the United States, Europe and Asia. Our success depends, to a significant extent, on our ability to discern our customers’ needs, including needs for customer service and product support, and to fill those needs in a timely and efficient manner while maintaining the high quality of our products. Our market and airline analysts focus on the long-term trends of the market, competitive analysis, product-enhancement planning and airline analysis. In terms of direct marketing to our customers, we rely heavily on the media, as well as participating in air shows and other cost-effective events that enhance customer awareness and brand recognition. Besides São José dos Campos in Brazil, we have regional sales offices in Amsterdam, Holland; Fort Lauderdale, Florida, U.S.A.; Beijing, China; and Singapore.

34 Production, New Orders and Options Prior to starting production or development of a new project, we secure letters of intent for future orders of a significant number of aircraft. We typically begin taking orders and building a backlog two years before we begin producing a new aircraft model, aiming to receive a significant number of orders before we deliver the initial aircraft. Once an order is taken, we reserve a place for that order on the production line, ensuring that we will maintain production sufficient to meet demand. Once a place is reserved on the production line, we are able to give customers delivery dates for their orders.

We include an order in backlog once we have received a firm commitment, represented by a signed contract. Our backlog does not include options and letters of intent for which definitive contracts have not been entered into.

Our options generally provide our customers the right to purchase an aircraft at a fixed price and on a specified delivery date, subject to escalation provisions, under a purchase agreement. Once a customer decides to exercise an option, we account for it as a firm order. Occasionally, we have extended the exercise date for our options and renegotiated the delivery schedule of firm orders, as well as allowed customers to convert their firm orders or options for one aircraft into firm orders or options for another aircraft within the same commercial aircraft family.

Services and Support We are working on further developing our portfolio of services for our commercial aviation customers, which comprises the following areas: • field Support, which provides convenient, accessible, on-site or remote assistance for all operational and technical issues in order to maximize customer performance; • technical Support, which serves technical needs through analytics, engineering expertise, and real-time fleet monitoring; • flight Operations, which supports the efficiency and safety of airline operations through tailored solutions, consulting, supervision and training resources; • aircraft Modification, which provides execution and coordination of system upgrades for improved fleet performance and cabin modifications for enhanced onboard amenities; • materials, which ensures availability and economy in parts and materials management for both scheduled and unscheduled maintenance; • maintenance, which provides optimized maintenance solutions based on best practices for efficiency, safety and effectiveness; • training, which prepares crew, maintenance technicians and operations personnel for the highest levels of competence; and • Digital Solutions, which deploys the internet as the core communication channel for 24 hours a day, seven days a week collaboration and information exchange.

We have a worldwide presence, with five regional units strategically positioned around the globe in order to provide us with greater agility in understanding the needs and desires of our customers and respecting the cultural diversity of the different regions where our customers are based. Our regional units are located as follows: • Fort Lauderdale, Florida, U.S.A., which supports our customers in North America; • Amsterdam, Netherlands, which supports our customers in Europe, Africa, the Middle East and Central Asia; • Singapore, which supports our customers in the Asia Pacific region; • Beijing, China, which supports our customers in China; and • São José dos Campos, Brazil, which supports our customers in Latin America.

All units mentioned above have the following infrastructure: • a spare parts distribution center; • technical and material field support teams with field engineers and customer account managers; • warranty and repair administration offices; and • services sales managers.

35 In São José dos Campos, we also offer the following services: • Customer Care Center, providing an integrated solution of technical and spare parts support available 24 hours a day, seven days a week; • spare parts planning and material engineering; • technical support; • flight operations support; • maintenance support engineering; • Maintenance Repair and Overhaul, or MRO, network management strategy and policy; • business development support; • technical publications development; and • technical services, such as: maintenance training, Digital Solutions, engineering services, pilot services and aircraft modifications.

Beyond parts fulfillment and simple rental plans, we also provide innovative programs for material planning, logistics, and acquisitions, such as our: • Fleet-Hour Pool Program; • Parts Consignment Program; • Embraer Collaborative Inventory Plan; • Embraer Parts Exchange Program; and • Customer Stock Optimization.

We own and operate MRO facilities in Nashville, Tennessee, where we have the Embraer Aircraft Maintenance Services, a dedicated service center for commercial aviation, and through Indústria Aeronáutica de Portugal S.A, or OGMA, we offer dedicated maintenance services to both commercial and defense customers in Alverca, Portugal.

The Embraer MRO Network that supports our commercial aviation aircraft fleet is also expanding with our third-party maintenance service centers. As of December 31, 2018, these centers are: • TAP Maintenance & Engineering, in Porto Alegre, Rio Grande do Sul, Brazil; • STAECO, in Jinan, China; • HNA Technik, in Tianjin, China; • AUSTRAL, in Buenos Aires, Argentina; • Kenya Airways, in Nairobi, Kenya; • SIA Engineering Company, in Singapore; and • Hawker Pacific, in Singapore.

Our strategy is to target our service and support leadership position by continuing to provide the best customer support anytime and anywhere in the world, and relying on our strong MRO Network, which satisfies customers’ expectations of quality, lead time, affordability, capability and global coverage.

We constantly monitor customer satisfaction levels and keep open communication channels with them to understand customer needs and define the most appropriate actions for the continuous improvement of our customer support. To do so, we use the following tools and forums: • a customer support satisfaction survey performed annually in order to identify our competitive position; • specific action plans and commitments with each customer, known as Customer Integrated Action Plans; • teamwork and systematic identification and integrated action plans to solve problems affecting us, our suppliers and customers;

36 • periodic dedicated meetings at the customer’s headquarters; • Embraer Operators’ Conferences, which are yearly events typically held in regions of the world where we have customer operators; • Embraer MRO Conference, which is typically a yearly event held in our service centers; • Maintenance Cost Workshop, which is typically a yearly event where operators share best maintenance practices and discuss cost reduction initiatives; • events organized by customers, including the Operators’ Maintenance Forum and the European Customer Community Conference; • interactive forums for discussions in the web portal FlyEmbraer, fostering the exchange of experiences among customers and Embraer; • participation in international fairs related to maintenance, technology, customer relationship management and others; • Customer Advisory Board, a biennial meeting with senior executives from our customer companies to get high level insights, visions and suggestions for our future; and • an internal program, Embraer Excellence in Customer Experience, which aims to address changes in the Services and Support area of the Commercial Aviation division, in order to elevate the performance of our Commercial Aviation business, covering current and future market needs, with the purpose of obtaining the highest levels of customer satisfaction based on their experience in the commercial aviation industry.

Competition We generally face competition from major manufacturers in the international aircraft market. Each category of our products faces competition of a different nature and generally from different companies. Some of our competitors have greater financial, marketing and other resources than we do.

We currently face the strongest competition from the following aircraft: • ATR-72, a 68-seat turboprop produced by ATR Aircraft, or ATR; • Q-400, a 72-seat turboprop produced by Bombardier; • CRJ-700, CRJ-900 and CRJ-1000, 70-seat, 86-seat and 98-seat regional jets, respectively, produced by Bombardier; • A220, former CSeries, 110 to 150-seat jets acquired by Airbus from Bombardier, which entered into service in 2016; • MRJ, a 76 to 88-seat jet under development by Mitsubishi, which is expected to enter into service by 2020; • ARJ21, a 90-seat regional jet produced by COMAC; • SSJ100, a 103-seat regional jet produced by Sukhoi; • A319, a 140-seat jet produced by Airbus; • A319neo, a re-engined A319 jet expected to enter into service in 2018; • 737-700, a 126-seat jet produced by Boeing; and • 737 MAX 7, a re-engined and stretched 737-700 jet, with 138-seat, expected to entering into service in 2019.

We are the leading manufacturer in the market for jets up to 150 seats in the world, with 29% of market share in terms of accumulated deliveries, since 2004, followed by Bombardier with 25%, Airbus with 16%, ATR with 13%, Boeing with 12% and the remaining 5% held by other competitors.

The key competitive factors in the markets in which we participate include design and technological strength, aircraft operational costs, price of aircraft, including financing costs, customer service and manufacturing efficiency. We believe that we will be able to compete favorably on the basis of our aircraft performance, efficiency, low operating costs, product development experience, global customer base, market acceptance, cabin design and aircraft price. In addition, while the competitive landscape has become increasingly aggressive, deals such as the Airbus acquisition of a majority stake in Bombardier’s C-Series Program are evidence of the opportunities in the 100-150 seats market. With the Airbus sales team marketing the C-Series Program, we believe customers who would not have previously considered the C-Series will seek our E190/E195-E2 as a comparable alternative.

37 Executive Aviation Business We refer to our business aviation segment as our “Executive Jets business.” Our current portfolio is one of the broadest in the industry, comprising the entry-level Phenom 100 EV, the light Phenom 300E, the medium cabin Legacy 450 and Legacy 500, the midsize jet Praetor 500, the super-midsize jet Praetor 600, the large cabin Legacy 650E and the ultra-large cabin Lineage 1000E.

We market our executive jets to companies, including fractional ownership companies, charter and air-taxi companies, high-net-worth individuals and to flight academies, both independent as well as those belonging to airlines and armed forces. Our Executive Jets business accounted for 21.8% of our revenue for the year ended December 31, 2018. On December 31, 2018, our firm orders in backlog for our executive jets totaled US$ 0.8 million.

In May 2005, we launched the Phenom 100 and Phenom 300, which are executive jets in the entry-level and light jet categories, respectively. The Phenom 100 jet, which carries six to eight people, received the Brazilian Aviation Authority and FAA certification in December 2008, the same month of its entry into service. The Phenom 300 carries up to ten people and has a larger fuselage and wingspan and longer range than the Phenom 100. It received the Brazilian Aviation Authority and FAA certification and entered into service one year after the Phenom 100. By the end of 2017, the Phenom 100 fleet comprised more than 360 aircraft distributed in more than 30 countries and the Phenom 300 fleet comprised over 490 jets distributed in more than 30 countries. Focused on constant improvement, we launched the Phenom 100EV and the Phenom 300E in 2016 and 2017, respectively.

In May 2006, we launched the Lineage 1000, an ultra-large executive jet based on the EMBRAER 190 commercial jet platform. The Lineage 1000 is configured to accommodate up to 19 passengers in a total cabin area of 750 square feet (70 square meters). The Lineage 1000 was certified by the Brazilian Aviation Authority in December 2008 and by the FAA in January 2009, and entered into service in the first half of 2009. By the end of 2018, the Lineage 1000 fleet comprised more than 25 units distributed in 13 countries. Continued investments in the Lineage 1000 resulted in the introduction of the Lineage 1000E, in 2013, enhancing the customer experience by extending its range capability and offering new interior amenities.

In April 2008, we formally launched two new programs in the medium cabin category, the medium cabin Legacy 450 jet, with a 2,575 nautical mile range and a capacity for up to nine passengers, and the medium cabin Legacy 500 jet, with a 3,125 nautical mile range and a capacity for up to 12 passengers. The Legacy 450/500 medium cabin jets are positioned in our executive jets portfolio between the Phenom 300 and the Legacy 650. The Legacy 500 was certified by the Brazilian Aviation Authority and the FAA in 2014, the same year that it entered into service. The Legacy 450 was certified by the Brazilian Aviation Authority and the FAA in August 2015 and by the EASA in September 2015. In November of the same year, we announced an increase of 2,900 nautical miles in the Legacy 450’s range, and it entered into service in December. In November 2017, we introduced the best-in-class 5,800 foot cabin altitude for the Legacy 450/500 jets, which further enhanced customer experience. These two aircraft programs have helped strengthen our position in the market and establish our portfolio as one of the broadest in the executive aviation industry. By the end of 2018, the Legacy 450/500 fleet was composed of more than 100 units distributed in 18 countries.

In October 2009, we introduced the Legacy 650 jet, a large jet based on the Legacy 600 platform, with a longer range for up to 14 passengers. The Legacy 650 received the Brazilian Aviation Authority and FAA certification in October 2010 and February 2011, respectively, and entered into service in November 2010. The latest evolution of the aircraft that started our Executive Jets business is the Legacy 650E, which introduces auto-throttle and interior enhancements, in addition to a ten-year warranty, which set a new industry standard for performance and reliability. By the end of 2018, the fleet of Legacy 600 and Legacy 650 comprised more than 280 jets in service in 55 countries.

In October 2018, we launched the new Praetor 500 midsize and Praetor 600, the most disruptive and technologically advanced midsize and super-midsize jets, respectively, introducing unprecedented range into their categories. The Praetor 600 is expected to be the farthest-flying super-midsize business jet, which allows nonstop flights between London and New York. The Praetor 500 will be the fastest midsize aircraft, capable of reaching Europe from the west coast of the US with a single stop. The Praetor 600 is expected to be certified and enter service in the second quarter of 2019, followed by the Praetor 500 in the third quarter of 2019.

38 Competition Phenom 100EV and Phenom 300E competitors in the entry-level and light jet categories include Textron, Bombardier, Honda and Pilatus. In the medium cabin category, the Legacy 500 and Praetor 600 competes with Textron, Bombardier, Dassault and Gulfstream aircraft, while the Legacy 450 and Praetor 500 competes largely with aircraft produced by Bombardier and Textron. The Legacy 650E competes with aircraft produced by Dassault, Bombardier and Gulfstream. Boeing and Airbus are the main competitors for the Lineage 1000E ultra-large jet.

Continuing Internationalization In October 2014, we announced our Legacy 500 and Legacy 450 assembly complex in Melbourne, Florida, more than doubling the size of our campus at Melbourne International Airport. The new complex consists of four new buildings: a delivery center, an assembly hangar, a paint facility and a flight preparation facility, which are operational, as well as a new dedicated delivery center that began operations in the first half of 2018. As of December 31, 2018, our Melbourne campus had an area of approximately 450,000 square feet.

Services and Support Our Executive Jets customer fleet has expanded globally and has a strong presence in major markets. We expect to continue enhancing customer support and services offered in our Executive Jets business. To this end, we have added five wholly owned service centers to our operations since 2007, in Fort Lauderdale, Florida; Mesa, Arizona; Le Bourget, France; Bradley, Connecticut and Sorocaba, São Paulo. At the end of 2018, we had 68 service centers to support our executive jets fleet. In addition, in order to ensure customer satisfaction, we implemented a new spare parts system and planning policy to generate synergies among business units. Our new planning policy will further enhance stock optimization and service levels, offering customers an availability between 92% and 98% for our spare parts items.

We have further developed our customer support and services structure to enhance our customers’ satisfaction in operating our executive jets. To measure our customers’ satisfaction, we conduct a yearly customer experience survey of executive jets customers to develop action plans that will allow us to provide effective responses to our clients. Our Customer Support Contact Center counts on a team of specialists dedicated to support all Embraer Executive Jets and offers complete and timely assistance for their operational, technical and maintenance needs. This Customer Support Contact Center operates 24 hours a day, seven days a week, and is based at Embraer’s headquarters in São José dos Campos. Its priority is to minimize downtime from the customer’s first contact to the final solution, by quickly and efficiently applying appropriate resources to critical needs, assuring that customers have expert assistance anywhere in the world.

Since 2014, our product support has been top-ranked in industry surveys. In 2016, for the first time, we were number one in both the AIN and Pro Pilot Product Support Surveys. In 2017, AIN ranked us first for project support. In 2018, we were ranked number one in Pro Pilot Product Support Survey and number two in AIN’s Product Support Survey. The positive customer responses evidenced by these surveys demonstrate our efforts in providing excellent customer support and services which are consistent with our business strategy and demonstrate Embraer’s commitment in this regard.

In 2018, our three service centers in the United States received for the eighth time the FAA Diamond award, a certificate of excellence related to maintenance technician training.

In 2013, we selected Flight Safety International as the training provider for the Legacy 450/500 and by the end of the year the first Full Flight Simulator had already been built. It was certified in November 2014 in accordance with the aircraft’s entry to service at the end of 2014. In 2016, Flight Safety offered its inaugural class in the Legacy 500 Full Flight Simulator, in Dallas, TX, USA.

Defense and Security Business We conceive, design, develop, manufacture and support a wide range of integrated solutions for the defense and security market. Our products include training/light attack aircraft, aerial surveillance platforms, military transport aircraft, government transport aircraft and command, control, communications, computer, intelligence, surveillance and reconnaissance systems and border surveillance and security. We offer a complete portfolio of customer services, ranging from maintenance and material solutions to complete Contractor Logistic Support programs.

39 As of December 31, 2018, we had sold more than 1,300 defense aircraft, including government transport aircraft, to more than 50 armed forces and operators worldwide. We are also the leading supplier of defense aircraft to the Brazilian Air Force based on the total number of aircraft in its fleet production. Our Defense and Security business accounted for 12.1% of our revenue for the year ended December 31, 2018.

Products Military Transport—KC-390 The KC-390 is a multirole military transport aircraft developed to set higher standards in its class. Flexible, safe and fast, the KC-390 is efficient for cargo and troop transport, aerial resupply, humanitarian missions, among other uses. Designed with modern engineering solutions, this new aircraft is an innovation in military transport aviation. Greater flexibility, strength, mobility, easy maintenance and new technology make the KC-390 the best option on the market.

In 2016, Embraer and Boeing entered into an agreement to jointly market and support the KC-390 military transport aircraft. Under the agreement, the companies will pursue new business opportunities together, both for the aircraft itself and for aircraft support and services. The KC-390 completed a key milestone in 2017, when Embraer demonstrated its Initial Operating Certificate, or IOC, to the Brazilian Air Force. After making its debut at the Paris Airshow in France, the aircraft subsequently carried out demonstrations in several countries and covered an additional 90,000 km. The aircraft confirmed its high level of maturity, achieving 100% availability during all flights in this period. During the first semester of 2018, the KC-390 prototype serial number 001 faced an incident that led this first serial unit to be allocated to flight test campaign in order to reduce impact in the certification schedule.

In the fourth quarter of 2018, the KC-390 reached another important milestone, when it obtained a Type Certificate from the Brazilian Aviation Authority. This certificate evidences that the project meets high standards of quality, which are the same used by the international air transport association. The Final Operating Certificate (FOC) is expected to be obtained by the end of 2019.

During 2018, Embraer and Boeing started discussions to create a joint venture for the KC-390. This partnership aims to increase total market capture of the KC-390 by promoting and developing new markets and applications, joint sales efforts, local aircraft manufacturing as well as aftermarket support (the joint venture is now subjected to antitrust authorities’ approval). Sales campaigns are taking place in several countries, a memorandum of understanding has already been signed for up to 16 aircraft and a campaign for five aircrafts plus an after-sales package (spare parts, maintenance and training, among others) is in final stages of negotiation in Portugal.

KC-390 JV As part of the Transaction, Embraer and Boeing (or their respective subsidiaries) will form a joint venture for the promotion and development of new markets and applications for the KC-390, multi-mission airplane, based on jointly identified opportunities, and development, manufacture and sales of the KC-390, in which joint venture Embraer or its subsidiary will hold the majority of the share capital. For further information on the KC-390 JV, see Explanatory Note on page 3 of this annual report.

Light Attack and Training—Super Tucano Equipped for counter insurgency scenarios with integrated sensors, data-link, cockpit protection and multiple weapons configurations, the combat proven Super Tucano is the market benchmark in its class, as the only turboprop platform under production that was designed from its inception for close air support, precision weapons delivery, intelligence, surveillance and reconnaissance, or ISR, and electronic warfare. Due to its handling characteristics, low operational cost and state-of-the-art avionics systems, the Super Tucano is also a full-fledged advanced trainer.

In February 2013, the U.S. Air Force awarded the Light Air Support, or LAS, contract to Sierra Nevada Corporation, or SNC, who partnered with us to supply 20 Embraer A-29 Super Tucano aircraft as well as ground training devices, pilot and maintenance training and logistic support. The aircraft have been used to provide light air support, reconnaissance and training capabilities to two foreign countries, and the U.S. Congress approved additional support to another country’s military operations with the Super Tucano through the LAS program. In March 2013, we officially opened a 40,000-square-foot facility in Jacksonville, Florida, to produce the LAS aircraft. The facility in Jacksonville performs pre-equipping, mechanical assembly, structural assembly, systems installation and testing, and flight testing of A-29 aircraft Through the LAS program, SNC and Embraer support more than 1,400 jobs with more than 100 companies throughout the United States. Jointly with SNC, we have been participating in the OA-X assessment, the U.S. Air Force’s potential program for the acquisition of the Super Tucano A-29 category. Although the budget approval by the U.S. government is still under discussion, the capabilities assessment was concluded in 2017 and the Super Tucano A-29 has met all mandatory requirements, being classified as a Tier-1 potential supplier, jointly with Textron AT-6.

40 In 2017, we sold six Super Tucano aircraft to an undisclosed customer, which were delivered in 2018. The airplanes will be used for tactical and advanced training as well as light attack and ISR (intelligence, surveillance and reconnaissance) missions. In addition, six Super Tucano aircraft were sold to the Philippine Air Force. All aircraft are expected to be delivered in 2019. The Super Tucano was selected as part of the Philippine air force’s modernization plan following a public bidding process involving other manufacturers. Also in 2017, Embraer and Mali’s Air Force signed a settlement agreement to adjust the scope from six to four Super Tucano. Furthermore, in the United States air force’s LAS program, three A-29 Super Tucano aircraft were delivered and six aircraft were purchased during 2017, which are scheduled to be delivered in the first half of 2020 to the Air Force of Nigeria. In addition, the A-29 Super Tucano aircraft was also successful in the ground and flight demonstrations conducted by the United States Air Force (USAF) for the Light Attack Aircraft (LAA) program, previously called OA-X.

Fighter—F-X2 Project In July 2014, Embraer Defense and Security and Saab entered into a memorandum of understanding to collaborate in a joint program management for the F-X2 Project, pursuant to the selection of the Gripen NG as Brazil’s next generation fighter jet. Under this agreement, we will perform a relevant role in the overall program performance as well as undertake an extensive share of work in systems development, integration, flight testing, final assembly and aircraft deliveries of both the single and two-seat versions of the state-of-the-art Gripen NG aircraft for the Brazilian Air Force. The contract between the companies that establishes the partnership for joint development, industrialization and management of the F-X2 Project for the Brazilian Air Force, became effective in 2015. We participate in the coordination of all development and production activities in Brazil. Furthermore, we and Saab will work together in the development of the two-seat version of the Gripen NG.

By December 2017, a team of more than 120 Embraer engineers and technicians were in Sweden to conduct initial training in the maintenance and development work for the Gripen NG. All the technology developed by the joint team will be later transferred to Brazil. A dedicated engineering development center for this program, the Gripen Design Development Network, or the GDDN, was inaugurated at Embraer’s industrial plant in Gavião Peixoto, in the State of São Paulo, to support the Brazilian Air Force Program. In June 2017, the first Gripen E prototype flight occurred in Sweden. In October 2018, at Vidsel Test Range in the north of Sweden, the Gripen E fighter successfully completed the first tests to verify the ability to release and launch external payloads. The tests conducted by the first test aircraft consisted in discharging an external fuel tank and firing an IRIS-T air-to-air missile.

Special Transportation Aircraft We have three ongoing programs under the contracts relating to special transportation aircraft. The first special mission program is I-X, accomplished between Embraer and the Brazilian Air Force. The contract started in 2014 with the sale of six Legacy 500 aircraft adapted to flight inspection missions. Due to budgetary constraints of the Brazilian government, in the end of 2017, the contract was amended to reflect the sale of four, instead of six aircraft. In 2018, the third unit of them was delivered to the Special Flight Inspection Group (GEIV). The second program started in the end of 2018 with the sale of two Phenom 100 aircraft to an undisclosed customer. Their deliveries are scheduled for 2019.

The third program delivered four Phenom 100 Aircraft to the Military Flight Training System (MFTS) of the United Kingdom Ministry of Defense, in 2017. The MFTS takes United Kingdom Armed Forces aircrew from initial training through elementary, basic and advanced flying training phases preparing them for their arrival at their designated operational conversion units. During 2018, the last aircraft of five Phenom 100 units was delivered to Affinity Flying Training Services to be operated by the UKMFTS Military Flight Training System (UKMFTS).

Modernization Programs We offer military aircraft modernization services and currently have four ongoing programs under contract, three with the Brazilian Air Force and one with the Brazilian Navy. The first program, known as F-5BR, is focused on performing structural and electronics upgrades for F-5 fighter jets. In 2012, we concluded the modernization and delivery of 46 F-5 jets to the Brazilian Air Force. In 2011, a contract to modernize one additional batch of 11 F-5 fighter jets was signed. During 2015, the scope of this contract was reduced from 11 to three aircraft. By the end of 2018, two aircraft were delivered.

41 The second program, known as the A-1M modernization program, focuses on modernizing the AMX. From 2013 to 2014, Defense and Security delivered three A-1M fighter jets to Brazilian Air Force. Due to Brazilian government budget constraints, the scope was adjusted from 43 to 14 aircraft at the end of 2016. In 2018, we delivered the fifth aircraft and the other deliveries are expected by 2020.

The third modernization program regards the upgrade of the 12 A-4 Skyhawk (AF-1 Brazilian Navy Designation), with the goal of incorporating new technology, including new avionics, radars, power generation and autonomous oxygen generating systems. During 2018, the scope of this contract was reduced from 12 to 7 aircraft. Until 2018, two modernized AF-1 (AF-1B) fighter jets were delivered to the Brazilian Navy.

The fourth contract signed between Embraer Defense and Security and the Brazilian Air Force relates to the modernization of five EMB 145 Airborne Early Warning and Control, or AEW&C. The contract also provides for six mission planning and analysis stations, which will be employed in the training and improvement of crews. The first delivery is scheduled for 2020.

Principal Defense and Security Subsidiaries and Joint Ventures Savis Tecnologia e Sistemas S.A. and Bradar Savis Tecnologia e Sistemas S.A. is a company dedicated to developing, designing, certifying, industrializing, integrating and deploying systems and services in the area of border monitoring and protection of strategic structures.

Bradar is specialized in the development of electronic systems and sensors as defense radars for ground and aerial surveillance, electronic warfare and intelligence equipment, and airborne remote sensing solutions for mapping and monitoring using synthetic aperture radar (BradarSAR) that generates high-resolution precision maps on day or night and all weather conditions. In 2018, the Bradar was merged into Embraer S.A. in order to guarantee better synergy and reduce costs.

Savis, through its distinct systems integration capabilities, and Bradar, with its technological development capabilities, have joined efforts in the execution of complex projects. Together, they form the Consortium Tepro, which is responsible for implementing the Integrated Border Monitoring System, or SISFRON, in Brazil. Savis as leader of the Tepro Consortium, is the lead system integrator for Phase I of Brazilian Army’s SISFRON, which is one of the largest ongoing border surveillance projects in the world. The full scope of the SISFRON will encompass the surveillance and protection of more than 10,000 miles of Brazilian western land borders, stretching through 11 Brazilian states and 10 neighboring countries, covering 27% of Brazil’s land mass.

SISFRON’s Phase I includes the surveillance and protection of approximately 400 miles of Brazilian borders under responsibility of the Western Military Command, covering the frontiers between the Brazilian States of Mato Grosso and Mato Grosso do Sul with Paraguay and Bolivia.

In 2017, the SISFRON Program was over 2/3 implemented, delivering operational capabilities to the Brazilian Army in different technologies and areas of application, including sensors for electromagnetic signal intelligence, or COMINT, mobile and fixed ground surveillance radars, optronics, tactical and strategic communications networks, mobile and fixed command and control centers. All of this works organically as one system, backed by extensive Integrated Logistic Support.

Another important accomplishment for Savis and Bradar in 2017 was the conclusion of the development phase and production of the first two operational units of COMINT Sensors for SISFRON by Bradar, the transfer and initial operation of the SISFRON Network Operations Center in the city of Campo Grande, State of Mato Grosso do Sul, and successful completion of the S200 Radar Conformity Assessment by the Brazilian Air Force.

In 2018, more than 70.0% of the SISFRON program was delivered and operational. During this year, additional operational capabilities were made available to the Brazilian Army, among which the deployment of electronic warfare systems developed and manufactured by Embraer.

42 Atech Atech is a Brazilian company, fully owned by us since 2013, focused in complex systems for critical missions, developing products and services in the area of command and control, communications, computer and intelligence, air defense and air traffic control for the defense, security and other civil applications. Atech is responsible for the development and modernization of Brazilian Air Traffic Control Systems and has already implemented the new SAGITÁRIO system in 14 Air Traffic Centers in Brazil. In 2017, Atech also signed important contracts, including a new long term contract to continue updating and modernizing the Brazilian air traffic control systems.

In 2017, Atech successfully delivered and implemented the second phase of the Air Traffic Flow Management System (Skyflow) to the Airport Authority of India. Atech also concluded the development and started the implementation of the integrated solution (Air-Ground Surveillance, Air Traffic Control, Communication and Command and Control) in an African country as part of the contract signed in 2015.

As part of the Nucleoelectric Generation Laboratory program, or LABGENE, signed with the Brazilian Navy to develop the protection and control system of the nuclear reactor for the project, Atech concluded all system definition and the procurement phase of the project and the program has been evolving as planned.

The company also continued the technology transfer and development of the mission training and support system of the new Brazilian FX fighter program, as part of our contract with SAAB. Other relevant programs have evolved in 2017, as the H-XBR (Atech is responsible for the Tactical Mission System) with the conclusion of the qualification phase of the system in the helicopter H-225. Atech is also positioned as the strategic alternative to develop critical systems for Embraer, including the new Logistics Execution System (LES) and digital solutions.

In 2018, Atech advanced on several fronts, increasing its revenues, conquering new markets and achieving better results, such as contracting with main suppliers for the LABGENE, receiving and accomplishing several tests of acceptance for the control and monitoring subsystems as well as the inauguration of the first replica of the control room. In the area of air traffic control in Brazil, Atech completed the upgrade of the aeronautical messaging system (AMHS) and the implementation of the platform for evaluation and simulation of the new aeronautical communications network (ATN-BR). In the defense market, it also successfully concluded tests for the acceptance of the first fixed center for air traffic control and surveillance in a North African country, as well as the delivery of the first mobile air and ground surveillance centers.

In the naval helicopter for the Brazilian Navy (H-XBR) program, the final certification of the tactical naval data management system was obtained, concluding the program’s development phase with the delivery of two complete sets with the embedded console tactical and mission computers.

Visiona Tecnologia Espacial S.A.

In November 2011, Embraer and Telecomunicações Brasileiras S.A., or Telebras, formed Visiona Tecnologia Espacial S.A., or Visiona, of which Embraer holds a 51% stake and Telebras 49%.

Through this partnership between Embraer and Telebras, Visiona is the prime contractor for the Brazilian Strategic and Defense Communications Geostationary Satellite, or SGDC, with responsibility for the system integration. This is a key step for Embraer’s entry into the satellite integration business.

In November 2013, Visiona was selected by Telebras to be the integrator of the SGDC system that, once delivered, will be operated by Telebras and the Brazilian Ministry of Defense.

In December 2016, after a successful phase of environmental and functional tests, the satellite was delivered and approved. It is ready to be shipped to the launch site according to its launch slot. The ground system’s test and validation was also concluded in December 2016.

In 2017, the SGDC X-Band services (6 GHz to 8.5 GHz), which is used for strategic defense communication was launched successfully, and Telebras took over its control. Visiona has also signed a contract to support Telebras in its satellite operations.

In 2018, Visiona launched the VCUB nano-satellite program, the first satellite designed by a company in the Brazilian industry, and signed partnerships with INPE, SENAI-SC / EMBRAPII, Government of Santa Catarina, CEMADEN and EMBRAPA for technological development and evaluation of the products generated by satellite.

43 Indústria Aeronáutica de Portugal S.A—OGMA Indústria Aeronáutica de Portugal S.A, or OGMA, located in Alverca, Portugal, combines the accumulated know-how as an aircraft manufacturer and maintenance service provider. It offers worldwide MRO services for defense, commercial and executive aviation as well for aircraft engines and components. Furthermore, OGMA plays an important role as a major aerostructures supplier of integrated solutions to OEMs and first tier suppliers. OGMA delivers assemblies and sub-assemblies of both metallic and composite materials. Embraer owns 65% of the voting capital of OGMA and the Portuguese Defense Company (EMPORDEF) owns the remaining 35%.

During 2016, OGMA made important investments focusing on efficiency and maintenance capability improvements, including a new painting hangar, a new commercial aircraft MRO line and manufacturing capabilities (automatic riveting and 5axe machines). In 2017, OGMA proceeded in making investments in continuous MRO improvements and in its aerostructures manufacturing area, specifically in equipment and technologies and continuous training for its personnel.

OGMA celebrated its 100 years of activity in the aeronautical market in 2018. During the period, OGMA continued its investments in the areas of MRO and the manufacturing of aerostructures. We also entered into a contract for the maintenance and management of the Brazilian Air Force’s C-130 aircraft fleet, as well as a contract with two airlines, from Scandinavia and Central Asia, respectively, for the maintenance of Embraer E-190 aircraft, strengthening OGMA’s position in this market. OGMA further extended the MRO spectrum, obtaining certification for maintenance of the Rolls-Royce AE1107 engine. In addition, we also entered into pylon manufacturing contract with one of the largest manufacturers of executive aircraft.

Services and Support Defense and Security Services and Support provides solutions to several air forces and government entities through our comprehensive portfolio. These solutions are tailored to customer needs and may include provision of material, training, maintenance, engineering and other aspects that will enhance fleet availability and mission readiness.

Support models may range from simple transactional sales to integrated support programs. The assessment of customer capabilities and requirements supports the definition of an integrated solution that will keep the fleet operating at the most effective way.

The newer KC-390, with its multi-mission capability, count on a dedicated team to design and implement the most effective entry into service solution. Customer participates directly in the process, along with Embraer team, from strategy to details, assuring a reliable and smooth operation from the beginning.

The Super Tucano, a proven platform by several air forces, continues its legacy with existing and new customers, several of them choosing Embraer as a provider of our comprehensive Integrated Support Program.

The list of supported platforms also includes passenger carriers from several government organizations. From most recent aircraft such as Phenom 100, Phenom 300, Legacy 450, older platforms like Legacy 600, ERJ-145, and legacy aircraft such as Bandeirantes (EMB-110) and Brasília (EMB-120), all of them have their support model designed to fulfill requirements for material, maintenance, training and technical support, among others. Our solutions provides customer the flexibility for keeping their fleet readily available for many different types of missions. Some of these aircraft are modified versions of commercial or business platform, fitted with equipment and sensors capable of performing several types of missions.

Keeping older platforms flying is also one of the pillars of the business unit, since some of them are almost 40 years old. Obsolescence programs find solutions to overcome material shortages or technical difficulties. Engineering solutions bring modern technologies to the older aircraft, building a more reliable, safe and cost effective operation.

We operate where customers need, all around the world, many times together with customer teams in their own bases. For more specific activities or comprehensive maintenance solutions, we own and operate Maintenance and Repair Organizations, as follows: • Alverca, Portugal, which we refer to as OGMA, began to operate in March 2005 and operates for commercial and defense customers; and; • Gavião Peixoto, in the State of São Paulo, Brazil, where we have a dedicated service center for defense customers. 44 These MROs are developing their capabilities for supporting KC-390 maintenance activities.

In 2018, sales efforts resulted in new contracts to support Embraer’s Defense and Security customers. We strengthened this relationship by establishing several support and services contracts in Latin America, Europe, Africa and Asia, improving the quality of service in order to meet customers’ operational requirements.

Competition Our military aircraft faces rigorous competition from various manufacturers from different countries in each market segment. The Super Tucano competes in the light attack market with the Textron AT-6 and Scorpion. In the flight training market, it competes with the Pilatus PC-21 (advanced) aircraft from Switzerland, the Textron T-6A/B from the U.S.

In the military transport segment, the KC-390 will operate in the medium airlift segment in the class of 23 tons. Hence its main competitor is the C-130J. Given the multi-mission design of KC-390, including Medical Evacuation, Search and Rescue, Firefighting, Air-to-Air Refueling, Transport of Troops and Aerial Resupply, specific competition with other platforms is also expected.

Other Related Businesses We provide fuel systems, structural parts, and mechanical and hydraulic systems to Sikorsky Aircraft Corporation, a Lookheed Martin Company, for its production of helicopters. We also manufacture general aviation propeller aircraft, such as crop dusters, also known as light aircraft. Our Other Related businesses accounted for 0.3% of our revenue for the year ended December 31, 2018.

We provide to Sikorsky Corporation, the development and manufacture of the landing gear, fuel system and fuel tanks for the S-92 and H-92 Helibus helicopters. We also act as a risk-sharing partner for Sikorsky. These contracts were renewed in 2015 and will expire in 2020.

We also developed Ipanema, a crop duster aircraft pursuant to specifications of the Brazilian Ministry of Agriculture. These aircraft are produced only on demand. Through December 31, 2018, we had delivered a total of 1,407 of these aircraft, including 18 in 2018.

Aircraft Operating Lease Activities In order to provide better financial support to our commercial activities, as well as to manage and reduce financial risks related to the marketing of aircraft, we created ECC Leasing in September 2002. ECC Leasing has been able to re-market aircraft in its portfolio with conditions and at values similar to market and without any guarantee from Embraer. All sale and leasing transactions were entered into based on market rates, helping to sustain the present and future values of our products.

In January 2017 ECC Leasing merged with Embraer Netherlands, with its assets and activities incorporated under Embraer Netherlands. The mission of Embraer Netherlands, as our company responsible for aircraft operating lease activities, is to manage and remarket Embraer’s aircraft portfolio, which as a result of contractual obligations, may be acquired by us via trade-in transactions. We also provide re-marketing services to third parties looking to sell their Embraer manufactured aircraft.

We have successfully completed sales campaigns for new aircraft, where the acceptance of trade-in aircraft as part of payment was allowed. We have also generated additional revenues through the sale and lease of aircraft received as trade-ins. Since its establishment in 2002, this activity handled 245 aircraft, of which 18 are available or under sale negotiations, and 182 were sold.

We believe the results of Embraer Netherlands will be largely dependent on market conditions, aircraft availability levels and the demand for jets in the 37 to 50 seat category.

45 Markets The following table sets forth our revenues by line of business and geographic region of end users for the periods indicated:

Year ended December 31, 2018 2017 2016 2015(1) 2014(1) Restated Restated (in US$ millions) Commercial Aviation North America 1,449.4 1,795.5 2,157.3 2,452.7 2,065.0 Latin America (except Brazil) 11.9 0.5 63.9 89.8 64.7 Asia Pacific 324.1 670.3 581.6 307.8 155.4 Brazil 0.2 0.9 (6.9) 145.3 73.9 Europe 519.1 200.1 105.1 316.5 624.7 Others 53.6 104.1 15.9 36.6 179.6 Total 2,358.3 2,771.4 2,916.9 3,348.7 3,163.3 Executive Jets North America 936.7 1,006.8 1,147.7 1,226.6 739.3 Latin America (except Brazil) 22.5 0.6 102.3 38.7 110.7 Asia Pacific 1.6 94.1 98.4 149.2 353.3 Brazil 16.1 17.1 46.7 72.6 207.1 Europe 127.4 161.7 158.1 218.3 168.4 Others — — 0.1 13.2 12.7 Total 1,104.3 1,280.3 1,553.3 1,718.6 1,591.5 Defense and Security North America 145.7 93.3 166.4 177.2 199.5 Latin America (except Brazil) 68.3 5.4 (0.7) 21.7 47.3 Asia Pacific 1.6 13.7 22.2 33.2 78.5 Brazil 258.9 587.1 479.6 479.3 1,004.5 Europe 122.8 133.5 99.3 84.8 100.0 Others 14.8 20.7 58.7 14.9 26.6 Total 612.1 853.7 825.5 811.1 1,456.4 Service and Support North America 422.2 421.0 416.6 — — Latin America (except Brazil) 47.3 45.1 45.2 — — Asia Pacific 104.7 81.4 85.0 — — Brazil 157.2 133.3 140.6 — — Europe 196.7 196.3 156.0 — — Others 52.7 45.1 38.8 — — Total 980.8 922.2 882.2 Other Related businesses North America 5.0 21.3 22.7 30.1 53.6 Asia Pacific ——— —0.1 Brazil 10.6 10.5 3.3 12.3 20.0 Europe ———7.33.9 Total 15.6 31.8 26.0 49.7 77.6

(1) The consolidated financial information as of and for the years ended December 31, 2015 and 2014 has been derived from our historical financial statements but was not restated for the retrospective application of IFRS 9 and IFRS 15 as management cannot be provided this financial information without unreasonable effort or expense.

46 Suppliers and Components; Risk-Sharing Arrangements We do not manufacture all of the parts and components used in the production of our commercial and executive aircraft. Approximately 80% of the production costs in our Commercial Aviation and Executive Jets businesses consist of materials and equipment purchased from our risk-sharing partners and other major suppliers. Risk-sharing arrangements with suppliers of key components enable us to focus on our core business: design, development, manufacture and sale of aircraft and systems for the Commercial Aviation, Executive Jets, and Defense and Security businesses. Risk-sharing arrangements are those in which suppliers are responsible for the design, development and manufacture of major components or systems of our aircraft. Our risk-sharing partners, therefore, must invest their own money in development and share the risk and success of our products with us.

In our Commercial Aviation, Executive Jets and Defense and Security businesses, we rely on risk-sharing partners to supply vital components of our aircraft. We select suppliers on the basis of, among other factors, technical performance and quality of their products, production capacity, prior relationship and financial competitiveness. We have had continuing relationships with most of our major suppliers since production of the Bandeirante aircraft began in 1975.

In addition, we have entered into purchase agreements with our major suppliers, which cover our production. These contracts contain pricing formulas that take into consideration the various factors that affect the business of our suppliers, and help us mitigate the effects of price volatility (which in some cases can be significant) of the materials, parts and components that are required for our operating activities. We are not obligated to purchase a minimum amount of materials annually under any of these supply contracts. Our ongoing supplier relationships depend on cooperation, performance and the maintenance of competitive pricing. For further information on our relationship with our suppliers, see “Item 3D. Key Information—Risk Factors—Risks Relating to Embraer—We work with a limited number of key suppliers.”

EMBRAER 170/190 Jet Family We are continuously improving the EMBRAER 170/190 jet family, together with risk-sharing partners that supply key systems for the aircraft. Our supplier arrangements for the EMBRAER 170/190 jet family differ from the supplier arrangements of ERJ 145 regional jet family, in which we use fewer suppliers. In the EMBRAER 170/190 jet family, each risk-sharing partner is responsible for the development and production of aircraft systems, including the landing gear, the hydraulic system and the flight control system, rather than individual components, and fewer components are supplied by companies that are not risk-sharing partners. The assumption of responsibility for systems by our risk-sharing partners lowers our capital expenditures, which decreases our development risks and increases our operating efficiency by reducing the number of suppliers per product and cutting production costs. It also shortens development and production time.

In addition, some of the risk-sharing partners for the EMBRAER 170/190 jet family have assumed a broader role in other aspects of the program by providing sales financing and residual guarantees, rather than simply supplying us with aircraft components.

When E-Jets were launched, they were one of the most advanced aircraft in operation. The fly-by-wire system, the integrated avionics and the double-bubble cross-section brought a new level of technology and passenger comfort for the segment. The family success led to 29% of the deliveries share in the up to150 seats jet segment during 2004 to 2018. Notwithstanding, during the last ten years we have been continually improving the family. New performance packages, maintenance improvements, external noise reduction and fuel burn reduction are examples of improvements developed.

The E-Jets E2 project is another important example of our commitment to keep our market leadership in the segment. The state of the art technology applied on the engines, wings, and avionics make the E2 family a highly efficient tool for airlines. The E2 will bring a new level of aerodynamic efficiency, as applied on the wing with one of the highest aspect ratio of the industry and advanced wing shape, it will also improve the systems and avionics, including fourth generation full fly-by-wire flight controls, and Pratt & Whitney’s PurePowerTM Geared Turbofan high by-pass ratio engines (PW1700G on the E175-E2, PW1900G on the E190-E2 and E195-E2). We expect that all of those improvements will result in double-digit reductions of fuel burn, emissions, noise and maintenance costs. Cockpit commonality with current generation E-Jets is a key driver in the design of the E-Jets E2, in order to enable a smooth transition for the E-Jets pilots. Honeywell’s Primus Epic™ 2 advanced integrated avionics system with large landscape displays and advanced graphics capabilities, and Honeywell’s Next Generation Flight Management System (NGFMS), already in development with current-generation E-Jets, will provide exceptional pilot situational awareness and flexibility for continuous innovation on the flight deck. E-Jets E2 has the additional objective of increasing revenue opportunities, as the family is designed to provide better aircraft availability and to increase ancillary revenue for operators.

47 Known for its comfortable and roomy cabins, with no middle seats, the E-Jets passenger experience will be further enhanced in the E2 generation. The U.K. design firm Priestmangoode was contracted to develop the aircraft cabin jointly with Embraer. The interiors will establish a new benchmark in cabin design, improve the passenger experience, and deliver a more comfortable and improved environment tailored to passengers’ needs, while maximizing airlines’ operational efficiency.

Other suppliers and partners for the E-Jets E2 have been announced: Liebherr (control systems for flaps and slats), Moog (fly-by-wire), Rockwell Collins (horizontal stabilizer control system), UTC Aerospace Systems (wheels, brakes, APU, electrical system), Intertechnique (engine and APU fuel feed, pressure refueling, fuel transfer, fuel tank inerting and ventilation, and fuel gauging and control), Crane Aerospace & Electronics (electronic control module for landing gear, brake control systems and proximity sensors), Triumph (fuselage segments, rudder and elevators) and Aernnova Aerospace (vertical and horizontal stabilizers).

We also announced that we have selected new IFEC’s systems suppliers for the E-Jets E2. Meggitt Polymers & Composites will design and produce a high performance radome assembly for in-flight connectivity, whilst KID-Systeme was selected by us to provide the SKYfi Club, a wireless streaming onboard platform.

Executive Jets The risk-sharing partners for the Phenom 100EV and Phenom 300E jets are Pratt & Whitney Canada, the engines’ supplier, Garmin, the avionics systems’ supplier, and Eaton Corporation, the hydraulic systems’ supplier. The main risk-sharing partners for the Legacy 450/500 jet family, Praetor 500 and Praetor 600 are Honeywell, the engines’ supplier, Rockwell Collins, the avionics systems’ supplier, and the main risk-sharing partners for the Legacy 650 include Rolls-Royce, the engines’ supplier, and Honeywell, the avionics systems’ supplier. The risk-sharing partners for the Lineage 1000E are the same as those for our EMBRAER 170/190 jet family.

Aircraft Financing Arrangements Commercial aircraft customers may request financing support for aircraft acquisition. This support usually includes providing assistance to customers in obtaining financing arrangements from different sources, including ECAs, leasing companies, commercial banks and capital markets. Financing support may exceptionally include providing assurance that financing will be available for the acquisition.

Additionally, customers may sometimes require short-term bridge financing prior to arranging long-term debt financing, as long- term funding may not be available for them at the time of delivery. On a case-by-case basis, we have provided interim financing, above market rates, to customers who already have their financing arrangement structured or who are in the process of negotiating such arrangements.

Government Regulation and Aircraft Certification We are subject to regulation by regulatory aviation agencies, both in Brazil and abroad. These agencies principally regulate the aircraft design, manufacturing and operation. Besides certification in Brazil, we must obtain certification in each jurisdiction in which our aircraft is registered and operated. The certifying authority in Brazil is the National Civil Aviation Agency (Agência Nacional de Aviação Civil), or the Brazilian Aviation Authority, a special organization with the status of a regulatory agency related to the Ministry of Infrastructure of the Presidency of the Federative Republic of Brazil, which supervises and certifies aircraft, aircraft parts, manufacturers and operations. We are also subject to the regulation of aviation authorities in other countries, including the FAA in the United States and the EASA for the European Union. Once an aircraft is certified by the Brazilian National Civil Aviation Agency, and validated by the FAA and/or the EASA, some authorities, including those in Australia and Mexico, may opt to ratify the product certification instead of running a full domestic validation process. Other countries, such as Canada, require compliance with their own specific national requirements before certification. Some countries simply validate and complement original certification of the Brazilian National Civil Aviation Agency or of the FAA or the EASA, in accordance with their own rules. The Brazilian National Civil Aviation Agency has a bilateral certification agreement with several aviation authorities, including the FAA and EASA. This cooperation among regulatory authorities leads to faster certification by the foreign authority.

Aircraft certification is a continuous process. The Brazilian Aviation Authority must approve any change in the design of any of our aircraft. Significant changes to aircraft design may require a separate validation/certification by other authorities as specified in their regulations and bilateral agreements. Changes in aircraft certification requirements do not require a new certification or a new validation of a previously certified aircraft, but significant safety improvements may otherwise be required by the authorities acting through operational rules or airworthiness directives.

48 Our defense products must comply with the certification guidelines defined in each contract with the customer. Unlike our civil aircraft, our defense products are not subject to regulatory obligations. Some contracts, including those for civil aircraft modified for military purposes, require civil certification (e.g. India, SIVAM, etc.). Other contracts, including those for LAS and KC-390, demand approval from the Military Certification Authority.

Seasonality We have historically experienced seasonality in our results of operations and cash flow generation. This is mainly due to a traditionally higher number of deliveries in the fourth quarter, particularly in our Executive Jets business, which is in line with overall executive jet industry seasonality. Deliveries of executive jets in the fourth quarter generally constitute at least 35% to 45% of annual deliveries in our Executive Jets business, and we expect this trend to continue.

4C. Organizational Structure Our operations are conducted by Embraer S.A. as the controlling and principal operating company. We have a number of direct and indirect subsidiaries, none of which is considered significant. A complete list of our subsidiaries is filed as Exhibit 8.1 to this annual report, and a description of our joint ventures and project subsidiaries and strategic alliances is included in the annual report in item 3 above.

4D. Property, Plant and Equipment For information on our property, plant and equipment, see Notes 2.2.13 and 15 to our audited consolidated financial statements included elsewhere in this annual report.

For a discussion of our capital expenditures relating to property, plant and equipment, see “Item 5C. Research and Development, Patents and Licenses, etc.—Capital Expenditures.”

Production The manufacture of an aircraft consists of three principal stages: production of primary parts, assembly of major components and final assembly. Primary parts include metal sheets and plates (produced from die-cast molds, stretch forming or various chemical treatments), parts produced using computerized and non-computerized machines, and prefabricated parts. The primary parts are then assembled, or mated, with one another to produce the aircraft’s major components, which are in turn joined to create the aircraft’s basic structure. In the final assembly stage, the aircraft’s various operating systems (including wiring and electronics) are installed into the structure and tested.

In São José dos Campos, State of São Paulo, Brazil we have production facilities for commercial and executive aircraft. In our Defense and Security business, we have production facilities located in the Gavião Peixoto plant, which is near the city of Araraquara, located in the central region of the State of São Paulo, Brazil. For the final assembly of executive jets, Embraer also has a facility in Melbourne, Florida.

We have the flexibility to increase or decrease production as a response to adjust demand.

Commercial Jets In July 2009, in line with our initiatives to improve production efficiency pursuant to the Business Efficiency Strategy (Frente Eficiência Empresarial), we converted the final assembly for the E-Jets E1 family to a line concept in São José dos Campos, which resulted in a significant reduction in the cycle of production time. In 2015 we started the prototype production for the new E-Jets E2 family of jets, with the first delivery and production certification in 2018.

Executive Jets Executive jets have been produced since 2011 in São José dos Campos, and are also produced in Melbourne, in United States. The Melbourne facility is a final assembly plant with a Customer Center and an Engineering Office. In 2014, we announced an expansion plan to assemble the Legacy 450/500 in this facility, to improve our production capacity. We have increasing the amount of executive jets produced in Melbourne since 2016.

49 Defense and Security The Gavião Peixoto facility includes flight-testing capabilities for all Embraer aircraft and a final assembly line for our defense aircraft. This facility has been operational since November 2002. In May 2014, we inaugurated the final assembly line of the new military transport and aerial refueling jet, the KC-390 and in February 2015, it successfully performed its first flight. Embraer is currently conducting flight tests for the KC-390. In the fourth quarter of 2018, we received the Type Certificate from the Brazilian Aviation Authority for the multi-mission airlift KC-390.

We have a final assembly facility in Jacksonville, Florida for Defense and Security where we initiated in 2013 the final assembly line for the A-29 Super Tucano for the U.S. Air Force’s LAS Program.

In 2016, we inaugurated the GDDN in Gavião Peixoto. It is the hub for the Gripen NG technology development in Brazil for Saab and Embraer together with the Brazilian partner industries and institutions. The GDDN includes the development environment and simulators required to undertake the fighter development work. In addition, the GDDN is connected to Saab in Sweden and the industrial partners in Brazil, securing both technology transfer and efficient development.

Other In September 2012, we opened two facilities in Évora, Portugal, one for the manufacture and assembly of metal components and one for the manufacture and assembly of composite material components. The start-up of these facilities went as planned, and they made their first deliveries in November 2012. In 2015 Évora’s production plan included major components for the Legacy 450/500, E-Jets, E-Jets E2 and KC-390.

We manufacture aerospace systems and components in ELEB, which is an Embraer subsidiary located in São José dos Campos, and its main products are landing gear systems, hydraulics and electro-mechanical sub-assemblies, such as actuators, valves, accumulators and pylons.

EZ Air Interior Limited, our subsidiary for the production of interior parts for our Commercial Aviation business in Mexican factories, began production and shipping of parts to Brazil in 2013. It achieved full production capacity in January 2015.

In 2015, we completed the acquisition of a new subsidiary, Embraer Aero Seating Technologies. We progressively acquired its ownership stake in the company, headquartered in Irwindale, California, which provides luxury seating solutions for the aviation industry and for Embraer product lines. In 2016, we opened a new state of the art manufacturing facility located in Titusville, Florida.

Environmental Matters We have all material permits required to operate our business in all Embraer sites around the world. The terms of these operating permits are reviewed every year and, as of December 31, 2018, we were in compliance with all of them. In addition, our Environmental and Occupational Health and Safety Management System was established in 2001, allowing us to maintain ISO 14001 certification since 2002. ISO 14001 is an internationally recognized standard of environmental management system efficiency for businesses and organizations, which was reviewed in 2015 and has included items concerning environmental risks and life cycle analysis. Embraer was already prepared for this new version even before it was required by the ISO. Certified environmental management systems have been progressively implemented across our manufacturing sites, with over 82% of our employees operating under an ISO 14001.

Work procedures and instructions are set up in order to ensure that the activities that cause environmental impacts are carried out in order to minimize or mitigate any environmental damage we perform studies of environmental aspects and impacts and we implement actions to eliminate or reduce them, including infrastructure works.

Embraer established a corporate procedure for performing environmental diagnoses and detailed investigations for finding the presence of contaminants in soil and water, due to past activities. This procedure is applied to the areas where Embraer has production and/or maintenance facilities, as well as to new areas being acquired. Currently, all industrial operations in Brazil and abroad have already mapped their soil and water. The evaluation results are reported to the CCRA (Committee for Environmental Risk and Control), board and shareholders.

Embraer takes into account environmental and safety requirements to enter into agreements with third parties. Embraer is committed to hire suppliers, service providers and contractors who respect the environment, health and safety through their practices and processes, and Embraer has a systematic procedure for their continual evaluation and monitoring.

50 We encourage not only the environmental certification but also the development of a full life cycle orientation for products and services, as this remains the most cost-efficient and practical way to effectively reduce environmental impacts. The environmental management system attempts to create economic value by reducing environmental costs and exposure at each stage of the product life, from design to operations and to end of life. Integrated Development of Environmentally Sustainable Products, through the Design for Environment methodology, aims to incorporate environmental requirements into product development throughout the various stages of production.

The implementation of further innovative and eco-efficient technologies and processes is a key factor in ensuring our sustainability, increasing the attractiveness of our products and our overall competitiveness. We continuously pursue eco-efficiency, seeking responsible business opportunities by developing breakthrough technologies, products and services, as well as by reducing the environmental impact of our activities and products throughout their life cycle, and, more generally, by integrating environmental concerns into our daily business. We recognize that environmental requirements, such as reduction of greenhouse gas emissions, are becoming one of the main drivers of airline fleet decisions and is already influencing aircraft developments. In 2012 at the Air Transport Action Group Aviation and Environment summit, Embraer, Boeing and Airbus signed a memorandum of understanding to collaborate with development of drop-in, affordable aviation biofuels as an effort to reduce the aircraft industry’s greenhouse gas emissions by 50% by 2050 based on 2005 levels.

Special focus is dedicated to the European Registration, Evaluation and Authorization of Chemicals, or REACH, regulation (EU No. 2007/1906), which came into force on June 1, 2007. REACH aims to improve the protection of human health and the environment through more strict regulation of chemical use in the aviation industry; it replaces the preexisting European Union, or EU, regulatory framework on chemicals. REACH introduces a range of new obligations over a period of 11 years which are intended to reduce the risks of harm that the 30,000 most frequently used chemicals may cause. The regulation establishes progressive withdrawal of some of the substances that are considered to be of very high concern for human health and the environment.

The regulation requires that any company which produces, imports, uses or prepares chemical substances, preparations or other items on the EU market be responsible for ensuring that the item complies with REACH. We are affected by the regulation because our products can be exported, not only to the countries of the EU, but also to all countries in which compliance with REACH is required. We have a facility in Évora that must comply with all REACH requirements. As of December 31, 2018, we have not suffered any penalties in connection with REACH.

Over the past few years, we have worked to fulfill our responsibilities under REACH. We have substituted substances used in our production processes that are harmful to the environment and employee health with less harmful alternatives. Several materials have already been replaced in accordance with REACH restrictions, and we are studying the feasibility of replacing more substances widely used in the aviation industry. We also participate in working groups with other firms in the aviation industry, including the International Aerospace Environmental Group and the Aerospace Industries Association, to develop solutions for REACH compliance and other environmental laws. We are working with our supply chain on several initiatives to avoid supply chain disruptions and provide support to customers, including the REACH questionnaire on the risk assessment of suppliers.

Insurance We maintain insurance at levels deemed to meet all risks associated with our operations and legislation. The insurance covers potential damages to our property, inventories, working process, cargo and aircraft hulls for our own fleet. In addition, we maintain a comprehensive aviation products liability policy, for claims arising out of our legal liability as manufacturers, repairers, suppliers or servicers. We also possess natural disaster and business interruption insurance.

ITEM 4A. UNRESOLVED STAFF COMMENTS We have no unresolved staff comments.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS This discussion should be read in conjunction with our audited consolidated financial statements and notes thereto and other financial information included elsewhere in this annual report. This annual report contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in “Item 3D. Key Information—Risk Factors” and the matters set forth in this annual report generally.

51 Except as otherwise indicated, all consolidated financial information in this annual report has been prepared in accordance with IFRS as issued by IASB and presented in U.S. dollars, while, for local purposes, our consolidated financial statements are also prepared in IFRS but are presented in reais. For certain purposes, including providing reports to our shareholders located in Brazil, filing financial statements with the CVM and determining dividend payments and other distributions and tax liabilities in Brazil, we have prepared and will continue to be required to prepare parent company financial statements in accordance with IFRS, presented in reais.

5A. Operating Results Current Conditions and Trends in our Industry The following discussion is based largely upon our current expectations about future events, and trends affecting our business. Actual results for our industry and performance could differ substantially. For further information related to our forward-looking statements, see “Introduction—Special Note Regarding Forward-Looking Statements” and for a description of certain factors that could affect our industry in the future and our own future performance, see “Item 3D. Key Information—Risk Factors.”

Strategic Partnership with Boeing On January 24, 2019, we entered into the Master Transaction Agreement and certain other transaction documents with Boeing and certain subsidiaries of Embraer or Boeing, pursuant to which a subsidiary of Boeing will acquire the controlling stake in Embraer’s commercial aviation business unit and Embraer or a subsidiary of Embraer and Boeing or a subsidiary of Boeing will form a joint venture for the promotion and development of new markets and applications for the KC-390 multi-mission aircraft. For further information on our strategic partnership with Boeing, see Explanatory Note on page 3 of this annual report.

Following the consummation of the Transaction, Boeing will have control of the entity that will own the business of designing, developing, manufacturing, assembling, testing, certifying, marketing, selling, delivering, maintaining, sustaining and supporting, and providing aftermarket services for, commercial aircraft platforms and programs with structural capacity of 50 or more seats in an all-standard economy class configuration, including the ERJ, EMB 110, EMB 120, Ejet and E2 families, with end-to-end commercial aviation product development and support capability.

The consummation of the transaction remains subject to (i) approval by antitrust authorities in Brazil, the United States and other applicable jurisdictions; and (ii) the satisfaction of other conditions customary in similar transactions. For risks relating to the Transaction, see “Item 3D. Risk Factors—Risks Relating to Embraer—The consummation of the strategic partnership with Boeing is subject to conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all. Failure to complete the proposed Transaction could adversely affect our business, financial condition and operating results and the trading price of our common stock and ADSs, “—Our strategic partnership with Boeing may not be implemented successfully or the implementation may be more difficult, time consuming or costly than expected,” and “—Although we expect that the strategic partnership with Boeing will result in synergies and other benefits to us, those benefits may not be realized fully or at all or may not be realized within the expected time frame.”

Commercial Aircraft According to Embraer Market Outlook, which is based on our forecast models, we expect that from 2018 to 2037, world air travel demand, as measured by revenue passenger kilometers, or RPK, will increase by an average of 4.5% per year. By 2037, we expect the Middle East and Asia Pacific will be the fastest growing aviation markets in the world, with an annual RPK growth rate of approximately 5.7%, followed by Latin America with 5.2%, Africa with 4.8%, the Commonwealth of Independent States (CIS) and Europe with 3.6% and 3.7%, respectively, and North America with 2.7%.

Also, based on our forecast models, we project global demand of approximately 10,500 commercial aircraft with up to 150 seats by 2037 (8,230 jets).

52 Executive Aircraft Market Overview Several indicators suggest that the business aviation industry has a positive momentum, including macroeconomic indicators, , new against pre-owned pricing gap improvement, near pre-crisis level flight activity, declining pre-owned inventory and U.S. tax reform incentives. However, aggressive price deals and increased competition continue to create a challenging environment.

In early 2019, the General Aviation Manufacturers Association reported that in 2018 the industry delivered 638 units (0.2% lower than in 2017), equivalent to US$17.5 billion (1% less than 2017). The expectation for 2019 is that deliveries will total 655 units. Looking forward, our market forecast projects that approximately 7,500 new business jets will be delivered over the next ten years, totaling US$215 billion for the ten-year period with North America representing 60% of all deliveries.

Defense and Security Overall we anticipate an increase in defense spending globally.

In light of continuous instability in the Middle East and the growing impact of actions of insurgent groups, military budgets in the region should also increase.

Regional conflict and tensions should also drive investment in defense materials in Africa and Europe.

We expect increased demand for proposals of customized solutions, creating opportunities for our Defense and Security portfolio and for those of our subsidiaries, notably in the areas of critical software, communications, sensors and platforms.

The Brazilian economic environment will be challenging for the implementation of new investment projects in the defense sector. Generally, budget restrictions may require the restructuring of the scheduled deliveries pursuant to the terms of existing contracts. We also anticipate that new opportunities will be on a smaller scale and will require the accommodation of constraints related to available resources.

Brazilian Economic Environment The Brazilian government has frequently intervened in the Brazilian economy and occasionally made drastic changes in policy and regulations. The Brazilian government’s actions to control inflation and affect other policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies and incentives, price controls, currency devaluations, capital controls and limits on imports. Changes in Brazil’s monetary, credit, tariff and other policies could adversely affect our business, as could inflation, currency and interest-rate fluctuations, social instability and other political, economic or diplomatic developments in Brazil, as well as the Brazilian government’s response to these developments.

Rapid changes in Brazilian political and economic conditions that have occurred and may occur require continued assessment of the risks associated with our activities and the adjustment of our business and operating strategy accordingly. Developments in Brazilian government policies, including changes in the current policy and incentives adopted for financing exports of Brazilian goods, or in the Brazilian economy, over which we have no control, may have a material adverse effect on our business.

53 The following table shows data for real GDP growth, inflation, interest rates and the U.S. dollar exchange rate for and as of the periods indicated.

December 31, 2018 2017 2016 2015 2014 Real growth in gross domestic product 1.1% 1.0% (3.6)% (3.8)% 0.5% Inflation (IGP-M)(1) 7.6% (0.5)% 7.2% 10.5% 3.7% Inflation (IPCA)(2) 3.8% 3.0% 6.3% 10.7% 6.4% CDI rate(3) 6.4% 9.9% 14.0% 13.2% 10.8% LIBOR rate(4) 2.8% 1.7% 1.0% 0.6% 0.3% Depreciation of the real vs. U.S. dollar 17.1% 1.5% (16.5)% 41.8% 9.0% Period-end exchange rate—US$1.00 R$ 3.875 R$ 3.308 R$ 3.259 R$ 3.905 R$ 2.656 Average exchange rate—US$1.00(5) R$ 3.680 R$ 3.203 R$ 3.450 R$ 3.388 R$ 2.361

Sources: FundaçãoGetúlio Vargas, or FGV, and the Central Bank and Bloomberg. (1) Inflation (IGP-M) is the general market price index measured by FGV. (2) Inflation (IPCA) is a board consumer price index measured by the Instituto Brasileiro de Geografia e Estatística. (3) The CDI rate is average of inter-bank overnight rates in Brazil (as of the last date of the respective period). (4) Three-month U.S. dollar LIBOR rate as of the last date of the period. The LIBOR rate is the London inter-bank offer rate. (5) Represents the average of the exchange rates on the last day of each month during the period.

Inflation and exchange rate variations have had, and may continue to have, substantial effects on our financial condition and results of operations. Inflation and exchange rate variations affect our monetary assets and liabilities denominated in reais. The value of these assets and liabilities as expressed in U.S. dollars declines when the real devalues against the U.S. dollar and increases when the real appreciates. In periods of devaluation of the real, we report (i) a remeasurement loss on real-denominated monetary assets and (ii) a remeasurement gain on real-denominated monetary liabilities. For further information on the effects of exchange rate variations on our financial condition and results of operations, see “Item 11D. Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Rate Risk.”

For further information on the impact of macro-economic factors on our financial position, see Note 26 of our 2018 audited consolidated financial statements.

Tax Incentives Similar to other Brazilian companies across multiple industries, we benefit from certain tax and other government-granted incentives, including related to our export and research and development activities. For the effective tax reconciliation, see Note 22 of our 2018 audited consolidated financial statements.

Tax Incentives for Companies in Research and Development Brazilian Law 11,196/05, also known as Lei do Bem, grants tax benefits to entities involved in research and development activities for technological innovation.

To take advantage of the tax benefits, a beneficiary must (i) assess its income tax according to the real profit (lucro real) measurement, (ii) record taxable profits, (iii) be current with all of its fiscal obligations, which consists of being able to obtain a certification from the government demonstrating that there are no outstanding debts with tax authorities, and (iv) have investments in research and development.

Technological innovation is deemed to be the development of a new product or manufacturing procedure, as well as the addition of new features or characteristics to an existing product or manufacturing procedure, which entails incremental improvements and gains in quality or productivity, therefore resulting in greater market competitiveness.

We and other Brazilian companies across multiple industries benefit from these tax incentives with respect to the income tax (Imposto de Renda Pessoa Jurídica), or IRPJ, and the social contribution on net income tax (Contribuição Social sobre o Lucro Líquido), or CSLL. These benefits allow us to deduct from our taxable net income in an amount between 60% to 80% of our expenditures related to research and development activities for technological innovation during a fiscal year. For further information, see Note 22 of our 2018 audited consolidated financial statements.

54 Tax Incentives and Payroll Exemptions for Exporting Companies Brazilian Law 12,546/11 established the tax incentives for exporting companies, which created the Special Regime for the Reintegration of Taxes of Exporting Companies (Regime Especial de Reintegração de Valores Tributários para as Empresas Exportadoras), or REINTEGRA, to stimulate and facilitate exports. The goal of REINTEGRA is to recover, in whole or in part, the residual tax costs from the production chain of exported goods, thereby reducing the tax burden. The exporting entity may receive tax credits according to a percentage, which may vary from 0.1% to 3%, established by decree of the Brazilian Finance Ministry and applied to the revenue earned from the export of the goods abroad. As a result of decree 9,393/2018 of the Brazilian Finance Ministry, which became effective on May 31, 2018, the tax incentive percentage was lowered to 0.1%.

To take advantage of the tax benefits, (i) an exporting entity must manufacture the exported product in Brazil, (ii) the product must be codified in the TIPI, which is a list issued by Brazilian fiscal authorities under the Tax on Manufactured Products (Imposto Sobre Produtos Industrializados), or IPI; and (iii) the cost of imported materials used in the exported product may not exceed certain limits prescribed by law, expressed as a percentage of the export price.

Brazilian Law 12,546/11 also aimed to increase production through the establishment of a payroll exemption. Until September 1, 2018, we benefited from this payroll exemption with the substitution of the employer social security contribution of 20% of INSS on payroll for an alternative tax called the Social Security Contribution Over Gross Revenues (Contribuição Previdenciária Sobre a Receita Bruta) to be levied on the revenues of certain products and services, excluding revenues from exports. Payroll exemption rates varied from 2.0% to 4.5% of gross revenues, depending on the business sector. Brazilian law 13,670/2018 cancelled the payroll exemption as from September 1st, 2018, and we filed a lawsuit requesting the applicability of the payroll exemption to us for the entire year of 2018. This lawsuit is pending judgment. There will be no payroll exemption in 2019.

Brexit In Europe, a presumed threat to our industry comes from the possibility of an economic downturn caused by the departure of the United Kingdom from the European Union, or Brexit. In the long term, we believe there will still be a gradual Eurozone economic recovery that, combined with low yields due to the highly competitive open aviation area and high regulatory costs, would keep the revenue environment under pressure.

Brexit should be effective soon. Negotiations are ongoing but the future relationships after the United Kingdom’s exit remain unclear. The United Kingdom has the largest aviation industry in Europe and a key geographical position in the network. Changes to the relationship between the United Kingdom and the European Union could potentially have considerable implications for all European carriers. Taken as a whole, the European Union is the single largest destination market from the United Kingdom, accounting for over 50% of passengers and 60% of scheduled commercial flights. Taking into account those countries that have access to the single aviation market as members of the European Common Aviation Area – ECAA, which includes Iceland, Norway and a number of Balkan countries, the importance of market access becomes even more significant.

Brexit is widely expected to present a significant negative shock to the United Kingdom’s economy and, by extension, to air travel demand as well. According to the International Air Transport Association – IATA, the direct economic impact is likely to see the United Kingdom air passenger market be 3% to 5% lower by 2020 than that compare to the scenario without Brexit.

A more fragile economic backdrop over the coming years will force airlines to be even more focused on making structural improvements to lower breakeven load factors and boost capital productivity.

Republic Airways Chapter 11 Filing In February 2016, Republic Airways Holdings, which currently operates a fleet of 230 Embraer Commercial Aviation aircraft (of which 50 are of the ERJ145 family and 180 are E170/E175 models), filed for a Chapter 11 bankruptcy. As a result, we have provisioned a total of US$100.9 million to account for expected expenses related to obligations from financial guarantees offered to the main financing agent of the ERJ 140/145 aircraft, acquired by and delivered to this customer. In November 2016, we signed a firm sale for 24 E175 jets with United Airlines. This order represents a transfer of 24 E175 jets previously placed with Republic Airways Holdings, which were cancelled. As of December 31, 2018, the obligations assumed in accounts payable was US$ 15.1 million and US$30.8 million in December 31, 2017 and US$ 41.6 million in December 31, 2016.

55 Critical Accounting Estimates Preparation of financial statements in accordance with IFRS requires us to use estimates and assumptions that affect the reported assets and liabilities, revenues and expenses and our disclosures. In the preparation of the financial statements included in this annual report, we believe that certain variables and assumptions derived from past experience and various other factors were reasonable and relevant. These estimates and assumptions are reviewed and relevant adjustments are recorded in our audited consolidated financial statements in our ordinary course of business.

The most significant accounting policies, including the variables and assumptions used in the estimates, and the sensitivity of these assessments to the different variables and conditions are described below:

Revenue from Contract with Customers In the Defense and Security segment, a significant portion of revenue is derived from long-term development contracts with the Brazilian and foreign governments, recognized over time by the cost incurred method, using the ratio of actual cumulative costs incurred divided by total estimated costs at completion for progress measurement. During the course of the contract, the Company assesses the costs incurred, adjusting total estimated costs at completion if necessary to reflect variations in costs in relation to the projection, changes in circumstances and/ or new events, such as contract modification. Any resulting increase or decrease in estimated revenues or costs at completion is recognized as catch-up adjustment in the consolidated statements of income in the reporting period which the circumstances that give rise to the revision become known by management. Should the total estimated costs at completion of contracts in progress be 10% lower than management’s actual estimates, the revenue recognized in 2018 would increase by US$385.9 million, and if the costs were 10% higher than management’s estimates, the recognized revenue would decrease by US$425.7 million.

Residual Value Guarantees The residual value guarantees granted on aircraft sales can be exercised at the end of a financing contract between a financial agent and the customer/operator of the aircraft. The guarantee are initially measured by fair value and are revised quarterly to reflect any losses in relation to the fair value of these commitments. The residual value guarantees may be exercised if the quoted market value is lower than the future fair value guaranteed. The future fair value is estimated in accordance with third party evaluation of the aircraft, including information from sale or leasing of similar aircraft on the secondary market. For further information on the residual value guarantees, see “Item 5E. Operating and Financial Review and Prospects—Off-Balance Sheet Agreements.”

Impairment The impairment test considers our medium and long-term strategic plan cash flows, brought to present value at an appropriate discount rate compatible with the market and that reflects the shareholders’ expectations of return. In preparing or using this information, we use estimates, as follows: a) Gross expected cash flow: management projects inflows and outflows based on past performance taking into account its business strategy and market development expectations. These projections also take into account the efficiency gains planned for the product cycle;

b) Growth rate: the growth rates were reflected in the revenue flow budgeted by us, consistent with the forecasts included in industry reports; and

c) Discount rate: an appropriate discount rate is used that reflects the expected return of investors at the time the calculation is made. This rate is also compared with the market to confirm its consistency.

Impairment of aircraft held in our property, plant and equipment available for leasing to third parties is measured at the fair value less cost to sell or value-in-use. Assessment of the recoverable value of that aircraft takes into account assessment of their fair value in an active market and recognition of impairment if their carrying value is higher than the fair value.

We performed an impairment analysis of the carrying amount of each cash-generating unit, or CGU, based on the value in use of the group of CGUs with goodwill allocated and for the CGUs with indicators of impairment, including CGUs with intangible assets still under development and not yet producing internally. Value in use was estimated using a discounted cash flow model for the CGUs. Estimated future cash flows were discounted using the weighted average capital cost (WACC) rate, which is reconciled to an estimated discount pre-tax rate of 11.4% and 11.9% in 2018 and 2017, respectively.

56 The process of estimating the value in use involves assumptions, judgments and estimates for future cash flows, which represent the Company’s best estimate approved by management. The impairment tests resulted in the need to recognize impairment losses in 2018 of US$61.3 million for Lineage aircraft model and US$50.5 million and US$8.7 million in 2017 for Legacy 650 (Executive Jets segment) and Monitoring, Sensoring and Radars (Defense and Security segment) CGUs, respectively.

There are no other than those CGUs mentioned before at risk of impairment as of December 31, 2018.

Fair Value of Financial Instruments The fair value of financial instruments that are not traded on an active market is determined by using valuation techniques. We use our judgment to select a variety of methods using assumptions based on market conditions at the end of each reporting period. The methods and calculations are the same as known techniques normally used by the financial market.

Income Taxes We are subject to income taxes in multiple jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. We also recognize liabilities based on estimates of whether additional taxes will be due. When the final tax outcome of these matters is different from the amounts that were initially recorded, the differences will impact the current and deferred income tax assets and liabilities in the period in which the final amount is determined.

Because our tax is largely determined in Brazilian reais and our functional currency is the U.S dollar, the income tax expense line is highly sensitive to the effects of changes in exchange rates, particularly those due to changes in non-monetary assets, composed primarily by inventory, intangibles and property, plant and equipment, which had an impact on tax reconciliation of a negative effects of US$117.4 in 2018, a negative effect of US$5.0 million in 2017 and a positive effect of US$206.1 million in 2016. For further information see our tax reconciliation in Note 22 of our 2018 audited consolidated financial statements.

If the real had depreciated or appreciated by 10% against the U.S dollar in relation to the actual exchange rate on December 31, 2018, the deferred income tax expense would have been higher or lower by approximately US$148.2 million.

Non-current Assets Held for Sale and Discontinued Operations A discontinued operation is a company’s business component that comprises operations and cash flows that may be clearly distinct and: • That represents a separate major line of business or geographic area of operations; • It is part of a co-ordinated single plan for the sale of a separate major line of business or geographic area of operations; or • It is a subsidiary acquired exclusively with a view to resale.

The classification of a company’s operation as discontinued operation is achieved through its disposal, or at the time the transaction meets the criteria of IFRS 5 to have its assets and liabilities classified as held for sale, whichever occurs earlier.

An asset or group of assets and liabilities is held for sale when it is expected that its carrying amount will be recovered mainly from the sale transaction rather than continuous use. This occurs if the asset is available for immediate sale under its current conditions, subject only to customary and usual terms for the conclusion of the transaction, when the sale transaction is defined as “highly probable” under the accounting standard.

The transaction initiated by the Company and Boeing involving assets of the Commercial Aviation business segment will be classified as held for sale and discontinued operation from February 26, 2019, date of shareholders’ approval on Extraordinary General Shareholders’ Meeting when the “highly probable” criteria was met. As of December 31, 2018, the criteria to classify the operation as an asset held for sale and discontinued operation has not been reached.

57 Principal Operating Data and Components of Our Statement of Income Operating Data Revenue We generate revenues from the sale of aircraft and spare parts as well as from providing maintenance and repair, training and other product support services. Of total revenues in 2018, 68.3% were generated through commercial and executive aircraft deliveries. Revenue arising from the sale of commercial and executive aircraft is denominated in U.S. dollars. In 2018, total Defense and Security revenue included 74.9% of revenue denominated in foreign currency, predominantly in U.S. dollars, and 25.1 % denominated in Brazilian reais. In addition, we generate revenue from our Other Related businesses, which include single-source supply of structural parts and mechanical and hydraulic systems to other aircraft manufacturers, and general aviation propeller aircraft, including crop dusters, which are also referred to as light aircraft.

On December 20, 2016, we announced the creation of Embraer Services and Support, a business unit focused on services and customer support, which brings together capabilities that were previously allocated to each business area, and is responsible for developing solutions in support of current and new products and services, as well as for managing the associated processes and resources. This represents an opportunity to obtain greater operational efficiency and recurring revenues. Currently there are approximately 2,200 Embraer commercial aircraft and over 1,300 Embraer executive jets, as well as more than 800 defense aircraft, in operation. Over the next 20 years, we expect that an estimated 6,400 new jets (up to 150 seats) will be put into service. In business aviation, market forecasts indicate that there may be more than 7,500 new jets placed into service over the next decade, not counting the commercialization of the pre-owned fleet. In 2017, the new business unit of Embraer Services and Support consolidated the services and customer support processes previously allocated to each of our business areas, to identify synergies and quantify our expertise in our Commercial Aviation, Executive Jets and Defense and Security businesses regarding services and support. Since the first quarter of 2018, we have reported the Services and Support business as a separate segment in our financial statements. For further information see Note 37.4 to our 2018 audited consolidated financial statements.

For the sales of our commercial, executive and defense and security aircraft, we receive an initial deposit upon the execution of the purchase agreement, progress payments prior to the delivery of each aircraft and a final payment upon delivery. The final payment typically represents the majority of the sale price. The deposits and the progress payments are for the most part nonrefundable in the event orders are cancelled, except for the Defense and Security segment. Payments in advance of delivery are recorded under advances from customers as a liability on our statement of financial position and, when we deliver the aircraft, these payments are recognized as revenue and recorded against trade account receivables of the aircraft. We generally receive monetary deposits for each option to purchase an executive or commercial jet. For further information on our operating revenues, see “Item 5A.—Operating Results—Critical Accounting Estimates—Revenue from Contracts with Customers.”

Our sales contracts in U.S dollar with our Executive Jets business customers generally include adjustments for inflation as measured by U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers, when deliveries are not in the same calendar year of the sale except when fixed prices are pre-determined considering the estimated inflation and strategic price positioning planning of a given aircraft model, in line with Embraer’s strategic planning. Our sales contracts with our Commercial Aviation and generally Defense and Security business customers include adjustments to the purchase price of the aircraft based on an escalation formula, which is based on a mix of index related to raw material, transportation equipment and labor costs. Specific to Defense and Security sales contracts with Brazilian customers, national index are used to adjust the prices of the relevant contract. The deposits, progress payments and advance payment are nonrefundable, a bank guarantee is issued in favor of the customer, except for a few Executive Jet Business unit sales. Once a customer decides to exercise an option, we account for it as a firm order, and we begin to receive the respective progress payments and recognize revenue upon delivery of the aircraft or the contractual milestone.

A significant part of our defense contracts, including the contracted research and development for specific programs, meet the criteria for revenue recognition by the POC method. For the contracts that do not meet the criteria for POC method we recognize revenue at a point of time, on the moment the product is delivered or the service is rendered. Certain contracts contain provisions for the redetermination of price based upon future economic conditions. Our defense customers continue to provide customer advances, which are converted into revenue as we fulfill pre-determined stages of completion of the project, including conception, development and design, and engineering, systems integration and customization. These installments are nonrefundable for the most part.

Cost of Sales and Services Cost of sales and services consists of the cost of the aircraft, spare parts and services rendered, comprising: • Raw materials. Substantially all materials costs are covered by contracts with suppliers. Prices under these contracts are generally adjusted based on an escalation formula which reflects, in part, inflation in the United States. 58 • Labor. These costs comprise salaries and related charges primarily in Brazilian reais. • Depreciation. Property, plant and equipment are depreciated over their useful lives, ranging from five to 48 years, on a straight-line basis. Depreciation of aircraft under operating leases is recorded in cost of sales and services from the beginning of the lease term using the straight-line method over the estimated useful life and considering a residual value at the end of the lease term. For further information on depreciation, see Note 15 to our 2018 audited consolidated financial statements. • Amortization. Internally-generated intangible assets are amortized in accordance with the estimated sales of the series of aircraft. Intangible assets acquired from third parties are amortized on straight-line bases over the estimated useful lives of the assets.

In accordance with the accounting standard for contingencies, we accrue a liability for the obligations associated with product warranties at the aircraft delivery date, which is estimated based on historical experience and recorded in cost of sales and services.

We enter into transactions that represent multiple-element arrangements, including training, technical assistance, spare parts and other concessions. These costs are recognized when the product or service is provided to the customer.

Results of Operations The following table presents statement of income data by business segment for the periods indicated:

2018 2017 2016 Restated Restated Revenue (in US$ million) Commercial aviation 2,358.3 2,771.4 2,916.9 Executive jets 1,104.3 1,280.3 1,553.3 Defense and security 612.1 853.7 825.5 Service and Support 980.8 922.2 882.2 Other 15.6 31.8 26.0 Total 5,071.1 5,859.4 6,203.9 Cost of sales and services Commercial aviation (1,976.7) (2,178.1) (2,325.3) Executive jets (914.0) (1,126.4) (1,343.7) Defense and security (702.3) (792.9) (693.6) Service and Support (689.0) (640.3) (601.6) Other (21.1) (26.4) (17.8) Total (4,303.1) (4,764.1) (4,982.0) Gross profit Commercial aviation 381.6 593.3 591.6 Executive jets 190.3 153.9 209.6 Defense and security (90.2) 60.8 131.9 Service and Support 291.8 281.9 280.6 Other (5.5) 5.4 8.2 Total 768.0 1,095.3 1,221.9 Operating expenses Commercial aviation (229.1) (230.5) (210.9) Executive jets (235.0) (206.0) (172.9) Defense and security (93.0) (109.5) (87.6) Service and Support (168.7) (177.0) (188.5) Other (6.9) (13.9) (3.0) Unallocated operating expenses(1) — (16.5) (345.3) Total (732.7) (753.4) (1,008.2) Operating profit before finance income 35.3 341.9 213.7

(1) Represents expenses with the Final Agreements with the DOJ and SEC and the TCAC with the MPF and CVM and our voluntary dismissal program in 2016 and in 2017.

59 The following table sets forth statement of income information, and this information as a percentage of our revenue, for the periods indicated:

Consolidated Statements of Income 2018 2017 2016 Restated Restated (in US$ million, except percentages presented in absolute values) Revenue 5,071.1 100% 5,859.4 100% 6,203.9 100% Cost of sales and services (4,303.1) 84.9% (4,764.1) 81.3% (4,982.0) 80.3% Gross profit 768.0 15.1% 1,095.3 18.7% 1,221.9 19.7% Operating income (expense) (732.7) 14.4% (753.4) 12.9% (1,008.2) 16.3% Administrative (182.6) 3.6% (179.1) 3.1% (164.3) 2.6% Selling (304.2) 6.0% (315.9) 5.4% (353.4) 5.7% Research (46.1) 0.9% (49.2) 0.8% (47.6) 0.8% Other operating income (expense), net (199.4) 3.9% (210.4) 3.6% (442.6) 7.1% Equity in income (losses) of associates (0.4) 0.0% 1.2 0.0% (0.3) 0.0% Operating profit before financial result 35.3 0.7% 341.9 5.8% 213.7 3.4% Financial expenses, net (171.5) 3.4% (40.6) 0.7% (37.5) 0.6% Foreign exchange gain (loss), net —0.0%6.6 0.1% 4.4 0.1% Profit (loss) before taxes on income (136.2) 2.7% 307.9 5.3% 180.6 2.9% Income taxes expense (35.0) 0.7% (27.9) 0.5% (0.3) 0.0% Net income (loss) for the period (171.2) 3.4% 280.0 4.8% 180.3 2.9% Attributable to: Owners of Embraer (178.2) 3.5% 264.0 4.5% 178.6 2.9% Non-Controlling Interest 7.0 0.1% 16.0 0.3% 1.7 0.0%

2018 Compared with 2017 Revenue Revenue decreased 13.5% to US$5,071.1 million in 2018 from US$5,859.4 million in 2017. Revenue in our Commercial Aviation business decreased 14.9% to US$2,358.3 million in 2018, from US$2,771.4 million in 2017. Executive Jets revenue decreased 13.7% to US$1,104.3 million in 2018, from US$1,280.3 million in 2017. Defense and Security revenue decreased 28.3% to US$612.1 million in 2018, from US$853.7 million in 2017. Services and Support revenue increased 6.4% to US$980.8 million in 2018, from US$922.2 million in 2017. Other Related businesses segment revenue decreased 50.9% to US$15.6 million in 2018, from US$31.8 million in 2017.

Commercial Aviation revenues decreased in 2018 primarily due to a 10.9% decrease in deliveries to 90 in 2018 from 101 in 2017. The segment’s revenues decreased at a higher rate than deliveries during the year, largely due to lower average pricing on its deliveries in 2018 as compared to 2017 given a combination of more E175 special configuration (70 seats vs. 76 seats for ordinary E175 configuration) deliveries, which have lower average prices than the ordinary configuration E175, and launch deliveries of the E190-E2 in 2018. Deliveries of E190, E190-E2, and E195 models together constituted 24.4% of total segment deliveries in 2018 compared to 21.8% of 2017 deliveries.

The decrease of 13.7% in Executive Jets revenue in 2018 was primarily due to lower jet deliveries, which declined 16.5% compared to 2017 (91 total executive jet deliveries in 2018 compared to 109 total executive jet deliveries in 2017). The decline in the segment’s revenues was lower than the decline in deliveries despite a higher percentage of light jet deliveries compared to large jet deliveries in 2018 (70.3% light deliveries in 2018 vs. 66.1% light deliveries in 2017) due principally to better average deal prices for executive jet deliveries in 2018 as compared to 2017.

A significant part of our Defense and Security business revenues are accounted for under the percentage of completion method, and we continued to execute our contracts with the Brazilian government, including the KC-390 program, SISFRON, deliveries of Special Mission Legacy 500 aircraft and others. In addition, we continued to deliver Super Tucano planes to a variety of militaries around the world. During 2018, our Defense and Security business revenues declined 28.3% to US$612.1 million in 2018, largely due to the cost base revision for the KC-390 development contract booked in the second quarter, resulting from the runway excursion incident involving prototype 001. This factor, combined with a 14.5% appreciation of the average U.S. dollar/real exchange rate from 2017 to 2018, resulted in the decrease of the value of Defense and Security revenues denominated in reais translated to dollars.

60 Our Services and Support business, which was reported as a separate business unit for the first time in 2018, reported revenues of US$980.8 million in 2018, representing a 6.4% increase from US$922.2 million in 2017. The growth was driven by increased spare parts revenue and better services revenues with Commercial Aviation and Executive Jets customers.

Cost of Sales and Services Cost of sales and services decreased 9.7% to US$4,303.1 million in 2018, from US$4,764.1 million in 2017. The decrease in cost of sales was less than the 13.5% decline in revenues in 2018, thus driving an increase in cost of sales and services as a percentage of revenue, to 84.9% in 2018 compared to 81.3% in 2017. This increase in cost of sales and services as a percentage of revenue was driven by our Commercial Aviation, Defense and Security, and Services and Support businesses.

Cost of sales and services in our Commercial Aviation business decreased 9.2% to US$1,976.7 million in 2018, from US$2,178.1 million in 2017. The decline in cost of sales and services was lower than the 14.9% decrease in revenues for 2018, primarily due to lower average pricing for the segment’s deliveries in 2018 as compared to 2017, as mentioned above. As a result, gross margin in our Commercial Aviation business decreased to 16.2% in 2018 from 21.4% in 2017.

Cost of sales and services in our Executive Jets business decreased 18.9% to US$914.0 million in 2018 from US$1,126.4 million in 2017. Cost of sales and services declined more than revenues in the segment during 2018, primarily due to a combination of higher average deal prices in 2018 as compared to 2017 and efforts to increase production efficiencies during the period. Gross margin in our Executive Jets business increased to 17.2% in 2018 from 12.0% in 2017.

Cost of sales and services in the Defense and Security segment decreased 11.4% in 2018 to US$702.3 million from US$792.9 million in 2017. The decline in cost of sales and services compared to a 28.3% decrease in revenues in the segment during the period, which is primarily due to cost base revisions on the KC-390 development contract resulting from the incident involving prototype 001 in the second quarter of 2018, devaluation of the Brazilian real versus the U.S. dollar, and certain other cost overruns related to the development project. As a result, gross margin in the Defense and Security segment decreased from 7.1% in 2017 to -14.7% in 2018.

Cost of sales and services in our Services and Support business increased 7.6% to US$689.0 million in 2018, compared to US$640.3 million in 2017. This compares to a 6.4% increase in revenues for the segment in 2018. This slight difference is principally due to a decline in profitability of the segment’s pool parts programs in 2018. Gross margin in the Services and Support segment decreased from 30.6% in 2017 to 29.8% in 2018.

Cost of sales and services in the Other Related Businesses segment decreased 20.1% to US$21.1 million in 2017, from US$26.4 million in 2017, while revenues for this segment decreased 50.9% in 2018.

Gross Profit As a result of the aforementioned factors, our gross profit decreased 29.9% to US$768.0 million in 2018 from US$1,095.3 million in 2017. Our gross margin fell to 15.1% in 2018 from 18.7% in 2017.

Operating Expenses As further discussed below, total operating expenses decreased 2.7% to US$732.7 million in 2018, from US$753.4 million in 2017. Total operating expenses as a percentage of revenues increased to 14.4% in 2018 compared to 12.9% in 2017, primarily due to lower fixed cost absorption caused by lower revenues in 2018 compared to 2017. Special items recognized in 2018 operating expenses included total net provisions and expenses of US$61.3 million as compared to US$56.2 million in total net provisions and expenses recognized in 2017.

Excluding the impact of these special items recognized in our results, our total operating expenses would have been US$671.4 million in 2018 and US$697.2 million in 2017; and, as a percentage of revenues, our total operating expenses would have been 13.2% of revenues in 2018 and 11.9% of revenues in 2017.

Administrative. Administrative expenses increased 2.0% to US$182.6 million in 2018, compared to US$179.1 million in 2017. The majority of our administrative expenses are fixed and do not vary significantly according to changes in our revenues.

Selling. Selling expenses decreased 3.7% to US$304.2 million in 2018, from US$315.9 million in 2017. The decline in selling expenses was primarily due to lower bad debt provisions booked in 2018 in the Services and Support segment as compared to 2017.

61 Research. Research expenses decreased 6.3% to US$46.1 million in 2018, from US$49.2 million in 2017.

Other operating (expense) income, net. Other operating (expense) income, net was an expense of US$199.4 million in 2018, compared to an expense of US$210.4 million in 2017. The decrease in other operating expenses is primarily due to lower spending on IT projects and higher other operating income from contractual fines. There were several special items recognized in other operating income (expense), net, in 2018 and 2017. The results for 2018 include an impairment charge in the Executive Jets segment of US$61.3 million, and in 2017 included expenses of US$10.1 million related to the finalization of negotiations reached and payments made related to the FCPA investigation, total provisions of US$6.4 million related to our voluntary dismissal program for employees in our Brazilian operations, US$8.7 million in impairments in the Defense and Security segment, and US$54.2 million in impairments in the Executive Jets segment, partially offset by US$23.2 million in provision reversals and other credits related to favorable developments in ongoing negotiations related to the Chapter 11 bankruptcy proceedings of Republic Airways Holdings.

The table below sets forth the special items recognized in other operating (expense) income, net for the periods indicated:

Special items 2018 2017 (in US$ millions) Provisions from voluntary dismissal program (Unallocated) — 6.4 Payments related to FCPA investigation (Unallocated) — 10.1 Special items related to Republic Airways (Commercial aviation business) — (23.2) Impairment loss Defense and Security business — 8.7 Impairment loss Executive Jet business 61.3 54.2 Total 61.3 56.2

Excluding the impact of these special items recognized in our results, our other operating (expense) income, net would have been US$138.1 million in 2018 and US$154.2 million in 2017, with the improvement driven by the aforementioned factors.

Equity in Income (Losses) of Associates Equity in loss of associates was a loss of US$0.4 million in 2018 compared to income of US$1.2 million in 2017.

Operating Profit (Loss) Before Financial Income (Expense) As a result of the aforementioned factors, our consolidated operating profit (loss) before financial income (expense) decreased 89.7% to US$35.3 million in 2018 from US$341.9 million in 2017. Our operating margin fell to 0.7% in 2018 from 5.8% in 2017.

Operating profit (loss) before financial income (expense) by segment for 2018 for the Commercial Aviation, Executive Jets, Defense and Security, Services and Support, and Other Related Businesses segments was US$152.5 million, US$(44.7) million, US$(183.2) million, US$123.1 million, and US$(12.4) million, respectively. In 2017, operating profit (loss) before financial income (expense) for these segments was US$362.8 million, US$(52.1) million, US$(48.7) million, US$104.9 million, and US$(8.5) million, respectively. See note 37 to our 2018 audited consolidated financial statements for operating profit by segment.

Excluding the aforementioned special items provisions and other expenses explained above, as well as an adjustment for the US$127.2 million cost base revision on the KC-390 development contract relating to the runway excursion incident involving prototype 001 in the second quarter of 2018, our operating profit (loss) would have been US$223.8 million in 2018 and US$398.1 million in 2017, and our operating margins would have been 4.4% in 2018 and 6.8% in 2017.

In addition, excluding the aforementioned special items provisions, other expenses, and the Defense and Security cost base revision explained above, our operating profit (loss) by segment for 2018 for the Commercial Aviation, Executive Jets, Defense and Security, Services and Support, and Other Related Businesses segments would have been US$152.5 million, US$16.6 million, US$(56.0) million, US$123.1 million, and US$(12.4) million, respectively; and in 2017, our operating profit (loss) for these segments would have been US$339.6 million, US$2.1 million, US$(40.0) million, US$104.9 million, and US$(8.5) million, respectively. In addition, there were no unallocated operating losses related to the aforementioned special items provisions and expenses explained above in 2018, compared to unallocated losses of US$16.5 million in 2017.

62 Financial Income (Expense), Net Financial expense, net increased from US$40.6 million in 2017 to US$171.5 million in 2018, primarily due to our current net debt position and lower financial income from our cash and equivalents, in addition to higher net financial expenses recognized on our residual value guarantee (RVG) portfolio.

Foreign Exchange Gain (Loss), Net Foreign exchange gain (loss), net was zero in 2018 compared to a gain of US$6.6 million in 2017, as foreign exchange hedging with derivative instruments was more efficiently matched with the net monetary and foreign exchange variations in 2018 as compared to 2017.

Profit (Loss) Before Taxes on Income As a result of the aforementioned factors, profit (loss) before taxes on income declined from US$307.9 million in 2017 to US$(136.2) million in 2018.

Income Tax Benefit (Expense) Income tax expense was US$35.0 million in 2018, compared to income tax expense of US$27.9 million in 2017. Income tax expense increased primarily, despite a pre-tax loss in 2018 as compared to pre-tax profit in 2017, due to 1) US$23.4 million higher taxes on profits from overseas subsidiaries; 2) US$112.4 million higher taxes related to functional currency effects on non-monetary assets; 3) US$16.1 million in lower research and development tax credits; and 4) US$45.3 million in lower fiscal credits. For further information see our tax reconciliation in Note 22 of our 2018 audited consolidated financial statements.

Our effective tax rate was 25.7% in 2018 and 9.1% in 2017.

Net Income (Loss) As a consequence of the aforementioned factors, our consolidated net income (loss) after taxes, excluding Non-Controlling Interest, declined from US$264.0 million in 2017 to US$(178.2) million in 2018. As a percentage of revenue, net income after taxes declined to 3.4% in 2018 compared to 4.8% in 2017.

2017 Compared with 2016 Revenue Revenue decreased 5.6% to US$5,859.4 million in 2017 from US$6,203.9 million in 2016. Revenue in our Commercial Aviation business decreased 5.0% to US$2,771.4 million in 2017, from US$2,916.9 million in 2016. Executive Jets revenue decreased 17.6% to US$1,280.3 million in 2017, from US$1,553.3 million in 2016. Defense and Security revenue increased 3.4% to US$853.7 million in 2017, from US$825.5 million in 2016. Services and Support segment revenue increased 4.5% to US$922.2 million in 2017, from US$882.2 million in 2016. Other Related businesses segment revenue increased 22.3% to US$31.8 million in 2017, from US$26.0 million in 2016.

Commercial Aviation revenues decreased in 2017 primarily due to a 6.5% decline in deliveries to 101 in 2017 from 108 in 2016. The segment’s revenues decreased at a lower rate than deliveries during the year, largely due to a more favorable mix of deliveries, consisting of a higher proportion of deliveries for larger E190 and E195 models (which generally carry higher deal prices relative to the smaller E175 model) in 2017 as compared to 2016. Deliveries of E190 and E195 models together constituted 21.8% of total segment deliveries in 2017 compared to 16.7% of 2016 deliveries.

The decrease of 17.6% in Executive Jets revenue in 2017 was partially due to lower jet deliveries, which decreased 6.8% compared to 2016. In addition, a less favorable mix of deliveries impacted our annual revenue comparison, since 2017 had a higher percentage of entry-level and light jet deliveries at 66.1% compared to the 62.4% proportion of 2016 deliveries of executive jets. Moreover, within the light jets category, lower price point Phenom 100 jets made up 16.5% of total segment deliveries in 2017 compared to 8.5% of 2016 deliveries.

63 A significant part of our Defense and Security business revenues are accounted for under the percentage of completion method, and we continued to execute our contracts with the Brazilian government, including the KC-390 development program, SISFRON, deliveries of Special Mission Legacy 500 aircraft and the SGDC program, which was launched in the second quarter of 2017. In addition, we continued to deliver Super Tucano planes to a variety of militaries around the world and customer support revenues increased during 2017. During 2017, our Defense and Security business revenues increased 3.4% to US$853.7 million in 2017, partially due to an 8.4% depreciation of the average U.S. dollar/real exchange rate from 2016 to 2017, which improved the value of Defense and Security revenues denominated in reais translated to dollars.

Our Services and Support business revenue was US$922.2 million in 2017, representing a 4.5% increase from US$882.2 million in 2016.

Cost of Sales and Services Cost of sales and services decreased 4.4% to US$4,764.1 million in 2017, from US$4,982.0 million in 2016. The decrease in cost of sales was less than the 5.6% decrease in revenues in 2017, thus driving an increase in cost of sales and services as a percentage of revenue, to 81.3% in 2017 compared to 80.3% in 2016. This increase in cost of sales and services as a percentage of revenue is largely a result of negative cost base revisions on certain Defense and Security contracts.

Cost of sales and services in our Commercial Aviation business decreased 6.3% to US$2,178.1 million in 2017, from US$2,325.3 million in 2016. The decrease in cost of sales and services was higher than the 5.0% decrease in revenues for 2017, mainly due to the aforementioned favorable mix of deliveries combined with higher government fiscal benefits in 2017 as compared to 2016. Gross margin in our Commercial Aviation business increased to 21.4% in 2017 from 20.3% in 2016.

Cost of sales and services in our Executive Jets business fell 16.2% to US$1,126.4 million in 2017 from US$1,343.7 million in 2016. Cost of sales and services decreased less than revenues in the segment during 2017, largely due to the aforementioned less favorable mix of deliveries during the period. Gross margin in our Executive Jets business decreased to 12.0% in 2017 from 13.5% in 2016.

Cost of sales and services in the Defense and Security segment increased 14.3% in 2017 to US$792.9 million from US$693.6 million in 2016. The increase in cost of sales and services compared to a 3.4% increase in revenues in the segment during the period, and reflects cost overruns on the KC-390 development, which under percentage of completion resulted in a negative cost base revision. Gross margin in the Defense and Security segment fell to 7.1% in 2017 from 16.0% in 2016.

Cost of sales and services in the Services and Support segment increased 6.4% to US$640.3 million in 2017, from US$601.6 million in 2016, while revenues for this segment increased 4.5% in 2017. Gross margin in the Services and Support segment declined to 30.6% in 2017 from 31.8% in 2016.

Cost of sales and services in the Other Related Businesses segment increased 48.3% to US$26.4 million in 2017, from US$17.8 million in 2016, while revenues for this segment increased 22.3% in 2017.

Gross Profit As a result of the aforementioned factors, our gross profit decreased 10.4% to US$1,095.3 million in 2017 from US$1,221.9 million in 2016. Our gross margin decreased to 18.7% in 2017 from 19.7% in 2016.

Operating Expenses As further discussed below, operating expense decreased 25.3% to US$753.4 million in 2017, from US$1,008.2 million in 2016. Operating expense as a percentage of revenues fell to 12.9% in 2017 compared to 16.3% in 2016, primarily due to a lower amount of special items recognized in results in 2017 compared to 2016. The special items recognized in 2017 included total net provisions and expenses of US$56.2 million as compared to US$293.1 million in total net provisions and expenses recognized in 2016, as explained below. The special items recognized in operating expense in 2016 included US$117.3 million in charges related to our voluntary dismissal program (restructuring expenses), US$228.0 million in provisions and charges related to the finalization of the FCPA investigation (provision for penalties) and US$52.2 million in provision reversals related to favorable developments in the Republic Airways Chapter 11 proceedings.

64 Excluding the impact of these special items recognized in our results, our operating expenses would have been US$697.2 million in 2017 and US$715.1 million in 2016; and, as a percentage of revenues, our operating expenses would have been 11.9% of revenues in 2017 and 11.5% of revenues in 2016.

Administrative. Administrative expenses increased 9.0% to US$179.1 million in 2017, compared to US$164.3 million in 2016, primarily due to the lower average U.S. dollar/real exchange rate, which was 8.4% higher as compared to the average exchange rate in 2016, as many of our administrative expenses are incurred in reais.

Selling. Selling expenses decreased 10.6% to US$315.9 million in 2017, from US$353.4 million in 2016. The decrease in selling expenses was primarily due to a combination of consolidated revenues decreasing 5.6% in 2017 and benefits from our cost control and productivity initiatives, with reductions across all of our major business units during the year.

Research. Research expenses increased 3.4% to US$49.2 million in 2017, from US$47.6 million in 2016. The increase in research expenses is primarily due to a slight increase in research expenses in connection with our Executive Jets business.

Other operating (expense) income, net. Other operating (expense) income, net was an expense of US$210.4 million in 2017, compared to an expense of US$442.6 million in 2016. The decrease in other operating (expense) income, net is primarily due to lower special items provisions and other expenses recognized in results during 2017 as compared to 2016. Total special items recognized in other operating (expense) income, net in 2017 was a net amount of US$56.2 million, consisting of: 1) US$6.4 million in provisions from our voluntary dismissal program; 2) US$10.1 million in provisions and expenses related largely to taxes on remittances for payments related to the finalization of the FCPA investigation; 3) US$8.7 million in impairments recognized in the Defense and Security business; 4) US$54.2 million in impairments recognized in our Executive Jets business; and 5) US$23.2 million in gains related to the remeasurement of claims in the Republic Airways Chapter 11 bankruptcy proceedings that were converted to equity. Total special items in 2016 were US$293.1 million, and included expenses of US$228.0 million related to the finalization of negotiations reached and payments made related to the FCPA investigation and total provisions of US$117.3 million related to our voluntary dismissal program for employees in our Brazilian operations, partially offset by US$52.2 million in provision reversals and other credits related to favorable developments in ongoing negotiations related to the Chapter 11 bankruptcy proceedings of Republic Airways Holdings.

The table below sets forth the special items recognized in other operating (expense) income, net for the periods indicated:

Special Items 2017 2016 (in US$ millions) Provisions from voluntary dismissal program (Unallocated) 6.4 117.3 Payments related to FCPA investigation (Unallocated) 10.1 228.0 Special items related to Republic Airways (Commercial aviation business) (23.2) (52.2) Impairment loss Defense and Security business 8.7 —

Special Items 2017 2016 (in US$ millions) Impairment loss Executive Jet business 54.2 — Total 56.2 293.1

Excluding the impact of these special items recognized in our results, our other operating (expense) income, net would have been US$154.2 million in 2017 and US$149.5 million in 2016, principally caused by lower levels of impairment charges on our portfolio of used aircraft, largely ERJ145 family commercial jets, lower taxes related to remittances and the absence of expenses related to the closure of our Chinese subsidiary Harbin Aircraft Industry Co., Ltd in 2017.

Equity in Income (Losses) of Associates Equity in loss of associates increased to a gain of US$1.2 million in 2017 from a loss of US$0.3 million in 2016.

65 Operating Profit (Loss) Before Financial Income (Expense) As a result of the aforementioned factors, our consolidated operating profit (loss) before financial income (expense) increased 60.0% to US$341.9 million in 2017 from US$213.7 million in 2016. Our operating margin improved to 5.8% in 2017 from 3.4% in 2016.

Operating profit (loss) before financial income (expense) by segment for 2017 for the Commercial Aviation, Executive Jets, Defense and Security, Services and Support, and Other Related Businesses segments was US$362.8 million, US$(52.1) million, US$(48.7) million, US$104.9 million, and US$(8.5) million, respectively. In 2016, the operating profit (loss) before financial income (expense) for these segments was US$380.7 million, US$36.7 million, US$44.3 million, US$92.1 million, and US$5.2 million, respectively.

Excluding the aforementioned special items provisions and other expenses explained above, our operating income would have been US$398.1 million in 2017 and US$506.8 million in 2016; and our operating margin would have been 6.8% in 2017 and 8.2% in 2016.

In addition, excluding the aforementioned special items provisions and other expenses explained above, our operating profit (loss) by segment for 2017 for the Commercial Aviation, Executive Jets, Defense and Security, Services and Support, and Other Related Businesses segments would have been US$339.6 million, US$2.1 million, US$(40.0) million, US$104.9 million, and US$(8.5) million, respectively; and in 2016, our operating profit (loss) for these segments would have been US$328.5 million, US$36.7 million, US$44.3 million, US$92.1 million, and US$5.2 million, respectively. In addition, unallocated operating loss related to the aforementioned special items provisions and expenses explained above was US$16.5 million in 2017, compared to unallocated losses of US$345.3 million in 2016.

Financial Income (Expense), Net Financial expense, net increased to US$40.6 million in 2017 from US$37.5 million in 2016, largely driven by 1) an increase of US$32.6 million in interest on loans and financing expenses; and 2) a decrease of US$74.3 million in interest income on cash and cash equivalents and financial investments. These expenses were partially offset by an increase of US$25.0 million in taxes on financial income and a decrease of US$26.7 million in expenses related to residual value guarantees in 2017 as compared to 2016.

Foreign Exchange Gain (Loss), Net Foreign exchange gain (loss), net increased to a gain of US$6.6 million in 2017 from a gain of US$4.4 million in 2016, reflecting net foreign exchange rate changes on monetary assets and liabilities denominated in other currencies which are translated into our functional currency, the U.S. dollar.

Profit Before Taxes on Income As a result of the aforementioned factors, profit before taxes on income increased 70.5% to US$307.9 million in 2017 from US$180.6 million in 2016.

Income Tax Benefit (Expense) Income tax expense was US$27.9 million in 2017, compared to income tax expense of US$0.3 million in 2016. Income tax expense increased due to a combination of higher profit before taxes and deferred income tax and social contribution of US$5.0 million in 2017 compared to a benefit of US$206.1 million in 2016. This was partially offset by US$7.3 million in higher research and development tax incentives, US$10.8 million in higher deductions related to payment of interest on shareholders’ equity, and US$49.7 million in higher fiscal credits in 2017 as compared to 2016.

Our effective tax rate was 9.1% in 2017 and 0.2% in 2016.

Net Income As a consequence of the aforementioned factors, our consolidated net income after taxes, excluding Non-Controlling Interest, increased 47.8% to US$264.0 million in 2017, from US$178.6 million in 2016. As a percentage of revenue, net income after taxes increased to 4.5% in 2017 compared to 2.9% in 2016.

66 Accounting Standards Standards and amendments to existing standards mentioned in this section have been published, but implementation is not mandatory for the year ended December 31, 2018. The Company has not early adopted the IFRS 16 in the financial statements included elsewhere in this annual report.

The accounting standards presented below may be relevant to the Company in the future, for this reason adoption projects are in course for each of them. It is not possible to estimate the effects of the adoption until the projects are concluded: • IFRS 16 — Leases: brings new concepts from the lessee’s point of view. In the model proposed by the new standard, the lessee shall recognize all leases as part of the statements of financial position in the caption of property, plant and equipment “right of use”, against a liability account. The initial recognition must be measured as at present value, considering a discount rate that is appropriate to the local reality of each entity. In the model proposed by the new standard, there are no significant changes in the accounting recognition to be made by the lessor. In adopting the standard, the Company has used three practical expedients: (1) transactions below US$ 5,000 will be outside the scope of this standard, (2) all contracts with less than 12 months will not be considered for the purposes of IFRS 16 and (3) in order to define the discount rates, management considered adopting the practical expedient which considers grouping contracts with similar characteristics. Embraer and its subsidiaries are analyzing the new accounting standard as well as the application in existing transactions and considering whether there is an impact in the consolidated financial statements, implying an increase in assets and liabilities, a reduction in the value of operating expenses and an increase in financial expenses. The standard is applicable as of January 1, 2019 and the Company intends to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption and the assets will be measured at the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses). The transition estimated effects is between 0.5%-1.0% of the Company’s total assets, with no impact on retained earnings. • IFRIC 23 — Uncertainty over income tax treatments: This is an interpretation of the IAS 12—Income Tax standard, which initial application will be effective as of January 1, 2019. The Company is analyzing all the circumstances covered by IFRIC 23 and does not expect relevant impacts on its adoption. According to the interpretation, there are two possible transition methods: (1) retrospective, where the application is performed without the effect of using facts or further knowledge and (2) retrospective with cumulative effect, method in which applies with all the effect of prior periods accumulated in shareholders’ equity. The Company will adopt this interpretation in compliance with method (2) mentioned.

Other accounting standards have been amended or are in the process of amendment and will come into effect in the coming years; however these are not mentioned, as the Company does not expect them to result in significant impacts.

5B. Liquidityand Capital Resources Overview Our liquidity needs arise principally from working capital requirements, research and development, principal and interest payments on our debt, capital expenditures and distributions to shareholders. To meet these needs, we generally rely on funds provided by operations, borrowings under our credit arrangements, cash contributions from risk-sharing partners, advance payments from customers and, to a lesser extent, issuance of debt and equity securities in the capital markets. For further information on our working capital requirements and our capital sources, see “Item 4B. Information on the Company—Business Overview—Suppliers and Components; Risk-Sharing Arrangements” and “Item 4B. Information on the Company—Business Overview—Commercial Aviation Business—Production, New Orders and Options” and “—Credit Facilities and Lines of Credit.”

As of the date of this annual report, we believe that our traditional sources of funds are sufficient to meet our foreseeable working capital requirements, including to (i) continue to improve the EMBRAER 170/190 jet family, the Phenom 100EV, the Phenom 300E, the Legacy 650E, the Lineage 1000E, the Legacy 450 and the Legacy 500, (ii) the development of the E2 jet family, (iii) make other planned capital expenditures and (iv) pay dividends and interest on shareholders’ equity. Our access to liquidity sources has not been materially impacted in 2018, and we do not expect that this access will be materially impacted in the near future. However, there can be no assurance that our traditional sources of funds, or that the cost or availability of our credit facilities or future borrowing sources, will not be materially impacted by market disruptions.

Our customers may reschedule deliveries, fail to exercise options or cancel firm orders as a result of potential economic downturns or financial volatility in the commercial airline industry. In addition, our risk-sharing partners’ cash contributions are refundable under certain limited circumstances and we may need to find replacement sources of capital.

67 Net Cash Generated (Used) by Operating Activities and Adjusted Working Capital 2018 Compared with 2017 In 2018, net cash generated by operating activities was US$1,107.6 million in 2018, compared to net cash generated by operating activities of US$753.0 million in 2017. The increase in cash flow from operating activities in 2018 is primarily a result of declines in financial investments and contract assets, and increases in trade accounts payable and contract liabilities, partially offset by lower net income and increases in inventories in 2018 compared to 2017.

We had adjusted working capital (defined as total current assets less cash and equivalents and financial investment minus total current liabilities less loans and financing) of US$1,197.4 million as of December 31, 2018 and US$1,028.4 million as of December 31, 2017. Our adjusted working capital increased in 2018 primarily as a result of higher inventories at the end of 2018 as compared to 2017.

2017 Compared with 2016 In 2017, net cash generated by operating activities was US$753.0 million in 2017, compared to net cash used by operating activities of US$6.6 million in 2016. The increase in cash flow from operating activities in 2017 is primarily a result of a decline in inventories and higher net income, partially offset by higher contract assets, lower trade payables, and lower other provisions in 2017 compared to 2016.

We had adjusted working capital (defined as total current assets less cash and equivalents and financial investment minus total current liabilities less loans and financing) of US$1,028.4 million as of December 31, 2017 and US$1,089.0 million as of January 1, 2017. Our adjusted working capital decreased in 2017 primarily as a result of the aforementioned factors described in the explanation for the variation in cash flow from operating activities above.

Net Cash Used in Investing Activities 2018 Compared with 2017 In 2018, net cash used in investing activities was US$523.1 million, compared to net cash used in investing activities of US$1,092.6 million in 2017.

Net cash used in investing activities in 2018 decreased primarily due to lower spending on property, plant, and equipment and intangibles in 2018 as compared to 2017, related in large part to efficiencies in the E-Jet E-2 development program and the entry into service of the first jet in the family, the E90-E2, which helped to reduce total development spending. In addition, lower investments in held to maturity securities in 2018 as compared to 2017 was a factor in the lower net cash used in investing activities in 2018.

2017 Compared with 2016 In 2017, net cash used in investing activities was US$1,092.6 million, compared to net cash used in investing activities of US$993.5 million in 2016.

Net cash used in investing activities in 2017 increased primarily due to higher investments in held to maturity securities in 2017 as compared to 2016, as we invested a portion of the proceeds of the issuance of the US$750.0 million notes due 2027 in these instruments. The increase in net cash used in investing activities occurred despite lower spending on property, plant and equipment and intangibles during 2017 related in large part to efficiencies in the E-Jets E2 development program, as well as higher proceeds from sale of property, plant and equipment in 2017 as compared to 2016.

Net Cash Generated (Used) by Financing Activities and Total Debt 2018 Compared with 2017 In 2018, net cash used by financing activities was US$503.4 million, compared to net cash generated by financing activities of US$369.5 million in 2017. The use of cash in financing activities in 2018 as compared to cash generation in 2017 is primarily due to lower issuance of debt in 2018 as compared to 2017 combined with slightly higher cash outflows for debt repayment. The decrease in borrowing during 2018 was primarily due to the absence of any bond issuances during the period, as we issued US$750.0 million of 10-year bonds in 2017. Additionally, we repaid US$596.3 million of borrowings during 2018 as compared to repayment of US$540.2 million in 2017. In 2018, we distributed US$40.6 million in dividends and interest on own capital compared to US$54.1 million in 2017. In 2018, we did not acquire any of own shares during the period, while in 2017 we spent US$15.0 million on share repurchases.

68 On December 31, 2018, we had total debt (composed of loans and financing) of US$3,647.7 million under our financing arrangements described below, 95.1% of which was long-term debt and 4.9% of which consisted of short-term debt. In comparison, we had total debt of US$4,198.3 million as of December 31, 2017, consisting of 90.7% of long-term debt and 9.3% of short-term debt.

2017 Compared with 2016 In 2017, net cash generated by financing activities was US$369.5 million, compared to net cash generated by financing activities of US$8.9 million in 2016. The higher cash generation from financing activities in 2017 as compared to 2016 is principally due to higher debt issuance in 2017, as we raised new financing proceeds of US$972.9 million compared to new borrowing of US$576.2 million in 2016. The increase in borrowing during 2017 was largely due to a bond issuance generating proceeds of US$750.0 million. Additionally, we repaid US$540.2 million of borrowings during 2017 as compared to repayment of US$523.7 million in 2016. In 2017, we distributed US$54.1 million in dividends and interest on own capital compared to US$28.2 million in 2016. In 2017, we also spent US$15.0 million in acquisition of own shares in comparison to US$17.1 million in 2016.

On December 31, 2017, we had total debt (composed by loans and financing) of US$4,198.3 million under our financing arrangements described below, 90.7% of which was long-term debt and 9.3% of which consisted of short-term debt. In comparison, we had total debt of US$3,759.9 million as of January 1, 2017, consisting of 86.4% of long-term debt and 13.6% of which consisted of short-term debt.

Credit Facilities and Lines of Credit Long-term Facilities In October 2006, our wholly owned finance subsidiary, Embraer Overseas Ltd., or Embraer Overseas, issued 6.375% US$400.0 million guaranteed notes due 2017. The notes were unconditionally guaranteed by us. As described below, in September 2013, we completed an exchange offer in which US$146.4 million in principal amount of our guaranteed notes due 2017 were exchanged for our guaranteed notes due 2023.

In October 2009, Embraer Overseas issued 6.375% US$500.0 million guaranteed notes due 2020 and, as of December 31, 2018, US$164.1 million was outstanding (US$2.4 million in the short-term), including principal and accrued interest. Interest will be paid semiannually. The notes are unconditionally guaranteed by us. As described below, in September 2013 we completed an exchange offer in which US$337.2 million in principal amount of our guaranteed notes due 2020 were exchanged for our guaranteed notes due 2023. In connection with the exchange offer, we received the requisite consents from holders of our guaranteed notes due 2020 to eliminate substantially all the restrictive covenants, certain events of default and related provisions contained in the indenture under which the notes were issued, and we delisted our guaranteed notes due 2020 from the New York Stock Exchange.

In June 2012, we issued 5.150% US$500.0 million notes due 2022 and, as of December 31, 2018, US$499.8 million was outstanding (US$1.1 million in the short-term), including principal and accrued interest. Interest is paid semiannually. The notes are our unsecured and unsubordinated obligations. The notes have been registered with the SEC and listed on the New York Stock Exchange. The indenture under which the notes were issued contains customary covenants and restrictions, including limitation on liens, consolidation, merger or transfer of assets.

In August 2013, we entered into a credit facility with FINEP in the amount of R$303.9 million, equivalent to US$78.4 million in December 31, 2018, to support the research and development expenses of the Legacy 450 aircraft. The facility bears interest at 3.5% per annum and is fully secured by a bank guarantee. The final maturity is in September 2023. As of December 31, 2018, we had US$55.6 million outstanding, of which US$12.8 million is due in the short-term, including principal and accrued interest. FINEP credit facilities are denominated in reais, and amounts appearing in this annual report have been converted into U.S. dollars, our functional currency, for purposes of preparing our IFRS financial statements.

In September 2013, we completed an exchange offer in which US$146.4 million in principal amount of our guaranteed notes with maturity in 2017 and US$337.2 million in principal amount of our guaranteed notes with maturity in 2020 were exchanged for approximately US$540.5 million in principal amount of notes issued by Embraer Overseas, with maturity in 2023. The notes due in 2023 are unconditionally guaranteed by us and were issued pursuant to exemptions from SEC registration pursuant to Regulation S and Rule 144A under the Securities Act. The notes due in 2023 are subject to a registration rights agreement, pursuant to which we have agreed to (i) exchange the notes within 270 days of their issuance for notes with the same terms and conditions which are registered with the SEC or (ii) file a resale shelf registration statement with the SEC on Form F-3. In June 2014, we filed a resale shelf registration statement accordingly. As of December 31, 2018, a total of US$516.6 million under our notes due 2023 was outstanding, of which US$8.9 million was due in the short-term, including principal and accrued interest.

69 In December 2013, we entered into a contract with BNDES to support project development in the total aggregate amount of R$1.4 billion, equivalent to US$364.3 million, in December 31, 2018. The final maturity is in January 2022. The facility bears interest of 3.5% per annum and is secured by guarantee deposits and by a bank stand by letter of credit. As of December 31, 2018, we had US$191.5 million outstanding under this credit facility, of which US$71.8 million is due in the short-term, including principal and accrued interest. This BNDES credit facility is denominated in reais.

In June 2015, Embraer Netherlands Finance issued 5.05% US$1.0 billion guaranteed notes due 2025 and, as of December 31, 2018, US$996.9 million was outstanding (US$2.1 million in the short-term), including principal and accrued interest. Interest is paid semiannually. The notes are unconditionally guaranteed by us. The notes have been registered with the SEC and listed on the New York Stock Exchange.

In December 2015, Embraer S.A. contracted loans in the amount of R$685.0 million, equivalent to US$176.8 million in December 31, 2018, at a weighted average rate of 10.96% per annum, both in the form of export credit notes in order to invest in export and production of goods to export. As of December 31, 2018, we had US$38.5 million of total export credit notes outstanding, (the total amount is due in the short-term) including principal and accrued interest, with final maturity in July 2018. The facility bears interest at 11.0% per annum. The export credit notes are denominated in reais, and amounts have been converted into U.S. dollars, our functional currency, for purposes of preparing our IFRS financial statements.

In August 2016, Embraer Portugal S.A. entered into a credit facility in the amount of US$200.0 million with maturity in 2021 to fund acquisition of fixed assets and working capital. The facility bears interest at 3.07% per annum. As of December 31, 2018, US$201.7 million was outstanding under this facility (US$2.6 million in the short-term).

In February 2017, Embraer Netherlands Finance issued 5.40% US$750.0 million guaranteed notes due 2027 and as of December 31, 2018, US$764.3 million was outstanding (US$16.9 million in the short-term), including principal and accrued interest. Interest is paid semiannually. The notes are unconditionally guaranteed by us. The notes have been registered with the SEC and listed on the New York Stock Exchange.

We may from time to time seek to retire or purchase our outstanding debt, including our guaranteed notes due 2020, 2022, 2023, 2025 and 2027, through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. The repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material, and notes repurchased may be cancelled or resold, but will only be resold in compliance with applicable requirements or exemptions under the relevant securities laws.

We have various other long-term loans and credit agreements with aggregate outstanding borrowings of US$218.7 million as of December 31, 2018. For further information on these financing arrangements, see Note 19 to our 2018 audited consolidated financial statements.

Some of our long-term financing agreements include customary covenants and restrictions, including those that require us to maintain: (i) a maximum leverage ratio, calculated as net debt to earnings before interest, taxes, depreciation and amortization, or EBITDA, of 3.5:1 and (ii) a minimum net debt service coverage ratio, calculated as EBITDA to financial expenses, of 2.25:1. Other restrictions included in our long-term financings include negative pledge covenants and restrictions on significant changes of control, sales of substantially all of our assets, dividend payments during events of default and certain transactions with our affiliates. As of December 31, 2018, we were in compliance with all restrictive covenants contained in our financing agreements.

As of December 31, 2018, US$303.9 million of our total debt was secured by a combination of mortgages on certain of our real estate, liens on certain of our machinery and equipment, guarantee deposits and by a bank standby letter of credit.

For further information on our loans and financings, including currency and maturity breakdowns and breakdowns between fixed and floating rate debt, see Note 19 to our 2018 audited consolidated financial statements.

Recourse and Non-Recourse Debt Total debt excludes non-recourse and recourse debt associated with customer financing arrangements transacted through special purposes entities, or SPEs. In structured financings, an SPE purchases an aircraft from us, pays us the full purchase price on delivery or at the conclusion of the sales financing structure, and leases the related aircraft to the ultimate customer. A third party financial institution facilitates the financing of an aircraft purchase through an SPE, and a portion of the credit risk remains with that third party. We may provide financial guarantees and/or residual value guarantees in favor of the financial institution, as well as act as the equity participant in the financial structuring processes.

70 Our 2018 audited consolidated financial statements contain balances related to recourse and non-recourse debt associated with customer financing arrangements of US$341.4 million and collateralized accounts receivable of US$235.9 million. Of this debt, US$10.8 million is non-recourse for which we have no obligation as a debtor or guarantor, other than potential obligations under existing financial guarantees for the financed aircraft. The remaining US$330.6 million of debt is recourse to us as a result of pending equity contributions and is partially secured by a pledge of a deposit with a financial institution. Our non-recourse and recourse debt is collateralized by the collateralized accounts receivables and by the financed aircraft and, as a result, we do not anticipate a net cash outflow related to our non-recourse debt in the future. These financing transactions do not materially affect our income statement and cash flow data since the terms of the leases and the loans are substantially the same.

5C. Researchand Development, Patents and Licenses, etc. Research and Development Our research and development activities are driven by our corporate strategic planning in the short, medium, and long terms. We refer to research activities as technological development and to development activities as integrated product development.

Based on our work defining the Company’s product and services strategies, including innovation, growth, and business prospects, we carry out projects that include the production and commercialization of new aircraft, systems, and aerospace services.

With a focus on our internal business plans and continuous monitoring of the global technology environment, we define a technological development plan which aims to research and develop solutions to the main challenges the Company will face in the medium and long terms, in order to remain competitive in our business segments.

In an effort to reduce development risk and optimize financial results of our projects, our development strategy and teams have the essential skills to manage and execute multi-disciplinary projects, maintaining and coordinating a global network of development partners and integrating diverse groups such as universities, research and development institutes, companies, and startups. As a result, application of advanced technologies allows for the evolution of products, including lighter, quieter, more comfortable and energy efficient aircraft, in addition to improvements in design and production cycles and optimization of company resources.

Following the results of the Company’s internal technological development planning, the new product and services design phase begins. In this phase our efforts are coordinated in an integrated manner with advanced project engineering and our business units, which work in collaboration with future customers and potential partners to conclude the design of new products and services. Once the design is approved, the product development program is created. In this capital-intensive phase, our development, product, process, and services groups work together with strategic partners, suppliers, and regulatory agencies, beginning the detailed development of the product, its production, systems, and associated services, until the effective entry into service of the product.

The Company has the majority of its research and development activities concentrated in Brazil, but also maintains internal initiatives and partnerships in several locations around the world.

Capital Expenditures We capitalize our expenditures related to product development projects as non-current intangible assets on our statement of financial position when it is probable that the relevant projects will generate future benefits, taking into account their commercial and technological feasibility and availability of technological and financial resources and only if their cost can be reliably measured. We amortize the assets in the form of charges to cost of sales and services on our statements of income, based on the total estimated number of aircraft to be delivered for each new product development project. We also capitalize expenditures related to property, plant and equipment as non-current assets on our statement of financial position and depreciate the assets in the form of charges to cost of sales and services on our statements of income. For further information on how we amortize our intangible assets and depreciate our property, plant and equipment, see “Item 5A. Operating and Financial Review and Prospects—Operating Results—Principal Operating Data and Components of Our Statement of Income—Cost of Sales and Services.”

71 Commercial Aviation and Executive Jets In our Commercial Aviation and Executive Jets businesses, we include our investments in development and property, plant and equipment as part of our capital expenditures. Development costs in the Commercial Aviation and Executive Jets businesses are capitalized from the date of board approval for the relevant project until the final certification.

Most of our development expenditures are associated with the development of new products either for the Commercial Aviation or Executive Jets businesses. For further information on our development expenditures, see “Item 5C. Operating and Financial Review and Prospects—Research and Development, Patents and Licenses, etc.—Research.”

Our main ongoing project is the development of the E-Jets E2 family, comprising three new aircraft, the E175-E2, E190-E2, and E195-E2.

Our disbursements in capital expenditures related to property, plant and equipment, composing our additions in the period except for the exchange pool program assets and aircraft under lease or available for lease. These investments are related mainly to (i) construction of new facilities and (ii) improvements and modifications to our plants and production facilities for the production of new aircraft models.

Our capital expenditures are generally financed by funds provided by operations, borrowings under our credit arrangements, cash contributions from risk-sharing partners, advance payments from customers and, to a lesser extent, capital increases to meet these needs. See “Item 5B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Overview” and “Item 5C. Operating and Financial Review and Prospects—Research.”

Defense and Security We incur expenditures for defense and security programs under both development and production contracts; however, the customers of these programs, which in our case mainly consist on the Brazilian government, fund these programs. A significant part of these contracts is defined as construction contracts and the revenue associated with these contracts is recognized on a POC basis as contract milestones are achieved.

Research We incur research expenses related to the creation of new technologies that may be applied to our aircraft. These expenses are not associated with any particular aircraft and include the implementation of quality assurance initiatives, improvements to the productivity of production lines and studies to determine the latest developments in technology and quality standards. Under IFRS, research costs are expensed as incurred in the research line item of our statement of income.

For information on our capital expenditures, comprising investments in development and property, plant and equipment, see “Item 5C. Operating and Financial Review and Prospects—Research and Development, Patents and Licenses, etc.—Capital Expenditures.”

Intellectual Property Our intellectual property, which includes utility patents, design patents, trade secrets, know-how and trademarks, is important to our business. We hold trademarks over our name and symbol and the names of our products, some of which are registered and some of which are in the process of registration in a number of countries, including Brazil, the United States, Canada, Singapore, Hong Kong, China, the European Union and Japan. As of December 31, 2018, we had approximately 400 trademarks registered or in the process of registration. Our trademarks are generally renewed at the end of their validity period, which usually runs from ten years from the date of application for registration. We do not believe that the loss of any of our trademarks would have a material impact on our business or results of operations.

72 We develop our intellectual property in our research, development and production process. Under the agreements we have with some of our suppliers and risk-sharing partners, they grant us access to information and technology necessary to better develop, manufacture and market our products. We aim to protect our intellectual property rights resulting from investments in technical research and development. We hold granted patents and patent applications relating to our technologies. Currently, we hold granted patents and patent applications from the appropriate registries in Brazil, the United States, the European Union, Russia, Japan, India and China in connection with the various technologies of our products. We require that our suppliers and risk-sharing partners respect the intellectual property rights of third parties and we believe that we have the necessary intellectual property rights to conduct our business and operations.

Considering our utility and design patent portfolios, as of December 31, 2018, we had filed 723 patent applications and had been granted 414 patents.

Innovation We seek to remain in the technological vanguard by constantly reinventing ourselves as we search for opportunities to transform our business, products, services and markets.

We believe innovation is key to the competitiveness and sustainability of our business. For this reason, we created the position of Vice-President for Strategy, Innovation and Digital Transformation in 2017.

In 2018, we created Embraer X, in Melbourne, Florida with outpost offices in Palo Alto, California and Boston, Massachusetts as an innovation and knowledge management area to reinforce our initiatives. The Embraer X focuses on the promotion of innovative ideas aimed at the development of new businesses, products, technologies, services and processes.

Also, in 2018, we implemented the Innovation Verticals, which are the strategic priority focuses for innovation. They orchestrate and integrate the efforts across all business units, Embraer X and Technology development. The verticals are: Autonomous Flight, Electrification, Platform Based Services, Urban Air Mobility, Artificial Intelligence & Data Science, Passenger Experience, Airframe Efficiency, Advanced Design & Manufacturing, Cybersecurity.

Our Innova Program is another tool that aims to strengthen the innovation culture within Embraer in order to generate new ideas and promote employee recognition. The Innova Program manages the Green Light, Innova Challenge and Innovation People Recognition processes. The Green Light process evaluates innovative proposals presented voluntarily by employees and provides time, technical/business mentor and resources to them in order to carry out the idea until its technical and economic feasibility is proven. More than 617 ideas proposed and nine innovative projects have been implemented since the creation of this process in 2012, including the launch of FIP Aerospacial, new robots, AI among others. In 2018, 64 innovative projects were under development. The Green Light process applies to any type of innovation: process, product, technology, services, marketing, management or new business. The Innova Challenge is an internal crowdsourcing mechanism that stimulates ideas to resolve issues globally from different departments of the company, and any employee in the world may participate in this process. In 2017, we changed the focus of Innova Challenge with the goal of improving strategic issues. By 2018 we had launched 2 challenges with more than 88 ideas from different challenges for employees. Cultural events like the Innovation Day had the participation of around 3.300 employees.

Innovations developed during the last five years accounted for approximately 44% of our net revenues in 2018.

5D. TrendInformation Given the order activity over the last couple of years, during which we received a significant amount of orders from U.S. carriers, particularly for 76-seat commercial aircraft, we can anticipate fairly correctly the production and delivery schedules for 2019 in our Commercial Aviation business. We expect deliveries of the E175 jet model to account for a greater share of total segment deliveries. In the executive jets market, despite rising corporate profits and the growth in the population of high net worth individuals the level of pre-owned aircraft for sale, although diminishing, continues to pressure new aircraft demand and has impeded recovery in the segment. We believe, however, that new executive jet product offerings, namely the Praetor 500 midsize jet and Praetor 600 super midsize jet, and the upgrades made on the Phenom 100EV and Phenom 300E, will help us to be better positioned in the industry in 2019 as compared to 2018.

With respect to our Defense and Security business, we expect to progress in our execution of existing programs, including the KC-390, SISFRON and LABGENE programs, as well as continue to deliver the Super Tucano aircraft to various governments around the world. However, due to a portion of revenues being denominated in reais, a lower expected average real to U.S. dollar exchange rate is likely to pressure revenues as reported in U.S. dollars in the segment.

73 Moreover, we expect 2019 to be a transition year, as we ramp up the production of the first model of the E190-E2, which entered into service in April 2018, and E195-E2, which is on track for its first delivery in 2019. We continue our investments in the E2 generation of commercial jets with E175-E2 model on schedule for entry into service in 2021. We will also be ramping up production of our medium-lift cargo and transport jet, the KC-390, with first delivery to the Brazilian Air Force expected in 2019. Also, we believe that industry-wide new executive jet deliveries in 2019 could be stable or increase in comparison with 2018, mainly due to introduction of new jet models and the potential positive effects of the recently passed Tax Reform Act in the United States, which is the largest executive jets market in the world.

For 2019, we expect to deliver between 85 and 95 commercial jets, 90 to 110 executive jets, including light and large jets, ten Super Tucano aircraft and two KC-390 cargo aircraft. It is important to highlight that for 2019 our result of operations and financial condition may be affected by costs and expenses associated with the creation of the Commercial Aviation JV in a strategic partnership between the Company and Boeing. In addition, after the closing of the Transaction, Embraer expects to significantly reduce its indebtedness, which will cause Embraer to have a significantly stronger cash position. Management expects to propose to the shareholders an extraordinary dividend distribution, which amount will be determined taking into account transaction costs and purchase price adjustments as well as the operating results of Embraer until the closing of the Transaction.

For 2020, the first year after the expected closing of the Transaction, we will include in our results of operations 100% of the expected results of the Executive Jets and Defense and Security segments (and the results of their respective services and support businesses) and exclude expected financial results from the 20% stake Embraer will have in the Commercial Aviation JV.

For further information on the risks relating to the Transaction, see “Item 3D. Key Information—Risk Factors—The consummation of the strategic partnership with Boeing is subject to conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all. Failure to complete the proposed Transaction could adversely affect our business, financial condition and operating results and the trading price of our common stock and ADSs,” “—Our strategic partnership with Boeing may not be implemented successfully or the implementation may be more difficult, time consuming or costly than expected,” and “—Although we expect that the strategic partnership with Boeing will result in synergies and other benefits to us, those benefits may not be realized fully or at all or may not be realized within the expected time frame.”

The following table summarizes our order book for our Commercial Aviation business as of December 31, 2018:

Commercial Aviation Firm Orders Options Deliveries Firm Order Backlog EMB 120 Brasília 352 — 352 — ERJ 135 108 — 108 — ERJ 140 74 — 74 — ERJ 145 708 — 708 — EMBRAER 170 191 5 191 — EMBRAER 175 771 250 567 204 EMBRAER 190 566 16 559 7 EMBRAER 195 172 1 169 3 EMBRAER 190 – E2 47 61 4 43 EMBRAER 195 – E2 111 32 — 111

Our total firm order backlog as of December 31, 2018, was US$ 16.3 billion, of which US$ 9.7 billion was from the Commercial Aviation segment, US$ 0.8 was from the Executive Jets segment, US$ 3.9 billion was from the Defense and Security segment and US$ 1.9 billion was from the Services and Support segment.

74 The following tables set forth our Commercial Aviation order book as of December 31, 2018 by aircraft type, customer and country: EMBRAER 170:

Customer Firm Orders Delivered Firm Order Backlog Airnorth (Australia) 1 1 — Alitalia (Italy) 6 6 — BA CityFlyer (UK) 6 6 — Cirrus (Germany) 1 1 — ECC Leasing (Ireland) 6 6 — EgyptAir (Egypt) 12 12 — Finnair (Finland) 10 10 — GECAS (USA) 9 9 — JAL (Japan) 18 18 — NAC / Jetscape (USA) 1 1 — LOT Polish (Poland) 6 6 — Petro Air (Libya) 2 2 — Regional (France) 10 10 — Republic Airlines (USA) 48 48 — Satena (Colombia) 1 1 — Saudi Arabian Airlines (Saudi Arabia) 15 15 — Sirte Oil (Libya) 1 1 — Suzuyo (Japan) 2 2 — TAME (Equator) 2 2 — US Airways (USA) 28 28 — Virgin Australia (Australia) 6 6 — Total 191 191 —

EMBRAER 175:

Customer Firm Orders Delivered Firm Order Backlog Air Canada (Canada) 15 15 — ECC Leasing (Ireland)(1) 11 — Air Lease (USA) 8 8 — Belavia (Belarus) 1 1 — NAC / Aldus (Ireland) 2 — 2 Alitalia (Italy) 2 2 — American Airlines (USA) 104 69 35 CIT (USA) 4 4 — Suzuyo (Japan) 11 9 2 Flybe (UK) 15 11 4 GECAS (USA) 5 5 — Horizon Air / Alaska (USA) 33 26 7 NAC / Jetscape (USA) 4 4 — KLM (The Netherlands) 17 17 — Mesa (USA) 7 7 — Mauritania Airlines (Mauritania) 2 — 2 LOT Polish (Poland) 12 12 — Northwest (USA) 36 36 — Oman Air (Oman) 5 5 — Republic Airlines (USA) 217 117 100 Royal Jordanian (Jordan) 2 2 — Skywest (USA) 158 146 12 TRIP (Brazil) 5 5 — Undisclosed 15 — 15 United Airlines (USA) 90 65 25 Total 771 567 204

(1) Aircraft delivered by ECC Leasing to Air Caraibes.

75 EMBRAER 190:

Customer Firm Orders Delivered Firm Order Backlog Aero Republica (Colombia) 5 5 — Aeromexico (Mexico) 12 12 — Air Astana (Kazakhstan) 2 2 — Air Canada (Canada) 45 45 — Air Caraibes (Guadalupe) 1 1 — Air Lease (USA) 23 23 — Air Moldova (Moldavia) 1 1 — NAC / Aldus (Ireland) 21 15 6 Augsburg (Germany) 2 2 — Austral (Argentina) 22 22 — AZAL (Azerbaijan) 4 4 — Azul (Brazil) 5 5 — BA CityFlyer (UK) 9 9 — BOC Aviation (Singapore) 14 14 — China Southern (China) 20 20 — CIT (USA) 77 — Conviasa (Venezuela) 16 16 — Copa (Panama) 15 15 — Finnair (Finland) 12 12 — GECAS (USA) 27 27 — Guizhou / Colorful (China) 9 9 — Dniproavia (Ukraine) 5 5 — Hainan (China) 50 50 — Hebei (China) 7 6 1 JAL (Japan) 14 14 — JetBlue (USA) 64 64 — ECC Leasing (Ireland) 1 1 — NAC / Jetscape (USA) 9 9 — Kenya Airways (Kenya) 10 10 — KLM (The Netherlands) 26 26 — KunPeng (China) 5 5 — LAM (Mozambique) 2 2 — Lufthansa (Germany) 9 9 — M1 Travel (Lebanon) 8 8 — NAS Air (Saudi Arabia) 3 3 — NIKI (Austria) 7 7 — Regional (France) 10 10 — Republic (USA) 2 2 — Taca (El Salvador) 11 11 — TRIP (Brazil) 3 3 — US Airways (USA) 25 25 — Virgin Austrália (Australia) 18 18 — Virgin Nigeria (Nigeria) 2 2 — TAME (Ecuador) 3 3 — Total 566 559 7

76 EMBRAER 195:

Customer Firm Orders Delivered Firm Order Backlog Arkia (Israel) 1 1 — Aurigny (Guernsey) 1 1 — Azul (Brazil) 59 59 — Belavia (Belarus) 4 4 — BOC Aviation (Singapore) 1 1 — Flybe (UK) 14 14 — GECAS (USA) 12 12 — Globalia (Spanish) 12 12 — Hainan (China) 20 20 — LOT Polish (Poland) 4 4 — Lufthansa (Germany) 34 34 — Montenegro (Montenegro) 11 — NAC / Jetscape (USA) 2 2 — NAC / Aldus (Irlanda) 4 1 3 Royal Jordanian (Jordan) 2 2 — Trip (Brazil) 11 — Total 172 169 3

EMBRAER 190 – E2:

Customer Firm Orders Delivered Firm Order Backlog Air Kiribati (Kiribati) 2 — 2 Aircastle (USA) 12 —12 Aercap (Ireland) 6 1 5 ICBC (China) 10 —10 Hainan (China) 2 — 2 Helvetic (Switzerland) 12 —12 Wideroe (Norway) 3 3 — Total 47 443

EMBRAER 195 – E2:

Customer Firm Orders Delivered Firm Order Backlog Aircastle (USA) 13 — 13 Aercap (Ireland) 44 — 44 Azul (Brazil) 51 — 51 Binter Canarias (Spain) 3 — 3 Total 111 — 111

For further information on trends in our business, see “Item 4B. Information on the Company—Business Overview—Business Strategies” and “Item 5A. Operating and Financial Review and Prospects—Operating Results—Current Conditions and Trends in our Industry.” For further information on risks affecting our business, see “Item 3D. Key Information—Risk Factors.”

77 Strategic Partnership with Boeing On January 24, 2019, we entered into the Master Transaction Agreement and certain other transaction documents with Boeing and certain subsidiaries of Embraer or Boeing, pursuant to which a subsidiary of Boeing will acquire the controlling stake in Embraer’s commercial aviation business unit and Embraer or a subsidiary of Embraer and Boeing or a subsidiary of Boeing will form a joint venture for the promotion and development of new markets and application for the KC-390 multi-mission aircraft. Embraer expects that the strategic partnership with Boeing will generate synergies and other benefits to Embraer. For further information on our strategic partnership with Boeing, see Explanatory Note on page 3 of this annual report and for risks relating to the Transaction, see “Item 3D. Key Information—Risk Factors—The consummation of the strategic partnership with Boeing is subject to conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all. Failure to complete the proposed Transaction could adversely affect our business, financial condition and operating results and the trading price of our common stock and ADSs, Our strategic partnership with Boeing may not be implemented successfully or the implementation may be more difficult, time consuming or costly than expected, and Although we expect that the strategic partnership with Boeing will result in synergies and other benefits to us, those benefits may not be realized fully or at all or may not be realized within the expected time frame.”

5E. Off-BalanceSheet Arrangements In the normal course of our business, we enter into certain off-balance sheet arrangements, including financial and residual value guarantees, trade-in obligations, product warranty commitments and operating leases. We also have a number of swap transactions that are described in “Item 11. Quantitative and Qualitative Disclosures about Market Risk.” For a detailed description of our derivative instruments, see Note 8 to our 2018 audited consolidated financial statements. See also Note 35 to 2018 our audited consolidated financial statements for additional information on our off-balance sheet arrangements. In addition, see “Item 3D. Key Information—Risk Factors—Risks Relating to Embraer— Some of our aircraft sales may be subject to financial and residual value guarantees and trade-in options that may require us to make significant cash disbursements.”

Financial and Residual Value Guarantees Residual value guarantees provide a third party with a specific guaranteed asset value at the end of a financing agreement and typically ensure that, at the exercise date (between six and 19 years after the aircraft delivery date), the relevant aircraft will have a residual market value of a percentage of the original sale price. Most of our residual value guarantees are subject to a limitation (a “cap”) and, therefore, on average our guaranteed residual value is 11% of the original sale price. In the event of a decrease in the market value of the underlying aircraft and an exercise by the purchaser of the residual value guarantee, we bear the difference, if any, between the guaranteed residual value and the market value of the aircraft at the time of exercise, limited to a cap. Our exposure is mitigated by the fact that the guaranteed party, in order to benefit from the guarantee, must make the aircraft meet specific return conditions.

Assuming all customers supported by financial guarantees defaulted on their aircraft financing arrangements, and also assuming we were required to pay the full aggregate amount of outstanding financial and residual value guarantees and were not able to remarket any of the aircraft to offset our obligations, our maximum unrecorded exposure under these guarantees (less provisions and liabilities) would have been US$155.8 million as of December 31, 2018. For further discussion of these off-balance sheet arrangements, see Note 35 to our 2018 audited consolidated financial statements.

As of December 31, 2018, we had US$25.3 million deposited in an escrow account (guarantee deposits on sales structure guarantees) as collateral for the financing of certain aircraft sold where we serve as secondary guarantor. If the initial guarantor of the debt (an unrelated third party) is required to pay the lender, the initial guarantor will be entitled to the amount in the escrow account. The amount is returned in the form of cash to us at maturity of the financing contracts (until 2021) if the aircraft purchaser does not default on the loan. The interest on the escrow account is added to the principal and recognized by us as financial income. For further information on the escrow accounts, see Note 10 to our 2018 audited consolidated financial statements.

We allocated the deposits from the escrow account to 15-year structured notes with the depositary bank in order to earn a better interest rate. This yield enhancement was obtained through a credit default swap transaction, which provides the right of early redemption of the note in case of a credit event by us. Upon a credit event, the note may be redeemed by the holder at the greater of the note’s market value or its original face amount, which would result in a loss to us of all interest accrued on such note to date. Credit events include obligation and payment defaults under the terms of the guarantees above specified thresholds, events related to the restructuring of the obligations above a specified threshold, bankruptcy and a repudiation of and/or moratorium on the obligations above a specified threshold. In December 2018, the total of the structured notes in were released as collateral, and is now recorded as a financial investment. For further information on the escrow accounts, see Notes 6.1 and 10 to our 2018 audited consolidated financial statements.

78 We continuously re-evaluate our risk under our guarantees and trade-in obligations based on a number of factors, including the estimated future market value of our aircraft based on third-party appraisals, including information developed from the sale or lease of similar aircraft in the secondary market, and the credit rating of customers.

The following table provides quantitative data regarding guarantees we render to third parties. The maximum potential payments represent the worst-case scenario and do not necessarily reflect the results expected by us. Estimated proceeds from performance guarantees and underlying assets represent the anticipated values of assets we could liquidate or receive from other parties to offset our payments under guarantees.

As of December 31, 2018 2017 2016 Description (in US$ millions) Maximum financial guarantees 66.6 107.7 191.2 Maximum residual value guarantees 253.1 267.4 286.1 Mutually exclusive exposure(1) (26.9) (29.0) (32.1) Provisions and liabilities recorded(2) (137.0) (126.0) (144.9) Off-balance sheet exposure 155.8 220.1 300.3 Estimated proceeds from performance guarantees and underlying assets 177.6 266.9 504.4

(1) When an underlying asset is covered by mutually exclusive financial and residual value guarantees, the residual value guarantee may only be exercised if the financial guarantee has expired without having been exercised. On the other hand, if the financial guarantee is exercised, the residual value guarantee is automatically terminated. After a financial guarantee expires without being exercised, there is an average three-month period in which a guaranteed party may exercise the residual value guarantee. This means that our exposure to mutually exclusive financial and residual value guarantees covering a single underlying asset cannot be cumulative. Therefore, the maximum exposure shown in this line item is not an aggregate amount of the combined value of mutually exclusive financial and residual value guarantees covering a single underlying asset. (2) Represents the sum of our financial and residual value guarantees. For further information on our provisions recorded and liabilities, see Note 23 to our 2018 audited consolidated financial statements.

As discussed in note 10 to our 2018 audited consolidated financial statements, as of December 31, 2018, 2017 and 2016, we maintained escrow deposits in the total amount of US$25.3 million, US$60.8 million and US$177.0 million, respectively, in favor of third parties for whom we have provided financial and residual value guarantees in connection with certain aircraft sales financing structures.

Because of a reorganization solicitation (Chapter 11) of the customer Republic Airways Holding, filed on February 25, 2016 with the United States of America, we made a provision of US$100.9 million, considering the best estimates on that moment based on the information contained in the reorganization filing document, to cover losses related to obligations with financial guarantees offered to the main financing agent of the ERJ 140/145 aircraft, acquired by this customer. In November 2016, we signed a firm sale for 24 E175 jets with United Airlines. This order represents a transfer of 24 E175 jets previously placed with Republic, which were cancelled. During 2016, the reorganization process developed, and we assumed the responsibility of buying back the ERJ 140/145 operated by Republic Airways until then. The provision made in 2015 was sufficient to cover Embraer’s losses with Republic Airways reorganization in a total amount of US$94.7 million related to guarantees and ERJ 140/145 aircraft repurchase. The difference between US$100.9 million provisioned in 2015 and the losses described above were reverted. Republic Airways was also subject to liquidated damages for contract settlements and accounts receivable within Embraer’s MRO business. To compensate Embraer, Republic Airways issued unsecured pre-petition claims in a total of US$106.0 million, losses on receivables (US$7 million), liquidated damages (US$12 million) and financial guarantees (US$87 million). The values described are the face value of the unsecured pre-petition claims, however, their market price may be lower than that, considering our best estimates. In December 31, 2018, these claims were recognized at approximately 56 cents on each US$1.00 (total of US$59.7 million recognized). As of December 31, 2018, the obligations assumed in accounts payable was US$15.1 million. For further information on the effects of this reorganization, see Notes 23 and 33 to our 2018 audited consolidated financial statements.

79 Trade-in Obligations We sometimes provide trade-in options to our customers in purchase agreements for new aircraft. These options provide customers with the right to trade in aircraft upon the purchase and acceptance of a new aircraft. The trade-in price for commercial aircraft is determined in the manner discussed under “Item 5A. Operating Results—Critical Accounting Estimates—Guarantees and Trade-In Rights.” In 2018, we accepted 1aircraft, with a total invoiced value of US$4.6 million, for trade-in pursuant to trade-in options. In the aggregate, we are currently subject to trade-in options relating to eight aircraft, as a result of trade-ins tied to contractual obligations with customers and to their taking delivery of certain new aircraft. In addition, other aircraft may become subject to trade-in due to new sales agreements. The trade-in price is determined based on the new aircraft sold, as well as other factors, including a market value assessment performed by independent third party appraisers. For further information on our trade-in options, see Note 35.1 to our 2018 audited consolidated financial statements.

We continue to monitor all trade-in commitments to anticipate any adverse economic impact they may have on our financial condition. We may be required to accept trade-ins at prices that are slightly above the then-market price of the aircraft, which would result in financial loss for us when we resell the aircraft. Based on our current evaluation and on third-parties appraisals, we believe that any aircraft accepted in connection with trade-in commitments may be sold or leased in the market without significant profits or losses. For further information on our guarantees, see “Item 5A. Operating Results—Critical Accounting Estimates—Guarantees.”

Operating Leases Our parent company operating leases refer to telephone and computer equipment, and those relating to our subsidiaries related to non-cancelable operating leases of land and equipment. These leases expire at various dates through 2044. Payments made under operating leases are amortized on the statement of income according to the straight-line method over the contract period. For further information on our operating leases, see note 35.2 to our 2018 audited consolidated financial statements.

5F. Tabular Disclosure of Contractual Obligations The following table and discussion provide additional disclosure regarding our material contractual obligations and commercial commitments as of December 31, 2018:

Total Less than 1 year 1 –3 years 3 –5 years More than 5 years Contractual Obligations (in US$ millions) Loans and financing 4,701.3 321.0 867.3 1,345.7 2,167.3 Operating leases 32.1 5.4 8.5 4.4 13.8 Recourse and non recourse debt 341.4 324.0 7.6 6.6 3.2 Customer advances 1,057.3 880.5 157.9 17.0 1.9 Suppliers 892.1 892.1 — — — Financial guarantees 152.1 51.0 39.9 31.3 29.9 Other Liabilities 227.3 5.4 92.2 95.3 34.4 Total 7,403.6 2,479.4 1,173.4 1,500.3 2,250.5

The above table shows the sum of the outstanding principal and anticipated interest due at maturity date. For fixed rate loans, the interest expenses were calculated based on the rate established in each debt contract. For floating rate loans, the interest expenses were calculated based on a market forecast for each period (LIBOR 6m – 12m), dated December 31, 2018. This floating rate exposure is managed through derivatives operations. For further information on our derivative instruments, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk.”

The above table does not reflect contractual commitments related to trade-in options and financial and residual value guarantees discussed in “Item 5E. Off-Balance Sheet Arrangements” above. For further information on risks related to our guarantees, see “Item 3D. Key Information—Risk Factors—Risks Relating to Embraer—Some of our aircraft sales may be subject to financial and residual value guarantees and trade-in options that may require us to make significant cash disbursements.” Also, the table does not reflect our sponsorship in the defined contribution pension plan for our employees, participation in which is optional, and our participation, recognized as expense, is expected to be around US$20.9 million per year.

80 Other liabilities include taxes and payroll charges payable in the total amount of US$126.6 million as of December 31, 2018. The above table does not reflect any information related to our derivative instruments, which are discussed more fully in “Item 11. Quantitative and Qualitative Disclosures About Market Risk.”

5G. Safe Harbor See “Special Note Regarding Forward-Looking Statements.”

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 6A. Directors and Senior Management We are managed by our board of directors (conselho de administração), composed of 11 members, and our board of executive officers (diretoria), composed of no less than four and no more than 11 members (each an executive officer). We have a permanent Fiscal Council (Conselho Fiscal), which is composed of at least three and no more than five members and an equal number of alternates.

There are no family relationships among the members of our board of directors and/or our board of executive officers.

Board of Directors Our board of directors ordinarily meets eight times a year and extraordinarily when called by the Chairman. It has responsibility, among other things, for establishing our general business policies and for electing our executive officers and supervising their management.

Our board of directors is appointed by our shareholders for a two-year term, reelection is permitted, and there are three reserved seats as follows: (i) one acting member to be appointed by the Brazilian government, as holder of the “golden share,” and (ii) two acting members to be appointed by our employees, Alexandre Magalhães Filho and Dejair Losnak Filho The remaining eight directors are elected in accordance with the slate voting or cumulative voting rules contained in our bylaws. For further information on the rules and procedures regarding the nomination and election of our board members, see “Item 10B. Additional Information—Memorandum and Articles of Association—Board of Directors—Election of Board of Directors.” There is no mandatory retirement age for our directors.

Under the rules of the Novo Mercado, the members of our board of directors have agreed to comply with the Novo Mercado Listing Rules and with the rules of the B3 Arbitration Chamber before taking office, and for this purpose have entered into a Statement of Consent from the Directors (Termo de Anuência dos Administradores).

Set forth below are the names, ages, positions, the year first elected and brief biographical descriptions of the members of our board of directors elected at our annual shareholders’ meeting held on April 12, 2017:

Year First Elected Name Age Position to Board Alexandre Gonçalves Silva 74 Chairman of the Board of Directors 2011 Sérgio Eraldo de Salles Pinto 54 Member of the Board of Directors 2009 Alexandre Magalhães Filho 66 Member of the Board of Directors 2015 Cecília Mendes Garcez Siqueira 61 Member of the Board of Directors 2015(1) Dejair Losnak Filho 55 Member of the Board of Directors 2017 Israel Vainboim 74 Member of the Board of Directors 2009 João Cox Neto 55 Member of the Board of Directors 2011 José Magno Resende de Araujo 59 Member of the Board of Directors 2013(2) Maria Leticia de Freitas Costa 58 Member of the Board of Directors 2017 Pedro Wongtschowski 72 Member of the Board of Directors 2015 Raul Calfat 66 Member of the Board of Directors 2017

(1) Cecília Mendes Garcez Siqueira was also a member from April 2009 to April 2011. (2) Elected as an alternate member for Mr. Antonio Franciscangelis Neto.

81 Alexandre Gonçalves Silva. Mr. Silva holds a BS in Mechanical Engineering from PUC Rio de Janeiro. In his 40-year career, he has occupied positions in several areas, including 22 years as a CEO. Mr. Silva was CEO of GE in Brazil from 2001 to 2007 and since then, Mr. Silva has occupied positions on boards of directors of various companies. Mr. Silva is Chairman of the Board of Directors of Embraer and an independent board member at, Votorantim Cimentos, Ultrapar and Nitroquímica. Mr. Silva is a Pro Bono Board member of the American Chamber of Commerce since 2003. Mr. Silva is an independent member of the Board of Directors of Embraer.

Sérgio Eraldo de Salles Pinto. Mr. Salles Pinto has been CEO of Bozano Group since 2011 and he was an Executive Officer from 2000 to 2010. From 1988 to 2000, he worked at several companies of Banco Bozano, Simonsen S.A. He was originally elected to the Board of Directors of Embraer in April 2009 and he is an independent member, being a member of the Human Resources Committee and coordinator of the Audit and Risk Committee. Mr. Salles Pinto earned undergraduate degrees in Economics and Electrical Engineering from the Center of Unified Teaching of Brasília (CEUB) and the University of Brasília (UnB), respectively. He holds a Master’s degree in Economics from Fundação Getúlio Vargas—Rio de Janeiro (EPGE) and a Master’s degree in Administration from the Catholic University of Rio de Janeiro (PUC). Mr. Salles Pinto is the Chairman of the Board of Directors of Bozano Investimentos Gestora de Recursos, a member of the Board of Directors of Azul Linhas Aéreas and Vice-President of the Board of Directors of Ouro Preto Óleo e Gás.

Alexandre Magalhães Filho. Mr. Magalhães Filho has a degree in accounting sciences, with a specialization in budget analysis. He has been an employee of Embraer since 1986, where he has held the following positions: 1986 to 2008, Budget Supervisor, Assistant Controllership Officer, and Pricing and Economic Planning Manager; 2008 to 2010, Costs Manager. His current position is Financial Process Manager, and he is in charge of cost, accounting and tax procedures, including products and services costing, accounting for 29 companies, controllership and IFRS accounting consolidation for 50 companies in the Embraer group, and tax operations. Mr. Magalhães Filho sat on the Fiscal Council of: (i) Banco do Brasil Previdência Privada (BBPREV) from 1997 to 2009; (ii) Embraer Prev – Sociedade de Previdência Complementar from 2010 to 2012, being reelected for the period 2015 to 2018; (iii) Instituto Embraer de Educação e Pesquisas, since 2001; and (iv) Cooperativa dos Empregados da Embraer (Cooperemb) from 2009 to 2011, was elected to the Board of Directors for the 2015-2017 term. Mr. Magalhães Filho was an alternate director for the representative of the Embraer Employees Investment Club (CIEMB) on the Board of Directors of Embraer from 2013 to 2015, was elected as an acting director for the 2015-2017 term and has been nominated by Embraer’s employees to be reelected for the 2017–2019 term.

Cecília Mendes Garcez Siqueira. Ms. Siqueira holds a degree in education and an MBA in General Business – Top Executives and Pension Plan Management, as well as a master’s degree in business management. She has been an employee of BB since 1979, where she has held the following positions: 1979 to 2002, various positions; 2002 to 2010, Chief Planning Officer, and Chief Administrative Officer until May 2018. Ms. Siqueira served on the Board of Directors of Neoenergia from 2002 to 2005, where she also acted as Coordinator of the HR Committee. From 2005 to 2008, Ms. Siqueira served as Vice Chairman of the Board of Directors of CPFL Energia, where she also acted as Coordinator of the HR Committee. She served as a director of Embraer from 2008 to 2011, where she also sat on the Strategies and Risk Committee. Ms. Siqueira also sat on the Board of Directors of Sauípe S.A. from 2011 to 2013. Ms. Siqueira is an independent member of the Board of Directors of Embraer.

Dejair Losnak Filho. Dejair Losnak Filho holds a Bachelor’s Degree in Law from the Universidade do Vale do Paraíba in São José dos Campos, in 2011; holds a post-graduate degree in Social Security and Labor Law, by UNISAL, in 2013; holds a post-graduate degree in Social Security Law from Faculdade Legale, in São Paulo; and a course for Members of the Board of Directors by the Instituto Brasileiro de Governança Corporativa (IBGC) in November and December 2017 Mr. Losnak was elected in 2017 a member of the Board of Directors of Embraer S.A.by representatives of non-shareholders, and has been Programmer of Production of the company since 2003.

Israel Vainboim. Mr. Vainboim was a member of the Board of Directors of Itaú Unibanco S.A. from 2009 to April 2015. He is a member of the Board of Directors of Cia. Iochpe-Maxion, member of the Board Council of MAM (Museu de Arte Moderna de São Paulo), member of the Board of Alfredo Volpi of Modern Art Institute, member of the Board of MASP, Vice-President of the Board of Albert Einstein Hospital in São Paulo and Chairman of the Board of the Brazilian-Israeli Chamber of Commerce. Mr. Vainboim served at Unibanco in various capacities since 1969. Mr. Vainboim was also the President of Unibanco from 1988 to 1992 and member of its Board of Directors until 2008. Mr. Vainboim was president of Unibanco Holdings S.A. from 1994 to 2007, Chairman of the Board of Directors and President of the Audit Committee of Unibanco Holdings S.A. from 2007 to February 2009. He was first elected to the Board of Directors of Embraer in April 2009 and he is an independent member. Mr. Vainboim earned an undergraduate degree in Mechanical Engineering from the Federal University of Rio de Janeiro and holds an MBA from Stanford University.

82 João Cox Neto. Mr. Cox currently serves as Chairman of the board of directors of TIM Participações and TIM Brasil S.A. and also as a member of the boards of directors of Petrobras S.A., Embraer S.A., Braskem S.A. and Linx S.A. He is the founding partner and managing director of Cox Investiments & Advisory. Between 2006 and 2010. Cox served as CEO and vice-chairman of Claro. In 2005, he was the vice-chairman of the board of directors of Cellcom Israel. He served as CFO and investor relations of Telemig Celular Participações and Tele Norte Celular Participações from April 1999 to August 2004 and also CEO of Telemig Celular and Amazonia Celular from August 2002 to August 2004. In addition, Cox has served as a member of the boards of directors of certain companies in Brazil, Argentina, Holland and Israel. He served as a board member of the CRSFN—National Financial System Resources Council, ABRASCA (Brazilian Association of Publicly Held Companies) and IBRI (Brazilian Institute of Investors’ Relations). Cox holds a bachelor’s degree in economics from Universidade Federal da Bahia and attended to post graduation in economics at Université du Québec à Montreal and at the College of Petroleum Studies of Oxford University. Mr. Cox is an independent member of the Board of Directors of Embraer, also acting as a head of the Governance and Human Resources Committee and member of the Audit and Risks Committee.

José Magno Resende de Araújo. On April 8, 2016, Mr. Araújo was appointed as Airsáce Operations Cammander of the Brazilian Air Force (Comando de Operações Aerospaciais). He served as Economic and Finance Secretary of the Brazilian Air Force (Secretaria de Economia, Finanças e Administração da Aeronáutica) from April 8, 2018 through January 10, 2019; as Chief of Staff for the Brazilian Air Force command from April 20, 2012 to April 8, 2016, as Commander of the Brazilian Air Force Training and Adaptation Center (Centro de Instrução e Adaptação da Aeronáutica) from April 7, 2011 to April 12, 2012 and as head of the Brazilian Air Force Congressional Support (Assessoria Parlamentar da Aeronáutica), from July 17, 2008 to April 7, 2011. Mr. Araújo completed several academic courses, including the Official Airmen Training Course at the Brazilian Air Force Academy in Pirassununga, SP in 1980, the Improvement Course for Offices, the Command and Staff Course, the Aerospace Policy and Strategy Course and an MBA in Strategic Institutional Management in 2006.

Maria Leticia de Freitas Costa. Mrs. Costa holds a degree in Production Engineering from Polytechnical School of the University of São Paulo in 1982, and a MBA from Samuel Curtis Johnson School of Business, Cornell University, in 1986. Mrs. Costa is a partner at Prada Assessoria Empresarial Ltda., since 2010; member of the Board of Directors of Localiza S.A., since 2009; member of the Board of Directors of RBS Mídia, since 2016; member of the Board of Directors of BB Mapfre, since 2015; member of the Board of Directors of Mapfre S.A., since 2015; member of the Board of Directors of Martins S.A., since 2014; member of the Board of Directors of Totvs S.A.; member of the Audit Committee of Votorantim Cimentos, since 2015; Strategy Committee of Votorantim Cimentos since 2018; member of the Audit Committee of Votorantim Metais (VMH and CBA), from 2015 to 2017; Post graduation Director of the Insper Institute of Education and Research, from 2011 to 2015; member of the Board of Directors of Marcopolo from 2012 to 2016; member of the Board of Directors of Gafisa S.A., from 2011 to 2012; member of the Audit Committee of Votorantim Industrial, from 2012 to 2014; member of the Strategy Committee of Bematech S.A., from 2014 to 2015. Mrs. Costa is an independent member of Embraer’s Board of Directors and a member of the Human Resources and Strategy Committees.

Pedro Wongtschowski. Mr. Wongtschowski served as General Manager of Oxiteno S.A. (1992-2006). From January 2007 to December 2012, he served as President of ULTRAPAR Participações S.A., a public company doing business in the fields of fuel distribution (Ipiranga), LPG distribution (Ultragaz), bulk liquid logistics (Ultracargo), and specialty chemicals manufacturing (Oxiteno). He is a member of the Board of Directors of Ultrapar Participações S.A. Mr. Wongtschowski is an independent director of Embraer, Votorantim S.A. and Centro de Tecnologia Canavieira S.A.

Raul Calfat. Mr. Calfat holds a degree in business administration from Fundação Getúlio Vargas’ Business School. Mr. Calfat was CEO, until December 2013, and is Chairman of the Board of Directors of Votorantim S.A., since January 2014; Chairman of the Board of Directors of Aché Laboratórios Farmacêuticos., since September 2018; independent board member of Duratex S.A., since 2015; and member of the Board of Directors of the Sírio-Libanês Hospital, since August 2015. Calfat is an independent member of Embraer’s Board of Directors and a member of the Strategy Committee and the Audit and Risk Committee.

83 Committees Three committees were formed to assist the board of directors in its duties and responsibilities: • Strategies Committee: this committee has no executive power. The members are appointed by our board of directors. The members of our board of directors and board of executive officers may serve on this committee The primary purpose of the Strategies Committee is to assist the board of directors. The members of our board of directors and board of executive officers may serve on this committee. The Strategies Committee’s responsibilities include assisting the board of directors in the performance of its duties, focused on the following subjects: (i) Strategic Plan and Action Plan of the Company, with its strategic objectives and macro-projects, and (ii) potential opportunities assessment of new business. The current members of the Strategies Committee are the following independent directors: Israel Vainboim (coordinator), Alexandre Gonçalves Silva, Maria Leticia de Freitas Costa, Pedro Wongtschowski and Raul Calfat. • Audit and Risks Committee (internally called as “Audit, Risk and Ethics Committee”): See “Item 6C. Board Practices—Audit and Risks Committee” below. • Human Resources Committee (internally called as the “Personnel and Governance Committee”): this committee has no executive power. The members are appointed by our board of directors. The members of our board of directors and board of executive officers may serve on this committee. The purpose of this committee is to assist the board of directors with matters related to human resources issues, which include appointing and removing executive officers from office and designating their duties as provided by the bylaws, compensation and human relations policy and transferring our resources to employee associations, charity and recreational entities, the private security fund and foundation. In addition, the committee also assists our board of directors in corporate governance matters. The current members of the Personnel and Governance Committee are the following independent directors: João Cox Neto (coordinator), Alexandre Gonçalves da Silva, Cecília Mendes Garcez Siqueira, Sérgio Eraldo de Salles Pinto and Maria Leticia de Freitas Costa. • Conselho Fiscal: See “Item 6C. Board Practices—Audit and Risks Committee—Conselho Fiscal” below.

Executive Officers Our executive officers are responsible for our day-to-day management. The board of executive officers has responsibilities established by our bylaws and by the board of directors.

The terms of office for our executive officers are two years and reelection is permitted.

The vote of at least seven members of our board of directors is necessary to remove an executive officer.

Our bylaws prohibit any executive officer from also serving simultaneously as a member of our board of directors.

Under the rules of the Novo Mercado, our executive officers have agreed to comply with the Novo Mercado Listing Rules and to the rules of the B3 Arbitration Chamber before taking office and for this purpose have entered into a Statement of Consent from the executive officers (Termo de Anuência dos Administradores).

Our chief executive officer’s two-year tenure will end on April 22, 2019, the scheduled date for our annual and extraordinary general shareholders’ meetings. We expect to announce our new president and chief executive officer on or before this date.

84 Set forth below are the names, ages, positions, the year first elected and brief biographical descriptions of our current executive officers as of the date of this annual report:

Name Age Position Year First Elected Paulo Cesar de Souza e Silva 63 President and Chief Executive Officer 2016(1) Fabiana Klajner Leschziner 47 Executive Vice President—General Counsel & Chief Compliance Officer 2016 Hélio Bambini Filho 56 Executive Vice President—Operations 2017 Jackson Medeiros de F. Schneider 54 Executive Vice President—Defense and Security 2014 Johann Christian Jean Charles Bordais 46 Executive Vice President—Services and Support 2017 John S. Slattery 50 Executive Vice President—Commercial Aviation 2016 Nelson Krahenbuhl Salgado 58 Executive Vice President—Chief Financial and Investor Relations Officer 2018 Mauro Kern Junior 58 Executive Vice President for Engineering 2015

(1) Elected as president and CEO in 2016 and elected as Executive Vice President—Commercial Aviation in 2010.

Paulo Cesar de Souza e Silva. Mr. Paulo Cesar has been the CEO of Embraer S.A. since July 2016. Mr. Silva joined Embraer in 1997 as Vice President for customer financing. In 2010, he was appointed President and CEO of Embraer Commercial Aviation, position he held until June 2016. As Embraer’s representative at Aviation Working Group, an international industry organization dedicated to developing initiatives to foster and facilitate advanced aviation financing, Mr. Silva contributed to the development and implementation for the Cape Town Treaty and the Aircraft Sector Understanding (ASU), which regulates the terms and conditions for Export Credit Agencies support. Both are key instruments to the airlines gaining access to efficient aircraft financing. Mr. Silva is a member of the Conquistadores Del Cielo and Wings Club. Under his tenure, the company has expanded its footprint in commercial aviation, consolidating its leadership in the segment with up to 130 seats. For more than two decades, he worked in financial institutions in Brazil, Europe, and the United States. Prior to joining Embraer, Mr. Silva held many executive positions within the international bank industry. Mr. Silva holds a Bachelor’s degree in Economics from Mackenzie University (São Paulo, Brazil) and a Finance MBA from the University of Lausanne, in Switzerland.

Fabiana Klajner Leschziner. Mrs. Leschziner is our Executive Vice President, General Counsel & Chief Compliance Officer since June 2016. She worked at DuPont in Brazil from September 2002 to December 2015 as the Legal and Government Affairs Director for Brazil and from January 2016 to June 2016 as Legal Director for Brazil and the Andean Region, responsible for the legal aspects of all business of DuPont in Brazil, Colombia, Venezuela, Peru, Ecuador and Bolivia. Fabiana graduated from the São Paulo University School of Law, in 1993, and holds an LL.M. from Cornell Law School, Ithaca, USA. She specializes in corporate law, corporate finance, capital markets, antitrust and international trade and was an associate at Davis Polk & Wardwell office in New York from July 1998 to December 2001.

Hélio Bambini Filho. Mr. Bambini has been our executive vice president of operations since October 2017. Previously, he held several positions at Embraer, including operations planning and industrial architecture director (2006). In 2007, he began to oversee Embraer’s supply chain management. In 2011, he became senior vice president of industrial operations and managed Embraer’s operations in São José dos Campos, Eleb, Botucatu, Gavião Peixoto, Taubaté, Evora (Portugal), AST (USA) and EZ Air Interior (Mexico). He was also responsible for the final assembly of our commercial aircraft and executive jets. In 2014, he was appointed as Senior Vice President and chief operating officer of the Embraer Defense and Security Business Unit, taking on the Defense Programs and Operations in Gavião Peixoto and Jacksonville (USA), and member of the board of Embraer Defense and Security subsidiaries: Atech Negócios em Tecnologia S.A., Savis Tecnologia e Sistemas S.A., Harpia Sistemas S.A., Bradar Indústria S.A. and Embraer Defense and Security Inc. (USA). Prior to joining Embraer, Mr. Bambini was the CEO of Sanmina-SCI and Segerstrom, both companies in the contract manufacturing segments. He was also a business development manager at Motorola and senior consultant at Arthur D. Little. He started his career in managerial positions at Multitel Microeletrônica and Mannesmann (Hartmann & Braun Division).Mr. Bambini holds bachelor’s degree in electronic engineering from Faculdade de Engenharia Industrial, a specialization in finance from PUC-Rio, a master’s degree in business administration from FGV in São Paulo and participated in a MBA exchange program at the University of Texas at Austin.

85 Jackson Schneider is President of Embraer Defense and Security since January 2014. He formerly held the position of Vice President of People, Institutional Relations and Sustainability at Embraer S.A. Schneider has a Law degree from the University of Brasília (UNB) and an MBA from Business School of São Paulo. He began his career within the Ministry of Justice. In the private sector, he was the Deputy Director of Corporate Affairs at Unilever and Vice President of Human Resources, Legal Relations and Corporate Affairs of Mercedes-Benz do Brasil. In addition, Schneider was President of ANFAVEA (Brazilian Association of Vehicle Manufacturers) and ABIPLA (Brazilian Association of Manufacturers of Cleaning Products, and Related Items). He was board member of CDES (Social and Economic Development Council of the Presidency of Republic). He is also board member of organizations such as the Biennial Foundation of São Paulo, the AACD (Association to Support Disabled Children) and MASP – Assis Chateaubriand São Paulo’s Art Museum, among others.

Johann Christian Jean Charles Bordais. Mr. Bordais is the Senior Vice-President of Embraer Services and Support. From July 2013 to December 2016, he was Vice President of Services and Support in Brazil, where he managed customer support staff from a variety of different areas and oversaw the Customer Care Center in São José dos Campos, as well as Embraer’s Authorized Aircraft Service Centers worldwide. Previously, Mr. Bordais was responsible for Embraer Services and Support office in Paris for 13 years, served as the Senior Manager for Aircraft Sales Support & Contract Administration and Manager of the Customer Order Desk. Before joining Embraer, Mr. Bordais worked at Raytheon/Beechcraft’s Authorized MRO in Paris and at an aircraft engine spare parts company in Dallas. Mr. Bordais holds a bachelor’s degree in international trade and a MBA from Oklahoma University.

John S. Slattery. Mr. Slattery has been Executive Vice-President of Embraer S.A. and President and CEO of Embraer Commercial Aviation since July 2016. He joined Embraer in early 2011 as non-executive Senior Vice President, responsible for Customer Finance; Asset & Risk Management and sales to the lessor community. The following year Mr. Slattery was appointed Chief Commercial Officer, taking on broader executive responsibilities incorporating worldwide sales of commercial aircraft and services. Prior to joining Embraer, Mr. Slattery spent fifteen years in executive and leadership roles at various commercial aerospace advisory, leasing, and banking organizations. In 2001, Mr. Slattery was a co-founder of RBS Aviation Capital (now SMBC Aviation Capital) and the firm’s Managing Director in New York, responsible for leading the bank’s commercial aircraft leasing and asset-backed financing to airline customers across the Americas. Mr. Slattery is a Fellow of The Royal Aeronautical Society, President Emeritus of The Wings Club and Director Emeritus of ORBIS International. An AMP graduate of Harvard Business School, Mr. Slattery was awarded an M.B.A. from the University of Limerick, and a BA from the University of South Wales.

Nelson Krahenbuhl Salgado. Mr. Salgado is our Executive Vice-President and Financial and Investor Relations Officer since April 2018. He has been working with Embraer since 1987, and worked for 10 years in the Engineering Department. He has held executive positions on corporate functions such as Strategic Planning, Economical and Financial Planning and Mergers and Acquisitions. From 2012-2014, he was the CEO of Visiona Tecnologia Espacial, a joint venture company formed by Embraer and Telebras. In February 2014, Mr. Salgado rejoined Embraer as Vice President, Institutional Relations and Sustainability. In January 2016, Mr. Salgado was appointed Vice President, and Strategy and Institutional Relations Officer. He holds a Master’s degree in Engineering from Universidade de São Paulo—USP; a PhD in Computational Mechanics from Wesser Institute of Technology United Kingdom; an MBA, from Fundação Getulio Vargas—FGV, São Paulo. Mr. Salgado was a visiting professor at the Aeronautical Engineering Division of the Instituto Tecnológico de Aeronáutica—ITA.

Mauro Kern Junior. In September 2017, Mr. Kern was appointed Embraer’s Executive Vice-President, Engineering. He joined Embraer in 1982 as a Mechanical Systems Engineer and served the company in the following years in several technical and managerial positions. In April 2007, he was appointed Embraer’s Executive Vice-President for the Airline Market. In April 2011, Mr. Kern was appointed Embraer’s Executive Vice-President for Engineering and Technology. In 2015, he took the position of Chief Operating Officer. Mr. Kern holds a Bachelor’s degree in Engineering from the University of Rio Grande do Sul.

6B. Compensation Overview Our executive officers, board of directors and fiscal council members are entitled to fixed compensation. In addition, our executive officers are eligible to participate in our executive profit sharing plan, which provides them with variable compensation that is based on their and our performance and is limited to a percentage of our net income for the year.

For the fiscal year ended December 31, 2018, the aggregate compensation (including benefits in kind granted) that we paid to members of the board of directors, the audit and risks committee, the fiscal council and the executive officers for services in all capacities was US$11.1 million: US$ 3.2 million to members of the board of directors, US$0.2 million to members of the fiscal council and US$ 7.7 million to the executive officers.

For the fiscal year ended December 31, 2018, members of our committees of the board of directors, including our audit and risks committee, received an aggregate additional compensation of US$0.8 million, which is included in the US$11.1 million compensation mentioned above.

86 In addition, in 2018, we contributed US$0.3 million for the payment of pension benefits to our executive officers. Members of our board of directors and fiscal council do not receive these benefits. The board of directors members, fiscal council members and executive officers did not receive any compensation (including benefits in kind) from any of our subsidiaries. As of December 31, 2018, none of the board of directors members, fiscal council members or executive officers had any financial or other interests in any transaction involving us which was not in the ordinary course of our business. For further information on our executive compensation, see Note 14.3 to our 2018 audited consolidated financial statements.

Stock Option Plan At a special shareholders’ meeting held on April 19, 2010, our shareholders approved a second stock option plan for management and employees, including those of our subsidiaries, subject to their continuous employment with us for at least two years. Our board of directors may choose employees and members of management who will be eligible to receive stock options, which are to be awarded free of charge. Nevertheless, in extraordinary circumstances our board of directors may grant stock options to persons employed with us for less than two years to hire and retain strategic personnel. Our board of directors may also determine the terms of the stock option contracts. This second stock option plan has an indefinite period of duration and may be terminated at any time by our board of directors, after which no new options may be granted. However, options granted prior to the termination of the plan will not be affected and may be exercised subject to the terms and conditions of the plan and respective stock option contract. Under the terms of this second stock option plan, we are authorized to grant options to purchase of up to 1.5% of our common shares, and the options vest as follows: 20% after one year following the date the options were granted; 30% after two years following the date the options were granted; and 50% after three years following the date the options were granted. As of December 31, 2018, the options granted on January 23, 2012 and March 20, 2013 were outstanding. On January 23, 2012, 4,860,000 options at an exercise price of R$11.50 per share, representing 4,860,000 common shares, were granted at an exercise price of R$11.50 per share; and on March 20, 2013, 4,494,000 options, representing 4,494,000 common shares, were granted at an exercise price of R$15.71 per share. Out of the total 9,354,000 options that were granted, 2,275,990 were canceled and 6,141,302 were exercised, the remaining 936,708 options, representing 936,708 common shares, are outstanding and can be exercised at any time.

At a special shareholders’ meeting held on January 10, 2012, the aforementioned second stock option plan was amended to provide for a revised vesting schedule, and options granted after January 10, 2012 vest as follows: 33% after three years following the date the options were granted; 33% after four years following the date the options were granted; and 34% after five years following the date the options were granted. The exercise price of each option is to be set on the grant date as the weighted average trading price of the last 60 trading days and can be adjusted by up to 30% to counteract any speculative activity in the market. Each option holder has up to five years from the date of grant to exercise options received prior to and during 2011, and up to seven years from the date of grant to exercise options received after 2011. Option holders may only exercise options during the term of their employment with Embraer. This amendment does not affect the accounting for grants existing prior to this plan.

Phantom Shares Plan In February 2014, we adopted a new model of long-term incentive plan aligned with our remuneration policy. The new model is based on the granting of virtual shares to officers and management and has as its objective of attracting and retaining highly qualified staff to ensure continuity of management and align the interest of officers and key personnel of the Company with that of shareholders. Participants in the plan are entitled to receive two classes of virtual shares, 50% in the form of virtual restricted shares and 50% in the form of virtual performance shares linked to performance indicator target. We pay the amount of the long-term incentive converting the virtual shares into reais by the average price of the Company’s shares in the ten trading sessions preceding the relevant determination date and three, four and five years after the grant of the virtual shares, respectively. In August 2017, we approved a change in the criteria of virtual performance shares, the amounts payable is based on the internal cost reduction target and the payroll related to the shares granted in 2015, 2016 and 2017 will be made in 2020, while the amount of performance shares granted in 2018 will be paid in 2021.On February 25, 2014, we approved a total benefit of US$13.0 million under the plan, equivalent to 1,570,698 virtual shares with a fair value of US$1.0 million as of December 31, 2018, equivalent to 175,100 virtual shares. On March 3, 2015 we approved the second grant with a total benefit of US$10.4 million under the plan, equivalent to 1,237,090 virtual shares with a fair value of US$3.0 million as of December 31, 2018, equivalent to 546,024, virtual shares. On March 10, 2016, we approved the third grant with a total benefit of US$8.5 million under the plan, equivalent to 1,095,720 virtual shares with a fair value of US$3.0 million as of December 31, 2018, equivalent to 541,595 virtual shares. On June 9, 2016, we approved the fourth grant with a total benefit of US$0.3 million under the plan, equivalent to 55,994 virtual shares with a fair value of US$0.2 million as of December 31, 2018, equivalent to 32,674 virtual shares. On August 25, 2016, we approved the fifth grant with a total benefit of US$0.3 million under the plan, equivalent to 70,978 virtual shares with a fair value of US$0.2 million as of December 31, 2018, equivalent to 43,783 virtual shares. On August 24, 2017 we approved the sixth grant with a total benefit of US$9.7 million under the plan, equivalent to 1,930,350 virtual shares with a fair value of US$4.2 million as of December 31, 2018, equivalent to 762,782 virtual shares. In 2018, we approved the sixth grant with a total benefit of US$10.4 million under the plan, equivalent to 1,625,372 virtual shares with a fair value of US$1.9 million as of December 31, 2018, equivalent to 346,221 virtual shares. For further information on this plan, see Note 28 to our 2018 audited consolidated financial statements.

87 Long-Term Incentive Plan The objectives of our Long-Term Incentive Plan are the recruitment and retention of highly-qualified personnel and to allow those who can contribute to our performance the opportunity to participate in our profits. Incentives under the plan are intended to promote continuity among our management and alignment of the interests between our executives and shareholders. Amounts distributed are defined with reference to the market, under the conditions described in our Long-Term Incentive Plan.

Short-Term Variable Compensation Policy Our Short-Term Variable Compensation Policy is designed to promote the retention of executives and alignment of their interests with those of shareholders. Goals with greater impact and importance for our company are given greater weight. We distribute short- term variable compensation to our eligible executives which is equal to a percentage of our operating profits.

Employee Profit Sharing Plan We first implemented a profit sharing plan in 1998 that linked employee profit sharing to dividend payments. In December 2008, the board of directors approved changes to the methodology for calculating the employee profit sharing. The new program, as amended in 2008 by our board of directors, is now tied to our net income, calculated in accordance with IFRS, and to individual and business unit performance targets. Of the total amount reserved for the profit sharing program, 50% is distributed in equal parts to all employees, while 50% is distributed proportionally to the employee’s salary.

For the 2018, 2017, 2016, 2015 and 2014 fiscal years, we distributed US$37.7 million, US$ 21.4 million, US$23.6 million, US$37.9 million and US$47.8 million, respectively, to our employees under our profit sharing plan.

Defined Contribution Pension Plan We sponsor a defined contribution pension plan for employees and the participation in this plan is optional. The plan is managed by EMBRAER PREV – Sociedade de Previdência Complementar. Contributions made by us to this plan in the years ended December 31, 2018, 2017, 2016, 2015 and 2014 were US$14.1, US$22.2 million, US$23.2 million, US$22.6 million and US$28.4 million, respectively. For further information on our post-retirement benefits, see note 25 to our 2018 audited consolidated financial statements.

Risk management studies are performed annually to identify the future exposure to be recorded as a provision. The provision recorded of medical benefits plan in Brazil was US$27.9 million as of December 31, 2018, US$31.8 million as of December 31, 2017 US$41.5 million as of December 31, 2016.

The actuarial methods used comply with the generally accepted actuarial methods in force, in accordance with the projected unit credit method.

D&O Insurance We maintain directors’ and officers’ liability insurance in an amount of US$100.0 million. This insurance covers liabilities resulting from wrongful acts, including any act or omission committed or attempted by any officer or director acting in his or her capacity as officer or director or any matter claimed against an officer or director solely due to his or her serving in such capacity.

6C. Board Practices Our board of directors is appointed for a two-year term. See “Item 6A. Directors and Senior Management—board of directors.”

The executive officers are elected by the board of directors. With the exception of Hélio Bambini Filho, who was elected on August 24, 2017, and Nelson Krahenbuhl Salgado, who was elected on April 17, 2018, our current executive officers were elected on April 12, 2017, with a term of office until the meeting of our board of directors to be held following the annual general meeting of our shareholders in April 2019 to approve our financial statements for the fiscal year ended December 31, 2018. The members of our board of directors and our executive officers have a uniform two-year term and are eligible for reelection. A vote of at least seven members of our board of directors is necessary to remove an executive officer. See “Item 6A. Directors and Senior Management—Executive Officers.”

88 An annual and extraordinary general shareholders’ meeting is scheduled to take place on April 22, 2019, in which, among other things, our shareholders will elect new directors and new members of the fiscal council.

None of our directors is party to an employment agreement providing for benefits upon termination of term. All of our executive officers are party to a service agreement setting forth the rights and obligations of the executive officers.

Audit and Risks Committee Our Audit and Risks Committee (internally called as “Audit, Risk and Ethics Committee”) has no executive power and may have up to five independent members. The primary purpose of the audit and risks committee is to assist the board of directors in its functions. The members of our board of directors may serve on the committee. The audit and risks committee’s responsibilities include validation and submission to the board of directors of guidelines for risk policy, verification of risk management policy compliance, supervision of activities performed by our independent auditors and monitoring the quality and integrity of internal controls and financial statements. Embraer’s statutory “audit and risks committee” is currently composed of four independent members of our board of directors.

Foreign private issuers are subject to local legislation which may prohibit the board of directors from delegating certain responsibilities to the audit committee, pursuant to Rule 10A-3 of the Exchange Act. Audit committees of foreign private issuers may be granted responsibilities, including advisory powers, with respect to certain matters to the extent permitted by law. Due to certain restrictions imposed by the Brazilian Corporate Law, our Audit and Risks Committee, unlike a U.S. audit committee, only has an “advisory” role and may only make recommendations for adoption by the full board of directors, which is responsible for the ultimate vote and final decision. For example, our Audit and Risks Committee makes recommendations regarding the appointment of auditing firms, which are subject to a vote by the board of directors. Our Audit and Risks Committee complies with Brazilian legal requirements (including for “independent directors,” as defined by Brazilian law).

Set forth below are the names, ages, position and the year first elected of the members of our Audit and Risks Committee appointed at our board of directors’ meeting held on April 12, 2017:

Name Age Position Year First Elected Sergio Eraldo de Salles Pinto 54 Coordinator and Effective member 2011 Israel Vainboim 74 Effective member 2011 João Cox Neto 55 Effective member 2015(1) Raul Calfat 66 Effective member 2017

(1) João Cox Neto was also a member of this committee from April 2011 through April 2013.

Fiscal Council (Conselho Fiscal) Under the Brazilian Corporate Law, the fiscal council is a corporate body independent of management and a company’s external auditors. The fiscal council has not typically been equivalent to or comparable with a U.S. audit committee. The primary responsibility of the fiscal council has been to monitor management’s activities, review the financial statements, and report its findings to the shareholders. In our case, our statutory audit and risks committee, established in accordance with the Novo Mercado Listing Rules, will serve as the equivalent of a U.S. audit committee. For further information on our committees, see “Item 6A. Directors and Senior Management—Committees.”

Under the Brazilian Corporate Law, the fiscal council may not have members who are members of the board of directors or the executive committee, or who are our employees or employees of a controlled company or of a company of this group, or a spouse or relative of any member of our management. In addition, the Brazilian Corporate Law requires that fiscal council members receive a remuneration of at least 10% of the average amount paid to each executive officer. The Brazilian Corporate Law requires a fiscal council to be composed of a minimum of three and a maximum of five members and their respective alternates.

89 Our fiscal council is composed of three to five members who are elected at the annual shareholders’ meeting, with terms lasting until the next annual shareholders’ meeting after their election. Under the Brazilian Corporate Law, if a company acquires control of another company, minority shareholders that in the aggregate hold at least 10% of the voting shares also have the right to elect separately one member of the fiscal council. This provision will not be applicable to us as long as we are subject to widespread control. Set forth below are the names, ages, the year first elected and positions of the members of our fiscal council and respective alternates, elected at our annual shareholders’ meeting held on April 12, 2017:

Name Age Position Year First Elected Ivan Mendes do Carmo(1) 56 Effective member 2008 Tarcísio Luiz Silva Fontenele 56 Alternate 2001 José Mauro Laxe Vilela(2) 71 Effective member 2011 Wanderley Fernandes da Silva 45 Alternate 2011 Mauricio Rocha Alves de Carvalho 57 Effective member 2016 Taiki Hirashima 78 Alternate 2004 João Manoel Pinho de Mello 45 Effective member 2018 Pedro Jucá Maciel 38 Alternate 2018 Wilsa Figueiredo 56 Effective member 2016 Luiz Claudio Moraes 57 Alternate 2016

(1) President of the Fiscal Council. (2) Vice-President of the Fiscal Council.

6D. Employees The table below sets forth the number of our employees by category at the dates indicated, and includes the employees of our wholly-owned subsidiaries. The total consolidated refers to all of our subsidiaries and joint ventures, including OGMA, ECTS, and Visiona:

As of December 31, 2018 2017 2016 2015 2014 Production Process 6,645 6,695 6,613 6,442 6,181 Research and Development 5,369 5,462 5,645 6,069 5,948 Customer Support 2,274 2,178 2,000 2,209 2,193 Administrative—Production Support 1,456 1,476 1,615 2,115 2,006 Administrative—Corporate 2,776 2,622 2,633 2,538 2,839 Total (including only wholly-owned subsidiaries of Embraer S.A) 18,520 18,433 18,506 19,373 19,167 Total Consolidated 20,530 20,320 20,348 23,050 22,301

Approximately 84% of our workforce is employed in Brazil. Most of our technical staff is trained at leading Brazilian engineering schools, including ITA, located in the city of São José dos Campos.

Embraer fully supports the choice of union association of its employees. In Brazil, 5.2% of the our employees are unionized, and, according to Brazilian labor laws, salary readjustments and other clauses negotiated in collective bargaining agreements extend to the entire category, resulting in 100% employees covered by clauses negotiated in these agreements.

We actively support the training and professional development of our employees. We have established a program at our facility in the city of São José dos Campos to provide newly graduated engineers with specialized training in aerospace engineering.

90 6E. Share Ownership As of December 31, 2018, our board members owned 1,201 of our common shares, our executive officers owned 1,010 of our common shares and each fiscal council members owned one of our common shares. None of the officers or directors individually owns more than 1% of the outstanding common shares. See “Item 6B. Compensation—Stock Option Plan” for a description of our stock option plan applicable to our management and employees, including those of our subsidiaries.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7A. Major Shareholders Shareholders We have total authorized capital of 1,000,000,000 shares, with an aggregate of 740,465,044 common shares, including one special “golden share” held by the Brazilian government, issued and outstanding. The golden share provides the Brazilian government with veto rights in certain specific circumstances. In addition, non-Brazilian shareholders may have their voting rights restricted in certain specific circumstances. For further information on the voting rights of our common shares, see “Item 10B. Additional Information—Memorandum and Articles of Association—Description of Capital Stock—Voting Rights of Shares.”

The table below sets forth information related to the amount of shares held by our significant shareholders. As of the date of this annual report, in accordance with the most recent shareholder position informed to us:

Common Shares Shares(1) (%) Brandes Investment Partners, L.P.(2) 106,656,095 14.40 Mondrian Investments Partners Limited(3) 73,587,000 9.94 BNDES Participações S.A.BNDESPAR(4) 39,762,489 5.37 Blackrock INC(5) 37,176,992 5.02 União Federal/Brazilian government(6) 1 0.00 Shares in company treasury 4,636,258 0.63 Others 478,646,209 64.64 Total 740,465,044 100.00

(1) The amount of shares includes our ADS. (2) Brandes Investment Partners, L.P. is a 100% employee-owned independent investment advisory firm founded and co-owned by Charles Howard Brandes. The firm manages the Brandes series of mutual funds in addition to other funds and caters to individual and institutions. (3) Mondrian Investment Partners Limited was founded in 1990, is an independent, employee-owned, global investment manager with offices in London and Philadelphia. The firm launches and manages equity, fixed income, and balanced mutual fund and invests in the public equity and fixed income markets across the globe. (4) BNDESPAR is a wholly-owned subsidiary of Banco Nacional de Desenvolvimento Econômico e Social–BNDES, the government-owned national development bank of Brazil. (5) Blackrock INC. is an American global investment management corporation based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is the world’s largest asset manager. (6) The Brazilian government holds our “golden share.”

There have been no significant changes in percentage ownership by any major shareholder in the past three years. On December 31, 2018, we had approximately 41,531 holders of common shares, including common shares in the form of ADSs. According to the most accurate information available to us, on December 31, 2018, an aggregate of 86,508,495 common shares in the form of ADSs were held by 139 record holders, including DTC in the United States.

91 7B. Related Party Transactions The Brazilian Government The Brazilian government, through its direct and indirect stakes in us and its ownership of our “golden share,” is one of our major shareholders. The issuance of the “golden share” was a requirement of the regulations governing our privatization in 1994 and grants the Brazilian government veto rights over certain military-related programs and corporate actions (including transfers of control and changes in our name, logo and corporate purposes). For further information on the voting rights of our golden share, see “Item 10B. Additional Information—Memorandum and Articles of Association—Description of Capital Stock—Voting Rights of Shares—Golden Share.” As of December 31, 2018, in addition to the “golden share,” the Brazilian government owned an indirect 5.37% stake in us through BNDESPAR, a wholly-owned subsidiary of BNDES, which, in turn, is controlled by the Brazilian government. As a result, for the purposes of this annual report’s disclosure requirements, we consider transactions between Embraer and the Brazilian government or its agencies as falling within the definition of “related party transactions.”

The Brazilian government plays an important role in our business activities, including as: • a major customer of our defense products, through the Brazilian Air Force; • a source for research debt financing through technology development institutions, including FINEP and BNDES; • an export credit agency, through BNDES; and • a source of short-term and long-term financing and a provider of asset management and commercial banking services, through Banco do Brasil.

For further information on the role of the Brazilian government in our business activities, see “Item 5B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Credit Facilities and Lines of Credit,” “Item 4B. Information on the Company—Business Overview—Aircraft Financing Arrangements,” “Item 3D. Key Information—Risk Factors—Risks Relating to Embraer—Any decrease in Brazilian government-sponsored customer financing, or increase in government-sponsored financing that benefits our competitors, may decrease the cost competitiveness of our aircraft” and “Item 3D. Key Information—Risk Factors—Risks Relating to Embraer—Any decrease in Brazilian government-sponsored customer financing, or increases in government sponsored financing that benefits our competitors, may decrease the competitiveness of our aircraft.” For further information regarding our related party transactions, see Note 15 to our 2018 audited consolidated financial statements.

A Major Customer (Brazilian Government) The Brazilian government, mainly through the Brazilian Air Force, has been a significant customer of Embraer since its inception. For the year ended December 31, 2018, the Brazilian government, mainly through the Brazilian Air Force, accounted for 48.1 % or US$ 346.7 million of the revenue of our Defense and Security business. In addition, as of December 31, 2018, the Brazilian Air Force owed us US$90.3 million in trade account receivables and had a credit against us of US$42.3 million in customer advances. We expect to continue to be the primary source of new aircraft and spare parts and services for the Brazilian government. For a description of our transactions with the Brazilian government, see “Item 4B. Information on the Company—Business Overview—Defense and Security Business.”

Financing Source BNDES We are borrowers under a number of credit facilities from BNDES, the sole parent of BNDESPAR, one of our significant direct shareholders and an affiliate of the Brazilian government. As of December 31, 2018, we had a total outstanding balance of loans borrowed from BNDES in the aggregate amount of US$ 191.5 million. For further information on the amounts, maturity dates and interest rates of the principal loans we have with BNDES, see “Item 5B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Credit Facilities and Lines of Credit.”

92 FINEP We maintain credit facilities with FINEP, which as of December 31, 2018, had a total outstanding balance of US$ 56.6 million. These loans were extended to us primarily to fund research and development expenses of the Phenom 100 and 300 aircraft and the Legacy 500 aircraft. For further information on the amounts, maturity dates and interest rates of the principal loans we have with FINEP, see “Item 5B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Credit Facilities and Lines of Credit.”

Banco do Brasil Banco do Brasil is a publicly-listed, state-owned bank controlled by the Brazilian government. As of December 31, 2018, we maintained outstanding non-recourse and recourse debt with Banco do Brasil in the total amount of US$314.3 million, which is recorded as a non-current liability on our statement of financial position.

Customer Financing by BNDES The Brazilian government has been an important source of export financing for our customers through BNDES-exim program, managed by BNDES. For further information on our aircraft financing arrangements, see “Item 4B. Information on the Company—Business Overview—Aircraft Financing Arrangements”.

A Service Provider (Banco do Brasil) As of December 31, 2018, we maintained cash and cash equivalents of US$12.3 million with Banco do Brasil and several of its affiliates. As of that date, we also had deposited with Banco do Brasil an amount of US$ 314.3 million, which served as collateral for a loan extended by Banco do Brasil to one of our subsidiaries. Banco do Brasil has been a provider of regular commercial banking and asset management services to us for many decades and is one of the banks responsible for the payment of our payroll expense. We maintained US$9.4 million deposited as collateral for a loan with BNDES. These services include maintaining our checking account.

7C. Interests of Experts and Counsel Not applicable.

ITEM 8. FINANCIAL INFORMATION 8A. Consolidated Statements and Other Financial Information See “Item 3A. Key Information—Selected Financial Data.”

Legal Proceedings Labor Lawsuits. We are defendants in individual labor lawsuits, for which we are awaiting the decision of the Brazilian labor courts. Due to the immaterial amount involved in these legal proceedings, we do not believe that any liabilities related to these individual labor lawsuits would have a material adverse effect on our financial condition or results of operations. For a further discussion of our labor lawsuits, see notes 21 and 24to our 2018 audited consolidated financial statements.

93 Tax Matters. We have challenged the constitutionality of certain Brazilian taxes and payroll charges, as well as modifications and the increases in the rates and basis of calculation of those taxes and charges and have obtained writs of mandamus or injunctions to avoid their payments or recover past payments.

Interest on the total amount of unpaid taxes and payroll charges accrues monthly based on the SELIC rate, the key lending rate of the Central Bank, and we make an accrual to the interest income (expenses), net line item of our statements of income. As of December 31, 2018, there was a US$58.0 million provision recorded as a liability (taxes and labor related) on our statement of financial position in connection with litigation contingencies that we classify as representing probable losses to us. For a further discussion of these challenges, see Note 24 to our 2018 audited consolidated financial statements.

SEC/DOJ and Brazilian Public Prosecutor’s Investigations. On October 24, 2016 we entered into the Final Agreements with the DOJ and the SEC for the settlement of criminal and civil violations of the FCPA. We also finalized the TCAC with the MPF and the CVM for the resolution of violations of certain Brazilian laws.

Under the Final Agreements with the DOJ and the SEC: • We agreed to pay US$98.2 million to the SEC (of which US$20.0 million was due to the MPF and the CVM under the TCAC, as described below), as disgorgement of profits. • We agreed to pay US$107.3 million to the DOJ, as penalty for one count of conspiracy to violate the anti-bribery and books and records provisions of the FCPA and one count of violating the internal controls provisions of the FCPA. • The DOJ agreed to defer prosecution for three years for the acts acknowledged by us in a DPA, after which period the charges will be dismissed if we do not violate the terms of the DPA. • We agreed to an external and independent monitorship for a period of three years.

Simultaneously with the Final Agreements, we finalized a TCAC with the MPF and the CVM to settle any potential claims that could be brought in court (ação civil pública) or through administrative proceedings (processo administrativo sancionador) in Brazil. The TCAC has also been approved by the relevant authorities and is fully effective.

Under the TCAC, we acknowledged violations of certain Brazilian laws between 2007 and 2011 and agreed to: • Pay a total equivalent to US$20.0 million to a Brazilian federal fund (Fundo de Defesa dos Direitos Difusos), as disgorgement of illegal profits, damages, and as a deterrent against similar practices. The amount payable under the TCAC was deducted from the amount payable under the Final Agreements. • Cooperate with the MPF and the CVM in lawsuits and administrative proceedings against individuals arising out of the acts acknowledged in the TCAC.

Under the TCAC, the MPF and the CVM acknowledged that (i) we voluntarily conducted a broad internal investigation, which assisted in uncovering facts that were the subject of criminal and administrative investigations, and (ii) we approached the Brazilian authorities pro-actively and in good faith, and they agreed that: • The MPF will not file suit (ação civil pública and ação de improbidade administrativa) against us arising out of the acts we have acknowledged and will terminate proceedings now underway. • The CVM will end an ongoing administrative proceeding arising out of the acts we have acknowledged. • The MPF and the CVM will inform other Brazilian federal agencies of the terms of the TCAC and cooperate with us in seeking that these agencies take the TCAC into consideration should other proceedings regarding the acknowledged acts be brought.

On February 22, 2017, in compliance with the Final Agreements, we hired the lawyer Alexandre Herman Rene as our external independent monitor, with the approval of the DOJ and the SEC, to assess our compliance with the Final Agreements, especially regarding the effectiveness of controls and procedures to reduce the risk of any FCPA violations. The monitor has been preparing annual reports containing certain observations and recommendations to further improve our anti-corruption and compliance policies and procedures.

94 The Final Agreements and the TCAC represent the conclusion of the internal investigation of allegations of noncompliance with the FCPA and certain Brazilian laws in four aircraft sales outside Brazil between 2007 and 2011.

Related proceedings and developments are ongoing and could result in additional fines, and possibly other sanctions and adverse consequences, which may be substantial. We believe that there is no adequate basis at this time for estimating accruals or quantifying any contingency with respect to these matters.

We will continue to cooperate with governmental authorities, as circumstances may require. In this regard, on February 23, 2017, we entered into an Exoneratory Agreement with Mozambican authorities for collaboration with the investigations in that country and under which there are no financial obligations for Embraer. In July 2018 we entered into a collaboration agreement with the Attorney General’s Office of the Dominican Republic in exchange for our cooperation with ongoing investigations in that country and paid US$7.0 million to the Dominican Republic.

Since the beginning of the internal investigation in 2011, we embarked on a comprehensive effort to improve and expand our compliance program worldwide. This multi-year task involved reexamining our compliance systems, and where appropriate, redesigning or adding to them. Some of the key enhancements include the creation of a Compliance Department; the appointment of a Chief Compliance Officer who is currently also our general counsel, which, for these compliance matters, reports directly to the Risk and Audit Committee of the board of directors; the development of a program to monitor engagement of and payments to third parties; improvements to compliance policies, procedure and controls; the enhancement of anonymous and other reporting channels; and the development of a comprehensive training and education program designed to maintain and reinforce a strong compliance culture at all levels of Embraer globally. We will continue to promote enhancements and update its compliance program.

Other Proceedings In addition, we are involved in other legal proceedings, all of which are in the ordinary course of business.

Our management does not believe that any of our proceedings, if adversely determined, would materially or adversely affect our business, financial condition or results of operations. For further information on our legal proceedings, see notes 21 and 24 to our 2018 audited consolidated financial statements.

Class Action In August 2016, a putative securities class action was filed in a U.S. court against the Company and certain of its former and current executives. On March 30, 2018, the court granted a motion to dismiss in our favor, and the plaintiffs did not appeal against this decision. Therefore, this class action was dismissed.

Dividends and Dividend Policy Amounts Available for Distribution At each annual shareholders’ meeting, the board of directors is required to recommend how net profits for the preceding fiscal year are to be allocated. For purposes of the Brazilian Corporate Law, net profits are defined as net income after income taxes and social contribution taxes for the fiscal year, net of any accumulated losses from prior fiscal years and any amounts allocated to employees’ and management’s participation in our profits, determined under IFRS. In accordance with the Brazilian Corporate Law and our bylaws, the amounts available for dividend distribution are the amounts determined under IFRS in our parent company financial statements. The amount for distribution is equal to our net income after taxes less (or plus): • any amounts allocated from the net income after taxes to the legal reserve, and • any amounts allocated from the net income after taxes to a contingency reserve for anticipated losses or the reversion of the reserve constituted on previous fiscal years.

95 For further information on amounts available for distributions, see Note 27 to our 2018 audited consolidated financial statements.

We are required to maintain a legal reserve, to which we must allocate 5% of net profits for each fiscal year until the amount for the reserve equals 20% of our capital stock. However, we are not required to make any allocations to our legal reserve in respect of any fiscal year in which the legal reserve, when added to our other established capital reserves, exceeds 30% of our capital stock. Net losses, if any, may be charged against the legal reserve. The balance of our legal reserve was US$204.4 million, which was equal to 13.1% of our capital stock as of December 31, 2018.

The Brazilian Corporate Law also provides for two additional, discretionary allocations of net profits that are subject to approval by the shareholders at the annual meeting. First, a percentage of net profits may be allocated to a contingency reserve for anticipated losses that are deemed probable in future years. Any amount so allocated in a prior year must be either reversed in the fiscal year for which the anticipated loss was forecasted if the loss does not in fact occur, or written off in the event that the anticipated loss occurs. Second, the amount for distribution may be limited to the fiscal year’s net profit already realized, and the difference between the amounts shall be allocated to an unrealized revenue reserve. Under the Brazilian Corporate Law, unrealized revenue is defined as the sum of: • price-level restatement of statement of financial position accounts; • the share of equity earnings of affiliated companies; and • profits from installment sales to be received after the end of the next succeeding fiscal year.

According to our bylaws and subject to shareholder approval, our board of directors may allocate to an investment and working capital reserve up to 75% of our parent company adjusted net income after taxes under IFRS. The reserve may not exceed 80% of our capital stock. The purpose of the investment and working capital reserve is to make investments in fixed assets or increase our working capital. The balance of the investment and working capital reserve may be used: • in the deduction of accumulated losses, whenever necessary; • in the distribution of dividends, at any time; • in the redemption, withdrawal, purchase or open market repurchase of shares, as authorized by law; and • to increase our capital, including by means of an issuance of new shares.

We may also grant a participation in our net income to our management and employees. However, the allocation to the investment and working capital reserve or the participation of our management and employees cannot reduce the mandatory distributable amount, as discussed below.

Otherwise, the reserved amounts, except for the contingency reserve and the unrealized revenue reserve that exceeds our capital stock must be used to increase our capital or be distributed as a cash dividend.

The amounts available for distribution may be further increased by a reversion of the contingency reserve for anticipated losses constituted in prior years but not realized, or further increased or reduced as a result of the allocations of revenues to or from the unrealized revenue reserve. The amounts available for distribution are determined on the basis of financial statements prepared in accordance with the Brazilian Corporate Law method. We have not established a contingency reserve.

As of December 31, 2018, unappropriated retained earnings of US$2,182.3 million were recorded in our statutory parent company books under IFRS. As of December 31, 2018, the amounts are net of minimum dividends and interest on shareholders’ equity paid or payable, as determined by the Brazilian Corporate Law.

For further dividends information, see Note 27 to our 2018 audited consolidated financial statements.

Mandatory Distribution The Brazilian Corporate Law generally requires that the bylaws of each Brazilian corporation specify a minimum percentage of the amounts available for distribution by the corporation for each fiscal year that dividends must be distributed to shareholders, also known as the mandatory distributable amount. Under our bylaws, the mandatory distribution is based on a percentage of adjusted net income, not lower than 25%, and not on a fixed monetary amount per share. The Brazilian Corporate Law, however, permits a publicly held company to suspend the mandatory distribution of dividends if the board of directors and fiscal council report presented at the shareholders’ meeting indicate that the distribution would be inadvisable in view of Embraer’s financial condition. This suspension is subject to approval of holders of common shares. In this case, the board of directors shall file a justification for the suspension with the CVM. Profits not distributed by virtue of the suspension will be attributed to a special reserve and, if not absorbed by subsequent losses, will be paid as dividends as soon as the financial condition of the corporation permits the payments.

96 Payment of Dividends We are required by the Brazilian Corporate Law and by our bylaws to hold an annual shareholders’ meeting by the end of the fourth month after the end of each fiscal year at which, among other things, the shareholders have to decide on the payment of an annual dividend. The payment of annual dividends is based on our parent company financial statements prepared under IFRS for the relevant fiscal year. Brazilian companies, including us, are permitted to make a special distribution to shareholders referred to as interest on shareholders’ equity, which may be distributed in lieu of dividends as part of the mandatory distributable amount. Payments of interest on shareholders’ equity are treated as a tax-deductible expense for IRPJ and CSLL purposes. Under the Brazilian Corporate Law, dividends generally are required to be paid within 60 days following the date the dividend was declared, unless a shareholders’ resolution sets forth another date of payment, which, in either case, must occur prior to the end of the fiscal year in which the dividend was declared. A shareholder has a three-year period from the dividend payment date to claim dividends (or payments of interest on shareholders’ equity) in respect of its shares, after which the amount of the unclaimed dividends reverts to the Company.

The Brazilian Corporate Law allows a company to pay interim dividends out of preexisting and accumulated profits determined under IFRS for the preceding fiscal year or semester, based on financial statements approved by its shareholders. According to our bylaws, the shareholders may declare, at any time, interim dividends based on the preexisting and accumulated profits, provided that the mandatory dividend has already been distributed to the shareholders. Our bylaws also permit us to prepare financial statements semiannually and for shorter periods. Our board of directors may approve the distribution of dividends calculated with reference to those financial statements, even before they have been approved by the shareholders. However, the dividends cannot exceed the amount of capital reserves.

In general, shareholders who are not residents of Brazil must register with the Central Bank to have dividends, sales proceeds or other amounts with respect to their shares eligible to be remitted outside of Brazil. The common shares underlying our ADSs will be held in Brazil by Banco Itaú S.A., also known as the custodian, as agent for the depositary, which will be the registered owner on the records of the registrar for our shares. Our current registrar is Banco Itaú Corretora de Valores S.A.. The depositary electronically registers the common shares underlying our ADSs with the Central Bank and, therefore, is able to have dividends, sales proceeds or other amounts with respect to these shares eligible to be remitted outside Brazil.

Payments of cash dividends and distributions, if any, will be made in Brazilian currency to the custodian on behalf of the depositary, which will then convert the proceeds into U.S. dollars and will cause the U.S. dollars to be delivered to the depositary for distribution to holders of ADSs. Under current Brazilian law, dividends paid to shareholders who are not Brazilian residents, including the holders of ADSs, will not be subject to Brazilian withholding income tax, except for dividends declared based on profits generated prior to December 31, 1995. For further information on Brazilian taxes, see “Item 10E. Additional Information—Taxation—Material Brazilian Tax Consequences.”

History of Dividend and Interest on Shareholders’ Equity Payments and Dividend Policy Law No. 9,249, dated December 26, 1995, as amended, provides for distribution of interest on shareholders’ equity as an alternative form of payment to shareholders and treats those payments as a deductible expense for purposes of calculating Brazilian corporate income tax and social contribution on net profits. These distributions may be paid in cash. The interest is limited to the daily pro rata variation of the TJLP (long term interest rate) and cannot exceed the greater of: • 50% of net income (after the deduction of social contribution on net profits, but before taking into account the provision for corporate income tax and the amounts attributable to shareholders as net interest on shareholders’ equity) for the period in respect of which the payment is made; or • 50% of the sum of retained profits and profit reserves as of the beginning of the period in respect of which the payment is made.

Any payment of interest on shareholders’ equity to holders of ADSs or common shares, whether or not they are Brazilian residents, is subject to Brazilian withholding income tax at the rate of 15% or 25% if the beneficiary is resident in a tax haven jurisdiction, that is, a country or location that does not impose any income tax or which imposes the tax at a maximum rate of less than 20%, or in which the domestic legislation imposes restrictions on the disclosure of the shareholding composition or the ownership of the investment. For further information on Brazilian taxes, see “Item 10E. Additional Information—Taxation—Material Brazilian Tax Consequences.” The amount paid to shareholders as interest on shareholders’ equity, net of any withholding tax, may be included as part of any mandatory distributable amount.

97 Under Brazilian law, we are obligated to distribute to shareholders an amount sufficient to ensure that the net amount received by them, after payment by us of applicable Brazilian withholding taxes in respect of the distribution of interest on shareholders’ equity, plus the amount of declared dividends, is at least equal to the mandatory distributable amount. When we distribute interest on shareholders’ equity, and that distribution is not accounted for as part of the mandatory distribution, Brazilian withholding tax will apply. All payments to date were accounted for as part of the mandatory distribution.

The following table sets forth the historical payments of dividends and historical payments of interest on shareholders’ equity we have made to our shareholders:

Date of Approval Period in which Profits were Generated Total Amount of Distribution (in R$ millions) (in US$ millions)(1) April 15, 2015(3) Full year of 2014 16.1 6.1 March 03, 2015(2) First quarter of 2015 29.4 9.2 June 11, 2015(2) Second quarter of 2015 29.4 9.5 August 06, 2015(2) Third quarter of 2015 29.4 8.3 December 10, 2015(2)(4) Fourth quarter of 2015 29.5 7.6 March 10, 2016(2) First quarter of 2016 29.5 8.3 June 9, 2016(2) Second quarter of 2016 29.4 9.2 September 15, 2016(2) Third quarter of 2016 14.7 4.5 March 8, 2017(2) First quarter of 2017 29.4 9.3 April 12, 2017(3) Full year of 2016 75.0 23.4 June 2, 2017(2) Second quarter of 2017 29.4 8.9 September 6, 2017(2) Third quarter of 2017 29.3 9.2 December 14, 2017(2)(5) Fourth quarter of 2017 66.0 19.9 March 5, 2018(2) First quarter of 2018 14.7 4.4 June 14, 2018(2) Second quarter of 2018 14.7 3.8 September 13, 2018(3) Full year of 2018 7.3 1.8 December 14, 2018(3)(6) Full year of 2018 7.4 1.9

(1) Translated from nominal reais into U.S. dollars at the selling exchange rates in effect on the last date of the month in which the dividends were approved. (2) Represents interest on shareholders’ equity. (3) Represents dividend payments. (4) Amount declared in 2015 but paid in 2016. (5) Amount declared in 2017 but paid in 2018. (6) Amount declared in 2018 but paid in 2019.

In 2018, we distributed US$ 11.9 million in interest on shareholders’ equity and interim dividends approved by Statutory Board of Directors in connection with shareholders’ equity reserves. In 2017, we distributed US$47.3 million in interest on shareholders’ equity in connection with profits generated in the year ended December 31, 2017. No dividends were approved for 2016. For further information on mandatory distribution of dividends, see “Item 8A. Financial Information—Mandatory Distribution.”

We intend to declare and pay dividends and/or interest on shareholders’ equity, as required by the Brazilian Corporate Law and our bylaws. Our board of directors may approve the distribution of dividends and/or interest on shareholders’ equity, calculated based on our semiannual or quarterly financial statements. The declaration of annual dividends, including dividends in excess of the mandatory distribution, requires approval by the vote of the majority of the holders of our common shares. The amount of any distributions will depend on many factors, including our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our board of directors and shareholders. Within the context of our tax planning, we may in the future continue to determine that it is in our benefit to distribute interest on shareholders’ equity.

8B. Significant Changes No significant changes or events have occurred after the close of the statement of financial position date as of December 31, 2018, other than the events already described in this annual report.

98 ITEM 9. THE OFFER AND LISTING 9A. Offer and Listing Details Our ADSs are listed on the New York Stock Exchange, or NYSE, under the symbol “ERJ.” In addition, our common shares are traded on the B3 under the symbol “EMBR3.” Each ADS represents four common shares.

Our ADSs began trading on the NYSE on June 5, 2006, with each ADS representing four common shares issued by us. The ADSs are issued under a deposit agreement and JPMorgan Chase Bank N.A., or JP Morgan, serves as depositary under that agreement.

9B. Plan of Distribution Not applicable.

9C. Markets Trading on the B3 In 2000, the São Paulo Stock Exchange, currently called the B3, was reorganized through the execution of memoranda of understanding by the Brazilian stock exchanges. Under the memoranda, all securities are now traded only on the B3, with the exception of electronically traded public debt securities and privatization auctions, which are traded on the Rio de Janeiro Stock Exchange.

Our common shares are listed and traded on the Novo Mercado segment of the B3. Trades in our common shares on the B3 settle in three business days after the trade date. Delivery of and payment for shares is made through the facilities of the CBLC—Companhia Brasileira de Liquidação e Custódia (clearinghouse for the B3), which maintains accounts for member brokerage firms.

In order to better control volatility, the B3 adopted a “circuit breaker” system pursuant to which trading sessions may be suspended for a period of 30 minutes or one hour whenever the indices of this stock exchange fall below the limit of 10% and 15%, respectively, in relation to the closing value of the index registered in the previous trading session.

The B3 is less liquid than the NYSE and other major exchanges in the world. The B3 had an aggregate market capitalization of approximately R$3.6 trillion, equivalent to US$916billion as of December 31, 2018. In comparison, the NYSE had a market capitalization of approximately US$20.7 trillion on the same date. Although any of the outstanding shares of a listed company may trade on the B3, in most cases less than one-half of the listed shares are actually available for trading by the public, the remainder being held by small groups of controlling persons, by governmental entities or by one principal shareholder. As of December 31, 2018, we accounted for approximately 0.5% of the market capitalization of all listed companies on the B3.

There is also significantly greater concentration in the Brazilian securities markets than in the NYSE or other major exchanges. During the one-year period ended December 31, 2018, the ten largest companies listed on the B3 represented approximately 46.0% of the total market capitalization of all listed companies.

Trading on the B3 by non-residents of Brazil is subject to limitations under Brazilian foreign investment legislation.

Novo Mercado Corporate Governance Practices In 2000, the B3 introduced three special listing segments, known as Levels 1 and 2 of Differentiated Corporate Governance Practices and the Novo Mercado, aiming at fostering a secondary market for securities issued by Brazilian companies with securities listed on the B3, by prompting these companies to follow good practices of corporate governance. The listing segments were designed for the trading of shares issued by companies voluntarily undertaking to abide by corporate governance practices and disclosure requirements in addition to those already imposed by Brazilian law. These rules generally increase shareholders’ rights and enhance the quality of information provided to shareholders.

99 To become a Level 1 (Nível 1) company, in addition to the obligations imposed by current Brazilian law, an issuer must agree to (i) ensure that shares of the issuer representing 25% of its total capital are effectively available for trading, (ii) adopt offering procedures that favor widespread ownership of shares whenever making a public offering, (iii) comply with minimum quarterly disclosure standards, (iv) follow stricter disclosure policies, with regards to contracts with related parties, material contracts and transactions made by controlling shareholders, directors and officers involving securities issued by the issuer, (v) submit any existing shareholders’ agreements and stock option plans to the B3 and (vi) make a schedule of corporate events available to shareholders.

To become a Level 2 (Nível 2) company, in addition to the obligations imposed by current Brazilian law, an issuer must agree to (i) comply with all of the listing requirements for Level 1 companies, (ii) grant tag-along rights for all shareholders in connection with a transfer of control of the company, offering the same price paid per share for controlling block, (iii) grant voting rights to holders of common shares in connection with certain corporate restructurings and related party transactions, including (1) any transformation of the company into another corporate form, (2) any merger, consolidation or spin-off of the company, (3) approval of any transactions between the company and its controlling shareholder, including parties related to the controlling shareholder, (4) approval of any valuation of assets to be delivered to the company in payment for shares issued in a capital increase, (5) appointment of an expert firm to ascertain the fair value of the company in connection with any deregistration and delisting tender offer, and (6) any changes to these voting rights, (iv) have a board of directors composed of at least five members, of which 20% must be independent directors, with a term limited to two years, (v) prepare annual financial statements in English, including cash flow statements, in accordance with international accounting standards, such as U.S. GAAP or IFRS, (vi) if it elects to delist from the Level 2 segment, hold a tender offer by the company’s controlling shareholder (the minimum price of the shares to be offered will be determined by an appraisal process), and (vii) adhere exclusively to the rules of the B3 Arbitration Chamber for resolution of disputes between the company and its investors.

To be listed on the Novo Mercado, an issuer must meet all of the requirements described above, in addition to (i) issuing only voting shares, (ii) have at least two, or the equivalent of 20% of the board members, whichever is bigger, independent members on the board of directors, with a term limited to two years, (iii) follow stricter disclosure policies with regards to the company’s policies, the internal rules of procedures, the code of business conduct and periodic reports of the audit committee, and (iv) adopt stricter compliance procedures, including an audit committee, an internal audit and other risk management controls. Regarding the obligation to ensure that shares of the issuer representing 25% of its total capital are effectively available for trading, for the companies listed on the Novo Mercado, the threshold might be reduced to 15% of its capital stock, provided its average daily trading volume remains equal to or greater than R$25.0 million, taking into account the trades performed during the previous 12 months. Our shares are listed on the Novo Mercado segment.

Regulation of Brazilian Securities Markets The Brazilian securities markets are regulated by the CVM (the Brazilian Securities and Exchange Comission), which has regulatory authority over stock exchanges and the securities markets generally, and by the Central Bank, which has, among other powers, licensing authority over brokerage firms and regulates foreign investment and foreign exchange transactions.

Under the Brazilian Corporate Law, a corporation is either public (companhia aberta), like us, or closely held (companhia fechada). All public companies, including us, are registered with the CVM and are subject to reporting requirements. Our shares are listed and traded on the Novo Mercado segment of the B3 and may be traded privately subject to limitations. 100 We have the option of asking for the trading of our securities on the B3 to be suspended in anticipation of a material announcement. Trading may also be suspended on the initiative of the B3 or the CVM, among other reasons, based on or due to a belief that the company has provided inadequate information regarding a material event or has provided inadequate responses to the inquiries by the CVM or the B3.

Trading on the B3 by non-residents of Brazil is subject to limitations under Brazilian foreign investment and tax legislation. The Brazilian custodian for our common shares and the depositary for our ADSs have obtained an electronic certificate of registration from the Central Bank to remit U.S. dollars abroad for payments of dividends, any other cash distributions, or upon the disposition of the shares and sales proceeds thereto. Pursuant to CMN Resolution No. 4,373, in order for an investor to surrender ADSs for the purpose of withdrawing the shares represented thereby, the investor is required to appoint a Brazilian financial institution duly authorized by the Central Bank and the CVM to act as its legal representative, who shall be responsible, among other things, for keeping and updating the investors’ certificates of registrations with the Central Bank, which entitles registered foreign investors to trade the underlying shares directly on the B3.

Disclosure Requirements Pursuant to CVM Rule No. 358, of January 3, 2002, the CVM revised and consolidated the requirements regarding the disclosure and use of information related to material facts and acts of publicly held companies, including the disclosure of information on the trading and acquisition of securities issued by publicly held companies.

These requirements include provisions that: • establish the concept of a material fact that gives rise to reporting requirements. Material facts include decisions made by the controlling shareholders, resolutions of the general meeting of shareholders and of management of the company, or any other facts related to the company’s business (whether occurring within the company or otherwise somehow related thereto) that may influence the price of its publicly traded securities, or the decision of investors to trade those securities or to exercise any of those securities’ underlying rights; • specify examples of facts that are considered to be material, which include, among others, the execution of shareholders’ agreements providing for the transfer of control, the entry or withdrawal of shareholders that maintain any managing, financial, technological or administrative function with or contribution to the company, and any corporate restructuring undertaken among related companies; • oblige the investor relations officer, controlling shareholders, other officers, directors, members of the audit committee and other advisory boards to disclose material facts; • require simultaneous disclosure of material facts to all markets in which the corporation’s securities are admitted for trading; • require the acquirer of a controlling stake in a corporation to publish material facts, including its intentions as to whether or not to de-list the corporation’s shares, within one year; • establish rules regarding disclosure requirements in the acquisition and disposal of a material stockholding stake; and • restrict the use of insider information.

101 9D. Selling Shareholders Not applicable.

9E. Dilution Not applicable.

9F. Expenses of the Issue Not applicable.

ITEM 10. ADDITIONAL INFORMATION 10A. Share Capital Not applicable.

10B. Memorandum and Articles of Association Set forth below is certain information concerning our capital stock, and a brief summary of certain significant provisions of our bylaws, the Brazilian Corporate Law, the relevant rules and regulations of the CVM, and the relevant rules of the Novo Mercado applicable to our capital stock. This description does not purport to be complete and is qualified by reference to our bylaws and to Brazilian law.

Corporate Purpose We are a corporation duly incorporated with a principal place of business and jurisdiction in the city of São José dos Campos, São Paulo, Brazil, governed mainly by our bylaws and the Brazilian Corporate Law. According to article I of our bylaws, our corporate purpose is to (i) design, build and market aircraft and aerospace materials and related accessories, components and equipment, according to the highest standards of technology and quality, (ii) perform and carry out technical activities related to the manufacturing and servicing of aerospace materials, (iii) contribute to the training of technical personnel as necessary for the aerospace industry, (iv) engage in other technological, manufacturing and business activities in connection with the aerospace industry, and to provide services therefore, (v) design, build and trade equipment, materials, systems, software, accessories and components for the defense, security and power industries, as well as to perform and carry out technical activities related to the manufacturing and maintenance activities, according to the highest standards of technology and quality, and (vi) conduct other technological, manufacturing and trade activities and services related to the defense, security and power industries.

Description of Capital Stock General As of December 31, 2018, our capital stock consisted of a total of 740,465,044 common shares, without par value, including 4,977,698 common shares held in treasury and one special class of common share known as the “golden share,” held by the Brazilian government. Our bylaws authorize the board of directors to increase the capital stock up to 1,000,000,00 common shares without seeking specific shareholder approval. All of our 735, 482,105 outstanding shares are fully paid. Our shareholders must approve at a shareholders’ meeting any capital increase that exceeds the above-referenced authorized amounts. Our shareholders are not liable for further capital calls. Their liability is limited to the amount of any portion of our capital which they have subscribed but not fully paid in.

Share Buyback Pursuant to our bylaws, our board of directors approved on December 7, 2007 a share buyback program for our common shares, in compliance with Instrução CVM No. 10/80, for the purpose of adding value to our shareholders through the management of our capital structure. We were authorized to buy back up to an aggregate of 16,800,000 common shares, representing approximately 2.3% of our outstanding capital, which totaled 740,465,044 common shares outstanding. The acquisition of the shares was made on the B3 and the common shares bought back will be kept in treasury form, and the treasury shares would not have any political or economic rights. The program was terminated on March 31, 2008. A total of 16,800,000 shares were purchased at an average price of R$19.06 per share. See “Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.”

102 On March 10, 2016, our board of directors approved a new share buyback program for our common shares, in compliance with Instrução CVM No. 10/80. We were authorized to buy back up to an aggregate of 3,000,000 common shares, representing approximately 0.4% of our outstanding capital, which totaled 737,439,054 common shares outstanding on March 10, 2016. The common shares were repurchased from March 17 through June 30.

On June 02, 2017, our board of directors approved a new share buyback program for our common shares, in compliance with Instrução CVM No. 10/80. We were authorized to buy back up to an aggregate of 3,000,000 common shares, representing approximately 0.4% of our outstanding capital, which totaled 735,752,704 common shares outstanding on June 2, 2017. The common shares were repurchased from June 6 through August 29, 2017.

In 2018, we did not approve a share buyback program.

Common Shares Each common share is generally empowered with one vote at our shareholders’ meetings. Pursuant to our bylaws and the B3 listing agreement in connection with the listing of our shares on the Novo Mercado, we cannot issue shares without voting rights or with restricted voting rights.

The Brazilian Corporate Law and our bylaws require that all our shareholders’ meetings be called by publication of a notice in the Diário Oficial do Estado de São Paulo (official government publication of the State of São Paulo), and in a newspaper of general circulation in the city where our headquarters are located, currently the O Vale in São José dos Campos, at least 30 days prior to the meeting, and in another newspaper of general circulation in São Paulo, where the São Paulo Stock Exchange is located, currently the Valor Econômico. The quorum to hold shareholders’ meetings at first call is the presence of shareholders representing 25% of the common shares; and at second call the meeting can be held with the presence of any number of shareholders.

According to our bylaws, in order to attend a shareholders’ meeting, a shareholder must show the ownership of the shares it intends to vote by showing an identification document and a proof of share ownership. Our shareholders may be represented at shareholders’ meetings by a proxy, issued within a one-year period prior to the meeting to (1) one of our directors or officers, (2) a lawyer or (3) a financial institution. Notwithstanding the above, the CVM decided on November 4, 2014 that shareholders that are legal entities may be represented at shareholders’ meetings by their legal representatives or by a duly appointed attorney-in-fact, pursuant to the bylaws and related corporate instruments of the legal entities and pursuant to the Brazilian Civil Code. Investment funds must be represented by their administrator.

Alternatively, the shareholders might participate in a shareholders’ meetings through a remote voting mechanism, which is regulated by CVM Rule No. 561, as amended, and aims to facilitate the participation of shareholders in general meetings either through the vote or through the submission of proposals and candidates for the election of members of the Board of Directors or Fiscal Council. For this purpose, this regulation provided the following: • the creation of a remote voting bulletin through which shareholders may exercise their right to vote prior to the date the shareholders’ meeting is held; • the possibility of inclusion of candidates and proposals of deliberation of minority shareholders in that bulletin, with due observance of certain percentages of equity interest, in order to facilitate shareholders’ participation in shareholders’ meetings; and • the deadlines, procedures and ways of sending this bulletin, which may be forwarded by the shareholder: (a) to the custodian (if the shares held by the shareholder are kept at a centralized deposit) or; (b) to the book-entry agent of the shares issued by the company (if such shares are not kept at a centralized deposit); or (c) directly to the company.

According to the Brazilian Corporate Law, the common shares are entitled to dividends in proportion to their share of the amount available for distribution. For further information on payment of dividends on our shares, see “Item 8A. Financial Information—Consolidated Statements and Other Financial Information—Dividends and Dividend Policy.” In addition, upon any liquidation of the company, the common shares are entitled to return of capital in proportion to their share of our shareholders’ equity.

103 According to the Brazilian Corporate Law, neither our bylaws nor actions taken at a shareholders’ meeting may deprive a shareholder of the following rights: • the right to participate in the distribution of profits; • the right to participate equally and proportionally in any remaining residual assets in the event of liquidation of the company; • preemptive rights in the event of issuance of shares, convertible debentures or warrants, except in some specific circumstances under Brazilian law described in “Item 10D. Preemptive Rights”; • the right to supervise our management in accordance with Article 109 of the Brazilian Corporate Law; and • the right to appraisal rights in the cases specified in the Brazilian Corporate Law, which are described in “Item 10D. Redemption and Right of Withdrawal.”

Golden Share The golden share is held by the Federative Republic of Brazil. For a discussion of the rights to which the golden share is entitled, see “Item 10B. Voting Rights of Shares—Golden Share.”

Voting Rights of Shares Each common share is generally empowered with one vote at general shareholders’ meeting. Pursuant to our bylaws and the B3 listing agreement in connection with the listing of our shares on the Novo Mercado, we cannot issue shares without voting rights or with restricted voting rights.

Limitations on the Voting Rights of Certain Holders of Common Shares Our bylaws provide that, at any shareholders’ meeting, no shareholder or group of shareholders, including brokers acting on behalf of one or more holders of ADSs, may exercise votes representing more than 5% of the quantity of shares into which our capital stock is divided. Votes that exceed this 5% threshold will not be considered.

For purposes of our bylaws, two or more of our shareholders are considered to be a “group of shareholders” if: • they are parties to a voting agreement; • one of them is, directly or indirectly, a controlling shareholder or controlling parent company of the other, or the others; • they are companies directly or indirectly controlled by the same person/entity, or group of persons/entities, which may or may not be shareholders; or • they are companies, associations, foundations, cooperatives and trusts, investment funds or portfolios, universalities of rights or any other forms of organization or undertaking (i) with the same administrators or managers, or further (ii) whose administrators or managers are companies that are directly or indirectly controlled by the same person/entity, or group of persons/entities, which may or may not be shareholders.

In the case of investment funds having a common administrator, only funds with policies of investment and of exercise of voting rights at shareholders’ meetings that fall under the responsibility of the administrator on a discretionary basis will be considered to be a group of shareholders.

In addition, shareholders represented by the same proxy, administrator or representative on any account at any shareholders’ meeting will be considered to be a group of shareholders, except for holders of our ADSs when represented by the relevant depositary. All signatories to a shareholders’ agreement that addresses the exercise of voting rights will also be considered to be a group of shareholders for purposes of the foregoing limitation.

104 This limitation on the voting rights of certain holders of common shares is illustrated in the following table:

Equity Interest of Shareholder or Group of Shareholders Voting Rights as a Percentage of our Capital Stock 1% 1% 2% 2% 3% 3% 4% 4% 5% 5% > 5% 5%

Limitation on the Voting Rights of Non-Brazilian Shareholders In accordance with the edital (invitation to bid) issued by the Brazilian government in connection with the privatization of Embraer in 1994, voting participation of non-Brazilian holders of Embraer common shares was limited to 40% of Embraer common shares votes at shareholders’ meeting.

Our bylaws provide that, at any shareholders’ meeting, non-Brazilian shareholders and groups of non-Brazilian shareholders may not exercise voting rights representing more than two-thirds of the total votes of all of the Brazilian shareholders present at the meeting. The total number of votes that may be exercised by Brazilian shareholders and by non-Brazilian shareholders will be assessed after giving effect to the 5% voting limitation described above in “Item 10B. Limitation on the Voting Rights of Certain Holders of Common Shares.” Votes of non-Brazilian shareholders that exceed this two-thirds threshold will not be considered. If the total vote of non-Brazilian shareholders at any shareholders’ meeting exceeds two-thirds of the votes that may be exercised by the Brazilian shareholders present at such meeting, the number of votes of each non-Brazilian shareholder will be proportionately reduced so that the total vote of non-Brazilian shareholders does not exceed two-thirds of the total votes that can be exercised by Brazilian shareholders present at the shareholders’ meeting.

The fraction of two-thirds effectively limits the voting rights of non-Brazilian shareholders and groups of non-Brazilian shareholders to 40% of share capital represented at the shareholders’ meeting. The objective of this limitation is to ensure that Brazilian shareholders constitute a majority of the total votes cast at any shareholders’ meeting. This limitation will effectively prevent our takeover by non-Brazilian shareholders and limit the ability of non-Brazilian shareholders to control us.

For purposes of our bylaws, the following are considered to be “Brazilian shareholders”: • Brazilian individuals, whether native or naturalized, resident in Brazil or abroad; • legal private entities organized under the laws of Brazil that have their administrative head offices in Brazil and (i) do not have a foreign controlling parent company, unless the parent company meets the requirements of clause (ii) of this item, and (ii) are controlled, directly or indirectly, by one or more Brazilian individuals, whether native or naturalized, resident in Brazil or abroad; and • investment funds or clubs organized under the laws of Brazil that have their administrative head office in Brazil and whose managers and/or investors holding the majority of their equity interests are persons/entities referred to above.

A Brazilian shareholder will be required to provide evidence to us and the depositary agent for the book-entry registry that such shareholder satisfies the foregoing requirements and only after this evidence is given will the shareholder be included in the records of Brazilian shareholders.

For purposes of our bylaws, “non-Brazilian shareholders” are any individuals, legal entities, investment funds or clubs and any other organizations that are not considered Brazilian shareholders and that cannot evidence that they satisfy the requirements to for registration as Brazilian shareholders, according to our bylaws.

A “group of shareholders,” as defined above, will be considered to be non-Brazilian whenever one or more of its members is a non-Brazilian shareholder.

105 The effect of this limitation on the voting rights of non-Brazilian shareholders (i.e., their participation) is illustrated in the following table, where the column “Non-Brazilian Shareholder Participation” indicates the maximum percentage of votes a non-Brazilian shareholder may cast:

Brazilian Shareholder Participation Non-Brazilian Shareholder Participation Non-Brazilian Shareholder Participation(1) (% of capital stock) (% of capital stock) (%) 90 10 10.00 80 20 20.00 70 30 30.00 60 40 40.00 59 41 39.33 50 50 33.33 40 60 26.67 30 70 20.00 20 80 13.33 10 90 6.67

(1) Number of votes calculated based on two-thirds of the Brazilian shareholders’ votes.

The tables below illustrate, in different situations, the voting system that will apply at our shareholders’ meetings.

Example 1 All Brazilian shareholders hold less than 5% and non-Brazilian shareholders hold a total of 40%, but without any individual holdings higher than 5%. This example shows a situation where the general restriction for non-Brazilian shareholders does not affect the voting ratio.

Effective % Effective % of of Votes After % of Votes After 5% Non-Brazilian Valid Vote Ratio Shareholder % Shares Attending Vote Restriction Restriction Votes (Votes/Share) Brazilian A 55551.00 Brazilian B 5 5 5 5 1.00 Brazilian C 5 5 5 5 1.00 Brazilian D 5 5 5 5 1.00 Brazilian E 5 5 5 5 1.00 Brazilian F 5 5 5 5 1.00 Brazilian G 5 5 5 5 1.00 Brazilian H 5 5 5 5 1.00 Brazilian I 5 5 5 5 1.00 Brazilian J 5 5 5 5 1.00 Brazilian K 5 5 5 5 1.00 Brazilian L 5 5 5 5 1.00 Total Brazilians 60 60 60 60 1.00 Non-Brazilians(1) 40 40 40 40(2) 1.00 Total 100 100 100 100 1.00

(1) Assumes that no individual non-Brazilian shareholder holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, this shareholder will also be subject to the 5% voting restriction on such holding. (2) Two-thirds of 60 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 40 votes.

106 Example 2 One Brazilian shareholder holds more than 5% of our capital, the other Brazilian shareholders hold 5% and non-Brazilian shareholders hold a total of 50%, but without any individual holdings higher than 5%.

Effective % Effective % of of Votes After % of % Shares Votes After 5% Non-Brazilian Valid Vote Ratio Shareholder Attending Vote Restriction Restriction Votes (Votes/Share) Brazilian A 20 5 5.0 8.57 0.25 Brazilian B 5 5 5.0 8.57 1.00 Brazilian C 5 5 5.0 8.57 1.00 Brazilian D 5 5 5.0 8.57 1.00 Brazilian E 5 5 5.0 8.57 1.00 Brazilian F 5 5 5.0 8.57 1.00 Brazilian G 5 5 5.0 8.57 1.00 Total Brazilians 50 35 35.0 59.99 1.00 Non-Brazilians(1) 50 50 23.3(2) 40.00 0.47 Total 100 85 58.3(2) 100.00 0.58

(1) Assumes that no individual non-Brazilian shareholder holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, this shareholder will also be subject to the 5% voting restriction on the holding. (2) Two-thirds of 35 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 23 votes.

Example 3 No Brazilian shareholders hold more than 5% of our capital, a non-Brazilian shareholder holds 30% and other non-Brazilian shareholders hold a total of 40%, but without any individual holdings higher than 5%.

Effective % Effective % of of Votes After % of % Shares Votes After 5% Non-Brazilian Valid Vote Ratio Shareholder Attending Vote Restriction Restriction Votes (Votes/Share) Brazilian A 55 5.010.01.00 Brazilian B 5 5 5.0 10.0 1.00 Brazilian C 5 5 5.0 10.0 1.00 Brazilian D 5 5 5.0 10.0 1.00 Brazilian E 5 5 5.0 10.0 1.00 Brazilian F 5 5 5.0 10.0 1.00 Total Brazilians 30 30 30.0 60.0 1.00 Non-Brazilians A 30 5 2.2(2) 4.4 0.07 Non-Brazilians(1) 40 40 17.8(2) 35.6 0.44 Total 100 75 50.0 100.0 0.50

(1) Assumes that no individual non-Brazilian shareholder (except Non-Brazilian A) holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, this shareholder will also be subject to the 5% voting restriction on the holding. (2) Two-thirds of 30 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 20 votes, proportionally divided between Non-Brazilian A and the other non-Brazilians.

107 Example 4 Two Brazilian shareholders holding more than 5% of our capital, three Brazilian shareholders holding 5% and non-Brazilian shareholders holding a total of 30%, but without individual holdings higher than 5%.

Effective % of Effective % of Votes After % of % Shares Votes After 5% Non-Brazilian Valid Vote Ratio Shareholder Attending Vote Restriction Restriction Votes (Votes/Share) Brazilian A 30 5 5.0 12 0.17 Brazilian B 25 5 5.0 12 0.20 Brazilian C 5 5 5.0 12 1.00 Brazilian D 5 5 5.0 12 1.00 Brazilian E 5 5 5.0 12 1.00 Total Brazilians 70 25 25.0 60 1.00 Non-Brazilians(1) 30 30 16.7(2) 40 0.56 Total 100 55 41.7 100 0.42

(1) Assumes that no individual non-Brazilian shareholder (except Non-Brazilian A) holds more than 5% of our capital. If a non-Brazilian shareholder holds more than 5% of our capital, this shareholder will also be subject to the 5% voting restriction on the holding. (2) Two-thirds of 25 (total votes of the Brazilian shareholders after application of the 5% voting restriction) equals 16.7 votes.

Shareholders’ Agreement Our bylaws prohibit any shareholder or group of shareholders from exercising voting control over us.

Golden Share The golden share is held by the Federative Republic of Brazil. The golden share is entitled to the same voting rights as the holders of common shares. In addition, the golden share entitles the holder thereof to veto rights over the following corporate actions: • change of our name and corporate purpose; • modification and/or application of our logo; • creation and/or alteration of military programs (whether or not involving Brazil); • development of third party skills in technology for military programs; • discontinuance of the supply of spare parts and replacement parts for military aircraft; • transfer of our control; • any amendments to the list of corporate actions over which the golden share carries veto rights, including the right of the Brazilian government to appoint one acting member to our board of directors and the right of our employees to appoint two acting members to our board of directors and to the rights conferred to the golden share; and • changes to certain provisions of our bylaws pertaining to voting restrictions, rights of the golden share and the mandatory tender offer requirements applicable to holders of 35% or more of our outstanding shares.

108 The matters listed above are subject to prior approval by our board of directors, followed by prior notices to the Brazilian government and to the Brazilian Ministry of Finance. Within 30 days from the notice, the Brazilian government, as holder of the golden share, may exercise its veto rights. After such period or the pronouncement from the Brazilian government, the board of directors shall meet. In case of rejection of the Brazilian government, the board of directors shall reconsider the previous resolution. In case of approval or in the absence of a response from the Brazilian government within the 30 day period, the previous resolution will be ratified and will be deemed to have been approved by our board of directors. In certain cases, pursuant to our bylaws or applicable law, the matter must be subject to approval at a shareholders’ meeting, and the Brazilian government shall also be entitled to exercise its veto rights related to that matter.

Disclosure of Significant Interest Brazilian Requirements Brazilian law provides that all shareholders or groups of shareholders will be required to disclose, through notice to us and to the stock exchanges on which our securities are traded, the negotiation of securities that results in the shareholder surpassing or decreasing the thresholds of 5%, 10%, 15%, and so on, of participation in a certain class or type of share representative of a company’s capital stock. In addition, our bylaws provide that all shareholders or groups of shareholders will be required to disclose, through notice to us and to the stock exchanges on which our securities are traded, the acquisition of shares that, together with those already held by them, exceed 5% of our capital stock. A violation of these disclosure obligations could result in the suspension of rights, including voting rights, by a resolution of shareholders at a shareholders’ meeting.

Certain U.S. Legal Requirements In addition, the U.S. Exchange Act imposes reporting requirements on shareholders or groups of shareholders who acquire beneficial ownership (as this term is defined under Rule 13d-3 of the U.S. Exchange Act) of more than 5% of our common shares. In general, shareholders must file, within ten days after the acquisition, a report of beneficial ownership with the SEC containing the information prescribed by the regulations under the U.S. Exchange Act. This information is also required to be sent to us and to each U.S. securities exchange on which our common shares are traded. Shareholders should consult with their own legal advisor regarding their reporting obligations under the U.S. Exchange Act.

Form and Transfer As our shares are in registered book-entry form, the transfer of shares is governed by the rules of Article 35 of the Brazilian Corporate Law. This Article provides that a transfer of shares is effected by an entry made by Banco Itaú S.A., also known as the registrar, in its books, by debiting the share account of the transferor and crediting the share account of the transferee. Banco Itaú S.A. also performs all the services of safe-keeping and transfer of shares and related services for us.

Transfers of shares by a non-Brazilian shareholder are made in the same way and entered into by that shareholder’s local agent on the shareholder’s behalf except that if the original investment was registered with the Central Bank pursuant to Resolution No. 4,373, the foreign investor must also seek amendment, if necessary, through its local agent, of the electronic registration to reflect the new ownership.

The B3 operates as a central clearing system. A holder of our shares may choose, in its discretion, to participate in this system and all shares elected to be put into this system will be deposited in the custody of the B3 (through a Brazilian institution duly authorized to operate by the Central Bank and having a clearing account with the B3). The fact that those shares are held in the custody of the B3 will be reflected in our register of shareholders. Each participating shareholder will, in turn, be registered in our register of beneficial shareholders maintained by the B3 and will be treated in the same way as registered shareholders.

109 Board of Directors According to the Brazilian Corporate Law, our officers and directors are prohibited from voting on, or acting in, matters in which their interests conflict with ours.

Our bylaws provide that the shareholders are responsible for determining the global remuneration of the members of our management bodies. Our board of directors is responsible for dividing the remuneration among the members of management. There are no specific provisions regarding the directors’ power to vote on their compensation in the absence of an independent quorum.

With respect to the borrowing powers of the board of directors, the board of directors has the power to authorize the borrowing of funds, either in the form of bonds, notes, commercial papers or other instruments of regular use in the market. Other financing arrangements, including bank loans, may be entered into by us upon the joint signatures of (i) two executive officers, (ii) one officer and one attorney-in-fact or (iii) two attorneys-in-fact.

There is no requirement under the Brazilian Corporate Law or our bylaws that directors retire upon reaching a certain age. In addition, our bylaws do not provide for the re-election of directors at staggered intervals.

For further information on our board of directors, see “Item 6A. Directors, Senior Management and Employees—Directors and Senior Management—board of directors” and “Item 6C. Directors, Senior Management and Employees—Board Practices.”

Election of Board of Directors The election of members of our board of directors, absent a request to adopt a cumulative voting system, will be conducted under a system of slate voting whereby voting will be based on a slate of directors and no voting will be allowed on individual candidates. Our board of directors is appointed by our shareholders for a two-year term and three reserved seats as follows: (i) one acting member (and his or her alternate) to be appointed by the Brazilian government, as holder of the “golden share” and (ii) two acting members (and his or her alternate) to be appointed by our employees. The remaining eight acting directors are elected in accordance with the slate voting or cumulative voting rules contained in our bylaws. A person may participate in two or more different slates. Each shareholder may only vote on one slate and the slate that receives the highest number of votes shall be declared elected.

Any shareholder or group of shareholders has a right to propose and submit a slate of members for election to the board of directors different than the slate provided according to our bylaws (i.e. proposed by the board of directors). The same shareholder or group of shareholders may not submit more than one slate. Our bylaws also contain a provision whereby a shareholder that intends to appoint an alternative slate must send written notice at least ten days prior to the general meeting at which the members of the board of directors will be elected, providing us with the name and other particulars and professional resume of the candidates. In case we receive this notice, we must publish a press release to our shareholders, that also has to be available on our website, within at least eight days before the date of the general meeting, informing shareholders how to obtain a copy of the proposed slate.

Alternatively, the election of members of the board of directors may be conducted under a system of cumulative voting. According to the regulations of the CVM and to our bylaws, adoption of a resolution for cumulative voting depends on a written request by shareholders representing at least 5% of our capital stock, submitted at least 48 hours in advance of the time for which the general shareholders’ meeting has been called. Under the cumulative voting system, each share is entitled to the same number of votes as the number of board members to be elected (subject to the restriction on shareholders holding greater than 5% of the common shares and restrictions on non-Brazilian shareholders as per our by-laws), and each shareholder is entitled to concentrate votes in just one member or to distribute the votes among more than one or all of the members. Any vacant offices not filled due to a tie in the voting will be subject to a new vote, under the same process.

110 Preemptive Rights Each of our shareholders has a general preemptive right to subscribe for shares in the event of any capital increase, or securities convertible into shares, in proportion to its shareholding, except in the event of the grant and exercise of any option to acquire shares of our capital stock. A period of at least 30 days following the publication of notice of the issuance of shares or securities convertible into shares is allowed for exercise of the right, and the right is negotiable. According to the Brazilian Corporate Law and our bylaws, the board of directors may, in its discretion, eliminate the preemptive rights of the shareholders in the event that we issue shares, debentures convertible into shares, or subscription warrants that will be offered either through a stock exchange or in a public offering, or through an exchange of shares in a public offering, the purpose of which is to acquire control of another company, as established by law.

In the event of a capital increase by means of the issuance of new shares, holders of ADSs, or of common shares, would, except under the circumstances described above, have preemptive rights to subscribe to any class of our newly issued shares. However, a holder may not be able to exercise the preemptive rights relating to the common shares underlying the ADSs unless a registration statement under the Securities Act is effective with respect to those shares to which the rights relate or an exemption from the registration requirements of the Securities Act is available. For further information on the risks related to our preemptive rights, see “Item 3D. Key Information—Risk Factors—Risks Relating to Our Common Shares and ADSs—Holders of our ADSs might be unable to exercise preemptive rights with respect to the common shares.

Redemption and Right of Withdrawal The Brazilian Corporate Law provides that, under limited circumstances, a shareholder has the right to withdraw from the company and to receive payment for his shares. This right of withdrawal may be exercised by dissenting shareholders if at least half of voting shares outstanding authorize us to: • reduce the mandatory distribution of dividends; • change our corporate purpose; • merge into or consolidate with another company, subject to the conditions set forth in the Brazilian Corporate Law; • transfer all of our shares to another company or receive shares of another company in order to make the company whose shares were transferred a wholly owned subsidiary of the other company, known as a merger of shares (incorporação de ações); • acquire control of another company at a price which exceeds the limits set forth in the Brazilian Corporate Law; • participate in a centralized group of companies as defined under the Brazilian Corporate Law and subject to the conditions set forth therein; or • conduct a spin-off that results in (i) a change of our corporate purposes, except if the assets and liabilities of the spun-off company are contributed to a company that is engaged in substantially the same activities, (ii) a reduction in the mandatory dividend or (iii) any participation in a centralized group of companies, as defined under the Brazilian Corporate Law.

In addition, if the entity resulting from a merger, incorporação de ações, as described above, or a consolidation or a spin-off of a listed company fails to become a listed company within 120 days of the shareholders’ meeting at which this decision was taken, the dissenting shareholders may also exercise their right of withdrawal.

The Brazilian Corporate Law contains provisions that restrict withdrawal rights and allow companies to redeem their shares at their economic value, subject to certain requirements. As our bylaws currently do not provide that our shares would be redeemable at their economic value, our shares would be redeemable at their book value, determined on the basis of the last statement of financial position approved by the shareholders. If the shareholders’ meeting giving rise to withdrawal rights occurs more than 60 days after the date of the last approved statement of financial position, a shareholder may demand that its shares be valued on the basis of a new statement of financial position that is as of a date within 60 days of such shareholders’ meeting.

111 According to the Brazilian Corporate Law, in events of consolidation, merger, incorporation of shares (incorporação de ações), participation in a group of companies, and acquisition of control of another company, the right to withdraw does not apply if the shares in question meet certain tests relating to market liquidity and float. Shareholders would not be entitled to withdraw their shares if the shares are a component of a general stock index in Brazil or abroad and shares held by persons unaffiliated with the controlling shareholder represent more than half of the outstanding shares of the relevant type or class.

Mechanism to Promote Dispersed Ownership of Our Shares Our bylaws contain provisions that have the effect of avoiding concentration of our shares in the hands of an investor or a small group of investors, in order to promote more dispersed ownership of our shares. To this end, these provisions place certain obligations on a shareholder or group of shareholders that becomes a holder of 35% or more of our total capital stock, or an Acquiring Shareholder. Not later than 15 days after a shareholder becomes an Acquiring Shareholder, this shareholder must submit a request to the Brazilian government, through the Ministry of Finance, to make a public tender offer to acquire all of our capital stock. The Brazilian government will have full discretion to accept or deny this request. The Acquiring Shareholder may not purchase any additional shares until the Brazilian government provides its opinion on the public offer. If the request is accepted by the Brazilian government, the Acquiring Shareholder must make a public offer for all shares within 60 days of acceptance. The offer must be made in accordance with the CVM and the B3 regulations and the provisions of our bylaws. If the request is denied by the Brazilian government, the Acquiring Shareholder must sell all shares the Acquiring Shareholder owns in excess of 35% of our total capital stock within 30 days. Failure to comply with these provisions will subject the Acquiring Shareholder to the potential suspension of all voting rights inherent to the shares the Acquiring Shareholder holds, if a resolution to this effect is approved at a general meeting of our shareholders called by our management. These provisions are not applicable to shareholders who become holders of 35% or more of our total capital stock in certain transactions specified in our bylaws as, for example, cancellation of our common shares held in treasury.

The public tender offer must be (i) directed to all of our shareholders, (ii) made through an auction to take place on the B3, (iii) launched at a set price calculated in accordance with the procedure set forth below, (iv) paid upfront, in reais, (v) made so as to assure equal treatment to all shareholders, (vi) irrevocable and not subject to any changes after publication of the bidding offer and (vii) based on a valuation report to be prepared in accordance with the rules set forth in our bylaws and in applicable CVM rules and regulations.

The price to be offered for the shares in the public tender offer will be calculated as follows: • Tender Offer Price = Value of the Share + Premium,

where: • “Tender Offer Price” corresponds to the acquisition price for each share issued by us in the public offering of shares provided hereunder. • “Value of the Share” corresponds to the greater of: (i) the highest unit quotation obtained for the shares issued by us during the 12-month period prior to the tender offer among values recorded on any stock exchange on which the shares were traded; (ii) the highest price paid by the Acquiring Shareholder, during the 36-month period prior to the tender offer, for a share or tranche of shares issued by us; (iii) the amount equivalent to 14.5 times our Consolidated Average EBITDA, as defined below, reduced by our net consolidated indebtedness, divided by the total number of shares issued by us; or (iv) the amount equivalent to 0.6 times the amount of our firm backlog orders, according to the last information disclosed by the latter, reduced by our net consolidated indebtedness, divided by the total number of shares issued by us.

112 • “Premium” corresponds to 50% of the Value of the Share. • “Consolidated EBITDA” is our consolidated operating profit before net financial expenses, income tax and social contribution, depreciation, depletion and amortization, as assessed based on the audited statements for our most recent complete fiscal year. • “Average Consolidated EBITDA” is the arithmetic average of our consolidated EBITDA for the two most recent complete fiscal years.

The launch of a public tender offer does not preclude us or any of our shareholders from launching a competing public tender offer, in accordance with applicable regulations.

Arbitration Any disputes or controversies relating to the regulations of the Novo Mercado, our bylaws, the Brazilian Corporate Law, the rules published by the CMN, the Central Bank, the CVM, and other rules applicable to the Brazilian capital markets in general, must be submitted to arbitration conducted in accordance with the rules of the B3 Arbitration Chamber (“Rules”).

According to item 1.4 of the Rules, unless otherwise agreed by the Parties, the parties should be bound by the Rules in force on the date of the request for arbitration. Any shareholder that becomes a holder of shares representing our control agrees to comply with the rules of the B3 Arbitration Chamber. These provisions will not apply however, in the event of a dispute or controversy related to our golden share.”

Going Private Process If our shareholders determine to take us private and at that time we are controlled by a shareholder, or a group of shareholders, the controlling shareholder or group of shareholders is responsible for conducting a public tender offer for the acquisition of our shares. If our shareholders determine to take us private and at that time we are subject to widespread control, we must conduct the public tender offer, within the limits imposed by applicable law. In this case, we may only purchase shares from shareholders that have voted in favor of our Company becoming a private company after purchasing all shares from the other shareholders that did not vote in favor of the “going private” decision and that have accepted the public tender offer.

Thus, we may become a private company only if we or our controlling shareholders, as the case may be, conduct a public tender offer to acquire all of our outstanding shares (taking into account, for this purpose, the shares held by the shareholders that expressly agree with the ‘going private’ decision or sign up for the public tender offer), subject to prior approval of the public tender offer by the Brazilian government, as holder of the golden share, and in accordance with the rules and regulations of Brazilian Corporate Law and the CVM regulations and rules of the Novo Mercado, as applicable.

The public tender offer must be made at a fair price based on a valuation report of the Company, which means that the offer for the purchase of the totality of shares must be equivalent to at least the value of the Company as appraised. According to our bylaws, the price per share shall be equivalent to, at least, the economic value of those shares as determined in a valuation report prepared by a specialized and independent company of recognized experience, which will be chosen at a shareholders’ meeting from a list of three institutions presented by our board of directors, by an absolute majority of the votes of the shareholders of our outstanding shares present at the meeting (excluding, for this purpose, the shares held by any controlling shareholder or group of shareholders at the time, if any, his/her partners and dependents as described in his/her income tax statement, if the controlling shareholder is an individual; treasury shares; shares held by our affiliates and by other companies that are a part of our economic group, as well as blank votes). All the expenses and costs incurred in connection with the preparation of the valuation report must be borne by the offeror.

113 Shareholders holding at least 10% of our outstanding shares (taking into account, for this purpose, all the Company’s shares, except for the shares held by the controlling shareholder; shares held by our affiliates and by other companies that are a part of our economic group; shares held by our officers and directors; and treasury shares) may require our management to call a special shareholders’ meeting to determine whether to perform another valuation using the same or a different valuation method. This request must be made within 15 days following the disclosure of the price to be paid for the shares in the public tender offer. The shareholders who make the request, as well as those who vote in its favor, must reimburse us for any costs involved in preparing the new valuation, if the new valuation price is not higher than the original valuation price. If the new valuation price is higher than the original valuation price, the public tender offer must be made at the higher price.

Delisting from the Novo Mercado If we are controlled by a shareholder, or a group of shareholders, at the time of our delisting from the Novo Mercado, either for our shares to be traded outside the Novo Mercado or as a result of a corporate reorganization, the controlling shareholder or group of shareholders is responsible for conducting a public tender offer for the acquisition of our shares. If we are subject to widespread control at the time of our delisting from the Novo Mercado, either for our shares to be traded outside the Novo Mercado or as a result of a corporate reorganization, the shareholders that voted in favor of the decision must conduct a public tender offer for the acquisition of our shares.

At any time, we may delist our shares from the Novo Mercado, provided that shareholders representing more than 1/3 (one third) of our outstanding shares (i) expressly agree with the delisting decision or (ii) accept the public tender offer (taking into account, for this purpose, the shares held by the shareholders that expressly agree with the delisting decision or sign up for the public tender offer). The decision of the shareholders must specify if the delisting will occur because the securities will no longer be traded on the Novo Mercado, or because we are going private. Our delisting from the Novo Mercado will not result in the loss of our registration as a public company on the São Paulo Stock Exchange.

If we delist from the Novo Mercado, by decision taken at a shareholders’ meeting, any controlling shareholder or group of controlling shareholders at the time, if any, must conduct a public tender offer for the acquisition of our outstanding shares (taking into account, for this purpose, the shares held by the shareholders that expressly agree with the delisting decision or sign up for the public tender offer). According to our bylaws, the price per share shall be equivalent to, at least, the economic value of those shares as determined in a valuation report prepared by a specialized and independent company of recognized experience, which will be chosen at a shareholders’ meeting from a list of three institutions presented by our board of directors, by an absolute majority of the votes of the shareholders of our outstanding shares present at the meeting (excluding, for this purpose, the shares held by any controlling shareholder or group of shareholders at the time, if any, his/her partners and dependents as described in his/her income tax statement, if the controlling shareholder is an individual; treasury shares; shares held by our affiliates and by other companies that are a part of our economic group, as well as blank votes). In addition, the Novo Mercado regulation establishes that the offer for the purchase of the totality of shares must be equivalent to at least the fair value of the Company as appraised. All the expenses and costs incurred in connection with the preparation of the valuation report must be paid by the offeror.

Pursuant to our bylaws, we may also be delisted if the São Paulo Stock Exchange decides to suspend trading of our shares on the Novo Mercado due to our non-compliance with the Novo Mercado regulations. In this case, the chairman of the board of directors must call a shareholders’ meeting, within two days of the determination by the São Paulo Stock Exchange, in order to replace all members of our board of directors. If the chairman of the board of directors does not call the shareholders’ meeting, any shareholder may do so. The new board of directors will be responsible for the compliance with the requirements that resulted in the delisting.

114 Additionally, if we are delisted from the Novo Mercado (1) because a decision taken at a general shareholders’ meeting resulted in non-compliance with the Novo Mercado regulations, the public tender offer must be conducted by the shareholders that voted in favor of the decision, or (2) as a result of our non-compliance with the Novo Mercado regulations resulting from acts of our management, we must conduct the public tender offer in order to become a private company, within the limits imposed by law, if the Company is not controlled by a controlling shareholder or group of shareholders. Otherwise, the controlling shareholder or group of shareholders is responsible for conducting a public tender offer for the acquisition of the shares.

According to the Novo Mercado regulations, in the event of a transfer of our shareholding control within 12 months following our delisting from the Novo Mercado, the selling controlling shareholders and the acquirer must offer to acquire the remaining shares for the same price and terms offered to the selling controlling shareholders, adjusted for inflation, or the surplus, if there is any, between the price per share offered at the public tender offer, adjusted for inflation, and the price per share received by the selling controlling shareholders due to the transfer of control.

Sarbanes Oxley Act of 2002 We maintain controls and procedures designed to ensure that we are able to collect the information required to disclose in the report we file with the SEC, and to process, summarize and disclose the information within the periods specified in the rules of the SEC. We have filed the relevant officer certifications under Section 404 of the U.S. Sarbanes Oxley Act of 2002 regarding internal controls over financial reporting as Exhibits 12.1 and 12.2 to this annual report.

10C. Material Contracts On January 24, 2019, we entered into the Master Transaction Agreement and certain other transaction documents with Boeing and certain subsidiaries of Embraer or Boeing, pursuant to which a subsidiary of Boeing will acquire the controlling stake in Embraer’s commercial aviation business unit and Embraer or a subsidiary of Embraer and Boeing or a subsidiary of Boeing will form a joint venture for the promotion and development of new markets and applications for the KC-390 multi-mission aircraft.

Pursuant to the terms and conditions of the Master Transaction Agreement, Embraer will contribute certain assets and rights related to its commercial aviation business to the Commercial Aviation NewCo and the Commercial Aviation NewCo will assume certain liabilities and obligations related to Embraer’s commercial aviation business and, in exchange for it, the Commercial Aviation NewCo will issue common shares and redeemable preferred shares to Embraer. The Commercial Aviation NewCo’s redeemable preferred shares will have a liquidation preference, receive an annual fixed cumulative dividend payable at a 3.3% rate, be redeemable after two years from the date of issuance, and have no voting rights.

Subject to the conditions in the Master Transaction Agreement, upon consummation of the Transaction, Boeing Brazil will acquire 80.0% of the issued and outstanding common shares and redeemable preferred shares of the Commercial Aviation NewCo, through the subscription of new shares to be issued by the Commercial Aviation NewCo and the acquisition directly from Embraer of existing shares issued by the Commercial Aviation NewCo to Embraer, at the Estimated Value. The Estimated Value is subject to adjustments customary for transactions of the same nature including for net debt and net working capital of the Commercial Aviation NewCo at the closing date of the Transaction.

Until the effective implementation of the Transaction, both parties will conduct their respective businesses completely separate and independent of each other and Embraer will conduct its commercial aviation business in the ordinary course, consistent with past practice.

The foregoing description is only a summary of certain provisions of the Master Transaction Agreement and is qualified in its entirety by reference to the copy of the executed Master Transaction Agreement which is filed as an exhibit to this annual report.

In addition, as part of the Transaction, Embraer and Boeing (or any of their respective subsidiaries) will form a joint venture for the promotion and development of new markets and applications for the multi-mission airplane KC-390, based on jointly identified opportunities, and development, manufacture and sales of the KC-390, in which joint venture Embraer or its subsidiary will hold the majority of the share capital.

115 The KC-390 NewCo will be EB Defense, LLC, a Delaware limited liability company incorporated by the Embraer Member Entity and in which the Embraer Member Entity is currently the sole member. Embraer or Embraer Member Entity will hold 51% and Boeing or the Boeing Member Entity will hold 49% of the membership interests of EB Defense, LLC, in accordance with the Amended and Restated Limited Liability Company Agreement, to be entered into and become effective upon the closing of the Transaction.

The foregoing description is only a summary of certain provisions of the Contribution Agreement and is qualified in its entirety by reference to the copy of the executed Contribution Agreement which is filed as an exhibit to this annual report.

Embraer expects that the strategic partnership with Boeing will generate synergies and other benefits to Embraer. For further information on our strategic partnership with Boeing, see Explanatory Note on page 3 of this annual report. The consummation of the Transaction remains subject to (i) approval by antitrust authorities in Brazil, the United States and other applicable jurisdictions; and (ii) the satisfaction of other conditions customary in similar transactions. For risks relating to the Transaction, see “Item 3D. Risk Factors—Risks Relating to Embraer—The consummation of the strategic partnership with Boeing is subject to conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all. Failure to complete the proposed Transaction could adversely affect our business, financial condition and operating results and the trading price of our common stock and ADSs, “—Our strategic partnership with Boeing may not be implemented successfully or the implementation may be more difficult, time consuming or costly than expected,” and “—Although we expect that the strategic partnership with Boeing will result in synergies and other benefits to us, those benefits may not be realized fully or at all or may not be realized within the expected time frame.”

10D. Exchange Controls There are no restrictions on ownership of our common shares by individuals or legal entities domiciled or headquartered outside Brazil. However, the registration of this investment with the Brazilian Central Bank is required and the right to convert dividend payments and proceeds from the sale of common shares into foreign currency and to remit such amounts outside Brazil is subject to restrictions under foreign investment legislation.

Pursuant to Brazilian law, investors may invest in common shares under Resolution No. 4,373, of September 29, 2014, issued by the CVM, governmental authority responsible for formulating the Brazilian monetary and credit policies. The rules of Resolution No. 4,373 allow foreign investors to invest in almost all financial assets and to engage in almost all transactions available in the Brazilian financial and capital markets, provided that certain requirements are fulfilled. In accordance with Resolution No. 4,373, the definition of foreign investor includes individuals, legal entities, mutual funds and other collective investment entities domiciled or headquartered abroad.

Pursuant to the Resolution No. 4,373, foreign investors must: (i) appoint at least one representative in Brazil with powers to perform actions related to the foreign investment; (ii) provide all required information that shall be sent by the representative to CVM through CVM’s website; (iii) be registered as a foreign investor with the CVM and the Brazilian tax authorities; and (iv) register the foreign investment with the Central Bank.

Securities and other financial assets held by foreign investors pursuant to Resolution No. 4,373 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Brazilian Central Bank or the CVM. In addition, securities trading for these investors is restricted to transactions carried out in the stock exchanges or organized over-the-counter markets licensed by the CVM.

Under Resolution No. 4,373, foreign investors registered with the CVM may buy and sell securities on Brazilian stock exchanges or organized over-the-counter markets without obtaining a separate certificate of registration for each transaction. Investors under these regulations are also generally entitled to favorable tax treatment.

116 Annex II to Resolution No. 4,373 provides for the issuance of depositary receipts in foreign markets in respect of Brazilian issuers’ securities.

In connection with equity offerings of our common shares, an electronic registration was issued in the name of the depositary with respect to the ADSs and is maintained by the custodian on behalf of the depositary. This electronic registration was carried out through the Brazilian Central Bank Information System. Pursuant to the registration, the custodian and the depositary are able to convert dividends and other distributions with respect to the common shares represented by ADSs into foreign currency and remit the proceeds outside Brazil, to the holder of ADSs. In the event that a holder of ADSs exchanges the ADSs for common shares, the custodian must update the registry of the investment with the Brazilian Central Bank within five business days after the exchange. In order to receive the common shares the investor must have a registration with the Central Bank and the CVM pursuant to Resolution 4,373. Until this registration has been obtained, the holder will not be able to receive the common shares.

In addition, if the foreign investor resides in a “tax haven” jurisdiction or is not an investor registered under Resolution No. 4,373, the investor will be subject to less favorable Brazilian tax treatment than a holder of ADSs.

For further information on Brazilian taxes, see “Item 3D. Key Information—Risk Factors—Risks Relating to our Common Shares and ADSs—If holders of our ADSs exchange the ADSs for common shares, they risk losing the ability to remit foreign currency abroad and Brazilian tax advantages” and “Item 10E. Additional Information—Taxation—Material Brazilian Tax Consequences.”

10E. Taxation The following discussion, subject to the limitations set forth below, summarizes certain Brazilian and United States tax considerations relating to the ownership of our common shares or ADSs. This discussion does not purport to be a complete analysis of all tax considerations in those countries and does not address tax treatment of shareholders under the laws of other countries. Shareholders who are resident in countries other than Brazil and the United States, along with shareholders that are resident in those two countries, are urged to consult with their own tax advisors as to which countries’ tax laws could be relevant to them. This summary is based upon the tax laws of Brazil and the United States as in effect on the date of this annual report, which are subject to change, possibly with retroactive effect, and to differing interpretations. Any change in the law may change the consequences described below.

Although there presently is no income tax treaty between Brazil and the United States, the tax authorities of the two countries have had discussions that may result in this treaty. No assurance can be given, however, as to if or when a treaty will enter into force or how it will affect the U.S. holders of common shares or ADSs.

Material Brazilian Tax Consequences General. The following discussion summarizes the principal Brazilian tax consequences of the acquisition, ownership and disposition of common shares or ADSs, as the case may be, by a holder that is not considered domiciled in Brazil, or a Non-Brazilian Holder, for purposes of Brazilian taxation.

This discussion is not a comprehensive discussion of all the tax considerations that may be relevant to a decision to purchase our common shares or ADSs and is not applicable to all categories of investors, some of which may be subject to special rules, and does not specifically address all of the Brazilian federal income tax considerations applicable to any particular holder. It is based on the tax laws of Brazil in effect on the date of this report, which are subject to change, possibly with retroactive effect, and to differing interpretations. Each prospective purchaser is urged to consult his own tax advisor about the particular Brazilian federal income tax consequences of an investment in our common shares or ADSs.

117 Taxation of Dividends. Dividends, including stock dividends and other dividends paid in kind, paid by us to the depositary in respect of the ADSs, or to a Non-Brazilian Holder in respect of the common shares, are currently not subject to withholding tax, provided that they are paid out of profits generated as of January 1, 1996. Dividends paid from profits generated before January 1, 1996 may be subject to Brazilian withholding income tax at variable rates, according to the tax legislation applicable to each corresponding year. There could be a question regarding a potential taxation on dividends supported by profits earned in the 2014 calendar-year, due to the new rules introduced in Brazil in order to aligning the Brazilian tax system with the International Financial Reporting Standards, or IFRS, as of January 1, 2015. However, any withholding tax related to 2014 profits will be borne by us, if due.

Taxation of Gains. According to Law No. 10,833, enacted on December 29, 2003, capital gains realized on the sale or disposition of assets located in Brazil by a Non-Brazilian Holder, regardless of whether the sale or the disposition is made to another non-Brazilian resident or to a Brazilian resident, is subject to taxation in Brazil. Accordingly, on the disposition of the common shares, which are considered assets located in Brazil, the Non-Brazilian Holder will be subject to income tax on the gains assessed, following the rules described below, regardless of whether the transactions are conducted in Brazil or abroad and with a Brazilian resident or not. Regarding the ADSs, although the matter is not free from doubt, arguably the gains realized by a Non-Brazilian Holder on the disposition of ADSs are not taxed in Brazil, based on the argument that ADSs would not constitute assets located in Brazil for purposes of Law No. 10,833/03. However, we cannot assure how Brazilian courts would interpret the definition of assets located in Brazil in connection with the taxation of gains realized by a Non-Brazilian Holder on the disposition of ADSs. Thus, the gain on a disposition of ADSs by a Non-Brazilian Holder may be subject to income tax in Brazil according to the rules described below for ADSs or those applicable to the disposition of common shares, when applicable. It is important to clarify that, for purposes of Brazilian taxation, the income tax rules on gains related to disposition of common shares or ADSs can vary depending on the domicile of the Non-Brazilian Holder, the form by which the Non-Brazilian holder has registered its investment with the Central Bank and/or how the disposition is carried out, as described below.

The deposit of common shares in exchange for ADSs may be subject to Brazilian income tax on capital gains at rates ranging from 15% to 22.5%, or 25% in case of a Non-Brazilian Holder located in a Low or Nil Tax Jurisdiction (as defined below), if the acquisition cost of the common shares is lower than (i) the average price per common share on a Brazilian stock exchange on which the greatest number of these shares were sold on the day of deposit or (ii) if no common shares were sold on that day, the average price on the Brazilian stock exchange on which the greatest number of common shares were sold in the 15 trading sessions immediately preceding such deposit. In this case, the positive difference between the average price of the common shares, calculated as above, and the corresponding acquisition cost, may be considered a capital gain. In some circumstances, there may be arguments to support that such tax treatment is not applicable in case of Non-Brazilian Holders registered under Resolution No. 4,373, or the 4,373 Holder, that are not resident in a Low or Nil Tax Jurisdiction (as defined below). Prospective holders of common shares should consult their own tax advisors as to the tax consequences of the deposit in exchange for ADSs The withdrawal of ADSs in exchange for common shares should not be considered as giving rise to a capital gain subject to Brazilian income tax, as far as the regulatory rules in respect to the registration of the investment before the Central Bank are duly observed.

Gains assessed on the disposition of common shares carried out on the Brazilian stock exchange (which includes the transactions carried out on the organized over-the-counter market) are: • exempt from income tax when assessed by a Non-Brazilian Holder that (i) is a 4,373 Holder and (ii) is not resident in a Low or Nil Tax Jurisdiction (as defined below); or • subject to income tax at a rate of up to 25% in any other case, including the gains assessed by a Non-Brazilian Holder that (i) is not a 4,373 Holder and/or or (ii) is a 4,373 Holder resident in a Low or Nil Tax Jurisdiction (as defined below). In these cases, a withholding income tax of 0.005% of the sale value shall be applicable and can be later offset with the eventual income tax due on the capital gain. Day trade transactions are subject to the rate of 1%.

118 Any other gains assessed on a disposition of the common shares that is not carried out on Brazilian stock exchanges are subject to income tax at rates of up to 22.5%, except for a resident of a Low or Nil Tax Jurisdiction (as defined below) which, in this case, is subject to income tax at a rate of up to 25%. In case the gains are related to transactions conducted on the Brazilian non-organized over-the-counter market with intermediation, the withholding income tax of 0.005% on the sale value shall also be applicable and can be offset with the eventual income tax due on the capital gain. In the case of a redemption of common shares or ADSs or a capital reduction by a Brazilian corporation, the positive difference between the amount effectively received by the Non-Brazilian Holder and the proportional acquisition cost of the common shares or ADSs redeemed is treated as capital gain derived from sale or exchange of common shares not carried out in a Brazilian stock exchange market and is therefore subject to income tax at rates of up to 25%, as the case may be. As a general rule, the gains realized as a result of a disposition transaction of common shares or ADSs are determined by the difference between the amount realized on the sale or exchange of the shares or ADSs and their acquisition cost.

There can be no assurance that the current preferential tax treatment for Non-Brazilian Holders of ADSs and 4,373 Holder of common shares will continue.

Any exercise of preemptive rights relating to the common shares or ADSs will not be subject to Brazilian income tax. Any gain on the sale or assignment of preemptive rights relating to our common shares or the ADSs by a Non-Brazilian Holder of common shares will be subject to Brazilian income taxation according to the same rules applicable to the sale or disposition of these shares.

Taxation on Interest on Shareholders’ Equity. For further information on taxation on interest on shareholders’ equity, see “Item 8A. Financial Information—Consolidated Statements and Other Financial Information—Dividends and Dividend Policy—History of Dividend and Interest on Shareholders’ Equity Payments and Dividend Policy.”

In accordance with Law No. 9,249, dated December 26, 1995, as amended, Brazilian corporations may make payments to shareholders characterized as distributions of interest on the company’s shareholders’ equity on top of or as an alternative to making dividend distributions. These interest are calculated by multiplying the TJLP as determined by the Central Bank from time to time by the sum of determined Brazilian company’s net equity accounts. Interest on Shareholders’ Equity are deductible for purposes of calculating the Brazilian corporate income tax and social contribution on net profits, as long as the following limits are observed: • 50% of net profits (after the social contribution on net profits but before taking such distribution and the provision for corporate income tax into account) related to the period for which the payment is made; and • 50% of the sum of retained profits and profit reserves as of the date of the beginning of the period for which the payment is made.

The Brazilian Corporate Law establishes that interest attributed to shareholders’ equity in respect of the common shares paid to shareholders who are Non-Brazilian holders, including Non-Brazilian holders of ADSs, are subject to Brazilian withholding income tax at the rate of 15%, 25% in case of a resident of a Low or Nil Tax Jurisdiction (as defined below) or where applicable local laws impose restrictions on the disclosure of the shareholding composition or the ownership of investments or the ultimate beneficiary of the income derived from transactions carried out and attributable to a Non-Brazilian holder. The distribution of interest on shareholders’ equity may be determined by our board of directors. We cannot assure you that our board of directors will not determine that future distributions of profits may be made by means of interest on shareholders’ equity instead of by means of dividends.

The amounts paid as distribution of interest on shareholders’ equity to a Non-Resident Holder located in a country that has a tax treaty with Brazil may be classified as (i) interest, (ii) dividends or (iii) other revenues. The classification will depend on the actual wording of the treaty.

Low or Nil Taxation Jurisdictions. On June 4, 2010, Brazilian tax authorities enacted Normative Ruling No. 1,037 listing (i) the countries and jurisdictions considered as Low or Nil Taxation Jurisdiction or where the local legislation does not allow access to information related to the shareholding composition of legal entities, to their ownership or to the identity of the effective beneficiary of the income attributed to non-residents (Tax Favorable Jurisdictions) and (ii) the privileged tax regimes, or PTR, which definition is provided by Law No. 11,727, of June 23, 2008. Brazilian tax authorities periodically update the list of countries/jurisdictions and regimes that shall be treated as Tax Favorable Jurisdiction and PTR.

119 The concept of PTR, encompasses the countries and jurisdictions that: (i) do not tax income or tax it at a maximum rate lower than 20%; (ii) grant tax benefits to non-residents (1) with no requirement to carry out substantial economic activity within the territory or (2) on the condition that they do not carry out substantial economic activity within the territory; (iii) do not tax income from outside its territory, or taxes it at less than 20%; or (iv) do not disclose certain information on the ownership and beneficial ownership of assets or on transactions within its territory, or imposes restrictions on disclosure of that information.

On November 28, 2014 the Brazilian Revenue Service issued Rule 488 reducing the concept of Tax Favorable Jurisdictions and of PTR to those that tax the income below the rate of 17% (previous concept adopted a 20% maximum rate for that purpose), which will probably result in an amendment to the list provided under Normative Ruling No. 1,037.

We believe that the best interpretation of the current tax legislation leads to the conclusion that the above mentioned PTR concept should apply solely for purposes of Brazilian transfer pricing and thin capitalization rules. Currently, the understanding of the Brazilian tax authorities is in the sense that payment of interest to beneficiaries resident in PTRs are not subject to the same treatment applicable to beneficiaries in Tax Favorable Jurisdictions (Answer to Advance Tax Ruling Request COSIT n. 575, of December 20, 2017). Nevertheless, we cannot assure you that subsequent legislation or interpretations by the Brazilian tax authorities regarding the definition of a PTR provided by Law No. 9,430, of December 27, 1996 altered by Law No. 11,727 will also apply to a Non-Brazilian Holder on payments of interest on shareholders’ equity. Notwithstanding the above, we recommend that you consult your own tax advisors regarding the consequences of the implementation of Law No. 11,727, Normative Ruling No. 1,037 and Rule 488.

Taxation on Foreign Exchange Transactions, or IOF/Exchange. Pursuant to Decree No. 6,306/07, the conversion into foreign currency or the conversion into Brazilian currency of the proceeds received or remitted by a Brazilian entity from a foreign investment in the Brazilian securities market, including those in connection with the investment by a Non-Brazilian Holder in the common shares and ADSs may be subject to the Tax on Foreign Exchange Transactions, or IOF/Exchange. Currently applicable rate for most foreign currency exchange transactions is 0.38%.

However, currency exchange transactions carried out for the inflow of resources into Brazil by a 4,373 Holder are subject to IOF/Exchange at (i) 0% rate in case of variable income transactions carried out on the Brazilian stock, futures and commodities exchanges, as well as in the acquisitions of shares of Brazilian publicly-held companies in public offerings or subscription of shares related to capital contributions, provided that the issuer company has registered its shares for trading in the stock exchange (ii) 0% for the outflow of resources from Brazil related to these type of investments, including payments of dividends and interest on shareholders’ equity and the repatriation of funds invested in the Brazilian market. Furthermore, the IOF/Exchange is currently levied at a 0% rate on the withdrawal of ADSs into shares.

In any case, the Brazilian government may increase the rate at any time, up to 25.0%. However, any increase in rates may only apply to future transactions.

Tax on Transactions Involving Bonds and Securities, or IOF/Bonds.” Pursuant to Decree 6,306/07 the IOF/Bonds may be imposed on any transactions involving bonds and securities, even if the transactions are carried out on a Brazilian stock exchange. The rate of IOF/Bonds applicable to transactions involving common shares and ADS is currently zero. In particular, the IOF/Bond also levies at a zero percent rate on the transfer of shares traded on the Brazilian stock exchange with the purpose of the issuance of depositary receipts to be traded outside Brazil. The Brazilian government may increase the rate of the IOF/Bonds at any time by up to 1.5% per day of the transaction amount, but only in respect of future transactions.

Other Brazilian Taxes. There are no Brazilian federal inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of common shares or ADSs by a Non-Brazilian Holder. Gift and inheritance taxes, however, may be levied by some states of Brazil on gifts made or inheritances bestowed by Non-Brazilian Holders to individuals or entities resident or domiciled within those states in Brazil. There are no Brazilian stamp, issue, registration or similar taxes or duties payable by holders of common shares or ADSs.

120 Material U.S. Federal Income Tax Consequences The following discussion, subject to the limitations and conditions set forth herein, summarizes certain U.S. federal income tax consequences of the purchase, ownership and disposition of Embraer common shares and ADSs. This discussion only applies to beneficial owners of Embraer common shares or ADSs that are “U.S. Holders” (as defined below) that hold common shares or ADSs of Embraer as capital assets (generally for investment purposes). This discussion does not address all aspects of U.S. federal income taxation that may be applicable to a U.S. Holder, including, gift, estate, alternative minimum and Medicare contribution tax consequences, or the tax consequences to U.S. Holders subject to special treatment under U.S. federal income tax law, including:

• partnerships and other entities classified as partnerships for U.S. federal income tax purposes;

• tax-exempt entities;

• dealers and traders in securities or foreign currencies;

• insurance companies;

• certain financial institutions;

• persons who own Embraer common shares or ADSs as part of an integrated investment, including a straddle, hedging or conversion transaction, comprising the Embraer common shares or ADSs and one or more other positions for tax purposes;

• certain taxpayers who file applicable financial statements required to recognize income for U.S. federal income tax purposes no later than when the associated revenue is reflected on such financial statements;

• U.S. Holders whose functional currency is not the U.S. dollar for U.S. federal income tax purposes;

• persons who actually or constructively own 10% or more of Embraer’s total combined vote or value of its outstanding common shares or ADSs;

• persons who acquired Embraer common shares or ADSs pursuant to the exercise of any employee stock option or otherwise as compensation; and

• persons holding Embraer common shares or ADSs in connection with a trade or business conducted outside the United States.

In addition, there is no discussion of state, local, or non-U.S. tax considerations of the purchase, ownership and disposition of Embraer common shares or ADSs. The discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended, or Code, its legislative history, existing final, temporary, and proposed U.S. Treasury regulations, rulings and other pronouncements of the U.S. Internal Revenue Service, or IRS, and judicial decisions as of the date of this annual report. Such authorities may be repealed, revoked or modified (with possible retroactive effect) so as to result in U.S. federal income tax consequences different from those discussed below.

This discussion is also based in part on the representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms.

Shareholders are urged to consult their own independent tax advisors concerning the U.S. federal income tax consequences of the ownership of Embraer common shares and ADSs in light of their particular situations, as well as any consequences arising under the laws of any other taxing jurisdiction.

As used herein, the term “U.S. Holder” means a beneficial owner of Embraer common shares or ADSs representing Embraer common shares that is (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any State or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust (1) that is subject to the supervision of a court within the United States and the control of one or more U.S. persons as described in Section 7701(a)(30) of the Code or (2) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. Except where specifically described below, this discussion assumes that we are not a controlled foreign corporation or a passive foreign investment company, or PFIC, in either case, for U.S. federal income tax purposes.

121 If a partnership (or an entity treated as a partnership for U.S. federal income tax purposes) holds Embraer common shares or ADSs, the tax treatment of such partnership and each partner will generally depend upon the status of the partner in such partnership and upon the activities of the partnership. Partnerships that hold Embraer common shares or ADSs, and partners of a partnership holding such common shares or ADSs, are urged to consult their own tax advisors regarding the consequences of the purchase, ownership and disposition of Embraer common shares or ADSs.

In general, for U.S. federal income tax purposes, a U.S. Holder who is a beneficial owner of an ADS will be treated as the owner of the underlying Embraer common shares that are represented by such ADS. The U.S. Treasury has expressed concerns that parties to whom ADSs are pre-released before shares are delivered to the depositary, or intermediaries in the chain of ownership between holders of ADSs and the issuer of the security underlying the ADSs, may be taking actions that are inconsistent with the claiming of foreign tax credits by holders of ADSs. Accordingly, the creditability of any Brazilian taxes could be affected by actions taken by such parties or intermediaries. Deposits or withdrawals of underlying common shares by U.S. Holders for ADSs will not be subject to U.S. federal income tax.

Distributions on Embraer Common Shares or ADSs For U.S. federal income tax purposes, the gross amount of any distributions (including distributions of notional interest charges attributed to shareholders’ equity) paid to U.S. Holders of Embraer common shares or ADSs (including Brazilian withholding taxes imposed on such distributions) will be treated as a dividend, to the extent paid out of current or accumulated earnings and profits of Embraer as determined under U.S. federal income tax principles. Such a dividend will be includable in the gross income of a U.S. Holder as ordinary income on the date received or accrued by the U.S. Holder. To the extent that the amount of any distribution exceeds Embraer’s current and accumulated earnings and profits for a taxable year (as determined under U.S. federal income tax principles), the distribution will first be treated as a tax-free return of capital to the extent of a U.S. Holder’s adjusted tax basis in the Embraer common shares or ADSs, and thereafter as capital gain. We do not expect to maintain calculations of earnings and profits in accordance with U.S. federal income tax principles, and unless and until such calculations are made, U.S. Holders should assume that a distribution is paid out of earnings and profits and will be treated as a dividend for U.S. federal income tax purposes.

Dividends paid by Embraer will not be eligible for the dividends received deduction allowed to domestic corporations under the Code.

The amount of any cash distribution paid in reais will be included in a U.S. Holder’s gross income in an amount equal to the U.S. dollar value of the reais calculated by reference to the exchange rate in effect on the date the dividend is received or accrued by the U.S. Holder, in the case of Embraer common shares, and by the depositary, in the case of ADSs, regardless of whether the reais are converted into U.S. dollars. If the reais received as a dividend are not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the reais equal to their U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the reais will be treated as U.S. source ordinary income or loss for U.S. federal income tax purposes.

Subject to the discussion above regarding concerns expressed by the U.S. Treasury and a number of other complex limitations and conditions (including a limit on credits that may be claimed with respect to qualified dividend income (as defined below)), a U.S. Holder will generally be entitled to claim a U.S. foreign tax credit in respect of any Brazilian withholding taxes imposed on dividends received on Embraer’s common shares or ADSs. U.S. Holders who do not elect to claim a credit for foreign taxes may instead claim a deduction in respect of such Brazilian withholding taxes. Dividends received with respect to the Embraer common shares or ADSs will be treated as foreign source income for U.S. federal income tax purposes, and will be “passive category income” for purposes of calculating foreign tax credits in most cases, subject to various limitations. The rules relating to computing foreign tax credits or deducting foreign income taxes are extremely complex, and U.S. Holders are urged to consult their own independent tax advisors regarding the availability of foreign tax credits with respect to any Brazilian withholding taxes in regards of dividends paid on Embraer’s common shares or ADSs.

Subject to certain exceptions for short-term and hedged positions, the amount of dividends received by certain non-corporate U.S. holders (including individuals) with respect to the Embraer common shares or ADSs may be eligible for a reduced rate of taxation if the dividends represent “qualified dividend income.” Dividends paid on the Embraer common shares or ADSs will be treated as qualified dividend income if (i) the Embraer common shares or ADSs are readily tradable on an established securities market in the United States, (ii) the U.S. Holder meets the holding period requirement for the common shares or ADSs (generally more than 60 days during the 121-day period that begins 60 days before the ex-dividend date) and (iii) Embraer was not in the year prior to the year in which the dividend was paid (with respect to a U.S. Holder that held Embraer common shares or ADSs), and is not in the year in which the dividend is paid, a PFIC. Under guidance issued by the IRS, the ADSs of Embraer should qualify as readily tradable on an established securities market in the United States so long as they are listed on the NYSE. In the case of Embraer common shares held directly by U.S. Holders and not underlying an ADS, it is not clear whether dividends paid with respect to such shares will represent “qualified dividend income.” U.S. Holders holding Embraer common shares directly and not through an ADS are urged to consult their own independent tax advisors.

122 Based on its audited financial statements as well as relevant market and shareholder data, Embraer believes that it was not a PFIC for U.S. federal income tax purposes with respect to its 2018 taxable year. In addition, based on Embraer’s audited or projected financial statements and current expectations regarding the value and nature of its assets, the sources and nature of its income, and relevant market and shareholder data, Embraer does not anticipate becoming a PFIC for its 2019 taxable year. However, because this determination is based on the nature of Embraer’s income and assets from time to time, involves the application of complex tax rules, and since Embraer’s view is not binding in the courts or the IRS, no assurances can be provided that Embraer will not be considered a PFIC for the current, or any past or future tax year. The potential application of the PFIC rules is further discussed below.

Sale, Exchange or Other Taxable Disposition of Embraer Common Shares or ADSs A U.S. Holder will recognize a taxable gain or loss on any sale, exchange or other taxable disposition of Embraer common shares or ADSs in an amount equal to the difference between the amount realized on the sale, exchange or other taxable disposition and the U.S. Holder’s adjusted tax basis (determined in U.S. dollars) in the Embraer common shares or ADSs. Such gain or loss will generally be capital gain or loss and will be long-term capital gain or loss if the Embraer common shares or ADSs have a holding period of more than one year. Certain non-corporate U.S. Holders (including individuals) may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of capital losses is subject to limitations under the Code.

Any gain or loss recognized by a U.S. Holder from the sale, exchange or taxable disposition of Embraer common shares or ADSs generally will be gain or loss from U.S. sources for U.S. foreign tax credit purposes. Consequently, if a Brazilian withholding tax or capital gains tax is imposed pursuant to a sale of Embraer common shares or ADSs, U.S. Holders who do not have sufficient foreign source income might not be able to derive effective U.S. foreign tax credit benefit in respect of such Brazilian withholding tax or capital gains tax. The rules relating to foreign tax credits, including the amount of foreign income taxes that may be claimed as a credit in any given year, are extremely complex and subject to limitations. U.S. Holders are urged to consult their own independent tax advisor regarding the application of the foreign tax credit rules to their particular circumstances.

Deposits and withdrawals of Embraer common shares in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.

Passive Foreign Investment Company Rules If, during any taxable year of a non-U.S. corporation, 75% or more of the corporation’s gross income consists of certain types of “passive” income, or the average value during a taxable year of the “passive assets” of the corporation (generally assets that generate passive income) is 50% or more of the average value of all the corporation’s assets, the corporation will be treated as a PFIC under U.S. federal income tax law. If a corporation is treated as a PFIC, a U.S. Holder may be subject to increased tax liability upon the sale of its stock, or upon the receipt of certain dividends, unless such U.S. Holder makes an election to be taxed currently on its pro rata portion of the corporation’s income, whether or not such income is distributed in the form of dividends, or otherwise makes a “mark-to-market” election with respect to the corporation’s stock as permitted by the Code. Currently, a U.S. Holder who owns common shares or ADSs in any year that Embraer is a PFIC in excess of certain de minimis amounts and fails to qualify for certain other exemptions would be required to file IRS Form 8621 to report such holdings. In addition, as discussed above, a U.S. Holder would not be entitled to (if otherwise eligible for) the preferential reduced rate of tax payable on certain dividend income. As stated above, although no assurances can be given, based on Embraer’s operations, projections and business plans and the other items discussed above, Embraer does not believe that it (or its predecessor) was or currently is a PFIC, and does not expect to become a PFIC for subsequent taxable years.

U.S. Holders are urged to consult their own independent tax advisors regarding the potential application of the PFIC rules and related reporting requirements to the common shares or ADSs and the availability and advisability of making an election to avoid the adverse tax consequences of the PFIC rules should Embraer be considered a PFIC for any taxable year.

123 U.S. Tax Reform – Tax Cuts and Jobs Act of 2017 On December 22, 2017 Public Law 115-97, informally referred to as the Tax Cuts and Jobs Act (the Act), was enacted and includes several provisions that affect the Company. The Act introduced tax reform that reduced the current corporate federal income tax rate from 35% to 21%, enacted a more restrictive policy in terms of the deductibility of interest, allows full expensing of certain qualified property including short-lived capital investments for five years and introduced a base erosion and anti-abuse tax (the BEAT), among other provisions.

For the year ended December 31, 2018, the Company recorded an immediate write-off of capital investments in the amount of $21.6 million corresponding to qualified property placed in service in 2018. For the year ended December 31, 2017, the Company recorded an immediate write-off of capital investments in the gross amount of $4.8 million corresponding to qualified property placed in service after September 27, 2017 and before December 31, 2017.

Effective for tax years beginning after December 31, 2017, the Act allows domestic corporations a new tax deduction in the amount of 37.5% of foreign derived intangible income (FDII). For the year ended December 31, 2018, the Company’s estimated FDII deduction is approximately $2.9 million. However, for the year ended December 31, 2018 the Company was no longer eligible to deduct the domestic production activities deduction (DPAD), which was repealed by the Act and was equal to 9% of the lesser of the taxpayer’s qualified production activities income or the taxpayer’s taxable income for the tax year. For the year ended December 31, 2017, the Company‘s DPAD deduction was approximately $8.7 million.

For the year ended December 31, 2017, the Company determined that the Act required a revaluation of its deferred tax assets and liabilities considering that these are measured using the enacted tax rates expected to apply to taxable income in years in which the related temporary differences are expected to be recovered or settled. For the year ended December 31, 2017, the Company recorded a net reduction of approximately $9.0 million in the value of its deferred tax liabilities that is affected by the rate change, which was recorded as a reduction to income tax expense in the Company’s consolidated statement of income. There were no subsequent revaluations of the Company’s deferred tax assets and liabilities due to the rate change for the year ended December 31, 2018.

Effective January 1, 2018, the BEAT is applicable to certain corporate taxpayers that make payments to foreign related parties for which a deduction is otherwise allowable, or for payments made in connection with acquisition of depreciable property. Payments for items which are a component of cost of sales are treated as a reduction of gross receipts and are excluded from the scope of the provision. The vast majority of payments made by the Company and its subsidiaries to foreign related parties are for procurement of aircraft parts. Most of these payments are recorded as a component of cost of sales and therefore are excluded from the BEAT base In addition, the Act contains significant new limitations on the ability of a taxpayer to deduct business interest paid or accrued on debt properly allocable to a trade or business. The Company has performed an assessment of the impact of BEAT as well as the interest expense limitation rules and concluded that these provisions are not applicable to the Company for the year ended December 31, 2018.

Information Reporting and Backup Withholding In general, payments of dividends on Embraer common shares or ADSs, and payments of the proceeds of the sale, exchange or other disposition of Embraer common shares or ADSs, paid within the United States or through certain U.S.-related financial intermediaries to a U.S. Holder are subject to information reporting and may be subject to backup withholding at a current maximum rate of 24% unless the U.S. Holder (i) is a corporation or other exempt recipient or (ii) in the case of backup withholding, provides an accurate taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is timely provided to the IRS. A U.S. Holder generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed its U.S. federal income tax liability by filing a timely refund claim with the IRS.

In addition, certain U.S. Holders are required to report to the IRS information relating to an interest in the common shares or ADSs, subject to exceptions (including an exception for common shares or ADSs held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax returns for each year in which they held an interest in the common shares or ADSs. U.S. Holders are urged to consult their own tax advisors regarding the effect, if any, of this information reporting requirement on their acquisition, ownership and disposition of the common shares or ADSs.

124 10F. Dividends and Paying Agents Not applicable.

10G. Statements by Experts Not applicable.

10H. Documents on Display We are subject to the periodic reporting and other informational requirements of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC. You may inspect and obtain copies, at prescribed rates, of reports and other information filed by us with the SEC at its Public Reference Room maintained at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. You may also inspect and copy this material at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.

We file our annual report on Form 20-F, including our financial statements, and other reports, including our reports on Form 6-K, electronically with the SEC. These filings are available at www.sec.gov. We also file financial statements and other periodic reports electronically with the CVM at its website, www.cvm.gov.br. Copies of our annual reports on Form 20-F and documents referred to in this annual report and our bylaws will be available for inspection upon request at our headquarters at Avenida Presidente Juscelino Kubitschek, 1909, 14th and 15th floors—Torre Norte—São Paulo Corporate Towers, 04543-907 São Paulo, SP, Brazil.

10I. Subsidiary Information Not required.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to various market risks, primarily related to potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We have established policies and procedures to manage sensitivity to interest rate and foreign currency exchange rate risk. These procedures include the monitoring of our levels of exposure to each market risk, including an analysis based on forecast of future cash flows, the funding of variable rate assets with variable rate liabilities, and limiting the amount of fixed rate assets which may be funded with floating rate liabilities. We may also use derivative financial instruments to mitigate the effects of interest rate fluctuations and to reduce our exposure to exchange rate risk. The following sections address the significant market risks associated with our financial activities.

Interest Rate Risk Our exposure to market risk for interest rate fluctuations principally relates to changes in the market interest rates of our U.S. dollar-denominated and real-denominated monetary assets and liabilities, principally our short- and long-term debt obligations. Increases and decreases in prevailing interest rates generally translate into increases and decreases in interest expense. Additionally, the fair values of interest rate-sensitive instruments are also affected by general market conditions.

Our short and long-term debt obligations totaled US$3,647.7 million as of December 31, 2018 and were denominated in U.S. dollars, Brazilian reais and Euros. Of the total amount of debt denominated in U.S. dollars (i.e., US$ 3,341.4 million), US$3,172.1 million was subject to fixed rates. The remaining floating rate U.S. dollar-denominated debt, or US$169.4 million, which corresponds to 5.1% of our debt denominated U.S. dollars, was indexed to LIBOR. It is likely that we will have to transition away from the LIBOR as a benchmark to our debt in 2021, as the banks’ obligations to report information used to set LIBOR will cease by then. We have not yet analyzed the effects of this transition.

Of our US$286.6 million Brazilian real-denominated debt as of December 31, 2018, US$1.9 million bears interest at a variable rate based on the TJLP, and US$284.7 million bears interest at a fixed rate of 4.5% per annum. The TJLP was 7.0% per annum as of December 31, 2018. Our Euro denominated debt totaled US$19.6 million as of fixed rate as of December 31, 2018.

125 The table below provides information about our short-term debt obligations as of December 31, 2018 that are sensitive to changes in interest rates and foreign currency exchange rates.

Weighted Average Total Amount Interest Rate 2018(1) Outstanding Total Fair Value (%) (in US$ millions) Short-Term Debt U.S. dollars (fixed rate) 5.33 34.3 34.5 U.S. dollars (LIBOR indexed) 4.19 21.6 26.8 Euro (fixed rate) 0.00 0 0 Reais (fixed rate) 4.51 122.8 124.1 Reais (TJLP indexed) 5.50 0.6 0.6 Total short-term debt 179.3 186.0

(1) The interest rate refers exclusively to the weighted average of our indebtedness (short-term and long-term). It does not represent the indexed rates as of December 31, 2018.

The table below provides information about our long-term debt obligations as of December 31, 2018 that are sensitive to changes in interest rates and foreign currency exchange rates:

Weighted Average TotalAmount 2024 and Interest Rate 2018(1) Outstanding 2020 2021 2022 2023 There-after Total Fair value (%) (in US$ millions) Long-Term Debt U.S. dollars (fixed rate) 5.33 3,137.8 162.2 199.5 499.1 508.2 1,768.8 3,274.5 U.S. dollars (LIBOR indexed) 4.19 147.8 2.1 16.6 0.5 0.6 128.0 148.2 Euro (fixed rate) 0.00 19.6 3.1 2.8 3.5 3.5 6.7 19.6 Reais (fixed rate) 4.51 161.9 69.0 68.2 16.1 8.6 — 127.1 Reais (TJLP indexed) 5.50 1.3 0.6 0.5 0.2 — — 1.1 Total long-term debt 3,468.4 237.0 287.6 519.4 520.9 1,903.5 3,570.5

(1) The interest rate refers exclusively to the weighted average of our indebtedness (short-term and long-term). It does not represent the indexed rates as of December 31, 2018.

In order to manage our interest rate risk on our monetary liabilities, we have entered into a number of swaps, which effectively convert US$284.7 million of our fixed interest rate, Brazilian real-denominated debt into floating interest rate, Brazilian real-denominated obligations; and convert US$102.6 million of our floating interest rate, U.S. dollar-denominated debt to fixed interest rate, U.S. dollar-denominated obligations.

126 The table below provides information about our short-term debt obligations as of December 31, 2018, after taking into account the effects of the aforementioned derivative transactions:

Weighted Average Total Amount Interest Rate 2018(1) Outstanding Total Fair Value (%) (in US$ millions) Short-Term Debt U.S. dollars (fixed rate) 5.32 36.2 40.1 U.S. dollars (LIBOR indexed) 2.98 19.8 21.2 Euro (fixed rate) 0.00 0 0 Reais (fixed rate) 0.00 00 Reais (CDI indexed) 2.45 122.7 124.1 Reais (TJLP indexed) 5.50 0.6 0.6 Total short-term debt 179.3 186.0

(1) The interest rate refers exclusively to the weighted average of our indebtedness (short-term and long-term). It does not represent the indexed rates as of December 31, 2018.

The table below provides information about our long-term debt obligations as of December 31, 2018, after taking into account the effects of the aforementioned derivative transactions:

Total Weighted Average Amount 2024 and Interest Rate 2018(1) Outstanding 2020 2021 2022 2023 There-after Total Fair value (%) (in US$ millions) Long-Term Debt U.S. dollars (fixed rate) 5.32 3,239.9 162.6 200.0 499.7 508.7 1,868.9 3,377.7 U.S. dollars (LIBOR indexed) 2.98 45.7 1.7 16.1 — — 27.9 45.0 Euro (fixed rate) 0.00 19.6 3.1 2.8 3.5 3.5 6.7 19.6 Reais (CDI indexed) 2.45 161.9 69.0 68.2 16.1 8.6 —127.1 Reais (TJLP indexed) 5.55 1.3 0.6 0.5 0.2 — — 1.1 Total long-term debt 3,468.4 237.0 287.6 519.5 520.8 1,903.5 3,570.5

(1) The interest rate refers exclusively to the weighted average of our indebtedness (short-term and long-term). It does not represent the indexed rates as of December 31, 2018.

Foreign Exchange Rate Risk In managing our foreign currency risk, we focus on balancing our non-U.S. dollar-denominated assets against our non-U.S. dollar-denominated liabilities plus shareholders’ equity in relation to our forecasts of future cash flows. Beyond the foreign currency exposure related to our debt obligations as summarized above, we also have other assets and liabilities denominated in currencies other than the U.S. dollar. These monetary assets and liabilities are primarily cash and cash equivalents, financial assets, accounts receivable and payable, deferred income taxes, dividends and certain other assets and liabilities and are primarily denominated in Brazilian reais. The effects on these assets and liabilities of the appreciation or devaluation of other foreign currencies against the U.S. dollar result in foreign exchange gains (losses) recognized as interest income (expense), net. The translation gains and losses arising from the remeasurement of our financial statements to U.S. dollars are recognized on our statement of income as foreign exchange gain (loss), net.

Our cash flow exposure comes as a result of the fact that approximately 6.0% of our net revenues and 30% of our total costs are denominated in reais. Having more real denominated costs than revenues generates the exposure. For further information on our hedges and derivate instruments, see Note 8 to 2018 audited consolidated financial statements.

127 The table below provides information about our assets and liabilities exposed to foreign currency risk as of December 31, 2018, as well as the derivative transactions outstanding at the same date:

Financial instruments indexed to currencies other than the U.S. dollar Outstanding Amount by Year of Maturity Total Total Outstanding There- Fair Amount 2019 2020 2021 2022 2023 after Value (in US$ millions) ASSETS Cash and cash equivalents and financial investments In Reais 406.5 406.5 — — — — — 406.5 In Euro 47.7 47.7 — — — — — 47.7 In other currencies 6.8 6.8 — — — — 6.8 Trade accounts receivable In Reais 10.7 10.7 — — — — — 10.7 In Euro 33.1 33.1 — — — — — 33.1 Deferred income tax assets In Reais 17.9 12.6 1.1 1.1 1.1 1.1 0.9 17.9 In Euro 2.8 2.0 0.2 0.2 0.2 0.2 — 2.8 In other currencies 0.9 0.6 0.1 0.1 0.1 — — 0.9 Other assets In Reais 265.8 182.1 83.7 — — — — 265.8 In Euro 11.5 10.3 1.2 — — — — 11.5 In other currencies 0.6 0.6 — — — — — 0.6 Total assets in Reais 700.9 611.9 84.8 1.1 1.1 1.1 0.9 700.9 Total assets in Euro 95.1 93.1 1.4 0.2 0.2 0.2 — 95.1 Total assets in other currencies 8.3 8.0 0.1 0.1 0.1 — — 8.3 LIABILITIES Loans In Reais 286.6 123.4 69.6 68.7 16.3 8.6 — 286.6 In Euro 19.6 — 3.1 2.8 3.5 3.5 6.7 19.6 Accounts payable to suppliers In Reais 77.1 77.1 — — — — — 77.1 In Euro 27.2 27.2 — — — — — 27.2 In other currencies 72.2 72.2 — — — — — 72.2 Customer advances In Reais 159.7 159.7 — — — — — 159.7 Other accounts payable & accrued liabilities In Reais 377.7 261.3 116.4 — — — — 377.7 In Euro 18.9 14.6 4.3 — — — — 18.9 In other currencies 3.9 3.6 0.3 — — — — 3.9 Taxes and payroll charges payable In Reais 120.3 62.0 58.3 — — — — 120.3 In Euro 4.5 4.5 — — — — — 4.5 Accrued taxes on income In Reais 32.3 32.3 — — — — 32.3 In Euro (4.4) (4.4) — — — — — (4.4) In other currencies 2.9 2.9 — — — — — 2.9 Deferred income tax liabilities In Reais 224.7 158.0 13.5 13.3 13.3 13.3 13.3 224.7 In Euro 11.2 7.9 0.7 0.7 0.7 0.7 0.5 11.2 In other currencies 0.8 0.8 — — — — — 0.8 Accrued dividends In Reais 5.0 5.0 — — — — — 5.0 Contingencies In Reais 48.8 15.4 14.0 14.0 14.0 14.0 (22.6) 48.8 In Euro 4.3 — 1.8 1.8 1.8 1.8 (2.9) 4.3 Total liabilities in Reais 1,332.2 894.2 271.8 96.0 43.6 35.9 (9.3) 1,332.2 Total liabilities in Euro 81.3 49.8 9.9 5.3 6.0 6.0 4.3 81.3 Total liabilities in other currencies 79.8 79.5 0.3 — — — — 79.8 Total exposure in Reais (631.3) (282.3) (187.0) (94.9) (42.5) (34.8) 10.2 (631.3) Total exposure in Euro 13.8 43.3 (8.5) (5.1) (5.8) (5.8) (4.3) 13.8 Total exposure in other currencies (71.5) (71.5) (0.2) 0.1 0.1 — — (71.5)

128 Credit Risk We may incur losses if counterparties to our various contracts do not pay amounts that are owed to us. In that regard, our primary credit risk derives from the sales of aircraft, spare parts and related services to customers, including the financial obligations related to those sales in the cases where we provide guarantees for the benefit of the providers of finance to the aircraft purchases of our customers. We are also exposed to the credit risk of the counterparties to our financial instruments.

Financial instruments which may potentially subject us to credit risk concentration include (i) financial investments and other financial instruments, (ii) trade accounts receivable, (iii) customer commercial financing and (iv) advances to suppliers We seek to limit our credit risk associated with cash and cash equivalents by placing the investments we make with those instruments with investment grade-rated following the guidelines of financial management policy. With respect to trade accounts receivable and customer commercial financing, we seek to limit our credit risk by performing ongoing credit evaluations. All these customers are currently meeting their commitments with us, are operating within the established credit limits that we assign to them and are considered by management to represent an acceptable credit risk level to us. Advances to suppliers are made only to select, long-standing suppliers. We analyze the financial condition of those suppliers on an ongoing basis with a view to limiting credit risk.

We may also have credit risk related to the sale of aircraft during the period in which their purchasers are finalizing the financing arrangements for their aircraft purchases from us. In order to try to minimize these risks, we continuously monitor customer credit analyses and work closely with financial institutions to facilitate customer aircraft financing.

129 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 12A. Debt Securities Not applicable.

12B. Warrants and Rights Not applicable.

12C. Other Securities Not applicable.

12D. American Depositary Shares Depositary Fees and Charges The depositary may charge, and collect from, (i) each person to whom ADSs are issued, including, without limitation, issuances against deposits of shares, issuances in respect to share distributions, rights and other distributions, issuances pursuant to a stock dividend or stock split declared by us, or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or the deposited securities, and (ii) each person surrendering ADSs for withdrawal of deposited securities or whose ADSs are cancelled or reduced for any other reason, U.S.$5.00 for each 100 ADSs (or portion thereof) issued, delivered, reduced, cancelled or surrendered (as the case may be) plus any additional fees charged by any governmental authorities or other institutions, including the Companhia Brasileira de Liquidação e Custódia (the Brazilian Clearing and Depositary Corporation) or the B3 – Brasil, Bolsa, Balcão, the stock exchange on which the shares are registered for trading. The depositary may sell (by public or private sale) sufficient securities and property received in respect of share distributions, rights and other distributions prior to the deposit to pay the charge.

The following additional charges shall be incurred by ADS Holders, by any party depositing or withdrawing shares or by any party surrendering ADSs, to whom ADSs are issued (including, without limitation, issuances pursuant to a stock dividend or stock split declared by us or an exchange of stock regarding the ADSs or the deposited securities or a distribution of ADSs pursuant to section 10 of the deposit agreement, whichever is applicable: • a fee of U.S.$0.02 or less per ADS for any cash distribution made pursuant to the deposit agreement; • a fee of U.S.$1.50 per ADS or ADSs or transfers made pursuant to section 3 of the deposit agreement; • a fee for the distribution or sale of securities pursuant to section 10 of the deposit agreement, this fee being in an amount equal to the fee for the execution and delivery of ADSs, referred to above which would have been charged as a result of the deposit of the securities (for purposes of section 7 of the deposit agreement treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to ADS holders entitled thereto; • any other charge payable by any of the depositary, any of the depositary’s agents, including, without limitation, the custodian, or the agents of the depositary’s agents in connection with the servicing of our common shares or other deposited securities (which charge shall be assessed against registered holders of our ADSs as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such registered holders or by deducting such charge from one or more cash dividends or other cash distributions); • an aggregate fee of U.S.$0.02 per ADS per calendar year (or portion thereof) for the services performed by the depositary in administering the ADSs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders as of the record date or record dates set by the depositary during each calendar year and shall be payable at the sole discretion of the depositary by billing such holders or by deducing such charge from one or more cash dividends or other cash distributions); and

130 • a fee for the reimbursement of those fees, charges and expenses as are incurred by the depositary and/or any of its agents (including, without limitation, the custodian and expenses incurred on behalf of holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the servicing of the shares or other deposited securities, the sale of securities (including, without limitation, deposited securities), the delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable law, rule or regulation (which fees and charges shall be assessed on a proportionate basis against holders as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distributions).

We will pay all other charges and expenses of the depositary and any agent of the depositary (except the custodian) pursuant to agreements from time to time between us and the depositary, except: • stock transfer or other taxes and other governmental charges (which are payable by holders or persons depositing shares); • cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or holders delivering shares, ADSs or deposited securities (which are payable by such persons or holders); • transfer or registration fees for the registration or transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities (which are payable by persons depositing shares or holders withdrawing deposited securities; there are no fees in respect of the shares as of the date of the deposit agreement); and • in connection with the conversion of foreign currency into U.S. dollars, JPMorgan shall deduct out of such foreign currency the fees, expenses and other charges charged by it and/or its agent (which may be a division, branch or affiliate) so appointed in connection with this conversion, JPMorgan and/or its agent may act as principal for such conversion of foreign currency.

These charges may at any time and from time to time be changed by agreement between us and the depositary.

Depositary Payments for the Year December 31, 2018 In 2018, JPMorgan paid US$2.4 million in connection with investor relations related expenses of Embraer incurred in 2018 that are eligible for reimbursement from JPMorgan under our contractual arrangements with that entity.

131 PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES No matters to report.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS Material Modifications to the Rights of Security Holders Not applicable.

Use of Proceeds Not applicable.

ITEM 15. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Disclosure controls and procedures refers to the controls and other procedures adopted by us that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

Our President and CEO, Paulo Cesar de Souza e Silva, and our executive vice-president and chief financial and investor relations officer, Nelson Krahenbuhl Salgado, after evaluating, together with management, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2018, the end of the period covered by this annual report, concluded that, as of this date, our disclosure control and procedures were effective to ensure information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and were effective in ensuring that such information is accumulated and communicated to our management, including our CEO and chief financial officer, as appropriate to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Effective internal control over financial reporting cannot, and does not, provide absolute assurance of achieving our control objectives. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework 2013. Based on this assessment, our management concluded that, as of December 31, 2018, our internal control over financial reporting was effective based on those criteria.

Attestation Report of the Registered Public Accounting Firm The effectiveness of our internal control over financial reporting as of December 31, 2018 has been audited by PricewaterhouseCoopers Auditores Independentes, an independent registered public accounting firm, as stated in their report which appears herein on page F-3.

132 Changes in Internal Control over Financial Reporting Our risks and internal controls department periodically evaluates our internal controls for the main cycles, documenting the processes used in each cycle, identifying opportunities and suggesting improvements for the existing control mechanisms. There was no change in our internal controls over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT Our board of directors has determined that Mr. Sergio Eraldo de Salles Pinto, an effective member of our statutory audit and risks committee is an “audit committee financial expert” as defined by current SEC rules. For a discussion of the role of our audit and risks committee, see “Item 6C. Directors, Senior Management and Employees—Board Practices—Audit and Risks Committee.”

ITEM 16B CODE OF ETHICS Our board of directors has adopted a Code of Ethics and Conduct applicable to our directors, officers and employees worldwide, including our principal executive officer, principal financial officer and controller. A copy of our Code of Ethics and Conduct has been filed as Exhibit 11.1 to this annual report.

ITEM 16C PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table sets forth by category of service the total fees for services performed by KPMG Auditores Independentes during the fiscal year ended December 31, 2017 and PricewaterhouseCoopers Auditores Independentes during the fiscal years ended December 31, 2017 and 2018:

Principal accountant fees and services Year ended December 31, 2018 2017 (in US$ thousands) Audit Fees 3,583.2 2,877.8 Audit-Related Fees 25.9 25.9 Tax Fees 44.9 268.1 All Other Fees 52.4 665.0 Total 3,706.4 3,836.9

Audit Fees Audit fees consisted of the aggregate fees in connection with (i) the audit of annual financial statements and quarterly reviews under Brazilian GAAP and IFRS as issued by the IASB, which are published in Brazil and United States (filed with the SEC on Form 6-K) performed in accordance with the standards of the PCAOB and (ii) statutory audits of subsidiaries.

Audit-Related Fees Audit-related fees consisted mainly of the aggregate fees in connection with compliance services provided to the Company and some of our subsidiaries related to documents filed with regulatory and government agencies and issuance of comfort letter related to the Company’s issuance of Notes.

Tax Fees Tax fees consisted of the aggregate fees in connection with tax compliance services for some of our subsidiaries.

All Other Fees All other fees consisted refer to miscellaneous permitted compliance services rendered in 2017 for some subsidiaries and services related to IT diagnosis.

133 Pre-Approval Policies and Procedures Our board of directors approves all audit and audit-related services provided by KPMG Auditores Independentes in 2016 and PricewaterhouseCoopers Auditores Independentes in 2017 and 2018. Any services provided by KPMG Auditores Independentes and PricewaterhouseCoopers Auditores Independentes that are not specifically included within the scope of the audit must be pre-approved by our audit and risks committee in advance of any engagement. Pursuant to Rule 2-01 of Regulation S-X, audit committees are permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimis exception prior to the completion of an audit engagement. In 2016, 2015 and 2014 none of the fees paid to KPMG Auditores Independentes and in 2017 and 2018 none of the fees paid to PricewaterhouseCoopers Auditores Independentes were approved pursuant to the de minimis exception.

ITEM 16D EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES None.

ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS On March 10, 2016, our board of directors approved a new share buyback program for our common shares, in compliance with CVM Instruction No. 10/80. We were authorized to buy back up to an aggregate of 3,000,000 common shares, representing approximately 0.4% of our outstanding capital, which totaled 737,439,054 common shares outstanding on March 10, 2016.

On June 2, 2017, our board of directors approved a new share buyback program for our common shares, in compliance with CVM Instruction No. 10/80. We were authorized to buy back up to an aggregate of 3,000,000 common shares, representing approximately 0.4% of our outstanding capital, which totaled 735,752,704 common shares outstanding on June 2, 2017. The common shares were repurchased from June 6 through August 29, 2017.

In 2018, we did not approve a share buyback program.

ITEM 16F CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT Not applicable.

ITEM 16G CORPORATE GOVERNANCE We are subject to NYSE corporate governance listing standards. As a foreign private issuer, the standards applicable to us are considerably different than the standards applied to U.S. listed companies. Under the NYSE rules, we are required only to: (i) have an audit committee or audit board, pursuant to an applicable exemption available to foreign private issuers, that meets certain requirements, as discussed below, (ii) provide prompt certification by our CEO of any material non-compliance with any corporate governance rules and (iii) provide a brief description of the significant differences between our corporate governance practices and the NYSE corporate governance practice required to be followed by U.S. listed companies. The discussion of the significant differences between our corporate governance practices and those required of U.S. listed companies follows below.

Majority of Independent Directors The NYSE rules require that a majority of the Board must consist of independent Directors. Independence is defined by various criteria, including the absence of a material relationship between the director and the listed company, which independence must be affirmatively determined by the board of directors. Likewise, the Novo Mercado Listing Rules require that at least 20%, or at least two, whichever is bigger, of the members of the board of directors of a company listed on the Novo Mercado segment of the B3 be independent. Independence of Board members in accordance with the Novo Mercado Listing Rules is defined by criteria similar to those set forth in the NYSE rules.

With the exception of Mr. José Magno Resende de Araújo (the representative of the Brazilian government, through the government’s ownership of the “golden share”), Mr. Alexandre Magalhães Filho and Dejair Losnak Filho (both representatives of our employees), all the current members of our board of directors have declared that they are independent for purposes of the Novo Mercado Listing Rules. Our directors meet the qualification requirements of the Brazilian Corporate Law, the CVM requirements and the Novo Mercado Listing Rules.

134 The Brazilian Corporate Law and our bylaws require that our directors be elected by our shareholders at a general shareholders’ meeting. The election of members of our board of directors, absent a request to adopt a cumulative voting system, will be conducted under a system of slate voting whereby voting will be based on a slate of Directors and no voting will be allowed on individual candidates. According to our bylaws, the board of directors will nominate a slate for the subsequent term of office. Our board of directors is appointed by our shareholders for a two-year term, having three reserved seats as follows: (i) one acting member (and his/her alternate) to be appointed by the Brazilian government, as holder of the “golden share” and (ii) two acting members (and his/her alternate) to be appointed by our employees. The remaining eight acting Directors are elected in accordance with the slate voting or cumulative voting rules contained in our bylaws. A person may participate in two or more different slates. Each shareholder may only vote on one slate and the slate that receives the highest number of votes shall be declared elected. For further information on the election of our board of directors, see “Item 10B. Additional Information—Memorandum and Articles of Association—Board of Directors—Election of Board of Directors.”

Executive Sessions NYSE rules require that the non-management directors must meet at regularly scheduled executive sessions without management. Brazilian Corporate Law does not have a similar provision. According to Brazilian Corporate Law, up to one third of the members of the board of directors can be elected from management. The remaining non-management directors are not expressly required to check on management. Embraer’s board of directors’ rules of procedure provide that the external members of the board of directors (who are comprised of members who do not hold any commercial, employment or management relationship with Embraer) shall meet on exclusive sessions to be held on the same day of and prior to the board of directors meetings to discuss the agenda of the meeting.

Nominating/Corporate Governance Committee NYSE rules require that listed companies have a Nominating/Corporate Governance Committee composed entirely of independent directors and governed by a written charter addressing the committee’s required purpose and detailing its required responsibilities, which include, among other things, identifying and selecting qualified board member nominees and developing a set of corporate governance principles applicable to the company. We are not required under applicable Brazilian law to have a Nominating Committee/Corporate Governance Committee, and accordingly, to date, have not established this committee. Members of our board of directors are elected by our shareholders at a general shareholders’ meeting.

Compensation Committee NYSE rules require that listed companies have a compensation committee composed entirely of independent directors and governed by a written charter addressing the committee’s required purpose and detailing its required responsibilities, which include, among other things, reviewing corporate goals relevant to CEO compensation, evaluating CEO performance and approving CEO compensation levels and recommending to the board non-CEO compensation, incentive-compensation and equity-based plans. We are not required under applicable Brazilian law to have a Compensation Committee. Under the Brazilian Corporate Law, the total amount available for compensation of our directors and executive officers and for profit-sharing payments to our executive officers is established by our shareholders at the annual general meeting. The board of directors is then responsible for determining the individual compensation and profit sharing of each executive officer, as well as the compensation of our board and committee members. In making these determinations, the board reviews the performance of the executive officers, including the performance of our CEO.

Audit Committee NYSE rules require that listed companies have an audit committee that (i) is composed of a minimum of three independent directors who are all financially literate, (ii) complies with the SEC rules regarding audit committees for listed companies, (iii) has at least one member who has accounting or financial management expertise and (iv) is governed by a written charter addressing the committee’s required purpose and detailing its required responsibilities. We have an Audit and Risks Committee which meets the requirements of Rule 10A-3 under the U.S. Securities Exchange Act of 1934. We do not claim an exemption from the listing standards for audit committees.

135 Embraer’s statutory “Audit and Risks Committee” is composed of independent members of our board of directors. Because foreign private issuers are subject to local legislation which may prohibit the full board of directors from delegating certain responsibilities to the audit committee, pursuant to Rule 10A-3, audit committees of foreign private issuers may be granted responsibilities, which may include advisory powers, with respect to such matters to the extent permitted by law. Due to certain restrictions imposed by the Brazilian Corporate Law, our Audit and Risks Committee, unlike a U.S. audit committee, only has an “advisory” role and may only make recommendations for adoption by the full board of directors, which is responsible for the ultimate vote and final decision. For example, our Audit and Risks Committee makes recommendations regarding the appointment of auditing firms, which are subject to a vote of the board of directors. Our Audit and Risks Committee complies with Brazilian legal requirements (including “independent directors,” as defined by Brazilian law).

Shareholder Approval of Equity Compensation Plans NYSE rules require that shareholders be given the opportunity to vote on all equity compensation plans and material revisions thereto, with limited exceptions. Under the Brazilian Corporate Law, shareholders must approve all stock option plans. In addition, any issuance of new shares that exceeds our authorized share capital is subject to shareholder approval.

Corporate Governance Guidelines NYSE rules require that listed companies adopt and disclose corporate governance guidelines. In addition to being subject to the Novo Mercado regulations that include rules on corporate governance, we have not adopted any formal corporate governance guidelines. We have adopted and observe, our Policy on Trading in Company Securities and Disclosure of Material Information and Preservation of Confidentiality that requires the public disclosure of all relevant information pursuant to guidelines set forth by the CVM, as well as insider trading rules, which, among other things, establishes black-out periods and requires insiders to inform management of all transactions involving our securities.

In November 2016, after the contribution and comments made by the CVM, the Brazilian Corporate Governance Code, which provides for corporate governance practices guidelines for publicly-held companies in Brazil, was released by an institution formed by several market entities, such as the Brazilian Pension System, the Brazilian Association of Publicly-Held Companies, the Brazilian Financial and Capital Markets Association, the Brazilian Private Equity & Venture Capital Association, the Brazilian Association of Capital Markets Investors, the Association of Capital Markets Investment Analysts and Professionals, B3, BRAIN – Brazil Investments and Business, the Brazilian Institute of Corporate Governance, the Brazilian Investor Relations Institute and the Brazilian Capital Markets Institute.

In June 2017, the CVM approved a new rule, CVM Rule No. 586, which establishes that companies must inform whether they will implement the provisions set forth in the Brazilian Corporate Governance Code, or otherwise justify the reasons for non-compliance with those practices. Additionally, the B3 and the Brazilian Institute of Corporate Governance have issued guidelines for corporate governance best practices in Brazil.

Code of Business Conduct and Ethics NYSE rules require that listed companies adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. Applicable Brazilian law does not have a similar requirement. However, we adopted a Code of Ethics and Conduct applicable to our officers, directors and employees worldwide, including at the subsidiary level. We believe this code substantially addresses the matters required to be addressed pursuant to the NYSE rules. A copy of our Code of Ethics and Conduct has been filed as Exhibit 11.1 to this annual report. For a further discussion of our Code of Ethics and Conduct, see “Item 16B. Code of Ethics.” We usually review our Code of Ethics every two years. The latest version of the Code of Ethics is the 5th Edition, and was approved on December 8, 2016.

Internal Audit Function NYSE rules require that listed companies maintain an internal audit function to provide management and the audit committee with ongoing assessments of the company’s risk management processes and system of internal control. Our internal audit reports to the Audit and Risks Committee, and risk management and internal control report to the Chief Financial Officer, respectively, assuring the necessary independence and competence to assess the design of our internal control over financial reporting, as well as to test its effectiveness as required by Section 404 of the Sarbanes-Oxley Act of 2002.

136 ITEM 16H MINE SAFETY DISCLOSURE Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS We have responded to Item 18 in lieu of responding to this item.

ITEM 18. FINANCIAL STATEMENTS Our audited consolidated financial statements, together with the report of the Independent Registered Public Accounting Firm thereon, are filed as part of this annual report and are located following the signature page hereof.

ITEM 19. EXHIBITS

Exhibit Number Description 1.1 Bylaws of Embraer approved at the Special Shareholders’ Meeting held on May 4, 2016 (English translation), incorporated herein by reference from our Annual Report on Form 20-F for the year ended December 31, 2017, as filed on March 23, 2018. 2.1 Form of Amended and Restated Deposit Agreement, as amended, among Embraer S.A., JP Morgan Chase Bank, N.A., as depositary, and the Holders from time to time of American Depositary Shares issued thereunder, including the Form of American Depositary Receipts, incorporated herein by reference from Exhibit (a)(2) to Embraer’s Registration Statement No. 333-133162. 2.2 The registrant hereby agrees to furnish to the SEC, upon request, copies of instruments defining the rights of holders of long- term debt of the registrant and its consolidated subsidiaries and for any of its unconsolidated subsidiaries for which financial statements are required to be filed. 4.1 Master Transaction Agreement, entered into by and among Embraer, Boeing, Boeing Brazil and the Commercial Aviation NewCo, dated as of January 24, 2019. 4.2 Contribution Agreement, entered into by and among EB Defense, LLC, Boeing Member Entity, Boeing, Embraer Member Entity, and Embraer, dated as of January 24, 2019. 8.1 List of Embraer’s subsidiaries. 11.1 Code of Ethics and Conduct, dated December 8, 2016, incorporated herein by reference from our Annual Report on Form 20-F for the year ended December 31, 2017, as filed on March 23, 2018. 12.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. 12.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. 13.1 Section 1350 Certification of Chief Executive Officer. 13.2 Section 1350 Certification of Chief Financial Officer. 101.INS XBRL Instance Document. 101.SCH XBRL Taxonomy Extension Schema. 101.CAL XBRL Taxonomy Extension Scheme Calculation Linkbase. 101.DEF XBRL Taxonomy Extension Scheme Definition Linkbase. 101.LAB XBRL Taxonomy Extension Scheme Label Linkbase. 101.PRE XBRL Taxonomy Extension Scheme Presentation Linkbase.

137 SIGNATURES The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

EMBRAER S.A.

By : /s/ PAULO CESAR DE SOUZA E SILVA Name: Paulo Cesar de Souza e Silva Title: President and Chief Executive Officer

By: /s/ NELSON KRAHENBUHL SALGADO Name: Nelson Krahenbuhl Salgado Title: Executive Vice-President and Chief Financial and Investor Relations Officer

Date: March 29, 2019 Embraer S.A.

Consolidated Financial Statements as of December 31, 2018 and Report of Independent Registered Public Accounting Firm

F-1 INDEX TO THE FINANCIAL STATEMENTS

Page Index to Financial Statements F-2 Consolidated Statements of Financial Position as of December 31, 2018, 2017 and January 01, 2017 F-6 Consolidated Statements of Income for the Years Ended December 31, 2018, 2017 and 2016 F-8 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017 and 2016 F-9 Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2018, 2017 and 2016 F-10 Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 2016 F-11 Notes to the Consolidated Financial Statements F-12

F-2 Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Embraer S.A.

Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated statements of financial position of Embraer S.A. and its subsidiaries (“the Company”) as of December 31, 2018 and 2017, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2018, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle As discussed in Note 2.2.1 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues from contracts with customers and financial instruments in 2018.

Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

F-3 Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers Auditores Independentes São José dos Campos, Brazil March 29, 2019

We have served as the Company’s auditor since 2017.

F-4 The Board of Directors and Shareholders

Embraer S.A.

We have audited the consolidated statement of financial position of Embraer S.A. and subsidiaries as at January 1, 2017, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the year ended December 31, 2016. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Embraer S.A. and subsidiaries as at January 1, 2017, and the results of its operations and its cash flows for the year ended December 31, 2016, in conformity with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

As discussed in note 2.2.1 to the consolidated financial statements, the Company has changed its method of accounting for financial instruments and revenue due to the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers.

/s/ KPMG Auditores Independentes

São José dos Campos, Brazil March 21, 2017, except as to the retrospective adjustments described in note 2.2.1 to the consolidated financial statements, which is as of March 29, 2019. F-5 Embraer S.A. Consolidated Statements of Financial Position as of December 31, 2018, 2017 and January 01, 2017 (In millions of U.S. dollar)

ASSETS Note 12.31.2018 12.31.2017 01.01.2017 (Restated)* (Restated)* CURRENT Cash and cash equivalents 5 1,280.9 1,270.8 1,241.5 Financial investments 6 1,743.4 2,366.1 1,775.6 Trade accounts receivable, net 7 318.0 297.0 336.8 Derivative financial instruments 8 5.4 29.5 21.0 Customer and commercial financing 1.2 2.1 8.5 Collateralized accounts receivable 9.1 218.5 185.6 142.8 Contract assets 30 358.0 447.5 370.6 Inventories 11 2,507.0 2,148.7 2,496.4 Guarantee deposits 10 339.9 0.1 — Income tax and social contribution 95.3 76.9 80.7 Other assets 12 203.4 255.3 349.7 7,071.0 7,079.6 6,823.6 NON-CURRENT Financial investments 6 183.5 251.2 173.1 Derivative financial instruments 8 4.1 4.8 11.1 Customer and commercial financing 10.5 14.3 28.9 Collateralized accounts receivable 9.1 17.4 103.1 180.5 Guarantee deposits 10 9.8 393.8 511.4 Deferred income tax and social contribution 22.1 21.6 13.4 11.6 Other assets 12 105.6 121.5 156.9 352.5 902.1 1,073.5 Investments 6.3 5.6 3.9 Property, plant and equipment, net 15 1,964.7 2,104.9 2,154.2 Intangible assets, net 16 1,898.8 1,882.4 1,664.6 4,222.3 4,895.0 4,896.2 TOTAL ASSETS 11,293.3 11,974.6 11,719.8

* See Note 2.2.1 for the discussion relating to the adjustments.

The accompanying notes are an integral part of these consolidated financial statements.

F-6 Embraer S.A. Consolidated Statements of Financial Position as of December 31, 2018, 2017 and January 01, 2017 (In millions of U.S. dollar)

LIABILITIES Note 12.31.2018 12.31.2017 01.01.2017 (Restated)* (Restated)* CURRENT Trade accounts payable 18 892.1 824.7 952.1 Loans and financing 19 179.3 388.9 510.3 Recourse and non-recourse debt 9.2 324.0 17.6 22.9 Other payables 20 288.4 292.2 379.5 Contract liabilities 30 1,045.4 1,001.1 1,086.8 Derivative financial instruments 8 8.1 8.8 8.4 Taxes and payroll charges payable 21 68.4 70.7 43.6 Income tax and social contribution 48.0 16.1 25.9 Financial guarantee and residual value 23 51.0 22.2 49.7 Dividends payable 5.0 36.8 24.8 Unearned income 2.0 — — Provision 24.1 116.9 124.1 123.8 3,028.6 2,803.2 3,227.8 NON-CURRENT Loans and financing 19 3,468.4 3,809.6 3,249.6 Recourse and non-recourse debt 9.2 17.4 346.5 351.0 Other payables 20 28.6 21.5 16.9 Contract liabilities 30 198.2 125.5 158.0 Derivative financial instruments 8 — 0.1 — Taxes and payroll charges payable 21 58.2 70.2 67.9 Deferred income tax and social contribution 22.1 254.0 258.0 265.2 Financial guarantee and residual value guarantees 23 101.1 134.6 161.1 Unearned income 73.2 91.7 106.9 Provision 24.1 125.5 136.2 179.0 4,324.6 4,993.9 4,555.6 TOTAL LIABILITIES 7,353.2 7,797.1 7,783.4 SHAREHOLDERS’ EQUITY Capital 27.1 1,551.6 1,438.0 1,438.0 Treasury shares 27.3 (31.4) (51.8) (49.1) Revenue reserves 2,433.7 2,743.2 2,566.1 Share-based remuneration 37.4 37.3 36.8 Accumulated other comprehensive loss (145.6) (107.7) (135.7) Retained earning — 5.1 (12.1) 3,845.7 4,064.1 3,844.0 Non-controlling interests 94.4 113.4 92.4 TOTAL SHAREHOLDERS’ EQUITY 3,940.1 4,177.5 3,936.4 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 11,293.3 11,974.6 11,719.8

* See Note 2.2.1 for the discussion relating to the adjustments.

The accompanying notes are an integral part of these consolidated financial statements.

F-7 Embraer S.A. Consolidated Statements of Income Years Ended (In millions of U.S. dollar)

Note 12.31.2018 12.31.2017 12.31.2016 (Restated)* (Restated)* REVENUE 5,071.1 5,859.4 6,203.9 Cost of sales and services (4,303.1) (4,764.1) (4,982.0) GROSS PROFIT 768.0 1,095.3 1,221.9 Operating Income (expense) Administrative (182.6) (179.1) (164.3) Selling (304.2) (315.9) (353.4) Research (46.1) (49.2) (47.6) Other operating income (expense), net 32 (199.4) (210.4) (442.6) Equity in income (losses) of associates (0.4) 1.2 (0.3) OPERATING PROFIT BEFORE FINANCIAL RESULT 35.3 341.9 213.7 Financial income (expense), net 33 (171.5) (40.6) (37.5) Foreign exchange gain (loss), net 34 —6.6 4.4 PROFIT (LOSS) BEFORE TAXES ON INCOME (136.2) 307.9 180.6 Income tax expense 22.2 (35.0) (27.9) (0.3) NET INCOME (LOSS) FOR THE PERIOD (171.2) 280.0 180.3 Atributable to : Owners of Embraer (178.2) 264.0 178.6 Non-controlling interests 7.0 16.0 1.7 Earnings per share-basic in US$ 29.1 (0.24) 0.36 0.24 Earnings per share-diluted in US$ 29.2 (0.24) 0.36 0.24

* See Note 2.2.1 for the discussion relating to the adjustments.

The accompanying notes are an integral part of these consolidated financial statements.

F-8 Embraer S.A. Consolidated Statements of Comprehensive Income Years Ended (In millions of U.S. dollar)

12.31.2018 12.31.2017 12.31.2016 (Restated)* (Restated)* NET INCOME (LOSS) FOR THE PERIOD (171.2) 280.0 180.3 ITEMS THAT WILL NOT BE RECLASSIFIED FOR THE STATEMENT OF INCOME Actuarial gain (loss) on post-employment benefit obligation 1.1 9.2 (7.6) ITEMS THAT MAY BE SUBSEQUENTLY RECLASSIFIED THROUGH PROFIT AND LOSS Financial instruments, net 0.4 (10.3) 11.0 Translation adjustments (65.4) 34.1 (0.8) OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX EFFECTS (i) (63.9) 33.0 2.6 TOTAL OF COMPREHENSIVE INCOME (235.1) 313.0 182.9 Attributable to: Owners of Embraer (216.1) 292.0 192.4 Non-controlling interests (19.0) 21.0 (9.5) (235.1) 313.0 182.9

(i) Items presented above are net of deferred income tax, if applicable, of US$ (2.8), US$ (3.8) and US$ 5.1 for the year ended December 31, 2018, 2017 and 2016, respectivelly. * See Note 2.2.1 for the discussion relating to the adjustments.

The accompanying notes are an integral part of these consolidated financial statements.

F-9 Embraer S.A. Consolidated Statements of Changes in Shareholders’ Equity Years Ended (In millions of U.S. dollar)

Accumulated other Revenue reserves comprehensive (loss) Actuarial gain (loss) on post- Additional For investment Result in transactions employment Cumulative Total Total Treasury Share-based Government Legal proposed and working with non-controlling benefit translation Financial shareholders’ Non-controlling shareholders’ Capital shares remuneration grants Reserve dividends capital Retained earnings interest obligation adjustment instruments equity interest equity At December 31, 2015 1,438.0 (38.4) 35.4 41.6 183.4 6.6 2,224.7 — (4.2) (41.9) (102.8) (0.6) 3,741.8 101.9 3,843.7 Adjustment related to accounting pratice change * — — — — — — — (24.6) — — — — (24.6) — (24.6) At January 01, 2016 (Restated) 1,438.0 (38.4) 35.4 41.6 183.4 6.6 2,224.7 (24.6) (4.2) (41.9) (102.8) (0.6) 3,717.2 101.9 3,819.1 Net income for the year — — — — — — — 178.6 — — — — 178.6 1.7 180.3 Actuarial loss on post employment benefit obligation — — — — — — — — — (7.6) — — (7.6) — (7.6) Translation adjustments — — — — — — — — — — 10.4 — 10.4 (11.2) (0.8) Financial instruments — — — — — — — — — — — 11.0 11.0 — 11.0 Total comprehensive income — — — — — — — 178.6 — (7.6) 10.4 11.0 192.4 (9.5) 182.9

Share-based remuneration — — 1.4 — — — — — — — — — 1.4 — 1.4 Stock options grants exercised — 6.4 — — — — — (4.7) — — — — 1.7 — 1.7 Acquisition of own shares — (17.1) — — — — — — — — — — (17.1) — (17.1) Allocation of profits: Dividends from 2015 approved in 2016 — — — — — (6.6) — — — — — — (6.6) — (6.6) Investment in subsidy — — — 1.0 — — — (1.0) — — — — — — — Legal reserve — — — — 9.0 — — (9.0) — — — — — — — Interest on own capital — — — — — — — (22.0) — — — — (22.0) — (22.0) Dividends — — — — — — — (23.0) — — — — (23.0) — (23.0) Reserve for investments and working capital — — — — — — 106.4 (106.4) — — — — — — — At December 31, 2016 (Restated) 1,438.0 (49.1) 36.8 42.6 192.4 — 2,331.1 (12.1) (4.2) (49.5) (92.4) 10.4 3,844.0 92.4 3,936.4 Net income for the year — — — — — — — 264.0 — — — — 264.0 16.0 280.0 Actuarial loss on post employment benefit obligation — — — — — — — — — 9.2 — — 9.2 — 9.2 Translation adjustments — — — — — — — — — — 29.1 — 29.1 5.0 34.1 Financial instruments — — — — — — — — — — — (10.3) (10.3) — (10.3) Total comprehensive income — — — — — — — 264.0 — 9.2 29.1 (10.3) 292.0 21.0 313.0 Share-based remuneration — — 0.5 — — — — — — — — — 0.5 — 0.5 Stock options grants exercised — 12.3 — — — — — (6.4) — — — — 5.9 — 5.9 Acquisition of own shares — (15.0) — — — — — — — — — — (15.0) — (15.0) Allocation of profits: Government grants — — — 4.3 — — — (4.3) — — — — — — — Legal reserve — — — — 12.0 — — (12.0) — — — — — — — Interest on own capital — — — — — — — (47.3) — — — — (47.3) — (47.3) Dividends — — — — — — — (16.0) — — — — (16.0) — (16.0) Reserve for investments and working capital — — — — — — 160.8 (160.8) — — — — — — — At December 31, 2017 (Restated) 1,438.0 (51.8) 37.3 46.9 204.4 — 2,491.9 5.1 (4.2) (40.3) (63.3) 0.1 4,064.1 113.4 4,177.5 Net loss for the year — — — — — — — (178.2) — — — — (178.2) 7.0 (171.2) Actuarial loss on post employment benefit obligation — — — — — — — — — 1.1 — — 1.1 — 1.1 Translation adjustments — — — — — — — — — — (39.4) — (39.4) (26.0) (65.4) Financial instruments — — — — — — — — — — — 0.4 0.4 — 0.4 Total comprehensive income — — — — — — — (178.2) — 1.1 (39.4) 0.4 (216.1) (19.0) (235.1) Share-based remuneration — — 0.1 — — — — — — — — — 0.1 — 0.1 Stock options grants exercised — 20.4 — — — — — (10.9) — — — — 9.5 — 9.5 Allocation of profits: Government grants — — — 0.1 — — — (0.1) — — — — — — — Interest on own capital — — — — — — (8.2) — — — — — (8.2) — (8.2) Dividends — — — — — — (3.7) — — — — — (3.7) — (3.7) Increase in share capital 113.6 — — — — — (113.6) — — — — — — — — Reserve for investments and working capital — — — — — — (184.1) 184.1 — — — — — — — AT DECEMBER 31, 2018 1,551.6 (31.4) 37.4 47.0 204.4 — 2,182.3 (0.0) (4.2) (39.2) (102.7) 0.5 3,845.7 94.4 3,940.1

* See Note 2.2.1 for the discussion relating to the adjustments.

The accompanying notes are an integral part of these consolidated financial statements.

F-10 Embraer S.A. Consolidated Statements of Cash Flows Years Ended (In millions of U.S. dollar)

Note 12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) OPERATING ACTIVITIES Net income (loss) for the period (171.2) 280.0 180.3 ADJUSTMENT TO NET INCOME FOR ITEMS NOT AFFECTING CASH Depreciation of property plant and equipment 15 159.2 196.5 194.5 Realization of government grants (3.6) (3.3) (3.1) Amortization of intangible assets 16 112.8 146.2 173.9 Realization of contribution from suppliers 16 (22.0) (27.3) (38.3) Loss (reversal) for inventory obsolescence 18.3 11.7 (23.9) Adjustment to market value, inventory, property plant and equipment and intangible 99.5 110.2 82.8 Allowance for doubtful accounts (7.8) 8.1 3.5 Losses on fixed assets disposal 15 19.8 18.6 19.6 Deferred income tax and social contribution 22.2 (21.2) (12.9) (137.5) Accrued interest (6.4) (29.0) (13.1) Interest on marketable securities, net (33.6) (23.6) (52.5) Equity in associates gains and losses 0.4 (1.2) 0.3 Share-based remuneration 0.1 0.5 1.4 Foreign exchange gain (loss), net 34 20.7 6.0 (12.6) Mark to market of the residual value guarantees 23 16.5 (13.3) 27.5 Provision for penalties — — 58.6 Provision for voluntary redundancy scheme — 6.4 28.2 Other (7.2) (4.3) (0.8) CHANGES IN ASSETS Financial investments 790.8 (244.6) (307.7) Derivative financial instruments 23.9 (1.7) (21.6) Collateralized accounts receivable and accounts receivable (16.0) 4.6 140.7 Contract assets 104.1 (76.9) 17.1 Customer and commercial financing 4.6 21.0 18.8 Inventories (281.9) 404.9 (136.9) Other assets 43.5 249.4 103.7 CHANGES IN LIABILITIES Trade accounts payable 70.1 (127.3) (93.8) Non-recourse and recourse debt (22.6) (9.9) (10.9) Other payables (16.3) (36.6) (23.0) Contribution from suppliers 125.5 86.0 123.9 Contract liabilities 101.2 (99.9) (110.5) Taxes and payroll charges payable 30.7 21.1 (153.1) Financial guarantees (21.2) (40.7) (87.7) Other provisions 9.8 (53.9) 45.1 Unearned income (12.9) (11.8) 0.5 NET CASH GENERATED (USED) BY OPERATING ACTIVITIES 1,107.6 753.0 (6.6) INVESTING ACTIVITIES Acquisition of property, plant and equipment 15 (154.3) (237.7) (392.5) Proceeds from sale of property, plant and equipment 15 0.3 19.1 2.9 Additions to intangible assets 16 (290.3) (470.5) (505.0) Additions investments in subsidiaries and affiliates (2.4) (0.6) (2.6) Investments measured at amortized cost (76.5) (404.0) (88.2) Loans granted to jointly controlled entity — — (12.3) Dividends received 0.1 0.1 0.1 Restricted cash reserved for construction of assets — 1.0 4.1 NET CASH USED IN INVESTING ACTIVITIES (523.1) (1,092.6) (993.5) FINANCING ACTIVITIES Proceeds from borrowings 124.0 972.9 576.2 Repayment of borrowings (596.3) (540.2) (523.7) Dividends and interest on own capital (40.6) (54.1) (28.2) Proceeds from stock options exercised 9.5 5.9 1.7 Acquisition of own shares — (15.0) (17.1) NET CASH GENERATED (USED) BY FINANCING ACTIVITIES (503.4) 369.5 8.9 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 81.1 29.9 (991.2) Effects of exchange rate changes on cash and cash equivalents (71.0) (0.6) 67.2 Cash and cash equivalents at the beginning of the period 1,270.8 1,241.5 2,165.5 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 1,280.9 1,270.8 1,241.5

The accompanying notes are an integral part of these consolidated financial statements.

F-11 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

1. Operations Embraer S.A. (“Embraer” or “the Company”) is a publicly-held company incorporated under the laws of the Federative Republic of Brazil (“Brazil”) with headquarters in São José dos Campos, State of São Paulo. The corporate purpose of the Company is: (i) To design, build and market aircraft and aerospace materials and related accessories, components and equipment, according to the highest standards of technology and quality; (ii) To perform and carry out technical activities related to the manufacturing and servicing of aerospace materials; (iii) To contribute to the training of technical personnel as necessary for the aerospace industry; (iv) To engage in and provide services for other technological, manufacturing and business activities in connection with the aerospace industry; (v) To design, build and trade in equipment, materials, systems, software, accessories and components for the defense, security and power industries, and to promote and carry out technical activities related to the manufacturing and servicing thereof, in accordance with the highest technological and quality standards; and (vi) To conduct other technological, manufacturing, trading and services activities related to the defense, security and power industries.

The Company’s shares [B3: EMBR3, NYSE: ERJ] are listed in the enhanced corporate governance segment of the Stock Exchange in Brazil (“B3”), known as the New Market (“Novo Mercado”). Embraer S.A. also holds American Depositary Shares (evidenced by American Depositary Receipts—ADRs) which are registered with the Securities and Exchange Commission (“SEC”) and listed on the New York Stock Exchange (“NYSE”).

The explanatory notes to subsequent events contain clarifications on Embraer and The Boeing Company (NYSE: BA) strategic partnership. The terms approved define the creation of a joint venture involving Embraer’s commercial aviation assets and associated services, in which Boeing will hold an 80% ownership stake and Embraer the remaining 20%, as well as the creation of a joint venture to promote and develop new markets and applications for the multi-mission aircraft KC-390, with ownership of 51% for Embraer and 49% for Boeing.

Additional information about the transaction is disclosed in Notes 3.6 and 38.1.

These consolidated financial statements were approved by the Company’s Board of Directors on March 12, 2019.

2. Presentation of the Financial Statements and Accounting Practices 2.1 Presentation and preparation of the financial statements The consolidated financial statements have been prepared in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) which include (i) IFRS, (ii) the International Accounting Standard (“IAS”), and (iii) the International Financial Reporting Interpretations Committee (“IFRIC”) or its predecessor, the Standing Interpretations Committee (“SIC”).

All informations presented in the consolidated financial statements are those considered relevant in the context of Company’s activities and for management purposes.

2.1.1 Basis of preparation These consolidated financial statements have been prepared under the historical cost convention, except when the account requires different criteria, and adjusted for assets and liabilities measured as at fair value in subsequent measurement, when applicable.

F-12 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management of the Company to exercise judgment in the process of applying the Company’s accounting policies. These consolidated financial statements include accounting estimates for certain assets, liabilities and other transactions.

The areas which involve high degree of judgments or complexities, or assumptions and significant estimates to the consolidated financial statements, are disclosed in Note 3.

2.1.2 Consolidation The consolidated financial statements include the balances of the December 31, 2018 financial statements of the Company and all subsidiaries directly or indirectly controlled by Embraer, special purpose entities (SPEs) controlled by the Company, as well as corporate venture capital investment funds (FIP), which is an associate accounted for by the equity method. The Company recognizes the assets, liabilities, revenues and expenses of jointly controlled entities in proportion to its shares in the joint operation.

All accounts and balances arising from transactions between consolidated entities are eliminated. a) Subsidiaries Subsidiaries are entities (including Special Purpose Entities—SPEs) over which the Company has control. The terms controlled entity and subsidiary are synonymous. The Company may have control through a 100% interest in an investee, or less than that, in which case there will also be non-controlling shareholders. Subsidiaries are all entities whose significant financial and operational policies may be directed by the Company. This analysis takes into consideration other factors, such as the existence of potential voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Company.

The accounting policies of the subsidiaries are consistent with the policies adopted by the Company. b) Consortia A consortium is a legal entity set up to meet a specific purpose and is subject to mandatory accounting controls under specific regulations. The Company’s subsidiaries that participate in a consortium account for the consortium transactions in relation to its interests in the consortium. This has reflects in the consolidated financial statements.

F-13 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

2.1.3 Corporate structure Below are informations regarding the Company’s consolidated subsidiaries and joint operations:

Participation Entity Embraer Group Country Core activities ELEB – Equipamentos Ltda. 100% Brazil Sale of hydraulic and mechanical equipment for the aviation industry Embraer Aircraft Holding Inc. 100% EUA Concentrates corporate activities in the USA Embraer Aircraft Customer Services, Inc. 100% EUA Sale of spare parts and support services in North America and the Caribbean Embraer Aircraft Maintenance Services Inc. 100% EUA Maintenance of aircraft and components Embraer Business Innovation Center, Inc. 100% EUA Develops technological innovation research in aviation and related areas Embraer Executive Jet Services, LLC 100% EUA After sale support and aircraft maintenance Embraer Executive Aircraft, Inc. 100% EUA Final assembly and delivery of executive jets Embraer Engineering & Technology Center 100% EUA Engineering services related to aircraft USA, Inc. research and development Embraer Aero Seating Technologies, LLC 100% EUA Production and maintenance of aircraft seats Embraer Defense and Security Inc. 100% EUA Supply of Super Tucano aircraft to the American Air Force (LAS) Embraer CAE Training Services LLC 51% EUA Pilot, mechanic and crew training Embraer Aviation Europe - EAE 100% France Concentrates corporate activities abroad, specifically Europe Embraer Aviation International - EAI 100% France Sale of parts and after sale services in Europe, Africa and the Middle East Embraer Europe SARL 100% France Commercial representation of the Company in Europe, Africa and the Middle East Embraer Defesa & Segurança Participações S.A. 100% Brazil Coordinates investments in the Defense & Security segments Atech - Negócios em Tecnologias S.A. 100% Brazil Development and control, communications, computer and intelligence services Visiona Tecnologia Espacial S.A. 51% Brazil Supply of the Brazilian Government’s Geostationary Defense and Strategic Communications Satellite System (SGDC) Visiona Internacional B.V. 100% Holanda Integration and supply of the Brazilian Government’s (SGDC) System . SAVIS Tecnologia e Sistemas S.A. 100% Brazil Operates in Defense and Security with the Brazilian Government Embraer GPX Ltda 100% Brazil Aircraft maintenance services Embraer Netherlands Finance B.V. 100% Holland Financial operations raising and investing funds of the Embraer Group Embraer Netherlands B.V. 100% Holland Concentrates corporate activities abroad Embraer Asia Pacific PTE. Ltd. 100% Singapore After sale services and support in Asia Airholding SGPS S.A. 100% Portugal Coordinates investments in subsidiaries in Portugal OGMA - Indústria Aeronáutica de Portugal 65% Portugal S.A. Aviation maintenance and production Embraer CAE Training Services (UK) Limited 51% United Kingdom No operations Embraer Portugal S.A. 100% Portugal Coordinates investments and economic activities in subsidiaries in Portugal Embraer - Portugal Estruturas Metálicas S.A 100% Portugal Fabrication of steel parts and products for the aviation industry Embraer - Portugal Estruturas em 100% Portugal Fabrication of composite parts and Compósitos S.A. products for the aviation industry Embraer (China) Aircraft Technical Services Co. 100% China Sales and maintenance for after sales Ltd. support in China EZ Air Interior Limited 50% Ireland Fabrication of interiors for commercial aircraft Embraer Overseas Ltd. 100% Cayman Islands Financial operations raising and investing funds of the Embraer Group Embraer Spain Holding Co. SL 100% Spain Concentrates corporate activities abroad ECC Investment Switzerland AG 100% Switzerland Coordinates investments in subsidiaries abroad ECC Insurance & Financial Company 100% Cayman Islands Covers financial guarantees offered in Limited. aircraft sale structuring Embraer Finance Ltd. 100% Cayman Islands Support to the Company in structuring specific operations Embraer Merco S.A. 100% Uruguay No operations -in the process of settlement

F-14 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Specific purpose entities (SPEs) - the Company organizes some of its aircraft sale financing transactions through SPEs and although it has no direct or indirect interest, it controls their operations or takes a majority share of their risks and rewards. Currently the only EPE that presents balance and therefore is consolidated is Refine, Inc. The EPEs in which Embraer is not a controlling shareholder are not consolidated based on fundamentals and technical analysis performed by Management. Except for the aforementioned consolidated SPEs, the Company does not have significant risks attributed to other structured operations involving SPEs.

Tepro Consortium - Entity constituted by SAVIS Tecnologia e Sistemas S.A, a company controlled by Embraer Defesa & Segurança, and Bradar Indústria S.A, a wholly-owned subsidiary newly incorporated by Embraer S.A, with the objective of assisting the Brazilian Army in the first phase of implementation of the Integrated Monitoring System (“Sisfron”) for the development of certain activities. Located in the city of Campinas, State of São Paulo, Brazil, it represents a direct ownership stake of 93.5% from SAVIS and 6.5% of Embraer S.A. (after the incorporation of Bradar Indústria S.A. in 2018).

Equity investment fund (FIP) - An Embraer initiative in conjunction with BNDES, FINEP and Desenvolve SP, created with the aim of strengthening the aerospace, aviation, defense and security supply chain and promoting integration of systems related to these sectors through support for small and medium enterprises. The transaction is not consolidated in the Company’s financial statements, but its results are presented in the equity income of associates in the consolidated statements of income.

Embraer Ventures Equity Investment Fund - Exclusive fund created to provide technological and finance support through investment to small and medium businesses focused on disruptive innovation in the aerospace segment. This fund is consolidated in the Company’s financial statements as Embraer has the control over it.

2.2 Summary of significant accounting policies We present below the significant accounting policies adopted in the preparation of these consolidated financial statements. Description of the significant accounting policies adopted by the Company contributes towards the correct interpretation of the consolidated financial statements, whether on account of the existence of more than one treatment option under the international accounting standards, or due to the complexity of the operation.

This set of annual consolidated financial statements includes the first year of adoption of standards IFRS 9 - Financial Instruments and IFRS 15 - Revenue from Contracts with Customers, and interpretation IFRIC 22 – Foreign currency transactions and advance considerations. Changes in the significant accounting policies applied as a result of this adoption are described in the following topic.

2.2.1 Changes in accounting policies - adoption of IFRS 9, IFRS 15 and IFRIC 22 As a result of the full retrospective adoption of accounting standards IFRS 9 and IFRS 15 and changes in the Company’s accounting policies, the consolidated financial statements for the prior year were restated.

The following tables present the impacts of the adoption adjustments for each item from the consolidated financial statements. Items that were not affected and restated by the changes were not included. As a result, the reported subtotals and totals cannot be recalculated from the numbers provided. The adjustments are explained in more detail in the topics below:

F-15 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Consolidated Statements of Financial Position

IFRS 15 IFRS 9 As of December 31, 2017 Published Adjustments Adjustments Restated Financial investments 2,365.6 — 0.5 2,366.1 Trade accounts receivables, net 717.2 (432.8) 12.6 297.0 Contract assets — 447.5 — 447.5 Other current assets 3,969.0 — — 3,969.0 Total Current Assets 7,051.8 14.7 13.1 7,079.6 Financial investments 251.3 — (0.1) 251.2 Deferred income tax and social contribution 2.9 13.0 (2.5) 13.4 Investments 5.6 — — 5.6 Other non-current assets 4,624.8 — — 4,624.8 Total Non-Current Assets 4,884.6 13.0 (2.6) 4,895.0 TOTAL ASSETS 11,936.4 27.7 10.5 11,974.6 Contract liabilities — 1,001.1 — 1,001.1 Advances from customers 799.2 (799.2) — — Provisions 141.4 (17.3) — 124.1 Unearned income 164.1 (164.1) — — Other current liabilities 1,678.0 — — 1,678.0 Total Current Liabilities 2,782.7 20.5 — 2,803.2 Contract liabilities — 125.5 — 125.5 Advances from customers 104.1 (104.1) — — Deferred income tax and social contribution 251.4 4.6 2.0 258.0 Unearned income 97.5 (5.8) — 91.7 Other non-current liabilities 4,518.7 — — 4,518.7 Total Non-Current Liabilities 4,971.7 20.2 2.0 4,993.9 Equity 4,182.0 (13.0) 8.5 4,177.5 TOTAL LIABILITIES 11,936.4 27.7 10.5 11,974.6

F-16 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

IFRS 15 IFRS 9 As of December 31, 2016 Published Adjustments Adjustments Restated Financial investments 1,775.5 — 0.1 1,775.6 Trade accounts receivables, net 665.3 (345.1) 16.6 336.8 Contract assets — 370.6 — 370.6 Other current assets 4,340.6 — — 4,340.6 Total Current Assets 6,781.4 25.5 16.7 6,823.6 Financial investments 168.3 — 4.8 173.1 Deferred income tax and social contribution 3.6 10.7 (2.7) 11.6 Other non-current assets 4,711.5 — — 4,711.5 Total Non-Current Assets 4,883.4 10.7 2.1 4,896.2 TOTAL ASSETS 11,664.8 36.2 18.8 11,719.8 Contract liabilities — 1,086.8 — 1,086.8 Advances from customers 716.4 (716.4) — — Provisions 135.8 (11.9) — 123.9 Unearned income 311.5 (311.5) — — Other current liabilities 2,017.2 — — 2,017.2 Total Current Liabilities 3,180.9 47.0 — 3,227.9 Contract liabilities — 157.9 — 157.9 Advances from customers 139.8 (139.8) — — Deferred income tax and social contribution 263.5 (1.3) 3.0 265.2 Unearned income 113.9 (7.0) — 106.9 Other non-current liabilities 4,025.5 — — 4,025.5 Total Non-Current Liabilities 4,542.7 9.8 3.0 4,555.5 Equity 3,941.2 (20.6) 15.8 3,936.4 TOTAL LIABILITIES 11,664.8 36.2 18.8 11,719.8

IFRS 15 IFRS 9 As of January 1, 2016 Published Adjustments Adjustments Restated Trade accounts receivables, net 781.9 (360.6) 8.9 430.2 Contract assets — 387.7 — 387.7 Other current assets 5,629.7 — — 5,629.7 Total Current Assets 6,411.6 27.1 8.9 6,447.6 Financial investments 749.6 — (9.0) 740.6 Deferred income tax and social contribution 4.5 14.2 (3.0) 15.7 Other non-current assets 4,503.8 — — 4,503.8 Total Non-Current Assets 5,257.9 14.2 (12.0) 5,260.1 TOTAL ASSETS 11,669.5 41.3 (3.1) 11,707.7 Contract liabilities — 1,136.8 — 1,136.8 Advances from customers 743.8 (743.8) — — Provisions 95.7 (6.0) — 89.7 Unearned income 320.0 (320.0) — — Other current liabilities 1,920.9 — — 1,920.9 Total Current Liabilities 3,080.4 67.0 — 3,147.4 Contract liabilities — — — — Advances from customers 164.1 (164.1) — — Deferred income tax and social contribution 417.3 (2.2) (2.0) 413.1 Unearned income 62.8 164.1 — 226.9 Other non-current liabilities 4,101.2 — — 4,101.2 Total Non-Current Liabilities 4,745.4 (2.2) (2.0) 4,741.2 Equity 3,843.7 (23.5) (1.1) 3,819.1 TOTAL LIABILITIES 11,669.5 41.3 (3.1) 11,707.7

F-17 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Consolidated Statements of Income

IFRS 15 IFRS 9 Year ended December 31, 2017 Published Adjustments Adjustments Restated Revenue 5,839.3 20.1 — 5,859.4 Cost of sales and services (4,773.3) 9.2 — (4,764.1) Gross Profit 1,066.0 29.3 — 1,095.3 Operating income (expense) (736.7) (12.7) (4.0) (753.4) Operating profit 329.3 16.6 (4.0) 341.9 Financial result (41.0) — 7.0 (34.0) Profit before taxes on income 288.3 16.6 3.0 307.9 Income tax expense (income) (25.5) (3.6) 1.2 (27.9) Net income 262.8 13.0 4.2 280.0 Atributable to: Owners of Embraer 246.8 13.0 4.2 264.0 Noncontrolling interest 16.0 — — 16.0 Earnings per share-basic in US$ 0.34 0.36 Earnings per share-diluted in US$ 0.34 0.36

IFRS 15 IFRS 9 Year ended December 31, 2016 Published Adjustments Adjustments Restated Revenue 6,217.5 (13.6) — 6,203.9 Cost of sales and services (4,980.7) (1.3) — (4,982.0) Gross Profit 1,236.8 (14.9) — 1,221.9 Operating income (expense) (1,030.8) 14.9 7.7 (1,008.2) Operating profit 206.0 — 7.7 213.7 Financial result (47.0) — 13.9 (33.1) Profit before taxes on income 159.0 — 21.6 180.6 Income tax expense (income) 8.7 (4.4) (4.6) (0.3) Net income 167.7 (4.4) 17.0 180.3 Atributable to: Owners of Embraer 166.1 (4.4) 17.0 178.7 Noncontrolling interest 1.7 — — 1.7 Earnings per share-basic in US$ 0.23 0.24 Earnings per share-diluted in US$ 0.23 0.24

F-18 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Reconciliation of restated Consolidated Statements of Changes in Shareholders’ Equity

Note 2018 2017 2016 As of December 31 of the previous year - originally published 4,182.0 3,941.2 3,843.7 IFRS 9 Adjustment Decrease of accounts receivable impairment allowance 2.2.1.a)(ii) 12.6 16.6 8.9 Adjustment to fair value due to change in classification 2.2.1.a) (i) 0.4 4.9 (9.0) Financial asset reclassification from available for sale to fair value through P&L - from Other cumulative translation adjustments (OCI) (11.5) — — - to Retained earnings 11.5 — — Effect of deferred income tax over the adjustments (4.5) (5.7) (1.0) 8.5 15.8 (1.1) IFRS 15 Adjustment Increase (decrease) of development contracts results due to contracts 2.2.1.b) (i), (ii) combinations and modifications (2.5) (7.8) (16.1) Increase (decrease) of development contracts results due to changes in 2.2.1.b) (iii) performance obligations identification (20.8) (32.1) (23.8) Effect of foreign currency transactions in CTA 1.9 7.3 — Effect of deferred income tax over the adjustments 8.4 12.0 16.4 (13.0) (20.6) (23.5) As of January 1 - restated 4,177.5 3,936.4 3,819.1

a) IFRS 9 - Financial Instruments The Company adopted IFRS 9 - Financial Instruments as a basis for recognition, measurement and classification of financial instruments. This standard replaces IAS 39 - Financial Instruments: Recognition and Measurement.

The adoption effects are presented retrospectively as of January 1, 2016 for the comparative periods presented in the consolidated financial statements. The changes made by the Company in its accounting practices resulting from the adoption of this new standard are detailed as follows:

(i) Classification and measurement of financial assets and liabilities The Company reviewed the classification of its financial assets within the categories existing in IFRS 9 by evaluating the business model in which the financial assets are managed and the contractual cash flow characteristics.

Certain financial investments in structured notes were reclassified from held to maturity category to financial assets measured as at fair value through profit or loss because their cash flows do not represent solely payments of principal and interest.

For financial liabilities, there were no changes in their categories in the transition of standards. IFRS 9 mainly retains the IAS 39 requirements for classification and measurement of financial liabilities.

The following table sets forth the financial assets and liabilities in the original measurement categories by IAS 39 as previously disclosed on December 31, 2017 and January 1, 2017, and the new measurement categories by adopting of IFRS 9:

F-19 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Financial instruments Note 12.31.2017 Category IAS 39 Categoya IFRS 9 (Restated) Assets Cash and cash equivalents 4 1,270.8 Loans and receivables Amortized cost Financial investments 5 2,617.3 Loans and receivables (iv) Fair value through other 1,307.6 comprehensive income 1,199.5 Held to maturity (iv) Fair value through profit or loss 50.5 Held to maturity (iv) Amortized cost 58.8 Available for sale Fair value through profit or loss 0.9 Fair value through profit or loss Fair value through profit or loss Guarantee deposits 10 393.9 Loans and receivables Amortized cost Collateralized accounts receivable 8 288.7 Loans and receivables Amortized cost Contract assets 30 447.5 Loans and receivables Amortized cost Trade accounts receivable, net 6297.0 Loans and receivables Amortized cost Customer and commercial financing 8 16.4 Loans and receivables Amortized cost Derivative financial instruments 734.3 Fair value through profit or loss Fair value through profit or loss Other assets (i) 12 82.2 Loans and receivables Amortized cost Liabilities Loans and financing 19 4,198.5 Liabilities measured at amortized Amortized cost 1,264.3 cost and other liabilities (iv) Liabilities measured at amortized Amortized cost 2,934.2 cost and other liabilities Trade accounts payable and others Liabilities measured at amortized Amortized cost liabilities (ii) 1,502.5 cost and other liabilities Financial guarantee and residual value (iii) 23 139.6 108.8 Fair value through profit or loss Fair value through profit or loss Liabilities measured at amortized Amortized cost 30.8 cost and other liabilities Derivative financial instruments 7 8.9 Fair value through profit or loss Fair value through profit or loss

(i) Comprises amounts of court-mandated escrow deposits and loans with jointly controlled entity. (i) Comprises amounts of trade accounts payable, other payables and non-recourse and recourse debt. (iii) Comprises amounts of residual value guarantees and accounts payable of financial guarantee (Note 23). (iv) In Note 28.1 to the Company’s annual financial statements as of December 31, 2017, certain financial instruments measured as at amortized cost (held to maturity and loans and receivables) were incorrectly disclosed in the explanatory notes as measured at fair value through profit or loss. This correction does not affect the measurement of amounts previously disclosed considering that, despite the incorrect classification in said Note, the instruments were correctly valued according to their nature.

F-20 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Financial instruments Note 01.01.2017 Category IAS 39 Categoya IFRS 9 (Restated) Assets Cash and cash equivalents 4 1,241.5 Loans and receivables Amortized cost Financial investments 5 1,948.7 Fair value through other 1,067.9 Loans and receivables (iv) comprehensive income Fair value through other 620.9 Held to maturity (iv) comprehensive income 173.8 Held to maturity (iv) Fair value through profit or loss 51.1 Held to maturity (iv) Amortized cost 35.0 Available for sale Fair value through profit or loss Guarantee deposits 10 511.4 Loans and receivables Amortized cost Collateralized accounts receivable 8 323.3 Loans and receivables Amortized cost Contract assets 30 370.6 Loans and receivables Amortized cost Trade accounts receivable, net 6 336.8 Loans and receivables Amortized cost Customer and commercial financing 8 37.4 Loans and receivables Amortized cost Derivative financial instruments 7 32.1 Fair value through profit or loss Fair value through profit or loss Other assets (i) 12 79.4 Loans and receivables Amortized cost Liabilities Loans and financing 19 3,759.9 Liabilities measured at amortized cost and other 1,357.4 liabilities (iv) Amortized cost Liabilities measured at amortized cost and other 2,402.5 liabilities Amortized cost Liabilities measured at Trade accounts payable and others amortized cost and other liabilities (ii) 1,722.4 liabilities Amortized cost Financial guarantee and residual value (iii) 23 188.0 122.2 Fair value through profit or loss Fair value through profit or loss Liabilities measured at amortized cost and other 65.8 liabilities Amortized cost Derivative financial instruments 7 8.4 Fair value through profit or loss Fair value through profit or loss

(i) Comprises amounts of court-mandated escrow deposits and loans with jointly controlled entity. (i) Comprises amounts of trade accounts payable, other payables and non-recourse and recourse debt. (iii) Comprises amounts of residual value guarantees and accounts payable of financial guarantee (Note 23). (iv) In Note 28.1 to the Company’s annual financial statements as of December 31, 2017, certain financial instruments measured as at amortized cost (held to maturity and loans and receivables) were incorrectly disclosed in the explanatory notes as measured at fair value through profit or loss. This correction does not affect the measurement of amounts previously disclosed considering that, despite the incorrect classification in said Note, the instruments were correctly valued according to their nature.

The accounting policies for classification, initial and subsequent measurement of financial assets and liabilities is disclosed in Note 2.2.4.

(ii) Impairment of financial assets The Company changed the method of measuring expected losses in financial assets as a result of the adoption of the new standard, which is no longer based on incurred loss (by default) and is based on historical data, as well as expectations of future loss.

F-21 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The Company applied the simplified approach under IFRS 9 to measure expected credit losses, which uses a provision for expected losses for all receivables and contract assets.

Expected credit losses of other financial assets measured at amortized cost and fair value through other comprehensive income are monitored periodically by the Company and no losses were identified as of December 31, 2017 and January 1, 2017.

(iii) Hedge Accounting The Company decided to keep the IAS 39 standard requirements regarding hedge accounting until the IASB concludes the macro-hedge project.

b) IFRS 15 - Revenue from Contracts with Customers The Company adopted IFRS 15 as a basis for revenue recognition and measurement of certain assets, liabilities and cost of sales, replacing the standards IAS 18—Revenue and IAS 11—Construction Contracts, as well as related interpretations.

The transiton method is the full retrospective as of January 1, 2016 with the use of certain practical expedients. Consequently, all affected financial statements items (revenues, costs of sales, assets, liabilities and operating expenses) were adjusted retrospectively.

The Company opted to use the practical expedients provided by the IFRS 15.C5 (a)(ii) and C5(d), which are transcribed below:

“IFRS 15.C5. An entity may use one or more of the following practical expedients when applying this standard retrospectively in accordance with paragraph C3(a): (a) for completed contracts, an entity need not restate contracts that: (i) begin and end within the same annual reporting period; or (ii) are completed contracts at the beginning of the earliest period presented.

(d) for all periods presented before the date of initial application, an entity need not disclose the amount of the transaction price allocated to the remaining performance obligations, nor an explanation of when it expects to recognize that amount as revenue.”

The following adjustments and reclassifications were made to the consolidated financial statements for the prior year (December 31, 2017) and the beginning of earliest period presented (January 1, 2016) as a result of the change in accounting practices:

(i) Combining contracts The Company has certain contracts negotiated with the same customer whose goods and/ or services are a single deliverable (commercial objective) and were entered by more the one entity of Embraer S.A. group, previously measured separately by each legal entity/ subsidiary. The adoption of IFRS 15 identified the need to combine these contracts for revenue recognition. Consequently, there was a need to determine the combined margin of the single performance obligation and to allocate the price, which adjusted the revenue recognition of these combined performance obligations, including provision for onerous contracts, in order to reflect the margin ascertained by the combination of the contracts.

(ii) Contract modifications Development contracts signed by subsidiaries other than the Company in subsequent periods to the original agreement with the same customer and which constitute a single commercial objective under IFRS 15 were treated as contractual modifications and recognized jointly with the original agreement on a cumulative basis.

F-22 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

(iii) Identifying performance obligations As part of the process of identifying performance obligations under the requirements of IFRS 15, there was a change in the performance obligations in certain contracts. This impact brought the need to redistribute the price of the transaction between the performance obligations of these contracts. Revenue redistribution followed the guidelines provided by the standard on the estimation of an individual selling price (stand alone), using cost plus margin method to price and discount allocation. The determination of individual sales price was made on the basis of observable data or, when not available, based on historical data or projections approved by Management.

(iv) Variable consideration IFRS 15 determines that variable consideration changes the allocated price of transaction and affects revenue recognition. Previously, some variable considerations, such as fines and contractual penalties, were recognized as operating income (expenses) instead of decrease revenue, being reclassified in the respective lines for presentation of the consolidated statements of income. The methods for measuring the variable considerations, as well as the restrictions over it have not changed.

(v) Costs to obtain a contract Incremental costs incurred by the Company to obtain a contract, such as sales commissions and bank guarantees, were previously recognized as operating income (expenses) because it did not meet the criteria for recognition as assets under previously accounting standards. With the adoption of IFRS 15, these incremental costs incurred exclusively to obtain a contract are capitalized as other assets and amortized when (or as that) revenue is recognized as cost of sales and services, because the Company expects to recover these costs. The impact of this topic in the trasition was reclassification of such costs from operating income (expenses) to the line of cost of sales and services in 2017 and 2016.

(vi) Presentation of contract assets and liabilities The Company has reclassified certain assets and liabilities in its consolidated financial statements in order to comply with the terminology set forth in IFRS 15 of assets and liabilities of contracts with customers, being:

• Contract assets of US$ 447.5 and US$ 370.6 as of December 31, 2017 and January 1, 2017, respectively, were previously presented as trade accounts receivable; • Contract liabilities of US$ 1,126.6 and US$ 1,244.8 as of December 31, 2017 and January 1, 2017, respectively, were previously presented as customer advances and deferred revenue.

IFRS 15 adoption did not bring changes in the judgments made by the Company regarding the period in which the revenues from its sales contracts are recognized.

c) IFRIC 22 - Foreign Currency Transactions and Advance Consideration This accounting interpretation came into effect as of January 1, 2018 and provides clarification on the transaction date to be considered for the translation of advances made or received in foreign currency transactions. According to the interpretation, the transaction date of advances paid or received is the effective date on which the entity initially recognizes the advance payment to the supplier or advance received from a customer.

The Company decided to adopt the interpretation prospectively, that is, the balances of advances, including the principal amount and their respective accumulated exchange variation, as of December 31, 2017 will be considered as the initial balances of the advances to suppliers and customer advances, and the date of December 31, 2017 as the date of the transaction.

F-23 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

2.2.2 Functional and presentation currency A Company’s functional currency is the currency of the primary economic environment in which it operates and should be the currency that best reflects company’s business and operations. Based on this analysis, management has concluded that the US Dollar (“US$” or “Dollar”) is its functional currency, based on analysis of the following indicators: • Currency that most influences the prices of goods and services; this is the currency in which the sales price of its goods and services are expressed and settled; • Currency of the country whose competitive forces and regulations most influence the Company’s business; • Currency that most influences the costs of providing goods or services, i.e., the currency in which the Company’s costs are normally expressed and settled; and • Currency in which the Company largely obtains funds for financial operations and in which it normally receives for its sales and accumulates cash.

2.2.3 Transactions in foreign currencies Transactions in other currencies (other than the functional currency) are translated into the functional currency at the foreign exchange rates in force on the transaction dates. The amounts are updated at the exchange rates of the reporting dates. Foreign exchange gains and losses resulting from this translation (in relation to monetary assets and liabilities indexed in currencies other than the functional currency) are recognized in the consolidated statements of income as foreign exchange gain (loss), net. Customer advances and advances to suppliers for goods and/ or services in foreign currencies are translated to the Company’s functional currency in the transaction date and no subsequent translation is recognized.

2.2.4 Financial Instruments a) Financial assets a.1) Recognition and measurement Financial assets are recognized when the Company becomes part of the instrument’s contractual arrangements. It is initially measured at fair value, plus transaction costs attributable to their acquisition or issuance, except for instruments measured at fair value through profit or loss (FVTPL), for which these costs are recognized immediately in the consolidated statements of income.

The Company classifies its financial assets under the following categories: (i) measured as at amortized cost, (ii) measured as at fair value through other comprehensive income (FVOCI) and (iii) measured at fair value through profit or loss (FVTPL).

Financial assets are not reclassified subsequent to initial recognition, unless the Company modifies the business model for the management of these financial assets, in which case all affected assets are reclassified on the first day of the new business model.

Financial assets are derecognised when the contractual rights to receive cash flows from the asset expires or are transferred in a transaction in which substantially all the risks and benefits of ownership of the financial asset are transferred by the Company.

a.2) Classification and subsequent measurement The Company classifies financial assets as measured at amortized cost only if both criteria are met: • The asset is held within a business model whose objective is to collect the contractual cash flows; and • The contractual terms give rise to cash flows, at specific dates, which relate only to the payments of principal and interest.

Financial assets measured as at amortized cost by the Company includes: cash and cash equivalents, certain financial investments, trade accounts receivable, contract assets, collateralized accounts receivable, customer financing, guarantee deposits and other financial assets.

F-24 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Financial assets measured as at fair value through other comprehensive income (FVOCI) are assets held within a business model whose purpose is achieved both through the receipt of contractual cash flows and the sale of financial assets, as well as their contractual terms generate, on specific dates, cash flows that are related only to payments of principal and interest.

Changes in fair value of FVOCI financial assets are recognized in accumulated other comprehensive (income) loss in the consolidated changes in shareholders’ equity. Gains or losses due to impairment and exchange variation, including interest calculated using the effective interest method, are recognized in the consolidated statements of income as financial income (expense), net, except for the exchange variation recognized as foreign exchange gain (loss), net. In the derecognition of these financial assets, any amounts accumulated in the consolidated statements of other comprehensive income are reclassified to the consolidated statements of income.

All financial assets not classified by the Company as measured at amortized cost or as FVOCI are classified as at fair value through profit or loss (FVTPL). These assets include financial assets held for active and frequent trading and derivative financial instruments.

(i) Business model evaluation The Company evaluates the business model objective for the management of financial assets as part of the accounting classification of the instruments. The factors considered in this evaluation are: • The current financial policy and the objectives set for portfolio management, which includes assessing whether the strategy focuses on contractual interest income, maintaining a determined interest rate profile, the relationship between the duration of the financial assets and related liabilities, expected cash outflows, or the collection of cash flows through the sale of underlying financial assets; • How portfolio performance is assessed and reported to Management; • Risks that affect the performance of the business model and how they are managed; • The frequency, volume and timing of assets sales in prior periods, the reasons for such transactions and future expectations.

(ii) Evaluation if contractual cash flows are only principal and interest payments To assess whether contractual cash flows are only principal and interest payments, the principal is defined as the fair value of the financial asset at the initial recognition, and interest as a consideration for the time value of money, the credit risk associated with value of principal outstanding during contractual terms, other risks and general costs of loans, as well as a profit margin in the transaction.

This evaluation is made by considering the contractual terms of the financial assets, which includes, in addition to evaluating whether the contractual cash flows are only principal and interest payments, the existence of terms that could change the timing or value of the contractual cash flows which would not meet the definition, including: contingent events, terms that can adjust contractual rates, prepayment and extension of due dates, and terms that limit access to cash flows of specific assets.

b) Financial liabilities The Company classifies its financial liabilities in the following categories: (i) measured as at amortized cost and (ii) fair value through profit or loss. A financial liability is measured at fair value through profit or loss if it is held for trading or is a derivative financial instrument, and its changes, including interest, is recognized in the consolidated statements of income. Changes in other financial liabilities measured as at amortized cost, including interest and exchange variation, are recognized in the consolidated statements of income under financial income (expenses), net caption, except for the exchange variation recognized as foreign exchange gain (loss), net.

F-25 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Financial liabilities are derecognised when contractual obligations are withdrawn, canceled or expired. The difference between the extinct book value and the consideration paid (including transferred assets or assumed liabilities) is recognized in the consolidated statements of income.

2.2.5 Cash and cash equivalents and financial investments Cash and cash equivalents include cash in hand, cash in transit (amounts paid by our customers or debtors that are pending release by the intervening bank at the reporting date), bank deposits and highly liquid short-term investments, usually maturing within 90 days of the investment date, readily convertible into a known amount of cash and subject to an insignificant risk of change in value.

Amounts related to cash and cash equivalents, which are however not available for use by the Company, are presented within other assets in the consolidated financial statements. Other financial investments with maturities of more than 90 days from the acquisition date are presented as financial investments.

2.2.6 Trade accounts receivable, net When making a sale, the Company evaluates its payment terms. If the sale amount is not due/ receipt immediately, which is the case of aircraft sales, it will be recognized in the trade accounts receivable. The amount receivable when the payment is deferred by the customer is adjusted to present value if applicable, identifying an interest rate compatible with the market at the time of sale and applying it to the amount receivable according to the transaction payment terms. The Company does not have trade accounts receivable from customers with a significant financing component.

Expected credit losses are recognized using actual credit loss experiences from the last 10 years and follow-up of prospective trends in the markets and segments that the Company operates. The identified factor is applied to the measurement of expected credit losses and recognition of impairment losses in the consolidated statements of income. The methodology data will be reviewed and updated periodically.

2.2.7 Derivative financial instruments and hedge operations The Company uses derivative instruments to hedge its operations against the risk of fluctuations in foreign exchange and interest rates; they are not used for speculative purposes.

Gains and losses on derivative transactions are recorded monthly in consolidated statements of income, taking into account the realizable value of these instruments (market value). The unearned gains and losses is recognized in the consolidated statements of financial position under derivative financial instruments, and the counterpart in consolidated statements of income under financial income (expense), net, (Note 33), except for operations to hedge exposure to changes in exchange rate or designated as hedge accounting, which is recognized as accumulated other comprehensive income (loss) in shareholders’ equity.

2.2.8 Hedge accounting Specific derivative transactions contracted to hedge the Company against financial risks are designated to hedge accounting. Different techniques are used in accounting for these derivatives, seeking to eliminate the effects of the volatility caused by such risks.

On initial designation of the hedge, the Company formally documents the relationship between hedging instruments and hedged items, including the risk management objectives and the strategy for conducting the transaction, together with the methods used to evaluate the effectiveness of the relationship. The Company continually assesses the contract to conclude whether the instrument is “highly effective” in offsetting changes in fair value of the hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within an effectiveness range of 80% to 125%.

F-26 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The Company has derivative financial instruments designated as fair value hedges and cash flow hedges, as follows:

a) Fair value hedges Changes in the fair value of derivatives designated as fair value hedges are recorded in the consolidated statements of income, in financial income (expenses), net, together with any changes in the fair value of the hedged asset or liability attributable to the hedged risk. The Company only uses fair value hedge accounting to hedge fixed interest risk on borrowings.

If the hedge no longer meets the hedge accounting criteria, the fair value of the instrument continues to be recognized in the consolidated statements of income in a specific separate account and the fair value of the hedged item is treated as if it were not hedged and amortized to the consolidated statements of income over the period to maturity.

b) Cash flow hedges The Company uses hedge accounting for cash flow hedges in order to hedge itself from cash flow variations attributed to exchange rate variation risk related to a transaction that is likely to affect the Company’s results.

The effective portion of changes in the fair value of derivatives designated as cash flow hedges is recognized in the consolidated shareholders’ equity under other comprehensive income (OCI), line of financial instruments. The gain or loss related to the ineffective portion is recognized in the consolidated statements of income as financial income (expense), net.

Amounts accumulated in OCI are reclassified to the consolidated statements of income in the periods in which the hedged item affects income or loss for the period.

When a cash flow hedge instrument is settled, or no longer meets the criteria for hedge accounting, any cumulative gain or loss in other comprehensive income at that time is realized against income or loss for the period (in the same line as the hedged item) in line with realization of the hedged operation against income or loss for the period. When the hedged transaction is no longer expected to occur, the gain or loss accumulated in OCI is immediately transferred to the consolidated statements of income under financial income (expense), net caption.

2.2.9 Collateralized accounts receivable and recourse and non-recourse debt In structured sales operations, the Company established a Specific Purpose Entity (SPE), which obtained funds from a financial institution, bought aircraft and paid the Company. In turn, this SPE structured financing for the end customer. In view of the right to receive from the end customer for the structured financing, the debt in relation to the funds obtained from the financial institution by the SPE is registered in liabilities as non-recourse and recourse debt and the corresponding anticipated financial flow as collateralized accounts receivable. The financing structure used gives the SPE the right to receive the aircraft at the end of the financing, accordingly the residual value of the aircraft is also presented in the collateralized accounts receivable. An aircraft devaluation estimate is recognized on a straight-line basis, in such a way that the cost of the aircraft to be received at the end of the structured financing represents its recoverable amount.

In certain other transactions, the customer financed the purchase of an aircraft through a financing agent and the Company provided guarantees for such financing. The Company therefore recognized the asset and liability flow for such transactions. The financial guarantee is eliminated in line with repayment of the financing.

2.2.10 Inventories The Company’s inventories are largely comprised of raw material, work in progress, spare parts and finished goods. Inventories of raw materials are recognized at acquisition cost. Inventories of work in process comprise raw materials, direct labor, other direct costs and general production costs attributable to the cost of the inventories. Once the products have been completed, they are recognized as finished products.

Inventories of raw material and spare parts are recognized as at the weighted average cost. Manufactured aircrafts (finished goods) and work in progress are measured at its individual production cost, which is recognized as cost of sales and services in the consolidated statements of income when aircraft is delivered to the customer.

F-27 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Inventories are assessed periodically to determine whether the net realizable value is higher than its cost and impairment loss is recognized if the book value is higher.

The Company periodically assesses the consumption and demand for its inventories and in accordance with established policy, records an expense for estimated losses due to obsolescence in the case of items without activity and for which there is no demand for subsequent periods. Calculation of the probable loss takes into account inventory movement in accordance with the production program and estimated demand and also covers expected losses from excess inventories or obsolete work in process. Probable losses on inventories of spare parts are recognized based on technical obsolescence or items without activity for over two years and for which there is no future demand.

The Company holds used aircraft for resale, usually received in trade-in transactions to facilitate new aircraft sales. The book value of these assets is compared periodicially with its net realizable value, which is the assets estimated selling price in the ordinary course of business less estimated costs to sell. Any loss identified is recognized as other operating income (expense), net in the consolidated statements of income. The estimated selling price of used aircraft is based in the assessment of third party appraisals.

2.2.11 Income tax and social contribution Tax expenses for the year comprise current and deferred income tax. Income tax is recognized in the consolidated statements of income, except the portion of deferred income tax related to items recognized directly in the consolidated shareholders’ equity in other comprehensive income.

The current income tax is calculated at the nominal rates of each country, wherein 34% in Brazil, composed of 25% income tax and 9% social contribution on net income.

Deferred income tax is recognized on temporary differences arising between the tax and accounting basis of assets and liabilities.

2.2.12 Investments Investments in associates are recorded and valued in the consolidated financial statements using the equity method of accounting. In the case of exchange variations on foreign investments that use a functional currency other than that used by the Company, such exchange variations are recognized in cumulative translation adjustments on equity, and are only recognized in the consolidated statements of income when the investment is sold or expensed.

Unrealized profits on transactions with subsidiaries are completely eliminated in equity calculations, on both sales from the subsidiary to the Company and sales between subsidiaries. Unrealized profits between the Company and its subsidiaries are eliminated in the Company’s consolidated statements of income on sales and cost of sales accounts.

Investments in associated entities over which the Company has significant influence are accounted for using the equity method.

2.2.13 Property, plant and equipment, net Property, plant and equipment are recognized by the acquisition, formation or construction cost, less accumulated depreciation and impairment losses.

Depreciation is calculated by the straight-line method based on the asset’s estimated useful life (Note 15). Land is not depreciated. The estimated useful lives are reviewed and adjusted, if appropriated, at the end of each fiscal year.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company.

F-28 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The Company estimates the residual value for certain aircraft spare parts included in the Exchange Pool Program, which is reviewed by Management, and if necessary adjusted, at the end of each reporting period. The Company does not attribute residual values to other assets as assets are not usually sold and in the event of a sale, the amount is not significant.

The items comprising property, plant and equipment are summarized below: a) Land - mainly comprises areas on which the industrial, engineering and administrative buildings are located. b) Buildings and land improvements - mainly plants, engineering departments and offices, and land improvements include parking lots, road systems and water and sewage networks. c) Facilities - comprise auxiliary industrial facilities that directly or indirectly support the Company’s industrial operations, as well as facilities of the engineering and administrative departments. d) Machinery and equipment - machinery and other equipment directly or indirectly used in the manufacturing process. e) Furniture and fixtures - furniture and fixtures used in the production, engineering and administrative departments. f) Vehicles - mainly industrial vehicles and automobiles. g) Aircraft - mainly aircraft leased to airlines, and those used to assist in testing new projects. h) Computers and peripherals - information technology equipment used mainly in the production process, engineering and administration. i) Tooling - tools used in the Company’s production process. j) Property, plant and equipment in progress - construction works to expand the manufacturing plants and aircraft maintenance centers. k) Exchange pool program - the exchange Pool program is an operation in which the customer contracts the availability of spare parts for aircraft maintenance. In this program, when it is necessary to change a damaged part, the customer delivers the damaged part to the Company and the Company provides the customer with a part in working order. The damaged part is in turn reconditioned and added to the Pool.

2.2.14Intangible assets, net a) Development Research costs are recorded as an expense when they are incurred. Project costs, comprised mainly of expenditure on product development, including drawings, engineering designs and construction of prototypes, are recorded as intangible assets when it is probable that the projects will generate future benefits, taking into account their commercial and technological feasibility, availability of technological and financial resources, and only if the cost can be reliably measured.

Capitalized development costs are amortized from the time at which benefits begin to accrue (units produced), based on estimated aircraft sales, and the amortized amounts are appropriated to production cost. These estimates are reviewed on an annual basis.

The Company has agreements with certain key suppliers, hereby denominated partners, who participate in the Company’s research and development projects by contributing cash. The Company records such contributions as liabilities on receipt and as the milestones are completed and the amounts are consequently no longer subject to return, they are recorded as a reduction of development expenditure, capitalized in intangible assets and amortized on the aircraft production series.

F-29 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

b) Computer software Software licenses are capitalized and amortized over their estimated useful lives.

Costs associated with maintaining computer software programs are recognized as expense as incurred. Development costs directly attributable to identifiable and unique software, controlled by the Company and that is expected to generate benefits greater than the costs for more than one year, are recorded in intangible assets.

2.2.15Impairment of long-lived assets At the end of each fiscal year, the Company performs impairment test for all cash-generating units (CGUs) with goodwill generated from business combination allocated and for CGUs with intangible assets still under development and not yet producing (undefined useful life).

CGUs with definite-lived assets (property, plant and equipament, and intangibles) allocated are analyzed, at each quarter, whether there is any indication it might be impaired to perform the impairment test.

Assets are grouped in CGUs taking into consideration the Company’s business model and its monitoring of cash flows. In general, the CGUs are defined in accordance with the families/ platforms of aircrafts or other goods and services produced by the Company, irrespective of its geographic location.

The Company applies the value in use concept, using discounted cash flow projections, discounted at an appropriate rate which reflects the investors’ expectations of return. The cash flow projections for the CGUs take into consideration the Company’s medium and long- term strategic plan, based on the characteristics and expectations of the business.

Any impairment losses of a CGU are recognized in the consolidated statements of income in the line of other operating income (expense), net and allocated to relevant assets of the impaired CGU.

The exception to this concept is aircrafts that the Company held in its property, plant and equipment for operating leases purposes. In this case, the aircraft is tested individually using the higher of its value in use and its market value to determine its recoverable amount. For impairment test purposes, the market value is estimated with the assistance of assessment prepared by third party appraisals and the value in use is determined by the discounted cash flow of lease agreement associated with each aircraft tested, when applicable.

2.2.16Leases The classification of whether an agreement is or contains a lease is based on the essence of the agreement and whether the agreement transfers the risks and rewards or merely assigns the right to use the asset.

a) Aircraft leases Aircraft available for leasing or leased under operating leases are recorded as property, plant and equipment and depreciated over their estimated useful lives. The rental income is recorded by the straight-line method over the lease period.

b) Other leases Other leases in which the Company holds substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recorded as a financed purchase, initially by recording a fixed asset and a financial liability (lease). Property, plant and equipment assets purchased as finance leases are depreciated at the rates disclosed in Note 15.

Other leases in which a significant part of the risks and rewards of ownership are assumed by the lessor are classified as operating leases. Payments made for operating leases are appropriated to the consolidated statements of income by the straight-line method over the lease period.

F-30 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

2.2.17Loans and financing Loans are recognized initially at fair value, net of transaction costs, and subsequently carried at amortized cost (plus charges and interest on a pro rata basis), taking into account the effective interest rate on each transaction.

Loans are classified as current or non-current liabilities based on contractual terms.

2.2.18Borrowing costs When a substantial period of time is required for construction or production of an asset before it is ready for use, the borrowing costs are capitalized as part of the cost of such assets. The costs are allocated based on the average rate for all active loans, weighted in accordance with additions in the period. Borrowing costs are interest and other costs incurred by the Company in obtaining funding.

2.2.19Financial guarantees and residual value guarantees In certain cases, the Company grants financial or residual value guarantees on delivery of its aircraft, as part of the aircraft financing structure.

The residual amount is guaranteed to the lender based on the expected future value of the aircraft at the end of the funding, subject to a maximum limit, agreed by contract.

Financial guarantees are calculated at the time of delivery of the aircraft and recognized as a reduction in sales revenue against contract liabilities. The income is realized in the consolidated statements of income over the aircraft financing period and all deferred income is recognized by the end of that period.

To cover the risk of losses on such guarantees, the Company may record an additional provision in the event of significant circumstances, such as a request for judicial reorganization of a client, based on the best estimate of potential losses (Note 23).

In some cases, the Company holds guarantees in the form of deposits in favor of third parties to whom financial and residual value guarantees have been provided as part of aircraft financing structures (Note 10).

2.2.20Dividends and interest on own capital Under the Company’s bylaws, shareholders are entitled to dividends or interest on own capital equivalent to 25% of net income for the year, adjusted in accordance with the bylaws. The calculation takes into account the interest on own capital net of withholding tax.

Proposed distributions of dividends to shareholders are recorded as a liability in the consolidated financial statements at the end of the year. Any amount over and above the minimum mandatory dividend is recognized in a specific account as additional dividends proposed in the revenue reserve in consolidated shareholders’ equity, until it is approved by the shareholders, at which point the reserve is reversed against a liability in the consolidated financial statements.

Interest on own capital paid or provisioned is recorded as a financial expense for tax purposes. However, for purposes of these consolidated financial statements, the amount is recorded as dividend distribution of net income for the year, and the gross amount is reclassified to consolidated shareholders’ equity.

2.2.21Unearned income Unearned income comprises government grants received by the Company and its subsidiaries.

Government grants are recognized against the expenses in which the resources were used. When government grants are received in advance for research investments they are recorded as unearned income and recognized in the consolidated statements of income to the extent that the resources are invested and contractual milestones are met, as reduction of research expenses.

F-31 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Government grants for the acquisition of property, plant and equipment are recognized as debt (loans and financing) in liabilities until the milestones determined by the granting entity are met. Once the milestones are completed, the grant is recognized as unearned income. This unearned income is recognized in the consolidated statements of income as a reduction of the depreciation expense of the underlying asset it is proposed to subsidize in proportion with the recognition of the expense.

Income earned with non-distributable government grants is allocated from the income of the year to the government grants reserve in shareholders’ equity.

2.2.22Provisions, contingent assets and liabilities, legal obligations and court-mandated escrow deposit Provisions – provisions are recognized based on the judgment of the Company’s Management and its legal counsel, the nature of the lawsuits, legal precedent, complexity and court interpretations, whenever the loss is considered probable, when such loss would result in a probable outflow of resources to settle the obligations and when the amounts involved can be measured with a reasonable degree of certainty, the provision is recognized. The provision for labor claims is recognized based on the Company’s historical percentage of cash outflows of each demand. The amounts provided represent the Company’s best estimate of the anticipated outflow of resources.

Contingent liabilities – amounts for which disbursement is classified as possible are disclosed but not recorded in the consolidated financial statements. Where the probability of loss is classified as remote, neither provision nor disclosure are required.

Legal obligations – arise from tax liabilities for which the legality or constitutionality is under appeal. The related amounts are fully recognized as provisions in the consolidated financial statements.

Court-mandated escrow deposits – recorded as other assets and periodically updated for monetary correction.

2.2.23Post-retirement benefits a) Defined contribution The Company provides defined contribution pension plans for its employees. For the companies incorporated in Brazil, these are managed by EMBRAER PREV – Sociedade de Previdência Complementar.

b) Post-retirement healthcare benefits The Company and some of its subsidiaries provide healthcare benefits to retired employees.

The planned costs of offering post-retirement healthcare benefits and coverage for dependents are recorded as a provision during the period of employment based on actuarial studies conducted to identify future exposure, based on the following main premises: i) Discount rate - brings future benefit flows to present value and is defined based on the ratio of Brazilian government securities; ii) Increase of medical costs rate - represents the increase in the value of medical care and is not applied linearly, as the companies historically tend to take measures to reduce the cost, or even change health plan providers; iii) Morbidity rate (aging factor) - measures the increased use of health plans in light of the aging population; iv) Mortality rate - uses the RP-2000 generational table provided by Society of Actuaries (SOA), which shows the rate by age and sex; v) Probability of Retirement - estimates the probability of retirement by age group; vi) Churn rate - uses the T-3 Table Service available from the Society of Actuaries (SOA), which shows the average rate of termination of employees by age.

F-32 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The Company recognizes changes in the provision for the plan against other comprehensive income in consolidated shareholders’ equity, net of taxes, to the extent that there are changes in the assumptions and against consolidated statements of income if there are changes in the costs of the current benefit plan or in the plan’s contractual characteristics.

This provision is reviewed at least annually.

2.2.24Product warranties Warranty expenditure on aircraft is estimated on delivery of these products. The estimates are based on historical data that includes, among others, warranty claims and related repair/ replacement costs, warranties given by the suppliers, contractual coverage period and warranty patterns for new aircrafts, for which the Company expects higher warranty costs in the launch of new models until the production process matures and increases the platform in service period. The coverage period varies from 3 to 6 years.

The Company may be obliged to modify the product to meet the requirements of the certification authorities, or after delivery, due to improvements or to the aircraft’s performance. The costs of such modifications are provisioned when the new requirements or improvements are requested and known.

Management reviews the assumptions and the evolution of warranty relates costs periodically, and if appropriated, adjustements to the provision is recorded.

The product warranties balances are presented in the provisions caption in the consolidated statements of financial position (Note 24.1).

2.2.25Share- based payment The Executive Remuneration Policy (PRE) determines that the remuneration of the Company’s management shall be granted as a Long Term Incentive (ILP in Portuguese) with the objective of retaining and attracting qualified personnel who will make an effective contribution to the Company’s performance. The Company provides two types of share-based remuneration in the form of LTIs: i) Stock options plan (capital instruments based on the Company’s share issues). In this modality, in return for the services provided, the program participants receive stock options, the fair value of which is calculated based on the Black & Scholes pricing model and recognized on a linear basis in the consolidated statements of income during the vesting period, which is the period during which the acquisition criteria are met; ii) Cash-settled phantom shares plan, in which the amounts attributed to the services provided by the participants are converted into virtual share units based on the market value of the Company’s shares. At the end of the acquisition period the participant receives the quantity of virtual shares converted into reais, at the shares’ current market value. The company recognizes the obligation during the acquisition period (quantity of virtual shares proportional to the period) in the same group as the participant’s normal remuneration. This obligation is presented as an account payable to employees and the fair value is calculated based on the market price of the shares and registered as financial income (expense) in the consolidated statements of income.

The phantom shares plan is a cash-settled share-based payment transaction and therefore has no impact on the calculation of diluted earnings per share.

2.2.26Earnings per share Basic earnings per common share are computed by dividing net income attributable to Embraer shareholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per share are computed by adjusting the number of shares outstanding to include the number of additional shares that would have been outstanding had the potentially dilutive shares attributable to stock options been put into circulation during the respective periods.

F-33 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

2.2.27Revenue recognition of contract with customers Revenue comprises the fair value of the consideration received or to be received for the sale of products and services in the ordinary course of business. Revenue is presented net of taxes, returns, reductions and discounts, and in the consolidated financial statements, after eliminating intercompany sales.

a) Revenue from sales of aircraft and spare parts Revenues from aircraft and spare parts sales are recognized when the control, as per IFRS 15, is transferred to the customer, that is, when all recognition conditions are met. Revenues from commercial, executive and agricultural aircraft and spare parts are generally recognized upon delivery or shipment to the customer.

In aircraft sales contracts, the Company normally receives customer advances before the product control is transferred. The Company understands that there is no significant financing component in this operation.

For the spare parts sale contracts, the client makes the payment after the transfer of control, with average payment term of 30 days.

In sales of aircraft contracts, other performance obligations, such as supply of spare parts, training services, technical assistance and other obligations may be presented, which may or may not be delivered simultaneously to the aircraft delivery. For the Commercial and Executive Aviation contracts, the individual selling price is allocated for these additional performance obligations, and the variable considerations (as discounts), are allocated using the cost plus margin method. In the Defense & Security aircraft sales, there is no stand- alone price basis considering its high customization, the price is allocated in the performance obligation considering the cost plus margin method.

For these performance obligations, the revenue is recognized when the control of related product or service is transferred to the customer.

b) Revenue from sale of services Services sale revenues are recognized at the time of control transfer to the customer, that is, to the extent that services are rendered over time. The performance obligations of such contracts are satisfied and recognized in the consolidated statements of income over time.

In the Defense & Security segment, some services, such as modernization services, the client’s payment schedule follow a schedule agreed between the parties.

In maintenance service contracts, the Company receives from the clients in an average term of 30 days.

Exchange Pool and EEC (Embraer Executive Care) programs revenues are recognized monthly during the contract period, because there is no customer use pattern that can be reliably projected, and consist of a fixed rate and part of a variable rate directly related to the hours actually flown by the aircraft covered in these programs. The payment term usually is 30 days.

c) Revenue from development contracts In the Defense & Security segment, there are some operations characterized by the development of products or technologies whose transfer of control occurs over time. In such contracts, their revenues are recognized over time at amounts equal to the ratio of actual cumulative costs incurred at the end of reporting period divided by total estimated costs at completion, multiplied by the allocated price less the cumulative revenue recognized in prior reporting period.

Some contracts contain clauses for price adjustment based on pre-established indexes and these are recognized in the accounting period. The adequacy of revenue recognition related to development contracts in the Defense & Security segment is based on Management’s best estimates of total estimated costs at completion, as they become evident.

F-34 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The Company understanding is that the cost incurred method provides the most reliable basis for estimating the progress of contracts whose revenues are recognized over time.

In these contracts, there is also a schedule of payments agreed between the Company and the customers, which vary from contract to contract. After analysis, the Company has concluded that there are no significant financing components in the Defense & Security segment contracts since there is no willingness on either side to finance the other and there are factors that are not under the control of any party which may affect the payment dates.

d) Contract assets and liabilities The contract assets relate to the Company’s rights to the consideration for the work completed and not billed at the date of the consolidated financial statements, mainly of development contracts that are measured through POC method and net of customer advances received and expected credit losses recognized. Contract assets are transferred to trade accounts receivable when the rights become unconditional.

Contract liabilities refer to advance payments received by the Company prior to the delivery of the aircraft, as well as to the supply of spare parts, training, technical assistance and other obligations included in aircraft sales contracts. They also refer to advances of consideration received from customers related to the acceptance of managerial stages/ tasks under development contracts (Defense & Security).

e) Costs to obtain a contract Refers to incremental costs incurred by the Company solely to obtain contracts with customers that will be recovered in the fulfillment of these contracts, such as costs incurred with sales commissions and bank guarantees granted in Defense & Security contracts. Assets for obtaining contracts are capitalized as other assets and amortized when (or as) the related contract revenue is recognized.

2.2.28Cost of sales and services Cost of sales and services consists of the cost of the aircraft, spare parts and services rendered, comprising: a) Material - Materials used in the production process, substantially acquired from foreign suppliers. b) Labor - comprises salaries and related charges, primarily in Brazilian reais. c) Depreciation - The Company’s fixed assets are depreciated using the straight-line basis over their useful lives. d) Amortization - Internally generated intangible assets are amortized in accordance with the estimated sales of the series of aircraft. Intangible assets acquired from third parties are amortized on straight-line bases over their estimated useful lives. e) Product warranties - The Company estimates and records a liability for guarantee obligations related to its products on the date of delivery of the aircraft, based on historical experience and recorded as cost of goods sold. f) Multiple-element arrangements - The Company enters into transactions that represent multiple-element arrangements, such as for providing training, technical assistance, spare parts and other concessions. These costs are recognized when the product or service is delivered or provided to the customer.

2.2.29Employee profit sharing plan The Company provides a profit sharing plan for its employees, which is linked to performance targets established in action plans set and agreed at the beginning of each year. The profit sharing approved policy is equivalent to 12.5% of net income for the period, may be adjusted annually by Management based on circumnstances. Provisions are recognized monthly by applying the agreed percentage to the payroll of the company, recognized in the consolidated statements of income accounts related to the job performed by each employee.

F-35 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Of the total amount of profit sharing, 50% is divided equally among all the employees and the other 50% in proportion to each employee’s salary.

2.2.30Financial income (expenses), net and foreign exchange gains (losses), net Financial income (expenses), net and foreign exchange gains (losses), net principally comprise interest income on cash and cash equivalents and financial investments measured as at amortized cost and FVOCI, financial charges on loans, tax updates and foreign exchange gains (losses) on assets and liabilities expressed in currencies other than the functional currency (US dollars), on an accrual basis. Gains or losses on fair value changes of FVTPL financial instruments are also recognized as financial income (expenses), net.

Changes in the fair value of the residual value guarantees and income or loss on the provision and implementation of derivative financial instruments capitalized are also recorded as financial income (expense), net in the consolidated statements of income.

Financial income and expense exclude borrowing costs attributable to acquisitions, buildings or the contribution of qualifying assets that require a substantial period of time to be ready for use or sale.

2.2.31Statement of cash flows The statement of cash flows was prepared using the indirect method.

2.2.32Segment reporting Operating segment information is presented in a manner consistent with the internal reports provided to the chief operating decision- maker. The chief operating decision-maker, who is responsible for allocating resources among and assessing the performance of the operating segments and for making strategic decisions, is the chief executive officer.

Generally, balances and transactions that are not directly allocated to a specific operating segment are appropriated pro-rata, based on the amount of revenue recognized by segment.

3. Critical accounting estimates and significant judgements Preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and adopt assumptions that affect the reported amounts of assets and liabilities, revenue and expense and their disclosure. Therefore, variables and assumptions derived from past experience and other factors deemed relevant were used in preparing accompanying consolidated financial statements included in this report. These estimates and assumptions are reviewed on an ongoing basis and the changes to accounting estimates are recognized in the period in which the estimates are revised on a prospective basis.

The significant accounting policies, including the variables and assumptions used in the estimates, and the relevant sensitivity of those judgments to different scenarios and conditions are described below:

3.1. Revenue from contract with customers In the Defense & Security segment, a significant portion of revenue is derived from long-term development contracts with the Brazilian and foreign governments, recognized over time by the cost incurred method (Note 2.2.27), using the ratio of actual cumulative costs incurred divided by total estimated costs at completion for progress measurement.

During the course of the contract, the Company assesses the costs incurred, adjusting total estimated costs at completion if necessary to reflect variations in costs in relation to the projection, changes in circumnstances and/ or new events, such as contract modification. Any resulting increase or decrease in estimated revenues or costs at completion is recognized as catch-up adjustment in the consolidated statements of income in the reporting period which the circumnstances that give rise to the revision become known by Management.

F-36 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

During the first half of 2018, in the development contract of KC-390 aircraft, the prototype 001 faced an incident that led the 1st serial unit to be allocated to flight test campaign in order to reduce impact in the certification schedule. This non-recurring event in the year negatively impacted the contract estimated costs at completion and revenue recognition, with a negative catch-up adjustment recognized of US$ 127.2 in gross profit of the consolidated statements of income.

Should the total estimated costs at completion of contracts in progress be 10% lower than Management’s actual estimates, the revenue recognized in 2018 would increase by US$ 385.9, and if the costs were 10% higher than Management’s estimates, the recognized revenue would decrease by US$ 425.7.

3.2. Residual value guarantees The residual value guarantees granted on aircraft sales may be exercised at the end of a financing contract between a financial agent and the customer/operator of these aircraft. The guarantees are initially measured at fair value and are revised quarterly to reflect changes in relation to the fair value of these commitments. The residual value guarantees may be exercised if the quoted market value is lower than the future fair value guaranteed. The future fair value is estimated in accordance with third party evaluation of the aircraft, including information from sale or leasing of similar aircraft in the secondary market. Refer to Note 26.4.5 for a sensitivity analysis of residual value guarantees.

3.3. Impairment of long-lived assets The impairment test considers the Company’s medium and long-term strategic plan cash flows, brought to present value at an appropriate discount rate compatible with the market and that reflects the shareholders’ expectations of return. In preparing or using this information, the Company uses estimates, as follows: a) Gross expected cash flow - the Management projected inflows and outflows based on past performance considering its business strategy and market development expectations. These projections also consider the efficiency gains planned for the product cycle; b) Growth rates - the growth rates were reflected in the revenue flow budgeted by the Company, consistent with the forecasts included in industry reports; c) Discount rates - an appropriate discount rate is used that reflects the expected return of investors at the time the calculation is made. This rate is also compared with the market to confirm its consistency.

Impairment of aircraft held in the Company’s property, plant and equipment available for leasing to third parties is measured at fair value less cost to sell or value in use. The assessment of the recoverable amount of such aircraft considers assessment of their fair value in an active market and recognition of impairment if their carrying value is higher than the fair value.

If the estimated discount pre-tax rate applied to the discounted cash flows be 1% higher than the Company’s estimates, it would not generate additional losses as of December 31, 2018.

3.4. Fair value of financial instruments The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses its judgment to select a variety of methods, using assumptions based on market conditions at the end of each reporting period. The methods and calculations are the same as known valuation techniques normally used by the financial market. Refer to Note 26.4 for sensitivity analysis of financial instruments.

F-37 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

3.5. Income taxes The Company is subject to income taxes in multiple jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes in each jurisdiction the Company operates. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Company also recognizes provisions based on estimates of whether additional taxes will be due. When the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which the final amount is determined.

Because the Company’s tax is largely determined in Brazilian reais and its functional currency is the dollar, the income tax expense line is highly sensitive to the effects of changes in exchange rates, particularly those due to changes in non-monetary assets.

If the real had devalued or appreciated by 10% against the dollar in relation to the actual exchange rate at December 31, 2018, the deferred income tax expense would have been higher or lower by approximately US$ 148.2.

3.6. Non-current assets held for sale and discontinued operations A discontinued operation is a Company’s business component which comprises operations and cash flows that may be clearly distinct and: • Represents a separate major line of business or geographic area of operations; • It is part of a co-ordinated single plan for the sale of a separate major line of business or geographic area of operations; or • It is a subsidiary acquired exclusively with a view to resale.

The classification of a Company’s operation as discontinued operation is achieved through its disposal, or at the time the transaction meets the criteria of IFRS 5 to have its assets and liabilities classified as held for sale, whichever occurs earlier.

An asset or group of assets and liabilities is held for sale when it is expected that its carrying amount will be recovered mainly from the sale transaction rather than continuous use. This occurs if the asset is available for immediate sale under its current conditions, subject only to customary and usual terms for the conclusion of the transaction, when the sale transaction is defined as ‘highly probable’ under the accounting standard.

The transaction initiated by the Company and The Boeing Company involving assets of commercial aviation segment will be classified as held for sale and discontinued operation from February 26, 2019, date of shareholders approval on Extraordinary General Shareholders’ Meeting when the ‘highly probable’ criteria was met.

As of December 31, 2018, the criteria to classify the operation as an asset held for sale and discontinued operation has not been reached.

4. Accounting standards not yet adopted Standards and amendments to existing accounting standards mentioned in this section have been published, but implementation is not mandatory for the year ended December 31, 2018, and the Company has not early adopted the amendments in these consolidated financial statements.

The accounting standards presented below may be relevant to the Company in the future, for this reason adoption projects are in course for each of them. It is not possible to estimate the effects of the adoption until such projects are concluded: • IFRS 16 - Leases: brings new concepts from the lessee’s point of view. In the model proposed by the new standard, the lessee shall recognize all leases as part of the consolidated statements of financial position in the caption of property, plant and equipment “right of use”, against a liability account. The initial recognition must be measured as at present value, considering a discount rate

F-38 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

that is appropriate to the local reality of each entity. In the model proposed by the new standard there are no significant changes in the accounting recognition to be made by the lessor. In adopting the standard, the Company used three practical expedients: (1) transactions below US$ 5,000 will be outside the scope of this standard, (2) all contracts with less than 12 months will not be considered for the purposes of IFRS 16 and (3) in order to define the discount rates, Management considered adopting the practical expedient which considers grouping contracts with similar characteristics. Embraer and its subsidiaries are analyzing the new accounting standard as well as the application in existing transactions and consider that there is an impact in the consolidated financial statements, implying an increase in assets and liabilities, a reduction in the value of operating expenses and an increase in financial expenses. The standard is applicable as of January 1, 2019 and the Company intends to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption and the assets will be measured at the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses). The estimated effect on transition is between 0.5%-1.0% of the Company’s total assets, without impact in Shareholders’ equity. • IFRIC 23 - Uncertainty over income tax treatments: This is an interpretation of the IAS 12 - Income Tax standard, whose initial application will be effective as of January 1, 2019. The Company is surveying all the circumstances covered by IFRIC 23 and does not expect relevant impacts on its adoption. According to the interpretation, there are two possible transition methods: (1) retrospective, where the application is performed without the effect of using facts or further knowledge and (2) retrospective with cumulative effect, method in which applies with all the effect of prior periods accumulated in Shareholders’ equity. The Company will adopt this interpretation in compliance with method (2) mentioned.

Other accounting standards have been amended or are in the process of amendment and will come into effect in the coming years; however these are not mentioned, as the Company does not expect them to result in significant impacts.

5. Cash and cash equivalents

12.31.2018 12.31.2017 Cash and banks 125.4 383.4 125.4 383.4 Cash equivalents Private securities (i) 352.6 219.4 Fixed deposits (ii) 802.9 668.0 1,155.5 887.4 1,280.9 1,270.8

(i) Applications in Bank Deposit Certificates (CDB’s), issued by financial institutions in Brazil, available for redemption in up to 90 days without impact on contracted remuneration; (ii) Fixed term deposits in US Dollars with original maturities of 90 days or less.

6. Financial investments

12.31.2018 12.31.2017 (Restated) Fair value Fair value through other Fair value through other Fair value Amortised comprehensive through profit Amortised comprehensive through profit cost income or loss Total cost income or loss Total Financial instruments Private securities (i) — 50.4 — 50.4 — 516.0 0.6 516.6 Structured Notes (ii) 48.8 — 1,308.0 1,356.8 50.5 — 1,199.6 1,250.1 Fixed Deposits (iii) — 457.3 0.1 457.4 — 791.6 — 791.6 Investment funds — — 2.4 2.4 — — — — Other (iv) — — 59.9 59.9 — — 59.0 59.0 48.8 507.7 1,370.4 1,926.9 50.5 1,307.6 1,259.2 2,617.3 Current portion 1.1 507.7 1,234.6 1,743.4 1.3 1,307.6 1,057.2 2,366.1 Non-current 47.7 — 135.8 183.5 49.2 — 202.0 251.2

(i) Private securities, being: investments in Financial Bills, investments in Bank Deposit Certificates and Committed Transactions issued by Brazilian financial institutions, issued with maturities of more than 90 days.

F-39 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

(ii) Structured notes, mainly comprised of: • Amount of US$ 1,103.7 (US$ 855.1 as of December 31, 2017), with credit risk of the issuing financial institution and the Brazilian government. • Amount of US$ 83.2 (US$ 222.2 as of December 31, 2017). In 2004, seeking to ensure profitability compatible with the term of guarantee deposit, the Company invested principal of US$ 123.4 in 15-year structured notes. In the inception, the transaction was recognized as restricted cash in the guarantee deposit line, however, due to negotiations between the parties at the end of 2016 and beginning of 2017, the restriction was waived, and then the amount was reclassified to financial investments line in the consolidated statements of financial position. This yield enhancement was obtained through a credit default swap (CDS), a transaction which provides the right of early redemption of the note in the case of default by the Company. Upon such default, the note may be redeemed by the holder at its market value or its original face value, which would result in a loss to the Company of all interest accrued to that date. Default events that can bring forward the due date for the notes includes: (a) bankruptcy or insolvency of the Company and (b) failure to pay or restructuring of Company debts in financing contracts. In the event of default, the maturity dates of these notes will be brought forward and the notes will be realized at market value, limited to a minimum of the amounts originally invested. Any amount by which the market value exceeds the amount invested will be paid to the Company in the form of bonds, or loans of that amount. (iii) Fixed-term deposits in US dollars issued by financial institutions, with maturities of more than 90 days from the contract date. (iv) Refers to the shares of newly created Republic Airways Holdings, as a result of Republic Airways’ request for bankruptcy. These shares were received by the Company as part of the entity restructuring plan (see Note 23—Financial Guarantees).

The weighted average interest rate as of December 31, 2018 related to cash equivalents and financial investments in Brazilian Reais were of 6.56% p.a. and in US Dollars 2.40% p.a. (10.18% and 1.70% p.a. respectively as of December 31, 2017).

7. Trade accounts receivable, net

12.31.2018 12.31.2017 01.01.2017 (Restated) (Restated) Foreign customers 325.7 306.3 305.0 Brazilian Air Force 21.8 14.4 9.1 Domestic customers 15.5 29.2 64.3 363.0 349.9 378.4 Allowance for doubtful accounts (45.0) (52.9) (41.6) 318.0 297.0 336.8

F-40 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The amounts and maturities of these trade accounts receivable are shown below:

12.31.2018 12.31.2017 01.01.2017 (Restated) (Restated) Current 217.0 223.6 279.6 Up to 90 days 52.6 48.6 49.6 From 91 to 180 days 13.6 15.7 19.5 More than 180 days 79.8 62.0 29.7 363.0 349.9 378.4

Changes in estimated credit losses year over year are shown below:

12.31.2018 12.31.2017 01.01.2017 (Restated) (Restated) Beginning balance (52.9) (41.6) (38.4) Additions (5.8) (22.1) (36.0) Reversal 17.7 9.9 12.5 Write-off 3.6 5.2 10.3 Foreign exchange variation (7.6) (4.3) 10.0 Ending balance (45.0) (52.9) (41.6)

8. Derivative financial instruments Derivative financial instruments are contracted to protect the Company’s operations from exchange and interest rate fluctuation risks and are not used for speculation.

As of December 31, 2018, the Company had the following instruments: • Non-deliverable forward (NDF), with the purpose of protecting the Company against the risks of exchange rate fluctuations. The fair value is determined by the observable market pricing model. • Swap operations, with the main objective of changing the debts index, from floating rates to fixed interest rates or vice versa, exchange of Dollar to Real or Euro and vice versa. The fair values of these instruments are measured by the future flow, determined by applying contractual interest rates to maturity, and discounted to present value at the date of the consolidated financial statements by the prevailing market rates. • Transactions with purchase options and currency sale, in order to protect cash flows of wage costs denominated in Reais, against the risk of currency fluctuations. The financial instrument used by the Company is zero-cost collar, which consists of the purchasing of a put option and the sale of a call option, contracted with the same counterparty and with a zero net premium. The fair value of this instrument is determined by the observable market pricing model (through market information providers) and widely used by market participants to measure similar instruments.

F-41 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Settlement Purpose Risk Counterparty date 12.31.2018 12.31.2017 Derivatives designated as hedge accounting Expenses in Brazilian Reais (i) Exchange rate Citibank 2019 (1.9) 0.8 BofaMLynch — — 0.3 Santander 2019 (1.2) 1.4 BNP Paribas 2019 (1.2) 1.3 Bradesco 2019 (1.9) — Itau BBA 2019 (1.3) — Export financing (ii) Interest rate Bradesco — — 3.7 BofaMLynch — — 4.5 Santander 2019 0.9 5.0 Project development (ii) Interest rate Itau BBA 2023 0.3 0.3 Votorantim 2022 0.3 0.5 BofaMLynch 2022 0.5 0.7 Santander 2022 1.7 2.7 HSBC 2022 0.3 0.4 Société Générale 2022 0.2 0.2 Safra 2022 0.1 0.2 Morgan Stanley S/A 2022 1.7 3.0 Bradesco 2022 0.4 0.7 Investments Interest rate Bradesco — — (1.1) Santander — — (0.1) BNP Paribas — — (0.1) Export Exchange rate and Interest rate Santander — — (0.1) Export (iii) Interest rate Itau BBA 2027 2.3 0.5 Other Derivatives 1.2 24.8 Recourse and non-recourse debt (iv) Interest rate Natixis 2022 0.3 1.0 Acquisition of property, plant and equipment (v) Interest rate Compass Bank 2024 (0.1) (0.2) Export (vi) Exchange rate Santander Totta 2019 — — Natixis — — (0.3) BNP Paribas — — 0.1 0.2 0.6 1.4 25.4

(i) Zero-cost collar financial instruments, designated as cash flow hedge, in the total amount of US$ 296.7, through purchase of a put option at the weighted average exercise price of R$ 3.43 and through the sale of a call option at the weighted average exercise price of R$ 4.10 for the year of 2019. (ii) Interest rate swap, designated as fair value hedge, of US$ 277.6 related to the Export and Project Development debt lines, subject to a weighted average fixed interest rate of 4.51% p.a. to a weighted average floating rate equivalent to 34.49% p.a. of CDI index (Interbank Deposit Certificate). (iii) Interest rate swap, designated as cash flow hedge, which converted 6-month LIBOR interest rate to a fixed interest rate of 2.37% p.a., related to US$ 100.0 debt. (iv) Interest rate swap, which converted the amount of US$ 7.3 of recourse and non-recourse debt from a weighted average fixed rate of 8.4% p.a. to a floating rate equivalent to LIBOR 6 months + 1.15% p.a. (v) Interest rate swap, related to operation in the amount of US$ 3.2, which converted a floating interest rate of LIBOR 1 month + 2.44% p.a. for fixed rate of 5.23% p.a. (vi) Non-deliverable forward instruments in the amount of US$ 2.5 for exchange of US Dollars to Euro.

F-42 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

As of December 31, 2018, loans and financing measured as at amortized cost amounted to US$ 3,647.6, and US$ 3,648.4 considering the effect of fair value of hedged risks by the hedge structures (As of December 31, 2017 US$ 4,198.3 and US$ 4,198.5, respectively).

The hedge effectiveness determined for the fair value and cash flow hedges in the inception date was 1:1 and 1:1, respectively. Considering changes in the discounted value of hedge instruments not yet liquidated since January 1st and in the value of hedged risk applied to determine the effectiveness relationship, the hedge effectiveness was 1:1.0056 and 1:1.1521 (1:1.0008 and 1:1.0303 as of December 31, 2017).

As of December 31, 2018 and 2017, the fair value of the derivative financial instruments was recorded in the consolidated statements of financial position as follows:

12.31.2018 12.31.2017 Assets Current portion 5.4 29.5 Non-current 4.1 4.8 Liabilities Current portion (8.1) (8.8) Non-current — (0.1) Net derivative financial instruments 1.4 25.4

9. Collateralized accounts receivable and recourse and non-recourse debt Refers to structured transactions in which the amount receivable comprises financial inflows to be received over time and residual values of aircraft under specified return conditions to be received at the end of the contract. The residual value of aircraft is monitored with the objective of recognizing its fair value in the accounts. These structured transactions (Note 2.2.9) were financed by a third party and the amounts were recognized as recourse and non-recourse debt.

The cash inflow of certain structured transactions was sold to third parties, to whom financial guarantees were granted. In such cases the Company maintained the cash inflow in collateralized accounts receivable and recognized the corresponding liabilities in recourse and non-recourse debt.

9.1 Collateralized accounts receivable

12.31.2018 12.31.2017 Estimated residual value of leased assets 215.8 215.6 Minimum lease payments receivable 122.6 127.6 Guaranteed operation (cash inflow) 27.0 42.7 Impairment (i) (129.5) (97.2) Investment in sales-type lease 235.9 288.7 Current portion 218.5 185.6 Non-current portion 17.4 103.1

(i) The amount recognized relates to the devaluation of assets linked to structured financing.

F-43 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

As of December 31, 2018, the maturities of the amounts classified as non-current assets are as follows:

Year 2019 3.7 2020 3.9 2021 4.0 2022 2.6 Thereafter 2022 3.2 17.4

9.2 Recourse and non-recourse debt

12.31.2018 12.31.2017 Recourse debt 330.6 347.0 Non-recourse debt 10.8 17.1 341.4 364.1 Current portion 324.0 17.6 Non-current portion 17.4 346.5

As of December 31, 2018, the maturities of the amounts classified as non-current liabilities were as follows:

Year 2019 3.7 2020 3.9 2021 4.0 2022 2.6 Thereafter 2022 3.2 17.4

10. Guarantee deposits

12.31.2018 12.31.2017 Sales financing guarantees (i) 314.4 321.4 Sales structure guarantees (ii) 25.3 60.8 Other 10.0 11.7 349.7 393.9 Current portion 339.9 0.1 Non-current 9.8 393.8

(i) Dollar-denominated financial investments linked to sales structures until the completion of these structures and settlement of the recourse and non-recourse debt. (ii) US dollar amounts deposited in an escrow account as collateral for the financing of certain aircraft sold where Embraer serves as secondary guarantor. If the initial guarantor of the debt (unrelated party) is required to pay the lender, the initial guarantor will be entitled to the amount in the escrow account in proportion to their guarantee. The amount is returned in the form of cash to the Company at maturity of the financing contracts if the aircraft purchaser does not default on the loan. The interest on the escrow account is added to the principal and recognized by the Company as financial income.

As of 31 December 2018 the guarantor to whom the guarantees are linked was in compliance.

F-44 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

11. Inventories

12.31.2018 12.31.2017 Raw materials 897.6 865.6 Work in process 891.6 612.4 Spare parts 424.3 405.2 Finished goods (i) 146.4 89.9 Held by third parties 108.7 82.3 Inventory in transit 91.1 85.2 Consumption materials 48.3 47.6 Used aircraft (ii) 46.0 102.0 Advances to suppliers 31.4 28.9 Loss on adjustment to market value (iii) (7.7) (17.2) Loss due to obsolescence (iv) (170.7) (153.2) 2,507.0 2,148.7

(i) The following aircraft were held in the finished products inventory: • December 31, 2018: two Legacy 450, four Legacy 500, one Phenom 100; three Phenom 300, one Lineage and two Ipanemas. • December 31, 2017: one Legacy 450, one Phenom 100, one Phenom 300, two Legacy 500, one Lineage and two Ipanemas. Of the total aircraft held in inventories as of December 31, 2018, one Ipanema and one Phenom 300 had been delivered by until March 25, 2019.

(ii) The following used aircraft were held in inventory as available for sale: • December 31, 2018: one Legacy 450, one Lineage, one Phenom 300; • December 31, 2017: three ERJ 140, two Lineage and one Boeing BBJ 737

(iii) Refers to the provision recorded for adjustments to the realizable value of used aircraft, as follows:

12.31.2018 12.31.2017 12.31.2016 Beginning balance (17.2) (19.9) (25.4) Additions (8.8) (8.2) (14.0) Disposals 18.3 10.9 19.5 Ending balance (7.7) (17.2) (19.9)

(iv) A provision was recorded for items without activity for over two years and with no planned use in the production program, and to cover expected losses from excess inventories or obsolete work in progress, except for inventories of spare parts, for which the provision is based on technical obsolescence of items without activity for over two years. Changes in the provision for obsolescence were as follows:

12.31.2018 12.31.2017 12.31.2016 Beginning balance (153.2) (138.1) (161.2) Additions (59.8) (48.7) (59.8) Disposals 41.5 37.0 83.7 Foreign exchange loss 0.8 (3.4) (0.8) Ending balance (170.7) (153.2) (138.1)

F-45 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

12. Other assets

12.31.2018 12.31.2017 Taxes recoverable (i) 132.2 171.0 Other debtors (ii) 61.6 53.5 Court-mandated escrow deposits (iii) 43.0 62.5 Prepaid expenses 24.3 22.4 Loan with a joint operation (iv) 23.2 19.7 Advances to employees 8.5 12.5 Advances for services to be rendered 3.2 11.5 Other 13.0 23.7 309.0 376.8 Current portion 203.4 255.3 Non-current portion 105.6 121.5

(i) Taxes recoverable

12.31.2018 12.31.2017 ICMS (State Value-added Tax) and IPI (Excise Tax) 85.5 96.3 PIS (Social Integration Program) and COFINS (Contribution for Social Security) 24.5 51.1 Income tax and social security on net income withheld 7.7 8.8 ISS (Service tax) 5.9 6.3 Other 8.6 8.5 132.2 171.0 Current portion 93.7 120.4 Non-current portion 38.5 50.6

(ii) Corresponds mainly to rework done on products supplied by third parties, which will be reimbursed according to the contractual terms and credits negotiated with certain suppliers that will be consumed over time from other receivables from suppliers. (iii) Refers to deposits arising from lawsuits, substantially to federal taxes and contributions (Note 22). (iv) Corresponds to the jointly controlled operation of the Embraer group (Note 2.1.2), where only assets and liabilities under the Company’s liability are consolidated. In this way, the amount presented, refers to the balance of loan receivable from the other partner of EZ Air Interior Limited.

13. Interest in entities (i) Wholly owned subsidiaries and special purpose entities Wholly-owned subsidiaries and special purpose entities (SPEs) controlled directly or indirectly by the Company and jointly controlled entities are described in notes 2.1.2 and 2.1.3 and are consolidated into the Embraer group.

There are no contractual or legal restrictions on the Company’s access to assets or settlement of liabilities of the wholly owned subsidiaries of the group.

There are inherent risks to the operations of these entities, the most significant of which are described below: • Economic Risks: potential losses from fluctuations in market conditions (price of products, exchange rate and interest); • Operational risk: potential losses resulting from the emergence of new technologies or failure of current processes;

F-46 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

• Credit risk: potential losses that might occur if a third party (customer) becomes unable to meet its obligations; and • Liquidity risk: financial inability to meet financial obligations.

(ii) Subsidiaries with participation of non-controlling shareholders Non-controlling shareholders have interests in the group entities listed below, however, based on contractual agreements and analysis of the applicable accounting standards, the Company has control and therefore has the right to consolidate the following entities:

Participation Participation Entity Country Embraer Group noncontrolling OGMA - Indústria Aeronática de Portugal S.A. Portugal 65.0% 35.0% Embraer CAE Training Services Ltd. United Kingdom 51.0% 49.0% Visiona Tecnologia Espacial S.A. Brazil 51.0% 49.0% Embraer CAE Training Services United States of America 51.0% 49.0%

Embraer group holds 51.0% of the entities Embraer CAE Training Services Ltd., Visiona Tecnologia Espacial S.A. and Embraer CAE Training Services. The powers described in the contractual agreements show that the Board of Directors is mainly comprised of Embraer representatives and the Embraer Group directs the principal operating activities of the entity.

The financial position of the most significant entity of the group with non-controlling interests is summarized below, which is OGMA—Indústria Aeronáutica de Portugal S.A. Other entities combined represent less than 5% of consolidated profit before taxes on income.

12.31.2018 12.31.2017 01.01.2017 Cash and cash equivalents 12.9 11.1 23.7 Current assets 168.9 207.9 155.1 Non current assets 61.0 66.0 55.4 Current liabilities 74.5 117.4 76.5 Non current liabilities 0.1 0.9 7.3 Noncontrolling interest 54.3 54.4 44.2

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Revenue 240.5 222.1 216.3 Net income for the year 9.6 12.3 11.2

Group subsidiaries with non-controlling interests are subject to the same risks as the wholly owned subsidiaries.

(iii) Jointly controlled entity EZ Air Interior Limited is a joint operation between the Embraer group and Zodiac Aerospace and shares with the other members’ joint management of the entities’ relevant activities.

The Company accounts for the assets, liabilities, revenues and expenses relating to its involvement in the joint operations in accordance with the rights and obligations assigned to Embraer.

12.31.2018 12.31.2017 01.01.2017 Cash and cash equivalents 1.3 1.2 1.4 Current assets 24.5 28.8 27.7 Non current assets 8.0 7.1 5.4 Current liabilities 13.1 48.2 24.6 Non current liabilities 41.5 4.4 25.4

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Revenue 48.4 42.0 47.4 Net income (loss) for the year (5.4) 0.1 (9.3)

F-47 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

14. Related parties 14.1 Related party transactions The table below summarizes balances and transactions with related parties outside the group and refers mainly to: • assets: (i) accounts receivable for spare parts, aircraft sales and product development, under conditions agreed between the parties, considering the volumes, risks involved and corporate policies (ii) mutual loans to subsidiaries abroad with interest rates compatible with those used by the Company on acquiring resources in foreign currencies (iii) balances of financial investments; and (iv) bank deposits; • liabilities: (i) purchase of aircraft components and spare parts, under conditions agreed between the parties, considering the volumes, risks involved and corporate policies (ii) advances received on accountofsales contracts, according to contractual agreements; (iii) commission for sale of aircraft and spare parts (iv) financing for research and product development at market rates for this kind of financing (v) loans and financing; and (vi) mutual loan contracts with the subsidiaries abroad with interest rates equivalent to those used by the Company to acquire similar funding (vii) export financing; and • Amounts in the consolidated statements of income: (i) purchases and sales of aircraft, components and spare parts and development of products for the defense and security market; (ii) financial income from financial investments and mutual loans; (iii) supplementary pension plan.

14.1.1 December 31, 2018

Current Non-current Financial Operating Assets Liabilities Assets Liabilities Results Results Banco do Brasil S.A. 326.2 314.3 9.4 — (4.2) — Banco Nacional de Desenvolvimento Econômico e Social – BNDES — 71.8 — 119.7 (8.3) — Caixa Econômica Federal — — — — 0.2 — Brazilian Air Force 42.3 90.3 — — — (176.2) Marinha do Brasil 0.9 — — — — (12.6) Embraer Prev – Sociedade de Previdência Complementar — 0.2 — — — (14.4) Brazilian Army — 4.3 — — — — Financiadora de Estudo e Projetos – FINEP — 13.0 — 43.5 (2.3) — 369.4 493.9 9.4 163.2 (14.6) (203.2)

14.1.2 December 31, 2017

Current Non-current Financial Operating Assets Liabilities Assets Liabilities Results Results Banco do Brasil S.A. 227.2 92.9 330.8 319.5 (0.5) — Banco Nacional de Desenvolvimento Econômico e Social – BNDES — 88.4 —219.0 (14.7) — Brazilian Air Force 314.1 90.3 — — — (23.7) Marinha do Brasil 6.6 — — — — (6.2) Caixa Econômica Federal 9.8 — — — — — Embraer Prev - Sociedade de Previdência Complementar —0.2 ———(22.9) Brazilian Army — 11.1 — — — (1.2) Financiadora de Estudo e Projetos – FINEP — 15.7 — 64.6 (2.9) — 557.7 298.6 330.8 603.1 (18.1) (54.0)

F-48 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

14.1.3 December 31, 2016

12.31.2016 Financial Operating Results Results Banco do Brasil S.A. (2.8) — Banco Nacional de Desenvolvimento Econômico e Social – BNDES (18.6) — Brazilian Air Force — 25.6 Marinha do Brasil — (2.7) Caixa Econômica Federal 28.5 — Embraer Prev – Sociedade de Previdência Complementar — (23.2) Brazilian Army — 5.0 Financiadora de Estudo e Projetos – FINEP (2.9) — Telecomunicações Brasileiras S.A. - Telebrás — (2.1) 4.2 2.6

14.2 Brazilian Federal Government – relationship Through its direct and indirect participation and ownership of a common share, denominated “golden share”, the Brazilian Federal Government is a significant shareholder. As of December 31, 2018, in addition to its “golden share”, the Brazilian Federal Government held an indirect stake of 5.37% in the Company’s capital through BNDESPAR, a wholly-owned subsidiary of the Banco Nacional do Desenvolvimento Econômico e Social – BNDES (the Brazilian Development Bank, or “BNDES”), which, in turn, is controlled by the Brazilian Federal Government.

The Brazilian government plays a key role in the Company’s business activities, including as: • a major customer for defense products (through the Brazilian Air Force, Army and Navy); • a source of research and development financing through technology development institutions such as FINEP and the BNDES; • an export credit agency (through the BNDES); and • a source of short-term and long-term financing and a provider of asset management and commercial banking services (through Banco do Brasil).

14.3 Remuneration of key management personnel:

12.31.2018 12.31.2017 Short-term benefits (i) 10.0 10.1 Share based payment 3.3 2.4 Labor contract termination 1.0 1.1 14.3 13.6

(i) Includes wages, salaries, profit sharing, bonuses and indemnities.

Key Management includes members of the statutory Board of Directors and Executive Directors.

15. Property, plant and equipment The annual weighted average rates by asset class are shown below. This information is based on the consolidated depreciation of the assets recognized in the year, compared, after annualization and elimination of any non-typical movement, to the net balance of the assets in the previous year:

Weighted average Class of assets depreciation rate (%) 12.31.2018 12.31.2017 Buildings and improvements 3.8% 4.6% Installations 4.9% 5.5% Machinery and equipment 10.0% 13.0% Furniture and fixtures 9.3% 11.8% Vehicles 22.7% 27.7% Aircraft 11.0% 8.0% Computers and peripherals 27.6% 28.2% Tooling 16.5% 16.4% Other assets 0.1% 0.7% Exchange pool program assets 3.7% 3.8%

F-49 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

12.31.2018 Exchange Machinery Furniture pool Buildings and and and Aircraft Computers and Other program Construction Land improvements Installations equipment fixtures Vehicles (i) peripherals Tooling assets assets in progress Total Cost At December 31, 2017 11.0 741.8 161.4 971.8 74.9 17.5 193.2 190.3 620.9 26.0 672.5 76.5 3,757.8 Additions — 1.3 — 28.5 1.9 0.5 10.2 6.3 16.6 1.4 46.3 41.3 154.3 Disposals — (10.9) (0.9) (36.5) (2.1) (0.5) (0.3) (6.4) (1.7) — (20.2) (0.7) (80.2) Impairment(ii) — — — (0.3) — — (6.0) — (2.5) — — — (8.8) Reclassifications* — 19.3 2.1 8.8 (0.1) — (120.8) 0.9 0.5 0.2 (31.8) (26.7) (147.6) Interest on capitalized assets — — — — — — — — — — — 4.8 4.8 Translation adjustments — (1.4) (0.2) 0.1 (0.4) (0.2) (0.1) (1.1) (4.7) — (16.0) (1.5) (25.5) At December 31, 2018 11.0 750.1 162.4 972.4 74.2 17.3 76.2 190.0 629.1 27.6 650.8 93.7 3,654.8 Accumulated depreciation At December 31, 2017 — (208.9) (104.1) (506.6) (43.4) (13.4) (81.3) (148.4) (329.7) (9.9) (207.2) — (1,652.9) Depreciation — (20.2) (2.8) (46.4) (2.9) (1.0) (9.1) (11.5) (48.1) — (17.2) — (159.2) Disposals — 10.7 0.9 33.5 1.5 0.4 0.3 6.3 0.7 — 6.9 — 61.2 Reclassifications* — 0.1 0.3 2.8 — — 51.4 (1.7) — (1.5) — — 51.4 Interest on capitalized assets — (1.5) — — — — — — — — — — (1.5) Translation adjustments — 0.4 0.1 (1.4) 0.2 0.2 — 0.8 5.6 — 5.0 — 10.9 At December 31, 2018 — (219.4) (105.6) (518.1) (44.6) (13.8) (38.7) (154.5) (371.5) (11.4) (212.5) — (1,690.1) Net At December 31, 2017 11.0 532.9 57.3 465.2 31.5 4.1 111.9 41.9 291.2 16.1 465.3 76.5 2,104.9 At December 31, 2018 11.0 530.7 56.8 454.3 29.6 3.5 37.5 35.5 257.6 16.2 438.3 93.7 1,964.7

12.31.2017 Exchange Machinery Furniture Computers pool Buildings and and and Aircraft and Other program Construction Land improvements Installations equipment fixtures Vehicles (i) peripherals Tooling assets assets in progress Total Cost At December 31, 2016 11.0 657.1 156.1 909.8 74.1 16.8 316.7 179.3 587.8 29.4 669.7 116.4 3,724.2 Additions — 4.1 — 40.3 3.6 0.4 14.4 11.4 30.8 8.6 43.6 80.5 237.7 Disposals — (8.1) — (10.1) (1.9) (0.7) (8.1) (0.8) (1.0) — (33.5) (1.1) (65.3) Impairment(ii) — — — (2.2) — — (25.8) — (2.1) — — — (30.1) Reclassifications* — 85.5 4.8 22.5 (1.4) 0.5 (104.0) (0.7) 5.1 (12.0) (22.2) (142.0) (163.9) Interest on capitalized assets — — — — — — — — — — — 22.1 22.1 Translation adjustments — 3.2 0.5 11.5 0.5 0.5 — 1.1 0.3 — 14.9 0.6 33.1 At December 31, 2017 11.0 741.8 161.4 971.8 74.9 17.5 193.2 190.3 620.9 26.0 672.5 76.5 3,757.8 Accumulated depreciation At December 31, 2016 — (191.3) (101.4) (445.1) (40.0) (12.7) (153.9) (136.2) (278.9) (9.4) (201.1) — (1,570.0) Depreciation — (21.3) (3.0) (60.3) (4.0) (1.2) (25.6) (12.1) (50.8) (0.2) (18.0) — (196.5) Disposals — 4.1 — 7.5 1.0 0.6 6.9 0.6 0.3 — 8.8 — 29.8 Reclassifications* — 0.6 0.4 — — 0.3 91.3 — — (0.3) — — 92.3 Translation adjustments — (1.0) (0.1) (8.7) (0.4) (0.4) — (0.7) (0.3) — 3.1 — (8.5) At December 31, 2017 — (208.9) (104.1) (506.6) (43.4) (13.4) (81.3) (148.4) (329.7) (9.9) (207.2) — (1,652.9) Net At December 31, 2016 11.0 465.8 54.7 464.7 34.1 4.1 162.8 43.1 308.9 20.0 468.6 116.4 2,154.2 At December 31, 2017 11.0 532.9 57.3 465.2 31.5 4.1 111.9 41.9 291.2 16.1 465.3 76.5 2,104.9

F-50 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

12.31.2016 Exchange Machinery Furniture Computers pool Buildings and and and Aircraft and Other program Construction Land improvements Installations equipment fixtures Vehicles (i) peripherals Tooling assets assets in progress Total Cost At December 31, 2015 11.0 616.5 151.8 853.3 70.5 17.0 323.5 163.2 533.5 22.8 622.6 75.8 3,461.5 Additions — 0.6 — 54.8 4.0 0.7 137.4 17.3 54.6 8.6 65.5 91.7 435.2 Disposals — (9.3) (0.2) (7.6) (2.3) (0.9) (17.8) (3.0) (0.9) — (15.1) (7.1) (64.2) Impairment — — — — — — (27.0) — — — — — (27.0) Impairment (iii) — — — — — — (64.9) — — — — — (64.9) Reclassifications* — 49.9 4.4 10.2 1.9 0.2 (34.7) 1.7 0.9 (2.0) 1.2 (59.8) (26.1) Interest on capitalized assets — — — — — — — — — — — 16.1 16.1 Translation adjustments — (0.6) 0.1 (0.9) — (0.2) 0.2 0.1 (0.3) — (4.5) (0.3) (6.4) At December 31, 2016 11.0 657.1 156.1 909.8 74.1 16.8 316.7 179.3 587.8 29.4 669.7 116.4 3,724.2 Accumulated depreciation At December 31, 2015 — (180.8) (97.2) (389.5) (37.9) (12.5) (156.4) (128.7) (233.4) (9.4) (188.3) — (1,434.1) Depreciation (20.0) (4.2) (62.7) (4.1) (1.1) (25.4) (10.4) (44.7) — (21.9) (194.5) Disposals — 9.2 — 4.9 1.9 0.8 15.5 2.9 0.5 — 6.0 — 41.7 Reclassifications* — — — 1.8 — — 8.6 (0.1) (1.6) — — — 8.7 Translation adjustments — 0.3 — 0.4 0.1 0.1 3.8 0.1 0.3 — 3.1 — 8.2 At December 31, 2016 — (191.3) (101.4) (445.1) (40.0) (12.7) (153.9) (136.2) (278.9) (9.4) (201.1) — (1,570.0) Net 11.0 435.7 54.6 463.8 32.6 4.5 167.1 34.5 300.1 13.4 434.3 75.8 2,027.4 At December 31, 2015 11.0 465.8 54.7 464.7 34.1 4.1 162.8 43.1 308.9 20.0 468.6 116.4 2,154.2

* On December 31, 2018, 2017 and 2016, reclassification of “Aircraft” and “Exchange pool program assets” classes refers to aircraft and items transferred to the inventory for sale purposes. In addition, in September 2017, 17 ERJ 145 aircraft were transferred to inventory in order to be disassembled and sold as parts (part-out procedures).

(i) The aircraft are used for testing, shuttle and operating leases and are adjusted to fair value, if applicable. The following aircraft are held: • December 31, 2018: three ERJ 135, 15 ERJ 145, one EMBRAER 190, one EMBRAER 120, one Legacy 450, one 690B; and • December 31, 2017: nine ERJ 135, 26 ERJ 145, four EMBRAER 170, one EMBRAER 190, one EMBRAER 120, one Legacy 450, one Legacy 500, one Phenom 300, one 690B.

(ii) Impairment losses recognized as discussed in Note 17.

As of December 31, 2018, property, plant and equipment of US$ 114.5 were pledged as collateral for loans, financing and labor contingencies (December 31, 2017, US$ 134.1).

The average rate for capitalization of borrowing costs is 5.5% p.a. for the year ended December 31, 2018 (5.4% p.a. for year ended December 31, 2017).

16. Intangible assets Internally developed intangible assets relate to expenditure incurred in developing new aircraft, including support services, production labor, materials and direct labor allocated to the construction of aircraft prototypes or significant components, and also the use of advanced technologies to make the aircraft lighter, quieter, more comfortable and energy-efficient and to reduce emissions, in addition to speeding up design and manufacture, while optimizing the use of resources.

12.31.2018 Internally developed Acquired from third party Defense and Commercial Executive Security Other Development Software Goodwill Other Total Intangible cost At December 31, 2017 1,825.2 1,355.7 33.5 5.8 13.9 343.3 12.0 45.6 3,635.0 Additions 209.3 41.3 4.0 0.1 2.5 8.0 — 25.1 290.3 Contributions from suppliers (125.5) — — — — — — — (125.5) Disposals — — — — — (3.4) — — (3.4) Reclassifications — — 5.9 (2.4) (10.1) 2.4 — (1.9) (6.1) Impairment — (58.5) — — — — — — (58.5) Interest on capitalized assets 7.3 2.7 — — — — — — 10.0 Translation adjustments — — — — — — (1.6) — (1.6) At December 31, 2018 1,916.3 1,341.2 43.4 3.5 6.3 350.3 10.4 68.8 3,740.2 Acumulated amortization At December 31, 2017 (1,031.8) (473.7) (27.9) (1.1) (6.8) (206.9) — (4.4) (1,752.6) Amortization (29.6) (51.1) (1.8) (0.1) (0.9) (28.1) — (1.2) (112.8) Amortization of contribution from suppliers 8.0 14.0 — — — — — — 22.0 Disposals — — — — — 2.2 — — 2.2 Reclassifications — — (2.7) — 4.8 — — (0.7) 1.4 Interest on capitalized assets (0.2) (1.4) — — — — — — (1.6) At December 31, 2018 (1,053.6) (512.2) (32.4) (1.2) (2.9) (232.8) — (6.3) (1,841.4) Intangible, net At December 31, 2017 793.4 882.0 5.6 4.7 7.1 136.4 12.0 41.2 1,882.4 At December 31, 2018 862.7 829.0 11.0 2.3 3.4 117.5 10.4 62.5 1,898.8

F-51 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

12.31.2017 Internally developed Acquired from third party Defense and Commercial Executive Security Other Development Software Goodwill Other Total Intangible cost At December 31, 2016 1,515.1 1,320.3 30.8 51.8 13.5 311.4 21.0 32.8 3,296.7 Additions 313.8 76.9 3.0 2.5 1.9 56.3 — 16.1 470.5 Contributions from suppliers (86.0) ———————(86.0) Disposals — — — — (1.5) — — — (1.5) Reclassifications 71.3 3.6 (0.3) (48.5) — (24.4) — (1.7) — Impairment — (49.9) — — — — (8.7) (1.9) (60.5) Interest on capitalized assets 11.0 4.8 — — — — — — 15.8 Translation adjustments — — — — — — (0.3) 0.3 — At December 31, 2017 1,825.2 1,355.7 33.5 5.8 13.9 343.3 12.0 45.6 3,635.0 Acumulated amortization At December 31, 2016 (992.4) (424.9) (25.6) — (5.7) (179.8) — (3.7) (1,632.1) Amortization (57.4) (56.7) (2.6) (0.1) (1.1) (27.1) — (1.2) (146.2) Amortization of contribution from suppliers 13.5 13.8 — — — — — — 27.3 Reclassifications 4.5 (4.3) 0.3 (1.0) — — — 0.5 — Interest on capitalized assets —(1.6) — — — — — — (1.6) At December 31, 2017 (1,031.8) (473.7) (27.9) (1.1) (6.8) (206.9) — (4.4) (1,752.6) Intangible, net At December 31, 2016 522.7 895.4 5.2 51.8 7.8 131.6 21.0 29.1 1,664.6 At December 31, 2017 793.4 882.0 5.6 4.7 7.1 136.4 12.0 41.2 1,882.4

12.31.2016 Internally developed Acquired from third party Defense and Commercial Executive Security Other Development Software Goodwill Other Total Intangible cost At December 31, 2015 1,276.1 1,248.9 25.6 36.1 10.1 263.3 16.4 24.0 2,900.5 Additions 351.1 65.4 5.2 15.7 10.7 48.1 — 8.8 505.0 Contributions from suppliers (123.9) ———————(123.9) Reclassifications — — — — (7.3) — — — (7.3) Interest on capitalized assets 11.8 6.0 —— — — —— 17.8 Translation adjustments — — — — — — 4.6 — 4.6 At December 31, 2016 1,515.1 1,320.3 30.8 51.8 13.5 311.4 21.0 32.8 3,296.7 Acumulated amortization At December 31, 2015 (923.6) (377.1) (25.6) — (4.6) (160.9) — (3.3) (1,495.1) Amortization (92.0) (61.5) — — (1.1) (18.9) — (0.4) (173.9) Amortization of contribution from suppliers 23.2 15.1 — — — — — — 38.3 Interest on capitalized assets — (1.4) — — — — — — (1.4) At December 31, 2016 (992.4) (424.9) (25.6) — (5.7) (179.8) — (3.7) (1,632.1) Intangible, net At December 31, 2015 352.5 871.8 — 36.1 5.5 102.4 16.4 20.7 1,405.4 At December 31, 2016 522.7 895.4 5.2 51.8 7.8 131.6 21.0 29.1 1,664.6

F-52 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

17. Impairment test As of December 31, 2018, the Company performed its annual impairment test of the CGUs to which goodwill and indefinite-lived assets are allocated, as well as for those CGUs which presented indicators the carrying amount may not be recoverable generate by new events or change in circumstances.

The Company performed impairment tests of the carrying amount of each applicable CGUs based in the value in use approach. Value in use was estimated using the discounted cash flow method for each applicable CGU. The process of estimating the value in use involves assumptions, judgments and estimates for future cash flows which represent the Management’s best estimate approved by the Board of Directors.

As of December 31, 2018, no impairment losses were identified, except for losses of US$ 61.3 in relation to the full remaining internally developed assets of Lineage 1000 aircraft model (Segment of Executive Aviation), for which US$ 58.5 was allocated in intangible assets and US$ 2.8 as losses on property, plant and equipament, related to sales forecast review of this aircraft model.

As of December 31, 2017, losses of US$ 50.5 and US$ 8.7 were recognized in CGUs of Legacy 650 aircraft (Segment of Executive Aviation) and of Monitoring, Sensoring and Radars, respectively. Losses were allocated in intangible assets and property, plant and equipment, and in the case of Monitoring, Sensoring and Radars CGU, the loss was also allocated in the goodwill recognized.

Impairment losses identified and recognized are consequences of changes in market conditions, analysis of potential customers and changes in industry forecasts of each impaired aircraft model.

(i) Key assumptions of impairment test Management determined the gross margin based on its expectations of market development, forecast and conditions for each CGU. The weighted average growth rates used are consistent with the forecasts included in industry reports and in the Company’s strategic business plan approved by the Board of Directors.

Estimated future cash flows were discounted using the weighted average capital cost rate (WACC), which is reconciled to an estimated discount pre-tax rate of 11.4% and 11.9% in 2018 and 2017, respectively, which reflects the return expected by the investors.

There are no other CGUs at risk of impairment losses on December 31, 2018 and 2017, except for those mentioned before.

18. Trade accounts payable

12.31.2018 12.31.2017 Foreign suppliers 574.0 545.4 Risk partners (i) 200.2 162.0 Domestic suppliers 117.9 117.3 892.1 824.7

(i) The Company’s risk-sharing suppliers/partners develop and produce significant aircraft components, including engines, hydraulic components, avionics, wings, tail sections, interior components and fuselage parts. Certain contracts between the Company and these risk-sharing suppliers/partners are long-term and include deferral of payments for components and systems for a negotiated term after delivery. Once the risk-sharing suppliers/partners have been selected and the aircraft development and production program has commenced, changing suppliers is more challenging. For example, in the case of engines, the aircraft is specially designed to accommodate a given component, which cannot be easily replaced by another supplier without incurring delays and significant additional expense. This dependence makes the Company vulnerable to the performance, quality and financial position of its risk- sharing suppliers/partners.

F-53 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

19. Loans and financing

Currency Contractual interest rate - % Effective interest rate - % Maturity 12.31.2018 12.31.2017 Other currencies: 5.05% to 6.38% 5.05% to 7.42% 2027 (i) 2,941.8 2,934.1 0.63% to 5.37% 0.63% to 5.37% 2021 124.1 220.6 Working capital US$ Libor 6M + 1.35% to 2.60% Libor 6M + 1.35% to 2.60% 2027 219.8 119.1 Libor 3M + 2.25% Libor 3M + 2.25% 2026 — 220.20 Euro 1.00% to 3.37% 1.00% to 3.37% 2026 19.6 14.0 Advances on foreign exchange contracts US$ 4.65% 4.65% 2018 — 3.1 1.04% to 1.10% 1.04% to 1.10% 2035 Property, plant and equipment US$ Libor 1M + 2.44% to 2.50% Libor 1M + 2.44% to 2.50% 2037 55.8 58.1 3,361.1 3,569.2 In local currency: 3.50% to 4.50% 3.50% to 4.50% 2023

Project development R$ TJLP + 1.92% to 5.00% TJLP + 1.92% to 5.00% 2022 248.0 396.0

Export Credit Note R$ 10.85% a 11.00% 10.85% a 11.00% 2019 38.5 233.1 286.5 629.1 Total 3,647.6 4,198.3 Current portion 179.3 388.9 Non-current portion 3,468.4 3,809.6

(i) Bonus Issue Guaranteed - Bonds

In October 2009, Embraer Overseas Limited issued US$ 500.0 thousand in guaranteed notes at 6.375% p.a., due on January 15, 2020. The operations are fully and unconditionally guaranteed by the Parent Company. Because Embraer Overseas Limited is a wholly owned subsidiary of Embraer S.A., whose objective is to perform financial operations.

Between August and September 2013, through its subsidiary Embraer Overseas Limited, Embraer S.A. made an offer to exchange existing bonds maturing in 2017 (settled in January 2017) and 2020 for “New Notes” maturing in 2023. In the case of bonds maturing in 2017 the exchange offer resulted in US$ 146.4 of the aggregate principal of existing notes and US$ 337.2 of the aggregate principal of the 2020 Notes, representing approximately 54.95% of the Notes exchanged. The total of the exchange offer, taking into account the effects of the exchange price on the negotiations and the total New Notes issued closed at approximately US$ 540.5 in principal at a rate of 5.696% p.a., maturing on September 16, 2023. The operations are fully and unconditionally guaranteed by the Parent Company.

In June 15, 2012, Embraer S.A. raised funds by issuing guaranteed notes, maturing on June 15, 2022, through an overseas offer of US$ 500.0 at a rate of 5.15% p.a.

In June 2015, the Company´s wholly-owned finance subsidiary Embraer Netherlands Finance B.V, which only performs financial operations, issued US$ 1,000 in Guaranteed Notes at 5.05% p.a., due on June 15, 2025, in an offering subsequently registered with the SEC. This operation is fully and unconditionally guaranteed by the Parent Company. Because Embraer Netherlands Finance B.V is a wholly owned subsidiary of Embraer S.A., whose objective is to perform financial operations, the transactions made by it are presented as third party transactions in the Parent Company Financial Statements.

In February 2017, Embraer Netherlands Finance B.V., Embraer S.A. subsidiary, issued a offering registered with the SEC of US$ 750.0 with an nominal interest rate of 5.40% p.a. maturing February 1, 2017. This operation is fully and unconditionally guaranteed by the Parent Company. Because Embraer Netherlands Finance B.V. is a wholly owned subsidiary of Embraer S.A., whose objective is to perform financial operations, the transactions made by it are presented as third party transactions in the Parent Company Financial Statements.

F-54 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

As of December 31, 2018, the movement and maturities of the long-term financing agreements are as follows:

12.31.2018 12.31.2017 12.31.2016 Opening balance 3,584.4 3,704.4 4,229.9 Principal addition 124.0 940.0 620.5 Interest addition 218.0 192.7 195.7 Principal payment (596.3) (521.3) (559.7) Interest payment (212.7) (186.4) (175.0) Foreing exchange 530.2 68.9 (551.5) Total 3,647.6 4,198.3 3,759.9

As of December 31, 2018, the maturity schedules of the long-term financing are:

Year 2020 237.0 2021 287.5 2022 519.5 2023 520.8 After 2023 1,903.6 3,468.4

19.1 Interest and guarantees As of December 31, 2018, loans denominated in US dollars (91,6% of the total) are mainly subject to fixed interest rates. The weighted average rate was 5.27% p.a. (5,18% p.a. at December 31, 2017).

As of December 31, 2018, loans denominated in Reais (7,9% of the total) are subject to fixed interest rates or interest based on the Brazilian Long-term Interest Rate (“TJLP”) and CDI (Interbank Deposit Certificate). The weighted average rate at December 31, 2018 was 2.47% p.a. (3.72% p.a. at December 31, 2017).

As of December 31, 2018, financing in Euros (0.5% of the total) had a rate of 1.32% on December 31, 2017.

Real estate, machinery, equipment, commercial pledges and bank guarantees totaling US$ 339.4 as of December 31, 2018 (US$ 441.1 as of December 31, 2017) were provided as collateral for loans.

19.2 Restrictive clauses The long-term financing agreements are subject to restrictive clauses, consistent with normal market practices, which establish control over the degree of leverage through the ratio of total consolidated indebtedness x EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization, as defined), as well as limits for debt service cover based on EBITDA x net financial expense. Agreements also include customary restrictions on the creation of new encumbrances on assets, significant changes in control of the Company, sale of assets.

As of December 31, 2018, the Company was in compliance with all the restrictive clauses.

20. Other payables

12.31.2018 12.31.2017 Other accounts payable (i) 114.6 112.0 Provisions related to payroll (ii) 92.8 108.6 Provision for employee profit sharing 34.3 29.8 Mutual with jointly controlled operation 23.2 19.7 Contractual obligations (iii) 17.5 16.9 Long-term incentive (iv) 16.9 9.9 Commission payable 10.9 10.6 Insurance 6.2 5.0 Brazilian air force 0.6 1.2 317.0 313.7 Current portion 288.4 292.2 Non-current portion 28.6 21.5

(i) Represents a provision for expenses already incurred as of the date of the balance sheet and for which payments are made during the following month. (ii) Refers to employee related obligations recorded in the financial statements; (iii) Substantially represents amounts recorded regarding maintenance costs of aircraft leased through operating leases and contractually agreed upon commitments for the sale of new aircraft or the expiration of residual financial guarantees; (iv) Refers to the Long-Term Incentive (ILP) granted to Company employees in the form of phantom shares, as described in Note 28—Share-based Remuneration.

F-55 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

21. Taxes and payroll charges payable

12.31.2018 12.31.2017 INSS (social security contribution) (i) 105.2 84.0 IRRF (withholding tax) 11.8 24.2 PIS and COFINS (ii) 1.6 4.2 Taxes refinancing program 1.1 15.0 IPI (manufacturing tax) 0.3 1.1 FGTS (government employee severance indemnity fund) 0.2 5.6 Others 6.4 6.8 126.6 140.9 Current portion 68.4 70.7 Non-current portion 58.2 70.2

The Company is challenging, through both administrative and judicial proceedings, the constitutionality of the tax calculation base and its expansion, as well as the rate increase of certain taxes, social contributions and charges, with the aim of ensuring its right to withhold payment or recover amounts paid in previous years.

By means of such administrative and judicial proceedings, the Company has obtained injunctions and similar measures to suspend payment or offset payment of taxes and social contributions and charges. Provisions have been recorded for taxes not paid, as a result of preliminary legal decisions, and are updated based on the SELIC interest rate, pending a final and definitive decision. In some cases the Company maintains judicial deposit for the continuity of the judicial proceedings.

(i) Corresponds substantially to: • The increase in the work-related accident insurance (“SAT”) rate. The Company is challenging the legality of the levy and absence of technical criteria for such rate since 1995. The amount involved is US$ 47.7 as of December 31, 2018 (US$ 54.6 as of December 31, 2017). • Additionally, in February, 2009, the Company filed a suit contesting the payment of social security on paid notice of dismissal and other indemnity payments. In October 2015 the Company obtained partial success in the dispute in relation to the employer’s portion of the Social Security on the paid notice, and therefore reduced the amount of the provision by US$ 2.5. Currently the remaining amount involved in the dispute in respect of the notice established in the collective agreement is US$ 10.0 as of December 31, 2018 and US$ 11.4 at December 31, 2017. • The Company obtained an injunction guaranteeing the right to not collect social security contributions according to the system established by Law 13,670 / 2018 in 2018 (maintenance of the Social Security Contribution on Gross Revenue—CPRB until 12/31/2018). The amount involved in the discussion is US$ 31.6 as of December 31, 2018.

(ii) Refers to: • Contributions to the PIS/PASEP fund (Social Integration Program / Public Servant Fund). The dispute involving the calculation base for the non-cumulative system, was included under the terms of Law 11,941/09, and the suit was withdrawn. The Company continues to contest criteria for application of the benefits of refinancing in the ambit of the legal dispute. • Another lawsuit discusses the inclusion of the exchange rate variation in the PIS / PASEP calculation basis and was judged favorably, which is why the provision in question was written off and the process will no longer be informed (US$ 3.3 as of December 31, 2017).

With respect to the legal discussions mentioned above for certain taxes exposures, the liabilities will be recognized until there is a final outcome and no further appeals can be made.

F-56 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

22. Income taxes As the tax basis for the majority of the Company’s assets and liabilities is maintained in reais and the accounting basis is measured in US dollars (functional currency), the fluctuations in the exchange rate significantly impacted the tax basis and, in turn, the deferred income tax expense (benefit).

Based on the expectation of future taxable income, the Company recorded deferred tax assets based on tax losses carryforwards.

Credits relating to temporary differences on non-deductible provisions, represented by labor contingencies, provisions and disputed taxes will be realized as such proceedings are concluded.

22.1 Deferred income tax and social contribution The components of deferred tax assets and liabilities are as follows:

12.31.2018 12.31.2017 01.01.2017 (Restated) (Restated) Temporarily non-deductible provisions 39.7 (76.1) (102.7) Tax loss carryforwards 0.5 4.5 28.3 Functional currency effect of the non monetary assets (323.4) (206.0) (201.0) Gains not realized from sales of the Company to subsidiairies 22.7 15.4 16.4 Effect of differences by fixed asset 7.5 (8.1) (31.2) Differences between basis: account x tax 20.6 25.7 36.6 Deferred tax assets (liabilities), net (232.4) (244.6) (253.6) Total deferred tax asset 21.6 13.4 11.6 Total deferred tax liability (254.0) (258.0) (265.2)

Changes in deferred income tax that affected profit and loss were as follows:

From the Other statement comprehensive of income income Total At January 01, 2016 (Restated) (429.9) 32.5 (397.4) Temporarily non-deductible provisions (99.9) — (99.9) Tax loss carryforwards 7.8 — 7.8 Functional currency effect of the non monetary assets 206.1 — 206.1 Provision Gain not realized at sales from Controlling company to subsidiairies (3.5) — (3.5) Effect of differences by fixed asset 4.9 — 4.9 Differences between basis: account x tax 22.1 6.3 28.4 At December 31, 2016 (Restated) (292.4) 38.8 (253.6) Temporarily non-deductible provisions 26.6 — 26.6 Tax loss carryforwards (23.8) — (23.8) Functional currency effect of the non monetary assets (5.0) — (5.0) Provision Gain not realized at sales from Controlling company to subsidiairies (1.0) — (1.0) Effect of differences by fixed asset 23.0 — 23.0 Differences between basis: account x tax (6.9) (3.9) (10.8) At December 31, 2017 (Restated) (279.5) 34.9 (244.6) Temporarily non-deductible provisions 115.8 — 115.8 Tax loss carryforwards (4.0) — (4.0) Functional currency effect of the non monetary assets (117.4) — (117.4) Gains not realized from sales of Parent Company to subsidiairies 7.3 — 7.3 Effect of differences by fixed asset 15.6 — 15.6 Differences between basis: account x tax 3.9 (9.0) (5.1) At December 31, 2018 (258.3) 25.9 (232.4)

F-57 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

22.2 Reconciliation of income tax expense

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Profit (loss) before taxation (136.2) 307.9 180.6 Income tax and social contribution expense at the nominal Brazilian enacted tax rate—34% 46.3 (104.7) (61.4) Tax on profits of overseas subsidiaries (33.2) (9.8) (4.0) Functional currency effect of the non monetary assets (117.4) (5.0) 206.1 Research and development tax incentives 27.7 43.8 36.5 Interest on own capital 3.0 16.9 6.1 Fiscal credits (recognized and non recognized) (26.0) 19.3 (30.4) Tax rate diference 30.9 5.3 (0.7) Other difference between IFRS and fiscal basis 41.4 3.3 (90.9) Other (7.7) 3.0 (61.6) (81.3) 76.8 61.1 Income tax and social contribution income (expense) benefit as reported (35.0) (27.9) (0.3) Current income tax and social contribution (expense) benefit as reported (56.2) (40.8) (137.8) Deferred income tax and social contribution income (expense) benefit as reported 21.2 12.9 137.5

The effective average income tax benefit (expense) rate for the year ended December 31, 2018 was 25.7% (9.1% as of December 31, 2017). The deviation between the effective rate year over year refers to the effect of difference between tax basis (Brazilian Reais) and accounting basis of non-monetary assets recorded in the Company’s functional currency (US Dollars).

23. Financial Guarantees and Residual Value Guarantees

12.31.2018 12.31.2017 Financial guarantee of residual value 125.4 108.9 Accounts payable (i) 15.1 30.8 Financial guarantee 11.6 17.1 152.1 156.8 Current portion 51.0 22.2 Non-current portion 101.1 134.6

The movement on the financial guarantees and residual guarantees is shown below:

Financial Financial guarantee of Accounts Additional guarantee residual value payable (i) provision (i) Total At January 01, 2016 40.1 94.7 57.4 100.9 293.1 Additions 0.1 — 11.9 — 12.0 Interest Additions — — 1.7 — 1.7 Disposals (6.6) — (95.6) — (102.2) Reversals — — — (10.4) (10.4) Reclassifications — — 90.5 (90.5) — Market value — 27.5 — — 27.5 Guarantee amortization (10.9) — — — (10.9) At December 31, 2016 22.7 122.2 65.9 — 210.8 Additions 1,2 — 3.7 — 4.9 Interest Additions — — 2.0 — 2.0 Disposals — — (40.8) — (40.8) Market value — (13.3) — — (13.3) Guarantee amortization (6.8) — — — (6.8) At December 31, 2017 17.1 108.9 30.8 — 156.8 Interest Additions — — 1.5 — 1.5 Disposals — — (17.2) — (17.2) Market value — 16.5 — — 16.5 Guarantee amortization (5.5) — — — (5.5) At December 31, 2018 11.6 125.4 15.1 — 152.1

F-58 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

(i) Accounts payable and additional provision: • Republic Airways Holdings—Refer to liabilities assumed as part of financial guarantees granted to the customer as a result of his filing for bankruptcy (Chapter 11) on February, 2016, which is partially concluded as of December 31, 2018.

24. Provisions and contingent liabilities 24.1 Provisions

12.31.2018 12.31.2017 01.01.2017 (Restated) (Restated) Product warranties (i) 98.0 101.1 94.1 Provisions for labor, taxes and civil (ii) 58.4 54.2 93.1 Taxes 31.4 41.8 28.5 Post retirement benefits 31.7 36.1 46.0 Environmental provision 2.4 1.8 1.0 Voluntary redundancy scheme — — 25.3 Other 20.5 25.3 14.8 242.4 260.3 302.8 Current portion 116.9 124.1 123.8 Non-current portion 125.5 136.2 179.0

(i) Recorded to cover product-related expenditure, including warranties and contractual obligations to implement improvements to aircraft delivered in order to meet performance targets. (ii) Provisions for labor, tax or civil contingencies, as shown in the table below Note 24.1.1.

Change in provision:

Provisions Voluntary Product labor, taxes and Post retirement redundancy Environment warranties civil benefits Taxes scheme provision Other Total At January 01, 2016 (Restated) 95.7 49.9 26.8 16.9 — 1.7 7.7 198.7 Additions 51.9 43.3 11.2 12.0 118.0 1.0 17.0 254.4 Interest — 4.3 3.3 — — — — 7.6 Used/payments (31.7) (2.7) — — (77.0) — (8.1) (119.5) Reversals (20.6) (5.5) — — (15.0) (2.0) — (43.1) Translation adjustments (1.2) 3.8 4.7 (0.4) (0.7) 0.3 (1.8) 4.7 At December 31, 2016 (Restated) 94.1 93.10 46.0 28.5 25.3 1.0 14.8 302.8 Additions 42.5 12.7 3.2 14.0 7.0 3.0 7.1 89.5 Interest — 12.5 4.4 — — — — 16.9 Used/payments (26.8) (61.1) (15.3) — (31.0) — — (134.2) Reversals (8.8) (2.3) (1.4) — (1.0) (2.0) — (15.5) Translation adjustments 0.1 (0.7) (0.8) (0.7) (0.3) (0.2) 3.4 0.8 At December 31, 2017 (Restated) 101.1 54.2 36.1 41.8 — 1.8 25.3 260.3 Additions 38.1 24.6 0.6 0.8 — 2.0 8.0 74.1 Interest — 5.1 2.9 — — — — 8.0 Used/payments (24.9) (6.4) (3.3) (11.2) — — — (45.8) Reversals (16.2) (11.8) (0.2) — — (1.0) — (29.2) Translation adjustments (0.1) (7.3) (4.4) — — (0.4) (12.8) (25.0) At December 31, 2018 98.0 58.4 31.7 31.4 — 2.4 20.5 242.4

F-59 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

24.1.1 Labor, tax and civil provisions

12.31.2018 12.31.2017 Tax related IRPJ (i) 9.2 10.1 PIS and COFINS 5.3 6.8 Social security contributions (ii) 2.4 2.8 Import taxes (iii) 0.8 0.9 FUNDAF 0.1 — Others 0.2 0.4 18.0 21.0 Labor related Plurimas 461/1379 (iv) 10.0 11.3 Reintegration (v) 7.0 5.1 Overtime (vi) 6.0 1.7 Dangerousness (vii) 1.0 0.1 Indemnity (viii) 3.1 2.3 Third parties 0.5 0.9 Others 12.4 11.6 40.0 33.0 Civil related Indemnity (ix) 0.4 0.2 0.4 0.2 58.4 54.2 Current portion 20.7 21.5 Non-current portion 37.7 32.7

(i) The Company has obtained injunction to suspend collection of withholding tax related to values transferred overseas. (ii) The Company was notified by the authorities for failing to withhold social security contributions from service providers. These lawsuits are at the second court level. (iii) Deficiency and Penalty Notices issued against the Company involving the drawback regime, disputing possible differences in relation to the tax classification of certain products and is at the analysis stage in the Federal Supreme Court—STJ (Supremo Tribunal de Justiça). (iv) Refers to claims for backdated salary increases and productivity payments, brought by former employees. (v) Suits brought by former employees claiming reinstatement with the Company for various reasons. (vi) Refer to requirements for payment of alleged differences in relation to overtime. (vii) Are requirements that seek the recognition of activity in hazardous condition. (viii)Indemnity claims in connection with alleged work-related accidents, pain and suffering, etc. (ix) Other indemnity claims brought by parties that had some kind of legal relationship with the Company.

The tax, labor and civil provisions are recorded in accordance with the Company’s accounting policy and the amounts shown here represent the estimated amounts that the Company’s legal department and its external counsel expect the Company to have to disburse to settle the lawsuits.

F-60 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

24.2 Contingent liabilities Contingent liabilities are amounts classified as possible losses, in accordance with the Company’s accounting policy, in the opinion of the Company’s legal department, supported by its external counsel. When the contingent liability arises from the same set of circumstances as an existing provision, the type of the corresponding provision is indicated at the end of the description. The Company’s main contingent liabilities are listed below: • The Company has a legal dispute related to the ISSQN rate in the amount of US$ 55.9 on December 31, 2018. • The Company is involved in a legal dispute related to tax credits paid by its subsidiaries abroad amounting to US$ 15.5 as of December 31, 2018 (US$ 6.6 as of December 31, 2017). • The Company has contingent liabilities amounting to US$ 36.4 as of December 31, 2018 related to labor claims (US$ 28.0 as of December 31, 2017).

24.3 SEC/DOJ and Brazilian public prosecutor’s investigations • In October 2016, the Company finalized definitive agreements with the United States and Brazilian authorities for the settlement of allegations for non-compliance with anti-corruption laws in the US and certain Brazilian laws. Under the final agreements with the DOJ (Department of Justice) and the SEC (Securities and Exchange Commission), the Company assumed the following main obligations: • Payment of US$ 98.2 to the SEC (of which US$ 20.0 or R$ 64.0 due to the Brazilian Securities and Exchange Commission (CVM or Comissão de Valores Mobiliários) and the Brazilian Federal Public Prosecutor’s Office (MPF or Ministério Público Federal) under the term of undertaking (TCAC or Termo de Compromisso de Ajuste de Conduta), as disgorgement of profits. • Payment of US$ 107.3 to the DOJ as a penalty for one count of conspiracy to violate the anti-bribery and books and records provisions of the FCPA (Foreign Corrupt Practices Act) and one count of violating the internal controls provisions of the FCPA. • Under an agreement with the DOJ on conditional deferral of the Deferred Prosecution Agreement (“DPA”) against the Company, it agreed that liability for the recognized facts will be deferred for 03 (three) years, after which period the charges will be dismissed if the Company does not violate the terms of the DPA.; and • To contract external and independent monitoring for a period of 03 (three) years. In February 2017, the United States authorities appointed a monitor as required under the above-mentioned definitive agreements with the United States authorities. As expected, the monitor annually presents reports containing certain observations and recommendations to further improve the Company’s compliance program, including the review or creation of anti-corruption and compliance related policies and procedures. As a consequence of the definitive agreements with the United States and Brazilian authorities, Embraer and the Attorney General’s Office of the Dominican Republic executed a collaboration agreement on July 28, 2018. Under the terms of the agreement, the Company undertook to cooperate with the investigation of facts related to the transaction occurred in that country and paid US$ 7.04 to the Dominican State. Related proceedings and other developments are ongoing and could result in additional fines that may be substantial and possibly other sanctions and adverse consequences, which may be substantial. The Company believes that there is no adequate basis for estimating accruals or quantifying possible contingencies related to these matters. • Class Action: In August 2016, a putative securities class action was filed in a US court against the Company and certain of its former and current executives. In March 30, 2018, the court judged the motion to dismiss in favor of the Company and there was no appeal against this decision, thus the lawsuit was closed.

F-61 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

25. Post-retirement benefits

12.31.2018 12.31.2017 Medical benefits plan Brazil 27.9 31.8 Medical benefits plan subsidiaries abroad 3.8 4.3 Post-retirement benefits 31.7 36.1

25.1 Post-retirement healthcare benefits provided by the Company in Brazil The Company provided healthcare plan for employees, which based on its conditions, is classified as a post-employment benefit. Under this healthcare plan, employees who retire from the Company have the option of remaining in the plan, contributing the full amount charged by the insurance company. However, due to certain rules for increases under Brazilian law, there could be times the contribution made by the retired employees is insufficient to cover the medical plan costs, which would represent exposure for the Company.

25.2 Post-retirement healthcare benefits provided by subsidiaries abroad Embraer Aircraft Holding sponsors a post-retirement healthcare plan for employees hired up to 2007. The expected costs of pension and provision of post-employment medical benefit for the individual employees and their dependents are provided on an accrual basis based on actuarial studies and the calculation is reviewed annually.

25.3 Defined contribution pension plan The Company and certain subsidiaries sponsor a defined contribution pension plan for their employees, participation in which is optional. The Company’s contributions to the plan for the years ended December 31, 2018 and 2017 were US$ 14.1 and US$ 22.2 respectively.

26. Financial Instruments 26.1 Financial instruments by category

12.31.2018 Fair value through other Amortised comprehensive Fair value through Note cost income profit or loss Total Assets Cash and cash equivalents 5 1,280.9 — — 1,280.9 Financial investments 6 48.8 507.8 1,370.3 1,926.9 Guarantee Deposits 10 349.7 — — 349.7 Collateralized accounts receivable 9 235.9 — — 235.9 Contract assets 358.0 — — 358.0 Trade accounts receivable, net 7 318.0 — — 318.0 Customer and commercial financing 11.7 — — 11.7 Derivative financial instruments 8 — — 9.5 9.5 Other Assets 66.2 — — 66.2 2,669.2 507.8 1,379.8 4,556.8 Liabilities Loans and financing 19 3,647.7 — — 3,647.7 Trade accounts payable and others liabilities 1,550.5 — — 1,550.5 Financial guarantee and of residual value 23 15.0 — 125.4 140.4 Derivative financial instruments 8 — — 8.1 8.1 5,213.2 — 133.5 5,346.7

F-62 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

12.31.2017 (Restated) Fair value through other Amortised comprehensive Fair value through Note cost income profit or loss Total Assets Cash and cash equivalents 5 1,270.8 — — 1,270.8 Financial investments 6 50.5 1,307.6 1,259.2 2,617.3 Guarantee Deposits 10 393.9 — — 393.9 Collateralized accounts receivable 9 288.7 — — 288.7 Contract assets 447.5 — — 447.5 Trade accounts receivable, net 7 297.0 — — 297.0 Customer and commercial financing 16.4 ——16.4 Derivative financial instruments 8 — — 34.3 34.3 Other Assets 82.2 ——82.2 2,847.0 1,307.6 1,293.5 5,448.1 Liabilities Loans and financing 19 4,198.5 — — 4,198.5 Trade accounts payable and others liabilities 1,502.5 — — 1,502.5 Financial guarantee and residual value 23 30.7 — 108.9 139.6 Derivative financial instruments 8— — 8.98.9 5,731.7 — 117.8 5,849.5

26.2 Fair value of financial instruments

The fair value of the Company’s financial assets and liabilities was determined using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to generate estimates of fair values. Consequently, the estimates presented below are not necessarily indicative of the amounts that might be realized in a current market exchange. The use of different assumptions and/or methodologies could have a material effect on the estimated realizable values.

The carrying amounts of cash and cash equivalents, trade accounts receivable, other financial assets and financial liabilities, except for loans and financing, are approximately their fair values. The following methods were used to estimate the fair value of each further category of financial instrument for which it is possible to estimate the fair value.

Financial investments – The fair value of securities is estimated by the discounted cash flow methodology. For private securities (corporate bonds), it is applied the market’s unit price of latest trade date at the end of reporting period multiplied by the quantity acquiried by the Company.

Loans and financing – The fair value of guaranteed notes (bonds) is the market’s unit price of latest trade date at the end of reporting period multiplied by the quantity issued. For the other loans and financing, the fair value is based on the value of the contractual cash flows. The discount rate used is based in the market interest rate to contract a new transaction in similar terms, or in its absence, in the future market yield curve for the cash flows of each liability.

The Company considers “fair value” to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observable inputs. A fair value hierarchy is used to prioritize the inputs used to measure fair value. The three Levels of the fair value hierarchy are as follows: • Level 1—quoted prices are available in active markets for identical assets or liabilities at the reporting period. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives and listed equities. F-63 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

• Level 2—pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. However, they may be directly or indirectly observable at the consolidated statements of financial position date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivatives such as swaps or over-the-counter forwards and options. • Level 3—pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in Management’s best estimate of fair value. At each balance sheet date, the Company performs an analysis of all instruments and includes in Level 3 all of those whose fair value is based on significant unobservable inputs.

The following table lists the Company’s financial assets and liabilities by level within the fair value hierarchy. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. In 2018 there was no change in the methods used to assess the fair value of financial instruments, as well as there were no changes or transfers of instruments level.

12.31.2018 Fair value of the other Note Level 2 Level 3 Total financial instruments Fair value Book value Assets Cash and cash equivalents 5 — — — 1,280.9 1,280.9 1,280.9 Financial investments 6 1,818.2 59.9 1,878.1 48.8 1,926.1 1,926.9 Guarantee Deposits 10 — — — 349.7 349.7 349.7 Collateralized accounts receivable — — — 235.9 235.9 235.9 Contract assets — — — 358.0 358.0 358.0 Trade accounts receivable, net 7 — — — 318.0 318.0 318.0 Customer and commercial financing — — — 11.7 11.7 11.7 Derivative financial instruments 8 9.5 — 9.5 — 9.5 9.5 Other Assets — — — 66.2 66.2 66.2 1,827.7 59.9 1,887.6 2,669.2 4,556.0 4,556.8 Liabilities Loans and financing — — — 3,647.7 3,756.8 3,647.7 Trade accounts payable and others liabilities 19 — — — 1,550.5 1,550.5 1,550.5 Financial guarantee and of residual value — 125.4 125.4 15.0 140.4 140.4 Derivative financial instruments 19 8.1 — 8.1 — 8.1 8.1 8.1 125.4 133.5 5,213.2 5,455.8 5,346.7

12.31.2017 (Restated) Fair value of the other Note Level 2 Level 3 Total financial instruments Fair value Book value Assets Cash and cash equivalents 5 — — — 1,270.8 1,270.8 1,270.8 Financial investments 6 2,507.2 59.6 2,566.8 50.4 2,617.3 2,617.3 Guarantee Deposits 10 — — — 393.9 393.9 393.9 Collateralized accounts receivable — — — 288.7 288.7 288.7 Contract assets — — — 447.5 447.5 447.5 Trade accounts receivable, net 7 — — — 297.0 297.0 297.0 Customer and commercial financing — — — 16.4 16.4 16.4 Derivative financial instruments 8 34.3 — 34.3 — 34.3 34.3 Other Assets — — — 82.2 82.2 82.2 2,541.5 59.6 2,601.1 2,846.9 5,448.1 5,448.1 Liabilities Loans and financing 19 — — — 4,198.5 4,408.6 4,198.5 Trade accounts payable and others liabilities — — — 1,502.5 1,502.5 1,502.5 Financial guarantee and of residual value 23 — 108.9 108.9 30.7 139.6 139.6 Derivative financial instruments 8 8.9 — 8.9 — 8.9 8.9 8.9 108.9 117.8 5,731.7 6,059.6 5,849.5

F-64 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Fair value of financial instruments using significant unobservable inputs (level 3) Assets Liabilities At 12.31.2016 (Restated) 35.0 122.2 Adding Shares 58.8 — Disposal Claim (34.8) — Market value 0.6 (13.3) At 12.31.2017 (Restated) 59.6 108.9 Market value 0.3 16.5 At 12.31.2018 59.9 125.4

Changes in Level 3 financial instruments are recognized in the consolidated statements of income under the caption of financial income (expense), net.

26.3 Financial risk management policy The Company has and follows a risk management policy, which involves the diversification of transactions and counterparties, with the objective of mapping the risks related to the financial transactions, as well as the operational directives related to these financial transactions. The policy provides for regular monitoring and management of the nature and general situation of the financial risks in order to assess the results and the financial impact on cash flows. The credit limits and risk rating of the counterparties are also reviewed periodically.

The Company’s risk management policy is part of the financial management policy established by the Executive Directors and approved by to the Board of Directors, and provides for monitoring by a Financial Management Committee. Under this policy, the market risks are mitigated when there is no counterparty in the Company’s operations and when it is considered necessary to support the corporate strategy. The Company’s internal control procedures provide for consolidated monitoring and supervision of the financial results and of the impact on cash flows.

The Financial Management Committee assists the Financial Department in examining and reviewing information in relation to the economic scenario and its potential impact on the Company’s operations, including significant risk management policies, procedures and practices.

The financial risk management policy includes the use of derivative financial instruments to mitigate the effects of interest rate fluctuations and to reduce the exposure to exchange rate risk. The use of these instruments for speculative purposes is forbidden.

26.3.1 Capital risk management The Company uses capital management to ensure the continuity of its investment program and offer a return to its shareholders and benefits to its stakeholders and also to maintain an optimized capital structure in order to reduce financial costs.

The Company may review its dividends payment policy, pay back capital to the shareholders, issue new shares or sell assets in order to maintain or adjust its capital structure (to reduce indebtedness, for instance).

Liquidity and the leverage level are constantly monitored in order to mitigate refinance risk and maximize the return to the shareholders. The ratio between liquidity and the return to the shareholders may be changed pursuant to the assessment of the Board of Directors.

The Company’s capital management may be modified to adjust to changes in the economic scenario or strategic repositioning of the Company.

As of December 31, 2018, cash and cash equivalents and financial investments were US$ 439.2 lower than the Company’s financial indebtedness (US$ 310.8 lower as of December 31, 2017).

F-65 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Of the total financial indebtedness as of December 31, 2018, 4.9% was short-term (9.3% as of December 31, 2017) and the weighted average term was equivalent to 5.5 years as of December 31, 2018 (6.0 years as of December 31, 2017).

26.3.2 Credit risk Credit risk is the risk of a transaction negotiated between counterparties not meeting an obligation established in a financial instrument, or in negotiation of sales to customers, leading to a financial loss. The Company is exposed to credit risk in its operational activities, cash held in banks and other investments in financial instruments held in financial institutions. • Cash and cash equivalents and financial investments The credit risk of cash and cash equivalents and financial investments is managed by the Company’s Financial Department in compliance with the financial and risk management policy. The counterparty credit limit is reviewed on a daily basis in order to minimize concentration of risks and mitigate financial losses due to the bankruptcy of a counterparty, as well as the transactions are performed with counterparties rated as investment grade by rating agencies (Fitch, Moody’s and Standard and Poor’s). The Financial Management Committee assists the Financial Department in examining and reviewing transactions with counterparties. As of December 31, 2018 and 2017, all financial investments measured as at amortized cost and as at FVOCI are considered low credit risk and are in compliance with the Company’s financial and risk management policy. The result of applying the expected credit losses model of IFRS 9 for cash and cash equivalents and financial investments was immaterial.

• Trade accounts receivable and contract assets with customers The Company may incur losses on amounts receivable from sales of spare parts and services to customers. To reduce the risk, Management performs an internal credit risk analysis which takes into account qualitative factors, such as past experiences, and quantitative factors, when applicable, related to external financial information. If the risk increases and/ or the customer present overdue amounts, the supply of spare parts and services can be stopped by the Company, which impacts its fleet operations. The Company applies IFRS 9 simplified approach to the measurement of expected credit losses on trade accounts receivable balances (Note 2.2.6). In order to calculate the expected credit losses, receivables are grouped by the period the items are outstanding, and an expected loss factor is applied based on actual credit loss experiences of each past period, which gradually increases as long as the receivable remains outstanding in portfolio. For receivables not overdue, the expected credit loss is calculated using past 10 years’ experience of losses and monitoring of forward trends. As of December 31, 2018, the initial expected loss factor under the methodology is 1.9% (1.8% as of December 31, 2017). Contract assets refer to contracts in progress that have not been billed, mainly related to development contracts recognized over time in the Defense & Security segment. The credit risk characteristic of the Company’s customers is different for the Defense & Security segment, since the counterparties refer only to government entities and agencies. The risk in this case is associated with the sovereign risk of each country, especially Brazil, as well as with the continuity of strategic projects under development, for which the Company usually has the enforceable right to receive for the performance completed to date. The Company historically has not presented losses in the trade accounts receivable and contract assets balances with these counterparties.

F-66 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Trade accounts receivable and contract assets are written off when there is no reasonable expectation of recovery. Indications include, among others, the inability of the debtor to participate in a plan to renegotiate its debt or possible legal actions have been exhausted.

• Other financial assets Other financial assets measured as at amortized cost includes: guarantee deposits, collateralized accounts receivable, customer financing, court-mandated escrow deposits and loan with joint operation. The result of the expected credit losses model set forth in IFRS 9 for other financial assets was immaterial. In addition, the Company has guarantees, such as guarantee deposits in financial institutions rated as investment grade, pledge assets or other contractual guarantees, which also mitigates the risk of financial loss in these assets.

26.3.3 Liquidity risk This is the risk of the Company not having sufficient funds to honor its financial commitments as a result of a mismatch of terms or volumes of estimated receipts and payments.

Projections and assumptions are established to manage the liquidity of cash in U.S. dollars and reais, in accordance with the financial management policy, based on contracts for future disbursements and receipts, and monitored periodically by the Company. Accordingly, possible mismatches are detected well in advance allowing the Company to adopt mitigation measures to reduce risks and financial cost.

The following table provides additional information related to undiscounted contractual obligations and commercial commitments and their respective maturities:

Less than one One to three Three to five More than Cash Flow year years years five years At December 31, 2018 Loans and financing 4,701.3 321.0 867.3 1,345.7 2,167.3 Trade accounts payable 892.1 892.1 — — — Recourse and non recourse debt 341.4 324.0 7.6 6.6 3.2 Financial guarantees 152.1 51.0 39.9 31.3 29.9 Other liabilities 227.3 5.4 92.2 95.3 34.4 Total 6,314.2 1,593.5 1,007.0 1,478.9 2,234.8 At December 31, 2017 (Restated) Loans and financing 5,400.7 491.6 784.9 1,220.2 2,904.0 Trade accounts payable 824.7 824.7 — — — Recourse and non recourse debt 364.1 17.6 332.7 8.0 5.8 Financial guarantees 156.8 22.2 52.5 31.1 51.0 Other liabilities 249.4 11.4 46.1 92.3 99.6 Total 6,995.7 1,367.5 1,216.2 1,351.6 3,060.4

The table above shows the outstanding principal and interest if applicable at the maturity dates. In the case of the fixed rate liabilities, interest expense was calculated based on the rate established in each debt contract. Interest expense on floating rate liabilities was calculated based on a market forecast for each period (e.g. LIBOR 6m - 12m).

F-67 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

26.3.4 Market risk a) Interest rate risk This risk arises from the possibility of the Company incurring losses on the fluctuation of floating interest rates, which might increase financial expenses of financial liabilities, and/ or decrease financial income of financial assets, as well as negatively impacting the fair value of financial assets measured as at fair value. The lines of the Consolidated Financial Statements most affected by interest rate risks are: • Cash, cash equivalents and financial investments – the Company policy for managing the risk of fluctuations in interest rates on financial investments is to measure market risk by the Value-At-Risk—VAR methodology, which consists of an aggregate analysis of variety of risk factors that might affect the return of those investments. • Loans and financing – the Company monitors financial markets with the purpose of evaluate hedge structures (derivative transactions) in compliance with the financial and risk management policy to protect its exposure risks of volatility in foreign currency and interest rates.

At December 31, 2018, the Company’s cash, cash equivalents, financial investments and loans and financing were indexed as follows:

Without derivative effect Pre-fixed Post-fixed Total Amount % Amount % Amount % Cash, cash equivalents and financial investments 2,742.3 85.49% 465.5 14.51% 3,207.8 100.00% Loans and financing 3,577.7 98.09% 69.8 1.91% 3,647.5 100.00%

With derivative effect Pre-fixed Post-fixed Total Amount % Amount % Amount % Cash, cash equivalents and financial investments 2,742.3 85.49% 465.5 14.51% 3,207.8 100.00% Loans and financing 3,194.3 87.57% 453.3 12.43% 3,647.6 100.00%

At December 31, 2018, the Company’s cash equivalents and post -fixed financing were indexed as follows:

Without derivative effect With derivative effect Amount % Amount % Cash equivalents and financial investments 465.4 100.00% 465.5 100.00% CDI 403.1 86.61% 403.2 86.62% Libor 62.3 13.39% 62.3 13.38% Loans and financing 69.9 100.00% 453.4 100.00% TJLP 1.9 2.72% 1.9 0.42% Libor 68.0 97.28% 65.4 14.42% CDI — 0.00% 386.1 85.16%

b) Foreign exchange rate risk The functional currency of the Company and the majority of its subsidiaries is the US dollar (Nota 2.2.1).

Consequently, the Company’s operations most exposed to foreign exchange gains/losses are those denominated in reais (labor costs, tax issues, local expenses, financial investments and loans and financing) as well as investments in subsidiaries in currencies other than the US dollar.

Company policy for protection against foreign exchange risks on assets and liabilities is mainly based on seeking to maintain a balance between assets and liabilities indexed in each currency and management of foreign currency purchases and sales to ensure that, on realization of the transactions contracted, this natural hedge will occur. This policy minimizes the effect of exchange rate changes on assets and liabilities already contracted, but do not protect against the risk of fluctuations in future results due to appreciation or depreciation of the real that can, when measured in dollars, result in an increase or reduction in the portion of costs denominated in reais.

Under certain market conditions, the Company may protect itself against potential future mismatches of expenses and revenues denominated in foreign currency, to minimize the effects of future exchange variations on the Company’s consolidated statements of income.

Efforts to minimize the foreign exchange risk for rights and liabilities denominated in currencies other than the functional currency may involve transactions with derivatives, such as swaps, exchange options and Non-Deliverable Forwards (“NDF”) (Note 8).

F-68 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

At December 31, 2018, the Company had the following amounts of financial assets and liabilities denominated in several currencies:

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Loans and financing Brazilian reais 286.5 629.0 832.9 U.S. dollars 3,341.6 3,555.5 2,910.7 Euro 19.6 14.0 16.3 3,647.7 4,198.5 3,759.9 Trade accounts payable Brazilian reais 77.1 87.6 91.9 U.S. dollars 715.6 621.0 783.2 Euro 27.2 115.0 75.3 Other currencies 72.2 1.1 1.7 892.1 824.7 952.1 Total (1) 4,539.8 5,023.2 4,712.0 Cash and cash equivalents and financial investments Brazilian reais 406.5 750.2 1,180.0 U.S. dollars 2,746.9 2,979.2 1,838.3 Euro 47.7 97.5 127.1 Other currencies 6.8 61.2 44.8 3,207.9 3,888.1 3,190.2 Trade accounts receivable: Brazilian reais 10.7 30.8 143.4 U.S. dollars 274.2 154.1 187.7 Euro 33.1 106.1 5.6 Other currencies — 6.0 0.1 318.0 297.0 336.8 Total (2) 3,525.9 4,185.1 3,527.0 Net exposure (1 - 2): Brazilian reais (53.6) (64.4) (398.6) U.S. dollars 1,036.1 1,043.2 1,667.9 Euro (34.0) (74.6) (41.1) Other currencies 65.4 (66.1) (43.2)

The Company has other financial assets and liabilities that are also influenced by foreign exchange variations that are not included in the table above. These are used to minimize exposure in the currencies presented.

26.4 Sensitivity analysis In order to present positive and negative variations of 25% and 50% in the risk variable considered, a sensitivity analysis of the financial instruments, including derivatives, is presented below describing the effects on the monetary and foreign exchange variations on the financial income and expense, as well as in the consolidated shareholders’ equity, determined on the balances recorded at December 31, 2018, in the event of such variations in the risk component.

However, statistical simplifications were made in isolating the variability of the risk factors in question. Consequently, the following estimates do not necessarily represent the amounts that might be determined in future consolidated financial statements. The use of different hypotheses and/or methodologies could have a material effect on the estimates presented below.

26.4.1 Methodology Assuming that the balances remain constant, the Company calculates the interest and exchange variation differential for each of the projected scenarios.

Evaluation of the amounts exposed to interest rate risk considers only the risks for the financial statement. Operations subject to prefixed interest rates were not included. The probable scenario is based on the possible change for each of the variables indicated, and positive and negative variations of 25% and 50% were applied to the rates in force as of the reporting date.

F-69 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

In the sensitivity analysis of derivative contracts, positive and negative variations of 25% and 50% were applied to the market yield curve (B3) as of the reporting date.

26.4.2 Interest risk factor

Additional variations in book balances (*) Amounts exposed at Probable Risk factor 12.31.2018 -50% -25% scenario +25% +50% Cash equivalents and financial investments CDI 403.1 (12.6) (6.0) 0.6 7.2 13.8 Net impact CDI 403.1 (12.6) (6.0) 0.6 7.2 13.8 Cash equivalents and financial investments LIBOR 62.3 (0.9) (0.5) — 0.4 0.9 Loans and financing LIBOR (68.0) 1.0 0.5 — (0.5) (1.0) Net impact LIBOR (5.7) 0.1 — — (0.1) (0.1) Loans and financing TJLP (1.9) 0.1 — — — (0.1) Net impact TJLP (1.9) 0.1 — — — (0.1) Rates considered CDI 6.40% 3.28% 4.91% 6.55% 8.19% 9.83% Rates considered LIBOR 2.87% 1.43% 2.14% 2.86% 3.57% 4.29% Rates considered TJLP 6.56% 3.49% 5.24% 6.98% 8.73% 10.47%

(*) The positive and negative variations of 25% and 50% were applied on the rates

26.4.3 Foreign exchange risk factor

Additional variations in book balances (*) Amounts exposed at Probable Risk factor 12.31.2018 -50% -25% scenario +25% +50% Assets 745.3 378.9 195.7 12.4 (170.8) (354.0) Cash, cash equivalents and financial investments R$ 528.4 268.6 138.7 8.8 (121.1) (251.0) Other assets R$ 216.9 110.3 57.0 3.6 (49.7) (103.0) Liabilities (79.7) (40.6) (20.9) (1.3) 18.2 37.9 Loans and financing R$ (286.5) (145.7) (75.2) (4.8) 65.6 136.1 Other liabilities R$ 206.8 105.1 54.3 3.5 (47.4) (98.2) Net impact 825.0 338.3 174.8 11.1 (152.6) (316.1) Exchange rate considered 3.8748 1.9050 2.8575 3.8100 4.7625 5.7150

(*) The positive and negative variations of 25% and 50% were applied on the rates 26.4.4 Derivative contracts

Additional variations in book balances (*) Amounts exposed at Probable Risk factor 12.31.2018 -50% -25% scenario +25% +50% Derivative Designated as Hedge Accounting Interest swap—fair value hedge CDI 6.5 4.1 1.8 (0.5) (2.4) (4.3) Hedge destinated as cash flow US$/R$ (7.4) 13.5 9.9 7.3 4.7 1.3 Hedge desifnated as cash flow LIBOR 2.3 — — — — — Other derivatives Interest swap LIBOR 0.2 — — — — 0.1 Foreign Exchange option EUR/US$ — (0.6) (0.2) — 0.2 0.3 Total 1.6 17.0 11.5 6.8 2.5 (2.6) Rate considered LIBOR 2.87% 1.43% 2.14% 2.86% 3.57% 4.29% Rate considered CDI 6.40% 3.28% 4.91% 6.55% 8.19% 9.83% Rate considered US$/R$ 3.8748 1.9050 2.8575 3.8100 4.7625 5.7150 Rate considered LIBOR 1.1467 0.5750 0.8625 1.1500 1.4375 1.7250

(*) The positive and negative variations of 25% and 50% were applied on the rates

F-70 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

26.4.5 Residual Value Guarantees The residual value guarantees are reported in a manner similar to financial derivative instruments.

Based on residual value guarantee contracts in force, the Company ascertains any changes in values based on third party appraisals. The probable scenario is based on the Company’s expectation of recording the provisions on a statistical basis, and the positive and negative variations of 25% and 50% have been applied to the third party appraisals at the balance sheet date.

Additional variations in book balances Amounts exposed at Probable 12.31.2018 -50% -25% scenario +25% +50% Financial guarantee of residual value 125.4 (104.5) (90.0) (1.0) 94.8 106.0 Total 125.4 (104.5) (90.0) (1.0) 94.8 106.0

If a provision is considered insufficient to cover the probable execution of the guarantees, it is increased to adjust it to the Company’s exposure at the reporting period.

27. Shareholders’ equity 27.1. Capital The authorized capital is divided into 1,000,000,000 common shares. The Company’s subscribed and paid up capital as of December 31, 2018 was US$ 1,551.6 and was comprised of 740,465,044 common shares, without par value, of which 4,977,698 shares were held in treasury.

The capital is comprised entirely of common shares. As per Article 14 of the Company’s bylaws, each common share generally empowered with one vote at general shareholders’ meeting, considering that no shareholder or group of shareholders, may exercise votes representing more than 5% of the quantity of shared into which our capital stock is divided. Votes that exceed this 5% threshold will not be considered.

As of December 31, 2018, the equity reserve of investment and working capital exceeded the percentage of 80% of the capital stock as set forth in the bylaws (Article 50) and additionally the revenue reserves (excluding the government grant reserve) exceeded the legal limit of the capital stock as provided in Article 99 of Brazilian Law 6,404/76 for listed entities. As a result, a capital increase of US$ 113.6 was approved at a meeting of the Board of Directors held on March 5, 2018. This increase was reflected in the first quarter of 2018.

27.2. Brazilian Government Golden Share The Federal Government holds one ”golden share” with the same voting rights as other holders of common shares but which grants it certain additional rights as established in article 9 of the Embraer’s bylaws.

27.3. Treasury Shares Common shares acquired with resources from the investments and working capital reserve. This operation occurred in accordance with rules approved by the Statutory Board of Directors in a meeting held on December 7, 2007 and corresponds to 4,977,698 common shares and US$ 31.4 as of December 31, 2018. These shares lose voting and economic rights during the period in which they are held in Treasury. The movement is shown below:

Share value Net income of USD Quantity (USD) uses At the beggining of the year 51.8 7,423,705 7.0 — Used for stock options plan(i) (20.4) (2,446,007) 8.3 10.9 At December 31, 2018 31.4 4,977,698 6.3 10.9

(i) The beneficiaries of the shares used in the share-based compensation plan include the Statutory Board of Directors, Executive Directors and certain employees. Refer to Note 28.

At December 31, 2018, the market value of the shares held in Treasury was US$ 27.5 (December 31, 2017—US$ 44.4).

F-71 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

27.4. Investment subsidy reserve This reserve was formed as allowed by article 195-A of Brazilian Corporate Law (as amended by Law 11.638, of 2007) and corresponds to the appropriation of the portion of retained earnings derived from government grants received by the Company, which cannot be distributed to shareholders in the form of dividends. It is recognized in the consolidated statements of income in the same expense line to which the subsidy refers.

These subsidies are not included in the calculation of the minimum mandatory dividends.

27.5. Legal reserve The statutory reserve is a revenue reserve recorded annually as an appropriation of 5% of the net income for the year. The reserve may not exceed 20% of capital, or 30% of capital and capital reserves.

The reserve limit was not exceeded as of December 31, 2018 and 2017.

27.6. Investment and working capital reserve The purpose of this revenue reserve is to shield funds which might otherwise be subject to distribution and are earmarked for: (i) investments in property, plant and equipment, without detriment to retained earnings, pursuant to art. 196 of Law 6.404/76; and (ii) the Company’s working capital (iii) redeem, reimburse or purchase shares of the Company and (iv) be distributed to the shareholders.

27.7. Interest on own capital and dividends Interest on own capital and interim dividends approved by the Statutory Board of Directors and distributed to the shareholders in 2018 are presented as follows: • In meeting held on March 5, 2018, the Statutory Board of Directors approved the distribution of interest on own capital for the first quarter of 2018 in the amount of US$ 4.4, corresponding to US$ 0.01 per share. Payment of interest on own capital is subject to withholding tax at 15%. The payment was made on April 11, 2018, without remuneration. • In meeting held on June 14, 2018, the Statutory Board of Directors approved the distribution of interest on own capital for the second quarter of 2018 in the amount of US$ 3.8, corresponding to US$ 0.01 per share. Payment of interest on own capital is subject to withholding tax at 15%. The payment was made on July 20, 2018, without remuneration. • In meeting held on September 13, 2018, Statutory Board of Directors approved the payment of interim dividends in the amount of US$ 1.8, corresponding to US$ 0.01 per common share. Payment was made from October 11, 2018, without any remuneration. • In a meeting held on December 14 2018, Statutory Board of Directors approved the payment of interim dividends in the amount of US$ 1.9, corresponding to US$ 0.01 per common share. Payment was made from January 10, 2019, without any remuneration.

27.8. Other Comprehensive Income Consists of the following adjustments: • Cumulative translation adjustment: foreign exchange gains/losses resulting from translation of the consolidated financial statements in the functional currency to the presentation currency (Real) and foreign exchange gains/losses resulting from translation of the foreign subsidiaries’ financial statements measured in other functional currencies to the Company’s functional currency (dollar); and • Other comprehensive income: unrealized actuarial gains (losses) resulting from the healthcare plans sponsored by the Company and the fair value variation of financial instruments available for sale.

F-72 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

28. Share-based compensation In February 2014, the Board of Directors approved the revision of the Executive Remuneration Policy (ERP), applicable to all executive officers and other Company executives. The elements of executive compensation include the Long Term Incentives (LTI), the main objectives of which are to (i) maintain and attract highly qualified personnel for the Company, (ii) assure those who are able to contribute to improving the Company’s performance of the right to participate in the results of their contribution, and (iii) also to ensure the continuity of the Company’s management by aligning the interests of executives with those of shareholders. The Company currently has two LTI modes: stock options and virtual shares.

28.1. Stock Option Program for the granting of stock options, for the executives of the Company or its subsidiaries, who may exercise their right, is as follows: I) 33% after 3 years, II) 33% after 4 years and III) 34% after 5 years, all in relation to the grant date of each option.

The exercise price of each option is set on the grant date at the weighted average stock option price of the last sixty trading days, and may be adjusted by up to 30% to offset any speculation. The participant will have a maximum exercise period of seven years, starting from the grant date.

The grants awarded are summarized below:

in thousands of options Grants Exercised Canceled (i) Outstanding Exercible Grants on January 23, 2012 4,860,000 (3,732,000) (1,009,100) 118,900 11.5 Grants on March 20, 2013 4,494,000 (2,409,302) (1,266,890) 817,808 15.7 At December 31, 2018 9,354,000 (6,141,302) (2,275,990) 936,708 27.2

(i) The cancellations refer to shares granted to executives or employees who no longer work for the Company. Additionally, on April 16, 2014, there was a cancellation of the grants awarded to members of the Board of Directors, with payment of compensation to plan participants.

28.2. Phantom shares plan The plan is based on the granting of virtual shares to directors and managers and the main objective is to attract and keep highly qualified staff in the Company and its subsidiaries to ensure continuity of management and align the interests of directors and key personnel of the Company and controlled entities to those of the Company’s shareholders.

The value of the long-term incentives (“LTI”) will be converted at the average price of the Company’s shares in the last 30 trading days by determining the quantity of virtual shares allocated to each participant, divided into two classes, with 50% in the form of restricted virtual shares and 50% in the form of virtual performance shares.

The Company will pay the LTI by converting the quantity of virtual shares into reais at the average quoted price (weighted by trading volume) of the Company’s shares in the last 10 trading days, as follows: • restricted virtual shares: (i) 33% on the third anniversary of the grant date; (ii) 33% on the fourth anniversary of the grant date, and (iii) 34% on the fifth anniversary of the grant date; and • A change in the virtual performance share calculation was approved in August 2017. Virtual performance shares granted in 2015, 2016 and 2017 will be paid in 2020, while those granted in 2018 will be paid in 2021. The amounts payable will now be based on the internal cost reduction target and not on the Economic Value Added indicator.

F-73 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The amounts resulting from conversion of virtual shares will be added to the amounts equivalent to dividends and interest on own capital effectively paid by the Company during the vesting period.

The fair value of virtual shares is determined based on the average price (weighted by trading volume) of the Company’s shares (EMBR3-R$) for the last 10 trading days prior to the close of the period, applied to the number of virtual shares assigned to each participant in proportion to the vesting period.

Amount of virtual Amount of virtual Fair value of stock Grant value stock(i) shares (R$) Grants on February 25, 2014 1,570,698 30.4 175,100 3.7 Grants on March 03, 2015 1,237,090 30.2 546,024 11.5 Grants on March 10, 2016 1,095,720 31.1 541,595 11.4 Grants on June 09, 2016 55,994 1.1 32,674 0.7 Grants on August 25, 2016 70,978 1.1 43,783 0.9 Grants on August 24, 2017 1,930,350 30.5 762,782 16.1 Grants on April 12, 2018 1,625,372 35.2 346,221 7.3 At December 31, 2018 7,586,202 159.6 2,448,179 51.6

(i) Virtual shares until December 31, 2018 considering the plan’s vesting period.

29. Earnings per share 29.1. Basic Basic earnings per common share is computed by dividing net income for the year by the weighted average number of shares outstanding during the period, excluding shares acquired by the Company and held in Treasury.

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Net income attributable to owners of Embraer (178.2) 264.0 178.6 (178.2) 264.0 178.6 Weighted average number of shares (in thousands) 734,065 734,264 735,571 Basic earnings per share—U.S. dollars (0.24) 0.36 0.24

29.2. Diluted Diluted earnings per share are calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all potentially dilutive shares. The Company has only one category of potentially dilutive shares, namely share purchase options. A calculation is made in respect of these share purchase options to determine the number of shares that could be acquired at fair value (determined as the average market price of the Company’s share), based on the monetary value of subscription rights tied to the share purchase options in circulation. The number of shares calculated as described above is compared with the number of shares issued, assuming the exercise of share purchase options.

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Net income attributable to owners of Embraer (178.2) 264.0 178.6 (178.2) 264.0 178.6 Weighted average number of shares (in thousands) 734,065 734,264 735,571 Dilution for the issuance of stock options (in thousands) (i) — 545 1,690 Weighted average number of shares (in thousands)—diluted 734,065 734,809 737,261 Diluted earnings per share—U.S. dollars (0.24) 0.36 0.24

(i) Refers to the effect of potentially dilutive shares for December 31, 2018.

F-74 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

At December 31, 2018, there were no anti-dilutive effects.

30. Revenue from contracts with customers a) Revenue disaggregation: The revenue amounts by category, including main product and service lines and main geographic areas are presented below, including the reconciliation of revenue’s analytical composition with the reportable segments of the Company:

Revenue by category at December 31, 2018:

Commercial Defense and Executive Service and Aviation Security Jets Support Other Total Aircraft 2,276.2 92.5 997.4 — 6.9 3,373.0 Aircraft/Development (Defense BU) — 267.0 — — — 267.0 Others 82.1 2.0 107.0 — — 191.1 Service — 183.2 — 622.7 0.1 806.0 Spare Parts — 67.4 — 358.1 8.5 434.0 Total 2,358.3 612.1 1,104.4 980.8 15.5 5,071.1

North Latin America America Asia Pacific Brazil Europe Other Total Aircraft 2,253.8 87.0 318.2 40.3 644.5 29.2 3,373.0 Aircraft/Development (Defense BU) 1.9 0.1 0.7 243.3 12.6 8.4 267.0 Others 66.6 11.9 5.2 74.7 8.9 23.8 191.1 Service 353.7 42.2 92.3 42.4 230.3 45.1 806.0 Spare Parts 283.0 8.8 15.6 42.3 69.7 14.6 434.0 Total 2,959.0 150.0 432.0 443.0 966.0 121.1 5,071.1

Revenue by category at December 31, 2017 (Restated):

Commercial Defense and Executive Service and Aviation Security Jets Support Other Total Aircraft 2,691.8 — 1,175.0 — 7.1 3,873.9 Aircraft/Development (Defense BU) — 651.8 — — — 651.8 Others 79.6 7.2 105.3 0.3 — 192.4 Service — 177.8 — 622.2 1.0 801.0 Spare Parts — 16.9 — 299.7 23.7 340.3 Total 2,771.4 853.7 1,280.3 922.2 31.8 5,859.4

North Latin America America Asia Pacific Brazil Europe Other Total Aircraft 2,711.5 0.2 754.0 20.0 359.3 29.0 3,874.0 Aircraft/Development (Defense BU) 38.0 1.3 9.8 558.4 33.7 10.6 651.8 Others 104.1 0.2 1.7 11.9 0.3 74.1 192.3 Service 304.1 36.9 75.4 109.4 231.5 43.6 800.9 Spare Parts 180.2 13.0 18.6 49.2 66.8 12.6 340.4 Total 3,337.9 51.6 859.5 748.9 691.6 169.9 5,859.4

Revenue by category at December 31, 2016 (Restated):

Commercial Defense and Executive Service and Aviation Security Jets Support Other Total Aircraft 2,868.6 42.2 1,402.9 — 0.1 4,313.8 Aircraft/Development (Defense BU) — 578.4 — — (0.3) 578.1 Others 48.7 (6.2) 150.4 1.5 — 194.4 Service (0.3) 194.4 — 596.9 1.8 792.8 Spare Parts (0.1) 16.7 — 283.8 24.4 324.8 Total 2,916.9 825.5 1,553.3 882.2 26.0 6,203.9

F-75 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

North Latin America America Asia Pacific Brazil Europe Other Total Aircraft 3,150.6 164.7 664.2 41.2 250.9 42.2 4,313.8 Aircraft/Development (Defense BU) 112.1 (1.3) 14.2 445.5 3.8 3.8 578.1 Others 157.3 1.4 17.3 (10.6) 12.1 16.8 194.3 Service 318.4 35.4 68.6 132.5 193.4 44.5 792.8 Spare Parts 172.3 10.5 22.9 54.7 58.3 6.2 324.9 Total 3,910.7 210.7 787.2 663.3 518.5 113.5 6,203.9

The contracts are grouped in the categories above as they have are affected similarly by economic factors.

b) Contract balances, including contract costs:

Note 12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Contract assets 358.0 447.5 370.6 Contract costs (Other assets) 9.1 7.6 6.5 Contract liabilities 1,243.6 1,126.6 1,244.8 Customer advances 1,057.4 938.1 911.3 Deferred revenue 186.2 188.5 333.5 Financial guarantee 23 11.6 17.1 22.7

As of December 31, 2018 and December 31, 2017 there were no losses recognized for contract assets. Losses recognized on trade accounts receivable balances are presented in Note 7.

Of the total revenues recognized as of December 31, 2018, US$ 785.9 were included in the balance of contract liabilities at the beginning of the period, US$ 652.7 for the year ended December 31, 2017 and US$ 678.7 for the year ended December 31, 2016.

The amount of revenue recognized as of December 31, 2018 related to performance obligations achieved in prior years (or partially achieved) is US$ 13.8, which refers mainly to change orders approved in the year without changes in goods or services to be delivered

The Company had the following amounts in other assets related to costs to obtain contracts:

Sales Bank commissions guarantee Off Set Costs Total At January 01, 2016 (Restated) — 9.3 — 9.3 Additions 5.9 2.6 0.1 8.6 Disposals (5.9) (5.4) (0.1) (11.4) At December 31, 2016 (Restated) — 6.5 — 6.5 Additions (10.2) 1.5 5.6 (3.1) Disposals 10.2 (0.4) (5.6) 4.2 At December 31, 2017 (Restated) — 7.6 — 7.6 Additions 1.5 1.4 0.8 3.7 Disposals (0.9) (0.5) (0.8) (2.2) At December 31, 2018 0.6 8.4 — 9.0

There were no impairment losses recognized for costs to obtain contracts.

Assets for obtaining contracts are amortized when (or as and when) the revenue is recognized.

As permitted by the standard, the tables above do not include values of short-term contracts (one year or less). In addition, there were no figures included in the tables above referring to variable consideration of contracts that currently have some restriction, according to the pratical expedient.

F-76 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

c) Performance obligations: The Company has a portfolio of firm orders, whose performance obligations are unsatisfied or partially satisfied. The amount of revenue allocated to performance obligations not yet satisfied (or partially satisfied) as of December 31, 2018 is US$ 16.3 billion, of which US$ 12.8 billion is expected to be satisfied in the next 5 years, as estimated by the Company.

31. Revenue (expenses) by type The Company opted to present the consolidated statements of income by function. The table below shows the detailed costs and expenses by nature:

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) As presented as statements of Income: Revenue 5,071.1 5,859.4 6,203.9 Cost of sales and services (4,303.1) (4,764.1) (4,982.0) Administrative (182.6) (179.1) (164.3) Selling (304.2) (315.9) (353.4) Research (46.1) (49.2) (47.6) Other income (expenses), net (199.4) (210.4) (442.6) Equity in losses on associates (0.4) 1,2 (0.3) Operating profit before financial income 35.3 341.9 213.7 Revenue (expenses) by nature: Revenue from sales of goods 4,450.5 5,023.6 5,404.7 Revenue from sales of services 676.5 920.6 880.8 Sales deductions and tax on revenue (i) (55.9) (84.8) (81.6) General manufacturing costs (ii) (4,031.1) (4,421.4) (4,613.6) Depreciation (159.2) (196.5) (194.5) Amortization (112.8) (146.2) (173.9) Personnel expenses (245.8) (245.4) (261.6) Selling expenses (42.7) (53.8) (83.6) Provision for penalties — (10.1) (228.0) Restructuring expenses —(6.4) (117.3) Miscellaneous (444.2) (437.7) (317.7) Operating profit before financial income 35.3 341.9 213.7

(i) Refers to sales taxes and other deductions. (ii) Refers to costs of materials, direct labor and general manufacturing expenses. F-77 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

32. Other operating income (expense), net

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Assets devaluation (i) (99.5) (109.1) (77.3) Corporate projects (ii) (83.4) (33.0) (21.4) Taxes on other outputs (27.5) (25.1) (36.7) Expenses system project (19.7) (27.7) (16.4) Provision for contingencies (12.0) (8.0) (1.3) Training and development (8.7) (10.0) (10.9) Flight safety standards (4.4) (4.8) (4.6) Aircraft maintenance and flights costs - fleet (3.3) (2.4) (3.4) Contractual fines (iii) (2.9) 6.6 (7.7) Extemporaneous credits — 10.8 16.0 Financial guarantee — 9.6 8.5 Restructuring expenses — (6.4) (117.3) Accounts payable for penalties — (10.1) (228.0) Other sales 8.8 13.3 11.3 Recovery of expenses 11.7 6.4 7.9 Royalties 15.3 11.9 11.9 Contractual fines revenue (iv) 35.4 2.4 24.2 Others (9.2) (34.8) 2.6 (199.4) (210.4) (442.6)

(i) Impairment losses recognized in the year, including US$ 61.3 of Lineage aircraft model (Note 17), US$ 6.0 of aircraft held in property, plant and equipment (Note 15) and US$ 32.2 of residual value devaluation related to assets attached to structured operations recorded in collateralized accounts receivable (Note 9); (ii) Refers to projects focused on system and process improvements and special projects of the Company; (iii) Refers to contractual fines to be paid to suppliers due to non-compliance with contractual clauses; (iv) Substantially fines charged to customers for cancellation of sales contracts, mainly in the Segment of Executive Aviation, in accordance with the contract terms.

33. Financial income (expense), net

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Financial income: Interest on cash and cash equivalents and financial investments 93.0 127.5 201.8 Interest on receivables 33.1 37.5 34.3 Residual value guarantee — 9.5 — Taxes over financial revenue (9.0) 8.0 (17.0) Other 0.1 0.3 2.4 Total financial income 117.2 182.8 221.5 Financial expenses: Financial restructuring costs (0.9) (1.5) (0.5) IOF - (tax on financial transactions) (1.4) (3.7) (2.9) Interest on taxes, social charges and contributions (3.7) (2.2) (21.0) Residual value guarantee (22.3) — (26.7) Interest on loans and financing (226.3) (215.2) (182.6) Other (18.7) (8.6) (17.0) Total financial expenses (273.3) (231.2) (250.7) Derivative instruments (15.4) 7.8 (8.3) Financial income (expenses), net (171.5) (40.6) (37.5)

F-78 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

34. Foreign exchange gains (losses), net

12.31.2018 12.31.2017 12.31.2016 (Restated) (Restated) Monetary and foreign exchange variations Assets: Advances to suppliers* — (1.3) — Tax credits (30.9) (2.2) 28.5 Trade accounts receivable and contract assets (24.6) (38.8) 14.6 Cash and cash equivalents and financial investments (80.8) (4.0) 204.2 Other (25.6) (0.4) 47.5 (161.9) (46.7) 294.8 Liabilities: Loans and financing 82.7 6.0 (153.3) Advances from customers* — 25.1 (46.3) Provisions 24.3 3.8 (27.6) Taxes and charges payable 13.0 1.6 (21.2) Accounts payable 17.4 6.8 (18.8) Suppliers 2.7 0.1 (11.7) Provisions for contingencies 3.3 (1.3) (3.2) Deferred taxes (1.3) (1.4) 0.4 Other (0.9) — (0.5) 141.2 40.7 (282.2) Net monetary and foreign exchange variations (20.7) (6.0) 12.6 Derivative instruments 20.7 12.6 (8.2) Foreign exchange gain (loss), net — 6.6 4.4

* See note to 2.2.1(c) for IFRIC 22 adoption discussions.

35. Responsibilities and Commitments 35.1. Trade-ins The Company has offered 8 aircraft trade-in options. Trade-in transactions are directly tied to contractual obligations with the customer and the purchase of new aircraft. Exercise of the trade-in option is tied to compliance by the customer with all the contractual clauses. These options establish that the price of the asset given in payment may be put towards the purchase price of a new and more up-to-date aircraft model produced by the Company. The Company continuously monitors all trade-in commitments in order to anticipate any adverse economic impact.

35.2. Leases Operating leases refer to buildings, machinery, vehicles and computer equipment. At December 31, 2018 the amounts recognized totaled US$ 7.3, at December 31, 2017 US$ 11.0 and at December 31, 2016 US$ 15.6. These leases expire at various dates through 2044.

The following table shows the payment schedule for the Company’s operating leases at December 31, 2018:

Year 2019 5.4 2020 4.5 2021 4.0 2022 3.5 After 2022 14.7 Total 32.1

F-79 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

35.3. Financial Guarantees The table below provides quantitative data on the financial guarantees provided by the Company to third parties. The maximum potential payments (off balance sheet exposure) represent the worst-case scenario and do not necessarily reflect the results expected 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.

12.31.2018 12.31.2017 Maximum financial guarantees 66.6 107.7 Maximum residual value guarantees 253.1 267.4 Mutually exclusive exposure (i) (26.9) (29.0) Provisions and liabilities recorded (137.0) (126.0) Off-balance sheet exposure 155.8 220.1 Estimated proceeds from financial guarantees and underlying assets 177.6 266.9

(i) When an underlying asset is covered by mutually exclusive financial and residual value guarantees, the residual value guarantee may only be exercised if the financial guarantee has expired without having been exercised. On the other hand, if the financial guarantee is exercised, the residual value guarantee is automatically terminated.

This exposure is reduced by the fact that, to benefit from the guarantee, the counterparty must ensure that the aircraft complies with rigid conditions for its return.

35.4. Insurance cover The Company contracts different types of insurance policies to protect assets in the event of any accident that might cause significant losses. Policies are also contracted for risks subject to compulsory insurance, either legally or contractually.

The Company and its subsidiaries have civil liability insurance for their operations in Brazil and abroad, with coverage and conditions that management considers appropriate to the risks involved.

To cover substantial damage to assets and loss of earnings of its operations in Brazil and abroad, the Company has insured an amount of US$ 7.7 billion.

36. Supplemental Cash Flow information 36.1 Payments made during the year and transactions not affecting cash and cash equivalents

12.31.2018 12.31.2017 12.31.2016 Payments made during the period: Interest 212.7 186.4 175.0 Income tax and social contribution 23.3 28.6 153.9 Non-cash financing and investing transactions Property, plant and equipment, transfer to pool parts inventory (29.5) (21.6) 2.5 Property, plant and equipment, transfer to financial guarantees — — 45.7 Property, plant and equipment, transfer from intangible assets — — 7.5 Property, plant and equipment, transfer for providing for the sale of inventory (112.7) (100.8) (34.8) Impairment of assets (55.2) (58.4) — Government grants — (4.3) (51.5)

37. Segment information Management defined the Company’s operating segments based on the reports used for strategic decision making, reviewed by the chief operating decision-maker.

F-80 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

The chief operating decision-maker analyzed the business, dividing it geographically and in terms of markets for specific products. From a geographic perspective, Management considers the performance of the operations in Brazil, North America, Latin America, Asia Pacific, Europe and Others.

During the year, as a result of a change in corporate internal structure and the way in which the chief-operating decision-maker allocates resources and reviews businesses performance, the segment of Services & Support was established. Therefore, the segment information is restated as required by IFRS 8 for retrospective disclosure of the new segment.

From a product perspective, the analysis considers the following market segments:

37.1 Commercial aviation business The Commercial Aviation business mainly involves the development, production and sale of commercial jets and aircraft leases. • ERJ 145 family, comprising the ERJ 135, ERJ 140 and ERJ 145 jets, certified to operate with 37, 44 and 50 seats, respectively. • EMBRAER 170/190 family, comprising the EMBRAER 170, a 70-seat jet, EMBRAER 175, a 76-seat jet, EMBRAER 190, a 100-seat jet and the EMBRAER 195, a 108-seat jet. The EMBRAER 170 model has been operating commercially since 2004, the EMBRAER 175 and EMBRAER 190 models started commercial operations in 2006, and the EMBRAER 195 model in 2007. • E-Jets E2, the second generation of the E-Jets family of commercial aircraft, consists of three new aircraft—E175-E2 with capacity of up to 88 seats, E190-E2 with up to 106 seats and E195-E2, with up to 132 seats in a typical single-class configuration. The E190-E2 started commercial operations inn the first half of 2018. The E195-E2 is scheduled to enter service in 2019 and the E175-E2 in 2021.

37.2 Defense and security business The defense and security business operations mainly involve research, development, production, modification and support for military defense and security aircraft, as well as a wide range of products and integrated solutions that include radars, special space systems (satellites) and advanced information and communications systems, such as Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance, or C4ISR systems.

The expansion and diversification of the portfolio, previously focused on military aircraft, was facilitated by a strategy of partnerships, acquisitions and organic growth.

The Company’s principal customer is currently the Brazilian Defense Ministry and, in particular, the Brazilian Air Force, although the diversification of the portfolio has resulted in a corresponding diversification of customers: the Brazilian Army and Navy and the Communications Ministry, as well as a growing international presence of our products and solutions.

The main products of the Defense and Security portfolio are as follows • Light Attack and Advanced Training Aircraft (Super Tucano) – the Super Tucano is a military turboprop that combines training and operational capacities with low acquisition and operating costs. The Super Tucano has the operational capacities for frontier surveillance, proximity aerial support and counter insurgence missions (COIN). • Aircraft Modernization – The Company offers aircraft upgrade services and currently operates four contracted programs. The first, known as F-5BR, is focused on the structural and electronic upgrading of the Brazilian Air Force’s F-5 jet. The second, A-1M, concerns upgrading of the AMX, an advanced ground attack jet, for the Brazilian Air Force. The third program, contracted by the Brazilian Navy, is for the revitalization and incorporation of new technologies to the A-4 Skyhawk aircraft (denominated AF-1 by the customer). In the fourth program, with the Brazilian Air Force, the Company was contracted to upgrade the EMB 145 AEW&C aircraft. • The ISR family (Intelligence, Surveillance and Reconnaissance), based on the ERJ 145 platform, includes the EMB 145 AEW&C – Anticipated Aerial Alert and Control, EMB 145 Multi Intel – Remote Sensing and Air-Ground Surveillance and EMB 145 MP – Sea Patrol and Anti Submarine War models. Originally developed to serve the SIVAM program, versions have been ordered by the Greek, Mexican and Indian governments.

F-81 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

• KC-390 is a joint project between the Brazilian Air Force and Embraer to develop and produce tactical military transportation and aerial refueling and represents a significant advance in terms of technology and innovation for the airspace industry. The aircraft is designed to establish new standards in its category, with lower operating costs and the flexibility to execute a variety of missions, including troop carriage and transportation, air delivery, aerial refueling, search and rescue and aerial fire-fighting and combat. • Transportation of Authorities and Special Missions – Derived from the commercial and executive aircraft platforms, these are aircraft used to transport government authorities or to carry out special missions. • Radars – solutions offered through Bradar, a technology-based industry specialized in developing and producing radars for Remote Sensing and Defense, include radar for anti-aircraft artillery, surveillance of terrestrial activity, military and civil air traffic control, a communications intelligence system and synthetic aperture radar for cartography and precision monitoring services. • Software and Systems Development – combining the expertise of Atech – Negócios em Tecnologia S.A. and investments by Embraer in system development and integration, provides specialized engineering services for the development, installation, revitalization and maintenance of critical control, defense and monitoring systems, as well as the machinery and equipment required for the services. • Frontier monitoring and protection of strategic structures – Based on its experience in systems integration, and through its wholly owned subsidiary Savis, Embraer is dedicated to developing, designing, certifying, producing, integrating and implementing systems and services in the field of frontier monitoring and control and protection of critical infra-structures. • Satellites - Visiona Space Technology, a joint venture between Embraer and Telebrás, was hired to provide and integrate the Brazilian Geostationary Defense and Communications Satellite system (SGDC), to meet the satellite communications requirements of the Brazilian government, including the National Broadband Program and a wide range of strategic defense transmissions, as well as the assimilation of technologies, marking Embraer’s presence in this market. Also provides services of supply and analysis of satellite images with the objective of developing major sensing projects in Brazil and neighboring countries.

37.3 Executive Jet business Executive Jets market operations comprise the development, production and sale of executive jets and the provision of support services, and leases of the following product lines: • Legacy 600 and Legacy 650 - executive jets in the super midsize and large categories, deliveries of which started in 2002 and 2010, respectively. • Legacy 450 and Legacy 500- executive jets in the Midlight and Midsize categories, deliveries of which started in 2014 and 2015, respectively. • Phenom family - executive jets in the Entry Jet and Light Jet categories, respectively. The first deliveries of the Phenom 100 were made in 2008, and deliveries of the Phenom 300 started in 2009. • Lineage 1000 - an ultra-large executive jet. Deliveries of this model started in 2009. • Praetor 500 and Praetor 600 - most disruptive executive jets in the Midsize and Super Midsize categories, introduced in Q4 2018 with deliveries starting in 2nd half 2019. F-82 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

37.4 Service & Support Segment created to strengthen Embraer’s know-how and provide the best after-service solutions and support to its customers through a comprehensive portfolio of innovative and competitive solutions to ensure operational efficiency of products manufactured by Embraer and by other aircraft manufacturers, extending the useful life of commercial, executive and defense aircraft.

In addition to its experience in proposing support solutions to customers, OGMA (Embraer’s subsidiary in Portugal) offers MRO (Maintenance, Repair and Overhaul) services for a wide range of commercial, executive and defense aircraft, aircraft components and engines and also it is a significant supplier of steel and composite aviation structures to several aircraft manufacturers. The services and support segment consists of 6 macro processes: • Capture customer needs and develop integrated support and services solutions: To develop integrated and competitive support solutions, technical services, materials, or MRO activities that meet the needs and expectations of Embraer customers. • Sell and administrate support and services solution: To sell integrated and competitive technical support, service solutions, materials, or MRO activities, and administer support and service contracts. • Deliver Material Solutions: To provide parts to customers, by direct sale or availability through special programs, manage component repair, provide inventory management services and advice on inventory formation, etc. • Deliver Technical Solutions: To provide technical, operational and maintenance support to customers fleets with services such as providing training for pilots and commissioners, aircraft modification and enhancement projects, review of technical, operational and maintenance publications, and sustaining digital solutions. • Deliver MRO Solutions: To provide maintenance services for aircraft, engines and landing gear (scheduled and unscheduled), aircraft modernization and component repair. • Monitor and ensure operational excellence and customer relationship excellence: To guarantee the operational excellence of Materials, Technique and MRO Solutions, through maintaining accountability of the operational leadership and the support areas, consistent monitoring of operational KPIs, reviewing customer satisfaction through MFA practices, maintaining customer relationships with CRM and operational areas that directly interface with the customers.

37.5 Other Operations in this segment relate to the supply of structural parts and mechanical and hydraulic systems, and production of agricultural crop-spraying aircraft.

Consolidated statements of income data by operating segment – year ended December 31, 2018:

Total Commercial Defense and Executive Service and reportable Aviation Security (i) Jets Support Other Segments Unallocated Total Revenue 2,358.3 612.1 1,104.3 980.8 15.6 5,071.1 — 5,0711 Cost of sales and services (1,976.7) (702.3) (914.0) (689.0) (21.1) (4,303.1) — (4,303.1) Gross profit 381.6 (90.2) 190.3 291.8 (5.5) 768.0 — 768.0 Gross profit % 16.2% -14.7% 17.2% 29.8% -35.3% 15.1% 15.1% Operating income (expense) (229.1) (93.0) (235.0) (168.7) (6.9) (732.7) — (732.7) Operating profit before financial income (expense) 152.5 (183.2) (44.7) 123.1 (12.4) 35.3 — 35.3 Financial income (expense), net (171.5) (171.5) Foreign exchange gain (loss), net — — Profit before taxes on income (136.2) Income tax expense (35.0) (35.0) Net income (171.2)

(i) The results of the Defense and Security segment include the negative impact of special non-recurring items of US$ 127.2 as described in Note 3.1.

F-83 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

In the Commercial Aviation segment, one customer individually contributed a 17,9% share of net revenue in 2018 with an approximate value of US$ 907.2

Revenue by geographic area – year ended December 31, 2018:

Commercial Defense and Executive Service and Aviation Security Jets Support Other Total North America 1,449.4 145.7 936.7 422.2 5.0 2,959.0 Europe 519.1 122.8 127.4 196.7 — 966.0 Asia Pacific 324.1 1.6 1.6 104.7 — 432.0 Latin America, except Brazil 11.9 68.3 22.5 47.3 — 150.0 Brazil 0.2 258.9 16.1 157.2 10.6 443.0 Other 53.6 14.8 — 52.7 — 121.1 Total 2,358.3 612.1 1,104.3 980.8 15.6 5,071.1

Assets by operating segment - year ended December 31, 2018:

Defense Total Commercial and Executive Service and reportable Aviation Security Jets Support Other Segments Unallocated Total Trade accounts receivable 5.8 111.2 1.3 192.2 7.5 318.0 — 318.0 Property, plant and equipment 688.8 295.6 544.0 435.6 0.7 1,964.7 — 1,964.7 Intangible assets 862.5 11.0 829.0 — 78.4 1,780.9 117.9 1,898.8 Total 1,557.1 417.8 1,374.3 627.8 86.6 4,063.6 117.9 4,181.5

Assets by geographic area - year ended December 31, 2018:

North America Europe Asia Pacific Brazil Total Trade accounts receivable 83.9 106.4 8.8 118.9 318.0 Property, plant and equipment 351.1 501.6 57.1 1,054.9 1,964.7 Intangible assets 53.6 5.7 — 1,839.5 1,898.8 Total 488.6 613.7 65.9 3,013.3 4,181.5

Consolidated statements of income data by operating segment – year ended December 31, 2017 Restated):

Total Commercial Defense and Executive Service and reportable Aviation Security Jets Support Other Segments Unallocated Total Revenue 2,771.4 853.7 1,280.3 922.2 31.8 5,859.4 — 5,859.4 Cost of sales and services (2,178.1) (792.9) (1,126.4) (640.3) (26.4) (4,764.1) — (4,764.1) Gross profit 593.3 60.8 153.9 281.9 5.4 1,095.3 — 1,095.3 Gross profit % 21.4% 7.1% 12.0% 30.6% 17.0% 18.7% 18.7% Operating income (expense) (230.5) (109.5) (206.0) (177.0) (13.9) (736.9) (16.5) (753.4) Operating profit before financial income (expense) 362.8 (48.7) (52.1) 104.9 (8.5) 358.4 (16.5) 341.9 Financial income (expense), net (40.6) (40.6) Foreign exchange gain (loss), net 6.6 6.6 Loss before taxes on income 307.9 Income tax expense (27.9) (27.9) Net income 280.0

F-84 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Revenue by geographic area – year ended December 31, 2017 (Restated):

Commercial Defense and Executive Service and Aviation Security Jets Support Other Total North America 1,795.5 93.3 1,006.8 421.0 21.3 3,337.9 Europe 200.1 133.5 161.7 196.3 — 691.6 Asia Pacific 670.3 13.7 94.1 81.4 — 859.5 Latin America, except Brazil 0.5 5.4 0.6 45.1 — 51.6 Brazil 0.9 587.1 17.1 133.3 10.5 748.9 Other 104.1 20.7 — 45.1 — 169.9 Total 2,771.4 853.7 1,280.3 922.2 31.8 5,859.4

Assets by operating segment - year ended December 31, 2017 (Restated):

Defense Total Commercial and Executive Service and reportable Aviation Security Jets Support Other Segments Unallocated Total Trade accounts receivable 2.7 22.9 6.8 256.3 8.2 296.9 — 297.0 Property, plant and equipment 781.3 578.4 298.7 445.8 0.7 2,104.9 — 2,104.9 Intangible assets 793.1 5.7 881.9 — 64.9 1,745.6 136.8 1,882.4 Total 1,577.1 607.0 1,187.4 702.1 73.8 4,147.4 136.8 4,284.3

Assets by geographic area - year ended December 31, 2017 (Restated):

North America Europe Asia Pacific Brazil Total Trade accounts receivable 36.8 45.0 3.5 211.7 297.0 Property, plant and equipment 378.0 555.4 56.3 1,115.2 2,104.9 Intangible assets 31.2 6.8 — 1,844.4 1,882.4 Total 446.0 607.2 59.8 3,171.3 4,284.3

Consolidated statements of income data by operating segment – year ended December 31, 2016 (Restated):

Total Commercial Defense and Executive Service and reportable Aviation Security Jets Support Other Segments Unallocated Total Revenue 2,916.9 825.5 1,553.3 882.2 26.0 6,203.9 — 6,203.9 Cost of sales and services (2,325.3) (693.6) (1,343.7) (601.6) (17.8) (4,982.0) — (4,982.0) Gross profit 591.6 131.9 209.6 280.6 8.2 1,221.9 — 1,221.9 Gross profit % 20.3% 16.0% 13.5% 31.8% 31.5% 19.7% 0.0% 19.7% Operating income (expense) (210.9) (87.6) (172.9) (188.5) (3.0) (662.9) (345.3) (1,008.2) Operating profit before financial income (expense) 380.7 44.3 36.7 92.1 5.2 559.0 (345.3) 213.7 Financial income (expense), net (37.5) (37.5) Foreign exchange gain (loss), net 4.4 4.4 Profit before taxes on income 180.6 Income tax expense (0.3) (0.3) Net income 180.3

F-85 Embraer S.A. Notes to the Consolidated Financial Statements In millions of U.S. dollar, unless otherwise stated

Revenue by geographic area – year ended December 31, 2016 (Restated):

Commercial Defense and Executive Service and Aviation Security Jets Support Other Total North America 2,157.3 166.4 1,147.7 416.6 22.7 3,910.7 Europe 105.1 99.3 158.1 156.0 — 518.5 Asia Pacific 581.6 22.2 98.4 85.0 — 787.2 Latin America, except Brazil 63.9 (0.7) 102.3 45.2 — 210.7 Brazil (6.9) 479.6 46.7 140.6 3.3 663.3 Other 15.9 58.7 0.1 38.8 — 113.5 Total 2,916.9 825.5 1,553.3 882.2 26.0 6,203.9

38. SUBSEQUENT EVENT 38.1 Approval of the transaction between Embraer and The Boeing Company On January 10, 2019 the Brazilian Federal Government informed that it would not exercise the veto right on the strategic partnership between Embraer and The Boeing Co., under the terms mentioned in item 1 (Operations). Thereafter, on January 11, 2019 the Company’s Board of Directors decided (i) to ratify the resolution of December 17, 2018 that approved the Transaction; (ii) to authorize the execution of the Master Transaction Agreement, which provides the terms and conditions for the consummation of the strategic partnership in connection with the commercial aviation, the Contribution Agreement, which provides the terms and conditions for the creation of a joint venture for the promotion and development of new markets and applications for the multi-mission airplane KC-390, as well as of the other agreements and documents necessary or convenient for the consummation of the Transaction; and (iii) to authorize, after the approval of the Transaction by Embraer’s shareholders, the executive officers to perform any act necessary for the consummation of the Transaction, including the transfer to the new company of the net equity comprised by assets, debts, properties, rights and obligations related to the commercial aviation business unit.

On January 24, 2019 Embraer and The Boeing Company entered into the Master Transaction Agreement and the Contribution Agreement and on February 26, 2019 the shareholders of the Company approved, with 96.8% of valid votes, the strategic partnership with The Boeing Company, as stated in the Management’s Proposal disclosed on January 24, 2019.

The consummation of the Transaction will be subject to (i) approval by antitrust authorities in Brazil, in the United States and other applicable jurisdictions; and (ii) the satisfaction of other conditions customary in similar transactions.

F-86 Exhibit 4.1

EXECUTION VERSION

MASTER TRANSACTION AGREEMENT

AMONG

BOEING BRASIL SERVIÇOS TÉCNICOS AERONÁUTICOS LTDA.,

THE BOEING COMPANY,

EMBRAER S.A.,

AND

YABORÃ INDÚSTRIA AERONÁUTICA S.A.

DATED AS OF JANUARY 24, 2019

TABLE OF CONTENTS

Page

Article I DEFINITIONS ...... 3

Article II CONTRIBUTION, PURCHASE AND SALE OF SHARES AND CAPITAL RAISE25 2.01 Contribution of Certain Assets and Assumption of Certain Liabilities ...... 25 2.02 Contributed and Excluded Assets ...... 25 2.03 Assumed and Excluded Liabilities...... 30 2.04 Purchase and Sale of Shares and Capital Raise ...... 33 2.05 Intended U.S. Tax Treatment ...... 35 2.06 Closing ...... 35 2.07 Purchase Price Calculation and Preliminary Adjustments ...... 35 2.08 Post-Closing Adjustment ...... 36 2.09 Withholding ...... 40 2.10 Post-Closing Tax Adjustment ...... 40

Article III REPRESENTATIONS AND WARRANTIES OF EDWARDS ...... 41 3.01 Existence of Edwards and the Company ...... 42 3.02 Due Authorization ...... 43 3.03 Governmental Authorizations for the Agreement...... 43 3.04 Capitalization of the Company Group; Company Joint Venture ...... 44 3.05 Absence of Conflicts ...... 45 3.06 Financial Statements ...... 46 3.07 Sufficiency of Assets; Title ...... 47 3.08 Compliance with Laws ...... 47 3.09 Governmental Authorizations ...... 48 3.10 Product Warranty and Liability ...... 49 3.11 Real Property ...... 49 3.12 Taxes ...... 50 3.13 Litigation ...... 53 3.14 Brokers ...... 53 3.15 Contracts ...... 54 3.16 Environmental Matters...... 57 3.17 Employee Benefit Plans ...... 58 3.18 Employee and Labor Matters ...... 59 3.19 Intellectual Property ...... 60 3.20 No Edwards CAB Material Adverse Effect ...... 61 3.21 Absence of Undisclosed Liabilities ...... 61 3.22 Customers ...... 62 3.23 Anti-Bribery ...... 62 3.24 Export; Sanctions ...... 63 3.25 Insurance ...... 64 3.26 Inventory ...... 64 3.27 Accounts Receivable ...... 65 3.28 Access to Information; Disclaimer ...... 65

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3.29 No Further Representations or Warranties ...... 65 3.30 Knowledge Persons ...... 66

Article IV REPRESENTATIONS AND WARRANTIES OF BULLS BRAZIL ...... 66 4.01 Existence of Bulls Brazil and Bulls Parent ...... 66 4.02 Due Authorization ...... 66 4.03 Governmental Authorizations ...... 67 4.04 Absence of Conflicts ...... 67 4.05 Financing...... 67 4.06 Brokers ...... 67 4.07 Litigation ...... 68 4.08 Solvency ...... 68 4.09 Investment Representation ...... 68 4.10 Anti-Bribery ...... 68 4.11 Access to Information; Disclaimer ...... 69 4.12 No Further Representations or Warranties ...... 69

Article V COVENANTS ...... 70 5.01 Conduct of Business ...... 70 5.02 Negative Covenants Relating to Conduct of the Commercial Aviation Business ...... 70 5.03 Further Assurances...... 74 5.04 Access to Information ...... 74 5.05 Regulatory Approvals; Efforts ...... 76 5.06 Third Party Consents...... 78 5.07 Board Recommendations; Adverse Recommendation Change ...... 79 5.08 Shareholder Meeting ...... 80 5.09 No Shop ...... 81 5.10 Notifications ...... 82 5.11 Financing Cooperation ...... 83 5.12 Termination of Related Party Contracts ...... 84 5.13 [INTENTIONALLY OMITTED]...... 84 5.14 Contribution; Shared Contracts...... 84 5.15 Ancillary Agreements; Related Actions ...... 86 5.16 Resignation of Directors ...... 86 5.17 Confidentiality ...... 86 5.18 Books and Records ...... 88 5.19 Insurance ...... 88 5.20 No Solicitation ...... 89 5.21 Assumption of Deferred Prosecution Agreement ...... 90 5.22 Excluded Marks ...... 90 5.23 MRO Contracts ...... 91 5.24 Company’s Rights Concerning the Contributed Assets ...... 91 5.25 IT Monitoring...... 91 5.26 OGMA ...... 92 5.27 CA Business...... 92

ii

Article VI TAX MATTERS ...... 92 6.01 Liability for Taxes...... 92 6.02 Preparation of Tax Returns and Payment of Taxes ...... 93 6.03 Cooperation ...... 93 6.04 Tax Contests...... 94 6.05 Transfer Taxes ...... 95 6.06 Section 338(g) Election Matters ...... 95

Article VII EMPLOYEES AND BENEFIT PLANS ...... 95 7.01 Transfer of Employment ...... 95 7.02 Pre-Closing HRIMS, Payroll and Benefits; Pension Plan ...... 96 7.03 Post-Closing Benefits...... 97 7.04 Employees and Retention ...... 98 7.05 General Employment Provisions ...... 98

Article VIII CONDITIONS PRECEDENT TO CLOSING ...... 99 8.01 Conditions to Each Party’s Obligation to Close ...... 99 8.02 Conditions to Bulls Brazil’s Obligation to Close ...... 100 8.03 Conditions to Edwards’ Obligation to Close ...... 102

Article IX CLOSING DELIVERIES ...... 102 9.01 Deliveries by Edwards to Bulls Brazil ...... 102 9.02 Deliveries by Bulls Brazil to Edwards ...... 103 9.03 Deliveries by the Company to Bulls Brazil ...... 103 9.04 Deliveries by Bulls Brazil to the Company ...... 104

Article X TERMINATION ...... 104 10.01 Termination ...... 104 10.02 Effect of Termination ...... 106 10.03 Termination Fees...... 106

Article XI INDEMNIFICATION ...... 108 11.01 Survival ...... 108 11.02 Indemnification by Edwards ...... 109 11.03 Indemnification by Bulls Brazil ...... 109 11.04 Limitations on Indemnification ...... 110 11.05 Direct Claims ...... 112 11.06 Third Party Claims ...... 113 11.07 Tax Treatment of Payment under Article XI ...... 114 11.08 Exclusive Remedy ...... 114 11.09 Payments ...... 114

Article XII MISCELLANEOUS...... 115 12.01 Notices ...... 115 12.02 Assignment; Successors and Assigns ...... 117 12.03 Amendments; Waiver ...... 117 12.04 Severability ...... 118

iii

12.05 Counterparts ...... 118 12.06 Entire Agreement ...... 118 12.07 Governing Law ...... 118 12.08 Arbitration ...... 118 12.09 Interpretation ...... 120 12.10 No Third Party Beneficiaries ...... 121 12.11 Expenses ...... 121 12.12 Publicity ...... 121 12.13 Specific Performance ...... 121 12.14 No Partnership ...... 122 12.15 Bulls Parent’s Guarantee ...... 122 12.16 Provisions Respecting Legal Representation ...... 122

iv

EXHIBITS

Exhibit A Agreed Accounting Principles Exhibit B Company’s Bylaws Exhibit C Contribution Steps Plan Exhibit D Form of Sharehold ers’ Agreement Exhibit E Form of General Services Agreement Exhibit F Form of Engineering Services Agreement Exhibit G Form of Intellectual Property License Agreement Exhibit H Form of Research and Development Agreement Exhibit I Form of Facilities Use Agreement Exhibit J1 Form of Company Preferred Supply Agreement Exhibit J2 Form of Edwards Preferred Supply Agreement Exhibit K Form of Supply Chain Cooperation Agreement Exhibit L Total Tax Cost Calculation Exhibit M Form of Retention Agreement Exhibit N1 Form of Company Maintenance Services Agreement Exhibit N2 Form of Edwards Maintenance Services Agreement Exhibit O1 Form of Company Material Support Agreement Exhibit O2 Form of Edwards Material Support Agreement Exhibit P Form of Sublease

SCHEDULES

Edwards Disclosure Schedules Bulls Brazil Disclosure Schedules Schedule 1.01(b) Company Joint Venture Schedule 1.01(c) Encumbrances Schedule 1.01(d) Excluded Marks Schedule 1.01(e) Key Employees Schedule 1.01(f) Knowledge Schedule 1.01(g) Minimum Required Spending Schedule 2.02(a)(i) Contributed Facilities Schedule 2.02(a)(ii) Contributed Tangible Personal Property Schedule 2.02(a)(iv) Certain Contributed Contracts Schedule 2.02(a)(xiii) Company Subsidiaries Schedule 2.02(b)(i) Retained Edwards Facilities Schedule 2.02(b)(ii) Excluded IT Assets Schedule 2.02(b)(iv) Excluded Contracts Schedule 2.02(b)(vi) Excluded Governmental Authorizations Schedule 2.03(a)(i) Assumed Debt Amount Schedule 2.03(b)(ix) Excluded Liabilities Schedule 2.04(a)(ii) Bulls Brazil’s Affil iate Schedule 5.01(e) Certain Assets to be Moved from Contributed Facilities Schedule 5.01(f) Certain Assets to be Moved to São José dos Campos Schedule 5.05(a) Regulatory Approvals

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Schedule 5.06 Required Consents Schedule 5.12 Related Party Contracts Schedule 5.14(d) Shared Contracts Schedule 5.20(b) Bulls Brazil Non-Solicit Schedule 5.23 MRO Contracts Schedule 7.04 Employees and Retention Schedule 8.01(e) Non-Brazil/U.S. Regulatory Approvals Schedule 8.02(i) Required Consents and Governmental Authorizations Schedule 9.01(d) Contributed Assets Encumbrances Schedule 11.02(f) Indemnified Liabilities

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MASTER TRANSACTION AGREEMENT

This MASTER TRANSACTION AGREEMENT is made as of January 24, 2019, by and among Boeing Brasil Serviços Técnicos Aeronáuticos Ltda., a limited liability company (sociedade limitada ) organized under the laws of the Federative Republic of Brazil (“ Bulls Brazil ”), The Boeing Company, a corporation organized under the laws of the State of Delaware, United S tates of America (“ Bulls Parent ”) (solely for the purposes of Sections 5.05, 5.17, and 12.15), Embraer S.A., a joint-stock corporation ( sociedade anônima ) organized under the laws of the Federative Republic of Brazil (“ Edwards ”), and Yaborã Indústria Aeronáutica S.A., a joint- stock corporation ( sociedade anônima ) organized under the laws of the Federative Republic of Brazil (the “ Company ”). Bulls Brazil and Edwa rds are each sometimes referred to herein, individually, as a “ Party ” and, collectively, as the “ Parties ”.

RECITALS :

WHEREAS, Edwards is engaged in, among other things, the Commercial Aviation Business (as defined below) and Edwards, directly or indirectly, owns, licenses or leases the Contributed Assets (as defined below);

WHEREAS, on July 5 th , 2018, Bulls Parent and Edwards agreed upon a non-binding memorandum of understanding to, among other things, establish a strategic joint venture and enter into various agreements to provide for cooperation and mutual support in research and development, engineering services, facilities use, intellectual property, product supply and supply purchasing cooperation in connection with Bulls Brazil acquiring control of the joint venture and the Commercial Aviation Business;

WHEREAS, pursuant to discussions between Bulls Parent and the Parties, the non- binding memorandum of understanding provided that, among other things, Bulls Brazil would acquire 80% of a newly formed company containing Edwards’ Commercial Aviation Business, and two or more of the Parties, Bulls Parent and the Company would enter into the aforementioned support agreements and various other agreements related thereto;

WHEREAS, Bulls Brazil, a limited liability company formed in 2003 with office locations in São Paulo and São José dos Campos, is engaged in, among other things, the cultivation and maintaining of Bulls Brazil’s presence and relationships in-country, research and development activities including collaboration with universities, government agencies, and other local aerospace and defense firms, as well as supporting local business development and objectives in the commercial, defense, engineering and technology services aerospace sectors;

WHEREAS, the Company is owned by Edwards and the Parties desire and intend that Edwards shall contribute, assign, transfer, convey and deliver to the Company the Commercial Aviation Business and assets that are, together with the Assets and services that Edwards is required to provide to, or make available for use by, the Company under certain of the support agreements, necessary and sufficient for the Company to conduct the Commercial Aviation Business on a stand-alone basis and consistent with the manner conducted prior to the closing of the transactions contemplated hereby;

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WHEREAS, Edwards is the owner of record of 1,199 common Shares (as defined below), which Shares constitute all of the issued and outstanding capital stock of the Company, except for 1 common Share, which is owned by ELEB – Equipamentos Ltda. (“ ELEB ”);

WHEREAS, the Company will create and issue certain non-voting, redeemable preferred Shares, with the rights and privileges set forth in the Company’s bylaws, that will be subscribed for by Edwards prior to the Closing (as defined below);

WHEREAS, at the Closing, Bulls Brazil desires to acquire, and Edwards desires to sell, transfer and deliver to Bulls Brazil, the Selling Shares Percentage (as defined below) of the issued and outstanding common Shares of the Company, and 80% of the issued and outstanding redeemable preferred Shares of the Company, and, immediately thereafter, Bulls Brazil desires to, and shall be required to, sell such redeemable preferred Shares of the Company to an Affiliate of Bulls Brazil, and Bulls Brazil further desires to subscribe for, and the Company desires to issue for subscription by Bulls Brazil, the Issued Shares (as defined below), in each case, free and clear of any Encumbrances (as defined below), on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, concurrently with the execution of this Agreement, Bulls Brazil and Edwards are entering into that certain definitive agreement (the “ Contribution Agreement ”) pursuant to which the parties thereto agree to, among other things, establish a strategic partnership for sales of certain defense and security products pursuant to the terms and subject to the conditions set forth in the Contribution Agreement;

WHEREAS, the board of directors of Edwards (the “ Edwards Board ”) at a meeting held on January 11, 2019 (a) determined that this Agreement, the Ancillary Agreements, and the transactions contemplated by this Agreement and the Ancillary Agreements are in the best interests of Edwards, (b) approved the terms and conditions of this Agreement and the Ancillary Agreements and the execution, delivery and performance of this Agreement and the Ancillary Agreements by Edwards and (c) resolved, on the terms and subject to the conditions set forth in this Agreement, (i) to call an extraordinary shareholders’ meeting to approve the transactions contemplated by this Agreement and the Ancillary Agreements, (ii) to recommend that the shareholders of Edwards vote in favor of the Shareholder Vote Proposals (as defined below) (such recommendation, the “ Voting Recommendation ”), and (iii) upon r eceipt of the Shareholder Approval, to effect the Contribution (as defined below), the sale to Bulls Brazil of common Shares representing the Selling Shares Percentage of the issued and outstanding common Shares of the Company, and 80% of the issued and outstanding redeemable preferred Shares of the Company, the Capital Raise (as defined below) with the subscription by Bulls Brazil for the Issued Shares, and the other transactions contemplated by this Agreement, as well as to effect the transactions contemplated by the Ancillary Agreements;

WHEREAS, the First Golden Share Approval (as defined below) was obtained on January 10, 2019; and

WHEREAS, the board of directors of Bulls Parent and the quota holders of Bulls Brazil have approved this Agreement and the Ancillary Agreements to which each of them is a party, as well as the transactions contemplated hereby and thereby, and authorized each of Bulls Brazil

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and Bulls Parent to enter into this Agreement and the Ancillary Agreements to which each of them is a party.

NOW, THEREFORE, in consideration of the mutual covenants of the Parties as hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used in this Agreement shall have the meanings set forth in this Agreement. In addition, for purposes of this Agreement, the following terms, when used in this Agreement, shall have the meanings assigned to them in this Article I.

“Adjustment Time ” means 11:59 p.m. São Paulo time on the day immediately prior to the Closing Date.

“Affiliate ” means, in respect of a Person, any other Person who at any time Controls, is Controlled by, or is under common Control with, such Person, but in each case, only for so long as such Control exists. For the avoidance of doubt, Persons in the Company Group (i) shall be deemed Affiliates of Edwards only until the Closing and (ii) shall be deemed Affiliates of Bulls Brazil after the Closing, for so long as they are Controlled by, or under common Control with, Bulls Brazil.

“Agreed Accounting Principles ” means the accounting principles specified on Exhibit A hereto.

“Agreement ” means this Master Transaction Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms.

“Ancillary Agreements ” means, collectively, (i) the Shareholders’ Agreement, (ii) the General Services Agreement, (iii) the Engineering Services Agreement, (iv) the Intellectual Property License Agreement, (v) the Research and Development Agreement, (vi) the Facilities Use Agreement, (vii) the Preferred Supply Agreements, (viii) the Supply Chain Cooperation Agreement, (ix) the Maintenance Services Agreements, (x) the Material Support Agreements and (xi) the Sublease.

“Antitrust Laws ” means the Brazilian Federal Law No. 12.529/2011 (as amended), the HSR Act, the Sherman Antitrust Act of 1890, the Clayton Act of 1914, the Federal Trade Commission Act of 1914 and any other applicable Laws relating to antitrust or competition regulation that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition, including such Laws of any other jurisdiction in addition to the United States or Brazil.

“Antitrust Termination Fee ” means one hundred million dollars ($100,000,000).

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“Apportioned Tax ” means any Tax that is properly attributable to a Straddle Period.

“Assets ” means any asset, property or right of every kind (whether tangible or intangible), including real and personal property.

“B3 ” means B3 S.A. – Brasil, Bolsa, Balcão , a stock exchange organized and existing in accordance with the Laws of Brazil and authorized by the CVM to function as such, including all successors thereto.

“Base Bulls Acquisition Value ” means four billion two hundred ten million dollars ($4,210,000,000).

“Books and Records ” means all books and records, documents and other information (in any form or medium) to the extent used in or relating to the Commercial Aviation Business or any of the Contributed Assets or Assumed Liabilities, including specifications, manufacturing, research and development and production reports and records, testing results, certification materials, service and warranty records, equipment logs, environmental, safety and health plans, policies and procedures, accounting records, Tax and labor books and records, sales records, service records and customer, vendor and supplier lists and files (including copies of all current and historical customer, vendor, supplier, contractor and service provider lists to the extent related to or used in the Commercial Aviation Business), insurance policies, financing documents, engineering and other documentation relating to aircraft design, maintenance, operation and safety, correspondence files, all written Contracts, Governmental Authorizations, and personnel records of the Commercial Aviation Business Employees.

“Brazil ” means the Fe derative Republic of Brazil ( República Federativa do Brasil ).

“Bulls Material Adverse Effect ” means any effect that, individually or together with any other effect(s), prevents (or would reasonably be expected to prevent) the ability of Bulls Brazil or Bulls Parent to perform its obligations under this Agreement or the Ancillary Agreements or to consummate the transactions contemplated by this Agreement or the Ancillary Agreements.

“Business Day ” means any day of the year other than (i) any Saturday or Sund ay or (ii) any other day on which banks located in the states of New York or Illinois, United States or the cities of São Paulo or São José dos Campos, state of São Paulo, Brazil are closed for business.

“Bylaws ” shall mean the amended and restated bylaws (Estatuto Social ) of the Company to be adopted effective as of the Closing in the form attached hereto as Exhibit B.

“CADE ” means the Brazilian Administrative Counsel for Economic Defense ( Conselho Administrativo de Defesa Econômica ), the Brazilian antitrust authority, and any successor thereto.

“Cash ” means, with respect to any Person as of any date of determination, all cash or cash equivalents (other than restricted cash) owned by such Person, including (i) cash on hand, checks, bank balances, term deposits and cash on deposit, (ii) short-term investments with original maturities of not more than ninety (90) days that are readily convertible to cash and subject to no risk of decrease in value (other than de minimis risk), including short-term deposits

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with original maturities of no more than ninety (90) days, demand deposits, savings accounts, certificates of deposit, money market funds and other highly liquid marketable securities, (iii) collateralized receivables related to the Refine (United) aircraft financing structure, (iv) net asset mark-to-market positions in derivative financial instruments, including swap and option contracts related to exchange and interest rate fluctuations, to the extent arising in the Ordinary Course, (v) other financial inves tments acceptable (without a policy exception) under Bulls’ investment policy, (vi) the notes issued by Seals Finance S.A. and the 5,700% Senior Notes issued by Bank of America Corp. and (vii) the guarantee deposits (other than those related to residual value guarantees and first loss default guarantees) posted by Edwards as collateral or security as of the date hereof, but excluding (x) any amounts required to cover uncleared checks, wire transfers or drafts issued by such Person (to the extent a corresponding amount has been released from accounts payable), (y) the amount of any uncleared checks, wire transfers or drafts issued to such Person (except to the extent a corresponding amount has been released from accounts receivable), or (z) any amounts held in escrow or trust for any other Person, or posted as collateral or security (including guarantee deposits) for any obligation related to residual value guarantees and first loss default guarantees. For the avoidance of doubt, “Cash” shall not be deemed to include the Capital Raise Amount.

“Claim ” means any claim (including any cross -claim or counterclaim), cause of action, allegation, infraction notice, charge, complaint, demand, dispute and other assertions of Liability, whenever or however arising, including by Law, Contract, tort, equity or otherwise.

“Closing Date Indebtedness Amount ” means the Assumed Debt Amount plus the aggregate amount of all other Indebtedness of the Company Group as of the Adjustment Time.

“Closing Date Modified Net Asset Amount ” means an amount equal to (i) the sum of the assets of the Company Group (including the Contributed Cash and the Capital Raise Amount) in the asset categories identified in Part A of the Agreed Accounting Principles, minus (ii) the sum of the Liabilities of the Company Group (other than any Indebtedness) in the liability categories identified in Part A of the Agreed Accounting Principles, minus (iii) the Closing Date Indebtedness Amount, in the case of each of the foregoing, determined as of the Adjustment Time and calculated in accordance with the Agreed Accounting Principles.

“Code ” means the U.S. Internal Revenue Code of 1986.

“Collective Arrangements ” means, to the extent relating to the Commercial Aviation Business Employees, all collective bargaining agreements ( acordos coletivos or convenções coletivas ) or other similar labor agreements with any labor union or works council that are binding under Law with respect to any Commercial Aviation Business Employee, but, in each case, excluding obligations under such Collective Arrangements for employees other than the Commercial Aviation Business Employees.

“Commercial Aviation Business ” means the business of designing, developing, manufacturing, assembling, testing, certifying, marketing, selling, and delivering commercial aircraft platforms and programs with a structural capacity capable of being configured to contain fifty (50) or more seats in an all-standard economy class configuration, including the ERJ (including for the avoidance of doubt the ERJ 145), EMB 110, EMB 120, Ejet and E2 families of

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regional jet aircraft, and their components, as well as all forms of maintaining, sustaining and supporting, and providing other aftermarket services for, such platforms and programs, including modifications, parts distribution and other logistics, maintenance, repair and overhaul services and training for such platforms and programs (the “ CA Business ”), in each case, as conducted by the Edwards Group as of the date hereof and as of the Closing Date but, in each case, excluding the Retained Businesses. For the avoidance of doubt, Commercial Aviation Business is intended to include the full scope of end-to-end commercial aviation product development and support capability.

“Commercial Aviation Business Employees ” m eans (a) as of the date hereof, the employees of the Edwards Group primarily engaged in the Commercial Aviation Business as of the date hereof or during the twelve (12)-month period prior to the date hereof, (b) as of any date of measurement during the Pre-Closing Period, the employees of the Edwards Group primarily engaged in the Commercial Aviation Business at such date, and (c) as of the Closing Date, the employees employed by the Company Group as of the Closing Date in accordance with Section 7.04(a).

“Commercial Aviation Business Retirees ” means each retiree of Edwards or any member of the Edwards Group who spent more than fifty percent (50%) of his or her aggregate employment with Edwards or any member of the Edwards Group working in or providing services to the Commercial Aviation Business and who has a right, in accordance with Article 31 of Brazilian Federal Law No. 9,656/1998, to post-termination extension of health care under an Edwards Benefit Plan or a Company Group Benefit Plan and is receiving such benefits, as of the Closing, under a Company Group Benefit Plan.

“Company Group ” means the Company and the Company Subsidiaries.

“Company Joint Venture ” means each of the entities set forth on Schedule 1.01(b).

“Competing Transaction ” means any of the following (other than the transactions contemplated by this Agreement or otherwise with Bulls Brazil or any of its Affiliates): (a) any merger, consolidation, share exchange, business combination, recapitalization or other similar transaction involving the disposition of equity securities representing ten percent (10%) or more of the voting power of Edwards, or (b) any sale, lease, exchange, dividend, mortgage, pledge, license, transfer or other disposition in a single transaction or a series of related transactions of (x) all or any portion of the Contributed Assets (i) representing ten percent (10%) or more of the consolidated revenues, net income or Assets of the Commercial Aviation Business, (ii) representing ten percent (10%) or more, by fair value, of the Contributed Assets, or (iii) Contributed Assets the disposition of which would impair Edwards’ ability to satisfy its obligations under Sections 2.02(a) and 5.03(b) in any material respect or (y) any Assets of the Edwards Group that are required or contemplated to be used or held for use in connection with Edwards’ performance under the Ancillary Agreements the disposition of which would impair Edwards’ ability to perform under such agreements in any material respect.

“Confidential Information ” means, as to a disclosing Person (the “ Disclosing Party ”), all non-public information of such Disclosing Party, including any information relating to the businesses, activities and operations of such Disclosing Party (including plans, strategies and

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projections), information on customers, products negotiation plans, any Contracts, books and records, and any technical, marketing, financial or other information, as well as any information relating to such Disclosing Party’s ri ghts and Assets, including Intellectual Property, whether in electronic, visual, oral, written or other form or medium, and all memoranda, summaries, notes, analyses, compilations, studies or other documents prepared by any Person to whom such information was provided (the “ Receiving Party ”) that reflect such information; provided that “Confidential Information” does not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party in breach of this Agreement or the Confidentiality Agreement, (ii) is or becomes available to the Receiving Party or its Representatives on a non-confidential basis from a third party source other than the Disclosing Party who is not legally prohibited from providing such information, (iii) was within the rightful possession of the Receiving Party or its Representatives, as evidenced by written records, prior to being furnished to them by the Disclosing Party, or (iv) was or is independently developed by the Receiving Party or its Representatives without reliance on any Confidential Information.

“Confidentiality Agreement ” means the Confidentiality Agreement dated October 6, 2017, between Bulls Parent and Edwards, as amended.

“Consent ” means any approval, authorization, permission, waiver or consent from any Person other than a Governmental Authority.

“Contract ” means any contract, agreement, click -through terms, purchase order, modification, obligation, instrument, promise, commitment, undertaking or arrangement (whether written, electronic or oral) that is or purports to be legally binding.

“Control ” (including the terms “ Controlled by ” and “ under common Control with ”) means, as used with respect to any Person, possession of the power or authority, directly or indirectly, to direct or cause the direction of management or policies of such Person, whether through ownership of voting securities, as trustee or executor, by Contract or otherwise, including by virtue of having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

“Corporate Books ” means the Company’s Registered Shares Register Book ( Livro de Registro de Ações Nominativas ) and Registered Shares Transfer Book ( Livro de Registro de Transferência de Ações Nominativas ).

“CVM ” means the Brazilian Securities Commission ( Comissão de Valores Mobiliários ).

“Data Room ” means the electronic data site established for Project Edwards by Intralinks on behalf of Edwards and to which Bulls Brazil and its Representatives have been given access in connection with the transactions contemplated hereby, including any part of the data site designated for any clean team of Bulls Brazil or its Representatives.

“Deferred Prosecution Agreement ” means the deferred prosecution agreement filed on October 24, 2016 (Case No. 16-60294-CR-COHN), by and between Edwards and the United States Department of Justice, Criminal Division, Fraud Section.

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“Edwards CAB Material Adverse Effect ” me ans (i) any effect that, individually or together with any other effect(s), prevents (or would reasonably be expected to prevent) Edwards’ ability to perform its obligations under this Agreement or the Ancillary Agreements or to consummate the transactions contemplated hereby or thereby and (ii) any effect that, individually or together with any other effect(s), has resulted in or would reasonably be expected to result in a material adverse effect on, or a material adverse change in, the Contributed Assets, Assumed Liabilities, financial condition or results of operations of the Commercial Aviation Business or the Company Group, in each case, taken as a whole, provided that, in the case of clause (ii), the following effects shall not be deemed to constitute, and shall not be taken into account in determining whether there has been or will be, an Edwards CAB Material Adverse Effect: (A) the execution and delivery of this Agreement and the Ancillary Agreements, the announcement, pendency or consummation of the transactions contemplated hereby or thereby, including (1) any action taken by Edwards or any other member of the Edwards Group that is required pursuant to this Agreement, or is consented to by Bulls Brazil, and, in each case, the result of any such actions, and (2) any Claim or Legal Proceeding under this Agreement or any Claim or Legal Proceeding brought by shareholders or creditors of Edwards (provided that the underlying causes of any such Claim or Legal Proceeding may be considered in determining whether an Edwards CAB Material Adverse Effect has occurred to the extent not otherwise excluded by another exception herein; provided, further, that such underlying cause may not be considered to the extent the resolution of such Claim or Legal Proceeding has been mutually agreed in writing by the Parties following fifteen (15) days notice between them); (B) conditions generally affecting any of the industries in which the Commercial Aviation Business operates (including political, economic and legal conditions); (C) general economic or business conditions (or changes in such conditions) in Brazil or any other country or region in the world in which the Commercial Aviation Business operates or conditions in the global economy generally; (D) an outbreak or escalation of any military conflict, war or other hostilities or the occurrence of any acts of terrorism, cyber-attacks (by Persons other than current or former employees or contractors of any member of the Edwards Group), sabotage, epidemics or pandemics, in each case, after the date hereof, whether or not pursuant to a declaration of an emergency or war; (E) any hurricane, flood, tornado, earthquake, tropical storms, fires or other natural disaster directly affecting the Commercial Aviation Business, in each case, after the date hereof; (F) any change after the date hereof in any applicable Laws or IFRS or other accounting standards applicable to the Commercial Aviation Business (or changes in interpretation or enforcement of any applicable Law or such accounting standards); (G) any change in the financial, credit, debt, banking, currency or capital markets in general or changes in currency exchange rates or interest rates; (H) any failure by any member of the Edwards Group or the Commercial Aviation Business to meet any internal or published projections, budget, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period (it being understood that the underlying causes of any such failure may be considered in determining whether an Edwards CAB Material Adverse Effect has occurred to the extent not otherwise excluded by another exception herein); (I) any fact, circumstance, effect, change, event or development affecting the market for commodities, including any change in the price or availability of commodities; (J) any change in the market price, credit rating or trading volume of shares or American depositary shares of Edwards, on the NYSE or the B3 or any change affecting the ratings or the ratings outlook for Edwards or any of its Subsidiaries (provided that the underlying causes of any such change may be considered in determining whether an Edwards CAB Material

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Adverse Effect has occurred to the extent not otherwise excluded by another exception herein), except to the extent that in the case of each of clauses (B), (C), (D), (E), (F), (G) and (I) above, such effect has a disproportionate effect on the Commercial Aviation Business as compared to other Persons in the commercial aviation industry and in which case only the extent of such disproportionate effect may be considered in determining whether there has been or will be an Edwards CAB Material Adverse Effect.

“Edwards Executive Officer ” means an individual who is an executive officer of Edwards both before and immediately after the Closing.

“Edwards Group ” means Edwards and its Subsidiaries, including the Company Group up to and until the Closing.

“Edwards Retained IP ” means Intellectual Property owned by or licensed to Edwards or one of its Affiliates (excluding the Company Group) as of the Closing that had, prior to such date, been used in any way in connection with the Commercial Aviation Business, but excluding any Contributed IP or any Intellectual Property licensed under a Contributed Contract.

“Edwards Termination Fee ” means an amount in cash equal to seventy-five million dollars ($75,000,000).

“Employee Benefit Plan ” means any plan, fund, program, policy, Contract or arrangement for the provision of executive compensation, deferred or incentive compensation, pay differential/practice, retirement, pension, profit sharing, equity bonus, bonus, commission, equity option, equity purchase, phantom equity, termination, salary continuation, employee assistance, supplemental retirement, severance, paid time off, vacation, sickness, disability, death, fringe benefit, insurance, medical, dental, welfare, post-employment welfare, change in control, retention or other direct or indirect, formal or informal, benefits pursuant to which a Person maintains, sponsors, contributes to, or is required to contribute to, for the benefit of any such Person’s current or former employees, directors, managers, consultants or other individual service providers, or any dependent, survivor or beneficiary of such individual, or otherwise has any Liability.

“Encumbrance ” means any lien, encumbrance, security interest, pledge, mortgage, usufruct ( usufruto ), arrolamento , fiduciary assignment ( cessão fiduciária ), fiduciary sale (alienação fiduciária ), easement, deed of trust, option, warranty, right of way, encroachment, servitude, conditional sale agreements and restrictions, right of first option or right of first refusal, preemptive rights, drag-along right, right of enjoyment, adverse ownership claim, hypothecation, restriction on transfer of title or voting or similar restrictions on the full ownership and possession of a given Asset, and any other claims, encumbrances or restrictions that have the same or a similar effect to the granting of security interest in such Asset, whether imposed by Contract, Law, equity or otherwise, except for the restrictions imposed by the Shareholders’ Agreement. For clarity, the foregoing shall not include licenses of or other grants of rights to use Intellectual Property or any restrictions on transfer of securities imposed by applicable securities Laws.

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“Enforceability Exceptions ” means (i) any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar applicable Laws of general applicability, now or hereafter in effect, affecting or relating to creditors’ rights and remedies generally and (ii) general principles of equity, whether considered in a proceeding at Law or in equity.

“Environment ” means soil, land surface, or subsurface strata, surface waters, groundwaters, drinking water supply, stream sediments, ambient air, plant and animal life and any other environmental medium or natural resource.

“Environmental Law ” means any Law that pertains to protection of the environment or human health (to the extent relating to exposure to harmful or deleterious substances), pollution, environmental matters or contamination of any type whatsoever, including all Laws relating to (i) the manufacture, processing, use, distribution, treatment, storage, labeling, disposal, control, recycling, cleanup, generation or transportation of harmful or deleterious substances; (ii) air, surface, ground, water or noise pollution; (iii) any Release; (iv) the protection of wildlife, endangered species, wetlands or other natural resources; (v) the protection of the health and safety of employees and other persons (to the extent relating to exposure to harmful or deleterious substances); and (vi) any notification requirements relating to the foregoing.

“ERISA ” means the U.S. Employee R etirement Income Security Act, as amended.

“Estimated Closing Date Modified Net Asset Amount ” means Edwards’ good faith estimate of the Closing Date Modified Net Asset Amount.

“Estimated Purchase Price Adjustment Amount ” means the amount by which (i) the Estimated Closing Date Modified Net Asset Amount exceeds the Target Closing Date Modified Net Asset Amount or (ii) the Target Closing Date Modified Net Asset Amount exceeds the Estimated Closing Date Modified Net Asset Amount; provided that any amount that is calculated pursuant to clause (ii) above shall be deemed to be a negative number.

“Excluded Company Subsidiary Liabilities ” means all Liabilities of the Company Subsidiaries as they exist as of the Closing that are not Assumed Liabilities.

“Excluded Marks” means the names and marks set forth on Schedule 1.01(d), and any other Trademarks that contain, comprise or are confusingly similar to, or are a confusingly similar derivative or variation of, any of the foregoing.

“Final Purchase Price Adjustment Amount” means the amount by which (i) the Closing Date Modified Net Asset Amount exceeds the Estimated Closing Date Modified Net Asset Amount or (ii) the Estimated Closing Date Modified Net Asset Amount exceeds the Closing Date Modified Net Asset Amount; provided that any amount that is calculated pursuant to clause (ii) above shall be deemed to be a negative number.

“First Golden Share Approval ” means the express written or deemed approval by the Government of Brazil, pursuant to Section 9, paragraph 2, II and III and paragraph 3 of the bylaws ( estatuto social ) of Edwards, of the transfer of the Contributed Assets and Assumed Liabilities to the Company, the acquisition by Bulls Brazil of the Selling Shares and the Capital Raise, all on the terms, and subject to the conditions, of this Agreement.

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“Fraud ” means conduct consisting of the following elements: (i) representation made of material fact, (ii) that was untrue, (iii) which the Party making the representation knew to be untrue at the time such representation was made, (iv) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (v) on which the recipient relied and (vi) as a result of such reliance, the recipient suffered Losses.

“Golden Share ” means the one special class common share issued by Edwards and owned by the Government of Brazil.

“Governing Documents ” means, with respect to any Person, the certificate of incorporation or formation or organization, articles of organization, bylaws, partnership, limited partnership agreement, limited liability company agreement, articles of incorporation, operating agreement, stockholders’ agreement or other similar governing documents of such Person.

“Government of Brazil ” means the federal government of Brazil, including any instrumentalities or agencies thereof.

“Governmental Authority ” means the governments of Brazil, the United States and any other sovereign nation or city-state, and any state or other political subdivision thereof, at the federal, state or municipal level, and any other individual, body or entity exercising or having the authority to exercise under the Laws thereof any executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, autarchy, agency, organization, department, bureau, office, board, commission or instrumentality, including any Tax Authority, and any court, arbitrator or arbitration panel with proper authority and jurisdiction under such Laws.

“Governmental Authorization ” means any permit, consent, license, ratification, waiver, permission, variance, clearance, registration, qualification, approval or authorization issued, granted, given or otherwise made available by or under the lawful authority of any Governmental Authority or pursuant to any Law. For clarity, the foregoing shall not include registrations or applications for Intellectual Property (or any recordation of transfers or licenses thereof or other recordations, approvals or authorizations in relation thereto).

“Hazardous Material ” means each and every element, compound, chemical mixture, contaminant, pollutant, material or other substance that is defined, determined or identified as hazardous, toxic, pollutant, contaminating, radioactive or words with similar meaning or effect under any Environmental Law or the Release of which is prohibited or regulated under any Environmental Law, including any petroleum and petroleum products and byproducts, asbestos, any radioactive or explosive materials, lead-based paint, chlorofluorocarbons and all other substances that destroy the ozone layer.

“HSR Act ” means the U.S. Hart -Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder.

“IFRS ” means the International Financial Repor ting Standards issued by the International Accounting Standards Board, as in effect from time to time.

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“Indebtedness ” means, without duplication, with respect to a Person, all Liabilities and other obligations of such Person (i) for borrowed money or issued in substitution for or exchange of indebtedness for borrowed money; (ii) to repay any amounts (determined without decrease for any deferred or capitalized financing costs) owed as evidenced by notes, debentures, bonds or other similar instruments reflecting recourse and non-recourse indebtedness; (iii) under any conditional sale, title retention or similar arrangement, or with respect to any deferred purchase price of any Assets or services (but excluding trade accounts payable to the extent reflected as a liability in the Closing Date Modified Net Asset Amount); (iv) to reimburse any obligor on any letter of credit or similar credit transaction securing obligations of any Person, in each case, only to the extent drawn; (v) amounts under any lease of real or personal property, or other similar Contract, that is required to be classified or accounted for as a capital lease in accordance with IFRS or the accounting principles applicable to such Person; (vi) constituting a guarantee of any Liabilities or obligations of any other Persons, excluding any residual value guarantees and first loss default guarantees (other than in respect of Republic Airways Holdings); (vii) for deferred or unrecovered rent or royalties owed by such Person under any lease, license, concession or other similar arrangement; (viii) secured by an Encumbrance (other than Permitted Encumbrance) on any of such Person’s Assets; (ix) any unpaid principal, premium, accrued and unpaid interest, related expenses, prepayment penalties, commitments and other fees, indemnities and all other amounts payable in connection with any of the foregoing, and (x) net liability mark-to-market positions in derivative financial instruments, including swap and options contracts related to exchange and interest rate fluctuations, to the extent arising in the Ordinary Course.

“Indemnified Person ” means either a Bulls Brazil Indemnified Person or an Edwards Indemnified Person, as the case may be.

“Indemnified Taxes ” means, without duplication, (i) any and all Taxes of any member of the Company Group relating to or attributable to any Pre-Closing Tax Period, (ii) any and all Taxes associated with the Contributed Assets or the Commercial Aviation Business relating to or attributable to any Pre-Closing Tax Period, (iii) any and all Taxes of any member of the Edwards Group (other than Taxes of any member of the Company Group) relating to or attributable to any Taxable period, (iv) any and all Taxes of any Person imposed on any member of the Company Group (or on the Contributed Assets or Commercial Aviation Business) arising under the principles of transferee or successor liability, by Contract or pursuant to any applicable Law, which relate to an event or transaction occurring before the Closing and are properly allocable to a Pre-Closing Tax Period, (v) any and all Taxes described in Article VI or as otherwise provided in this Agreement that are properly allocable to Edwards, (vi) any and all Taxes resulting from the Contribution or the implementation of the Contribution Steps Plan, (vii) any and all Taxes of any member of an affiliated, consolidated, combined or unitary group of which a member of the Company Group (or any predecessor of such member) is or was a member on or prior to the Closing Date pursuant to Section 1.1502-6 of the Treasury Regulations under the Code or any analogous or comparable provisions of local, state or non-U.S. Law, (viii) any and all Taxes properly allocable to the Edwards Group arising as a result of the sale of the Selling Shares, and (ix) any and all Taxes that result from or are connected with the Capital Raise.

“Indemnifying Person ” means either Edwards or Bulls Brazil, as the case may be.

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“Indemnity Loss ” means any and all Losses (regardless whether such Losses result from the negligence, gross negligence or strict liability of, or any other basis of liability under the Law or in equity with respect to, an Indemnified Person); provided that (a) punitive and exemplary damages shall not constitute Indemnity Losses except to the extent they are payable in a Third Party Claim against an Indemnified Person for which such Indemnified Person is entitled to indemnification under this Agreement and (b) consequential and special damages (including damages relating to lost profits and diminution in value, to the extent such lost profits and diminution in value constitute consequential damages) shall not constitute Indemnity Losses except to the extent they are (i) payable in a Third Party Claim against an Indemnified Person for which such Indemnified Person is entitled to indemnification under this Agreement or (ii) the natural, probable and reasonably foreseeable result of the matter, facts or circumstances that gave rise to such Indemnity Loss, taking into account any special circumstances known by or reasonably apparent to the Indemnifying Person at the later of (x) the date of this Agreement and (y) the time of the event or occurrence providing the basis for indemnification of Indemnity Losses, but excluding, in connection with this clause (ii) only, damages calculated based on multiples of earnings, EBITDA or similar financial metrics, other than in the case of Fraud.

“Insolvency Event ” means any of the following events: (i) Edwards makes a general assignment of its assets for the benefit of its creditors, including attachment of, execution on, or the appointment of a custodian or receiver with respect to a substantial part of Edwards’ property or any property essential to the conduct of its business; (ii) Edwards files, or undertakes, any composition or arrangement with creditors generally, winding-up, dissolution, administration, receivership (administrative or otherwise), judicial reorganization ( recuperação judicial ), out of court reorganization ( recuperação extrajudicial ), bankruptcy ( falência ) or any event analogous to any of the foregoing shall occur in any jurisdiction in which Edwards is organized, resident or carries on business; and (iii) a Person files a request for bankruptcy ( falência ) against Edwards and such proceeding (x) is not timely defended pursuant to applicable Law and is not settled, stayed or dismissed within sixty (60) days from the filing of the defense ( contestação ) or (y) secured by a preventive deposit ( depósito elisivo ) timely made.

“Intellectual Property ” means all intellectual property and industrial property rights arising under the Laws of any jurisdiction, including: (a) patents, patent applications and statutory invention registrations and similar rights in inventions, (b) copyrights and all rights in any original works of authorship that are within the scope of any applicable copyright Law, (c) trade secrets and all other intellectual property rights in confidential or proprietary information, processes, technology, designs, formulae, algorithms, procedures, methods, discoveries, specifications, inventions, compositions, formulae, and know-how, and (d) any trademarks, service marks, trade names, service names, trade dress, logos, domain names, and other identifiers of source or origin (“ Trademarks ”), together with goodwill associated with any of the foregoing.

“Intervening Event ” means any material event or development or material change in circumstances involving the Edwards Group that (a) is unknown and not reasonably foreseeable by any member of the Edwards Board as of the date of this Agreement, and (b) does not relate to any Competing Transaction or any inquiry, indication of interest, proposal or offer that would reasonably be expected to lead to a Competing Transaction; provided that in no event shall the following constitute an Intervening Event: any event or development relating to (i) Bulls Parent,

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Bulls Brazil or any of their respective Affiliates, or any competitor of Edwards or any other member of the Edwards Group, (ii) the absence of or failure to obtain any Governmental Authorization (including the Second Golden Share Approval) from, or any communications from or positions taken by the Government of Brazil prior to the Shareholder Meeting, (iii) the termination of the Contribution Agreement, or (iv) changes in and of themselves in the market price or trading volume of the equity securities of Edwards, the ratings or the ratings outlook for Edwards by any applicable rating agency or any analyst’s recommendations or ratings with respect to Edwards (it being understood that the underlying facts and circumstances giving rise to any of the changes referred to in this clause (iv) may, if not otherwise excluded from the definition of Intervening Event, be considered in determining whether an Intervening Event has occurred).

“IRS ” means the U.S. Internal Revenue Service.

“IT Assets ” means all hardware, software, databases, systems, websites, applications, networks and other information technology assets and equipment (excluding any software contained in any of the foregoing that embodies Intellectual Property that was designed and/or developed by Edwards or its Affiliates (“ Edwards Proprietary Software ”)).

“Key Employee ” means all individuals set forth on Schedule 1.01(e).

“Knowledge ” m eans the actual knowledge, after having reviewed the applicable representation or warranty set forth in Article III and after reasonable inquiry by such individual of the employees that report directly to such individual, of the individuals set forth on Schedule 1.01(f).

“Law ” means any and all laws (including common laws), constitutions, statutes, decrees, ordinances, directives, regulations, rules, codes and any other legislation enacted, promulgated or prescribed by or under the authority of, any Governmental Authority, including a Tax Authority, whether domestic or foreign, and including all Orders and the terms of any Governmental Authorizations.

“Legal Proceeding ” means any Claim, action, demand, lawsuit, arbitration, mediation, inquiry, audit, notice of violation, proceeding, litigation, citation, summons or subpoena by or before any Governmental Authority of any nature, whether civil, criminal, administrative, regulatory or otherwise, and whether at Law or in equity.

“Liability ” or “ Liabilities ” means any and all debts, liabilities, guarantees, binding assurances, commitments and obligations, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due and whenever or however arising.

“Loss ” or “ Losses ” means any and all losses, damages (including consequential, special, punitive, exemplary and incidental damages), penalties, fines, Taxes, costs and expenses, and the amounts of and/or paid or payable in respect of, any and all Liabilities and Claims (including interest, penalties, reasonable attorneys’ and accountants’ fees and disbursements and all amounts paid in investigation, defense or settlement of any of the foregoing), including any of the foregoing or portion thereof that may arise out of or relate to the period after the Closing.

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“Material Customer ” means each customer of the Commercial Aviation Business with whom the Edwards Group has a Contract for the payment for goods and services in an amount greater than or equal to one hundred million dollars ($100,000,000).

“Material Supplier ” means each supplier or vendor of the Commercial Aviation Business (i) with which the Edwards Group has a Contract for the payment for goods and services in an amount greater than or equal to seventy-five million dollars ($75,000,000) for the twelve (12)- month period immediately prior to the date hereof or expected to be paid for the twelve (12)- month period after the date hereof, (ii) that is a sole source supplier to the Edwards Group, or (iii) that supplies a statement of work (“ SOW ”) and such SOW cannot be substituted (A) with another SOW from a different supplier of goods and services providing equivalent pricing together with equivalent or better quality and delivery performance; and (B) upon no more than three (3) months’ notice .

“Material Tax Contest ” means any Tax Contest for a Pre-Closing Tax Period (including, for the avoidance of doubt, a Tax Contest that relates to a Straddle Period) with a Brazilian Tax Authority that (1) could give rise to an Indemnified Tax and (2) the Indemnified Tax could have a minimum exposure of one million dollars ($1,000,000); provided that Material Tax Contest shall not include any Tax Contest for a Straddle Period if the disputed Taxes attributable to the Post-Closing Tax Period (if any) could exceed the amount of the Indemnified Tax.

“Minimum Required Spending ” means the budget for capital and maintenance expenditures, capitalized and expensed research and development investment, capitalized and expensed engineering, and the other items, in each case, as set forth on the attached Schedule 1.01(g), setting forth by quarter the foregoing expenditures to be made by Edwards exclusively in connection with the Commercial Aviation Business.

“Net Debt Amount ” means Edwards’ good faith estimate of an amount equal to (i) the sum of the Indebtedness of the Company Group minus (ii) the sum of the Cash of the Company Group, in the case of each of the foregoing, determined as of the Adjustment Time and calculated in accordance with the Agreed Accounting Principles.

“NYSE ” means the New York Stock Exchange.

“Order ” means any award, decision, injunction, judgment, writ, decree, ruling, subpoena, verdict, consent decree, compliance order, civil or administrative order or other order entered, issued, made or rendered by any court, administrative agency or other Governmental Authority acting in its official capacity as such, or by any arbitrator or arbitration panel, in each case acting within its authority under Law.

“Ordinary Course ” means, with respect to a Person, such Person’s ordinary course of business consistent with past practice.

“PATRIOT Act ” means the U.S. Uniting and Strengthening America by Providi ng Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Permitted Encumbrances ” means (i) Encumbrances of mechanics, carriers, workmen, repairmen, warehouseman, materialmen or other similar Encumbrances arising or incurred in the

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Ordinary Course for security amounts that are not overdue for a period of more than sixty (60) days or which are being contested in good faith by appropriate proceedings and for which adequate reserves (as determined in accordance with IFRS or other accounting principles and standards applicable to such member of the Company Group) have been established on the balance sheet of any member of the Company Group; (ii) Encumbrances for Taxes, labor Claims, assessments and other governmental charges which are not yet due and payable or which are being contested in good faith by appropriate proceedings and for which adequate reserves (as determined in accordance with IFRS or other accounting principles and standards applicable to such member of the Company Group) have been established on the balance sheet of any member of the Company Group; (iii) all building codes, zoning, planning, land use and special designations of record or other similar limitation or restriction issued by a Governmental Authority having jurisdiction over the Contributed Facilities that are not violated in any material respect by the present use or occupancy of Contributed Facilities subject thereto or by the implementation of the Contribution; (iv) as to the Leased Facilities, the terms and conditions of the Real Property Leases with respect thereto; (v) any Encumbrances that are expressly set forth in any Governing Documents, this Agreement or any Ancillary Agreement; (vi) with respect to the Owned Facilities and Leased Facilities, defects, imperfections or irregularities in title, easements, covenants and rights of way and other similar restrictions, in each case, that (A) individually or in the aggregate, are not and would not reasonably be expected to be material as to any of such Owned Facilities or Leased Facilities, or (B) do not affect in any material respect the transfer and registration of such Owned Facilities and Leased Facilities as part of the Contribution; (vii) as to any Real Property Lease, any Encumbrance affecting solely the interest of the landlord or tenant thereunder, which does not impair in any material respect the value or use of such Real Property Lease as currently used by Edwards; (viii) statutory landlords’ or lessors’ liens under the Real Property Leases arising in the Ordinary Course with respect to rent payable thereunder and securing amounts that are not delinquent; and (ix) any Encumbrances set forth in Schedule 1.01(c).

“Person ” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, or other entity, including a Governmental Authority.

“Post-Closing Tax Period ” means any Tax period (or portion of any Straddle Period) beginning after the Closing Date.

“Post-Contribution Steps ” m eans those steps and actions identified in the Contribution Steps Plan required to be taken by Edwards after the Contribution and before the Closing.

“Pre-Closing Tax Period ” means any Tax period (or portion of any Straddle Period) ending on or before the Closing Date.

“Pre-Contribution Steps ” means those steps and actions identified in the Contribution Steps Plan required to be completed by Edwards prior to the Contribution.

“Privacy Policies ” means all applicable policies, terms and conditions of any memb er of the Edwards Group that govern the collection, sharing and use of personal or personally identifiable information in the conduct of the Commercial Aviation Business.

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“PTAX Rate ” means the arithmetic average of the buying and selling rate (PTAX) for any two (2) currencies published by the Brazilian Central Bank on its website (http://www.bcb.gov.br/pt-br/#!/n/txcambio) (or, if such site or source is unavailable, its equivalent successor source or any other authoritative source as may be mutually agreed between Bulls Brazil and Edwards).

“Real Property Leases ” means all real property leases, subleases, licenses, occupancy agreements and other Contracts to which Edwards or any other member of the Edwards Group is a party or by which any of them is bound relating to the Leased Facilities, pursuant to which Edwards holds or has been granted the right to use or occupy, now or in the future, the Leased Facilities or any portion thereof, including any and all modifications, amendments, renewals, extensions and supplements thereto and any assignments thereof.

“Related Party Contract ” means any Contract relating to the Commercial Aviation Business between any member of the Company Group, on the one hand, and Edwards or any of its respective Affiliates (other than the members of the Company Group), on the other hand.

“Release ” means any releasing, spilling, leaking, pumping, pouring, emitting, discharging, escaping, leaching, dumping, discarding, depositing, dispersing, migration, burying, abandoning or disposing on or into the Environment of any Hazardous Materials whether or not such Release is deemed a violation of Environmental Laws.

“Representatives ” means, when used with respect to any Person, the directors, officers, employees, consultants, accountants, legal counsel, investment bankers or other financial advisors, agents and other representatives of such Person and its Subsidiaries and Affiliates.

“Retained Business ” means, in each case as of the Closing, (a) the Lineage, Legacy and AEWC programs that use Commercial Aviation Business platforms; (b) the businesses conducted by each of OGMA - Indústria Aeronáutica de Portugal S.A. (“ OGMA ”), Atech Negócios em Tecnologias S.A., Savis Tecnologias e Sistemas S.A., Visiona Tecnologia Espacial S.A., Embraer Business Innovation Center, Inc. and Embraer Aero Seating Technologies (the “Excluded Companies ”) and (c) any crop dusting business, including the Ipanema crop duster aircraft; provided that the businesses in clause (b) shall not include any businesses to the extent conducted as of the Closing by members of the Edwards Group (including the Company Group) outside of the Excluded Companies (for the avoidance of doubt, the businesses conducted by and in the Excluded Companies are, themselves, included in the Retained Business).

“SEC ” means the U.S. Securities and Exchange Commission.

“Second Golden Share Approval ” means the express or deemed approval by the Government of Brazil in respect of its Golden Share, pursuant to Section 9, paragraph 2, IV of the bylaws ( estatuto social ) of Edwards, whether by the affirmative vote by the Government of Brazil or the failure by the Government of Brazil to exercise its veto right at the Shareholder Meeting called for the Shareholder Approval, of the transfer of the Contributed Assets and Assumed Liabilities to the Company, the acquisition by Bulls Brazil of the Selling Shares and the Capital Raise, all on the terms, and subject to the conditions, of this Agreement, including the execution of this Agreement and the Ancillary Agreements, without any additional terms or

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conditions or any waiver, amendment, modification or supplement to this Agreement or the Ancillary Agreements, or the transactions contemplated hereby or thereby, but excluding any Brazilian antitrust approval by CADE.

“Securities Act ” means the U.S. Securities Act of 1933 and the rules and regulations promulgated thereunder.

“Selling Shares Percentage ” means a percentage equal to eighty percent (80%) of the result of (i) the Base Bulls Acquisition Value minus the Net Debt Amount divided by (ii) the Base Bulls Acquisition Value minus eighty percent (80%) of the Net Debt Amount.

“Shareholder Approval ” means the approval of the Shareholder Vote Proposals by the shareholders of Edwards with at least a majority of the valid votes at an extraordinary Shareholder Meeting properly called and held with the specific purpose of approving the Shareholder Vote Proposals.

“Shareholder Meeting Materials ” means the materials prepared by Edwards for the Shareholder Meeting (together with any amendments and supplements thereto) that are required by Law for the purpose of obtaining the Shareholders Approvals.

“Shareholder Vote Proposals ” means the proposals to approve the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements by the Edwards Group.

“Shares ” means the common stock and the preferred stock, all registered and with no par value, of the Company.

“Straddle Period ” means any Tax year or period beginning on or before the C losing Date and ending after the Closing Date.

“Subsidiary ” means, with respect to any given Person, any other Person the equity interests of which are wholly-owned, directly or indirectly, at the relevant time, by that Person (except for any equity intere sts issued or transferred to “nominee” equityholders (or the equivalent) as necessary or desirable under the Laws of the jurisdiction of formation of such corporation, limited liability company, partnership, association or other entity) but only for so long as they are wholly-owned. For the avoidance of doubt, each member of the Company Group shall only be deemed a Subsidiary of Edwards up to and until the Closing.

“Superior Proposal ” means a bona fide written proposal or offer with respect to any Competing Transaction (provided that, for purposes of this definition, references in the definition of Competing Transaction to “10% or more” shall be deemed references to “more than 50%”, and provided, further, that (b)(x)(iii) and (b)(y) of such defined term shall be excluded), that (i) did not result from a breach of Section 5.09, (ii) is for consideration that is at least one hundred and five percent (105%) of the sum of the Base Purchase Price and the Capital Raise Amount, and (iii) the Edwards Board determines in good faith, after consultation with outside legal counsel and a financial advisor, and taking into account the legal, financial, regulatory, financing, certainty and timing and other relevant aspects of such proposal and the Person making the proposal and its plans for the Commercial Aviation Business and such other factors

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that are deemed relevant by the Edwards Board, is on terms more favorable to the Edwards Group than the transactions contemplated by this Agreement (after taking into account any revisions to the terms of this Agreement that may be proposed by Bulls Brazil at such time) and the Ancillary Agreements, taken as a whole.

“Target Closing Date Modified Net Asset Amount ” means an amount equal to two hundred twenty-five million dollars ($225,000,000).

“Tax ” (and, with correlative meaning, “ Taxes ”, “ Taxable ” and “ Taxation ”) means, without duplication, (i) taxes, charges, fees, contributions, social contributions, contributions on economic intervention imposts, levies or any other assessments imposed by any Tax Authority, of any country, state, province or municipality, including all income, profits, revenues, franchise, services, receipts, gross receipts, margin, capital, financial, net worth, sales, use, excise, recording, real estate, real estate transfer, escheat, unclaimed property, withholding, alternative minimum or add on, ad valorem, inventory, payroll, estimated, goods and services, employment, welfare, social security, disability, occupation, unemployment, general business, premium, real property, personal property, capital stock, stock transfer, stamp, transfer, documentary, conveyance, production, windfall profits, pension, duties, customs duties, contributions on import transactions, value added and other similar taxes, withholdings, duties, charges, fees, levies, imposts, license and registration fees, governmental charges and assessments, including related interest, penalties, fines, additions to tax and expenses levied by any national, federal, state and local Tax Authority, (ii) any Liability for the payment of amounts described in clause (i) whether as a result of transferee liability, joint and several or secondary liability for being a member of an affiliated, consolidated, combined, unitary or other economic group (defined within the meaning of Section 1504(a) of the Code or any similar provision of foreign, state, provincial or local applicable Law), including under Section 1.1502-6 of the Treasury Regulations for any period, or payable by reason of contract assumption, operation of Law, or otherwise and (iii) any Liability for the payment of amounts described in clause (i) or clause (ii) as a result of any Tax sharing, Tax indemnity or Tax allocation agreement.

“Tax Authority ” means any national, federal, state, local, or munic ipal Governmental Authority exercising authority to charge, audit, regulate and/or administer the imposition of Taxes (including the Brazilian Federal Revenue Service ( Secretaria da Receita Federal do Brasil ) and the IRS).

“Tax Return ” means any report, re turn, estimate, statement, notice, form, Tax election, declaration, claim for refund or other document filed or required to be filed with any Tax Authority relating to any Tax, including any schedule or attachment thereto, and including any amendment thereof.

“Third Party ” means any Person, other than the Parties or their respective Affiliates.

“Third Party Claim ” means any Legal Proceeding brought by a Third Party.

“Tooling ” means any moulds, jigs, templates, dies, fixtures, inspections gauges and other devices, such as platforms, slings and transporters, used and customized for the manufacture, installation and assembly of aviation and other Edwards Group products.

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“Transaction Expenses ” means, in each case, to the extent not paid in full as of the Adjustment Time, all fees, costs, expenses and other amounts incurred by the Company Group or any member thereof (whether directly or for the benefit of any member of the Edwards Group or their respective Representatives), or to which any of them has become obligated to pay, in each case prior to Closing, in connection with any and all of the preparation, negotiation, execution, delivery and performance of, and investigation and diligence for, this Agreement, the Ancillary Agreements, the Bylaws and the transactions contemplated hereby and thereby (including the Contribution and the Capital Raise), including any retention, change of control, severance and other similar payments triggered by the occurrence of the transactions contemplated hereby and thereby (and not by any actions of Bulls Brazil or its Affiliates after the Closing) and the employer portion of payroll Taxes thereon, and accounting, legal, consulting and other professional service fees, expenses and disbursements of consultants, advisors, financing sources (including any cost, expense, fee, premium or penalty associated with any outstanding Indebtedness that is incurred or triggered in connection with the Contribution or the Capital Raise) and other Representatives; provided that, notwithstanding the f oregoing, “Transaction Expenses” shall not include: (x) Liabilities under any Retention Program or any other retention or severance agreement entered into at the instruction of Bulls Brazil and, in each case, the employer portion of payroll Taxes thereon, (y) any fees or expenses incurred by or on behalf of Bulls Brazil or its Affiliates (other than the Company Group or any member thereof) in connection with the transactions contemplated by this Agreement whether or not billed or accrued (including any fees and expenses of legal counsel, financial advisors, investment bankers, brokers, accountants), and (z) any financing costs associated with the financing of the transactions contemplated by this Agreement by Bulls Brazil or its Affiliates.

“Transfer Taxes ” means all federal, state, local and foreign transfer, documentary, duties or sales, excise, use, recording, value-added, stamp, registration, recording, real and personal property, stock transfer, such as federal excise tax (IPI), state value added tax (ICMS), social contribution on gross revenues (PIS and COFINS), tax on transfer on real estate properties (ITBI), financial tax (IOF) and any similar Taxes (including any penalties and interest and excluding for the avoidance of doubt any Taxes imposed on the basis of net profits or income) applicable to, imposed upon, arising out of, or incurred in connection with the Contribution, the sale of Selling Shares, and the Capital Raise.

“Treasury Regulations ” means the U.S. Federal Income Tax Regulations promulga ted under the Code.

“Willful Breach ” means a breach of this Agreement that has resulted from either (i) Fraud or (ii) a deliberate act or a deliberate failure to act with actual knowledge at the time of such act or failure to act that the act or failure to act constituted, or would reasonably be expected to result in, such a breach of this Agreement.

The following terms have the meanings provided for in the Sections set forth below:

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Term Section Accounts Receivable ...... Section 2.02(a)(v) Actual Amount ...... Section 2.08(d)(iii) Adverse Recommendation Change ...... Section 5.07(a) Anti-Corruption Laws ...... Section 3.23(a) Applicable Rate ...... Section 2.08(e) Assumed Debt Amount ...... Section 2.03(a)(i) Assumed Liabilities ...... Section 2.03(a) Assumed Product Liability Claims ...... Section 2.03(a)(iii) Assumed Retiree Health Benefits ...... Section 2.03(a)(iv) Base Purchase Price ...... Section 2.04(a)(iii) BMA ...... Section 12.16 Bulls Brazil ...... Preamble Bulls Brazil Amount ...... Section 2.08(d)(i) Bulls Brazil Disclosure Schedules ...... Article IV Bulls Brazil Indemnified Person ...... Section 11.02 Bulls Brazil Non-Solicit ...... Section 5.20(b) Bulls Parent ...... Preamble CA Business ...... Article I Cap ...... Section 11.04(a) Capital Raise ...... Section 2.04(a)(iv) Capital Raise Amount ...... Section 2.04(a)(v) Carve-Out Balance Sheet ...... Section 3.06(b) Carve-Out Financial Statements ...... Section 3.06(b) Claim Amount ...... Section 11.05(a) Claim Reply Period ...... Section 11.05(b) Closing ...... Section 2.06 Closing Balance Sheet ...... Section 2.08(a)(iv) Closing Conditions...... Section 2.04(a) Closing Date...... Section 2.06 Closing Date Calculations...... Section 2.08(a)(ii) Closing Date Payment...... Section 2.04(a)(iii) Closing Shareholders’ Meeting ...... Section 2.04(e) Closing Statement ...... Section 2.08(a) Company ...... Preamble Company Group Benefit Plans ...... Section 7.02(b) Company Preferred Supply Agreement ...... Section 5.15 Company Subsidiaries ...... Section 2.02(a)(xiii) Continuing Employees ...... Section 7.03 Contributed Assets ...... Section 2.02(a) Contributed Cash ...... Section 2.02(a)(xii) Contributed Contracts ...... Section 2.02(a)(iv) Contributed Facilities ...... Section 2.02(a)(i) Contributed Inventory ...... Section 2.02(a)(iii) Contributed IP ...... Section 2.02(a)(vi)

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Contributed Tangible Personal Property ...... Section 2.02(a)(ii) Contribution ...... Section 2.01 Contribution Agreement ...... Recitals Contribution Steps Plan ...... Section 2.01 Controlling Party ...... Section 6.04(c) Covered Insurance Claim ...... Section 5.19 Deductible ...... Section 11.04(a) Disclosing Party ...... Article I Dispute ...... Section 12.08(a) Edwards...... Preamble Edwards Amount ...... Section 2.08(d)(ii) Edwards Audited Financial Statements ...... Section 3.06(a) Edwards Benefit Plans ...... Section 3.17(a) Edwards Board ...... Recitals Edwards Disclosure Schedules ...... Article III Edwards Financial Advisor ...... Section 3.14(a) Edwards Financial Statements ...... Section 3.06(a) Edwards Indemnified Person ...... Section 11.03 Edwards Pension Plan ...... Section 7.02(c) Edwards Preferred Supply Agreement ...... Section 5.15 Edwards Proprietary Software ...... Article I Edwards Representative ...... Section 3.23(a) ELEB...... Recitals Engineering Services Agreement ...... Section 5.15 Estimated Calculations...... Section 2.07(a)(i) Estimated Closing Balance Sheet ...... Section 2.07(a)(ii) Excluded Assets ...... Section 2.02(b) Excluded Companies ...... Article I Excluded Contracts ...... Section 2.02(b)(iv) Excluded Inventory ...... Section 2.02(b)(iii) Excluded Liabilities ...... Section 2.03(b) Excluded Product Liability Claims ...... Section 2.03(a)(iii) Expert Calculations ...... Section 2.08(c) Facilities Use Agreement ...... Section 5.15 FCPA...... Section 3.23(a) Final Statement ...... Section 2.08(c) Fundamental Representation ...... Section 11.01(a) General Services Agreement...... Section 5.15 Government Official ...... Section 3.23(b) ICDR ...... Section 12.08(a) ICDR Rules ...... Section 12.08(a) Initial Termination Date ...... Section 10.01(b)(i) Insurance Policies ...... Section 3.25 Intellectual Property License Agreement...... Section 5.15 Intended U.S. Tax Treatment ...... Section 2.05 Issued Shares ...... Section 2.04(a)(iv)

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KC JV Closing ...... Section 8.02(k) Leased Facilities...... Section 2.02(a)(i) Maintenance Services Agreements ...... Section 5.15 Material Contract ...... Section 3.15(a) Material Support Agreements ...... Section 5.15 Neutral Auditor ...... Section 2.08(c) Non-Solicitation Period ...... Section 5.20(a) Notice of Claim ...... Section 11.05(a) Objection Notice ...... Section 2.08(b) OFAC ...... Section 3.24(a) OGMA ...... Article I Owned Facilities ...... Section 2.02(a)(i) Parties ...... Preamble Party ...... Preamble Per Claim Threshold ...... Section 11.04(a) Pre-Closing Period ...... Section 5.01 Preferred Supply Agreements ...... Section 5.15 Preliminary Statement ...... Section 2.07(a) Privileged Communications ...... Section 12.16 Receiving Party ...... Article I Regulatory Approvals ...... Section 5.05(a) Regulatory Requirements...... Section 5.05(d) Replacement Contract ...... Section 5.14(d) Reply Certificate ...... Section 11.05(b) Required Consents ...... Section 5.06 Research and Development Agreement ...... Section 5.15 Resolution Period ...... Section 2.08(b) Retained Edwards Facilities ...... Section 2.02(b)(i) Retention Program ...... Section 7.04(b) Review Period ...... Section 2.08(b) ROFR ...... Section 3.03 Sanctions ...... Section 3.24(a) Selling Shares...... Section 2.04(a)(i) Shared Contracts ...... Section 5.14(d) Shareholder Meeting ...... Section 5.08(a) Shareholders’ Agreement ...... Section 5.15 Skadden ...... Section 12.16 SOW ...... Article I Step-In Rights ...... Section 5.24 Sublease ...... Section 5.15 Supplemental Claim Reply Period ...... Section 11.05(b) Supply Chain Cooperation Agreement ...... Section 5.15 TAC...... Section 3.15(a)(iii) Tax Arbiter ...... Section 2.10(b) Tax Contest ...... Section 6.04(a) Tax Incentives and Benefits ...... Section 3.12(m)

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Termination Date ...... Section 10.01(b)(i) Third Party Consents...... Section 5.06 Total Tax Cost...... Section 2.10(a) Trademarks ...... Article I Transaction Process Matters ...... Section 2.02(b)(x) Used Facility………………………………………………………………..Section 2.02(a)(iii) Voting Recommendation ...... Recitals

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ARTICLE II

CONTRIBUTION, PURCHASE AND SALE OF SHARES AND CAPITAL RAISE

2.01 Contribution of Certain Assets and Assumption of Certain Liabilities. Upon the terms and subject to the conditions of this Agreement and in accordance with the Contribution steps plan attached hereto as Exhibit C (the “ Contribution Steps Plan ”), on or prior to the Closing, the following shall occur (the “ Contribution ”):

(a) Edwards shall, and shall cause its Affiliates to, contribute, assign, transfer, convey and deliver to the Company, either directly or by the contribution to the Company of one or more Edwards’ Subsidiaries, and the Company, prior to the Closing, shall have received from or been conveyed by Edwards and its Affiliates, all right, title and interest in and to the Contributed Assets, which as of the Closing Date, shall be free and clear of any Encumbrances (other than Permitted Encumbrances);

(b) the Company or one of its Subsidiaries shall prior to the Closing Date assume the Assumed Liabilities; and

(c) the Company shall issue common Shares and redeemable preferred Shares to Edwards, which common Shares and redeemable preferred Shares shall have the rights and preferences that are the same as those set forth in paragraphs 1, 2 and 3 of Article 5 of the Bylaws.

The issuance of the common Shares and of the redeemable preferred Shares to Edwards as provided in Section 2.01(c) shall be in exchange for the Contribution of the Contributed Assets and assumption of the Assumed Liabilities, with the redeemable preferred Shares deemed to be partial consideration for the Company Subsidiaries for all U.S. Tax purposes. The redeemable preferred Shares shall be issued to Edwards at their fair market value of two hundred fifty thousand dollars ($250,000), and Edwards shall amend the Company’s bylaws as part of the Contribution in order to provide for such redeemable preferred Shares.

2.02 Contributed and Excluded Assets.

(a) Contributed Assets . The “ Contributed Assets ” shall consist of all of the following Assets (other than the Excluded Assets), regardless of whether such Assets are contributed by Edwards and its Affiliates directly to the Company or indirectly by the contribution of one of Edwards’ Subsidiaries holding certain of the Contributed Assets such that as of the Closing Date the Company Group shall own and hold all of the Contributed Assets:

(i) each parcel of real property set forth on Schedule 2.02(a)(i), including all facilities, buildings and other structures thereon and all fixtures and appurtenances thereto, and all other improvements in connection therewith (the “Owned Facilities ”), and each leasehold or right of use set forth on Schedule 2.02(a)(i), including all improvements in connection therewith (the

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“Leased Facilities ”, and together with the Owned Facilities, the “ Contributed Facilities ”), as well as all appurtenants or easements providing for o r enabling the delivery and furnishing of electric, gas, fuel, water and other utility services to the Contributed Facilities;

(ii) (A) all machinery, equipment, equipment subassemblies, tools, spare and replacement parts, packaging materials, storage and shipping materials, vehicles, computer-related hardware (including servers, routers, desktops, laptops, peripherals and mobile computing devices), physical or tangible materials embodying any Contributed IP, furnishings, office equipment and supplies, telephone and communications equipment and any other tangible personal property or other such tangible Assets (in each case, other than Tooling used exclusively in the Retained Business or any other businesses of the Edwards Group (other than the Commercial Aviation Business) and intangible IT Assets), in each case, located at any of the Contributed Facilities, and those items listed on Schedule 2.02(a)(ii), (B) any Tooling used in the Commercial Aviation Business regardless of location, and (C) all intangible IT Assets (including those used by engineering and quality functions) used in any way in the Commercial Aviation Business regardless of location (all of the foregoing from clauses (A) and (B), collectively, the “ Contributed Tangible Personal Property ”); provided that Edwards shall not be required to deliver (notwithstanding its obligation to convey title to) at Closing any Tooling to the extent continued possession is required by any member of the Edwards Group to perform its obligations under the Edwards Preferred Supply Agreement or General Services Agreement;

(iii) all inventory, including raw materials, spares, work-in-process and finished goods inventories either (A) located at any of the Contributed Facilities, (B) used or held for use in respect of any Commercial Aviation Business platform or program and located at any facility to which the Company or any of its Subsidiaries has access, use, entry or pass-through rights and/or occupancy rights under the Facilities Use Agreement or the Sublease (a “ Used Facility ”) or (C) held in consignment by any Third Party for delivery to (x) a Contributed Facility or (y) a Used Facility for use in the Commercial Aviation Business, other than, in the case of clauses (B) and (C)(y), any such inventory required by Edwards to perform under the Edwards Preferred Supply Agreement (collectively, clauses (A), (B) and (C), the “ Contributed Inventory ”);

(iv) each Contract to which Edwards or any other member of the Edwards Group is a party or by which any of them is bound (A) pursuant to which any Contributed IP is licensed from any Third Parties, (B) pursuant to which any Contributed Facility is leased from any Third Parties or which Edwards or any other member of the Edwards Group has a right to use under any form, (C) that is set forth in Section 3.15 of the Edwards Disclosure Schedules, (D) that relates primarily to the Commercial Aviation Business and is not required, or, with respect to Contracts entered into after the date hereof, would not have been required, to be set forth on Section 3.15 of the Edwards Disclosure Schedules, (E) that is entered into after the date hereof that would have been a Material Contract

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had it been entered into prior to the date hereof, provided such Contract is entered into in accordance with and not in breach of Sections 5.01 and 5.02, (F) those Contracts set forth on Schedule 2.02(a)(iv), and (G) any other Contract that is mutually agreed by Edwards and Bulls Brazil to be included as a Contributed Contract after having followed the process required by the first sentence of Section 12.03 for an amendment hereof (collectively, the “ Contributed Contracts ”);

(v) all rights to payment arising out of any Contributed Contracts, and all accounts and notes receivable and unbilled revenues of the Commercial Aviation Business, however arising, including, in each case, all rights, Claims and remedies relating thereto and any related deposits, collateral and other security therefor (the “ Accounts Receivable ”);

(vi) all Intellectual Property (including Edwards Proprietary Software) used or held for use primarily in connection with the Commercial Aviation Business, together with the goodwill associated with any of the foregoing and any and all registrations and applications for any of the foregoing (collectively, the “Contributed IP ”);

(vii) all Governmental Authorizations necessary for the Company Group to operate, as of the Closing Date, the Commercial Aviation Business and the Contributed Facilities, in each case, as operated as of the date hereof and as of the Closing Date, and for the Company Group to provide the services to the Edwards Group pursuant to the Ancillary Agreements, excluding such Governmental Authorizations held for use by Edwards or any member of the Edwards Group necessary to comply with its obligations to the Company Group pursuant to the applicable Ancillary Agreements, to the extent such Governmental Authorizations are not necessary to the operations of the Commercial Aviation Business or the Contributed Facilities;

(viii) all credits, prepaid expenses and other items, deferred charges, advance payments, security and other deposits (including in respect of insurance or bonding obligations of the Commercial Aviation Business and judicial deposits) and Claims for refunds (other than Tax refunds) or reimbursements (including advances to employees, advances to service providers, credits with suppliers, compulsory loans and garnishment), in each case, to the extent relating to the Commercial Aviation Business or any of the Contributed Assets or Assumed Liabilities;

(ix) all Claims, rights and remedies of Edwards or any member of the Edwards Group against any Third Parties to the extent arising out of or relating to (A) any Assumed Liabilities or (B) the condition at Closing, or the ownership, use or operation after the Closing, of any Contributed Assets;

(x) all rights under all representations, warranties, guarantees or other similar commitments made by any suppliers, contractors or other Persons to

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Edwards or any member of the Edwards Group in connection with the provision of any products or services, to the extent such representation, warranty, guarantee or commitment covers or otherwise relates to (A) any Assumed Liabilities or (B) the condition at Closing, or the ownership, use or operation after the Closing, of any Contributed Assets;

(xi) all Books and Records, provided that, subject to Section 5.18, Edwards shall be permitted to retain copies of any Books and Records to the extent they also relate to the Retained Business or any other businesses (other than Commercial Aviation Business) of Edwards Group (or for which, and to the extent, such retention is required by applicable Law);

(xii) Cash in an amount equal to not less than one billion five hundred million dollars ($1,500,000,000), and such additional Cash, if any, to the extent that the Closing Date Payment would be a negative number without the contribution of such additional Cash (the “ Contributed Cash ”);

(xiii) all of the issued and outstanding equity securities of (A) Edwards’ Subsidiaries set forth on Schedule 2.02(a)(xiii) owned by Edwards or any of its Subsidiaries (collectively, the “ Company Subsidiaries ”) and (B) each Company Joint Venture owned by Edwards or any of its Subsidiaries;

(xiv) the Company Group Benefit Plans, and all cash and securities supporting or otherwise underlying such Company Group Benefit Plans;

(xv) all goodwill associated with or arising in connection with the Commercial Aviation Business or any of the Contributed Assets and any intangible capitalized investments associated with the Commercial Aviation Business that are reflected on the Closing Balance Sheet;

(xvi) all Tax incentives, Tax losses, and Tax loss carry forwards, and rights to receive Tax refunds, rebates or similar payments of Taxes or similar Tax benefits of the Edwards Group (including the Company Group) to the extent such Tax items are attributable to the Contributed Assets or the Commercial Aviation Business and are permitted to be transferred pursuant to applicable Law;

(xvii) all Tax Returns, and any other relevant documents related to such Tax Returns, of the Company Subsidiaries or of the Edwards Group, to the extent relating to the Commercial Aviation Business; and

(xviii) all Assets acquired by or on behalf of the Commercial Aviation Business prior to the Closing, in accordance with the Minimum Required Spending pursuant to Section 5.01(d).

(b) Excluded Assets. Notwithstanding the foregoing, the Edwards Group (excluding the Company Group) shall retain its right, title and interest in and to, and the Contributed Assets shall not consist of, the following Assets (the “ Excluded Assets ”):

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(i) all owned or leased real property, including that set forth on Schedule 2.02(b)(i), including all facilities, buildings and other structures thereon and all fixtures and appurtenances thereto, and all other improvements in connection therewith, other than the Contributed Facilities (the “ Retained Edwards Facilities ”);

(ii) in each case other than the Contributed Tangible Personal Property and Contributed Inventory, all machinery, equipment, equipment subassemblies, tools, Tooling, spare and replacement parts, packaging materials, storage and shipping materials, vehicles, computer-related hardware (including servers, routers, desktops, laptops, peripherals and mobile computing devices), IT Assets (including all IT Assets listed on Schedule 2.02(b)(ii)), furnishings, office equipment and supplies, telephone and communications equipment, and any other tangible personal property or other such tangible Assets;

(iii) all inventory, including raw materials, spares, work-in-process and finished goods inventories, other than any Contributed Inventory (such inventories and supplies to be retained by Edwards, the “ Excluded Inventory ”) ;

(iv) all Contracts that are not Contributed Contracts (the “ Excluded Contracts ”), including the Contracts set forth on Schedule 2.02(b)(iv), and including all rights, Claims and remedies under the Excluded Contracts, in each case, other than to the extent of the Contributed Assets set forth in Sections 2.02(a)(viii) through (x), and (xviii);

(v) the Excluded Marks and all Intellectual Property (including Edwards Proprietary Software) not used or held for use primarily in connection with the Commercial Aviation Business, including the Edwards Retained IP, together with the goodwill associated with any of the foregoing and any and all registrations and applications for any of the foregoing;

(vi) the Governmental Authorizations set forth on Schedule 2.02(b)(vi);

(vii) all Cash in existence at the time of the Closing, other than any Contributed Cash and the Cash included in the Contributed Assets under Sections 2.02(a)(v), (viii) and (xiv);

(viii) all insurance policies and benefits, including rights and proceeds, under any insurance policies of Edwards or any member of the Edwards Group, subject to the rights of the Company Group pursuant to Section 5.19;

(ix) all Employee Benefit Plans (other than the Company Group Benefit Plans) and all cash and securities supporting or underlying such Employee Benefit Plans (other than the Company Group Benefit Plans);

(x) all documents reflecting communications between or among Edwards or its Subsidiaries (other than any members of the Company Group) and legal counsel in the course of Edwards efforts to dispose of the Commercial

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Aviation Business, including in connection with the negotiation, documentation and consummation of the transactions contemplated by this Agreement, the Ancillary Agreements and the privilege related thereto (the “ Transaction Process Matters ”);

(xi) all Claims, rights and remedies of Edwards or any member of the Edwards Group against any Third Parties (other than those under Sections 2.02(a)(iv) through (x), (xii), (xiv), (xvi), and (xviii)), including all such Claims, rights and remedies arising out of or relating to (A) any Excluded Liabilities or (B) any Excluded Assets;

(xii) all rights and Claims of the Edwards Group or any member thereof under this Agreement and the Ancillary Agreements;

(xiii) all goodwill associated with or arising in connection with the Retained Business or any other businesses of Edwards (other than the Commercial Aviation Business) or any of the Excluded Assets;

(xiv) all Tax incentives, Tax losses and Tax loss carry forwards, and claims for and rights to receive refunds, rebates or similar payments of Taxes, and similar Tax benefits or Tax assets of the Edwards Group, the Commercial Aviation Business or attributable to the Contributed Assets, in each case, that are not described in Section 2.02(a)(xvi); and

(xv) all Tax Returns, and any other relevant documents directly related to such Tax Returns, not relating to the Company Group, the Contributed Assets or the Commercial Aviation Business.

2.03 Assumed and Excluded Liabilities.

(a) Assumed Liabilities. The “Assumed Liabilities ” shall consist of only the following Liabilities of the Edwards Group as they exist as of the Closing:

(i) Indebtedness set forth in Schedule 2.03(a)(i), together with all Indebtedness under any Contributed Contracts, in an aggregate amount not to exceed four billion five hundred million dollars ($4,500,000,000) (the “ Assumed Debt Amount ”); provided that (x) the terms and conditions of such debt, including as to costs, expenses, fees, premiums, penalties, including as to prepayment, shall be no less favorable to the borrower or obligor than prior to the Contribution and (y) such terms and conditions shall not have been modified in anticipation of the Contribution in a manner less favorable to the obligor, in the case of each of (x) and (y), unless such changes in terms and conditions are expressly consented to in writing by Bulls Brazil or expressly requested by Bulls Brazil in writing pursuant to Section 5.11 or Section 5.14(a);

(ii) any executory obligations under the terms of Contributed Contracts to be performed after the Closing (even if such obligations were first incurred prior to the Closing), including product warranty obligations under and in

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accordance with the terms of the Contributed Contracts, but excluding all Liabilities, whether incurred or arising prior to, on or after the Closing Date, arising out of or relating to any breach or default under, or other failure to perform when required in accordance with the terms of, any such Contributed Contract at or prior to the Closing; provided that nothing in this clause (ii) shall be deemed to limit clause (iii);

(iii) any product liability Claims by a Third Party, brought under any theory (including tort, warranty, defect, strict liability, negligence, gross negligence or failure to warn, and including product recall, replacement or repair liability), for Liabilities caused by a defect in products that were developed or manufactured by Edwards or any member of the Edwards Group using the Contributed Assets of the Commercial Aviation Business (excluding, for the avoidance of doubt, Claims relating to (x) any products of the sort (e.g., KC-390 landing gear) developed or manufactured by Edwards or any member of the Edwards Group prior to the Closing that are to be supplied to Edwards under the Company Preferred Supply Agreement, (y) any Assets retained by Edwards or any member of the Edwards Group as of immediately after the Closing, or (z) any Retained Business) (“ Assumed Product Liability Claims ”), other than the initial twenty-five million dollars ($25,000,000), in the aggregate, in Claims otherwise payable to one or more Third Parties under Claims described in this Section 2.03(a)(iii) (the “ Excluded Product Liability Claims ”);

(iv) any obligations to provide post-employment extension of health care under an Edwards Benefit Plan or a Company Group Benefit Plan for (A) Commercial Aviation Business Retirees as of the Closing, and (B) Commercial Aviation Business Employees, to the extent they become eligible for such benefits, as required by applicable Law, in an aggregate amount under (A) and (B) not exceedi ng twenty million dollars ($20,000,000) (the “ Assumed Retiree Health Benefits ”); and

(v) other than any Assumed Retiree Health Benefits, obligations (A) for salaries, wages, and sales commissions and other employment compensation earned by Commercial Aviation Business Employees, and owed by Edwards or any member of the Edwards Group, as of the Closing; (B) in respect of accrued but unpaid or unused vacation owed to Commercial Aviation Business Employees; (C) for reimbursable business expenses of Commercial Aviation Business Employees approved in the Ordinary Course; (D) under Company Group Benefit Plans, and (E) for the employer portion of Taxes relating to any of the foregoing, in the case of clauses (A) through (E), only to the extent that such obligations are in accordance with established employment policies and not the result of any (x) breach or default under, or other failure to perform when required in accordance with the terms of, any Company Group Benefit Plan or Contract or (y) violation of any Law by Edwards or any member of the Edwards Group.

(b) Excluded Liabilities. Notwithstanding the foregoing, the Company shall not assume or otherwise be obligated to pay, perform or discharge any of the following

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Liabilities (the “ Excluded Liabilities ”), which Excluded Liabilities shall be retained by the Edwards Group:

(i) any and all Indebtedness of Edwards or any member of the Edwards Group other than the Assumed Debt Amount;

(ii) any and all Liabilities for Indemnified Taxes to the extent such Taxes are permitted to be Excluded Liabilities under applicable Law;

(iii) any and all Liabilities arising out of or relating to any Legal Proceedings pending prior to the Closing;

(iv) any and all Liabilities to the extent arising out of or relating to any of the Excluded Assets or Retained Business;

(v) to the extent arising out of any acts or omissions of any members of the Edwards Group (including the Company Group) or any other Person prior to the Closing, any and all Liabilities arising out of or relating to (A) any Environmental Laws or the violation thereof or (B) any generation, use, handling, treatment, storage, transportation, disposal or Release at, from or adjacent to any of the Contributed Facilities, or by any members of the Edwards Group (including the Company Group prior to the Closing) or any other Person, of any Hazardous Materials;

(vi) any and all Liabilities (other than Assumed Product Liability Claims) arising out of or relating to any breach or default under, or other failure to perform when required in accordance with the terms of, any Contract (including any Contributed Contract), at or prior to the Closing;

(vii) any and all Liabilities arising out of or relating to any Edwards Benefit Plan other than (A) the Assumed Retiree Health Benefits (subject to Section 2.03(a)(iv)), and (B) the obligations described in Section 2.03(a)(v) with respect to Company Group Benefit Plans;

(viii) any and all workers’ compensation Claims by or on b ehalf of any Commercial Aviation Business Employee to the extent that such Claim arises, or relates to any period, at or prior to the Closing;

(ix) the Excluded Product Liability Claims, and the Liabilities set forth on Schedule 2.03(b)(ix);

(x) any Transaction Expenses;

(xi) any and all obligations of the Edwards Group or any member thereof (other than the Company Group) under this Agreement or any of the Ancillary Agreements; and

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(xii) any and all other Liabilities of any member of the Edwards Group not specifically includ ed as an Assumed Liability in definition of “Assumed Liabilities” in Section 2.03(a) above.

2.04 Purchase and Sale of Shares and Capital Raise.

(a) Upon the terms and subject to the conditions set forth in this Agreement, including the satisfaction or waiver of each of the closing conditions set forth in Article VIII (the “ Closing Conditions ”), at the Closing:

(i) Edwards shall sell, assign, convey, transfer and deliver to Bulls Brazil, and Bulls Brazil shall purchase and acquire from Edwards, (A) that number of common Shares constituting the Selling Shares Percentage of the issued and outstanding common Shares of the Company following the Contribution, free and clear of any Encumbrances, and (B) that number of redeemable preferred Shares constituting 80% of the issued and outstanding redeemable preferred Shares of the Company following the Contribution, free and clear of any Encumbrances and valued at two hundred thousand dollars ($200,000) (such common Shares and redeem able preferred Shares, the “ Selling Shares ”);

(ii) Bulls Brazil shall immediately thereafter sell 100% of the redeemable preferred shares constituting Selling Shares valued at two hundred thousand dollars ($200,000) pursuant to Section 2.04(a)(i) to an Affiliate of Bulls Brazil set forth on Schedule 2.04(a)(ii);

(iii) Bulls Brazil shall pay to Edwards an amount (the “ Closing Date Payment ”) equal to the sum of (x) the result of the Selling Shares Percentage multiplied by the result of (A) the Base Bulls Acquisition Value divided by eighty percent (80%) minus (B) the Net Debt Amount (the “ Base Purchase Price ”), and (y) eighty percent (80%) multiplied by the Estimated Purchase Price Adjustment Amount (which may be positive or negative), by wire transfer of immediately available funds to a single account designated in writing by Edwards no later than five (5) Business Days prior to Closing;

(iv) immediately after the consummation of the acquisition of the Selling Shares by Bulls Brazil, and subject to Section 2.04(e), Bulls Brazil and Edwards shall, at the Closing Shareholders’ Meeting (as defined below), (A) approve a capital increase of the Company in the amount of the Capital Raise Amount (as defined below), (B) the Company shall issue that number of common Shares equal to the result of (x) total number of Shares issued and outstanding immediately before Closing multiplied by (y) the result of (1) the Net Debt Amount divided by (2) the result of (i) the Base Bulls Acquisition Value divided by 80% minus (ii) the Net Debt Amount, free and clear of any Encumbrances (the “Issued Shares ”), (C) Edwards shall expressly and immediately waive its preemptive right to subscribe for such Issued Shares, and (D) Bulls Brazil shall subscribe for the Issued Shares (the “ Capital Raise ”); and

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(v) upon delivery of the Issued Shares by the Company to Bulls Brazil, Bulls Brazil shall pay to the Company an amount equal to an amount of cash in dollars equal to the Net Debt Amount (the “ Capital Raise Amount ”) by wire transfer of immediately available funds to a single account designated in writing by the Company no later than five (5) Business Days prior to Closing.

(b) The Closing Date Payment and the Capital Raise Amount shall be converted for payment in Brazilian Reais based on the closing PTAX Rate for dollars and Brazilian Reais on the fifth (5 th ) Business Day immediately preceding the Closing Date. The Estimated Purchase Price Adjustment Amount shall be calculated in accordance with the Agreed Accounting Principles and in dollars.

(c) Unless otherwise indicated herein or required by applicable Law or a Governmental Authority, all payments made pursuant to this Agreement, other than the Capital Raise Amount, shall be made directly to Bulls Brazil or Edwards, as the case may be, and any such payments shall be treated as an adjustment to the Base Purchase Price. The Parties shall use reasonable efforts to ensure that any requirement that may apply in order for a payment to be treated as an adjustment to the Base Purchase Price under applicable Law is satisfied.

(d) Solely for purposes of the Capital Raise and the issuance of the Issued Shares by the Company, the Parties expressly waive, and the Parties and the Company shall not be bound by, the terms and con ditions of the Shareholders’ Agreement governing the approval of capital increases and issuances of Shares by the Company, including the Dilution Policy (as defined in the Shareholders’ Agreement).

(e) On the Closing Date, Edwards shall cause the Company to hold an extraordinary general shareholders’ meeting immediately after the consummation of the acquisition of the Selling Shares by Bulls Brazil, and the following rules and procedures shall apply in connection with such meeting (the “Closing Shareholders’ M eeting ”):

(i) the agenda for the Closing Shareholders’ Meeting shall include the resolution by the shareholders solely on the following matters: (A) approval of the Capital Raise, pursuant to the terms of this Agreement; (B) adoption of the Bylaws; and (C) the appointment by Bulls Brazil of the new members of the Company’s Board of Directors;

(ii) Edwards and Bulls Brazil agree to vote to approve the resolutions;

(iii) during the Closing Shareholders’ Meeting , immediately after the approval of the Capital Raise, the Company and Bulls Brazil shall execute the subscription bulletin for the Issued Shares, and the Company shall record such subscription for the Issued Shares and annotate in the Corporate Books the ownership of the Issued Shares by Bulls Brazil, and that the Issued Shares and the exercise of any rights and obligations in connection thereto are subject to the terms of the Shareholders’ Agreement;

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(iv) the secretary of the Closing Shareholders’ Meetings sh all prepare written minutes that will be executed by Edwards, Bulls Brazil and the chairman and the secretary of the Closing Shareholders’ Meeting; and

(v) the Company shall file the minutes of the Closing Shareholders’ Meeting for registration with the Board of Trade of the State of São Paulo ( Junta Comercial do Estado de São Paulo – JUCESP ) within not more than thirty (30) days after the Closing Date.

2.05 Intended U.S. Tax Treatment. For U.S. federal, state and local income Tax purposes, the Parties intend that the Contribution, followed by the sale of the Selling Shares and the Capital Raise, will not qualify as a tax-free exchange or tax-free reorganization under the Code (“ Intended U.S. Tax Treatment ”) an d agree to work together in good faith to achieve the Intended U.S. Tax Treatment. The Parties further agree to not report or take any Tax position (on a Tax Return or otherwise) for U.S. federal, state and local income Tax purposes that is inconsistent with the Intended U.S. Tax Treatment, unless otherwise required by applicable Law.

2.06 Closing. The closing of the transactions contemplated by Section 2.04 (the “Closing ”) shall occur as promptly as practicable, but in no ev ent more than five (5) Business Days following the satisfaction or waiver of all Closing Conditions (other than those of such conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), provided that such five (5) Business Days period shall be extended in order to enable the Parties to close on the first Business Day of a month if the Closing would otherwise be required to occur prior to the first Business Day of a month. The Closing shall occur at the offices of Pinheiro Neto Advogados, or at such other place or on such other date as the Parties may agree in writing. The date on which the Closing actually occurs is referred to in this Agreement as the “ Closing Date ” and the Closing shall be deemed effective as of 11:59 p.m. São Paulo time on the Closing Date. For the avoidance of doubt, all of the transactions contemplated by Section 2.04 shall be consummated on the Closing Date, and each of the transactions contemplated by Section 2.04 is contingent upon all of such transactions occurring on the Closing Date.

2.07 Purchase Price Calculation and Preliminary Adjustments.

(a) No later than seven (7) Business Days prior to the Closing Date, Edwards shall deliver to Bulls Brazil a statement, certified by the Chief Financial Officer of Edwards (the “ Preliminary Statement ”) and prepared (and its components prepared) in good faith in accordance with Section 2.08(f), that includes:

(i) a calculation of the Estimated Closing Date Modified Net Asset Amount, including a reasonably detailed explanation of the calculation of such amounts and the line items and components thereof (collectively, the “ Estimated Calculations ”); and

(ii) an estimated unaudited balance sheet of the Company as of the Adjustment Time (the “ Estimated Closing Balance Sheet ”).

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(b) Edwards shall in good faith consult with Bulls Brazil routinely during and with respect to the preparation of the Preliminary Statement, and Bulls Brazil and its Representatives shall have reasonable access during normal business hours to the books and records and employees of the Edwards Group to the extent necessary or desirable in connection with their review of the Preliminary Statement and the components thereof. Edwards shall give Bulls Brazil a reasonable opportunity to review and comment on the Preliminary Statement and its components. If Edwards and Bulls Brazil cannot mutually agree in good faith on the Preliminary Statement or the Estimated Calculations prior to their delivery pursuant to Section 2.07(a), then (i) (A) Edwards shall deliver the Preliminary Statement to Bulls Brazil pursuant to Section 2.07(a), and (B) Bulls Brazil shall deliver a written notice of objection to Edwards specifying in reasonable detail any adjustment to the Estimated Calculations proposed by Bulls Brazil and the basis therefor; (ii) the Estimated Purchase Price Adjustment Amount shall be deemed to be the undisputed portion of the Estimated Purchase Price Adjustment Amount for purposes of calculating the amount of the Closing Date Payment; and (iii) the difference between the Estimated Purchase Price Adjustment Amount calculated based on item (i)(B) above and the Estimated Purchase Price Adjustment Amount calculated based on the Preliminary Statement shall be deposited at Closing with a mutually acceptable escrow agent pursuant to a mutually satisfactory escrow agreement with customary terms and conditions, which the Parties shall begin to negotiate with an escrow agent with at least thirty (30) days in advance of the estimated Closing Date (it being understood that the Parties may by mutual agreement terminate the escrow agreement with the escrow agent before the Closing Date in the event Bulls Brazil fails to deliver a notice of objection or there is no difference between the Estimated Purchase Price Adjustment Amount calculated based on item (i) above and the Estimated Purchase Price Adjustment Amount calculated based on the Preliminary Statement), and the amounts deposited in escrow shall be released upon resolution of such dispute or determination of the Final Purchase Price Adjustment Amount. Acceptance by Bulls Brazil of the Preliminary Statement from Edwards is solely for the purpose of determining the Closing Date Payment and shall not constitute or reflect Bulls Brazil ’s agreement as to its accuracy or completeness. Edwards’ acceptance of any of Bulls Brazil’s comments shall be without prejudice to Edwards’ right to object to any portion of the Closing Statement in accordance with Section 2.08(b).

2.08 Post-Closing Adjustment.

(a) The Company shall deliver to Edwards as soon as practicable, but in no event more than one hundred twenty (120) days after the Closing Date, a statement, certified by the Chief Financial Officer of the Company (the “ Closing Statement ”), and prepared (and its components prepared) in good faith in accordance with Section 2.08(f), setting forth:

(i) the Closing Date Modified Net Asset Amount;

(ii) the Final Purchase Price Adjustment Amount (together with the Closing Date Modified Net Asset Amount, the “ Closing Date Calculations ”);

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(iii) a reasonably detailed explanation of the calculation of such amounts and the line items and components thereof; and

(iv) an unaudited balance sheet of the Company as of the Adjustment Time (t he “ Closing Balance Sheet ”).

(b) Edwards shall have sixty (60) days to review the Closing Statement and the components thereof from the date of delivery thereof (the “ Review Period ”). During the Review Period, Edwards and its Representatives shall have reasonable access during normal business hours to the books and records and employees of the Company used in the preparation of the Closing Statement to the extent required in connection with such review. If Edwards objects to any aspect of the Closing Statement, Edwards shall deliver a written notice of objection (the “ Objection Notice ”) to Bulls Brazil prior to the expiration of the Review Period; provided that Edwards may so object to the Closing Statement based only on the existence of mathematical errors therein or on the failure of the Closing Date Calculations to be prepared in accordance with Section 2.08(f) and on no other basis. The Objection Notice shall specify in reasonable detail any adjustment to the Closing Date Calculations proposed by Edwards and the basis therefor, including in each case the specific items proposed to be adjusted, the specific dollar amount of each such adjustment and a reasonably detailed explanation of how such proposed adjustment was calculated. If Edwards delivers an Objection Notice to Bulls Brazil prior to the expiration of the Review Period, Bulls Brazil and Edwards shall, for a period of thirty (30) days thereafter (the “ Resolution Period ”), attempt in good faith to resolve the matters contained therein, and Edwards shall provide Bulls Brazil and its Representatives with reasonable access during the Resolution Period to all books and records and employees used in connection with the preparation of the Objection Notice. Any written resolution as to any such matter, signed by each of Bulls Brazil and Edwards, shall be final, binding and non-appealable for purposes of this Article II. Except to the extent challenged in an Objection Notice in accordance with this Section 2.08(b), or if Edwards does not deliver an Objection Notice to Bulls Brazil prior to the expiration of the Review Period, Edwards shall be deemed to have agreed to the Closing Statement and the Closing Date Calculations contained therein in their entirety and that such Closing Statement and the Closing Date Calculations or undisputed portions thereof (as the case may be) shall be final, binding and non-appealable for purposes of this Article II. The Closing Statement and the Closing Date Calculations shall alternatively become final, binding and non- appealable, prior to the expiration of the Review Period, upon Edwards’ w ritten notice to Bulls Brazil of its acceptance of the Closing Statement and the Closing Date Calculations.

(c) If, at the conclusion of the Resolution Period, Bulls Brazil and Edwards have not reached an agreement with respect to all disputed matters, then within ten (10) Business Days thereafter, Bulls Brazil or Edwards may elect to have any or all of such matters remaining in dispute submitted to PricewaterhouseCoopers (or its successor), or if such firm is unavailable or unwilling to so serve, to a mutually acceptable internationally recognized independent accounting firm (such selected firm, the “Neutral Auditor ”); provided that, if Bulls Brazil and Edwards are unable to agree on a firm within such ten (10) Business Day period, then Bulls Brazil and Edwards shall each select such a

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firm and such firms shall jointly select a third internationally recognized independent accounting firm to serve as the Neutral Auditor. In connection with the resolution of any such dispute by the Neutral Auditor: (i) each of Bulls Brazil and Edwards shall have a reasonable opportunity to meet with the Neutral Auditor, to submit its calculation of the Final Purchase Price Adjustment Amount, and to provide its respective views as to any disputed issues with respect to the Closing Statement and the calculation of any of the Closing Date Calculations; (ii) Bulls Brazil and Edwards shall instruct the Neutral Auditor to determine the Closing Date Calculations in accordance with this Section 2.08 as soon as practicable and in any event within ninety (90) days of such submittal and upon reaching such determination shall deliver a copy of its calculations (the “ Expert Calculations ”) to Edwards and Bulls Brazil; (iii) Bulls Brazil and Edwards shall reasonably cooperate with the Neutral Auditor during the term of such Neutral Auditor’s engagement; and (iv) the determination made by the Neutral Auditor of the Closing Date Calculations shall be final, binding and non-appealable for purposes of this Article II, absent manifest error. The Neutral Auditor shall act as an expert and not an arbitrator and shall only consider those items submitted to the Neutral Auditor by Bulls Brazil and Edwards in accordance with this Section 2.08, unless otherwise mutually agreed by Bulls Brazil and Edwards during the Resolution Period. The Expert Calculations shall show in detail the differences, if any, between the Closing Date Calculations reflected therein and the Closing Date Calculations set forth in the calculations provided to the Neutral Auditor by Bulls Brazil and Edwards . The Neutral Auditor’s determination shall be made solely in accordance with the terms and procedures set forth in this Agreement and based solely on the submissions and supporting materials provided by Bulls Brazil and Edwards in accordance with the terms and procedures set forth in this Agreement (i.e., not on the basis of an independent review). The Neutral Auditor may not assign a value to any item greater than the greatest value for such item claimed by either Bulls Brazil or Edwards or less than the smallest value for such item claimed by either Bulls Brazil or Edwards. The Closing Statement, once modified or agreed to in accordance with Section 2.08(b) or this Section 2.08(c) , shall become the “ Final Statement ”.

(d) If Edwards and Bulls Brazil submit their respective calculations to the Neutral Auditor for resolution as provided in Section 2.08(c), the responsibility for the fees and expenses of the Neutral Auditor shall be as follows:

(i) if the Neutral Auditor resolves the Final Purchase Price Adjustment Amount in favor of Bulls Brazil ’s position (such amount, the “ Bulls Brazil Amount ”), then all of the fees and expenses of the Neutral Auditor shall be paid by Edwards;

(ii) if the Neutral Auditor resolves the Final Purchase Price Adjustment Amount in favor of Edwards’ position (such amount, the “ Edwards Amount”), then all of the fees and expenses of the Neutral Auditor shall be paid by Bulls Brazil; and

(iii) if the Neutral Auditor resolves the Final Purchase Price Adjustment Amount in favor of neither Bulls Brazil’ s position nor Edwards’ position (the amount so determined is referred to herein as the “ Actual Amount ”),

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then Edwards shall pay a fraction of the fees and expenses of the Neutral Auditor, the numerator of which equals the difference between the Edwards Amount and the Actual Amount and the denominator of which equals the difference between the Edwards Amount and the Bulls Brazil Amount, and Bulls Brazil shall be responsible and shall pay for the remainder of such fees and expenses of the Neutral Auditor.

(e) If the Final Purchase Price Adjustment Amount is negative, then Edwards shall pay to Bulls Brazil an amount equal to 0.8 multiplied by the Final Purchase Price Adjustment Amount, together with interest thereon at a rate per annum equal to five percent (5%) (the “ Applicable Rate ”), calculated on the basis of the actual number of days elapsed from the Closing Date to the date of payment, by wire transfer of immediately available funds to the account designated by Bulls Brazil in writing, within four (4) Business Days after the date on which the Preliminary Statement becomes the Final Statement. If the Final Purchase Price Adjustment Amount is positive, then Bulls Brazil shall pay to Edwards an amount equal to 0.8 multiplied by the Final Purchase Price Adjustment Amount, together with interest thereon at the Applicable Rate, calculated on the basis of the actual number of days elapsed from the Closing Date to the date of payment, by wire transfer of immediately available funds to the account(s) designated by Edwards in writing, within four (4) Business Days after the date on which the Preliminary Statement becomes the Final Statement. If the Final Purchase Price Adjustment Amount is zero, no payments shall be required under this Section 2.08(e). All amounts payable under this Section 2.08 shall be calculated in dollars and then converted for payment in Brazilian Reais based on the closing PTAX Rate for dollars and Brazilian Reais for the third (3 rd ) Business Day immediately preceding the date of payment of the Final Purchase Price Adjustment Amount.

(f) The Preliminary Statement, the Estimated Closing Balance Sheet, the Estimated Calculations, the Closing Statement, the Closing Date Calculations and their respective components, and all determinations and calculations contained therein and thereof, shall be prepared in accordance with the Agreed Accounting Principles and after giving effect to the Contribution. The Parties agree that, notwithstanding anything to the contrary in this Agreement, the purpose of the determination of the Preliminary Statement, the Estimated Closing Balance Sheet, the Estimated Calculations, the Closing Statement, the Closing Balance Sheet, the Closing Date Calculations and their respective components, and all determinations and calculations contained therein and thereof, is solely to calculate the difference between the Closing Date Modified Net Asset Amount and the Target Closing Date Modified Net Asset Amount and not the introduction of any accounting principles, procedures, practices, methodologies or policies that would be inconsistent with the Agreed Accounting Principles.

(g) The type and quantity of the Contributed Inventory reflected on the Final Statement shall be determined through a physical count and inspection made jointly by Bulls Brazil and Edwards and their respective Representatives (including such additional test counts as reasonably requested by either Party) of all such Contributed Inventory as of the Adjustment Time and valued in accordance with the Agreed Accounting Principles. The type and quantity of (x) the Contributed Inventory required by the

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Company to perform under the Company Preferred Supply Agreement for purposes of determini ng Edwards’ credit under the Company Preferred Supply Agreement and (y) the Excluded Inventory required by Edwards to perform under the Edwards Preferred Supply Agreement for purposes of determining the Company’s credit under the Edwards Preferred Supply Agreement shall be determined through a physical count and inspection made jointly by Bulls Brazil and Edwards and their respective Representatives (including such additional test counts as reasonably requested by either Party) of all such Contributed Inventory required by the Company to perform under the Company Preferred Supply Agreement and all such Excluded Inventory required by Edwards to perform under the Edwards Supply Agreement in each case as of the Adjustment Time and valued in accordance with IFRS using only the same inventory accounting methods, policies, practices, principles and procedures (with consistent classifications), judgments, and estimating methodologies and provisions established by Edwards that were used in the preparation of the Edwards Audited Financial Statements, and regardless of whether such inventory accounting methods, policies, practices, principles and procedures, judgments and estimating methodologies and provisions were used in, are consistent with, or are in accordance with, those used in the preparation of the Carve-Out Balance Sheet. The physical count and inspection of all Contributed Inventory and all Excluded Inventory shall be conducted on the Closing Date and in accordance with procedures to be mutually agreed upon by Bulls Brazil and Edwards. Edwards shall use reasonable best efforts to segregate Contributed Inventory required by the Company to perform under the Company Preferred Supply Agreement and the Excluded Inventory required by Edwards to perform under the Edwards Preferred Supply Agreement at least seven (7) Business Days prior to the Closing Date.

2.09 Withholding.

(a) The Parties agree that, under the Law applicable as of the date hereof, there shall be no deduction or withholding of any Taxes from the Base Purchase Price due by Bulls Brazil to Edwards or any adjustments pursuant to Section 2.08.

(b) Notwithstanding anything herein to the contrary, each Party shall be entitled to deduct and withhold from the consideration or any other amount payable pursuant to this Agreement such Taxes and other amounts that are required to be withheld under applicable Law, and to collect from a Party any forms required by applicable Law. To the extent that amounts are so deducted, withheld and remitted to the relevant Tax Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the recipient in respect of which such deduction and withholding was made.

2.10 Post-Closing Tax Adjustment.

(a) Edwards shall deliver to Bulls Brazil as soon as practicable, but in no event more than sixty (60) days after the Closing Date, a good faith estimate of the total tax cost to be incurred by Edwards arising from the Contribution and the sale of the Selling Shares (the “ Total Tax Cost ”), together with reasonably detailed supporting documentation. The Total Tax Cost shall be calculated based on the rules set forth and attached to this Agreement as Exhibit L.

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(b) Bulls Brazil shall have twenty (20) Business Days to review and comment on the calculation of the Total Tax Cost and Edwards shall provide such other supporting documentation that Bulls Brazil reasonably requests in good faith in connection with such review. Edwards shall consider any reasonable comments that Bulls Brazil may have on such calculations in good faith. If the Parties cannot agree on the calculation of the Total Tax Cost (including any interpretation or application of the rules set forth in Exhibit L), the disputed items shall be determined by an indepe ndent Tax arbiter (the “ Tax Arbiter ”). The Tax Arbiter (i) shall be an internationally recognized independent law firm or accounting firm, and (ii) shall be selected in a manner that is consistent with the principles set forth in Section 2.08(c). In determining the calculation of the Total Tax Cost, the Parties and the Tax Arbiter shall follow the principles and shall use procedures consistent to those set forth in clauses (i) to (iii) of the second sentence of Section 2.08(c) and the next four sentences of Section 2.08(c). For the avoidance of doubt, the Tax Arbiter shall be required to make any and all determinations relating to the Total Tax Cost in accordance with the language and principles set forth in Exhibit L. The determination made by the Tax Arbiter regarding the Total Tax Cost shall be final, binding and non-appealable for purposes of this Section 2.10, absent manifest error. The fees and expenses of the Tax Arbiter shall be allocated between Bulls Brazil and Edwards consistent with the principles set forth in Section 2.08(d).

(c) If the Total Tax Cost, after any adjustment, is less than one billion two hundred million dollars ($1,200,000,000), then Edwards shall return to Bulls Brazil fifty percent (50%) of any such difference by wire transfer of immediately available funds to the account designated by Bulls Brazil in writing to Edwards, within seven (7) Business Days after the date that Bulls Brazil agrees to the calculation of the Total Tax Cost. Any such payment shall be deemed an adjustment to the Base Purchase Price for purposes of this Agreement. If the Total Tax Cost equals or exceeds one billion two hundred million dollars ($1,200,000,000), then Edwards shall make no payment pursuant to this Section 2.10. For purposes of calculation under this Section 2.10, the amounts in Brazilian Reais (or in currencies other than Brazilian Reais) paid or payable in connection with the Total Tax Cost shall be converted into dollars at the closing PTAX Rate for dollars and Brazilian Reais (or as to currencies other than Brazilian Reais at the closing rate of the leading market indicator for such currency) upon each date of payment of such Taxes and, for such amounts that have not been paid by the date of determination of the Total Tax Cost, on the date immediately prior to such date of determination.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF EDWARDS

Except (a) as set forth in the correspondingly numbered Sections of the disclosure schedule delivered by Edwards to Bulls Brazil concurrently with the execution of this Agreement (the “ Edwards Disclosure Schedules ”), and (b) for any exception or disclosure set forth in any other section of the Edwards Disclosure Schedules to the extent it is reasonably apparent on the face of such disclosure that such exception or disclosure is applicable to qualify such representation and warranty, Edwards represents and warrants to Bulls Brazil and, as of the Closing, to Bulls Brazil and the Company, as follows:

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3.01 Existence of Edwards and the Company.

(a) Edwards is an entity duly organized and validly existing under the Laws of Brazil. Edwards has all requisite corporate power and authority to own, lease and operate its Assets (including the Selling Shares) and to conduct its business, including the Commercial Aviation Business, as it is presently conducted and is duly qualified or licensed to transact business, and, where applicable, is in good standing in each jurisdiction in which the Assets owned, leased or operated by it or in which the conduct of its business, including the Commercial Aviation Business, makes such licensing or qualification necessary, except where the failure to be so qualified or licensed, as applicable, would not reasonably be expected to result in an Edwards CAB Material Adverse Effect.

(b) Each member of the Company Group and each Company Joint Venture is an entity duly organized, validly existing and, where applicable, in good standing under the Laws of the jurisdiction of its organization, except where failure to be in good standing would not have an Edwards CAB Material Adverse Effect. Each member of the Company Group and each Company Joint Venture has or will have on the Closing Date all requisite power and authority to own, lease and operate its Assets and conduct its business, including the Commercial Aviation Business as it is presently conducted, and is duly qualified or licensed to transact business, and, where applicable, is in good standing in each jurisdiction in which the Assets owned, leased or operated by it or in which the conduct of its business, including the Commercial Aviation Business, by such Person makes such licensing or qualification necessary, except where the failure to be so qualified or licensed, as applicable, or the failure to be in good standing would not reasonably be expected to result in an Edwards CAB Material Adverse Effect.

(c) Edwards has made available to Bulls Brazil true, correct and complete copies of the current Governing Documents that are complete and correct in all respects of each of the members of the Company Group and each Company Joint Venture.

(d) None of the members of the Edwards Group or their respective Affiliates is, or, immediately after giving effect to the transactions contemplated by this Agreement and the Ancillary Agreements, will be, insolvent (either because its financial condition is such that the sum of its debts is greater than the fair value of its assets or because the fair salable value of its assets is less than the amount required to pay its probable liability on its existing debts as they mature), and none of the members of the Edwards Group or any of their respective Affiliates has, or immediately after giving effect to the transactions contemplated by this Agreement and the Ancillary Agreements, will have, unreasonably small capital with which to engage in its business or incurred debts (and does not immediately plan to incur debt) beyond its ability to pay as they become due. No transfer of property is being made, and no obligation is being incurred by Edwards or any other member of the Edwards Group in connection with the transactions contemplated by this Agreement and the Ancillary Agreements with the intent to hinder, delay or defraud either present or future creditors of Edwards, any members of the Edwards Group or any of their respective Affiliates.

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(e) Since the date of its incorporation, the Company has not conducted any business or other activities, except for the conduct of the Commercial Aviation Business after the consummation of the Contribution, and has no, and prior to the Contribution and as of the Closing will have no, Assets, Liabilities or obligations of any nature, other than its rights and obligations under this Agreement and the Ancillary Agreements to which it is a party and after the Contribution the Contributed Assets and the Assumed Liabilities.

3.02 Due Authorization. Each of Edwards and the Company has all requisite corporate power and corporate authority to execute, deliver and perform this Agreement and the Ancillary Agreements to which it is a party and, subject to the Shareholder Approval and the Second Golden Share Approval, to consummate the transactions contemplated hereby and thereby. The execution and delivery by each of Edwards and the Company of this Agreement and the Ancillary Agreements to which it is a party, the performance by each of Edwards and the Company of its obligations hereunder and thereunder and, subject to the Shareholder Approval and the Second Golden Share Approval, the consummation by each of Edwards and the Company of the transactions contemplated hereby and thereby (including the Contribution, the sale of the Selling Shares by Edwards and the approval of the Capital Raise) have been or, prior to or at the Closing, shall be duly and validly authorized by all requisite corporate and other similar action on the part of Edwards and the Company (including on the part of the Edwards Board or similar governing bodies). Each of Edwards and the Company has duly and validly executed and delivered this Agreement and, prior to or at the Closing, each of Edwards and the Company will have duly and validly executed and delivered the Ancillary Agreements to which it is a party. This Agreement constitutes, and upon execution and delivery thereof each Ancillary Agreement to which Edwards or the Company is a party will constitute, assuming due execution and delivery hereof and thereof by all other parties hereto and thereto, legal, valid and binding obligations of Edwards and the Company, enforceable against Edwards or the Company in accordance with their respective terms, subject to the Enforceability Exceptions. At a meeting duly called and held on January 11, 2019, the Edwards Board unanimously (a) determined that this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby are in the best interests of Edwards, (b) approved the terms and conditions of this Agreement and the execution, delivery and performance of this Agreement and the Ancillary Agreements by Edwards and (c) resolved, on the terms and subject to the conditions set forth in this Agreement, (i) to make the Voting Recommendation to the shareholders of Edwards and call the relevant Shareholder Meeting of Edwards to vote on the Shareholder Vote Proposals, and (ii) upon receipt of the Shareholder Approval, to effect the Contribution, the sale of the Selling Shares to Bulls Brazil, the approval of the Capital Raise by Edwards and the other transactions contemplated by this Agreement.

3.03 Governmental Authorizations for the Agreement. No Governmental Authorization is required in connection with the execution, delivery and performance by Edwards or the Company of this Agreement and the Ancillary Agreements to which Edwards, the Company or any member of the Edwards Group is a party, or the consummation by Edwards of the transactions contemplated hereby or thereby, including the Contribution, the sale of the Selling Shares and the approval of the Capital Raise, except, with respect to the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, for (i) the receipt of the Second Golden Share Approval, (ii) the approval of the Shareholder Vote Proposals, (iii) the CADE approval, those approvals under the HSR Act and any other approval

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under any other applicable Antitrust Laws, (iv) the approvals necessary for the transfer or issuance of Governmental Authorizations required to be obtained by the Company for the operation of the Commercial Aviation Business after the Contribution, and (v) such other Governmental Authorizations the failure of which to obtain would not be material to the Commercial Aviation Business or the Company Group after the Closing. The First Golden Share Approval was obtained by Edwards on January 10, 2019 and is in force and effect. On December 17, 2018, Edwards delivered a notice to the Government of Brazil making reference to the transactions contemplated by this Agreement and the Ancillary Agreements for purposes of the Government of Brazil’s exercise of its right of first refusal under that certain Right of First Refusal for Acquisition of Real Property, Machinery and Equipment Agreement ( Contrato de Concessão do Direito de Preferência a Aquisição de Imóveis e Máquinas e Equipamentos ) entered into on October 27, 1994, by and between Edwards and the Government of Brazil, and on January 10, 2019, the Government of Brazil has waived, in a binding and unconditional manner, its right of first refusal set forth in such agreement in relation to the transactions contemplated by this Agreement an d the Ancillary Agreements (the “ ROFR ”).

3.04 Capitalization of the Company Group; Company Joint Venture.

(a) All of the issued and outstanding shares of capital stock of each member of the Company Group, including the Selling Shares, have been (and, in the case of the redeemable preferred Shares and the Issued Shares, will be at the Closing) duly authorized and validly issued, are (or at the Closing will be) fully paid and non- assessable, have been issued in compliance with applicable Law and have not been issued in violation of any preemptive rights, rights of first offer, rights of first refusal or similar rights and are free and clear of any Encumbrances.

(b) The authorized share capital of the Company consists of 1,200 registered common shares, with no par value. As of the date hereof, 1,200 common Shares were issued and outstanding, all of which are owned by Edwards, except for 1 common Share which is owned by ELEB, and are all fully paid in ( integralizadas ). Set forth on Section 3.04(b) of the Edwards Disclosure Schedules is, with respect to each member of the Company Group and each Company Joint Venture as of the date hereof, (i) the jurisdiction of incorporation or organization of such Person, and (ii) the identity of each Person who holds such shares of capital stock of such Person, including the number of such shares each Person holds. (A) There are no authorized, issued or outstanding shares of capital stock or other equity interests of any member of the Company Group or any Company Joint Venture and (B) neither the Company nor any of its Subsidiaries owns any equity interest in any Person other than the Company’s Subsidiaries, except for the Company Joint Ventures. There are no agreements, options, warrants, calls, rights or other instruments or agreements relating to the sale, issuance or redemption of any shares of capital stock or other equity interests of any member of the Company Group, including the Selling Shares and the Issued Shares, or any securities or other instruments convertible into, exchangeable for, any shares of capital stock of or other equity interests of any member of the Company Group, in each case, (A) evidencing the right to purchase, or otherwise requiring any member of the Company Group to issue or sell or give any Person a right to subscribe for or acquire such shares of capital stock or other equity interests, including the Selling Shares and the Issued Shares, and (B) to which any

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of the members of the Edwards Group or any member of the Company Group is a party or by which it is bound. There are no agreements, options, warrants, calls, rights or other instruments or agreements relating to the sale, issuance or redemption of any shares of capital stock or other equity interests owned by any member of the Edwards Group in any Company Joint Venture, and no member of the Edwards Group has any obligation to provide any additional funding, whether in the form of debt or capital contribution, to any Company Joint Venture. No member of the Edwards Group has guaranteed any indebtedness for borrowed money of any Company Joint Venture, and aggregate indebtedness for borrowed money of the Company Joint Ventures is not in excess of ten million dollars ($10,000,000).

(c) There are no stockholders’ agreeme nts or voting trusts, proxies or other agreements or understandings to which any of the members of the Edwards Group is a party or by which it is bound with respect to the voting, transfer or other disposition of any of the shares of capital stock or other equity interests of any member of the Company Group, including the Selling Shares and the Issued Shares, or of any Company Joint Venture owned by any such member of the Edwards Group or of the Company Group. There are no outstanding bonds, debentures, notes or other Indebtedness of any member of the Company Group having the right to vote (or convertible into, exchangeable into, or exercisable for, securities having the right to vote) on any matters on which the holders of shares of capital stock or other equity interests of any member of the Company Group may vote. None of the members of the Edwards Group is a party to any agreement pursuant to which any Person is or shall be on the Closing Date entitled to elect, designate or nominate any director of any member of the Company Group or the Company Joint Venture.

3.05 Absence of Conflicts. Neither the execution and delivery by Edwards or the Company of this Agreement or any of the Ancillary Agreements to which Edwards or the Company is a party, nor, subject to the Shareholder Approval, the Second Golden Share Approval and the other Governmental Authorizations referred to in Section 3.03 (except for the First Golden Share Approval and the waiver of the ROFR by the Government of Brazil), the consummation by Edwards of the transactions contemplated hereby or thereby (including the Contribution, the sale of the Selling Shares and the approval of the Capital Raise), will (a) violate or result in the breach of the Governing Documents of any of the members of the Edwards Group (including any member of the Company Group or any Company Joint Venture); (b) violate or result in the breach of any Law to which Edwards or any member of the Edwards Group (including any member of the Company Group), the Commercial Aviation Business or any of the Contributed Assets prior to the Contribution and the Company Group as of the Contribution is subject, or by which any of them is bound, or result in any revocation, cancellation, suspension or modification of any Governmental Authorization; (c) violate, result in the breach of, constitute a default (or create an event which, with notice or lapse of time or both, would constitute a default under), result in the acceleration, termination or maturity of, create in any party the right to accelerate, terminate, modify, amend or cancel, require any consent of, or notice to, any Person (other than any Governmental Authority) pursuant to, or result in the loss of a benefit or increase in any fee, Liability or other obligation under, any Material Contract binding upon Edwards or any other member of the Edwards Group (including any member of the Company Group) to the extent related to the Commercial Aviation Business or any of the Contributed

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Assets; (d) (with or without notice or lapse of time) result in the creation or imposition of, or triggering of, any rights pursuant to, any Encumbrances (other than Permitted Encumbrances) upon or with respect to the Commercial Aviation Business or any of the Contributed Assets; or (e) result in the termination or impairment, or create in any party the right to terminate, in whole or in part, any of the Governmental Authorizations required for the operation of the Commercial Aviation Business, except with respect to clauses (b) through (e) as would not reasonably be expected, individually or in the aggregate, to be material to the Commercial Aviation Business.

3.06 Financial Statements.

(a) Section 3.06(a) of the Edwards Disclosure Schedules sets forth true, correct and complete copies of (i) the audited consolidated balance sheet of Edwards and its Subsidiaries as of December 31, 2017 and December 31, 2016, and the related audited consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flow for the fiscal years ended December 31, 2017 and December 31, 2016, respectively (the “ Edwards Audited Financial Statements ”), and (ii) the unaudited balance sheet of Edwards and its Subsidiaries as of June 30, 2018 and September 30, 2018 and the related unaudited statements of income, comprehensive income, changes in stockholders’ equity and cash flow for the six (6) -month period and the nine (9)-month period ended June 30, 2018 and September 30, 2018, respectively (together with the Edwards Audited Financial Statements, the “ Edwards Financial Statements ”). Each of the Edwards Financial Statements was prepared in accordance with IFRS consistently applied. Each of the Edwards Financial Statements fairly presents, in all material respects, the financial position of Edwards as of the dates indicated therein, and the results of Edwards’ operations and cash flows for the periods indicated therein.

(b) Section 3.06(b) of the Edwards Disclosure Schedules sets forth a true, correct and complete copy of the unaudited carve-out balance sheet of the Company as of December 31, 2017 (the “ Carve-Out Balance Sheet ”) and related statements of income, of the Company for the year ended December 31, 2017, and the unaudited carve-out balance sheet and related statements of income, of the Company as of and for the six (6)- month period ended June 30, 2018, in each case, after giving effect to the Contribution and the Capital Raise (collectively, the “ Carve-Out Financial Statements ”). The Carve - Out Financial Statements were prepared in accordance with IFRS consistently applied and applied consistently with IFRS as applied in the preparation of the Edwards Financial Statements, and are derived from and in accordance with the Books and Records. The Carve-Out Financial Statements fairly present, in all material respects, the financial position of the Company as of the dates indicated therein and the results of its operations for the periods indicated therein, giving effect to the Contribution and the Capital Raise as if they had been completed as of December 31, 2017 and June 30, 2018, respectively.

(c) The Edwards Group maintains a system of internal accounting controls with respect to the Commercial Aviation Business established and administered in accordance with IFRS. Such systems of internal accounting controls are sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with the accounting

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principles used to prepare the Edwards Financial Statements and the Carve-Out Financial Statements and to maintain asset accountability; (iii) access to Assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accounting for Assets is compared with the existing Assets at reasonable intervals and appropriate action is taken with respect to any differences. Since January 1, 2017, the Edwards Group has not identified or been made aware of any fraud that involves the Commercial Aviation Business or its management or other current employees or any Claim regarding any of the foregoing and, since January 1, 2017 and through the date of this Agreement, the Edwards Group has received no written notice from its independent auditors regarding any of the foregoing, or regarding any significant deficiencies or material weaknesses in the design or operation of the Edwards Group’s internal controls relating to the Commercial Aviation Business.

3.07 Sufficiency of Assets; Title.

(a) As of the date hereof, Edwards or one of its Affiliates has good and valid title to, or valid leasehold or license interest in, the Contributed Assets free and clear of all Encumbrances other than Permitted Encumbrances; provided that, for the avoidance of doubt, the foregoing (and the representations and warranties in Section 3.07(b) and Section 3.07(c)) shall not be deemed to constitute a representation or warranty with respect to infringement, misappropriation or other violation of Third Party Intellectual Property rights, which are addressed exclusively in Section 3.19(b).

(b) Upon the Closing, after giving effect to the Contribution, the Company Group will have good and valid title to or valid leasehold or license interest in the Contributed Assets, free and clear of any Encumbrance (except for Permitted Encumbrances).

(c) Upon the Closing, after giving effect to the Contribution, the Contributed Assets taken together with the Assets and services the Edwards Group is obligated to provide to the Company Group under the Intellectual Property License Agreement, the General Services Agreement, the Edwards Preferred Supply Agreement and the Facilities Use Agreement (as and to the extent such Assets and services are required to be provided) constitute all of the Assets and services necessary and sufficient to conduct the Commercial Aviation Business as conducted by the Edwards Group as of the date hereof and as of the Closing Date and as are necessary and sufficient in order for the Company to comply with its obligations under the Ancillary Agreements.

3.08 Compliance with Laws. Edwards and the other members of the Edwards Group are conducting, and at all times since January 1, 2017, have conducted, the Commercial Aviation Business in all material respects in compliance with all applicable Laws. Since January 1, 2017 and through the date of this Agreement, none of Edwards or any other member of the Edwards Group has received any notice from any Governmental Authority (a) alleging any material violation of any such Law in connection with, or relating to, the conduct of the Commercial Aviation Business, or (b) requiring any member of the Edwards Group or its respective Representatives to take or omit to take any action with respect to the Commercial Aviation Business in order to prevent a material violation of any such Law. This Section 3.08 does not

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relate to Taxes; Environmental Matters; Employee Benefit Plans; Employee and Labor Matters; Intellectual Property; or Anti-Bribery, which are addressed in Sections 3.12, 3.16, 3.17, 3.18, 3.19, and 3.23, respectively.

3.09 Governmental Authorizations.

(a) The Edwards Group owns, holds, possesses, or has been granted use of and lawfully uses, and as of the Closing Date the Company Group will own, hold, possess or have been granted use of and will lawfully use, in the operation of the Commercial Aviation Business, all Governmental Authorizations necessary for the ownership, possession, use and/or disposition of the Contributed Assets and/or the operations, activities and conduct of the Commercial Aviation Business as currently conducted, except as would not, individually or in the aggregate, be material to the Commercial Aviation Business.

(b) Section 3.09(b) of the Edwards Disclosure Schedules includes a list, as of the date hereof, of all Governmental Authorizations that are material for the uninterrupted operation of the Commercial Aviation Business, including the provision of the services by the Company Group under the Ancillary Agreements. With respect to each Governmental Authorization set forth on Section 3.09(b) of the Edwards Disclosure Schedules, such Section of the Edwards Disclosure Schedules provides whether such Governmental Authorization is permitted by the terms thereof to be transferred to the Company Group or if a new Governmental Authorization shall be obtained prior to Closing.

(c) Each material Governmental Authorization with respect to the operation of the Commercial Aviation Business is, as of the date hereof in relation to the Edwards Group, and each material Governmental Authorization with respect to the operation of the Commercial Aviation Business by the Company Group will be, on the Closing Date, in full force and effect, free and clear of any Encumbrances other than Permitted Encumbrances. Each member of the Edwards Group is in compliance with the material terms and conditions of each such Governmental Authorization held by it as of the date hereof and as of the Closing Date and, upon the Contribution and as of the Closing Date, each member of the Company Group, has made all necessary filings and provided all information required by applicable Law to be provided to any Person and has paid all fees required to maintain or obtain such Governmental Authorization in full force and effect upon Contribution and as of the Closing Date. Except as to matters that have been finally resolved, as of the date hereof, no Person has alleged or claimed that any member of the Edwards Group fails to hold any Governmental Authorization necessary for the operation of the Commercial Aviation Business.

(d) As of the date hereof, no member of the Edwards Group has received any written notice from any Governmental Authority regarding (i) any actual or, to Edwards’ Knowledge, possible violation of any Law with respect to requiring a Person to obtain a Governmental Authorization for the operation of the Commercial Aviation Business or any failure to comply with any term or requirement of any such Governmental Authorization, (ii) any actual or, to Edwards’ Knowledge, possible revocation,

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withdrawal, suspension, cancellation, termination or modification of any such Governmental Authorization or (iii) any additional requirements or restrictions for the Company or any other member of the Company Group to obtain any new or hold any such Governmental Authorization.

3.10 Product Warranty and Liability.

(a) Each product manufactured, sold, leased or delivered, or services rendered, by or on behalf of Edwards or any other member of the Edwards Group relating to the Commercial Aviation Business (including all IT Assets and Edwards Proprietary Software incorporated therein) conformed in all material respects to all applicable contractual specifications and all express and implied warranties made by Edwards or any other member of the Edwards Group (except to the extent non-conformity is immaterial or is expressly consented to by a customer).

(b) Section 3.10(b) of the Edwards Disclosure Schedules sets forth all standard warranty terms applicable to any products manufactured, sold, leased or delivered, or services rendered, by or on behalf of Edwards or any member of the Edwards Group relating to the Commercial Aviation Business since November 1, 2013. Since November 1, 2013, there have been no significant deviations in standard warranty terms relating to the Commercial Aviation Business.

(c) (i) There are no product liability Claims by a Third Party, brought under any theory (including tort, warranty, defect, strict liability, negligence, gross negligence or failure to warn, and including product recall, replacement or repair liability), for Liabilities caused by a defect in products that were developed or manufactured by Edwards or any member of the Edwards Group using the Contributed Assets of the Commercial Aviation Business, and (ii) there is no systemic design, manufacturing or other defect in any product manufactured, sold, leased or delivered, or services rendered, by or on behalf of Edwards or any member of the Edwards Group using the Contributed Assets of the Commercial Aviation Business.

(d) As of the date hereof, there are no outstanding Governmental Authority mandated inspections, recalls, repairs or retro-fits applicable to any product manufactured, sold, leased or delivered, or services rendered, by or on behalf Edwards or any member of the Edwards Group relating to the Commercial Aviation Business.

3.11 Real Property.

(a) The Edwards Group holds (i) good and valid title (or the local legal equivalent thereto) to each of the Owned Facilities and (ii) valid leasehold interests in, or rights of use for, each of the Leased Facilities, in each case free and clear of all Encumbrances other than Permitted Encumbrances. No Person other than the Edwards Group is in possession of the Contributed Facilities or the Leased Facilities and there are no Contracts granting to any Person other than the Edwards Group the right to use or occupy any Contributed Facility or any portion thereof, except for (A) customary limited grants of use of the Contributed Facilities to suppliers and customers of the Commercial

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Aviation Business in the Ordinary Course and for grants of use to organizations created by or for use of employees of the Commercial Aviation Business and (B) the Facilities Use Agreement.

(b) The Edwards Group (x) owns and holds valid title to the facilities subject to the Facilities Use Agreement that are owned by the Edwards Group and (y) has good and valid leasehold title in and to, and the right to use, the facilities subject to the Facilities Use Agreement that are leased by, or assigned by Governmental Authorization to, the Edwards Group.

(c) Section 3.11(c) of the Edwards Disclosure Schedules lists the Real Property Leases and includes the complete and accurate legal description of each real property leased under each Real Property Lease. On or prior to the date hereof, Edwards has delivered to Bulls Brazil a true, correct and complete copy of each Real Property Lease. With respect to each Real Property Lease:

(i) such Real Property Lease is a valid and binding obligation of the member of the Edwards Group party thereto and, to Edwards’ Knowledge, of the other party thereto, enforceable in accordance with its terms and in full force and effect, except as may be limited by the Enforceability Exceptions; and

(ii) the Edwards Group is not in breach or default under such Real Property Lease, and no event has occurred or circumstance exists which, with the delivery of notice, passage of time or both, would constitute such a breach or default by any member of the Edwards Group of such Real Property Lease, except, in each case, as would not reasonably be expected, individually or in the aggregate, to be material to the Commercial Aviation Business.

(d) Since January 1, 2017 through the date of this Agreement, the Edwards Group has not received any written or, to Edwards’ Knowledge, oral notice of any (i) violations of planning, health, safety, fire, zoning, use, occupancy or building regulation, wetlands or Environmental Law or other Law or requirement relating to or affecting the Contributed Facilities or any of the Retained Edwards Facilities subject to the Facilities Use Agreement, (ii) existing, pending or threatened condemnation proceedings affecting the Contributed Facilities or the Retained Edwards Facilities subject to the Facilities Use Agreement, or (iii) existing, pending or, to Edwards’ Knowledge, threatene d zoning, building code or other moratorium proceedings, or similar matters that would reasonably be expected to adversely affect the ability of the Edwards Group to operate or use the Contributed Facilities or any of the Retained Edwards Facilities subject to the Facilities Use Agreement. As of the date hereof, there is no Legal Proceeding seeking to challenge, condition or restrict in any material respect the ownership, lease, use, occupancy or operations by the Edwards Group at all or any material portion of any Contributed Facility or any of the Retained Edwards Facilities subject to the Facilities Use Agreement.

3.12 Taxes. Each representation and warranty in this Section 3.12 relating to the Edwards Group (including, for the avoidance of doubt, the Company Group) shall have been

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made, for all purposes hereunder, by the Edwards Group solely in connection with, or in any way relating to, the Commercial Aviation Business.

(a) All income and other material Tax Returns (i) of each member of the Company Group, (ii) of each member of the Edwards Group or (iii) that relate to the Commercial Aviation Business or the Contributed Assets, in each case, that are required to be filed with a Tax Authority (taking into account any available extensions) have been properly prepared and duly and timely filed, and all such Tax Returns are true, correct and complete in all material respects. All material Taxes imposed on such members of the Company Group and Edwards Group have been or will be duly and timely paid other than Taxes contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with IFRS. No member of the Edwards Group or the Company Group has received any injunction allowing such member to forgo payment on and/or reduce the amount of Taxes with respect to such Tax Returns.

(b) To the Knowledge of Edwards, each member of the Edwards Group and each member of the Company Group have duly and timely withheld or collected, and timely paid over and reported to the appropriate Tax Authorities, all material Taxes required to be withheld or collected in any Pre-Closing Period pursuant to applicable Laws.

(c) There are no Tax Contests or other material actions pending or threatened against, or in respect of, any member of the Company Group, the Edwards Group, or the Contributed Assets in respect of Taxes before any Tax Authority. All existing obligations of the Company Group or the Edwards Group of such nature have been adequately provisioned in the Edwards Financial Statements and the Carve-Out Financial Statements.

(d) To the Knowledge of Edwards, all members of the Company Group (i) are not (and have never been) subject to Tax in any country other than their respective places of incorporation or formation by virtue of having a permanent establishment, place of business or source of income in that jurisdiction, (ii) are in material compliance with all applicable transfer pricing Laws, including the execution and maintenance of contemporaneous documentation substantiating the transfer pricing practices and methodologies of the Edwards Group and the Company Group, and (iii) have adequately documented all material intercompany agreements and duly executed such documents in a timely manner.

(e) There are no Encumbrances for Taxes upon any of the Contributed Assets, except for Permitted Encumbrances.

(f) There are no outstanding agreements or waivers extending the statutory period for assessment or collection, or the applicable statute of limitations, of any Taxes of any member of the Company Group or with respect to the Contributed Assets.

(g) Other than the U.S. consolidated group the parent of which is Embraer Aircraft Holding, Inc., no member of the Company Group has (i) ever been considered a

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member of an affiliated group filing a consolidated federal income Tax Return or (ii) any Liability for Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or non-U.S. Law), as a transferee or successor, by contract, or otherwise. No member of the Company Group is a party to or has any obligation under any Tax sharing agreement, Tax indemnity agreement, Tax allocation agreement, any agreement to surrender any Tax Losses or other Tax relief or any similar contract or arrangement pursuant to which it has or shall have any obligation to make any payments on or after the Closing Date.

(h) No private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into or issued by any Tax Authority with respect to the Company Group for any Taxable year for which the statute of limitations has not yet expired.

(i) To Edwards’ Knowledge, no member of the Company Group will be required to include any material item of income in, or exclude material items of deduction from, Taxable income for any Taxable period (or portion thereof) ending after the Closing Date as a result of (i) a change in method of accounting occurring for a Taxable period ending on or before the Closing Date under Code Section 481(c) (or any corresponding or similar provision of state, local or non-U.S. Law), (ii) a transaction arising in a Taxable period (or portion thereof) ending on or before the Closing Date and pursuant to which payments are required to be made after the Closing Date and the income from which is required to be recognized under applicable Law when payments are received rather than when the transaction arose, (iii) an agreement entered into with a Tax Authority executed on or prior to the Closing Date or (iv) any deferred intercompany gain or any excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local or non-U.S. Law).

(j) No member of the Company Group (i) has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code (or any similar provision of state, local or non-U.S. Law), (ii) is a partner for Tax purposes with respect to any joint venture, partnership or similar arrangement, or other Contract that is treated as a partnership for Tax purposes, except for the Company Joint Ventures, or (iii) owns a single member limited liability company that is treated as a disregarded entity for U.S. Federal Tax purposes.

(k) Prior to the Contribution, the Company has never (i) had any assets or conducted any business activities or (ii) filed any Tax Returns.

(l) Edwards has made available to Bulls Brazil copies of (i) all material Tax Returns for each of the entities of the Edwards Group and the Company Group (which copies are true, correct and complete in all material respects) for any taxable year in which the statute of limitations remains open and (ii) all material Tax assessments for the Company Group, the Contributed Assets or with respect to the Commercial Aviation Business that are ongoing.

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(m) Section 3.12(m) of the Edwards Disclosure Schedules contains a complete and accurate list, as of the date hereof, of the Tax benefits and Tax incentives from which the Edwards Group and the Com pany Group benefit (“ Tax Incentives and Benefits ”) with respect to the Commercial Aviation Business.

(n) Notwithstanding anything to the contrary contained herein, nothing in this Section 3.12 is or shall be construed as a representation or warranty with respect to the amount, value or condition of, or any limitations on, any net operating losses, net capital losses, research and development, research and experimentation, investment, foreign or other Tax credits, basis and similar Tax assets and attributes, or the ability of the Company Group or any of its Affiliates, the Commercial Aviation Business or any Person to utilize any such Tax assets and attributes in respect of any Post-Closing Tax Period.

3.13 Litigation.

(a) As of the date of this Agreement, there is no pending or, to Edwards’ Knowledge, threatened Legal Proceeding against, involving or adversely affecting Edwards or any other member of the Edwards Group relating to the Commercial Aviation Business or the Contributed Assets that would, individually or in the aggregate, be material to the Commercial Aviation Business.

(b) Since January 1, 2017, no member of the Edwards Group has entered into any settlement or other compromise in connection with, or in any way relating to, the Commercial Aviation Business, that would be enforceable against the members of the Company Group after the Closing or that would restrict or alter the conduct of the Commercial Aviation Business as currently conducted in any material respect.

(c) As of the date of this Agreement, none of the members of the Edwards Group is subject to, and there is no outstanding Order in respect of the Contributed Assets or the Commercial Aviation Business that would, individually or in the aggregate, be material to the Commercial Aviation Business.

(d) There is no Order or Legal Proceeding involving Edwards as of the date hereof that (i) questions the legality of the transactions contemplated by this Agreement, the Bylaws or any of the Ancillary Agreements or (ii) would reasonably be expected to prevent, hinder or delay the consummation of any of the transactions contemplated hereby.

(e) This Section 3.13 does not relate to Real Property; Taxes; Environmental Matters; Employee Benefit Plans; Employee and Labor Matters; or Anti-Bribery, which are addressed in Sections 3.11, 3.12, 3.16, 3.17, 3.18, and 3.23, respectively.

3.14 Brokers.

(a) Except for Citigroup Global Markets Inc. (the “ Edwards Financial Advisor ”), the fe es and expenses of which shall be paid by Edwards, no Person is entitled to any brokerage or finder’s fee or other similar commission in connection with the

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transactions contemplated by this Agreement or any of the Ancillary Agreements based upon arrangements made by or on behalf of Edwards or any of its Affiliates.

(b) The Edwards Financial Advisor has delivered to the Edwards Board its opinion to the effect that, as of the date of such opinion, based upon and subject to the various limitations, assumptions, qualifications, factors and matters set forth therein, the consideration to be paid to Edwards pursuant to this Agreement is fair, from a financial point of view, to Edwards.

3.15 Contracts.

(a) For purposes of this Agreement, each of the following Contracts (other than this Agreement, the Ancillary Agreements and any Real Property Lease) to which any member of the Edwards Group is a party, or by which any of them is bound, in each case, as of the date hereof, and primarily relating to the Commercial Aviation Business (except for those Contracts that are included on Schedule 2.02(b)(iv)), shall constitute a “Material Contract ”:

(i) each Contract with a Material Supplier or Material Customer;

(ii) each Contract that (A) limits in any material respect the ability of any member of the Edwards Group or its respective Affiliates to compete in any line of business or geographic region or with any Person, engage in any activity or business, or own, operate, sell, transfer, pledge or otherwise dispose of any material amount of Assets or businesses, (B) contains any “most favored nation” provision or arrangement that grants any right of first refusal, first offer, first negotiation or similar preferential right to any other Person, (C) contains a minimum purchase or sale requirement or a “take or pay” provision that in either case requires aggregate payments to or from any Third Party in excess of thirty- seven million Brazilian reais (R$37,000,000), or (D) restricts the ability of the Edwards Group to directly or indirectly solicit, hire or enter into an agreement regarding the employment (or consultancy, secondment or similar position) of any Person;

(iii) each Contract with any Governmental Authority, including each concession or administrative authorization Contract and settlement agreements (including any term of adjustment of conduct ( termo de ajuste de conduta or termo de compromisso ) (“ TAC ”)), except for Contracts with customers, Governmental Authorizations and Ordinary Course labor matters that are not material in the aggregate;

(iv) each Contract that provides for payment by any member of the Edwards Group based on sales or profit, or that constitutes a royalty arrangement in excess of thirty-seven million Brazilian reais (R$37,000,000);

(v) each Contract that involves future expenditures or receipts by any member of the Edwards Group of (x) aggregate payments to any Third Party in excess of thirty-seven million Brazilian reais (R$37,000,000), or nine million two

54

hundred fifty thousand Brazilian reais (R$9,250,000) in any one-year period or (y) aggregate payments to any member of the Edwards Group in excess of thirty- seven million Brazilian reais (R$37,000,000), or nine million two hundred fifty thousand Brazilian reais (R$9,250,000) in any one-year period;

(vi) each Contract that provides for any uncapped indemnification obligation or indemnification obligations that would reasonably be expected to result in Liability to the Company Group in excess of ninety-two million five hundred thousand Brazilian reais (R$92,500,000);

(vii) each Contract that provides for the assumption or retention of any environmental Liability of any Person, and each Contract providing for clean up obligations relating to the Contributed Facilities or the facilities owned, leased or otherwise occupied by the Edwards Group that are subject to the Facilities Use Agreement;

(viii) each Contract that provides for the acquisition or disposition of Assets or any business by any member of the Edwards Group (whether by merger, sale of stock, sale of Assets or otherwise) excluding purchases or dispositions of Assets in the Ordinary Course, pursuant to which any member of the Edwards Group has any ongoing material obligations (including for deferred purchase price obligations, earn-out obligations, indemnification obligations and other contingent Liabilities);

(ix) each Contract with a broker, distributor or dealer or agency Contract that is material to the Commercial Aviation Business;

(x) each Contract relating to the ownership of, investments in, or loans or advances to, any Person, including interests in any joint ventures and any other equity investments;

(xi) each Contract with any present or former director, officer or employee of any member of the Edwards Group or any Company Joint Venture, but excluding any Company Group Benefit Plan, confidentiality agreement, invention assignment agreement, non-competition agreement in favor of any member of the Edwards Group or indemnification agreement with directors and officers of any member of the Edwards Group, or employment agreements in the Ordinary Course;

(xii) each Contract that constitutes a Related Party Contract and requires aggregate payments to or from any member of the Edwards Group in an amount in excess of ninety-two million five hundred thousand Brazilian reais (R$92,500,000) within any one-year period;

(xiii) (A) each material Contract relating to acquisition, sale, transfer, license or other disposition of, or the development, ownership or use of, or access to any IT Assets or Edwards Proprietary Software, (B) each Contract relating to acquisition, sale, transfer, license or other disposition of, or the development,

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ownership or use of, or access to any Intellectual Property, but excluding licenses for commercial off-the-shelf computer software, invention assignment agreements with employees and Contracts with customers and Contracts with suppliers entered into in the Ordinary Course and, in the case of development, Contracts that do not relate to material Intellectual Property, or (C) each Contract that provides for indemnification of any Person with respect to infringement, misappropriation or other unauthorized use of Intellectual Property;

(xiv) each Collective Arrangement;

(xv) each Contract that limits the incurrence of Indebtedness or the declaration or payment of dividends or other distributions by any member of the Company Group or otherwise imposes an Encumbrance (other than Permitted Encumbrances), or restricts the granting of Encumbrances (other than Permitted Encumbrances), on any Contributed Asset;

(xvi) each Contract that provides for liability for consequential, special, punitive and/or exemplary damages, in each case, that would reasonably be expected to result in Liability to the Company Group in excess of ninety-two million five hundred thousand Brazilian reais (R$92,500,000);

(xvii) each Contract that would by its terms bind Bulls Brazil or any of its Affiliates (other than a member of the Company Group); and

(xviii) any agreement to enter into any Contract of the type described in subsections (i) through (xvii) of this Section 3.15(a).

(b) Each Material Contract is in full force and effect (except for those Material Contracts that have expired or have been terminated in accordance with their terms) and, is the valid and binding obligation of the relevant member of the Edwards Group and enforceable against the relevant member of the Edwards Group and, to Edwards’ Knowledge, against any other party thereto, in accordance with its terms, except as enforceability may be limited by the Enforceability Exceptions. None of the members of the Edwards Group nor, to the Knowledge of Edwards, any other party to any Material Contract, is in breach thereof, or in default thereunder, and none of the members of the Edwards Group has provided or received any written or oral notice of any breach of or default under any Material Contract and except for such breaches or defaults as would not be material, individually or in the aggregate, to the Commercial Aviation Business. As of the date hereof, Edwards has not received any notice or Claim of default under any Material Contract or any notice of an intention to terminate, or challenge the validity or enforceability of, any such Material Contract from a counterparty thereto. For purposes of this Section 3.15(b), any Contracts entered into by the Edwards Group during the Pre-Closing Period in compliance with Sections 5.01 and 5.02, that would have been Material Contracts had they been entered into prior to the date hereof, shall be deemed to be Material Contracts.

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(c) Section 3.15 of the Edwards Disclosure Schedules contains a true, correct and complete list as of the date hereof of all written Material Contracts (and all amendments thereto), in each case identified by the corresponding reference to the clauses of this Section 3.15 to which such Material Contract relates. Copies of all written Material Contracts that are true, correct and complete in all respects have been provided to Bulls Brazil.

3.16 Environmental Matters.

(a) The Edwards Group and each of the properties of the Commercial Aviation Business (including the Contributed Facilities) are in compliance in all material respects with all, and have not violated in any material respect any applicable Environmental Laws.

(b) (i) since November 1, 2009, none of the Commercial Aviation Business or any member of the Edwards Group, and no Person for whose conduct the Commercial Aviation Business or the Edwards Group may be held responsible, has Released any Hazardous Materials, and (ii) no Hazardous Materials are otherwise present at any location for which the Commercial Aviation Business or the Edwards Group may be liable, including, for the avoidance of doubt, any current or former Assets of the Edwards Group or any other location where any Hazardous Materials were generated, treated, stored, handled, transferred, transported, disposed, deposited, used or processed relating to the Commercial Aviation Business or the Edwards Group. Any Hazardous Materials at or emanating from any of the Contributed Facilities that are the subject of any ongoing investigation or remediation have been identified to Bulls Brazil in Section 3.16(b) of the Edwards Disclosure Schedules.

(c) Except for matters that have been finally resolved, none of the Commercial Aviation Business, the members of the Edwards Group or any Person for whose conduct the Commercial Aviation Business or Edwards Group may be liable: (i) has, prior to the date hereof, entered into or been subject to any Order, instrument of adjustment of conduct ( termo de ajustamento de conduta or termo de compromisso ) or similar agreement with any Governmental Authority or any other Third Party, pursuant to any Environmental Laws or regarding any Hazardous Materials; (ii) has, since January 1, 2017, received any written request for information, notice, demand letter, administrative inquiry or formal complaint or Claim under any Environmental Laws or regarding any Hazardous Materials; or (iii) is subject to any pending or, to Edwards’ Knowledge, threatened Legal Proceeding pursuant to Environmental Laws or regarding any Hazardous Materials.

(d) Edwards has made available to Bulls Brazil all (i) material written reports or similar documents regarding any environmental, health or safety assessments, audits, investigations and any sampling, monitoring, remediation and similar matters, and (ii) written reports or similar documents of any legal or financial liability exceeding one hundred thousand dollars ($100,000), including environmental, health or safety assessments, audits, investigations and any sampling, monitoring, remediation and similar matters, and in any case relating to the Commercial Aviation Business that are in

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the possession or control of Edwards or its Affiliates (including the Edwards Group), including any such documents relating to any Release or presence of, or exposure to, any Hazardous Materials.

(e) No member of the Edwards Group is subject to any Order, or any indemnity or other agreement with any other Person relating to any Liability under any Environmental Law.

(f) Section 3.16(f) of the Edwards Disclosure Schedule sets forth a true, correct and complete list of all properties formerly owned, leased or operated by the Commercial Aviation Business within the last fifteen (15) years at which any bulk storage of Hazardous Materials, or any manufacturing, by or on behalf of the Commercial Aviation Business (or, to Edwards’ Knowledge, any other Person) has occurred.

3.17 Employee Benefit Plans.

(a) Section 3.17(a) of the Edwards Disclosure Schedules sets forth a true, correct and complete list, as of the date hereof, of each Employee Benefit Plan that Edwards or any member of the Company Group maintains, sponsors, contributes to or is required to contribute to for the benefit of any Commercial Aviation Business Employee and Commercial Aviation Business Retirees (the “Edwards Benefit Plans ”) . Edwards has made available to Bulls Brazil a true, complete and correct copy of each Edwards Benefit Plan and the written rules and other documentation relating to any Edwards Benefit Plans (including, with respect to any pension plan, the actuarial report for the most recently completed fiscal or plan year, if any), and complete and correct copies of any material communications since November 1, 2013 with any Governmental Authority in respect thereof.

(b) (i) Except for matters that have been resolved, all Edwards Benefit Plans comply and have been operated materially in accordance with their terms and the requirements of applicable Law; (ii) each of Edwards and the other members of the Edwards Group is in material compliance with all Laws applicable to the Edwards Benefit Plans or any employee benefits matter relating to the Commercial Aviation Business Employees and Commercial Aviation Business Retirees; (iii) there are no Legal Pro ceedings pending or, to Edwards’ Knowledge, threatened, involving any Edwards Benefit Plan; (iv) no Edwards Benefit Plan is under audit or is the subject of an audit, investigation or other administrative proceeding by any Governmental Authority, nor to Ed wards’ Knowledge is any such audit, investigation or other administrative proceeding, threatened; and (v) each Edwards Benefit Plan required to be registered has been registered and has been maintained in good standing with applicable Governmental Authorities.

(c) Except as required by applicable Law, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement and the Contribution will not (alone or in combination with any other event): (i) entitle any Commercial Aviation Business Employee to severance pay or any other compensation or benefit; (ii) result in any material payment becoming due,

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accelerate the time of payment or vesting of benefits or increase the amount of compensation due to any Commercial Aviation Business Employee; or (iii) trigger any funding obligation under any Edwards Benefit Plan or impose any material restrictions or limitations on the Company Group’s rights to amend, merge or terminate any Edwards Benefit Plan.

(d) All pension plans that are Edwards Benefit Plans have sufficient funds to cover all Liabilities and benefits under the applicable pension plan and no pension plan that is an Edwards Benefit Plan is in deficit.

(e) No Edwards Benefit Plan is subject to the Laws of the United States, including ERISA as it relates to Commercial Aviation Business Employees and Commercial Aviation Business Retirees, or provides benefits to any Commercial Aviation Business Employee located in the United States.

(f) Except with respect to the Commercial Aviation Business Retirees and with respect to Commercial Aviation Business Employees, to the extent they become eligible for post-employment extension of health care, as may be required by applicable Law, based on their participation in applicable Edwards Benefit Plans prior to the Closing, none of Edwards or any member of the Edwards Group has any material obligation with respect to post-employment extension of health, welfare or life insurance benefits.

(g) None of Edwards or any other member of the Edwards Group has, within the past six years, sponsored, maintained, contributed to or been required to maintain or contribute to, or has any actual or contingent liability under, any Employee Benefits Plan that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code or is otherwise a defined benefit plan that is subject to the Laws of a foreign jurisdiction.

3.18 Employee and Labor Matters.

(a) Section 3.18(a) of the Edwards Disclosure Schedules sets forth a true, correct and complete list of each L1 and L2 leader of Edwards or the Edwards Group as of the date hereof who was engaged primarily in the Commercial Aviation Business during 2017.

(b) None of Edwards or any other member of the Edwards Group is obligated or has agreed to increase or vary, after the date of this Agreement, the salary, fee, pension benefits, bonus, commission or other remuneration or benefits (whether in cash or in kind) payable to the Commercial Aviation Business Employees, other than as required by applicable Law.

(c) (i) As of the date hereof, other than as disclosed in Section 3.18(c) of the Edwards Disclosure Schedules, (i) none of the Commercial Aviation Business Employees are represented by a labor union, works council or other employee representative group, and (ii) neither Edwards nor any other member of the Edwards Group is party to or bound by any Collective Arrangement, and there are no such agreements currently being negotiated.

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(d) Each of the members of the Edwards Group is and, since November 1, 2013, has been, in compliance with all applicable Laws regarding employment and employment practices in respect of Commercial Aviation Business Employees, including any and all such Laws relating to terms and conditions of employment, wages and hours, plant closings and mass layoffs, occupational safety and health, collection and payment of withholding and/or social security Taxes, employees severance fund and any similar Tax, labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, worke rs’ compensation, leaves of absence and unemployment insurance and workers’ compensation, except, in each case, for such failure to be in compliance as is not, and would not reasonably be expected to be, material to the Commercial Aviation Business or the Company Group.

(e) Neither Edwards nor any other member of the Edwards Group has had, in respect of any Commercial Aviation Business Employees, (i) since November 1, 2013, any unfair labor practice or employment discrimination charges or complaints or other labor grievances or labor or employment-related administrative proceedings or arbitrations, pending or, to Edwards’ Knowledge, threatened against it, before any Governmental Authority or state or local agency responsible for the investigation or prevention of unlawful labor or employment practices or failure to pay wages; (ii) since November 1, 2013, a pending or threatened labor strike, slowdown, walk-out, lockout or work stoppage; or (iii) since November 1, 2013, mass layoffs or plant closing.

(f) As of the date hereof, neither Edwards nor any other member of the Edwards Group has received notice of any intention of any Key Employee to terminate his or her employment or provision of services whether as a consequence of the transactions contemplated under this Agreement or otherwise.

(g) The Edwards Group has not been notified of any administrative procedure, including any audit or infraction notice, before the Ministry of Labor and Employment (Ministério do Trabalho e Emprego ) or any administrative procedure, TAC, civil action filed by the Public Prosecutor Office of Labor Affairs ( Ministério Público do Trabalho ).

3.19 Intellectual Property.

(a) Section 3.19(a) of the Edwards Disclosure Schedules sets forth as of the date hereof all Intellectual Property registrations and applications included in the Contributed IP. As of the date hereof, all of such items are unexpired, and to the Knowledge of Edwards valid and enforceable. The Edwards Group exclusively owns all of its material proprietary Intellectual Property (including the Edwards Retained IP) that it owns or purports to own, free and clear of any Encumbrances other than Permitted Encumbrances.

(b) The operation of the Commercial Aviation Business as currently conducted by the Edwards Group does not infringe, misappropriate or otherwise violate

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the Intellectual Property of any other Person, and there is no notice alleging the same (including cease and desist letters and invitations to take a patent license) or challenging the ownership, enforceability or validity of any Contributed IP or Edwards Retained IP, and, to the Knowledge of Edwards, no Person is materially infringing, misappropriating or otherwise violating any Contributed IP or Edwards Retained IP.

(c) All Persons who created, invented or contributed to Contributed IP or Edwards Retained IP owned or purported to be owned by the Edwards Group have assigned in writing to the Edwards Group their rights in same that do not vest initially in the Edwards Group by operation of Law. No Person (other than employees or service providers in the course of their duties for the Edwards Group) has possession or any current or contingent right to possess any material source code of the Edwards Group. No software licensed, distributed, conveyed or made available by the Edwards Group to any other Person contains, uses, incorporates, is based upon or otherwise interacts with any “open source” or similar software in any manner that would require the Edwards Group to license or make available material proprietary source code in such circumstances.

(d) The Edwards Group has, with respect to the Commercial Aviation Business, (i) taken commercially reasonable steps to protect and maintain (x) their Confidential Information and trade secrets; and (y) the security, operation and integrity of all IT Assets and Edwards Proprietary Software (and all data collected, processed or stored therein), and, to the Knowledge of Edwards, there have been no material breaches, interruptions or violations of same; and (ii) complied with all Privacy Policies in all material respects. The IT Assets and Edwards Proprietary Software used in connection with the Commercial Aviation Business are sufficient for the conduct of such business as currently conducted and are, to the Knowledge of Edwards, free of all material bugs, errors, defects, malware, viruses or other corruptants.

3.20 No Edwards CAB Material Adverse Effect. (a) Since the date of the Carve-Out Balance Sheet to the date hereof there has not occurred an Edwards CAB Material Adverse Effect and (b) from the date of the Carve-Out Balance Sheet to the date hereof, each of the members of the Edwards Group has conducted the Commercial Aviation Business in the Ordinary Course in all material respects.

3.21 Absence of Undisclosed Liabilities.

(a) The Company and its Subsidiaries do not have any Liabilities that would be required to be reflected or reserved against on a balance sheet of the Company prepared in accordance with IFRS, except for Liabilities (i) reflected or reserved against on the Carve-Out Balance Sheet, (ii) that have been discharged or paid in full prior to the date of this Agreement, (iii) that have been incurred in the Ordinary Course since the date of the Carve-Out Balance Sheet, (iv) incurred in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, (v) solely between the Company and its Subsidiaries or among Subsidiaries of the Company, (vi) that are Excluded Liabilities, and (vii) Liabilities that would not, individually or in the aggregate, be reasonably expected to be material to the Commercial Aviation Business.

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(b) Neither Edwards nor any other member of the Edwards Group is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar Contract (including any Contract or arrangement relating to any transaction or relationship between or among Edwards and any other member of the Edwards Group, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand), or any off-balance sheet arrangements, where the result, purpose or intended effect of such commitment, joint venture, partnership, Contract or arrangement is to avoid disclosure of any material transaction involving, or material Liabilities of, Edwards and any other member of the Edwards Group, taken as a whole, in Edwards’ published financial statements or other documents required to be published by a Governmental Authority.

3.22 Customers. Since December 31, 2017 through the date hereof, none of the Material Customers has notified any member of the Edwards Group that it is cancelling or terminating (or intends to cancel or terminate), or materially reducing (or intends to materially reduce) its commitment under, its Contract with the Edwards Group.

3.23 Anti-Bribery.

(a) Since January 1, 2013, none of Edwards, any other member of the Edwards Group, any of the directors, officers or employees of Edwards or any other member of the Edwards Group (each, a “ Edwards Representative ”) or, to the Knowledge of Edwards, any agent of Edwards or any member of the Edwards Group acting at least in part for the benefit of a member of the Edwards Group or on behalf of the Edwards Group, has taken any action in violation of the Anti-Corruption Law of Brazil (Law No. 12,846/2013), the Brazilian Anti-corruption Regulatory Decree (Decree No. 8,420/2015), the Brazilian Conflict of Interest Law (Brazilian Federal Law No. 12,813/2013), the Brazilian Law of Administrative Improbity (Brazilian Federal Law No. 8,429/1992) and the Brazilian Public Procurement Law (Brazilian Federal Law No. 8,666/1993), as well as applicable antitrust and anti-money laundering Laws, in connection with the conduct of its respective business, the U.S. Foreign Corrupt Practices Act (the “ FCPA ”) or any other applicable anti-corruption or anti-bribery Law (collectively, the “ Anti-Corruption Laws ”).

(b) Without limiting the foregoing, since January 1, 2013, in connection with the Commercial Aviation Business, neither the Edwards Group nor any Edwards Representative or, to the Knowledge of Edwards, agent of Edwards or any member of the Edwards Group has offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee, or any other Person acting in an official capacity for any Governmental Authority, to any political party or official thereof, or to any candidate for political office (a “ Government Official ”) or to any Person under circumstances where Edwards or any other member of the Edwards Group, its Affiliates or the Edwards Representatives knew or had reason to believe that all or a portion of such money or thing of value would be offered, given, or promised, directly or indirectly, to any Government Official, in each case, for the purpose of (i) influencing any act or decision of such

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Government Official in his or her official capacity; (ii) inducing such Government Official to perform or omit to perform any activity related to his or her legal duties; (iii) securing any improper advantage; or (iv) inducing such Government Official to influence or affect any act or decision of any Governmental Authority, in each case, in order to assist the Edwards Group, its Affiliates or the Edwards Representatives in obtaining or retaining business for or with, or in directing business to, the Edwards Group, the Company Joint Venture or any other Person, excluding in each of the preceding cases, (A) any lawful expediting payment to a Government Official the purpose of which is to expedite or to secure the performa nce of a “routine governmental action,” as that term is defined in the FCPA, or similar action by a Government Official or political party or (B) any lawful reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a Government Official or political party that was directly related to (1) the promotion, demonstration, or explanation of products or services; or (2) the execution or performance of a contract with a foreign government or agency thereof. For the avoidance of doubt, nothing in this Section 3.23(b) shall be interpreted in a manner inconsistent with the scope of the representations and warranties made in Section 3.23(a).

(c) Without limiting the foregoing, since January 1, 2013, no member of the Edwards Grou p or, to Edwards’ Knowledge, agent of Edwards, acting at least in part for the benefit of a member of the Edwards Group or on behalf of the Edwards Group, and no Edwards Representative has made, offered, requested or taken any act in furtherance of any bribe or other unlawful benefit, including, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Edwards Group has in place reasonable internal controls designed to prevent any Edwards Representative from undertaking any such conduct and to ensure compliance with applicable Anti-Corruption Laws.

(d) During the five (5) years prior to the date hereof, to the Knowledge of Edwards, (i) no agent of Edwards or Edwards Representative is or has been the subject of any investigation, inquiry or enforcement proceedings by any Governmental Authority regarding any offense or alleged offense under the Anti-Corruption Laws, and (ii) no such investigation, inquiry or proceedings have been threatened or are pending.

3.24 Export; Sanctions. Each representation and warranty in this Section 3.24 relating to the Edwards Group (including, for the avoidance of doubt, the Company Group) shall have been made, for all purposes hereunder, by the Edwards Group solely to the extent relating to the Commercial Aviation Business and shall not be construed to apply to any member of the Edwards Group in other respect.

(a) None of Edwards, any other member of the Edwards Group, any Company Joint Venture, or any Edwards Representative is, or is owned or controlled by, a Person that is the target of economic sanctions administered by the Office of Foreign Assets Control of the United States Department of the Treasury (“ OFAC ”) (including the designation as a “Specially Designated National or Blocked Person” thereunder), Her Majesty’s Treasury, the European Union and the Bureau of Industry Security of the U.S. Department of Commerce, and any sanctions measures under the U.S. International

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Emergency Economic Powers Act, the U.S. Trading with the Enemy Act, the U.S. Iran Sanctions Act, the U.S. Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010, and the U.S. Iran Threat Reduction and Syria Human Rights Act of 2012, the U.S. National Defense Authorization Act of 2012 and the U.S. National Defense Authorization Act of 2013, all as amended, and any executive order, directive or regulation pursuant to the authority of any of the foregoing, including the regulations of the United States Department of the Treasury set forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders or licenses issued thereunder (collectively, “Sanctions ”), nor are any of the foregoing designated as a Specially Designated National or Blocked Person by OFAC or otherwise the target or subject of Sanctions.

(b) Since January 1, 2013, in connection with the Commercial Aviation Business, no member of the Edwards Group has made a violation of applicable Sanctions.

(c) None of Edwards, any other member of the Edwards Group or any Company Joint Venture is located, organized or resident in any country or territory that is, or whose government is, the subject or target of comprehensive Sanctions that broadly restrict or prohibit trade, investment or other dealings with such country, territory or government (currently, Cuba, Iran, North Korea, Syria and the Crimea region of Ukraine).

3.25 Insurance. Section 3.25 of the Edwards Disclosure Schedules sets forth all material insurance policies held by the Edwards Group that relate to the Commercial Aviation Business as of the date hereof (the “ Insurance Policies ”). Copies of each Insurance Policy that are complete and correct in all respects, have been made available to Bulls Brazil. As of the date hereof, (a) all of the Insurance Policies held by the Edwards Group are in full force and effect, and free and clear of any Encumbrances (other than Permitted Encumbrances), (b) all premiums due under the Insurance Policies have been paid in full, (c) the Edwards Group has complied in all material respects with the provisions of such policies, (d) no member of the Edwards Group has received written notice of cancellation of or intent to cancel any of the Insurance Policies and (e) no member of the Edwards Group has received any written notice from any insurer under any of the Insurance Policies reserving or denying any rights with respect to a claim that is pending as of the date hereof.

3.26 Inventory. All items included in the inventory shown on the Carve-Out Balance Sheet, including the Contributed Inventory, and all inventory thereafter created or acquired by the Edwards Group in connection with the Commercial Aviation Business on or prior to Closing wherever located, have been created or acquired in the Ordinary Course. As of the date hereof, all Contributed Inventory is in the possession or control of the Edwards Group at the locations listed under Section 3.26(a) of the Edwards Disclosure Schedules, except for items that are in the possession or control of suppliers set forth on Section 3.26(b) of the Edwards Disclosure Schedules. The Contributed Inventory is in good and marketable condition in all material respect and held for sale. Provisions and/or reserves have been made to reduce excess and obsolete inventories to their estimated net realizable value.

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3.27 Accounts Receivable. Except to the extent fully collected on or prior to the Closing Date, the Accounts Receivable reflected on the Carve-Out Balance Sheet and the Accounts Receivable arising after the date of the Carve-Out Balance Sheet, (i) represent bona fide arm’s length sales of products or services in the Ordinary Course, (ii) are fully collect ible within sixty (60) days after the invoice date, and (iii) constitute valid claims of the Edwards Group, free and clear of all Encumbrances, except for Permitted Encumbrances and not subject to any rights of set-off or other defenses other than cash discounts set forth on the Carve-Out Balance Sheet or set forth in the Estimated Closing Date Modified Net Asset Amount as an express line item identifying the amount and recipient of such cash discount. Receivables have been appropriately reduced to their estimated net realizable value through reserves for bad debts and allowances for doubtful accounts expressly set forth on the Carve-Out Balance Sheet and, in the case of Accounts Receivable arising since the date of the Carve-Out Financial Statements, additions to such reserves and allowances (A) calculated in accordance with IFRS using the same accounting principles, practices, procedures, policies and methods that are described in, and to the extent not so described, were used in the preparation of the Carve-Out Balance Sheet and (B) set forth in the Estimated Closing Date Modified Net Asset Amount as an express line item identifying the amount of such bad debt or allowance for doubtful account and the debtor in respect thereof.

3.28 Access to Information; Disclaimer. Edwards acknowledges and agrees that (i) it has had an opportunity to discuss with Bulls Brazil and its Affiliates the plans for the future operation of the Commercial Aviation Business and the conduct and governance of the Company and its Subsidiaries after the Closing, including the potential risks and benefits relating to its continued investment in the Company, (ii) it has been afforded the opportunity to ask questions of and receive answers from officers and other Representatives of Bulls Brazil and its Affiliates, (iii) it has conducted its own independent investigation of Bulls Brazil and its Affiliates (including the Company Group after the Closing), their respective businesses and the transactions contemplated hereby and by the Ancillary Agreements, and has not relied on any representation, warranty or other statement by any Person on behalf of Bulls Brazil or any of its Affiliates, other than the representations and warranties of Bulls Brazil contained in Article IV of this Agreement, in any certificate delivered pursuant to Article IX or in the Company Preferred Supply Agreement (all of which representations and warranties Edwards is expressly relying on in connection with this Agreement, the Ancillary Agreements, and the transactions contemplated hereby and thereby), and all other representations and warranties are specifically disclaimed and (iv) any plans relating to the future operation of the Commercial Aviation Business and the conduct and governance of the Company and its Subsidiaries are subject to uncertainties inherent in attempting to develop any such plans. Without limiting the foregoing, except for the representations and warranties set forth in Article IV of this Agreement, the certificates to be delivered by Bulls Brazil pursuant to Article IX and the Company Preferred Supply Agreement, Edwards further acknowledges and agrees that none of Bulls Brazil or any of its stockholders, directors, officers, employees, Affiliates, advisors, agents or other Representatives has made any representation or warranty concerning any estimates, projections, forecasts, business plans or other forward-looking information regarding Bulls Brazil or its Affiliates, including, after the Closing, the Company and its Subsidiaries or their respective businesses and operations.

3.29 No Further Representations or Warranties. Except for the representations and warranties of Edwards contained in this Article III, the certificates to be delivered by Edwards

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pursuant to Article IX and the Edwards Preferred Supply Agreement (all of which representations and warranties Bulls Brazil and its Affiliates are expressly relying on in connection with this Agreement, the Ancillary Agreements, and the transactions contemplated hereby and thereby), (a) Edwards is not making and has not made, and no other Person is making or has made on behalf of Edwards, and neither Bulls Brazil nor Bulls Parent are relying on, any express or implied representation or warranty in connection with this Agreement or the transactions contemplated hereby, (b) neither Edwards nor any Person on behalf of Edwards is making, and neither Bulls Brazil nor Bulls Parent are relying on, any express or implied representation or warranty with respect to Edwards or any of its Subsidiaries or their respective businesses or with respect to any other information made available to Bulls Brazil or any of its Affiliates or any Representatives of Bulls Brazil or any of Bulls Brazil’s Affiliates in connection with the transactions contemplated by this Agreement and (c) Edwards hereby disclaims all liability and responsibility for all projections, forecasts, estimates, financial statements, financial information, appraisals, statements, promises, advice, data or information made, communicated or furnished (orally or in writing, including electronically) to Bulls Brazil or any of its Affiliates or any Representative of Bulls Brazil or any of Bulls Brazil’s Affiliates, including omissions therefrom, and including regarding the success, profitability or the value of the Commercial Aviation Business.

3.30 Knowledge Persons. Each of the individuals listed on Schedule 1.01(f) have reviewed the representations and warranties in this Article III and the Edwards Disclosure Schedules.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BULLS BRAZIL

Except as set forth in the correspondingly numbered Sections of the Bulls Brazil Disclosure Schedules accompanying this Agreement (the “ Bulls Brazil Disclosure Schedules ”), Bulls Brazil represents and warrants to Edwards as follows:

4.01 Existence of Bulls Brazil and Bulls Parent. Bulls Brazil is a limited liability company duly incorporated and validly existing under the Laws of Brazil. Bulls Parent is a corporation duly incorporated and validly existing under the Laws of Delaware. Each of Bulls Brazil and Bulls Parent has all requisite corporate power and authority to own, lease and operate its Assets and to conduct its business as it is presently conducted and is duly qualified to transact business, and is duly qualified or licensed in each jurisdiction in which the Assets owned, leased or operated by it or in which the conduct of its business makes such licensing or qualification necessary.

4.02 Due Authorization. Each of Bulls Brazil and Bulls Parent has all requisite corporate power and authority to execute, deliver and perform this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each of Bulls Brazil and Bulls Parent of this Agreement and the Ancillary Agreements to which it is a party, the performance by each of Bulls Brazil and Bulls Parent of its obligations hereunder and thereunder, and the consummation by each of Bulls Brazil and Bulls Parent of the transactions contemplated hereby and thereby, have been duly and

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validly authorized by all requisite corporate action on the part of each of Bulls Brazil and Bulls Parent, and no other corporate actions or proceedings on the part of each of Bulls Brazil and Bulls Parent are necessary to authorize the execution, delivery and performance by Bulls Brazil or Bulls Parent of this Agreement, the Ancillary Agreements to which it is a party or the transactions contemplated hereby or thereby. Each of Bulls Brazil and Bulls Parent has duly and validly executed and delivered this Agreement and, prior to or at the Closing, each of Bulls Brazil and Bulls Parent will have duly and validly executed and delivered the Ancillary Agreements to which it is a party. This Agreement constitutes, and upon execution and delivery thereof the Ancillary Agreements to which Bulls Brazil or Bulls Parent is a party will constitute, assuming due execution and delivery hereof and thereof by all other parties hereto and thereto, legal, valid and binding obligations of Bulls Brazil and Bulls Parent, enforceable against Bulls Brazil and Bulls Parent in accordance with their respective terms, subject in all respects to Enforceability Exceptions.

4.03 Governmental Authorizations. Except as set forth on Section 4.03 of the Bulls Brazil Disclosure Schedules, no Governmental Authorization is required in connection with the execution, delivery and performance by Bulls Brazil or Bulls Parent of this Agreement and the Ancillary Agreements to which Bulls Brazil or Bulls Parent is a party, or the consummation of the transactions contemplated hereby or thereby, except for the CADE approval, those approvals under the HSR Act and any other approval under any other applicable Antitrust Laws.

4.04 Absence of Conflicts. Subject to the provisions of Section 4.03, neither the execution and delivery by Bulls Brazil or Bulls Parent of this Agreement or any of the Ancillary Agreements to which Bulls Brazil or Bulls Parent is a party, nor the consummation by Bulls Brazil or Bulls Parent of the transactions contemplated hereby or thereby, will (a) violate or result in the breach of the Governing Documents of Bulls Brazil or Bulls Parent; (b) violate or result in the breach of any Law to which Bulls Brazil, Bulls Parent or any of their respective Assets is subject or by which it is bound; (c) violate, result in the breach of, constitute a default (or create an event which, with notice or lapse of time or both, would constitute a default under), result in the acceleration, termination or maturity of, create in any party the right to accelerate, terminate, modify, amend or cancel, require any consent of, or notice to, any Person pursuant to, or result in the loss of a benefit or increase in any fee, Liability or other obligation under, any material Contract binding upon Bulls Brazil, Bulls Parent or any of their respective Assets; or (d) (with or without notice or lapse of time) result in the creation or imposition of any Encumbrances (other than Permitted Encumbrances) upon or with respect to the business of Bulls Brazil, Bulls Parent or any of their respective Assets, except for, in the case of the foregoing clauses (b) to (c), any matter that would not reasonably be expected to result in a Bulls Material Adverse Effect.

4.05 Financing. Bulls Brazil has or has access to on the date hereof, and will have on the Closing Date, available sufficient cash, marketable securities and other sources of immediately available funds to (a) pay the full Closing Date Payment and the Capital Raise Amount in cash as contemplated by, and on the terms and subject to the conditions set forth in, this Agreement and (b) pay all related fees and expenses of Bulls Brazil associated with the transactions contemplated hereby.

4.06 Brokers. Except for J.P. Morgan Securities LLC, the fees and expenses of which shall be paid by Bulls Brazil or its Affiliates, no Person is entitled to any brokerage or finder’s

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fee or other similar commission in connection with the transactions contemplated by this Agreement or any of the Ancillary Agreements based upon arrangements made by or on behalf of Bulls Parent, Bulls Brazil or any of their respective Affiliates.

4.07 Litigation. As of the date hereof, there is no Legal Proceeding pending or, to the knowledge of Bulls Brazil, threatened against Bulls Parent or Bulls Brazil, and there is no Order outstanding against Bulls Parent or Bulls Brazil, which, individually or in the aggregate, has had or would reasonably be expected to have a Bulls Material Adverse Effect.

4.08 Solvency. Assuming the accuracy, in all material respects, of the representations and warranties of Edwards contained in Article III that relate to the subject matter of clauses (i) through (iii) of this Section 4.08 and after giving effect to the transactions contemplated by this Agreement and the Ancillary Agreements, Bulls Brazil will not (i) be insolvent (either because its financial condition is such that the sum of its debts is greater than the fair value of its assets or because the fair salable value of its assets is less than the amount required to pay its probable liability on its existing debts as they mature), (ii) have unreasonably small capital with which to engage in its business or (iii) have incurred debts (and does not immediately plan to incur debt) beyond its ability to pay as they become due. No transfer of property is being made, and no obligation is being incurred in connection with the transactions contemplated by this Agreement and the Ancillary Agreements with the intent to hinder, delay or defraud either present or future creditors of Bulls Brazil.

4.09 Investment Representation . Bulls Brazil is an “accredited investor” as defined in Regulation D promulgated by the SEC under the Securities Act. Bulls Brazil acknowledges that, assuming the accuracy of the representations and warranties of Edwards contained in Article III of this Agreement, the certificates to be delivered by Edwards pursuant to Article IX and the Edwards Preferred Supply Agreement (all of which representations and warranties Bulls Brazil and its Affiliates are expressly relying on in connection with this Agreement, the Ancillary Agreements, and the transactions contemplated hereby and thereby), it is informed as to the risks of the transactions contemplated by this Agreement and of its ownership of the Commercial Aviation Business and the Company Group, and further acknowledges that the Selling Shares have not been registered, and the Issued Shares will not be registered, under the U.S. federal securities laws or under any state or foreign securities laws, and that the Selling Shares and the Issued Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless such transaction is pursuant to the terms of an effective registration statement under the Securities Act and are registered under any applicable state or foreign securities laws or pursuant to an exemption from registration thereunder.

4.10 Anti-Bribery. Since January 1, 2015, neither Bulls Parent nor any of its Subsidiaries (including Bulls Brazil), any of their respective directors, officers or employees or, to the knowledge of Bulls Brazil, any agent of Bulls Parent or any of its Subsidiaries (including Bulls Brazil) acting at least in part for the benefit of Bulls Parent or any of its Subsidiaries (including Bulls Brazil) or on behalf of Bulls Parent or any of its Subsidiaries (including Bulls Brazil), has taken any action in violation of the Anti-Corruption Laws, except for such actions as would not have a Bulls Material Adverse Effect.

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4.11 Access to Information; Disclaimer. Bulls Brazil acknowledges and agrees that (i) it has had an opportunity to discuss the business of Edwards and its Subsidiaries and with the management of Edwards, (ii) it has had reasonable access to (A) the books and records of Edwards and its Subsidiaries and (B) the documents provided by Edwards for purposes of the transactions contemplated by this Agreement, (iii) it has been afforded the opportunity to ask questions of and receive answers from officers of Edwards, (iv) it has conducted its own independent investigation of Edwards and its Subsidiaries, their respective businesses and the transactions contemplated hereby, and has not relied on any representation, warranty or other statement by any Person on behalf of Edwards or any of its Subsidiaries, other than the representations and warranties of Edwards contained in Article III of this Agreement, the certificates to be delivered by Edwards pursuant to Article IX and the Edwards Preferred Supply Agreement (all of which representations and warranties Bulls Brazil and its Affiliates are expressly relying on in connection with this Agreement, the Ancillary Agreements, and the transactions contemplated hereby and thereby), and that all other representations and warranties are specifically disclaimed, (v) the Carve-Out Financial Statements may not necessarily be indicative of the conditions that would have existed or the results of operations that would have been achieved if the Commercial Aviation Business had been operated as an unaffiliated “stand - alone” company, and (vi) the individuals listed on Schedule 1.01(f) are not personally making any representations and warranties under this Agreement. Without limiting the foregoing, except for the representations and warranties set forth in Article III of this Agreement, the certificates to be delivered by Edwards pursuant to Article IX and the Edwards Preferred Supply Agreement (all of which representations and warranties Bulls Brazil and its Affiliates are expressly relying on in connection with this Agreement, the Ancillary Agreements, and the transactions contemplated hereby and thereby), Bulls Brazil further acknowledges and agrees that none Edwards or any of its stockholders, directors, officers, employees, Affiliates, advisors, agents or other Representatives has made any representation or warranty concerning any estimates, projections, forecasts, business plans or other forward-looking information regarding Edwards, its Subsidiaries or their respective businesses and operations.

4.12 No Further Representations or Warranties. Except for the representations and warranties expressly provided in this Article IV, (a) Bulls Brazil is not making and has not made, and no other Person is making or has made on behalf of Bulls Brazil, and Edwards is not relying on, any other express or implied representations or warranties in connection with this Agreement or the transactions contemplated hereby, (b) neither Bulls Brazil nor any Person on behalf of Bulls Brazil is making, and Edwards is not relying on, any express or implied representation or warranty with respect to Bulls Brazil or Bulls Parent or their respective businesses or with respect to any other information made available to Edwards or any of its Affiliates or any Representative of Edwards or any of Edwards’ Affiliates in connection with the transactions contemplated by this Agreement or by any of the Ancillary Agreements, and (c) Bulls Brazil and its Affiliates hereby disclaim all liability and responsibility for all projections, forecasts, estimates, financial statements, financial information, appraisals, statements, promises, advice, data or information made, communicated or furnished (orally or in writing, including electronically) to Edwards or any of its Affiliates or any their respective Representatives, or to any other Person, including omissions therefrom.

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ARTICLE V

COVENANTS

5.01 Conduct of Business. Except (i) as otherwise expressly permitted or required by this Agreement (including the Contribution), (ii) as otherwise required by applicable Law, (iii) as set forth in Section 5.01 of the Edwards Disclosure Schedules or (iv) as otherwise consented to by Bulls Brazil in writing (which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of (x) the Closing and (y) the termination of this Agreement in accordance with Section 10.01 (the “ Pre-Closing Period ”), Edwards shall and shall cause each member of the Edwards Group (including the Company Group) to:

(a) conduct the Commercial Aviation Business in the Ordinary Course and use commercially reasonable efforts to preserve intact the Commercial Aviation Business;

(b) use commercially reasonable efforts to preserve such Person’s curre nt relationships with its customers, licensors, distributors, suppliers, Governmental Authorities, and any other Persons with whom such Person has material business relationships, in each case, to the extent related to the Commercial Aviation Business;

(c) keep current and in full force and effect all Governmental Authorizations necessary for the operation of the Commercial Aviation Business;

(d) make expenditures in accordance with the Minimum Required Spending;

(e) move, prior to the Closing, all the Assets set forth on Schedule 5.01(e) from the Contributed Facilities;

(f) move, prior to the Closing, all the Assets set forth on Schedule 5.01(f) to the Contributed Facility located in São José dos Campos, state of São Paulo, Brazil;

(g) comply with the terms of the Deferred Prosecution Agreement; and

(h) cause, prior to the Contribution, ELEB to transfer to Edwards the one common Share in the Company that is owned by ELEB.

5.02 Negative Covenants Relating to Conduct of the Commercial Aviation Business. Except (i) as otherwise permitted or required by this Agreement (including the Contribution and the Capital Raise), (ii) as otherwise required by applicable Law, (iii) as set forth in Section 5.01 of the Edwards Disclosure Schedules or (iv) with the prior written consent of Bulls Brazil (which consent shall not be unreasonably withheld, conditioned or delayed), during the Pre-Closing Period, Edwards shall not, and shall cause each member of the Edwards Group (including the Company Group) not to, in each case, to the extent related to the Commercial Aviation Business:

(a) (i) amend, modify or supplement such Person’s Governing Documents (including those in respect of any Company Joint Venture) in any material respect, or (ii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation,

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restructuring, recapitalization or reorganization, except as contemplated by the Contribution Steps Plan;

(b) effect any reclassification or stock split or make any other similar changes in the capitalization or capital structure of such Person, except as contemplated by the Contribution Steps Plan;

(c) (i) make or agree to make any loans, advances or capital contributions to, or investments in, any Third Party or the securities of any Third Party, or agree to guarantee any loans, advances or capital contributions to, or investments in, any Third Party, or (ii) acquire, or obtain ownership interest in, whether by merger or consolidation, by the purchase of Assets or securities, or by any other manner, directly or indirectly, any business or Third Party, other than purchases of equipment, supplies and inventory in the Ordinary Course;

(d) fail to pay any Taxes when due other than Taxes being contested in good faith and for which adequate reserves are established;

(e) terminate or amend any Contract with any Material Supplier, fail to extend or renew any Contract with any Material Supplier that expires during the Pre-Closing Period, other than in the Ordinary Course and for pricing not in excess of existing pricing escalation provisions, enter into any agreement with a new supplier or vendor that would have been considered a Material Supplier had such Contract been entered into prior to the date of this Agreement or enter into a Contract with a Material Supplier on terms substantially different from the Edwards Group standard supply Contract as of the date hereof;

(f) terminate or amend any Contract with any Material Customer, other than in the Ordinary Course;

(g) make, change or revoke any material Tax election, adopt or change any accounting method or accounting period with respect to material Taxes or any material methods of reporting income or deductions, settle or compromise any material audit or proceeding with respect to Taxes, surrender any right to claim any material refund of Taxes, consent or agree to any extension or waiver of statute of limitations with respect to any material Taxes, or enter into any material agreement relating to Taxes with any Governmental Authority (including any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign Tax Law) or any advance pricing agreement), in each case, other than as required pursuant to changes in accounting practices applicable to such Person as permitted under clause (h) below;

(h) change any method, practice or policy of accounting currently used by such Person, except to the extent required by IFRS or other applicable accounting principles;

(i) except as may be required by any Edwards Benefit Plan, Company Group Benefit Plan, or Collective Arrangement as in effect on the date hereof or by any applicable Law, (i) grant any severance, retention or termination pay other than in the

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Ordinary Course, or enter into or materially amend any severance, retention or employment agreement with any Commercial Aviation Business Employee, other than in the Ordinary Course; (ii) increase the compensation or benefits provided to any Commercial Aviation Business Employee other than increases in the Ordinary Course; (iii) grant any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by, any Commercial Aviation Business Employee; (iv) establish, adopt, enter into or amend any Edwards Benefit Plan other than such actions taken in the Ordinary Course that do not increase the Liability of the Company Group in any material respect; or (v) hire any Person as a Commercial Aviation Business Employee, or terminate or promote any Commercial Aviation Business Employee, except as required by a Contract in existence as of the date hereof or in the Ordinary Course;

(j) enter into, renew, amend or terminate any Collective Arrangement or other Contract with any union or other representative of any Commercial Aviation Business Employee other than upon expiration and/or consistent with past practices;

(k) effect or permit a plant closing, mass layoff or similar event;

(l) (A) sell, abandon, encumber, lease, assign, license (in each case, other than grants of Permitted Encumbrances), let lapse, expire, dispose of or transfer the right to own, use or lease any Contributed Asset, except (x) in the Ordinary Course, (y) for dispositions of immaterial equipment and immaterial property no longer required in the operation of the Commercial Aviation Business as currently conducted and (z) sales or dispositions as to which the consideration for all such sales or dispositions does not exceed twenty-five thousand dollars ($25,000) individually and one hundred thousand dollars ($100,000) in the aggregate in any twelve (12)-month period (provided that the exception in this clause (z) shall not apply to divestitures), or (B) move any material Assets from any of the Owned Facilities or the Leased Facilities to any Retained Edwards Facilities, except for inventory, including raw materials, spares, work-in-process and finished goods inventories, (x) to the extent not (aa) used or held for use in respect of the Commercial Aviation Business or (bb) required by the Company to perform the statement of work under the Company Preferred Supply Agreement or (y) required by Edwards to perform the statement of work under the Edwards Supply Agreement (it being understood that, in the case of raw materials and common spares, Edwards shall take into account the anticipated demands of both the Company Group and the Edwards Group as of the Closing Date), and as otherwise contemplated by Section 5.01(e);

(m) enter into, modify, amend or supplement any Related Party Contract that will not be terminated prior to the Closing in accordance with Section 5.12;

(n) other than settlements for cash not involving non-monetary obligations of any member of the Edwards Group, settle, waive, release or otherwise resolve, in whole or in part, any Claims or Legal Proceeding, or any Claims involving a Material Supplier or Material Customer, in an amount in excess of three million seven hundred thousand Brazilian reais (R$3,700,000);

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(o) modify any Privacy Policies or the operation or security of any IT Asset in any manner that is materially adverse to the Commercial Aviation Business or take any action that would (or fail to take any action the failure of which would) reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of any Contributed IP or Edwards Retained IP;

(p) write-down the value of any Assets of or stock in any Subsidiary of Edwards in an amount in excess of one hundred thousand dollars ($100,000), except to the extent required by IFRS or accounting principles applicable to such Person;

(q) enter into any Contract or Governmental Authorization that (i) would limit, restrict or otherwise impair in any way the freedom or ability of Bulls Brazil or the Company or any of their respective Affiliates, including, after the Closing, Bulls Parent, to operate or compete in any line of business or with any Person or in any area, or (ii) would limit, restrict or otherwise impair in any way the freedom or ability of Bulls Brazil or any of its respective Affiliates to own or operate the Company or the Contributed Assets;

(r) disclose to any Third Party (other than a Representative of the Edwards Group) any material Confidential Information other than as required by a Governmental Authority, a Legal Proceeding or applicable Law or pursuant to a binding and enforceable Contract (i) requiring each Person to whom the disclosure is made to maintain the confidentiality of, and preserve all rights of the Edwards Group in, such Confidential Information and (ii) restricting the use of such Confidential Information to the subject matter of such Contract;

(s) enter into any Contract that would be a Material Contract pursuant to clauses (ii), (iii), (iv), (vi), (vii), (xii), (xvi), or (xvii) of the definition of Material Contracts;

(t) amend or fail to comply with the terms of the Assumed Debt Amount, other than, as to any amendment, to carry out the Contribution and assignment of the Assumed Debt Amount to the Company Group; provided that the resulting terms and conditions shall be no less favorable to the Company or its Subsidiaries than the terms and conditions previously applicable to Edwards in relation to such Indebtedness;

(u) incur any Indebtedness that would cause the Company Group to have Indebtedness in excess of the Assumed Debt Amount; or

(v) authorize, commit or agree, whether in writing or otherwise, to do any of the foregoing.

Other than the right to consent or withhold consent with respect to the foregoing matters, nothing contained in this Agreement shall give Bulls Brazil, directly or indirectly, any right to Control or direct the operation of the Commercial Aviation Business or the Company Group prior to the Closing. Subject to the immediately preceding sentence and consistent with the terms of this Agreement, prior to the Closing, Edwards shall Control the operation of the Commercial Aviation Business and the Company Group.

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5.03 Further Assurances.

(a) Prior to the Closing, each Party shall use its respective reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done (and to assist and cooperate with the other Party in doing), all things reasonably necessary under applicable Law or otherwise for such Party to consummate and make effective, in the most expeditious manner practicable (and, in any event, prior to the Termination Date), the transactions contemplated by this Agreement, including the satisfaction, but not the waiver, of the conditions set forth in Article VIII.

(b) Without limiting the generality of Section 5.03(a), Edwards shall, and shall cause the other members of the Edwards Group to, from time to time when requested by Bulls Brazil, whether at or after the Closing, and without further consideration, promptly (i) execute and deliver, or cause to be executed and delivered, all such documents reasonably necessary or advisable to (A) vest in Bulls Brazil all right, title and interest in and to the Selling Shares and the Issued Shares, and vest in the Company Group all right, title and interest in and to the Contributed Assets, in each case in accordance with Sections 2.01, 2.02 and 2.04 of this Agreement, and (B) perfect and record each of the sale and transfer of the Selling Shares to Bulls Brazil, the issuance of the Issued Shares to Bulls Brazil, the payment of the Capital Raise Amount to the Company, and the contribution of the Contributed Assets to the Company Group, and (ii) for a period of five (5) years after the Closing, with respect to any Asset held by the Edwards Group as of the Closing Date that was necessary to conduct the Commercial Aviation Business as conducted by the Edwards Group as of the date hereof and as of the Closing Date, furnish to the Company Group services at cost, or access for use of such Asset, that enable the Company Group to have the capability in respect of such Assets held by the Edwards Group as of the Closing Date as necessary for the Commercial Aviation Business, except to the extent such capability has already been furnished under the Ancillary Agreements. Notwithstanding anything to the contrary herein, services provided in accordance with clause (ii) of this Section 5.03(b) shall be taken into consideration when calculating the amount of Indemnity Losses arising out of or resulting from any breach or inaccuracy of Section 3.07(c).

(c) All Taxes associated with the transfer of Assets from the Edwards Group to the Company Group after the Closing pursuant to Section 5.03 shall be an Indemnified Tax.

5.04 Access to Information.

(a) During the Pre-Closing Period, Edwards shall, and shall cause each of the members of the Edwards Group to, and Edwards and each of the members of the Edwards Group shall cause its Representatives to, afford to Bulls Brazil, its Affiliates and their respective Representatives reasonable access on reasonable advance notice and in a manner that does not unreasonably burden the operations of the business of Edwards and the other members of the Edwards Group, during normal business hours to the officers, employees, Representatives, auditors, properties and facilities, and all Books and Records, and shall reasonably promptly furnish or cause to be furnished to Bulls Brazil

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copies (including in electronic form) of Books and Records and such other financial and other operating data and information as Bulls Brazil may reasonably request in writing; provided that Edwards shall not be obligated to allow Bulls Brazil, its Affiliates or its or their respective Representatives to perform any environmental testing, sampling or other invasive assessment during the Pre-Closing Period. Notwithstanding the foregoing, Edwards shall not be obligated to disclose any information (i) if providing such access or disclosing such information would violate any applicable Law (including Antitrust Laws and privacy Laws), (ii) that would, in the reasonable judgment of Edwards, after taking into account the Confidentiality Agreement, result in the loss of attorney-client privilege with respect to such information, (iii) that would result in the disclosure of trade secrets (unless proper measures are taken to protect such trade secret status), or (iv) constituting an Excluded Asset or Transaction Process Matters; provided that Edwards shall use its reasonable best efforts (A) to allow for such access or disclosure in a manner that does not result in a loss of attorney-client privilege or (B) to develop an alternative to providing such information so as to address such matters that is reasonably acceptable to Bulls Brazil and Edwards, in each case, including through targeted redaction. Edwards shall advise Bulls Brazil in such circumstances that it is unable to comply with Bulls Brazil ’s requests for information pursuant to the immediately preceding sent ence, and Edwards shall provide Bulls Brazil with a reasonably detailed explanation on why such information is being withheld.

(b) During the Pre-Closing Period, no member of the Edwards Group shall have any obligation to provide any access to information contained in any Tax Returns or Books and Records not relating to the Company Group, the Commercial Aviation Business or the Contributed Assets.

(c) At the end of each three (3)-month period following the date of execution of this Agreement and until the end of the Pre-Closing Period, and to the extent permitted by applicable Law, Edwards shall deliver to Bulls Brazil a copy of all Contracts entered into by any of the members of the Edwards Group within the relevant period that would be classified as Material Contracts, pursuant to this Agreement, if such Contracts had been entered into on or prior to the date of execution of this Agreement. Upon Bulls Brazil’s reasonable request, Edwards shall also provide to Bulls Brazil any other information that Bulls Brazil may reasonably request in its discretion in connection with such Contracts.

(d) No notice, access, review or investigation pursuant to this Section 5.04 or any information provided, made available or delivered to Bulls Brazil or its Affiliates pursuant to this Section 5.04 or otherwise shall affect any representations, warranties, covenants or agreements of Edwards or rights or remedies of Bulls Brazil contained in this Agreement.

(e) During the Pre-Closing Period, Edwards shall provide to Bulls Brazil the following reports:

(i) within ninety (90) days after the end of each fiscal year of Edwards, a copy of (A) the audited annual consolidated financial statements of

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Edwards and its Subsidiaries and (B) carve-out audited annual consolidated financial statements of the Company and its Subsidiaries, in each case as of and for such year, prepared in accordance with IFRS consistently applied and applied consistently with IFRS as applied in the preparation of the Edwards Financial Statements, and setting forth in comparative form the figures for the previous year (to the extent such figures are available), all in reasonable detail and accompanied by the opinion of an independent accounting firm;

(ii) within forty-five (45) days after the end of Edwards’ first, second and third quarterly accounting periods, a copy of (A) the unaudited quarterly consolidated financial statements of Edwards and its Subsidiaries and (B) the carve-out unaudited quarterly consolidated financial statements of the Company and its Subsidiaries, in each case as of and for such period, prepared in accordance with IFRS consistently applied and applied consistently with IFRS as applied in the preparation of the Edwards Financial Statements, and setting forth in comparative form the figures for the corresponding period of the previous year (to the extent such figures are available); and

(iii) within fifteen (15) days after the end of each month, a copy of the unaudited monthly statements of income and statements of cash flows of each of Edwards and its Subsidiaries for such month, to the extent prepared by Edwards.

(f) During the Pre-Closing Period, Edwards shall notify Bulls Brazil, and Bulls Brazil shall notify Edwards, as the case may be, as promptly as practical, but in no event later than two (2) Business Days after becoming aware of any such facts, of the filing of any Legal Proceeding or the issuance of any Order that (i) questions the legality of the transactions contemplated by this Agreement, the Bylaws or any of the Ancillary Agreements, or (ii) would reasonably be expected to prevent, hinder or delay the consummation of any of the transactions contemplated hereby.

(g) Prior to the Closing, Edwards shall give Bulls Brazil, its Affiliates and their respective Representatives reasonable access on reasonable advance notice to the IT Assets and Edwards Proprietary Software of the Company Group for the limited purpose of performing various assessment activities designed to test the security of Company Group systems, services, products and/or applications, in a manner that does not unreasonably burden the operations of the business of the Company Group or the Edwards Group.

5.05 Regulatory Approvals; Efforts.

(a) During the Pre-Closing Period, each Party shall, and shall cause its Affiliates to, use its respective reasonable best efforts to (i) as promptly as reasonably practicable obtain all Governmental Authorizations set forth on Schedule 5.05(a) and any other Governmental Authorization that may be, or become, necessary for the performance of such Party’s or any of its Affiliate’s respective obligations pursuant to this Agreement and for the consummation of the transactions contemplated by this Agreement (collectively, the “ Regulatory Approvals ”), and (ii) avoid entry of, or effect

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the dissolution of, any Governmental Authorization that would have the effect of preventing or materially delaying the consummation of the transactions contemplated by this Agreement. The Parties shall cooperate with each other in seeking to promptly obtain the Regulatory Approvals, and each Party shall pay fifty (50%) percent of any filing fees associated with the obtaining of Regulatory Approvals. In furtherance and not in limitation of the foregoing, each Party agrees to (A) make an appropriate and complete filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this Agreement as promptly as reasonably practicable and advisable, (B) make all other required filings with respect to other Regulatory Approvals, including the CADE approval, as soon as reasonably practicable and advisable after the date of this Agreement and (C) not enter into any agreement with the United States Federal Trade Commission, the United States Department of Justice (including for the extension of any waiting period) or any other Governmental Authority not to consummate the transactions contemplated by this Agreement, except with the prior written consent of the other Party.

(b) Without limiting the generality of the foregoing, each Party shall promptly notify the other of any substantive communication it or any of its Affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement and, subject to applicable Law, permit the other to review in advance any proposed substantive communication by such Party to any Governmental Authority. Neither Party shall participate in any substantive meeting or discussion with any Governmental Authority in respect of any Regulatory Approval, unless it consults with the other in advance and, to the extent permitted by such Governmental Authority, gives the other Party or its counsel the opportunity to attend and participate at such meeting. The Parties shall coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other may reasonably request in connection with the foregoing and in seeking early termination of any applicable waiting periods. Subject to applicable Law, the Parties shall provide each other in advance with copies of all substantive correspondence (including documents and data exhibits and attachments), filings or communications between them or any of their Affiliates on the one hand, and any Governmental Authority or members of its staff, on the other hand, with respect to this Agreement and the transactions contemplated by this Agreement. The Parties shall consult the other on any information relating to Bulls Brazil or Edwards, as the case may be, and any of their respective Affiliates that appear in any filing made with, or written materials submitted to (in each case, including any amendments thereto), any Governmental Authority in connection with the transactions contemplated by this Agreement or filings to be made under applicable Antitrust Laws (and any amendments thereto), and shall consider in good faith comments proposed by Bulls Brazil or Edwards, as the case may be; provided that such materials (or any other information or materials provided to or received by any Party under this Section 5.05(b)) may be redacted (x) to remove references concerning the valuation of the Commercial Aviation Business, (y) as necessary to comply with contractual arrangements, and (z) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns, to the extent that such attorney-client or other privilege or confidentiality concerns are not governed by a common interest privilege or doctrine; provided, further, that the Parties may, as each deems advisable, reasonably designate any material or information provided to or

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received by any Party under this Section 5.05(b) as “outside counsel only material”. Notwithstanding anything in this Section 5.05 or elsewhere in this Agreement to the contrary, Bulls Brazil and Edwards shall jointly direct and control all aspects of the Parties’ efforts to obtain Regulatory Approvals either before any Governmental Authority or in any Legal Proceeding pursuant to any Antitrust Laws brought to enjoin the transactions contemplated by this Agreement.

(c) In the event that any Legal Proceeding is commenced challenging the transactions contemplated by this Agreement as violating any Antitrust Law, each Party shall cooperate with each other Party and use its respective reasonable best efforts to contest and resist any such Legal Proceeding and to have vacated, lifted, reversed or overturned any Order resulting therefrom, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement.

(d) Notwithstanding anything contained in this Agreement, in exercising its reasonable best efforts to obtain the Regulatory Approvals and to consummate the transactions contemplated by this Agreement, neither Bulls Brazil nor any of its Affiliates shall be obligated to agree to, accept, perform, or effect, and Edwards shall not, without Bulls Brazil’s prior written consent, agree to, accept, perform or effect, any divestiture or any other undertakings, conditions, remedies, restrictions, obligations, commitments or actions (including any amendments, supplements or modifications to, or waiver of any conditions of, this Agreement or any Ancillary Agreement) required by any Governmental Authority in order to obtain any such Regulatory Approvals (such undertakings, conditions, remedies, restrictions, obligations, commitments or actions, the “Regulatory Requirements ”).

(e) Neither Bulls Brazil nor any of its Affiliates shall enter into or consummate any business combination with any Third Party (by way of merger, consolidation, share exchange, investment, joint venture strategic alliance, other business combination, asset, stock or equity purchase or otherwise), that would prevent the obtaining of any Regulatory Approval contemplated by this Section 5.05 by the Termination Date.

5.06 Third Party Consents. During the Pre-Closing Period, Edwards shall, at its sole cost and expense, make as promptly as reasonably practicable following the date of this Agreement, the notifications required in connection with, and shall use reasonable best efforts to obtain the Consents of all Third Parties (such consents, the “ Third Party Consents ”) required in connection with the consummation of the transactions contemplated hereby (including the Contribution, the sale of the Selling Shares and the Capital Raise), including the Consent of each Third Party listed on Schedule 5.06 (the “Required Consents ”) (it being understood that, as promptly as reasonably practicable following receipt of the Third Party Consents, Edwards shall deliver true, correct and complete copies thereof to Bulls Brazil); provided that neither Edwards nor any other member of the Edwards Group shall take any action in connection with obtaining a Third Party Consent that would impose any conditions or obligations on the Company Group or the Company Joint Venture after the Closing without the prior consent of Bulls Brazil (which consent shall not be unreasonably withheld, conditioned or delayed) other than such obligations

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as shall already have existed pursuant to the Contributed Assets and Assumed Liabilities prior to the Contribution. Subject to Section 8.02 with respect to Required Consents, if, on the Closing Date, any such Third Party Consent is not obtained, or if an attempted conveyance, assignment, transfer or delivery thereof would be ineffective or a violation of Law or Contract or would materially and adversely affect the rights of the Company Group or its designee(s) thereto or thereunder, Edwards shall continue to use reasonable best efforts to obtain any remaining Third Party Consents and shall take all such steps as may be necessary to ensure that the Company Group or its designee(s) obtain all of the economic benefits (including the economic benefit of the contractual rights) and assume the obligations and bear the economic burdens associated with such Contributed Assets in accordance with this Agreement, including potentially subcontracting, sublicensing or subleasing to the Company Group or its designee(s) or under which Edwards would enforce for the benefit of the Company Group or its designee(s) any and all of their rights against a Third Party associated with such Contributed Assets, and Edwards would promptly pay to the Company Group when received all monies received by it in respect of any such Contributed Asset, and Edwards will compensate the Company Group for any increased costs related to these steps such that the Company is in no worse position as a result of the failure to obtain such Third Party Consent. Edwards shall hold the relevant assets, rights and/or income in trust for the sole benefit of the Company Group or its designee(s) and on behalf of the Company Group or its designee(s) and shall as soon as practicable from receipt pay over to the Company Group or its designee(s) all receipts of cash relating to such assets or rights, pending such Third Party Consent being obtained or other limitation on transfer being removed, as applicable. Notwithstanding anything in this Agreement to the contrary, Edwards shall not be in breach of this Agreement for failure to convey, assign, transfer or deliver any Contributed Asset without the consent, waiver or approval of any Third Party (including any Governmental Authority), if an agreement to do any of the foregoing would constitute a breach or other contravention thereof or would violate any applicable Law without such consent, waiver or approval, so long as Edwards provides services to the Company Group pursuant to Section 5.03(b) or otherwise provides the benefits of such Contract under this Section 5.06. For avoidance of doubt, when any such Contributed Asset is transferred to the Company Group, any Taxes associated with such transfer shall be considered an Indemnified Tax.

5.07 Board Recommendations; Adverse Recommendation Change.

(a) Except as expressly permitted by this Section 5.07, neither the Edwards Board nor any committee thereof nor any Edwards statutory officer shall, directly or indirectly, withhold, withdraw, qualify, amend or modify, or publicly propose to withhold, withdraw, qualify, amend or modify, the Voting Recommendation (with respect to the period from the date of this Agreement until the receipt of the Shareholder Approval) or fail to make, or include in the applicable Shareholder Meeting Materials, the approval, adoption, recommendation or declaration of advisability by the Edwards Board or any committee thereof or any Edwards statutory officer of this Agreement or any of the other transactions contemplated by this Agreement, or make any public statement inconsistent with the Voting Recommendation (any of the foregoing actions or omissions described in this Section 5.07(a) , an “Adverse Recommendation Change ”).

(b) Notwithstanding anything to the contrary set forth in Section 5.07(a), upon the occurrence of any Intervening Event or the receipt of a Superior Proposal, the

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Edwards Board may, at any time prior to the Shareholder Meeting, make an Adverse Recommendation Change only if all of the following conditions are met:

(i) Edwards shall have (A) delivered to Bulls Brazil five (5) Business Days’ prior written notice, which shall (1) set forth in reasonable detail information describing the Intervening Event or Superior Proposal and the rationale for the Adverse Recommendation Change and (2) state expressly that, subject to clause (ii) below, the Edwards Board has determined to effect an Adverse Recommendation Change and (B) prior to making such an Adverse Recommendation Change, to the extent requested by Bulls Brazil, engage in good faith negotiations with Bulls Brazil during such five (5) Business Day period to amend this Agreement to the minimum extent, and only to the minimum extent, such that making an Adverse Recommendation Change in response to the Intervening Event or Superior Proposal in accordance with clause (ii) below would no longer be required by the Edwards Board’s fiduciary duties under the Laws of Brazil; and

(ii) the Edwards Board shall have determined in good faith, after consultation with its outside legal counsel and financial advisors, that, in light of such Intervening Event or Superior Proposal and taking into account any revised terms proposed by Bulls Brazil, making such Adverse Recommendation Change would be required by the Edwards Board’s fiduciary duties under the Laws of Brazil.

5.08 Shareholder Meeting.

(a) As promptly as reasonably practicable following the date of this Agreement, Edwards shall hold a shareholder meeting (the “ Shareholder Meeting ”) to approve the Shareholder Vote Proposals. Unless the Edwards Board shall have made an Adverse Recommendation Change, Edwards shall use its reasonable best efforts to obtain as promptly as reasonably practicable the Shareholder Approval, including the Second Golden Share Approval. Notwithstanding the foregoing, Edwards shall not be required, in order to obtain the Second Golden Share Approval, to take any action or commit to any obligations that would have an adverse effect on Edwards (other than de minimis adverse effects).

(b) Promptly after the date of this Agreement, Edwards shall prepare the Shareholder Meeting Materials. Subject to Section 5.07, Edwards shall include the Voting Recommendation in the Shareholder Meeting Materials. Bulls Brazil shall promptly furnish to Edwards all information concerning Bulls Brazil required by Law to be included in the Shareholder Meeting Materials. Edwards shall provide Bulls Brazil and its counsel with a reasonable opportunity to review and comment on the Shareholder Meeting Materials (and any amendments thereto) each time prior to dissemination to the shareholders of Edwards, and Edwards shall consider in good faith all reasonable comments proposed by Bulls Brazil and its counsel. Edwards shall provide Bulls Brazil and its counsel, to the extent not prohibited under applicable Law, with (i) any comments or other communications, whether written or oral, that Edwards or its counsel may

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receive from time to time from Governmental Authorities with respect to the Shareholder Meeting Materials promptly after receipt of those comments or other communications and (ii) a reasonable opportunity to participate in Edwards’ response to those comments and to provide comments on that response (and Edwards shall consider in good faith all reasonable comments proposed by Bulls Brazil and its counsel), including by participating with Edwards or its counsel in any discussions or meetings with Governmental Authorities to the extent such participation is not prohibited by the applicable Governmental Authority, and to participate in all shareholder meetings of Edwards concerning the transactions contemplated by this Agreement.

(c) Edwards shall consult with Bulls Brazil regarding the date of the Shareholder Meeting and, unless this Agreement is terminated in accordance with Article X, shall not cancel, postpone or adjourn the Shareholder Meeting without the prior written consent of Bulls Brazil; provided that Edwards may (A) cancel, postpone or adjourn and reconvene the Shareholder Meeting to the extent required by the CVM or (B) following reasonable consultation with Bulls Brazil, cancel, postpone or adjourn and reconvene the Shareholder Meeting solely to the extent reasonably necessary (x) to ensure that any supplement or amendment to the Shareholder Meeting Materials is made available to Edwards’ shareholders in advance of the S hareholder Meeting, to the extent that the Edwards Board, after consultation with outside counsel, reasonably determines that making any such supplement or amendment available to Edwards’ shareholders is necessary to comply with applicable Law, (y) to solicit additional proxies in favor of the approvals set forth in the Shareholder Vote Proposals, or (z) to provide additional disclosure regarding an Intervening Event or a Superior Proposal. In the event the Shareholder Meeting is cancelled, postponed or adjourned and reconvened pursuant to the foregoing proviso, Edwards shall duly give notice of and reconvene the Shareholder Meeting on a date scheduled by mutual agreement of Edwards and Bulls Brazil, acting reasonably, or, in the absence of such agreement, as soon as practicable following the date of such cancellation, postponement or adjournment.

(d) Edwards shall use its reasonable best efforts to ensure that the Shareholder Meeting is called, noticed, convened, held and conducted in compliance in all material respects with all applicable Laws and Edwards’ Governing Documents. The adoption of the matters set forth in the Shareholder Vote Proposals shall be the only matters that Edwards shall propose to be acted on by the shareholders of Edwards at the Shareholder Meeting; provided that Edwards may, at its sole discretion, propose an extraordinary dividend distribution to its shareholders.

(e) At and prior to the Shareholder Meeting, unless there has been an Adverse Recommendation Change in accordance with Section 5.07(b), Edwards shall use its reasonable best efforts to solicit proxies from its shareholders to obtain the approval of the Shareholder Vote Proposals in accordance with applicable Law.

5.09 No Shop.

(a) During the Pre-Closing Period, Edwards shall not, and shall cause each member of the Edwards Group and each of their respective officers, directors and

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Controlled Affiliates not to, and Edwards shall cause its Representatives not to, directly or indirectly through any other Person or otherwise, solicit, initiate or conduct any discussions, negotiations or other communications with, or provide any non-public information to or otherwise knowingly cooperate in any other way with, or knowingly facilitate or knowingly encourage any effort to attempt to, or negotiate or enter into any Contract, letter of intent, memorandum of understanding or other arrangement or understanding with, any Person or group of Persons regarding any Competing Transaction; provided that (1) ministerial acts, such as answering unsolicited phone calls, shall not be deemed to “facilitate” for purposes of, or otherwise to constitute a breach of, this Section 5.09, and (2) the Edwards Group and its Representatives shall be permitted to inform any such Person of the restrictions contained in this Section 5.09 or contact any such Person to ascertain facts or clarify terms and conditions of any such Competing Transaction or any such inquiry or proposal; provided that in no event shall any member of the Edwards Group or any of their Representatives provide any such Person Confidential Information with respect to the Edwards Group or the Commercial Aviation Business. Edwards shall, and shall cause its Subsidiaries and Representatives to, immediately cease all existing discussions or negotiations with any Person (except for Bulls Brazil and Bulls Brazil’s Affiliates and its and their respective Representatives) conducted prior to the date of this Agreement with respect to any Competing Transaction, request the prompt return or destruction of all Confidential Information previously furnished and promptly terminate all physical and electronic data room access previously granted to any such Person or its Representatives. Notwithstanding anything to the contrary in this Agreement, at any time prior to the date on which Edwards obtains the Shareholder Approval, in response to the receipt of a written proposal of a Competing Transaction made after the date of this Agreement that the Edwards Board determines in good faith (after consultation with their outside legal counsel and a financial advisor) constitutes a Superior Proposal, Edwards and any other members of the Edwards Group (including any of their Representatives) may furnish non-proprietary information with respect to the Edwards Group and the Commercial Aviation Business to the Person making such proposal (and such Person’s Representatives) pursuant to a customary confidentiality agreement; provided that all such information is publicly available prior to the provision of such information to such Person.

(b) Edwards shall promptly (and in any event within two (2) Business Days) notify Bulls Brazil of the receipt by Edwards, the Edwards Group or any of their respective Representatives of any inquiries, or proposals or requests for information concerning a Competing Transaction, including the material terms thereof and the identity of the Person making such proposal and copies of all written materials relating to such inquiries, proposals or requests.

5.10 Notifications. During the Pre-Closing Period, promptly upon a Party becoming aware of (a) any facts or circumstances resulting in or that could reasonably be expected to result in (i) such Party being in material breach of any of its covenants, agreements or other obligations in this Agreement, (ii) such Party being in material breach of, or there being a material inaccuracy with respect to, any of such Party’s representations or warranties, or (iii) the failure of any of such Party’s conditions to consummate the Closing under Article VIII to be satisfied by Closing, or (b) any Order or Legal Proceeding that seeks to prevent, make illegal, or materially

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delay or alter the Closing or the transactions contemplated by this Agreement, such Party shall give written notice thereof (including identification of the related provisions of this Agreement and the facts and circumstances underlying the notice) to the other Party. No such notice shall (x) amend or otherwise modify the Disclosure Schedules (or any underlying representations, warranties, covenants, agreements or other obligations) in any manner or for any purpose, (y) cure any breach or inaccuracy in any representation or warranty, or any breach of any covenant, agreement or other obligation, or (z) effect a waiver of, or otherwise limit or adversely affect, any rights and remedies available under this Agreement (including the right to indemnification under Article XI for any of such breaches or inaccuracies) to the Party to whom such notice is to be delivered.

5.11 Financing Cooperation. Prior to the Closing, Edwards shall, and shall cause the other members of the Edwards Group and their respective Representatives to, cooperate as reasonably requested by Bulls Brazil, including by providing reasonable access (subject to execution of non-disclosure and confidentiality agreements reasonably acceptable to Edwards) to prospective financing sources as may be reasonably necessary for such sources to evaluate the Commercial Aviation Business in connection with any debt or other financing sought by Bulls Brazil or its Affiliates in connection with the repayment, discharge, refinancing or defeasance at or after the Closing of any existing Indebtedness of the Commercial Aviation Business, including the Assumed Debt Amount, and the Company Group prior to or at the Closing, including by obtaining customary payoff, discharge or defeasance or similar letters and other instruments of termination and discharge reasonably requested by Bulls Brazil, including executing and delivering any definitive financing documents in connection with the foregoing to the extent reasonably requested by Bulls Brazil, and furnishing any lenders involved with any such refinancing with all documentation and other information required by any Governmental Authority with respect to any financing under applicable “know your customer” and anti -money laundering rules and regulations, including the PATRIOT Act; provided that the actions contemplated in the foregoing do not (A) cause any representation or warranty in this Agreement to be breached, (B) cause any condition to the Closing set forth in Article VIII to fail to be satisfied or otherwise cause any breach of this Agreement, (C) require any member of the Edwards Group, including any member of the Company Group prior to the Closing, to pay any out-of-pocket fees or expenses (including any commitment or other similar fee), or provide any indemnities or incur any liability or other obligation in connection with any refinancing, except for the Company Group after the Closing, (D) require any member of the Edwards Group, including any member of the Company Group prior to the Closing, or any of their respective Representatives to enter into, execute, deliver or provide (or to have provided on their behalf) any certificates or opinions or any definitive financing documents, including any credit or other agreements, pledge or security documents that are not contingent on Closing or would be effective prior to Closing, (E) result in the contravention of, or that could reasonably be expected to result in a violation or breach of any Laws, (F) cause any member of the Edwards Group, including any member of the Company Group, or any of their respective officers, directors or employees, to incur any personal liability or (G) require any member of the Edwards Group, including any member of the Company Group prior to the Closing, to provide access to or disclose information that Edwards determines would violate any obligation of confidentiality of any member of the Edwards Group, including any member of the Company Group. Bulls Brazil acknowledges and agrees that neither any member of the Edwards Group, nor any member of the Company Group, nor their respective Representatives shall have any responsibility for, or incur

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any liability to any Person under, any of the foregoing financings that Bulls Brazil or its Affiliates may raise in connection with the transactions contemplated hereby or any cooperation provided pursuant to this Section 5.11 (other than, in the case of the Company Group, after the Closing). Bulls Brazil shall promptly, upon request by Edwards, reimburse Edwards and its Subsidiaries, as applicable, for all out-of-pocket costs and expenses (including attorneys’ fees) incurred by Edwards or its Subsidiaries, as applicable, in connection with the cooperation contemplated by this Section 5.11.

5.12 Termination of Related Party Contracts. Prior to the Closing, Edwards shall terminate, or cause to be terminated (without any costs or any other Liability to Bulls Brazil or its Affiliates (including, after the Closing, the Company Group)), each of the Related Party Contracts other than those specifically set forth on Schedule 5.12. Prior to the Closing, Edwards shall cause (i) all amounts owed under the Related Party Contracts to any Company Subsidiary by Edwards and its Affiliates (other than the Company Group) to be paid to such Company Subsidiary, and (ii) all amounts owed under the Related Party Contracts to Edwards and their Affiliates (other than the Company Group) by the Company Group to be paid to Edwards or such Affiliate, cancelled or otherwise discharged; provided that this Section 5.12 shall not apply to any Related Party Contract under which amounts are owed solely between or among members of the Company Group.

5.13 [INTENTIONALLY OMITTED].

5.14 Contribution; Shared Contracts.

(a) Edwards shall, and Edwards shall cause each applicable Affiliate and each applicable member of the Edwards Group (including the Company Group) to, do all things reasonably necessary, proper or advisable under applicable Law to, as promptly as reasonably practicable and upon the terms and subject to the conditions of this Agreement, consummate the transactions contemplated by the Contribution, in accordance with the Contribution Steps Plan and any applicable Laws, including using reasonable best efforts to obtain any new Governmental Authorization for the Company and its Subsidiaries required for the operation of the Commercial Aviation Business to substitute for any Governmental Authorization that cannot be transferred to the Company; provided that, in the event of any conflict between the terms of this Agreement and the Contribution Steps Plan, this Agreement shall prevail. Prior to effecting any Pre- Contribution Step or Post-Contribution Step, Edwards shall give Bulls Brazil sufficient opportunity to review and comment on all documentation relating to such Pre- Contribution Step and Post-Contribution Step and shall consider in good faith and incorporate such reasonable comments made by Bulls Brazil. Without limiting the foregoing, all Pre-Contribution Steps and Post-Contribution Steps shall be duly and properly completed by Edwards in compliance with any applicable Laws and effective against any Governmental Authority or any other Third Party.

(b) After the Closing Date, each of the Parties shall take all actions reasonably requested by the other Party to effect the provisions of Section 2.02, including, in the case of the Edwards Group, the prompt transfer to the Company of any Contributed Assets that are owned by the Edwards Group and are for any reason not transferred at the

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Closing, and, in the case of Bulls Brazil, the prompt return by the Company of any Excluded Assets included in the Contributed Assets that are inadvertently transferred to the Company as part of the Contribution. The Parties acknowledge and agree that Edwards, as the Party originally responsible for the implementation of the Contribution, shall bear any and all costs related to the transfer of such Assets and Liabilities, including applicable Taxes.

(c) Notwithstanding the foregoing, the Company shall not assume or otherwise be obligated to pay, perform or discharge any of the Excluded Liabilities, which Excluded Liabilities shall be retained by Edwards or any members of the Edwards Group.

(d) Members of the Edwards Group are parties to certain Contracts for the procurement of goods and services that relate to the operations or conduct of the Commercial Aviation Business, but which primarily relate to the other businesses of the Edwards Group, which Contracts, except to the extent such Contracts are Contributed Contracts, are set forth on Schedule 5.14(d) (such Contracts, the “ Shared Contracts ”). During the Pre-Closing Period, Edwards shall, and shall cause the other members of the Edwards Group to, use their respective reasonable best efforts to obtain the agreement of the Third Parties that are the counterparties to a Shared Contract to enter into a new Contract effective as of the Closing Date pursuant to which a member of the Company Group will (i) receive substantially the same goods and services provided by the Shared Contract to the Edwards Group for the Commercial Aviation Business on terms and conditions substantially similar to those contained in the provisions of the Shared Contract pertaining to the Commercial Aviation Business and/or (ii) perform the obligations of the applicable member of the Edwards Group that pertain to the Commercial Aviation Business thereunder under substantially similar terms and conditions as contained in the provisions of the Shared Contract pertaining to the Commercial Aviation Business (each, a “ Replacement Contract ”). Edwards shall, and shall cause the other members of the Edwards Group to, consult with Bulls Brazil prior to and in connection with obtaining each such Replacement Contract, and Bulls Brazil shall cooperate in all reasonable respects with Edwards, upon the reasonable request of Edwards, in seeking to obtain such Replacement Contracts. If one or more Replacement Contracts are not so obtained, then upon the written request of Bulls Brazil or, after the Closing, the Company, unless doing so would be prohibited by applicable Law or the applicable counterparty, during the remaining term of the applicable Shared Contract Edwards shall use reasonable best efforts and Bulls Brazil, or the Company, as the case may be, will cooperate in all reasonable respects with Edwards to receive substantially the same goods and services provided by the Shared Contract to the Edwards Group in the provisions thereof to the extent pertaining to the Commercial Aviation Business as of the date hereof and for the Company to bear the economic and other burdens of such Shared Contract to the extent pertaining solely to the Commercial Aviation Business, including the performance or discharge, on behalf of Edwards, of the obligations of Edwards under the provisions of each such Shared Contract pertaining to the Commercial Aviation Business in accordance with the provisions thereof, except for any Liabilities under such Contract that constitute an Excluded Liability. Notwithstanding anything to the contrary set forth in this Section 5.14(d), Bulls Brazil shall not be required (x) to

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expend any money with respect to negotiating any Shared Contract or Replacement Contract or (y) to commence or participate in any Legal Proceeding or offer or grant any accommodation (financial or otherwise) to Edwards, the applicable counterparty or any Third Party in order to provide the Company or other member of the Company Group with the benefits under a Shared Contract or with a Replacement Contract.

(e) Edwards shall as soon as practicable cause the Company Group to apply for and, to the extent legally permitted under applicable Law, obtain all available Tax Incentives and Benefits (other than any Tax Incentives and Benefits described in Section 2.02(a)(xvi)).

5.15 Ancillary Agreements; Related Actions. On the Closing Date, Bulls Brazil, Edwards and the Company shall, and Edwards shall cause each applicable member of the Edwards Group to, and Bulls Brazil shall cause Bulls Parent for those agreements to which it is a party to, enter into, execute and deliver (1) a shareholders’ agreement in the form set forth in Exhibit D (t he “Shareholders’ Agreement”), (2) a general services agreement in the form set forth in Exhibit E (the “ General Services Agreement ”), (3) an engineering services agreement in the form set forth in Exhibit F (the “ Engineering Services Agreement ”), (4) an intellectual property license agreement in the form set forth in Exhibit G (the “ Intellectual Property License Agreement ”), (5) a research an d development agreement in the form set forth in Exhibit H (the “Research and Development Agreement ”), (6) a facilities use agreement in the form set forth in Exhibit I (the “ Facilities Use Agreement ”), (7) a preferred supply agreement with the Company as supplier in the form set forth in Exhibit J1 (the “ Company Preferred Supply Agreement ”) and a preferred supply agreement with Edwards as supplier in the form set forth in Exhibit J2 (the “Edwards Preferred Supply Agreement ” and, together with the Company Pre ferred Supply Agreement, the “ Preferred Supply Agreements ”), (8) a supply chain cooperation agreement in the form set forth in Exhibit K (the “ Supply Chain Cooperation Agreement ”), (9) maintenance services agreements in the forms set forth in Exhibit N1 and Exhibit N2 (the “Maintenance Services Agreements ”) (10) the material support agreements in the forms set forth in Exhibit O1 and Exhibit O2 (the “Material Support Agreements ”) and (11) a sublease in the form in Exhibit P (the “ Sublease ”). On the Closing Date, Bulls Brazil shall c ause the Affiliate of Bulls Brazil that acquires 100% of the redeemable preferred shares constituting Selling Shares pursuant to Section 2.04(a)(ii) to execute and deliver a Permitted Transferee Joinder Agreement (as defined in the Shareholders’ Agreement) .

5.16 Resignation of Directors and Officers. No later than ten (10) Business Days prior to the Closing, Bulls Brazil shall indicate in writing to Edwards any director and officer of the Company Group from whom a letter of resignation will be required at the Closing, and upon receipt of such request, Edwards shall obtain and deliver to Bulls Brazil executed letters of resignation of each director and officer of the Company Group designated by Bulls Brazil, pursuant to which such designated director or officer will resign as director or officer, as the case may be, effective as of the Closing.

5.17 Confidentiality.

(a) Following the Closing, Edwards shall, and shall cause its Representatives and Affiliates to, keep confidential any Confidential Information in the possession of

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Edwards or its Representatives or Affiliates, as the case may be, to the extent relating to the Commercial Aviation Business, the Company Group, Bulls Brazil and its Affiliates; provided that (i) the foregoing shall not apply to any Confidential Information to the extent it also relates to the Retained Businesses or the other businesses (other than the Commercial Aviation Business) of Edwards and its respective Affiliates, (ii) Edwards shall be allowed to disclose Confidential Information to the extent such disclosure is determined by Edwards (with the advice of counsel) to be required by any applicable Law, including applicable rules of any securities exchange, and (iii) Edwards shall be liable for any breaches by its Representatives and/or its Affiliates of the obligations set forth in this Section 5.17(a). In the event that Edwards or any of its Representatives or Affiliates is required by applicable Law to disclose any such information, Edwards shall (A) to the extent permitted by such applicable Law, provide Bulls Brazil with prompt written notice of such requirement, (B) disclose only that information that Edwards determines (with the advice of counsel) is required by such applicable Law to be disclosed and (C) use reasonable efforts to preserve the confidentiality of such information, including by, at Bulls Brazil’s request, reasonably cooperating with Bulls Brazil to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded such information (at Bulls Brazil’s sole cost and expense). For the purposes of clarity, all use of Confidential Information relating to Intellectual Property is covered by the Intellectual Property License Agreement.

(b) Following the Closing, Bulls Brazil shall, and shall cause its Representatives and Affiliates (including all members of the Company Group) to, keep confidential any Confidential Information in the possession of Bulls Brazil or its Representatives or Affiliates (including any member of the Company Group), as the case may be, to the extent relating to the businesses of Edwards and its Affiliates (but excluding the Commercial Aviation Business); provided that (i) the foregoing shall not apply to any Confidential Information to the extent it also related to the Commercial Aviation Business, (ii) Bulls Brazil shall be allowed to disclose Confidential Information to the extent such disclosure is determined by Bulls Brazil (with the advice of counsel) to be required by any applicable Law, including applicable rules of any securities exchange, and (iii) Bulls Brazil shall be liable for any breaches by its Representatives and/or its Affiliates of the obligations set forth in this Section 5.17(b). In the event that Bulls Brazil or any of its Representatives or Affiliates is required by any applicable Law to disclose any such information, Bulls Brazil shall (i) to the extent permitted by such applicable Law, provide Edwards with prompt written notice of such requirement, (ii) disclose only that information that Bulls Brazil determines (with the advice of counsel) is required by such applicable Law to be disclosed and (iii) use reasonable efforts to preserve the confidentiality of such information, including by, at Edwards’ request, reasonably cooperating with Edwards to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded such information (at Edwards’ sole cost and expense). For the purposes of clarity, all use of Confidential Information relating to Intellectual Property is covered by the Intellectual Property License Agreement.

(c) Notwithstanding anything to the contrary in the Confidentiality Agreement, the Confidentiality Agreement shall survive until the Closing.

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5.18 Books and Records.

(a) In order to facilitate the resolution of any Claims made against or incurred by Edwards in connection with the Commercial Aviation Business relating to the Pre- Closing Period, for a period of ten (10) years after the Closing (provided that Bulls Brazil shall cause the Company to retain the Books and Records with respect to Tax matters that are in the Company’s or its Subsidiaries’ possession at the Closing until the expiration of the applicable statute of limitations, including any extensions thereof, and to abide by all record retention agreements entered into by Edwards or its Affiliates with any Tax Authority with respect to the Commercial Aviation Business), Bulls Brazil shall (i) retain the Books and Records relating to the Pre-Closing Period that are in the Company’s or its Subsid iaries’ possession at the Closing and (ii) upon reasonable notice, afford the Representatives of Edwards reasonable access (including the right to make, at the expense of Edwards, photocopies), during normal business hours, to such Books and Records that a re in the Company’s or its Subsidiaries’ possession at the Closing for any reasonable purpose.

(b) In order to facilitate the resolution of any Claims made against or incurred by Bulls Brazil or any member of the Company Group relating to the Commercial Aviation Business, for a period of ten (10) years after the Closing (provided that Edwards shall retain the Books and Records with respect to Tax matters that are in the possession of Edwards or their respective Affiliates (other than the Company Group) at the Closing until the expiration of the applicable statute of limitations, including any extensions thereof, and to abide by all record retention agreements entered into with any Tax Authority), Edwards shall (i) retain the Books and Records relating to periods prior to the Closing which are in the possession of Edwards or its Affiliates (other than the Company Group) at the Closing and shall not otherwise have been delivered to Bulls Brazil, and (ii) upon reasonable notice, afford the officers, employees, agents and representatives of Bulls Brazil or the Company reasonable access (including the right to make, at the expense of the requesting Party, photocopies), for any reasonable purpose during normal business hours, to such Books and Records that are in the possession of Edwards or its respective Affiliates (other than the Company Group) at the Closing and have not otherwise been delivered to Bulls Brazil or the Company.

(c) To the extent reasonably required by Bulls Brazil upon delivery of written notice to Edwards, Edwards shall cause the officers and employees of the members of the Edwards Group to fully cooperate with Bulls Brazil in connection with Assumed Product Liability Claims made against or incurred by Bulls Brazil or any member of the Company Group after the Closing Date, including by requiring such officers and employees with knowledge of matters relevant to an Assumed Product Liability Claim to communicate freely with Bulls Brazil with respect to such matters.

5.19 Insurance. As of the Closing Date, the Company Group shall have the right to make claims and receive proceeds in respect of any occurrence based insurance policies held by Edwards or any other member of the Edwards Group following the Closing and under which the Company Group or the Commercial Aviation Business is an insured (a “ Covered Insurance Claim ”), to the extent payable after the Closing in respect of (A) any of the Assumed Liabilities

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or (B) any Loss relating to the condition of any of the Contributed Assets at the Closing that shall not have been remedied or repaired at the Closing or, if partially remedied or repaired, such portion of such benefits, rights or proceeds as corresponds to what remains to be remedied or repaired. To the extent required by Bulls Brazil, after the Closing, with respect to any act, omission, event or circumstance relating to the Company Group or the Commercial Aviation Business that occurred or existed prior to the Closing that is a Covered Insurance Claim, Edwards shall, or shall cause the applicable member of the Edwards Group to, upon the request of Bulls Brazil, the Company or a member of the Company Group, make such Covered Insurance Claim under such occurrence based policies subject only to the terms and conditions of such occurrence based policies to the extent such coverage is available and use commercially reasonable efforts to collect the insurance proceeds with respect thereto; provided that the Company Group shall (i) first notify Edwards (or a local Third Party claims administrator designated by Edwards in writing) of each such Covered Insurance Claim and (ii) be responsible for all costs incurred in pursuing such Covered Insurance Claim and any amount of a Covered Insurance Claim that falls below applicable deductibles or self-insured retentions. Edwards shall provide reasonable assistance, as may be reasonably requested by Bulls Brazil or the Company Group from time to time, in submitting a Covered Insurance Claim and in collecting the insurance proceeds with respect to a Covered Insurance Claim on behalf of the Company Group. Edwards and its Affiliates shall not commute or otherwise terminate any insurance policies that may provide coverage for a Covered Insurance Claim.

5.20 No Solicitation; No Hire.

(a) For a period of twenty-four (24) months following the Closing (the “ Non- Solicitation Period ”), Edwards shall not, and shall cause its Affiliates not to, without the prior written consent of Bulls Brazil, directly or indirectly solicit, hire, enter into an agreement regarding the employment (or consultancy, secondment, or similar position) of, or employ or continue to employ, any Key Employee or any employee of the Company Group as of the Closing; provided that nothing in this Section 5.20(a) shall prohibit the solicitation or hiring of any such employees (other than Key Employees) (i) resulting from general advertisements for employment (including any recruitment efforts conducted by any recruitment agency, so long as neither Edwards nor any of its Affiliates has directed such recruitment efforts at such employee), (ii) if such employee approaches Edwards or its Affiliates on an unsolicited basis or (iii) following termination of such employee’s employmen t with the Company Group without any solicitation or encouragement by Edwards or its Affiliates.

(b) During the Non-Solicitation Period, Bulls Brazil shall not, and shall cause its Affiliates not to, without the prior written consent of Edwards, directly or indirectly solicit, hire or enter into an agreement regarding the employment (or consultancy, secondment, or similar position) of any of the employees of Edwards or its Subsidiaries; provided that nothing in this Section 5.20(b) shall prohibit the solicitation or hiring of any such employee (i) resulting from general advertisements for employment (including any recruitment efforts conducted by any recruitment agency, so long as neither Bulls Brazil nor any of its Affiliates has directed such recruitment efforts at such employee), (ii) if such employee approaches Bulls Brazil or its Affiliates on an unsolicited basis or (iii) following termination of such employee’s employment with the Edwards Group, without

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any solicitation or encouragement by Bulls Brazil or its Affiliates (the “ Bulls Brazil Non- Solicit ”); and provided, further, that the Bulls Brazil Non-Solicit will cease to apply in its entirety and permanently if less than eighty percent (80%) of the aggregate number of Commercial Aviation Business Employees set forth on Schedule 5.20(b), are employed or otherwise retained by the Company Group at any time within the Non-Solicitation Period. In addition, the Bulls Brazil Non-Solicit shall cease to apply as to any employee category by function, or subfunction if there are multiple subfunctions listed within a function, set forth on Schedule 5.20(b), if less than the percentage of the Commercial Aviation Business Employees set forth on Schedule 5.20(b) with respect to such function or subfunction, as applicable, are employed or otherwise retained by the Company Group in such function or subfunction, as applicable, at any time within the Non-Solicitation Period, but only for so long as the number of Commercial Aviation Business Employees employed or otherwise retained by the Company Group with respect to such function or subfunction remains below the applicable percentage threshold for such function or subfunction.

5.21 Assumption of Deferred Prosecution Agreement. During the Pre-Closing Period, each Party shall, and shall cause its Affiliates to, use its respective reasonable best efforts to obtain as promptly as practicable and, in any event, at least thirty (30) days prior to the Closing, any approval or authorization required pursuant to Paragraph 21 of the Deferred Prosecution Agreement. Effective as of the Closing, the Company shall assume and be bound by the obligations set forth in the Deferred Prosecution Agreement solely with respect to the Commercial Aviation Business in accordance with the requirements set forth in Paragraph 21 of the Deferred Prosecution Agreement.

5.22 Excluded Marks.

(a) Bulls Brazil, for itself and its Affiliates (including the Company Group), acknowledges and agrees that (i) the Company Group is not purchasing, acquiring or otherwise obtaining any right, title or interest in and to the Excluded Marks, and (ii) other than as expressly provided in Section 5.22(b), as of the Closing, the Company Group shall not have (or have acquired or obtained) any rights in or to (or to adopt, use, register, or seek to register) any Excluded Marks, in any jurisdiction, either alone or in combination with any other Trademarks.

(b) Effective as of the Closing, Edwards hereby grants to the Company Group, for a period of eighteen (18) months after the Closing, a limited, non-exclusive license to use the Excluded Marks solely as used in the conduct of the Commercial Aviation Business immediately prior to the Closing, as reasonably necessary to facilitate the transition by the Company Group to new names and marks for the Commercial Aviation Business. Bulls Brazil, on behalf of itself and its Affiliates (including the Company Group), agrees that as promptly as reasonably practicable following the Closing, but in any event no later than eighteen (18) months following the Closing, the Company Group shall cease and discontinue any and all uses of the Excluded Marks, either alone or in combination with other Trademarks. All goodwill generated by the Company Group’s use of t he Excluded Marks pursuant to the foregoing license in this Section 5.22 shall inure to the benefit of Edwards and its Affiliates, for no additional

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consideration. Any use by the Company Group of any of the Excluded Marks as permitted in this Section 5.22 is subject to their use of the Excluded Marks in a form and manner, and with standards of quality, of that in effect for the Excluded Marks as of the Closing.

(c) Notwithstanding Section 5.22(a) and Section 5.22(b), Bulls Brazil and its Affiliates have the right to use the Excluded Marks at all times after the Closing as and to the extent required by applicable Law, in a non-trademark sense to factually describe the transactions consummated hereby and the history of the Commercial Aviation Business and (subject to commercially reasonable efforts to exhaust or replace such collateral as soon as reasonably practicable) on legal and business documents and office collateral in existence as of the Closing Date.

5.23 MRO Contracts. Prior to the Closing, Bulls Brazil and Edwards shall negotiate in good faith a Contract to be entered into by the Company and Edwards at Closing covering the maintenance, repair and overhaul services set forth on Schedule 5.23 , subject to Edwards’ satisfying cost, quality and control parameters; provided that the Company and Edwards shall be under no obligation to enter into such Contract if the Company and Edwards are unable to reach an agreement with respect to the final terms of such Contract before the Closing Date.

5.24 Company’s Rights Concer ning the Contributed Assets. After the Closing, the Contributed Assets are property of the Company, regardless of the retention, possession or use of the Contributed Assets by the Edwards Group. The Parties acknowledge that the Contributed Assets are essential for the growth and development of the Commercial Aviation Business. Upon the occurrence of any Insolvency Event by or against Edwards: (i) at the Company’s discretion and upon delivery of a notice containing proper instructions and directions, Edwards irrevocably undertakes to, and shall take, all appropriate action to promptly return, or cause to be returned, to the Company any Contributed Asset that may be in Edwards’ or a Third Party’s possession, provided that Edwards irrevocably undertakes to abstain from taking any action or remedy seeking to contest, impede, delay or in any other way hinder the repossession of such Contributed Asset by the Company; and (ii) if the possession of any Contributed Assets is not transferred to the Company in accordance with clause (i), the Company shall be entitled to take control of all such Contributed Assets and operate and maintain them (the “ Step-In Rights ”). Should the Company decide to exercise its Step-In Rights, the Company shall give Edwards notice, which notice shall be effective and complied with immediately by Edwards. Upon the delivery of such notice to Edwards, Edwards shall cooperate fully with the Company to facilitate the Company’s effective exercise of its Step-In Rights, including (x) permitting and providing full access to Edwards’s facilities and related assets; (y) abstaining from managing Edwards’ business in any form that may compromise or impede the effective exercise of the Step-In Rights by the Comp any; and (z) directing Edwards’ employees to fully comply with Company’s instructions with respect to the Contributed Assets and performing all further acts as may be necessary in order to guarantee the exercise by the Company of the Step-In Rights.

5.25 IT Monitoring. Beginning as of the date hereof and until the Closing, Edwards shall (a) maintain the monitoring, alerting, and auditing of log files on all Edwards information technology systems; (b) implement, maintain, and comply with an end user communication protocol and procedure regarding targeted phishing and threats relating to viruses, worms, Trojan

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horses, or similar disabling code or programs; (c) implement IT Assets and Edwards Proprietary Software configured to identify, monitor, record and analyze security events or incidents, (d) provide to Bulls Brazil evidence of compliance with the foregoing prior to the Closing; (e) for any malicious or suspicious activity detected by enhanced monitoring, provide evidence that a response occurred in a reasonable time and that steps were taken to identify root cause and close within a reasonable time (suggested evidence would include a record of date and time for detection, initial response, closure along with steps taken and root cause or other evidence deemed appropriate by Edwards); and (f) implement a forced change in passwords requiring each user to create a passphrase up to 64 characters with a minimum of 14, with lockout policy after 5 failed attempts; provided that Bulls Brazil shall bear any reasonable out-of-pocket incremental costs incurred by the Edwards Group in connection with compliance of clauses (c) and (e) of this Section 5.25.

5.26 OGMA. In the event that OGMA enters into any E2 Geared Turbofan TM (GTF) engine maintenance services agreement with United Technologies Corporation, Pratt & Whitney Division, Edwards shall cause OGMA to pay to the Company a royalty of three percent (3%) of the annual gross revenues arising out of or relating to such Contract. The royalty payment shall be made within thir ty (30) days after the end of OGMA’s fiscal year, and shall be supported by a financial schedule that depicts the royalty payment calculation, including revenue totals by commercial airline or aircraft leasing customer. The Company shall have the right to examine, reproduce, and audit all financial records to the extent reasonably necessary to confirm the calculation of royalty payment. Edwards shall provide reasonable access to the books and records of OGMA to support the Company audit rights of the royalty calculation.

5.27 CA Business. During the Pre-Closing Period, Edwards shall cause each of the entities and businesses referred to in clauses (a) through (c) of the definition of Retained Businesses not to commence any CA Business or, to the extent any such entity or business conducts any CA Business as of the date hereof, not to add to or expand any such CA Business after the date hereof, other than the OGMA Geared TurbofanTM (GTF) activities.

ARTICLE VI

TAX MATTERS

6.01 Liability for Taxes.

(a) Edwards shall be liable for any and all Taxes of the Company and each of the Company Subsidiaries for all Pre-Closing Tax Periods. Without duplication, Edwards shall be liable for all Taxes relating to the Contributed Assets and the Commercial Aviation Business for all Pre-Closing Tax Periods.

(b) Apportioned Taxes shall be allocated to the Pre-Closing Tax Period and the Post-Closing Tax Period as follows:

(i) for Apportioned Taxes based upon or related to income or receipts, Edwards shall be responsible for the amount of such Apportioned Taxes that would be payable if the Straddle Period ended on the Closing Date.

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(ii) for Apportioned Taxes measured by the amount or level of any item (including such Taxes as are measured by the amount of capital or the value of intangibles), Edwards shall be responsible for the amount of such Apportioned Taxes that are determined by multiplying (i) the amount or level of such items immediately prior to the Closing, by (ii) a fraction, the numerator of which is the number of calendar days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period.

(iii) for all Apportioned Taxes not described in clauses (i) and (ii) above, Edwards shall be responsible for the amount of such Apportioned Taxes that are determined by multiplying (x) the amount of such Apportioned Taxes for the entire Straddle Period, by (y) a fraction, the numerator of which is the number of calendar days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period.

6.02 Preparation of Tax Returns and Payment of Taxes.

(a) Pre-Closing Returns. Edwards shall prepare and timely file (or cause to be prepared and timely filed), taking into account extensions, all Tax Returns of or which include the Company Group, the Contributed Assets or the Commercial Aviation Business that are due on or prior to the Closing Date. Such Tax Returns shall be prepared in a manner consistent with past practice unless otherwise required by applicable Law. Edwards shall pay or cause the Company Group to pay all Taxes with respect to such Tax Returns other than Taxes contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with IFRS.

(b) Straddle Period and Post-Closing Returns. The Company shall prepare and timely file (or cause to be prepared and timely filed), taking into account extensions, all Tax Returns of or related to the Company Group, the Contributed Assets or the Commercial Aviation Business that are required to be filed after the Closing Date and which relate to Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice unless otherwise required by applicable Law. If any such Tax Returns include Taxes that could be allocated to Edwards pursuant to this Article VI or Article XI, the Company shall provide Edwards with copies of any such Tax Returns at least twenty (20) Business Days prior to the date such Tax Returns are due (taking into account extensions) for Edwards’ review and comment and shall incorporate all reasonable comments of Edwards in good faith. All Taxes in respect of such Tax Returns shall be paid in accordance with the provisions of this Article VI and Article XI.

6.03 Cooperation. Each Party, and its respective Affiliates, shall make available to the other Party, its respective Affiliates, and its Representatives such records and information as such Party may reasonably request for the preparation of any Tax Returns or other similar governmental reports that are required to be filed by such Party, as well as such additional records as such Party may reasonably require for the defense of any Tax Contest concerning any such Tax Return or other similar governmental report or form, including executing and

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delivering such powers of attorney and other documents to the extent necessary to carry out the provisions of this Section 6.03; provided that (i) neither Bulls Brazil nor any of its Affiliates (other than the Company and the Company Subsidiaries) shall be required to make available any such records and information as it relates to any affiliated, combined, unitary or aggregate group of Bulls Brazil or its Affiliates (other than the Company and the Company Subsidiaries) and (ii) neither Edwards nor any of its Affiliates (other than the Company and the Company Subsidiaries) shall be required to make available any such records and information as it relates to any affiliated, combined, unitary or aggregate group of Edwards or its Affiliates (other than the Company and the Company Subsidiaries), except to the extent relating to the Contributed Assets or the Commercial Aviation Business, and Edwards shall be entitled to redact any information contained in any such records and information as Edwards reasonably determines is not directly related to the Contributed Assets and Commercial Aviation Business. Any information obtained under this Section 6.03 shall be kept confidential except (i) as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting or defending any Tax Contest or (ii) with the consent of Edwards or Bulls Brazil, as the case may be. Bulls Brazil shall make available to Edwards such Tax Returns and information as reasonably required by Edwards to comply with its obligations under this Agreement; provided that neither Bulls Brazil nor any of its Affiliates (other than the Company and the Company Subsidiaries) shall be required to make available any such records and information as it relates to any affiliated, combined, unitary or aggregate group of Bulls Brazil or its Affiliates (other than the Company and the Company Subsidiaries). Notwithstanding anything herein to the contrary, no member of the Edwards Group shall have the right to review any information, documentation or other materials that are subject to the attorney client privilege or the privilege provided by Section 7525 of the Code.

6.04 Tax Contests.

(a) After the Closing, the Company shall promptly forward to each of the Parties (and in each case, in any event, within thirty (30) days), all written notifications and other communications from any Governmental Authority relating to any Tax inquiry, audit, claim, assessment, infraction notice, court proceeding, or any examination or investigation commenced, brought, conducted or heard by or before any court or other Governmental Authority or other dispute or judicial proceedings or review with respect to any Tax matter that affects any member of the Company Group, the Contributed Assets or the Commercial Aviation Business (a “ Tax Contest ”) if such Tax Contest could give rise to an Indemnified Tax.

(b) Edwards shall have the sole right to control the defense, compromise, or other resolution of any Material Tax Contest, including responding to inquiries from any Tax Authority and settling the Material Tax Contest. The Company shall have the sole right to control the defense, compromise, or other resolution of any Tax Contest other than a Material Tax Contest that relates to a Pre-Closing Tax Period, including responding to inquiries from a Tax Authority and settling the Tax Contest.

(c) Notwithstanding anything herein to the contrary, the party controlling a Tax Contest (including, for the avoidance of doubt, a Material Tax Contest) pursuant to Section 6.04(b) (“ Controlling Party ”) shall conduct and defend such Tax Contest

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diligently and in good faith. The Controlling Party shall (i) keep the other party reasonably apprised of the status of any such Tax Contest, (ii) provide copies of any written correspondence or other submissions received from any Tax Authority with respect to such Tax Contest to the other party, (iii) provide copies of any written correspondence to be provided to any Tax Authority in connection with such Tax Contest for review, and (iv) bear its own costs incurred in connection with defending, compromising or otherwise resolving the Tax Contest. The Controlling Party shall take the other party’s reasonable comments on government submissions and the strategy for defending the Tax Contest into consideration. Any decision by a Controlling Party to settle a Tax Contest that could give rise to an Indemnified Tax shall take into consideration reasonable comments and opinions by the Indemnifying Person, including any expert opinions from an internationally recognized law firm on the likelihood of loss of the respective Tax Contest.

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event of any conflict between any other provisions of this Agreement (including the provisions contained in Article XI) and this Section 6.04, the provisions of this Section 6.04 shall govern the conduct of all Tax Contests.

6.05 Transfer Taxes. All Transfer Taxes incurred in connection with this Agreement and/or the Contribution and the Capital Raise shall be borne and paid by Edwards. To the extent the Company is legally required or held responsible to pay any Transfer Taxes and file any Tax Returns and other documentation with respect to any Transfer Taxes, the Company shall file such Tax Returns and pay such Transfer Taxes and, for this purpose, Edwards shall reimburse the Company for such Transfer Taxes, plus any gross revenue Taxes applicable over such reimbursements, within five (5) Business Days of the due date of such Tax Return.

6.06 Section 338(g) Election Matters. Neither Bulls Brazil nor any of its Affiliates shall, without the prior written consent of Edwards, make or file an election under Section 338(g) of the Code (or any similar provision of state, local or foreign Law) with respect to Embraer Aircraft Customer Services, Inc. and Embraer Aircraft Maintenance Services, Inc.

ARTICLE VII

EMPLOYEES AND BENEFIT PLANS

7.01 Transfer of Employment. Prior to the Closing and subject to the Contribution Steps Plan, Sections 2.01 to 2.03, Sections 5.14(a) and 5.14(c) and Section 7.05(a), Edwards shall use reasonable best efforts and satisfy all applicable Laws such that, as of immediately prior to the Closing, (i) each Commercial Aviation Business Employee shall be employed by a member of the Company Group, whether by operation of applicable Laws governing employer succession, employer substitution or some other automatic transfer scheme, and (ii) only Commercial Aviation Business Employees are employed by the members of the Company Group.

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7.02 Pre-Closing HRIMS, Payroll and Benefits; Pension Plan.

(a) Edwards shall take all necessary actions to ensure that, prior to the Closing, the Company or a member of the Company Group, as the case may be, maintains and administers, separate from the other members of the Edwards Group and only with respect to Commercial Aviation Business Employees, self-sufficient human resource information management systems and payroll systems. To the extent administrators, record keepers or other service providers need to be engaged on behalf of or by the Company with respect to such systems, Edwards and the Company shall use reasonable best efforts and standards in contracting with such service providers, and Edwards shall provide to the Company the opportunity to review and comment on any terms of engagement and/or Contracts negotiated with such Third Parties, and Edwards shall consider in good faith all reasonable comments proposed by Bulls Brazil to such documents.

(b) Edwards shall take all necessary actions to ensure that, prior to the Closing, the Company or a member of the Company Group, as the case may be, maintains, sponsors, and administers, separate from the other members of the Edwards Group and only on behalf of Commercial Aviation Business Employees, except as provided herein, the same or substantially the same pension and health and welfare benefit programs as those currently sponsored by Edwards and offered to Commercial Aviation Business Employees, which shall be established in compliance with applicable Law, individual employment agreements, and Collective Arrangements (the “ Company Group Benefit Plans ”). Further, Edwards shall take all necessary actions to ensure that, prior to the Closing, Commercial Aviation Business Retirees are covered by an applicable Company Group Benefit Plan solely with respect to the provision of post- termination extension of health care that such retirees were eligible for under an applicable Edwards Benefit Plans immediately prior to the creation of the applicable Company Group Benefit Plan. To the extent Third Party providers, carriers, administrators, record keepers or other service providers need to be engaged on behalf of or by the Company with respect to such benefit programs, Edwards and the Company shall use reasonable best efforts and standards in contracting with such service providers, and Edwards shall provide to the Company the opportunity to review and comment on any terms of engagement and/or Contracts negotiated with such Third Parties, and Edwards shall consider in good faith all reasonable comments proposed by Bulls Brazil to such documents.

(c) Notwithstanding Section 7.02(b) and as provided in this Section 7.02(c), with respect to the private pension plan sponsored by Edwards in Brazil (“ Edwards Pension Plan ”), Edwards shall, and shal l cause its Affiliates to, take all actions necessary, prior to the Closing, to enable the Company and the Company Group to remain a sponsor under the Edwards Pension Plan after the Closing and enable all Commercial Aviation Business Employees who become Continuing Employees to continue to participate in the Edwards Pension Plan after the Closing, including by obtaining all necessary regulatory and corporate approvals to amend the bylaws of the Embraer Prev – Sociedade de Previdência Complementar in order to provide that any company in which Edwards holds

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an equity interest is allowed to participate in the plan and has the authority set forth in item (i) below.

(i) Edwards shall, and shall cause its Affiliates to, take all necessary steps, working with Embraer Prev – Sociedade de Previdência Complementar , the current manager of the Edwards Pension Plan, to ensure that the Company Group and its Affiliates, as of the Closing, have authority with respect to the design, operation and administration of the Edwards Pension Plan proportionate to its sponsorship of the Edwards Pension Plan.

(ii) Edwards shall, and shall cause its Affiliates to, cooperate in the rebranding of the Edwards Pension Plan to reflect the Company as a sponsor.

(iii) Edwards shall, and shall cause its Affiliates to, cooperate with the Company and its Affiliates, in the administration of the Edwards Pension Plan with respect to the participation of Continuing Employees under the Edwards Pension Plan.

(iv) Notwithstanding anything hereto the contrary, nothing in this Section 7.02 shall obligate the Company or the Company Group to remain a sponsor of the Edwards Pension Plan for any specific period of time after Closing, and to the extent the Company or Company Group decides to initiate a transfer of management of the Edwards Pension Plan with respect to Continuing Employees to a new private pension plan entity to be maintained and sponsored by the Company or a member of the Company Group, Edwards shall, and shall cause its Affiliates to, cooperate in good faith with respect to all actions necessary to complete such transfer of management, including timely completing and satisfying any notice obligations and requirements necessary for a plan transfer, timely completing the transfer request to the National Superintendence of Supplementary Pension ( PREVIC – Superintendência Nacional de Previdência Complementar ), the transfer of assets and obligations from the Edwards Pension Plan (with respect to Commercial Aviation Business Employees only) to the Company pension plan, and any other requirement reasonably necessary or provided for by Law.

(d) With respect to the creation of Company Group Benefit Plans under Sections 7.02(b) and 7.02(c), Edwards shall ensure that such plans do not have terms less favorable to the Company Group than the terms of the Edwards Benefit Plans with respect to the Edwards Group and that such plans do not include, are not assigned and do not assume any obligations other than are commercially reasonable with respect to the covered population of Commercial Aviation Business Employees or Commercial Aviation Business Retirees and subject to Sections 2.03(a)(iv) and 2.03(a)(v).

7.03 Post-Closing Benefits. During the twelve-month (12) period commencing at the Closing Date, Bulls Brazil shall provide, or shall cause an Affiliate of Bulls Brazil or a member of the Company Group to provide, to each Commercial Aviation Business Employee as of the Closing (such employees, the “ Continuing Employees ”), compensation and benefits that are in

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the aggregate, substantially comparable to the compensation and benefits being provided to either, in Bulls Brazil’s discretion, Commercial Aviation Business Employees as of the date of this Agreement or similarly situated employees of Bulls Brazil (in each case, without regard to any stock or equity-based compensation plans or programs, and any change in control, retention or severance benefits), subject to any applicable Law, individual employment agreement, or Collective Arrangement; provided that in all instances described above, subject to any applicable Law, individual employment agreement, or Collective Arrangement, Bulls Brazil, in its discretion, may provide such compensation and employee benefits to Continuing Employees under any of the Company Group Benefit Plans or Bulls Brazil’s or any of its Affiliate’s employee benefit plans.

7.04 Employees and Retention.

(a) Schedule 7.04 sets forth the categories of Commercial Aviation Business Employees by function, including the number of such Commercial Aviation Business Employees by function as of the date hereof and the maximum and minimum number of such employees, by function, to be Commercial Aviation Business Employees at Closing. Prior to the Closing, Edwards and Bulls Brazil shall cooperate in good faith to identify the Edwards employees that will be transferred to or employed by the Company Group at Closing, which employees shall be reasonably satisfactory to Bulls Brazil. The Commercial Aviation Business Employees at Closing shall include, as to each of the functions set forth in Schedule 7.04, employees representing a mix of seniority, experience and performance (based on Edwards’ evaluations for 2017 and 2018, which shall be made available to Bulls Brazil as to all Commercial Aviation Business Employees) that is consistent with the mix of seniority, experience and performance of the Commercial Aviation Business Employees at the date hereof.

(b) Edwards, to the extent requested by Bulls Brazil in writing and at Bulls Brazil’s sole expense, shall enter into, or cause a member of the Company Group to enter into, or permit Bulls Brazil to enter into, at or prior to Closing, retention agreements, substantially in the form provided by Bulls Brazil, with Commercial Aviation Business Employees as may be specifically requested prior to the Closing (the “ Retention Program ”); provided that such Retention Program shall provide that in the event the Closing does not occur, such retention agreements shall be null and void and no payments or benefits will be due under the Retention Program.

7.05 General Employment Provisions.

(a) To the extent applicable, prior to the Closing, Edwards and its Affiliates shall complete, or cause to be completed, the information and consultation obligations required by applicable Law or Collective Arrangements concerning the transactions contemplated by this Agreement with respect to the Commercial Aviation Business Employees.

(b) Edwards, the Company Group, and Bulls Brazil shall, and shall cause their respective Affiliates to, reasonably cooperate in (i) providing such information and assistance with the information and consultation processes with unions, works councils

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and other employee representative bodies and Governmental Authorities as is required or may be reasonably requested in connection with the transactions contemplated by this Agreement, and (ii) providing information and assistance with respect to effectuating the arrangements contemplated under the terms of this Agreement; provided that the Parties shall not be required to provide such information and assistance if providing such assistance or disclosing such information would violate any applicable Law (including privacy Laws) or Privacy Policies.

(c) The Parties shall cause the Collective Arrangements to be assigned from Edwards or its Affiliates to members of the Company Group, where required by applicable Law.

(d) The provisions of this Article VII are solely for the benefit of the Parties, and no current or former employee, director or independent contractor or any other individual associated therewith shall be regarded for any purpose as a Third Party beneficiary of the Agreement, and nothing herein shall be construed as an amendment to any terms and conditions of employment, employment agreement, Employee Benefit Plan or other employee benefit plan for any purpose. Nothing in this Article VII shall be construed, subject to applicable Law, to (i) limit the right of Edwards, Bulls Brazil or any of their respective Affiliates to amend or terminate any employment without just cause, Employee Benefit Plan or any other employee benefit plan, to the extent such amendment or termination is permitted by the terms of the applicable plan or (ii) require Bulls Brazil or any of its Affiliates to retain the employment of any particular Commercial Aviation Business Employee for any fixed period of time following the Closing Date.

ARTICLE VIII

CONDITIONS PRECEDENT TO CLOSING

8.01 Conditions to Each Party’s Obliga tion to Close. The respective obligations of each Party to consummate the Closing are subject to the satisfaction or waiver (to the extent permitted by applicable Law) by each Party of the following conditions:

(a) Second Golden Share Approval. The Second Golden Share Approval shall have been obtained in connection with the Shareholder Approval.

(b) Shareholder Approval. The Shareholder Approval (other than the Second Golden Share Approval) shall have been obtained.

(c) CADE Approval. Approval for the consummation of the transactions contemplated by this Agreement by CADE shall have been obtained and the term of fifteen (15) days counted as from the publication of the decision in the Official Gazette of Brazil shall have elapsed without any further condition or change.

(d) HSR Waiting Period. The waiting period (and any extension thereof) applicable to the consummation of the transactions contemplated hereby under the HSR Act shall have expired or been terminated.

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(e) Non-Brazil/U.S. Regulatory Approvals. Each of the notifications to, or Governmental Authorizations from, the Governmental Authorities set forth on Schedule 8.01(e) shall have been made or obtained, as described thereon.

(f) No Injunctions. There shall not be in effect any Law or Order binding on a Party that prohibits the Closing.

8.02 Conditions to Bulls Brazil’s Obligation to Close . The obligations of Bulls Brazil to consummate the Closing are subject to the satisfaction (or waiver by Bulls Brazil) of each of the following conditions:

(a) Contribution. The Contribution and the Post-Contribution Steps shall have been completed, in all material respects, in accordance with the Contribution Steps Plan, Sections 2.01 to 2.03 and Sections 5.14(a) and 5.14(c); provided that Bulls Brazil shall not be entitled to waive this Closing Condition until the later of (x) the date that all other Closing Conditions in Section 8.01 and this Section 8.02 (other than those Closing Conditions that by their nature cannot be satisfied until the Closing, but that would be capable of being satisfied if the Closing occurred on such date) have been satisfied and (y) the date that is twelve (12) months from the date hereof.

(b) Accuracy of Fundamental R&W. (i) The representations and warranties of Edwards set forth in Sections 3.01(a), 3.01(b) and 3.01(e) (Existence of Edwards and the Company ), Section 3.02 (Due Authorization ), Section 3.03 (Governmental Authorizations for the Agreement ), Section 3.04 (Capitalization of the Company Group; Company Joint Venture ), Section 3.14 (Brokers ), and Section 3.20(a) (No Edwards CAB Material Adverse Effect ) shall be true and correct in all respects (other than de minimis inaccuracies) and (ii) the representations and warranties of Edwards set forth in Section 3.07 (Sufficiency of Assets; Title ) and Section 3.23 (Anti-Bribery ) shall be true and correct in all material respects, in the case of both clauses (i) and (ii), as of the date hereof and as of the Closing Date as if made on and as of such date, and except for representations and warranties that by their express terms address matters only as of a particular date, which representations and warranties shall be so true and correct only as of such date.

(c) Accuracy of Other R&W. All other representations and warranties of Edwards set forth in Article III (other than the representations and warranties of Edwards that are expressly set forth in Section 8.02(b)) shall be true and correct (without giving effect to any limitation as to “materiality” or “Edwards CAB Material Adverse Effect” set forth herein) as of the date hereof and as of the Closing Date as if made on and as of such date, except (i) for representations and warranties that by their express terms address matters only as of a particular date, which representations and warranties shall be true and correct only as of such date and (ii) where the failure of any such representations and warranties to be true and correct would not, and would not reasonably be expected to, result in an Edwards CAB Material Adverse Effect.

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(d) Covenant Compliance. Edwards shall have performed and complied in all material respects with all of its covenants, obligations and agreements contained in this Agreement to be performed and complied with by it on or prior to the Closing Date.

(e) No Edwards CAB Material Adverse Effect. Since the date of this Agreement, no Edwards CAB Material Adverse Effect shall have occurred.

(f) Edwards and Company Closing Deliveries. Bulls Brazil shall have received all documents and other items to be delivered pursuant to Section 9.01 (except for de minimis deliveries) and all documents and other items to be delivered pursuant to Section 9.03.

(g) Shareholder Approval. Bulls Brazil shall have received a copy of the Shareholder Approval.

(h) No Legal Proceeding. There shall not be any Legal Proceeding filed or initiated by the Government of Brazil after the date hereof seeking to impose, or any Law promulgated or enacted by the Government of Brazil after the date hereof that imposes, on Bulls Parent, Bulls Brazil or the Company Group in relation to or in connection with the Closing or the other transactions contemplated by this Agreement and the Ancillary Agreements any burdens or costs (including through any changes or additions to the terms and conditions of this Agreement and the Ancillary Agreements) that, in the aggregate, are greater (in absolute amount) than sought to be imposed on the Edwards Group (excluding the Company Group) in such Legal Proceeding, or imposed on the Edwards Group (excluding the Company Group) under such Law.

(i) Consents and Authorizations. Edwards shall have delivered, or caused to be delivered, to Bulls Brazil each of the Required Consents and Governmental Authorizations as set forth on Schedule 8.02(i).

(j) Key Employees. At least forty (40) of the Key Employees shall have entered into retention agreements or other arrangements in the form attached hereto as, or as otherwise described on, Exhibit M, with any modifications as may be satisfactory to Bulls Brazil in its discretion.

(k) Closing of the Contribution Agreement. The closing of the transactions contemplated by the Contribution Agreement (the “ KC JV Closing ”) shall have been consummated concurrently with the closing of the transactions contemplated by this Agreement; provided that the KC JV Closing shall not be a condition to the obligations of Bulls Brazil to consummate the Closing if the failure of the KC JV Closing to occur shall have been caused by a breach of the Contribution Agreement by Bulls Brazil or its Affiliates.

(l) Closing Certificate. Bulls Brazil shall have received a certificate, dated as of the Closing Date and signed by an Edwards Executive Officer, to the effect that the conditions set forth in Sections 8.02(a) through (e) have been satisfied.

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8.03 Conditions to Edwards’ Obligation t o Close. The obligations of Edwards to consummate the Closing are subject to the satisfaction or waiver by Edwards of the following conditions:

(a) Accuracy of Fundamental R&W. The representations and warranties of Bulls Brazil set forth in Section 4.01 (Existence of Bulls Brazil and Bulls Parent ), Section 4.02 (Due Authorization ) and Section 4.06 (Brokers ) shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made on and as of such date, except for representations and warranties that by their express terms address matters only as of a particular date, which representations and warranties shall be true and correct in all respects only as of such date.

(b) Accuracy of Other R&W. The representations and warranties of Bulls Brazil contained in Article IV (other than the representations and warranties of Bulls Brazil that are expressly set forth in Section 8.03(a)) shall be true and correct (without giving effect to any limitation as to “materiality” or “Bulls Material Adverse Effect” set forth herein) as of the date hereof and as of the Closing Date as if made on and as of such date, except (i) for representations and warranties that by their express terms address matters only as of a particular date, which representations and warranties shall be true and correct as of such date and (ii) where the failure of any such representations and warranties to be true and correct would not, and would not reasonably be expected to, result in a Bulls Material Adverse Effect.

(c) Covenant Compliance. Bulls Brazil shall have performed and complied in all material respects with all of its covenants, obligations and agreements contained in this Agreement to be performed and complied with by it on or prior to the Closing Date.

(d) Closing of the Contribution Agreement. The KC JV Closing shall have been consummated concurrently with the closing of the transactions contemplated by this Agreement; provided that the KC JV Closing shall not be a condition to the obligations of Edwards to consummate the Closing if the failure of the KC JV Closing to occur shall have been caused by a breach of the Contribution Agreement by Edwards or its Affiliates.

(e) Closing Certificate. Edwards shall have received a certificate, dated as of the Closing Date, signed by an executive officer of Bulls Brazil, to the effect that the conditions set forth in Sections 8.03(a) through (c) have been satisfied.

(f) Bulls Brazil Closing Deliveries. Edwards and the Company, as the case may be, shall have received all documents and other items to be delivered pursuant to Section 9.02 and Section 9.04.

ARTICLE IX

CLOSING DELIVERIES

9.01 Deliveries by Edwards to Bulls Brazil. At the Closing, Edwards shall deliver, or cause to be delivered, to Bulls Brazil each the following:

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(a) any and all documents and forms necessary for the transfer, assignment and delivery of the Selling Shares, duly executed by Edwards, including the Corporate Books;

(b) the minute and attendance books, stock ledgers and registers and corporate seals, if any, of the Company and any of its Subsidiaries (which shall have been duly signed, revised and updated for all events up until the Closing Date) in the possession of Edwards (it being understood that any such minute and attendance books, stock ledgers and registers and corporate seals in the possession of the Company or any of its Subsidiaries shall remain with such Person and not be delivered to Bulls Brazil);

(c) each Ancillary Agreement to which Edwards or one or more of its Affiliates are contemplated to be a party, duly executed by such Persons;

(d) documentation evidencing that the Encumbrances (other than Permitted Encumbrances) that are applicable to the Contributed Assets and are set forth on Schedule 9.01(d) have been, or immediately upon the occurrence of the Closing shall be, released and terminated;

(e) a certificate from the Board of Trade of the State of São Paulo ( Junta Comercial do Estado de São Paulo – JUCESP ), dated no earlier than five (5) days prior to the Closing Date, as to the legal existence of the Company;

(f) the certificate referred to in Section 8.02(l), duly executed by an Edwards Executive Officer; and

(g) executed and, to the extent applicable, filed and registered, copies of all material Contribution documents required by the Contribution Steps Plan.

9.02 Deliveries by Bulls Brazil to Edwards. At the Closing, Bulls Brazil shall deliver, or cause to be delivered, to Edwards each of the following:

(a) the Closing Date Payment pursuant to, and in accordance with, Section 2.04;

(b) each Ancillary Agreement to which Bulls Brazil or one or more of its Affiliates are contemplated to be a party, duly executed by such Persons;

(c) a Permitted Transferee Joinder Agreement (as defined in the Shareholders’ Agreement), duly executed by the Affiliate of Bulls Brazil that acquires 100% of the redeemable preferred shares constituting Selling Shares pursuant to Section 2.04(a)(ii); and

(d) the certificate referred to in Section 8.03(e), duly executed by an executive officer of Bulls Brazil.

9.03 Deliveries by the Company to Bulls Brazil. At the Closing, the Company shall deliver, or cause to be delivered, to Bulls Brazil each of the following:

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(a) any and all documents and forms necessary for the delivery of the Issued Shares, including the subscription bulletin for the Issued Shares executed by the Company;

(b) a copy of the duly executed and approved minutes of the Closing Shareholders’ Meeting; and

(c) a copy of the duly executed and approved minutes of the Board of Directors of the Company appointing the new officers of the Company.

9.04 Deliveries by Bulls Brazil to the Company. At the Closing, Bulls Brazil shall deliver, or cause to be delivered, to the Company each of the following:

(a) the duly executed subscription bulletin for the Issued Shares; and

(b) the Capital Raise Amount pursuant to, and in accordance with, Section 2.04.

ARTICLE X

TERMINATION

10.01 Termination. This Agreement may be terminated at any time prior to the Closing:

(a) By the mutual written agreement of Edwards and Bulls Brazil;

(b) By either Edwards or Bulls Brazil:

(i) if the Closing shall not have occurred on or before the date that is fifteen (15) months after the date hereof (the “ Initial Termination Date ”); provided that (A) if on such date any of the Closing Conditions set forth in Sections 8.01(c), 8.01(d), 8.01(e) and, to the extent relating to Antitrust Law, 8.01(f), shall not have been satisfied or waived by Bulls Brazil or Edwards but all other Closing Conditions shall have been satisfied (other than those Closing Conditions that by their nature cannot be satisfied until the Closing, but that would be capable of being satisfied if the Closing occurred on the Initial Termination Date) or waived by the Party then entitled to give such waiver (to the extent permitted by applicable Law), then each Party shall have the right, by delivery of a written notice to the other Party, to extend the Initial Termination Date to 11:59 p.m. (São Paulo time) on the date that is twenty-one (21) months after the date hereof and (B) if on the Initial Termination Date the Closing Condition set forth in Section 8.03(d) shall not have been satisfied as a result of the closing condition in Section 6.1(b) of the Contribution Agreement not having been satisfied but all other Closing Conditions shall have been satisfied (other than (x) those Closing Conditions that by their nature cannot be satisfied until the Closing, but that would be capable of being satisfied if the Closing occurred on the Initial Termination Date, or (y) any of the Closing Conditions set forth in Sections 8.01(c), 8.01(d), 8.01(e) and, to the extent relating to Antitrust Law,

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8.01(f)) or waived by the Party then entitled to give such waiver (to the extent permitted by applicable Law), then Bulls Brazil shall have the right, by delivery of a written notice to Edwards, to extend the Initial Termination Date to 11:59 p.m. (São Paulo time) on the date that is twenty-one (21) months after the date hereof; provided that Bulls Brazil shall not be entitled to extend the Initial Termination Date pursuant to this clause (B) if Bulls Brazil would not be entitled to assert the failure of the condition set forth in Section 6.1(b) of the Contribution Agreement to be satisfied as the basis for not effectuating the Closing (as defined in the Contribution Agreement) pursuant to the terms of Section 6.1(b) of the Contribution Agreement (for purposes of this Agreement, the term “ Termination Date ” shall mean the Initial Termination Date, unless the Initial Termination Date has been extended pursuant to clause (A) or (B) of this proviso, in which case the term “ Termination Date ” shall mean the date to which the Initial Termination Date has been so extended); provided, further, that the right to terminate this Agreement under this Section 10.01(b)(i) shall not be available to any Party seeking to terminate if such Party has materially breached any of its representations, warranties, covenants, agreements or other obligations under this Agreement and such material breach proximately caused the failure of the Closing to occur on or before the Termination Date;

(ii) if there shall be any Regulatory Requirement or Law in effect that is binding on a Party and prohibits or permanently enjoins the Closing or the other transactions contemplated by this Agreement and the Ancillary Agreements, in each case, which Regulatory Requirement shall have become final and non- appealable; provided that (A) the Party seeking to terminate this Agreement pursuant to this Section 10.01(b)(ii) shall have performed and complied with in all material respects its obligations under this Agreement to challenge and eliminate such Regulatory Requirement or Law, including under Section 5.05 and Section 5.08(a); and (B) except in the event of a judicial decision that is final and non- appealable, such termination right shall not be available until the earlier of (x) six (months) following the date such Law or Regulatory Requirement shall have come into effect and (y) the Termination Date; or

(iii) if the Shareholder Meeting is convened with the presence of shareholders constituting a quorum pursuant to Edwards’ Governing Documents and, at such meeting (or at any reconvened meeting, in the case of any adjournment thereof pursuant to this Agreement), the Shareholder Vote Proposals fail to receive the Shareholder Approval.

(c) by Bulls Brazil:

(i) if Edwards is in breach of any of its covenants, agreements or other obligations in this Agreement, or is in breach of, or there is an inaccuracy with respect to, any of the representations or warranties set forth in Article III hereof, which breach or inaccuracy (x) would result in any Closing Condition set forth in Section 8.02 not being satisfied, and (y) by its nature cannot be cured or has not been cured by Edwards, as the case may be, by the earlier of (A) the tenth (10th )

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Business Day immediately prior to the Termination Date and (B) the date that is ninety (90) days after Edwards’ receipt of written notice of such breach or inaccuracy from Bulls Brazil; provided that Bulls Brazil is not then in material breach of its representations, warranties, covenants, agreements or other obligations contained in this Agreement;

(ii) if all Closing Conditions shall have been satisfied other than the Closing Condition in Section 8.02(h) or Section 8.01(c) and those Closing Conditions that by their nature cannot be satisfied until the Closing (but that would be capable of being satisfied at the Closing);

(iii) if the Edwards Board shall have (x) failed to include the Voting Recommendation in the Shareholder Meeting Materials when mailed or (y) at any time prior to obtaining the Shareholder Approval, makes an Adverse Recommendation Change in respect of the Shareholder Vote Proposals; or

(iv) if the Shareholder Approval shall not have been obtained on or prior to February 28, 2019, provided that Bulls Brazil shall cease to have the right to terminate this Agreement pursuant to this Section 10.01(c)(iv) once the Shareholder Approval has been obtained.

(d) by Edwards, if Bulls Brazil is in breach of any of its covenants, agreements or other obligations in this Agreement, or is in breach of, or there is an inaccuracy with respect to, any of the representations or warranties set forth in Article IV hereof, which breach or inaccuracy (i) would result in any Closing Condition set forth in Section 8.03 not being satisfied, and (ii) by its nature cannot be cured or has not been cured by Bulls Brazil, as the case may be, by the earlier of (A) the tenth (10 th ) Business Day immediately prior to the Termination Date and (B) the date that is ninety (90) days after Bulls Brazil ’s receipt of written notice of such breach or inaccuracy from Edwards; provided that Edwards is not then in material breach of its representations, warranties, covenants, agreements or other obligations contained in this Agreement.

10.02 Effect of Termination. In the event of the termination of this Agreement by a Party as provided in this Article X, written notice thereof shall be given to the other Party, specifying the provision hereof pursuant to which such termination is made, and this Agreement shall immediately become void and of no effect, without any Liability on the part of any Party other than (a) as set forth in Section 10.03; provided that this Section 10.02, Section 10.03, Article I and Article XII (in each case subject to the limitations set forth therein) which shall survive termination of this Agreement, and (b) Liability of any Party (whether or not the terminating Party) for any Willful Breach of this Agreement prior to such termination, which Liabilities shall survive the termination of this Agreement.

10.03 Termination Fees.

(a) If this Agreement is terminated by Bulls Brazil pursuant to Section 10.01(c)(iii) or by Edwards pursuant to Section 10.01(b)(iii) after having made an Adverse Recommendation Change, Edwards shall, concurrently with such termination in

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the case of a termination by Edwards, and within five (5) Business Days in the case of a termination by Bulls Brazil, pay, or cause to be paid, to Bulls Brazil an amount equal to the Edwards Termination Fee by wire transfer of immediately available funds.

(b) If this Agreement is terminated: (i) by Bulls Brazil or Edwards pursuant to Section 10.01(b)(i) and on the Termination Date all of the Closing Conditions shall have been satisfied or waived (other than (x) the Closing Conditions set forth in Sections 8.01(d) or 8.01(e) and (y) those Closing Conditions that by their nature cannot be satisfied until the Closing Date, but that would be capable of being satisfied if the Closing Date occurred on the Termination Date) or (ii) by Bulls Brazil or Edwards pursuant to Section 10.01(b)(ii) due to Regulatory Requirements imposed under applicable Antitrust Laws (other than the Antitrust Laws of Brazil); then in the case of each of clauses (i) and (ii), Bulls Brazil shall, concurrently with such termination in the case of a termination by Bulls Brazil, or within five (5) Business Days in the case of a termination by Edwards, pay, or cause to be paid, to Edwards an amount equal to the Antitrust Termination Fee by wire transfer of immediately available funds.

(c) In no event shall a Party be required to pay the Edwards Termination Fee or the Antitrust Termination Fee, as the case may be, on more than one occasion. In the event the Edwards Termination Fee or the Antitrust Termination Fee, as the case may be, is payable to a Party in accordance with this Section 10.03, then, except in the case of Willful Breach, such payment shall be the sole and exclusive remedy of such Party or any of its Affiliates, shareholders or Representatives, against the other Party or any of its Subsidiaries, shareholders and Representatives with respect to the termination event giving rise to the payment of the Edwards Termination Fee or the Antitrust Termination Fee, as the case may be.

(d) The provisions of this Section 10.03 are an integral part of the transactions contemplated by this Agreement and, without such provisions, the Parties would not have entered into this Agreement. Each Party acknowledges and agrees, on behalf of itself and its Affiliates, that the payment of the Edwards Termination Fee or the Antitrust Termination Fee, as the case may be, is not a penalty but instead is liquidated damages in a reasonable amount that shall compensate a Party in the circumstances in which the Edwards Termination Fee or the Antitrust Termination Fee, as the case may be, is payable, for the efforts and resources expended and the opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated by this Agreement, which amount would otherwise be impossible to calculate with precision. This Section 10.03 shall not limit the right of a Party to seek specific performance of this Agreement pursuant to Section 12.13 prior to the termination of this Agreement or to obtain remedies for any Willful Breach of this Agreement.

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ARTICLE XI

INDEMNIFICATION

11.01 Survival.

(a) The representations and warranties contained in Article III and in Article IV (or in any certificate executed and delivered by Edwards or Bulls Brazil in fulfillment of the requirements or conditions of this Agreement) and all covenants, agreements and other obligations of Edwards and Bulls Brazil made in this Agreement which by their terms are to be performed or complied with, in whole or in part, by Edwards or Bulls Brazil, as the case may be, at or prior to the Closing shall survive for a period of twenty- four (24) months following the Closing Date; provided that (i) Section 2.03(a) and Section 2.03(b) shall survive until no Claim may be made under applicable Laws with respect to any Assumed Liability or Excluded Liability, as the case may be, whether as a result of full discharge, waiver, estoppel, extinguishment under applicable statutes of limitations or laches, or otherwise, (ii) the representations and warranties set forth in Section 3.01 (Existence of Edwards and the Company ), Section 3.02 (Due Authorization ), Section 3.03 (Governmental Authorizations for the Agreement ), Section 3.04 (Capitalization of the Company Group; Company Joint Venture ), Section 3.07 (Sufficiency of Assets; Title ), Section 3.14 (Brokers ), Section 3.16 (Environmental Matters ), Section 3.23 (Anti-Bribery), Section 3.24 (Export; Sanctions ), Section 4.01 (Existence of Bulls Brazil and Bulls Parent ), Section 4.02 (Due Authorization ) and Section 4.06 (Brokers ) (each, a “ Fundamental Representation ”), and the representations and warranties set forth in Section 3.12 (Taxes ) shall each survive until the ninetieth (90th ) day following the expiration of the applicable statute of limitations (as that may have been extended or waived), and (iii) notwithstanding the foregoing, any representation or warranty the inaccuracy or breach of which results from or arises out of any Willful Breach shall survive until the ninetieth (90 th ) day following the expiration for the statute of limitations for such underlying Willful Breach.

(b) All covenants, agreements and other obligations of Edwards and Bulls Brazil made in this Agreement which by their terms are to be performed or complied with, in whole or in part, by such Person following the Closing shall survive the Closing Date until fully performed in accordance with their terms.

(c) No knowledge of or investigation by or on behalf of a Party shall constitut e or effectuate a waiver of such Party’s right to enforce any representation, warranty, covenant, agreement or other obligation contained in this Agreement or in any way limit such Party’s right to indemnification under this Article XI.

(d) No Claim regarding a breach of any such representation, warranty, covenant, agreement or other obligation shall be made after the expiration of the applicable survival period. Any Claim for indemnification asserted in writing prior to the expiration of any such survival period as provided in this Section 11.01 (regardless of whether a Legal Proceeding has been commenced) shall have been timely made for purposes of this Article XI such that the representation, warranty, covenant, agreement or

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obligation that is the subject of such Claim, to the extent of such Claim only, shall survive until such Claim has been fully and finally resolved in accordance with the terms of this Agreement. For the avoidance of doubt, the separate obligations of the Parties under this Article XI shall survive until ninety (90) days after the expiration of the survival period for the last representation, warranty, covenant, agreement or other obligation under this Agreement.

11.02 Indemnification by Edwards. Subject to the provisions of this Article XI, after the Closing, Edwards shall indemnify, defend and hold harmless Bulls Brazil, its Affiliates (including the Company Group, it being understood that the Company will have standing to seek, without duplication of recovery for the same Loss, indemnification directly from Edwards pursuant to this Article XI if the Company Group is an Indemnified Person and Bulls Brazil decides, at Bulls Brazil’s discretion, to have the Company bring an indemnification Claim against Edwards) and its and their respective officers, directors, equityholders, employees, agents, attorneys and other representatives and their respective successors and assigns (each, a “Bulls Brazil Indemnified Person ”) for, from and against any and all Indemnity Losses incurred or suffered by any Bulls Brazil Indemnified Person arising out of or resulting from any and all of the following:

(a) any breach or inaccuracy of any representation or warranty made by Edwards in this Agreement or in any certificate delivered by Edwards pursuant hereto;

(b) any breach of, or failure by Edwards to perform or comply with, any of its covenants, agreements or other obligations set forth in this Agreement;

(c) any Excluded Liabilities;

(d) any Indemnified Taxes;

(e) any Excluded Company Subsidiary Liabilities; and

(f) any Liabilities set forth on Schedule 11.02(f).

11.03 Indemnification by Bulls Brazil or the Company. Subject to the provisions of this Article XI, after the Closing, Bulls Brazil (solely with respect to Sections 11.03(a) and 11.03(b)) and the Company (solely with respect to Section 11.03(c)) shall indemnify, defend and hold harmless Edwards, its Affiliates and its and their respective officers, directors, equityholders, employees, agents, attorneys and other representatives and their respective successors and assigns (each, an “ Edwards Indemnified Person ”) for, from and against any and all Indemnity Losses incurred or suffered by any Edwards Indemnified Person arising out of or resulting from any and all of the following:

(a) any breach or inaccuracy of any representation or warranty made by Bulls Brazil in this Agreement or in any certificate delivered by Bulls Brazil pursuant hereto;

(b) any breach of, or failure by Bulls Brazil to perform or comply with, any of its covenants, agreements or other obligations under this Agreement; and

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(c) any Assumed Liabilities, except with respect to any Indemnity Losses that are subject to indemnification under Section 11.02(a) or Section 11.02(b).

11.04 Limitations on Indemnification. Notwithstanding the provisions of Section 11.02 and Section 11.03 to the contrary:

(a) Edwards shall have no obligation to indemnify any Bulls Brazil Indemnified Person under Section 11.02(a) (i) for any individual Claims where the Indemnity Loss relating thereto is less than two hundred thousand dollars ($200,000) (the “Per Claim Threshold ”), provided that any Claims arising out of substantially the same facts or circumstances may be aggregated for purposes of the Per Claim Threshold, and provided, further, that upon exceeding the Per Claim Threshold, the entire amount of such item from the first dollar shall be subject to indemnification, (ii) unless and until the aggregate Indemnity Losses not excluded by the Per Claim Threshold incurred or suffered by all Bulls Brazil Indemnified Persons (or any of them) thereunder exceed thirty million dollars ($30,000,000) (the “ Deductible ”), in which case, Edwards shall be responsible for such for Indemnity Losses in excess of the Deductible; and (iii) after the aggregate Indemnity Losses paid to Bulls Brazil Indemnified Persons (or any of them) by Edwards under Section 11.02(a) exceed five hundred million dollars ($500,000,000) (the “Cap ”); provided that (x) none of the Per Claim Threshold, the Deductible or the Cap shall apply to any amounts payable in respect of Indemnity Losses arising from or related to (A) any inaccuracy or breach of any Fundamental Representation or (B) any Claim based on Fraud, although such amounts shall be aggregated with all other Indemnity Losses to determine if indemnification obligations exceed the Deductible, and no such amounts shall be counted towards the Cap, and (y) the Per Claim Threshold and Deductible shall not apply to any breach or inaccuracy of Section 3.10 and, except for any Claims based on Fraud, the maximum Indemnity Losses for which Edwards shall be obligated to indemnify the Bulls Brazil Indemnified Parties (or any of them) in respect of a breach or inaccuracy of Section 3.10 and any Claims that would otherwise constitute Assumed Product Liability Claims shall be twenty-five million dollars ($25,000,000); provided that this amount shall be reduced by the amount actually paid by Edwards as Excluded Product Liability Claims.

(b) Bulls Brazil shall have no obligation to indemnify any Edwards Indemnified Person under Section 11.03(a) (i) unless and until the aggregate Indemnity Losses incurred or suffered by all Edwards Indemnified Persons (or any of them), thereunder exceed the Deductible, in which case, Bulls Brazil shall be responsible for such Indemnity Losses in excess of the Deductible; and (ii) after the aggregate Indemnity Losses paid to Edwards Indemnified Persons (or any of them) by Bulls Brazil under Section 11.03(a) exceed the Cap; provided that neither the Deductible nor the Cap shall apply to any amounts payable in respect of Indemnity Losses arising from or related to (A) any inaccuracy or breach of any Fundamental Representation or (B) any Claim based on Fraud, although such amounts shall be aggregated with all other Indemnity Losses to determine if indemnification obligations exceed the Deductible, and no such amounts shall be counted towards the Cap.

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(c) For purposes of this Article XI, when (i) determining whether any breach or inaccuracy of a representation or warranty in this Agreement has occurred and (ii) calculating the amount of any Indemnity Losses relating thereto, in each case, all references as to materiality, Edwards CAB Material Adverse Effect, Bulls Material Adverse Effect or other similar materiality-based qualifications set forth therein shall be disregarded; provided that references to such materiality-based qualifications shall not be disregarded in the definitions of Material Contracts and Permitted Encumbrances or when determining whether any breach or inaccuracy of the representations and warranties set forth in Section 3.06 (Financial Statements ), Section 3.20 (No Edwards CAB Material Adverse Effect ) and Section 3.21 (Absence of Undisclosed Liabilities ) has occurred.

(d) The amount for which any Indemnifying Person shall be liable with respect to any Indemnity Loss incurred by any Indemnified Person shall be reduced to the extent that such Indemnified Person shall theretofore have actually realized any proceeds (net of any costs or expenses expended by such Indemnified Person in seeking such proceeds, including the present value of any increases in insurance premiums) recovered from Third Parties (including insurers) with respect to such Indemnity Loss or any of the events, conditions, facts or circumstances resulting in such Indemnity Loss.

(e) In the event the Company’s senior management becomes aware of a ny breach giving rise to an indemnification obligation of Edwards under Section 11.02, the Company shall take commercially reasonable steps to, in its reasonable judgment, mitigate any Indemnity Losses which form the basis of such indemnification obligation. In the event the senior management of Edwards becomes aware of any breach giving rise to an indemnification obligation of the Company under Section 11.03, Edwards shall provide the Company with notice thereof and, if requested by the Company, take commercially reasonable steps to, in its reasonable judgment, mitigate any Indemnity Losses which form the basis of such indemnification obligation. Any and all amounts paid or payable by an Indemnified Person in connection with any mitigation required by this Section 11.04(e) shall constitute Indemnity Losses. Nothing in this Section 11.04(e) is intended to supersede any obligations under Law to mitigate Indemnity Losses.

(f) For the avoidance of doubt, to the extent any Indemnity Loss gives rise to a Claim by an Indemnified Person under more than one provision of this Agreement (including, for example, multiple representations, warranties and/or covenants), or under more than one clause of Section 11.02 or Section 11.03, such Indemnified Person may seek recovery under any and all such provisions and clauses; provided that any Indemnity Loss under this Agreement shall be determined without duplication of recovery for the same Loss by reason of the state of facts giving rise to such Indemnity Loss arising out of an Assumed Liability, an Excluded Liability, an Indemnified Tax or an Excluded Company Subsidiary Liability or constituting a breach of more than one representation, warranty, covenant or agreement.

(g) Notwithstanding anything to the contrary herein, with respect to any Indemnity Losses payable by Edwards pursuant to Section 11.02 in respect of any representation or warranty relating to, or any Indemnity Loss incurred by, any member of the Company Group, Edwards may, in its sole discretion, determine to satisfy its

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indemnification obligation in full by making either (i) eighty percent (80%) of such payment to Bulls Brazil or (ii) one-hundred percent (100%) of such payment to the applicable member of the Company Group.

11.05 Direct Claims. The obligations of an Indemnifying Person under this Article XI in connection with any Claim by an Indemnified Person, other than in respect of a Third Party Claim, are subject to the following terms and conditions:

(a) The Indemnified Person shall deliver to the Indemnifying Person notice of such Claim (each such notice, a “ Notice of Claim ”), describing in reasonable detail (to the extent known or reasonably anticipated) the nature and basis of such Claim and, to the extent reasonably availabl e to the Indemnified Person, the amount thereof (the “ Claim Amount ”); provided that the failure to deliver such Notice of Claim shall not affect the rights of the Indemnified Person hereunder except to the extent that the Indemnifying Person shall have been actually and materially prejudiced as a result of such failure. Any Notice of Claim delivered pursuant to this Section 11.05(a) may be supplemented, including any Claim Amount, from time to time thereafter by the Indemnified Person.

(b) If the Indemnifying Person objects to such Claim or Claim Amount, or any portion thereof, as specified in such Notice of Claim, the Indemnifying Person shall, within thirty (30) days after the delivery of any such Notice of Claim (t he “ Claim Reply Period ”), deliver to the Indemnified Person a written notice (a “ Reply Certificate ”), (i) describing, in reasonable detail, its objection to such Claim or Claim Amount or any portion thereof, and (ii) specifying in reasonable detail, to the extent known or reasonably anticipated, the nature and basis for such objection. Any Reply Certificate delivered pursuant to this Section 11.05(b) shall be supplemented and delivered to the Indemnified Person by the Indemnifying Person within thirty (30) days after the delivery to it of any supplemented Notice of Claim (a “ Supplemental Claim Reply Period ”).

(c) If a Reply Certificate (or a supplement thereto) is not delivered by the Indemnifying Person prior to the expiration of the Claim Reply Period or Supplemental Claim Reply Period (as the case may be), or if the Indemnifying Person timely delivers a Reply Certificate and does not object to a portion of the Claim or Claim Amount, as may be supplemented, then the Indemnifying Person shall be deemed to have acknowledged its obligation to indemnify the Indemnified Person in full for the Claim Amount specified in such Notice of Claim (or supplement thereto) with respect to the Claim (or the uncontested portion thereof), and the Indemnifying Person shall pay such Claim Amount (or the uncontested portion thereof) to the Indemnified Person within five (5) Business Days after the expiration of the Claim Reply Period or Supplemental Claim Reply Period (as the case may be) by wire transfer of immediately available funds to the account designated in writing by each Indemnified Person entitled to such payment.

(d) If the Indemnified Person receives a timely Reply Certificate in accordance with Section 11.05(b), the Indemnifying Person shall not be required to pay the contested portion of any Claim Amount referred to in such Reply Certificate unless and until either (i) mutual agreement of the Indemnified Person and the Indemnifying Person as to the payment of the Claim Amount (or any other amount mutually agreed

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upon by such Persons) or (ii) a final non-appealable Order has been entered (as may be rendered pursuant to Section 12.08) resolving the Claims contested in such Reply Certificate and indicating that the Indemnified Person is entitled to such Claim Amount.

11.06 Third Party Claims. The indemnity obligations of the Indemnifying Persons under this Article XI that result from any Third Party Claim shall be subject to the following terms and conditions.

(a) The Indemnified Person shall deliver to the Indemnifying Person notice of any Third Party Claim that is asserted against, imposed upon or incurred by the Indemnified Person and that gives rise to an obligation of the Indemnifying Person under this Article XI, stating (to the extent known or reasonably anticipated) the nature and basis of such Third Party Claim and the amount thereof promptly after the Indemnified Person receives any written notice of such Third Party Claim; provided that the failure to deliver such notice shall not affect the rights of the Indemnified Person hereunder except to the extent that the Indemnifying Person shall have been actually and materially prejudiced as a result of such failure. Subject to Section 11.06(b) below, if the Indemnifying Person, (i) agrees in writing to assume responsibility for all Indemnity Losses arising out of such Third Party Claim (with no reservation of any rights) and (ii)has the financial ability to provide full indemnification with respect to such Third Party Claim (including the ability to post any bond required), then the Indemnifying Person shall have the right to undertake, by counsel of its own choosing, the defense of such Third Party Claim at the Indemnifying Person’s sole risk and expense.

(b) If (i) the Indemnifying Person elects not to undertake such defense; (ii) the Indemnifying Person fails to undertake the defense of such Third Party Claim, within thirty (30) days after delivery of notice by the Indemnified Person of such Third Party Claim, or thereafter to diligently pursue or maintain such defense; (iii) such Third Party Claim seeks non-monetary relief (other than immaterial non-monetary relief) or involves criminal or quasi-criminal allegations or involves a Governmental Authority; or (iv) the Indemnifying Person and Indemnified Person have conflicting interests with respect to such Third Party Claim, then the Indemnified Person (upon further notice to the Indemnifying Person) shall have the right to undertake the defense and/or settlement of such Third Party Claim, by counsel or other Representatives of its own choosing, without limiting the indemnification obligations of the Indemnifying Person under this Agreement. If the Indemnified Person undertakes the defense and/or settlement of a Third Party Claim pursuant to this Section 11.06(b), the Indemnifying Person shall pay to the Indemnified Person, in addition to all other amounts required to be paid hereunder, the reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Indemnified Person in connection with the investigation, defense and/or settlement thereof as and when such costs and expenses are so incurred. Notwithstanding the foregoing, if the Indemnifying Person has satisfied the conditions set forth in clauses (i) and (ii) of Section 11.06(a) with respect to a Third Party Claim, the Indemnified Person shall not, without the Indemnifying Person’s consent (which consen t shall not be unreasonably withheld, conditioned or delayed), settle or consent to the entry of an Order obligating the Indemnifying Person to pay any amounts with respect to such Third Party Claim.

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(c) Notwithstanding anything in this Section 11.06 to the contrary, the Indemnifying Person shall not, without the Indemnified Person’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), settle or compromise any Third Party Claim or consent to the entry of any Order, unless (i) the Indemnifying Person agrees in writing to pay all amounts payable pursuant to such settlement, compromise or Order and to release the Indemnified Person from all Liability in respect of such Third Party Claim, (ii) such settlement, compromise or Order includes as an unconditional term thereof the Indemnified Person receiving from the Third Party an irrevocable release from all Liability in respect of such Third Party Claim, in form and substance reasonably satisfactory to the Indemnified Person, (iii) such settlement, compromise or Order would not result in the finding or admission of any violation of Law or other wrongdoing, and (iv) such settlement, compromise or Order does not impose any injunctive relief or material operational restrictions on the Indemnified Person.

11.07 Tax Treatment of Payment under Article XI. Unless otherwise required by applicable Law or a Governmental Authority, (a) all payments made pursuant to Section 11.02 shall be made directly to Bulls Brazil or, at Bulls Brazil ’s discretion , the Bulls Brazil Indemnified Person, (b) all payments made pursuant to Section 11.03 shall be made directly to Edwards or, at Edwards’ discretion, the relevant Edwards Indemnified Person, and (c) any payments pursuant to this Article XI shall be treated as an adjustment to the Final Purchase Price Adjustment Amount. The Parties shall use reasonable efforts to ensure that any requirement that may apply in order for a payment to be treated as an adjustment to the Final Purchase Price Adjustment Amount under applicable Law is satisfied. If any payments made pursuant to this Article XI are determined to be Taxable, the party making the payment shall pay such additional amount to ensure the net amount the receiving party receives equals the full amount that it would have received had the payment not been Taxable.

11.08 Exclusive Remedy. Except (a) in the case of Fraud, (b) for injunctive or provisional relief, and (c) as permitted by Section 2.08 (Post-Closing Adjustments ) and Section 12.13 (Specific Performance ), after the Closing, indemnification pursuant to this Article XI shall be the sole and exclusive remedy for the Parties for monetary damages for breach of any representation or warranty, or breach of covenant, agreement or other obligation contained in this Agreement.

11.09 Payments; Right to Set Off. Except as otherwise expressly provided herein, any amounts owing by the Parties pursuant to Article XI shall be paid in Brazilian Reais based, if applicable, on the then existing PTAX Rate on the third (3 rd ) Business Day immediately preceding the date of payment. Notwithstanding anything to the contrary in this Agreement, Bulls Brazil and the Company shall have the right to set off any amounts to which any of them may be entitled from Edwards under Article XI of this Agreement, to the extent that such amounts relate to a Claim under Article XI that is not resolved within twelve (12) months after the date on which such Claim was made, against any amounts that are owed to Edwards by Bulls Brazil and the Company under any of this Agreement (but for the avoidance of doubt not the Ancillary Agreements), the Shareholders Agreement or the Bylaws, including any dividends to be distributed by the Company to Edwards pursuant to the Bylaws and the Shareholders’ Agreement, in each case, to the maximum extent permitted under applicable Law.

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ARTICLE XII

MISCELLANEOUS

12.01 Notices. All notices hereunder shall be in writing and shall be deemed to have been duly delivered (i) as of the date delivered if delivered personally, mailed by registered or certified mail (postage prepaid, return receipt requested) or sent by overnight courier (providing proof of delivery) or (ii) as of the date transmitted if sent by electronic transmission to the following facsimile numbers or electronic mail addresses, in each case, to the addresses below (or at such other contact information for a party hereto as shall be specified by like notice):

If to Edwards and the Company (before Closing), addressed as follows:

Embraer S.A. Avenida Presidente Juscelino Kubitscheck, 1909, 14º, 15º andares - Torre Norte São Paulo, SP 04543-907 Facsimile: +55 (11) 3040-6872 E-mail: [email protected] [email protected] Attention: General Counsel Chief Financial Officer

with a copy, which shall not constitute notice, to:

Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036 Facsimile: +1 (212) 735-2000 E-Mail: [email protected] [email protected] Attention: Paul T. Schnell, Esq. Thomas W. Greenberg, Esq.

with a copy, which shall not constitute notice, to:

Barbosa, Müssnich, Aragão Advogados Av. Pres. Juscelino Kubitschek, 1455, 10º andar São Paulo, SP 04543-011 Brazil Facsimile: +55 (11) 2179-4597 E-Mail: [email protected] [email protected] Attention: Paulo Cezar Aragão Roberto Dias Carneiro

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If to Bulls Brazil and the Company (after the Closing), addressed as follows:

Boeing Brasil Serviços Técnicos Aeronáuticos Ltda. Av. Dr. Altino Bondensan, 500 São José dos Campos, SP 05502-001 Brazil Facsimile: +1 (786) 265 4760 E-mail: [email protected] [email protected] Attention: Donna Hrinak, President, Latin America Ana Paula Ferreira, Communications, Latin America with a copy, which shall not constitute notice, to:

The Boeing Company 100 N. Riverside Plaza Chicago, IL - 60606 Facsimile:: +1 (312) 544 2829 E-mail: [email protected] Attention: Edward J. Neveril, Chief Counsel of Mergers and Acquisitions with a copy, which shall not constitute notice, to:

Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Facsimile: +1 (212) 455 2502 E-mail: [email protected] Attention: S. Todd Crider with a copy, which shall not constitute notice, to:

Pinheiro Neto Advogados Rua Hungria, 1100 São Paulo, SP 01455-906 Brazil Facsimile: +55 (11) 3247 8600 E-mail: [email protected] Attention: Fernando Alves Meira

If to Bulls Parent, addressed as follows:

The Boeing Company 100 N. Riverside Plaza Chicago, IL - 60606 Facsimile:: +1 (312) 544 2829 E-mail: [email protected]

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Attention: Edward J. Neveril, Chief Counsel of Mergers and Acquisitions

with a copy, which shall not constitute notice, to:

Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Facsimile: +1 (212) 455 2502 E-mail: [email protected] Attention: S. Todd Crider

with a copy, which shall not constitute notice, to:

Pinheiro Neto Advogados Rua Hungria, 1100 São Paulo, SP 01455-906 Brazil Facsimile: +55 (11) 3247 8600 E-mail: [email protected] Attention: Fernando Alves Meira

12.02 Assignment; Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or delegated by any of the parties hereto (whether by merger, operation of Law or otherwise) without the prior written consent of the other parties hereto and any purported assignment in violation of this Section 12.02 shall be void; provided that Bulls Brazil may assign this Agreement to any of its Affiliates at any time upon delivery of written notice to Edwards so long as (i) such assignment shall occur upon the written adhesion of the respective assignee to the terms of this Agreement, (ii) such assignment shall not impair or delay the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements, and (iii) no such assignment will relieve Bulls Parent of its obligations under Section 12.15 or Bulls Brazil under this Agreement. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto, and their respective successors and permitted assignees.

12.03 Amendments; Waiver. No amendment, supplement or modification of this Agreement (whether direct or indirect) shall be effective unless the Parties, Bulls Parent and the Company (i) have been provided at least thirty (30) days prior written notice of such proposed amendment, supplement or modification in accordance with Section 12.01 prior to its execution in accordance with the immediately following clause (ii), and (ii) have signed a written instrument expressly referencing this Agreement and the specific provisions hereof that are intended to be so amended, supplemented or modified. Any purported amendment, supplement or modification that fails to comply with the foregoing shall be null and void, ab initio . Any failure by a Party, Bulls Parent or the Company to comply with any obligation, covenant, agreement or condition herein may be waived by the other parties hereto only by a written instrument signed by the party granting such waiver, and such waiver shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure to comply with this Agreement.

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12.04 Severability. If any provision of this Agreement is held invalid, unenforceable or illegal by court of competent jurisdiction, the remainder of this Agreement shall not be affected. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement to the extent (and only to the extent) necessary to make it enforceable, valid and legal and still effect the original intent of the Parties herein, and the parties hereto undertake to execute any amendment to this Agreement that is agreed to by the Parties reflecting any changes agreed upon by the Parties.

12.05 Counterparts. This Agreement may be executed and delivered in counterparts, and facsimile and electronic signatures shall constitute a valid and binding execution of this Agreement.

12.06 Entire Agreement. This Agreement (including the Edwards Disclosure Schedules and the Bulls Brazil Disclosure Schedules), the Confidentiality Agreement, the Bylaws and the Ancillary Agreements collectively constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, between the parties hereto with respect to the transactions contemplated by this Agreement, unless otherwise specifically provided in a written instrument executed by the Parties expressly referencing this Agreement and this Section 12.06.

12.07 Governing Law. This Agreement and the rights and obligations of the parties arising out of or relating hereto shall be governed by and construed in accordance with the Laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the State of New York; provided that, for the avoidance of doubt, the Ancillary Agreements and the rights and obligations of the parties under each of the Ancillary Agreements shall be governed by and determined in accordance with the Laws specified therein.

12.08 Arbitration.

(a) Subject to Section 2.08, any dispute, controversy or Claim arising out of, relating to or in connection with this Agreement (a “ Dispute ”) shall be referred to and finally and definitely settled by arbitration administered by the International Center for Dispute Resolution (“ ICDR ”) in accordance with its International Arbitration Rules (the “ICDR Rules ”), except as expressly modified by this Section 12.08.

(b) The arbitration shall be conducted in the English language and the seat of the arbitration shall be in New York City (in the New York County), New York, United States.

(c) If, considering both claims and counterclaims as expressly estimated in the Notice of Arbitration and the Answer thereto (as those terms are defined in the ICDR Rules), the total amount in dispute submitted to arbitration is less than the amount of three million seven hundred thousand Brazilian reais (R$3,700,000), and there is no Claim for injunctive or equitable relief, then the arbitration shall be resolved by one (1) arbitrator appointed as set forth in Section 12.08(d). In all other cases, the arbitration

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shall be resolved by three (3) arbitrators appointed as set forth in Section 12.08(e). There shall be no ex parte communications between the Parties and (i) the arbitrators, or (ii) the arbitrator candidates included on the lists provided pursuant to the process described in Section 12.08(d) and Section 12.08(e).

(d) If the arbitration is to be resolved by one (1) arbitrator as set forth in Section 12.08(c), then such arbitrator shall be selected after the filing of the Answer using the ICDR list method established in the ICDR Rules, except that the ICDR shall provide a second list (i) if the parties to arbitration fail to agree on any of the Persons listed, (ii) if acceptable arbitrators are unable or unavailable to act, or (iii) if the appointment cannot be made from the initially submitted list for any other reason, within fifteen (15) days from the receipt of the first list of arbitrators by the parties. Prior to preparing the lists of arbitrators to be used for the selection of the arbitral tribunal, the ICDR shall consult with the parties and take into consideration the need for any particular expertise or knowledge that the arbitrators should have to resolve the Dispute.

(e) If the arbitration is to be resolved by three (3) arbitrators as set forth in Section 12.08(c), then the three (3) arbitrators shall be selected after the filing of the Answer using the ICDR list method established in the ICDR Rules, except as modified herein. The parties to the arbitration shall first attempt to agree on three (3) arbitrators from the initial list provided by the ICDR. If the parties to the arbitration fail to reach an agreement on all three (3) arbitrators within fifteen (15) days of the parties receiving the initial list of arbitrators from the ICDR, each party shall nominate one (1) arbitrator from such list. Neither the ICDR nor the parties shall communicate to the arbitrators which party nominated them. The third arbitrator shall be appointed pursuant to the ICDR list method, except that the ICDR shall provide a second list if the appointment cannot be made from the remaining arbitrators identified on the initial list within fifteen (15) days of receipt of the first list of arbitrators by the parties. If the parties to the arbitration are unable to select the third arbitrator from the second list provided by the ICDR, then such third arbitrator shall be appointed by the ICDR.

(f) The arbitral tribunal, or the emergency arbitrator as provided in the ICDR Rules, shall have the power to grant any remedy or relief that it deems appropriate, including specific performance and penalties in the event of non-compliance with its orders or awards, as well as interim, conservatory or provisional measures. The parties undertake to comply with any interim award or Order granting such provisional measures without delay and any such measures may be enforced in any court of competent jurisdiction.

(g) By agreeing to arbitration, the parties hereto do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other interim Order in aid of arbitration proceedings, or to issue Orders in connection with the enforcement of any award. The parties hereto shall be entitled to seek injunctive, provisional, or other equitable relief in any court of competent jurisdiction pending the commencement or determination of any arbitration proceedings, and exercising any such right shall not be deemed (i) incompatible with the agreement to arbitrate as set forth in this Section 12.08 or (ii) a waiver of the right to arbitrate.

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(h) All arbitration proceedings pursuant to this Section 12.08 shall be confidential and shall not be disclosed except as, and only to the extent, necessary to prepare for or conduct the arbitration hearing on the merits, as required by applicable Law, or required in connection with any court application for interim relief or post- arbitration confirmation or enforcement proceedings.

(i) Any award rendered by the arbitral tribunal in any arbitration proceeding pursuant to this Section 12.08 shall be in writing, be reasoned and determine a final term for compliance with its decision by the parties and shall be final and binding on the parties thereto, and judgment thereon may be entered in any court of competent jurisdiction. Notwithstanding anything herein to the contrary, the arbitrators shall not make decisions on the basis of equity ( equidade ).

(j) In no event will any of the parties be required to pay defeated fees (honorários de sucumbência ) to the attorneys of the prevailing party.

12.09 Interpretation.

(a) The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms. The use of the word “including” in this Agreement shall be by way of example rather than by limitation. Reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. The use of the words “or,” “either” and “any” shall n ot be exclusive. Except as otherwise indicated, all references in this Agreement to “Articles,” “Sections”, “Schedules” and “Exhibits” are intended to refer to Articles, Sections, Schedules and Exhibits to this Agreement. The terms “hereof,” “hereunder,” “herein” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The use of the word “threatened” in this Agreement shall be deemed followed by “in writing.” All references to documents or other materials that were delivered, provided or made available to Bulls Brazil shall include any such document or material (i) posted to the Data Room prior to the date hereof, (ii) that are publicly available in the Electronic Data Gathering, Analysis and Retrieval (EDGAR) database of the SEC or the Electronic System (IPE) of the CVM, or (iii) otherwise made available to Bulls Brazil or any of its Representatives (electronically or otherwise) prior to the date hereof. All references to “dollars” or “$” shall be to U.S. dollars. All references to “R$” shall be to Brazilian Reais. References to any provisions of Law shall be construed as references to such provisions as amended, expanded, consolidated or reissued, or as their applicability may be altered from time to time by other rules, and shall include any provision from which they originate (with or without modifications), regulations, instruments or other legal rules subordinate thereto. References to any period of days shall be deemed to be to the relevant number of calendar days (unless Business Days are specified), provided that all references to terms or periods in this Agreement shall be counted excluding the date of the event that causes such term or period to begin and including the last day of the relevant term or period. All periods provided for in this

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Agreement ending on a day that is not a Business Day shall be automatically extended to the first subsequent Business Day. This Agreement shall be construed as if drafted jointly by the Parties.

(b) Unless this Agreement specifically provides otherwise, neither the specification of any fact, item or matter in any representation or warranty contained in this Agreement nor the inclusion of any specific fact, item or matter in the Edwards Disclosure Schedules or the Bulls Brazil Disclosure Schedules is intended or will be deemed to imply that such fact, item or matter, or other facts, items or matters, are or are not in the Ordinary Course. The inclusion of any fact or item in the Edwards Disclosure Schedules or the Bulls Brazil Disclosure Schedules shall not constitute, or be deemed to be, an admission by any Party hereto to any Third Party of any fact, item or matter whatsoever (including any violation, noncompliance with, or Liability or obligation under, applicable Law, other requirement or breach of Contract).

12.10 No Third Party Beneficiaries. Except (i) for Bulls Parent (who shall be an express third party beneficiary of all of Bulls Brazil’s rights and interests under this Agreement and th e Ancillary Agreements) and the Company and (ii) as otherwise expressly provided in Article XI with respect to the Indemnified Persons (who shall be express third party beneficiaries with respect to Article XI), this Agreement is solely for the benefit of the Parties and no provision of this Agreement shall be deemed to confer upon any other Person, including any shareholders of any Party, any remedy, Claim, Liability, reimbursement, cause of action or other right, including rights of any Commercial Aviation Business Employee in respect of any right of any party hereunder or any right to contract or any right to employment or continued employment with the parties hereto and their respective Affiliates.

12.11 Expenses. Except as otherwise expressly provided herein, all fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such fees, costs and expenses, whether or not the transactions contemplated by this Agreement are consummated.

12.12 Publicity. Except as otherwise provided herein, prior to the Closing, (a) the Parties shall consult in advance with each other before issuing any press release or otherwise making any public disclosure or public statements with respect to this Agreement, the Ancillary Agreements or the transactions contemplated hereunder or thereunder; and (b) no such press release, public disclosure or public statement shall be made unless mutually agreed upon by the Parties or required by Law or applicable stock exchange regulation.

12.13 Specific Performance. The Parties hereto recognize, acknowledge and agree that the breach or violation of this Agreement by a Party would cause irreparable damage to the other Party and that none of the Parties has an adequate remedy at Law. Subject to the following sentence, the Parties acknowledge and agree that (a) unless this Agreement has been terminated in accordance with Section 10.01, each Party shall be entitled, in addition to any other remedies that may be available, to obtain injunctive relief, specific performance of the terms of this Agreement or other equitable relief, to redress breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions hereof without proof of damages or otherwise and (b) the right of specific performance is an integral part of the transactions

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contemplated by this Agreement and without that right, none of the Parties would have entered into this Agreement. A Party seeking an order or injunction to prevent breaches of this Agreement or to enforce specifically the terms and provisions hereof shall not be required to provide, furnish or post any bond or other security in connection with or as a condition to obtaining any such order or injunction, and each Party hereby irrevocably waives any right it may have to require the provision, furnishing or posting of any such bond or other security. If any Legal Proceeding is brought by any Party to enforce this Agreement, the other Parties shall waive the defense that there is an adequate remedy at Law.

12.14 No Partnership. Nothing in this Agreement (including any terminology used herein or therein) and no action taken by the parties under this Agreement is intended to, or shall be deemed to, establish any partnership or agency relationship, including under applicable U.S. Tax Law, between or among any of the parties.

12.15 Bulls Parent’s Guarantee .

(a) Bulls Parent hereby irrevocably and unconditionally guarantees the complete performance in full of Bulls Brazil’s obligations to pay the Base Purchase Price, the Capital Raise Amount, the Estimated Purchase Price Adjustment Amount and any Final Purchase Price Adjustment Amount that may be due by Bulls Brazil under this Agreement. To the fullest extent permitted by applicable Law, Bulls Parent waives presentment to and protest to any other Person of any of the guaranteed obligations and also waives notice of acceptance of its guarantee and, except as set forth in Section 12.15(b), any other defenses or benefits available to guarantors or sureties under applicable Law. The obligations of Bulls Parent hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, decree in bankruptcy or otherwise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the guaranteed obligations or otherwise.

(b) Notwithstanding any of the foregoing, nothing herein shall be deemed to waive or limit Bulls Parent’s ability to assert any Claims, defenses or other rights that Bulls Brazil may have under this Agreement.

12.16 Provisions Respecting Legal Representation. It is acknowledged by each Party hereto that each of Edwards and their Affiliates (other than the members of the Company Group) have retained Skadden, Arps, Slate, Meagher & Flom LLP (“ Skadden ”) and Barbosa, Müssnich, Aragão Advogados (“ BMA ”) to act as their counsel in connection with the transactions contemplated by this Agreement and that neither Skadden nor BMA has acted as counsel for any other Party in connection with such transactions and that none of the other Parties has the status of a client of Skadden or BMA for conflict of interest purposes arising out of the transactions contemplated hereby. The Parties hereby agree that, in the event that a dispute arises after the Closing between Bulls Brazil, the Company, and/or their Affiliates, on the one hand, and Edwards and/or its Affiliates, on the other hand, Skadden and/or BMA may represent Edwards and its Affiliates in such dispute even though the interests of Edwards and its Affiliates may be directly adverse to Bulls Brazil, the Company or their respective Affiliates. The Parties further

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agree that, as to all privileged communications among Skadden, BMA, Edwards and/or any of their respective Affiliates (other than members of the Company Group) that relate in any way to the transactions contemplated hereby (collectively, the “ Privileged Communications ”), the attorney-client privilege and the expectation of client confidence belongs to Edwards and shall not pass to or be claimed by Bulls Brazil, the Company or any of their Affiliates. The Privileged Communications are the property of Edwards, and after the Closing none of the Company, its Affiliates, or any Person purporting to act on behalf of or through the Company or its Affiliates will seek to obtain such communications, whether by seeking a waiver of the attorney-client privilege or through other means. As to any such Privileged Communications prior to the Closing Date, Bulls Brazil and the Company, together with any of their respective Affiliates, successors and assigns, further agree that no such party may use or rely on any of the Privileged Communications in any action against or involving any of the parties after the Closing. The Privileged Communications may be used by Edwards in connection with any dispute that relates in any way to the transactions contemplated hereby. Notwithstanding the foregoing, in the event that a dispute arises between Bulls Brazil, the Company or any of their Affiliates and a Third Party after the Closing, the Company and its Affiliates may assert the attorney –client privilege to prevent disclosure of confidential communications by Skadden and/or BMA to such Third Party; provided that neither the Company nor its Affiliates may waive such privilege without the prior written consent of Edwards.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ]

123 Exhibit 4.2

CONTRIBUTION AGREEMENT

dated as of January 24, 2019

by and among

EB DEFENSE, LLC,

BOEING EB DEFENSE, LLC,

THE BOEING COMPANY,

EMBRAER AIRCRAFT HOLDING, INC.

and

EMBRAER S.A.

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS ...... 2

Section 1.1 Definitions...... 2 Section 1.2 Index of Defined Terms ...... 8

ARTICLE II CLOSING DATE CONTRIBUTIONS; CLOSING ...... 10

Section 2.1 Closing Date Cash Commitments ...... 10 Section 2.2 Closing ...... 10 Section 2.3 Other Closing Deliveries...... 11

ARTICLE III CERTAIN REPRESENTATIONS AND WARRANTIES OF EMBRAER ...... 11

Section 3.1 Representations of Embraer Regarding the Company and Certain Contributed Assets ...... 11

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE MEMBERS 12

Section 4.1 Incorporation; Authorization ...... 13 Section 4.2 No Conflict...... 13 Section 4.3 Governmental Authorizations ...... 14 Section 4.4 Absence of Litigation ...... 14 Section 4.5 Brokers ...... 14 Section 4.6 Anti-Bribery ...... 14 Section 4.7 No Other Representations and Warranties; Disclaimers ...... 15

ARTICLE V ADDITIONAL AGREEMENTS ...... 16

Section 5.1 Required Regulatory Approvals...... 16 Section 5.2 Confidentiality ...... 17 Section 5.3 Further Action ...... 18 Section 5.4 Exclusivity ...... 19 Section 5.5 Finalization of Defense JV Commercial Agreements ...... 19 Section 5.6 Tax Treatment ...... 19 Section 5.7 Company Operations ...... 20 Section 5.8 FAB License ...... 20 Section 5.9 KC-390 Opportunities ...... 20 Section 5.10 Adoption of Key Policies ...... 21

ARTICLE VI CONDITIONS TO CLOSING ...... 21

Section 6.1 Conditions to Each Member’s Obligations to Effect the Closing..21 Section 6.2 Conditions to Embraer’s Obligation to Effect the Closing ...... 22

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Section 6.3 Conditions to Boeing’s Obligations to Effect the Closing...... 23

ARTICLE VII TERMINATION, AMENDMENT AND WAIVER ...... 23

Section 7.1 Termination ...... 23 Section 7.2 Effect of Termination ...... 24

ARTICLE VIII INDEMNIFICATION ...... 25

Section 8.1 Survival ...... 25 Section 8.2 Indemnification by a Member ...... 25 Section 8.3 Limitations on Indemnification ...... 25 Section 8.4 Non-Third Party Claims ...... 26 Section 8.5 Third Party Claims ...... 27 Section 8.6 Additional Indemnification Provisions ...... 29 Section 8.7 Exclusive Remedies ...... 29

ARTICLE IX MISCELLANEOUS ...... 30

Section 9.1 Expenses ...... 30 Section 9.2 Amendment; Waiver ...... 30 Section 9.3 Assignment; Successors and Assigns ...... 30 Section 9.4 No Third-Party Beneficiaries ...... 30 Section 9.5 Governing Law ...... 30 Section 9.6 Arbitration ...... 31 Section 9.7 Severability ...... 32 Section 9.8 Counterparts; Electronic Delivery ...... 33 Section 9.9 Descriptive Headings; Interpretation ...... 33 Section 9.10 Notices ...... 33 Section 9.11 Entire Agreement ...... 36 Section 9.12 Public Announcements ...... 36 Section 9.13 Parent Guarantees...... 36

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INDEX OF EXHIBITS & SCHEDULES

Exhibits

Exhibit A Form of Amended and Restated LLC Agreement Exhibit B Accounting Policies and Practices Exhibit C Business Plan Exhibit D Certificate of Formation Exhibit E Commercial Document Framework Exhibit F Form of Sales Support Agreement Exhibit G List of Transaction Documents Exhibit H-1 Form of Anti-Bribery Policy Exhibit H-2 Form of Code of Conduct Exhibit H-3 Form of Export-Import Compliance Plan

Schedules

Schedule 1.1(a) Excluded Orders Schedule 1.1(b) Required Consents Schedule 2.1 Closing Date Contributions Schedule 3.1(c) Sufficiency of IP Schedule 4.4 Litigation Schedule 4.6 Anti-Bribery Schedule 5.1(a) Required Regulatory Approvals

iii 1034377.14-CHISR01A - MSW

CONTRIBUTION AGREEMENT

This CONTRIBUTION AGREEMENT (this “Agreement”), dated as of January [ ●], 2019, is made by and among EB Defense, LLC, a Delaware limited liability company (the “Company”), Boeing EB Defense, LLC, a Delaware limited liability company (“Boeing”), Embraer Aircraft Holding, Inc., a Delaware corporation (“Embraer” and, together with Boeing, the “Members” and each a “Member”), and, solely for the purposes of Sections 5.2 and 9.13, The Boeing Company, a Delaware corporation (“Boeing Parent”), and Embraer S.A., a corporation ( sociedade por ações ) organized under the laws of the Federative Republic of Brazil (“Embraer Parent”). Each of the Members and the Company are referred to herein as a “Party” and, collectively, the “Parties.” Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in Article I.

WHEREAS , contemporaneously with the execution of this Agreement, Boeing Parent, Embraer Parent, and certain of their respective Subsidiaries have entered into that certain Master Transaction Agreement (“MTA”), which sets forth the terms and conditions upon which a Brazilian subsidiary of Boeing Parent will acquire control of a joint venture entity relating to the commercial aviation business of Embraer Parent (the “Commercial Aviation JV”);

WHEREAS , as contemplated by the MTA and pursuant to the terms and subject to the conditions set forth in this Agreement, the Members desire to form and jointly own the Company as a joint venture entity to engage in, or conduct, the In-Scope Business;

WHEREAS , in connection with the foregoing, Embraer formed the Company on January 10, 2019, as a Delaware limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act;

WHEREAS , Embraer and the Company entered into the original limited liability company agreement of the Company as of January 10, 2019 (the “Original Agreement”);

WHEREAS , pursuant to the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined herein): (a) Boeing and Embraer will each make initial cash capital contributions to the Company, and Embraer will license or sub-license the Licensed IP (as defined below) to the Company; (b) Boeing will make future cash contributions to the Company pursuant to an implementation plan to be attached as an exhibit to the Amended and Restated Agreement (as defined below); (c) the Parties will amend and restate the Original Agreement in its entirety by entering into the Amended and Restated Limited Liability Company Agreement of the Company in the form attached hereto as Exhibit A (the “Amended and Restated Agreement” and, the Original Agreement or the Amended and Restated Agreement, when in effect, the “LLC Agreement”); and (d) Embraer will be admitted as a member of the Company in connection therewith;

WHEREAS , in furtherance of the transactions contemplated hereby, Embraer Parent will obtain and deliver to Boeing the FAB License (as defined below); and

WHEREAS , the Parties recognize the importance of protecting FAB’s Intellectual Property, and, as a result, any Intellectual Property licensed by FAB to Embraer or its Affiliates

1034377.14-CHISR01A - MSW

and sublicensed by Embraer or its Affiliates to the Company will be subject to confidentiality obligations as set forth in the License Agreements.

NOW, THEREFORE , in consideration of the mutual promises and covenants made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound, hereby agree as follows:

ARTICLE I DEFINITIONS

Section 1.1 Definitions.

“Accounting Policies and Practices” means those certain accounting policies and practices set forth on Exhibit B.

“Affiliate” means, in respect of a Person, any other Person who at any time Controls, is Controlled by, or is under common Control with, such Person, but in each case, only for so long as such Control exists. For the avoidance of doubt, the Company and its Subsidiaries (i) shall be deemed Affiliates of Embraer only until the Closing and (ii) shall not be deemed Affiliates of any Member after the Closing for the purposes of this Agreement.

“Aftermarket Services & Support Agreements” means the Aftermarket Services & Support Agreements to be entered into by and between the Company and the other parties thereto, in accordance with the principles set forth in the Commercial Document Framework.

“Aftermarket Services” means for the KC-390 worldwide (other than any such services performed in respect of aircraft delivered pursuant to Excluded Orders or Loss Orders) spares, sustainment spares, maintenance, repair and overhaul (MRO) services, midlife upgrades and customer support and field services, engineering, training, service bulletins and associated engineering support.

“Antitrust Laws” means the Brazilian Federal Law No. 12.529/2011 (as amended), the HSR Act, the Sherman Antitrust Act of 1890, the Clayton Act of 1914, the Federal Trade Commission Act of 1914 and any other applicable Laws relating to antitrust or competition regulation that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition, including such Laws of any other jurisdiction in addition to the United States or Brazil.

“Business Day” means any day of the year other than (i) any Saturday or Sunday or (ii) any other day on which banks located in the states of New York or Illinois, United States or the cities of São Paulo or São José dos Campos, state of São Paulo, Brazil are closed for business.

“Business Plan” means the business plan of the Company attached hereto as Exhibit C.

“Certificate of Formation” means the certificate of formation of the Company filed with the Secretary of State of the State of Delaware on January 10, 2019, in the form attached hereto as Exhibit D, as may be amended by the Members in accordance with the LLC Agreement and the Delaware Act from time to time.

2

“Claim” means any claim (including any cross-claim or counterclaim), cause of action, allegation, infraction notice, charge, complaint, demand, dispute and other assertions of Liability, whenever or however arising.

“Closing Date” means the date on which the Closing occurs.

“Code” means the U.S. Internal Revenue Code of 1986, as amended, or any successor to such statute.

“Commercial Document Framework” means the document attached hereto as Exhibit E, which sets forth certain key principles and other agreements between the Members with respect to the definitive versions of the Defense JV Commercial Agreements, to be negotiated in accordance with Section 5.5.

“Company Interest” means a membership interest of the Company issued to a Member.

“Consent” means any approval, consent, ratification, permission, waiver or authorization from any Person other than a Governmental Authority.

“Contract” means any contract, agreement, click-through terms, purchase order, modification, obligation, instrument, promise, commitment, undertaking or arrangement (whether written, electronic or oral) that is or purports to be legally binding.

“Control” (including the terms “Controlled by” and “under common Control with”) means, as used with respect to any Person, possession of the power or authority, directly or indirectly, to direct or cause the direction of management or policies of such Person, whether through ownership of voting securities, as trustee or executor, by Contract or otherwise, including by virtue of having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

“Defense JV Commercial Agreements” means each of the Supply Agreements, License Agreements, Engineering Services Agreements, Aftermarket Services & Support Agreements and the Sales Support Agreement.

“Encumbrance” means any lien, encumbrance, security interest, pledge, mortgage, usufruct (usufruto), arrolamento, fiduciary assignment (cessão fiduciária), fiduciary sale (alienação fiduciária), easement, deed of trust, option, warranty, right of way, encroachment, servitude, conditional sale agreements and restrictions, right of first option or right of first refusal, preemptive rights, drag-along right, right of enjoyment, adverse ownership claim, hypothecation, restriction on transfer of title or voting or similar restrictions on the full ownership and possession of a given asset, and any other claims, encumbrances or restrictions that have the same or a similar effect to the granting of security interest in such asset, whether imposed by Contract, Law, equity or otherwise. For clarity, the foregoing shall not include licenses of or other grants of rights to use Intellectual Property or any restrictions on transfer of securities imposed by applicable securities Laws.

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“Engineering Services Agreements” means the Engineering Services Agreements to be entered into by and between the Company and the other parties thereto, in accordance with the principles set forth in the Commercial Document Framework.

“Excluded Orders” means (a) all orders from FAB for use by FAB, (b) any order that becomes an Additional Excluded Order in accordance with Section 5.9 and (c) the specific orders set forth on Schedule 1.1(a).

“Executory Period Orders” means any In-Scope Business orders originated between the date hereof and the Closing; provided that such orders shall not include any order which is a Loss Order.

“FAB” means the Brazilian Air Force ( Força Aérea Brasileira ).

“FAB License” means a written, definitive, duly executed and binding agreement (not including a letter of intent or any other preliminary written agreement) with FAB permitting Embraer to license or sublicense to the Company, as the case may be, the Intellectual Property required to enable the Company to conduct the In-Scope Business in accordance with the Business Plan and to comply with its obligations under the Defense JV Commercial Agreements, which shall, in any case, with respect to all Intellectual Property related to the KC-390 in which FAB has rights, whether through ownership, contract, operation of law or otherwise, include (i) a license, (with the right to sublicense) or sublicense (with the further right to sublicense), as the case may be, which will be exclusive in the United States, to the Company for use of such Intellectual Property by the Company and the Members in the In-Scope Business, and (ii) a waiver or other contractual arrangement pursuant to which FAB is prevented from vetoing, blocking, charging for (other than payment to FAB by the Company of the existing 3.1% royalty in connection with sales of the KC-390), or otherwise restricting, in each case, the Company’s use of such Intellectual Property to conduct the In-Scope Business. For the avoidance of doubt, any Taxes required by Law to be paid by the Company to a Tax Authority in respect of the Company’s payment of the royalty pursuant to the FAB License shall be treated as an expense of the Company and shall be paid by the Company.

“Final Assembly Work” means final assembly and check-out of the KC-390 for Sales Work.

“Fraud” means conduct including the following elements: (a) representation made of material fact, (b) that was untrue, (c) which the Party making the representation knew to be untrue at the time such representation was made, (d) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (e) on which the recipient relied and (f) as a result of such reliance, the recipient suffered Losses.

“Fundamental Representation” means the representations and warranties of each Member, as applicable, set forth in Sections 3.1(a) (Organization; Authorization), 3.1(b) (No Prior Operations or Liabilities), 3.1(c) (Sufficiency of IP), 4.1 (Incorporation; Authorization) and 4.5 (Brokers).

“Governance Documents” means each of the Certificate of Formation and the LLC Agreement.

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“Governmental Authority” means the governments of the United States, Brazil and any other sovereign nation or city-state, and any state or other political subdivision thereof, at the federal, state or municipal level, and any other individual, body or entity exercising or having the authority to exercise under the Laws thereof any executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, autarchy, agency, organization, department, bureau, office, board, commission or instrumentality, including any Tax Authority, and any court, arbitrator or arbitration panel with proper authority and jurisdiction under such Laws.

“Governmental Authorization” means any permit, consent, license, ratification, waiver, permission, variance, clearance, registration, qualification, approval or authorization issued, granted, given or otherwise made available by or under the lawful authority of any Governmental Authority or pursuant to any Law. For clarity, the foregoing shall not include registrations or applications for Intellectual Property (or any recordation of transfers or licenses thereof or other recordations, approvals or authorizations in relation thereto).

“Governmental Order” means any order (other than an order constituting an approval), writ, judgment, injunction, decree, stipulation, determination or award entered, rendered, issued or made by any Governmental Authority.

“HSR Act” means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder.

“In-Scope Business” means, together, Final Assembly Work, Sales Work and Aftermarket Services; provided that In-Scope Business shall not include Restricted Activities.

“Indemnity Loss” means any and all Losses (regardless whether such Losses result from the negligence, gross negligence or strict liability of, or any other basis of liability under the Law or in equity with respect to, a Company Indemnified Person); provided that (a) punitive and exemplary damages shall not constitute Indemnity Losses except to the extent they are payable in a Third Party Claim against a Company Indemnified Person for which such Company Indemnified Person is entitled to indemnification under this Agreement and (b) consequential and special damages (including damages relating to lost profits and diminution in value, to the extent such lost profits and diminution in value constitute consequential damages) shall not constitute Indemnity Losses except to the extent they are (i) payable in a Third Party Claim against a Company Indemnified Person for which such Company Indemnified Person is entitled to indemnification under this Agreement or (ii) the natural, probable and reasonably foreseeable result of the matter, facts or circumstances that gave rise to such Indemnity Loss, taking into account any special circumstances of the In-Scope Business known by, or reasonably apparent to, the Indemnifying Person at the later of (x) the date of this Agreement and (y) the time of the event or occurrence providing the basis for indemnification of Indemnity Losses, but excluding, in connection with this clause (ii) only, damages calculated based on multiples of earnings, EBITDA or similar financial metrics, other than in the case of Fraud.

“Intellectual Property” means all intellectual property and industrial property rights arising under the Laws of any jurisdiction, including: (a) patents, patent applications (including patents issued thereon) and statutory invention registrations and similar rights in inventions, (b)

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trademarks, service marks, trade names, service names, trade dress, logos, domain names, social media accounts and other identifiers of source, together with goodwill associated with any of the foregoing, (c) all rights in any original works of authorship or any part thereof that are within the scope of any applicable copyright Law, (d) trade secret and all other intellectual property rights in confidential and proprietary information, including in confidential processes, technology, designs, formulae, algorithms, procedures, methods, discoveries, processes, techniques, ideas, know-how, research and development, technical data, tools, materials, specifications, processes, inventions, compositions, formulas, customer information, operational data, invention reports, technical reports, pricing information, software and know-how, and (e) rights in data, databases and software.

“KC-390” means the platform commonly known as the Embraer KC-390, as may be updated, improved or modified from time to time within the In-Scope Business.

“Law” means any and all laws (including common laws), constitutions, statutes, decrees, ordinances, directives, regulations, rules, codes and any other legislation enacted, promulgated or prescribed by or under the authority of any Governmental Authority, including a Tax Authority, whether domestic or foreign, and including all Governmental Orders and the terms of any Governmental Authorizations.

“Legal Proceeding” means any Claim commenced, brought, conducted or heard by or before any Governmental Authority.

“Liability” means any and all debts, liabilities, guarantees, assurances, commitments and obligations, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due and whenever or however arising.

“License Agreements” means one or more agreements entitled the License Agreement, to be entered into among two or more of Boeing, Embraer and the Company, in accordance with the principles set forth in the Commercial Document Framework.

“Loss” means any and all losses, damages (including consequential, special, punitive, exemplary and incidental damages), penalties, fines, Taxes, costs and expenses, and the amounts of or paid or payable in respect of, any and all Liabilities and Claims (including interest, penalties, reasonable attorneys’ and accountants’ fees and disbursements and all amounts paid in investigation, defense or settlement of any of the foregoing), including any of the foregoing or portion thereof that may arise out of or relate to the period after the date of this Agreement.

“Loss Order” means an In-Scope Business order originated between the date hereof and the Closing where the expected contract costs associated with such order are expected to exceed expected contract revenue associated with such order (determined in accordance with the Accounting Policies and Practices) as of the time of the Closing.

“Master Teaming Agreement” means that certain Master Teaming Agreement for KC-390 Aircraft, Support, and Training, dated as of November 30, 2015, by and between Boeing Parent and Embraer Parent.

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“Permitted Encumbrances” means (i) Encumbrances of mechanics, carriers, workmen, repairmen, warehouseman, materialmen or other similar Encumbrances arising or incurred in the ordinary course of business consistent with past practice for security amounts that are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings and for which adequate reserves (as determined in accordance with IFRS or other accounting principles and standards applicable to such Member) have been established on the balance sheet of such Member; (ii) Encumbrances for Taxes, labor Claims, assessments and other governmental charges which are not yet due and payable or which are being contested in good faith by appropriate proceedings and for which adequate reserves (as determined in accordance with IFRS or other accounting principles and standards applicable to such Member) have been established on the balance sheet of such Member; and (iii) any Encumbrances that are expressly set forth in the governing documents of any Member, this Agreement or any other Transaction Document.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company or other entity, including any Governmental Authority.

“Required Consents” means the Third Party Consents set forth on Schedule 1.1(b).

“Restricted Activities” means activities that would otherwise constitute In-Scope Business but for the fact that they are related to activities that are subject to facilities clearances or other approvals required pursuant to the U.S. National Industrial Security Program, Foreign Ownership, Control, or Influence (FOCI) and the rules and guidance promulgated thereunder.

“Restricted Person” means each of Boeing Parent, Embraer Parent, and their respective Controlled Affiliates.

“Sales Support Agreement” means that certain Sales Support Agreement to be entered into by and between Boeing and Embraer, attached hereto as Exhibit F.

“Sales Work” means marketing, selling and distributing the KC-390 for sales worldwide, other than Excluded Orders and Loss Orders.

“Second Golden Share Approval” means the express or deemed approval by the Government of Brazil in respect of its Golden Share, pursuant to Section 9, paragraph 2, IV of the bylaws ( estatuto social ) of Embraer Parent, whether by the affirmative vote by the government of Brazil or the failure by the government of Brazil to exercise its veto right at the shareholder meeting called for the Shareholder Approval, without any additional terms or conditions or any waiver, amendment, modification or supplement to this Agreement or the other Transaction Documents, or the transactions contemplated hereby or thereby or by the MTA, but excluding any Brazilian antitrust approval by the Brazilian Administrative Counsel for Economic Defense (Conselho Administrativo de Defesa Econômica ), the Brazilian antitrust authority, and any successor thereto.

“Shareholder Approval” means the approval of the proposals to approve the consummation of the consummation of the transactions contemplated by this Agreement and the other Transaction Documents by the shareholders of Embraer Parent with at least a majority of the valid votes at an

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extraordinary shareholder meeting properly called and held with the specific purpose of approving such matters.

“Subsidiary” means, with respect to any given Person, any other Person the equity interests of which are wholly owned, directly or indirectly, at the relevant time, by that Person (except for any equity interests issued or transferred to “nominee” equityholders (or the equivalent) as necessary or desirable under the Laws of the jurisdiction of formation of such corporation, limited liability company, partnership, association or other entity) but only for so long as they are wholly owned.

“Supply Agreements” means the Supply Agreements to be entered into by and between the Company and each of Embraer Parent and the Commercial Aviation JV, in accordance with the principles set forth in the Commercial Document Framework.

“Tax” or “Taxes” means, without duplication, (i) taxes, charges, fees, contributions, social contributions, contributions on economic intervention imposts, levies or any other assessments imposed by any Tax Authority, of any country, state, province or municipality, including all income, profits, revenues, franchise, services, receipts, gross receipts, margin, capital, financial, net worth, sales, use, excise, recording, real estate, real estate transfer, escheat, unclaimed property, withholding, alternative minimum or add on, ad valorem, inventory, payroll, estimated, goods and services, employment, welfare, social security, disability, occupation, unemployment, general business, premium, real property, personal property, capital stock, stock transfer, stamp, transfer, documentary, conveyance, production, windfall profits, pension, duties, customs duties, contributions on import transactions, value added and other similar taxes, withholdings, duties, charges, fees, levies, imposts, license and registration fees, governmental charges and assessments, including related interest, penalties, fines, additions to tax and expenses levied by any national, federal, state and local Tax Authority, (ii) any Liability for the payment of amounts described in clause (i) whether as a result of transferee liability, joint and several or secondary liability for being a member of an affiliated, consolidated, combined, unitary or other economic group (defined within the meaning of Section 1504(a) of the Code or any similar provision of foreign, state, provincial or local applicable Law), including under Section 1.1502-6 of the Treasury Regulations for any period, or payable by reason of contract assumption, operation of Law, or otherwise and (iii) any Liability for the payment of amounts described in clause (i) or clause (ii) as a result of any Tax sharing, Tax indemnity or Tax allocation agreement.

“Tax Authority” means any national, federal, state, local, or municipal Governmental Authority exercising authority to charge, audit, regulate or administer the imposition of Taxes (including the Brazilian Federal Revenue Service ( Secretaria da Receita Federal do Brasil ) and the U.S. Internal Revenue Service).

“Third Party” means any Person who is not a Party or an Affiliate of a Party.

“Transaction Documents” means this Agreement, each of the Governance Documents, all transaction documents set forth on Exhibit G and any certificate, instrument or other document delivered pursuant to any of the foregoing.

Section 1.2 Index of Defined Terms.

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Accounting Policies and Practices ...... 1.1 FAB License ...... 1.1 Additional Excluded Order ...... 5.9 FCPA...... 4.6(a) Adverse Condition ...... 5.3(d) Final Assembly Work ...... 1.1 Affiliate ...... 1.1 Fraud ...... 1.1 Aftermarket Services ...... 1.1 Fundamental Representation ...... 1.1 Aftermarket Services & Support Governance Documents ...... 1.1 Agreements ...... 1.1 Government Official ...... 4.6(b) Agreement ...... Preamble Governmental Authority ...... 1.1 Amended and Restated Agreement . Recitals Governmental Authorization ...... 1.1 Anti-Corruption Laws ...... 4.6(a) Governmental Order ...... 1.1 Antitrust Laws ...... 1.1 HSR Act ...... 1.1 Boeing ...... Preamble ICDR ...... 8.4(d) Boeing Parent ...... Preamble ICDR Rules ...... 9.6(a) Business Day ...... 1.1 In-Scope Business ...... 1.1 Business Plan ...... 1.1 Indemnifying Person ...... 8.2 Cap ...... 8.3(a) Indemnity Claims ...... 8.2 Certificate of Formation ...... 1.1 Indemnity Loss...... 1.1 Claim ...... 1.1 Initiating Member ...... 5.9 Claim Amount ...... 8.4(a) Intellectual Property ...... 1.1 Closing ...... 2.2(a) KC-390 ...... 1.1 Closing Date...... 1.1 KC-390 Opportunity ...... 5.9 Closing Date Cash Contribution ...... 2.1 Law ...... 1.1 Closing Date Contribution ...... 2.2(b)(iv) Legal Proceeding ...... 1.1 Closing In-Kind Contribution ...... 2.2(b)(ii) Liability ...... 1.1 Code ...... 1.1 License Agreements ...... 1.1 Commercial Aviation JV ...... Recitals Licensed IP...... 3.1(c) Commercial Document Framework ...... 1.1 LLC Agreement ...... Recitals Company ...... Preamble Loss ...... 1.1 Company Indemnified Persons ...... 8.2 Loss Order ...... 1.1 Company Interest ...... 1.1 Master Teaming Agreement ...... 1.1 Confidentiality Agreement ...... 5.2 Member ...... Preamble Consent ...... 1.1 MTA ...... Recitals Contract ...... 1.1 Non-Initiating Member ...... 5.9 Control ...... 1.1 Non-Third Party Claim ...... 8.4(a) Cooperation Request ...... 5.9 Notice of Claim ...... 8.4(a) Deductible ...... 8.3(a) Original Agreement ...... Recitals Defense JV Commercial Agreements ..... 1.1 Party ...... Preamble Dispute ...... 9.6(a) Permitted Activity ...... 5.4 Embraer ...... Preamble Permitted Encumbrances ...... 1.1 Embraer In-Kind Contribution ...... 2.2(b)(ii) Person ...... 1.1 Embraer Parent...... 1.1 Reasonable Limitations ...... 5.9 Encumbrance...... 1.1 Reply Certificate ...... 8.4(b) Engineering Services Agreements ...... 1.1 Representative ...... 4.6(a) Excluded Orders...... 1.1 Required Consents ...... 1.1 Executory Period Orders ...... 1.1 Required Regulatory Approvals ...... 5.1(a) FAB ...... 1.1 Restricted Activities ...... 1.1

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Restricted Person ...... 1.1 Supply Agreements ...... 1.1 Sales Work ...... 1.1 Tax ...... 1.1 Sales Support Agreement ...... 1.1 Tax Authority ...... 1.1 Second Golden Share Approval ...... 1.1 Third Party ...... 1.1 Separate Campaign ...... 5.9 Third Party Claim ...... 8.5 Shareholder Approval ...... 1.1 Transaction Documents ...... 1.1 Subsidiary ...... 1.1

ARTICLE II CLOSING DATE CONTRIBUTIONS; CLOSING

Section 2.1 Closing Date Cash Commitments. On the terms and subject to the conditions hereof, each Member, on a several and not joint basis, hereby commits to fund the Company with an amount in cash equal to the aggregate funding commitment set forth opposite such Member’s name on Schedule 2.1 (such amount with respect to each Member, such Member’s “Closing Date Cash Contribution”). Except as expressly set forth in this Agreement or the LLC Agreement (and subject to the conditions set forth herein and therein), no Member shall be required to contribute capital or grant any loans, in each case to the Company or any of its Subsidiaries.

Section 2.2 Closing.

(a) General. The closing of the transactions contemplated by this Section 2.2 (the “Closing”) shall take place remotely via the electronic exchange of documents and signature pages, as soon as practicable, but not later than three Business Days after the satisfaction or waiver of the conditions to the Parties’ obligations set forth in Article VI (other than such conditions as may, by their terms, only be satisfied at the Closing or on the Closing Date, but subject to the satisfaction or waiver of such conditions at the Closing), or at such other place or on such other date as the Members may mutually agree in writing.

(b) Closing Date Contributions; Issuance of Company Interests. At the Closing:

(i) each Member shall contribute to the Company cash in the amount equal to such Member’s Closing Date Cash Contribution by wire transfer of immediately available funds to the account designated in writing by the Company (which account shall be designated at least two Business Days prior to the Closing Date);

(ii) Embraer will cause the Licensed IP (as defined below) to be licensed or sublicensed to the Company on terms consistent with those set forth in the Commercial Document Framework and may, at its own and absolute discretion, structure such license or sublicense (other than any Intellectual Property that is licensed or sublicensed under the FAB License) as in-kind capital contributions (the “Closing In-Kind Contribution”) to the Company;

(iii) Embraer may, at its own and absolute discretion, elect to contribute to the Company additional Intellectual Property licenses (including, for the avoidance of doubt, any sublicenses to Third Party intellectual property included therein) and other intangibles, including, subject to Section 5.3(d), any Executory Period Orders, on or after the Closing (together with the Closing In-Kind Contribution, the “Embraer In-Kind Contribution”); and

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(iv) in exchange for the contribution(s) of each Member set forth in clauses (i) and (ii) above (with respect to each Member, such Member’s “Closing Date Contribution”), the Company shall issue to such Member the Company Interests set forth opposite such Member’s name on Schedule 2.1 under the column “Initial Company Interests.”

Section 2.3 Other Closing Deliveries.

(a) Boeing Deliveries. At the Closing, Boeing shall:

(i) execute and deliver, and cause Boeing Parent to execute and deliver, to Embraer duly executed counterparts to the LLC Agreement; and

(ii) execute and deliver, and cause any Affiliate of Boeing party thereto to execute and deliver, to Embraer duly executed counterparts to each of the Defense JV Commercial Agreements to which Boeing or its respective Affiliates, as the case may be, are a party.

(b) Embraer Deliveries. At the Closing, Embraer shall:

(i) execute and deliver, and cause Embraer Parent and the Company to execute and deliver, to Boeing duly executed counterparts to the LLC Agreement; and

(ii) execute and deliver, and cause the Company and any Affiliate of Embraer party thereto to execute and deliver, to Boeing duly executed counterparts to each of the Defense JV Commercial Agreements to which Embraer, the Company or their respective Affiliates, as the case may be, are a party.

ARTICLE III CERTAIN REPRESENTATIONS AND WARRANTIES OF EMBRAER

Section 3.1 Representations of Embraer Regarding the Company and Certain Contributed Assets. In order to induce Boeing to enter into and perform this Agreement and to complete the transactions contemplated by this Agreement and the other Transaction Documents, Embraer hereby represents and warrants to Boeing as follows:

(a) Organization; Authorization. The Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Company has the full and requisite limited liability company power and authority to enter into, execute and deliver this Agreement and each of the other Transaction Documents to which it is a party, to perform all of the obligations to be performed by it hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Company of this Agreement and each of the other Transaction Documents, the performance of its obligations hereunder and thereunder and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all necessary limited liability company action, and no other limited liability company action or proceeding is necessary to authorize the execution and delivery by the Company of this Agreement and each of the other Transaction Documents, the performance of its obligations hereunder and thereunder or the

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consummation of the transactions contemplated hereby and thereby. This Agreement has been, and each of the other Transaction Documents to which it is party will be at the Closing, duly authorized, executed and delivered by the Company.

(b) No Prior Operations or Liabilities. The Company is a limited liability company that was formed in order to facilitate and engage in the transactions contemplated by this Agreement and the Transaction Documents. As of the date hereof, the Company (i) has not engaged in any business activities or conducted any operations other than entering into the Original Agreement and this Agreement, (ii) does not own any assets, (iii) does not have any liabilities or obligations of any kind whatsoever in existence, whether accrued, contingent, absolute or otherwise, other than pursuant to its formation and this Agreement, and (iv) is not a party to any Contract other than the Original Agreement and this Agreement.

(c) Sufficiency of IP. Except as set forth on Schedule 3.1(c), Intellectual Property that is subject to the licenses or sublicenses from Embraer to the Company, including any Intellectual Property that is licensed or sublicensed under the FAB License (collectively, the “Licensed IP”), owned by or licensed to Embraer and its Affiliates, is sufficient in all material respects to conduct the In-Scope Business as contemplated by the Business Plan; provided that the foregoing representation and warranty shall not be deemed to constitute a representation or warranty with respect to infringement, misappropriation or other violation of Intellectual Property rights, which are addressed exclusively in Section 3.1(e).

(d) No Other Royalties. Other than the royalty payable to FAB under the FAB License, there are no material royalty amounts payable to any Person in connection with the Company’s or the Members’ use of the Licensed IP to conduct the In-Scope Business as contemplated by the Business Plan.

(e) No Infringement. The use or other exploitation (e.g., copying, display, performance) of the Licensed IP to conduct the In-Scope Business as contemplated by the Business Plan will not infringe the Intellectual Property rights of any Person.

(f) No Claims or Proceedings. There have been no Claims, allegations, suits, or other Legal Proceedings asserted or, to the knowledge of Embraer, threatened, against Embraer or any of its Affiliates alleging that the activities contemplated by the In-Scope Business, to the extent such activities were performed by or on behalf of Embraer or any of its Affiliates prior to the date hereof, have infringed, misappropriated, or otherwise violated any Intellectual Property rights of any Person.

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE MEMBERS

In order to induce the other Member to enter into and perform this Agreement and to complete the transactions contemplated by this Agreement and the other Transaction Documents, each Member hereby represents and warrants to the other Member (and from and after the Closing, to the Company) as follows:

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Section 4.1 Incorporation; Authorization.

(a) Embraer is a corporation, validly existing and in good standing under the Laws of the State of Delaware and has all necessary corporate power to enter into, perform the transactions contemplated by, and carry out its obligations under, the Transaction Documents to which Embraer is or will be a party. Boeing is a limited liability company, validly existing and in good standing under the Laws of the State of Delaware and has all necessary limited liability company power to enter into, perform the transactions contemplated by, and carry out its obligations under, the Transaction Documents to which Boeing is or will be a party.

(b) Each of the Members has all requisite power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is a party and, subject to receipt of the Required Regulatory Approvals (as defined below) and the Shareholder Approval, to consummate the transactions contemplated hereby and thereby. The execution and delivery by each of the Members of this Agreement and the other Transaction Documents to which it is a party, the performance by each of the Members of its obligations hereunder and thereunder and, subject to receipt of the Required Regulatory Approvals and the Shareholder Approval, the consummation by each of the Members of the transactions contemplated hereby and thereby have been or, prior to or at the Closing, shall be duly and validly authorized by all requisite and other similar action on the part of each Member. Each of the Members has duly and validly executed and delivered this Agreement and, prior to or at the Closing, each of the Members will have duly and validly executed and delivered each other Transaction Document to which it is a party. This Agreement constitutes, and upon execution and delivery thereof each other Transaction Document to which either Member is a party will constitute, assuming due execution and delivery hereof and thereof by all other parties hereto and thereto, legal, valid and binding obligations of such Member, enforceable against such Member in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar applicable Laws of general applicability, now or hereafter in effect, affecting or relating to creditors’ rights and remedies generally and general principles of equity, whether considered in a proceeding at Law or in equity.

Section 4.2 No Conflict. Subject to receipt of the Required Regulatory Approvals and the Shareholder Approval, neither the execution and delivery by either Member of this Agreement or any of the other Transaction Documents to which such Member is a party, nor the consummation by either Member of the transactions contemplated hereby or thereby, will (a) violate or result in the breach of the certificate or articles of incorporation or association or similar organizational documents of such Member; (b) violate or result in the breach of any Law to which such Member or any of its respective assets is subject or by which it is bound; (c) assuming that all Consents set forth in Schedule 1.1(b) have been obtained, violate, result in the breach of, constitute a default (or create an event which, with notice or lapse of time or both, would constitute a default under), result in the acceleration, termination or maturity of, create in any Member the right to accelerate, terminate, modify, amend or cancel, require any consent of, or notice to, any Person pursuant to, or result in the loss of a benefit or increase in any fee, Liability or other obligation under, any material Contract binding upon either Member or the In-Scope Business; or (d) (with or without notice or lapse of time) result in the creation or imposition of any Encumbrances (other than Permitted Encumbrances) upon or with respect to the business of either Member or the In-Scope Business, except for, in the case of the foregoing clauses (b) to (c), any matter that would not (i)

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reasonably be expected to be material, individually or in the aggregate, to such Member, the In- Scope Business or the Company or (ii) materially impair or delay the ability of such Member to consummate the transactions contemplated by, or perform its obligations under, the Transaction Documents to which it is or will be a party.

Section 4.3 Governmental Authorizations. Except for the Required Regulatory Approvals, no Governmental Authorization is required in connection with the execution, delivery and performance by either Member of this Agreement and the other Transaction Documents to which such Member is a party, or the consummation by either Member of the transactions contemplated hereby or thereby, except for such Governmental Authorizations the failure to which would not be material to the Company or the In-Scope Business after the Closing.

Section 4.4 Absence of Litigation. Except as set forth in Schedule 4.4, there are no Legal Proceedings pending or, to the knowledge of such Member, threatened by or against such Member or its Affiliates, whether at law or in equity, or before or by any Governmental Authority, that would reasonably be expected to materially adversely affect (a) such Member’s ability to perform its obligations under this Agreement, (b) the consummation of the transactions contemplated by this Agreement or (c) the Company’s conduct of the In-Scope Business.

Section 4.5 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from such Member or any of its Affiliates in connection with transactions contemplated hereby based upon arrangements made by or on behalf of such Member or any of its Affiliates for which the Company or the other Member or their respective Affiliates will have any Liability.

Section 4.6 Anti-Bribery.

(a) Except as set forth in Schedule 4.6(a), since January 1, 2013, neither Member, nor any of the directors, officers or employees of either Member (each, a “Representative”) or, to the knowledge of a Member, any agent of such Member acting at least in part for the benefit of such Member or on behalf of such Member, has taken any action in violation of the Anti-Corruption Law of Brazil (Law No. 12,846/2013), the Brazilian Anti-corruption Regulatory Decree (Decree No. 8,420/2015), the Brazilian Conflict of Interest Law (Brazilian Federal Law No. 12,813/2013), the Brazilian Law of Administrative Improbity (Brazilian Federal Law No. 8,429/1992) and the Brazilian Public Procurement Law (Brazilian Federal Law No. 8,666/1993), as well as applicable antitrust and anti-money laundering Laws, in connection with the conduct of its respective business, the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-corruption or anti-bribery Law (collectively, the “Anti-Corruption Laws”).

(b) Without limiting the foregoing and except as set forth in Schedule 4.6(b), since January 1, 2013, in connection with the its business, neither Member nor any of their Representatives or, to the knowledge of such Member, any agent of such Member has offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee, or any other Person acting in an official capacity for any Governmental Authority, to any political party or official thereof, or to any candidate for political office (a “Government Official”) or to any Person under circumstances where such Member, its Affiliates or any of its Representatives knew or had reason

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to believe that all or a portion of such money or thing of value would be offered, given, or promised, directly or indirectly, to any Government Official, in each case, for the purpose of (i) influencing any act or decision of such Government Official in his or her official capacity; (ii) inducing such Government Official to perform or omit to perform any activity related to his or her legal duties; (iii) securing any improper advantage; or (iv) inducing such Government Official to influence or affect any act or decision of any Governmental Authority, in each case, in order to assist such Member, its Affiliates or its Representatives in obtaining or retaining business for or with, or in directing business to such Member, the Company or any other Person, excluding in each of the preceding cases, (A) any lawful expediting payment to a Government Official the purpose of which is to expedite or to secure the performance of a “routine governmental action,” as that term is defined in the FCPA, or similar action by a Government Official or political party or (B) any lawful reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a Government Official or political party that was directly related to (1) the promotion, demonstration, or explanation of products or services; or (2) the execution or performance of a contract with a foreign government or agency thereof. For the avoidance of doubt, nothing in this Section 4.6(b) shall be interpreted in a manner inconsistent with the scope of the representations and warranties made in Section 4.6(a).

(c) Without limiting the foregoing and except as set forth in Schedule 4.6(c), since January 1, 2013, no Member, to such Member’s knowledge, agent of such Member, acting at least in part for the benefit of such Member, and none of such Member’s Representatives has made, offered, requested or taken any act in furtherance of any bribe or other unlawful benefit, including, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. Each Member has in place reasonable internal controls designed to prevent any of its Representatives from undertaking any such conduct and to ensure compliance with applicable Anti-Corruption Laws.

(d) Except as set forth in Schedule 4.6(d), during the five (5) years prior to the date hereof, to the knowledge of each Member, (i) no agent of such Member or any of its Representatives is or has been the subject of any investigation, inquiry or enforcement proceedings by any Governmental Authority regarding any offense or alleged offense under the Anti- Corruption Laws, and (ii) no such investigation, inquiry or proceedings have been threatened or are pending.

Section 4.7 No Other Representations and Warranties; Disclaimers. In making its determination to proceed with the transactions contemplated by this Agreement, each Member has relied on the results of its own independent investigation and verification and only the representations and warranties of the Members expressly and specifically set forth in Article IV of this Agreement, and in the certificates executed by each Member and delivered at the Closing contemplated hereby. THE REPRESENTATIONS AND WARRANTIES IN ARTICLE III AND ARTICLE IV OF THIS AGREEMENT AND IN THE CERTIFICATES EXECUTED BY EACH MEMBER AND DELIVERED AT THE CLOSING CONTEMPLATED HEREBY CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF THE MEMBERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, AND EACH MEMBER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE III AND ARTICLE IV OF THIS AGREEMENT AND IN THE CERTIFICATES

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EXECUTED BY THE MEMBERS AND DELIVERED AT THE CLOSING CONTEMPLATED HEREBY, ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE EXPRESSED OR IMPLIED ARE SPECIFICALLY DISCLAIMED BY THE MEMBERS.

ARTICLE V ADDITIONAL AGREEMENTS

Section 5.1 Required Regulatory Approvals.

(a) Each Member shall, and shall cause its Affiliates to, use its respective reasonable best efforts to (i) as promptly as reasonably practicable obtain all Governmental Authorizations set forth on Schedule 5.1(a) and, except for the FAB License (which shall be governed by Section 5.8), any other Governmental Authorization that may be, or become, necessary for the performance of such Party’s or any of its Affiliate’s respective obligations pursuant to this Agreement and for the consummation of the transactions contemplated by this Agreement (collectively, the “Required Regulatory Approvals”), and (ii) avoid entry of, or effect the dissolution of, any Governmental Authorization that would have the effect of preventing or materially delaying the consummation of the transactions contemplated by this Agreement. The Members shall cooperate with each other in seeking to promptly obtain the Required Regulatory Approvals. In furtherance and not in limitation of the foregoing, each Party agrees to (A) make all required filings with respect to Required Regulatory Approvals as soon as reasonably practicable and advisable after the date of this Agreement and (B) not enter into any agreement with the United States Federal Trade Commission, the United States Department of Justice (including for the extension of any waiting period) or any other Governmental Authority not to consummate the transactions contemplated by this Agreement, except with the prior written consent of the other Party.

(b) Without limiting the generality of the foregoing, each Member shall promptly notify the other of any substantive communication it or any of its Affiliates receives from any Governmental Authority relating to any Required Regulatory Approvals (other than the Second Golden Share Approval or the process of obtaining the FAB License) and, subject to applicable Law, permit the other to review in advance any proposed substantive communication by such Party to any Governmental Authority in connection therewith. Neither Member shall participate in any substantive meeting or discussion with any Governmental Authority in respect of any Required Regulatory Approvals (other than the Second Golden Share Approval or the process of obtaining the FAB License), unless it consults with the other in advance and, to the extent permitted by such Governmental Authority, gives the other Member or its counsel the opportunity to attend and participate at such meeting. The Parties shall coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other may reasonably request in connection with the foregoing and in seeking early termination of any applicable waiting periods. Subject to applicable Law, the Parties shall provide each other in advance with copies of all substantive correspondence (including documents and data exhibits and attachments), filings or communications between them or any of their Affiliates on the one hand, and any Governmental Authority or members of its staff, on the other hand, with respect to any Required Regulatory Approvals (other than the Second Golden Share Approval or the process of obtaining the FAB License). The Members shall consult with each other on any information

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relating to Boeing or Embraer, as the case may be, and any of their respective Affiliates that appear in any filing made with, or written materials submitted to (in each case, including any amendments thereto), any Governmental Authority in connection with filings to be made under applicable Antitrust Laws (and any amendments thereto), and shall consider in good faith comments proposed by Boeing or Embraer, as the case may be; provided that such materials (or any other information or materials provided to or received by any Party under this Section 5.1(b)) may be redacted (x) to remove references concerning the valuation of the In-Scope Business, (y) as necessary to comply with contractual arrangements, and (z) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns, to the extent that such attorney-client or other privilege or confidentiality concerns are not governed by a common interest privilege or doctrine; provided, further, that the Parties may, as each deems advisable, reasonably designate any material or information provided to or received by any Party under this Section 5.1(b) as “outside counsel only material”. Notwithstanding anything in this Section 5.1(b) or elsewhere in this Agreement to the contrary, Boeing and Embraer shall jointly direct and control all aspects of the Parties’ efforts to obtain the Required Regulatory Approvals (other than the Second Golden Share Approval or the process of obtaining the FAB License) either before any Governmental Authority or in any Legal Proceeding pursuant to any Antitrust Laws brought to enjoin the transactions contemplated by this Agreement.

(c) In the event that any Legal Proceeding is commenced challenging the transactions contemplated by this Agreement as violating any Antitrust Law, each Party shall cooperate with each other Party and use its respective reasonable best efforts to contest and resist any such Legal Proceeding and to have vacated, lifted, reversed or overturned any Governmental Order resulting therefrom, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement.

(d) Notwithstanding anything contained in this Agreement, in exercising its reasonable best efforts to obtain the Required Regulatory Approvals and to consummate the transactions contemplated by this Agreement, neither Boeing nor Embraer nor any of their Affiliates shall be obligated to agree to, accept, perform, or effect, and the Company shall not, without Boeing’s and Embraer’s prior written consent, agree to, accept, perform or effect, any divestiture or any other undertakings, conditions, remedies, restrictions, obligations, commitments or actions (including any amendments, supplements or modifications to, or waiver of any conditions of, this Agreement or any of the Transaction Documents) required by any Governmental Authority in order to obtain any such Required Regulatory Approvals.

(e) Neither Boeing nor Embraer nor any of their Affiliates shall enter into or consummate any business combination with any Third Party (by way of merger, consolidation, share exchange, investment, joint venture strategic alliance, other business combination, asset, stock or equity purchase or otherwise), that would reasonably be expected to prevent the obtaining of any Required Regulatory Approval contemplated by this Section 5.1.

Section 5.2 Confidentiality. Each Member acknowledges that it remains bound by that certain Confidentiality Agreement, dated as of October 6, 2017, by and among Boeing Parent and Embraer Parent (as amended from time to time, the “Confidentiality Agreement”).

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Section 5.3 Further Action.

(a) Each of the Members shall (i) execute and deliver, or shall cause to be executed and delivered, such documents and other papers and shall take, or shall cause to be taken, such further actions as may be reasonably required to carry out the provisions of this Agreement and give effect to the transactions contemplated hereby, (ii) refrain from taking any action that would reasonably be expected to have the effect of delaying, impairing or impeding the Closing and (iii) use its reasonable efforts to cause all of the conditions to the obligations of the other Member to consummate the Closing to be met on or prior to the Closing.

(b) Each of the Members will cooperate to obtain any Consent or Governmental Order that may be required in connection with the transactions contemplated by the Transaction Documents.

(c) Embraer shall not request or cause a Governmental Authority to issue any Governmental Order that would prevent a condition set forth in Section 6.1(b) or Section 6.1(c) from being satisfied. For the avoidance of doubt, Embraer does not covenant to cause any Governmental Authority not to issue a Governmental Order.

(d) Without limiting the foregoing, Embraer shall use its commercially reasonable efforts to cause the terms of any Executory Period Orders to permit the assignment of such Executory Period Orders to the Company in connection with the Closing without (i) any payment of money, (ii) any default, acceleration or other modification of terms or (iii) providing a termination right (each of the matters set forth in clauses (i), (ii) and (iii), an “Adverse Condition”). To the extent assignable in accordance with the immediately preceding sentence, such Executory Period Orders may, at Embraer’s option, constitute part of the Embraer In-Kind Contribution and shall be assigned to the Company at, or as soon as reasonably practicable following, the Closing. In the event any Executory Period Order is not able to be assigned by Embraer to the Company (without the imposition of any Adverse Condition or otherwise), Embraer will cause, and Boeing and the Company will cooperate in all reasonable respects with Embraer, (x) to provide to the Company the benefits of the applicable Executory Period Order, subject to the terms thereof and, to the extent the Company receives the benefits therefrom, subject to the Company bearing the burdens that it would have received had it originally entered into the Executory Period Order directly and any incremental Liabilities, costs and expenses incurred by Embraer in connection with providing the Company with such benefits and burdens, (y) to cooperate in any reasonable and lawful arrangement requested by Boeing designed to provide such benefits to the Company, and (z) to enforce, at the request of Boeing and for the account of the Company, any rights of Embraer relating to such Executory Period Order. To the extent that the Company requests and is provided the benefits of any Executory Period Order referred to in this Section 5.3(d), the Company will perform or discharge, on behalf of Embraer, Embraer’s obligations pursuant to such Executory Period Order in accordance with the terms thereof.

(e) Without limiting the foregoing, Boeing shall use its commercially reasonable efforts to cause the terms of any agreement related to an Executory Period Order entered into by Boeing (or, if such agreement contemplates orders other than Executory Period Orders, the portions of such agreement related to Executory Period Orders) to permit the assignment of such agreements (or the portions of such agreements) to the Company in connection

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with the Closing without any Adverse Condition. To the extent assignable in accordance with the immediately preceding sentence, such agreements (or the portions of such agreements) shall be assigned to the Company at, or as soon as reasonably practicable following, the Closing. In the event any agreement (or the portion of any agreement) is not able to be assigned by Boeing to the Company (without the imposition of any Adverse Condition or otherwise), Boeing will cause, and Embraer and the Company will cooperate in all reasonable respects with Boeing, (x) to provide to the Company the benefits of the applicable agreement (or portion of such agreement), subject to the terms thereof and, to the extent the Company receives the benefits therefrom, subject to the Company bearing the burdens that it would have received had it originally entered into the agreement (or the portion of such agreement) directly and any incremental Liabilities, costs and expenses incurred by Boeing in connection with providing the Company with such benefits and burdens, (y) to cooperate in any reasonable and lawful arrangement requested by Embraer designed to provide such benefits to the Company, and (z) to enforce, at the request of Embraer and for the account of the Company, any rights of Boeing relating to such agreement (or the portion of such agreement). To the extent that the Company requests and is provided the benefits of any such agreement (or portion of any such agreement) referred to in this Section 5.3(e), the Company will perform or discharge, on behalf of Boeing, Boeing’s obligations pursuant to such agreement in accordance with the terms thereof.

Section 5.4 Exclusivity. Until the earlier of (a) the Closing and (b) the termination of this Agreement in accordance with Section 7.1, each Member agrees that, except in connection with a Permitted Activity, it will not, and it will cause each of its Restricted Persons not to, directly or indirectly, solicit, initiate, encourage, enter into, conduct, engage in or continue any communications or negotiations, or engage in any activities in furtherance of entering into any agreements or understandings, whether written or oral, binding or non-binding, with any Third Party regarding any joint venture or other similar business enterprise, to conduct all or a portion of the In-Scope Business. As used herein, “Permitted Activity” shall mean any activities in furtherance of the transactions contemplated by this Agreement or the Transaction Documents and not otherwise prohibited hereunder.

Section 5.5 Finalization of Defense JV Commercial Agreements. From and after the date hereof until the Closing or earlier termination of this Agreement in accordance with the terms hereof, the Members shall negotiate in good faith to finalize the form of each Defense JV Commercial Agreement for execution at the Closing (other than any such agreement that was entered into, or attached in agreed form as an Exhibit hereto, at signing), each on terms consistent with those set forth in the Commercial Document Framework. Each of the Members agree to provide appropriate resources and attention to finalizing the Defense JV Commercial Agreements (other than any such agreement that was entered into, or attached in agreed form as an Exhibit hereto, at signing) expeditiously following the date hereof and, subject to the satisfaction of the conditions set forth in Article VI (other than those conditions to be satisfied at the Closing itself), to execute the Defense JV Commercial Agreements at the Closing, if not executed prior to the Closing.

Section 5.6 Tax Treatment. The Parties agree to treat the Closing Date Contributions, together with certain other arrangements entered into in connection with the transactions described herein, as transfers of property described in Section 721(a) of the Code and shall not take any

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position inconsistent with such treatment on any Tax return or any audit, examination or other proceeding with respect to Taxes unless otherwise required by applicable Law.

Section 5.7 Company Operations. From the date hereof until the Closing, the Company will not, and Embraer will cause the Company not to, (a) engage in any business activities or conduct any operations of any kind, (b) own any assets at any time, (c) have any liabilities or obligations of any kind whatsoever in existence, whether accrued, contingent, absolute or otherwise, other than pursuant to its formation at any time, and (d) be a party to any Contract other than the Original Agreement at any time; provided that nothing in this Agreement shall prevent the Company from entering into Executory Period Orders, and other agreements solely related to the performance of any such Executory Period Orders so obtained, between the date hereof and the Closing, in each case, with the prior written consent of Boeing (not to be unreasonably withheld, conditioned or delayed; provided, that refusing to provide consent if such Executory Period Order is a Loss Order shall not be unreasonable); provided further that any such other agreements shall be taken into account, in the aggregate, to determine if the applicable Executory Period Order is a Loss Order and any such Executory Period Orders and other agreements shall be sought, obtained and performed in accordance with Law.

Section 5.8 FAB License. As soon as reasonably practicable after the date hereof, and no later than the date on which all conditions set forth in Article VI have been satisfied (other than the condition set forth in Section 6.3(h) and such other conditions to be satisfied at the Closing itself), Embraer shall cause the FAB License to obtained and to remain in full force and effect in accordance with its terms from the date of the execution and delivery of the FAB License until and through the Closing.

Section 5.9 KC-390 Opportunities. The Members hereby acknowledge and agree that, subject to any restrictions under Antitrust Laws and each of Boeing Parent’s and Embraer Parent’s obligations to ensure maximum value for their respective stockholders (the “Reasonable Limitations”), the Members have a shared interest in maximizing profitable sales orders for the KC-390 between the date hereof and the Closing, as such orders would ultimately inure to the financial benefit of the Company and thereby to each Member. As such, subject in all cases to the Reasonable Limitations (which each of Boeing and Embraer shall be entitled to determine in good faith in their sole discretion), the Members agree to engage in good faith discussions, which the Members intend to engage in on terms substantially similar to those set forth in Section 2 of the Master Teaming Agreement and as further set forth below, with respect to the manner in which the Members may cooperate in the pursuit of any “requests for proposal” or other similar procurement processes initiated between the date hereof and the Closing by a potential purchaser of the KC-390 with respect to which the KC-390 meets all cost and technical specifications promulgated by such potential purchaser or otherwise in Embraer’s and Boeing’s reasonable determination the KC-390 would qualify for such procurement process (a “KC-390 Opportunity”). Upon a Member’s identification of a KC-390 Opportunity with respect to which such Member (the “Initiating Member”) seeks the other Member’s assistance, such Initiating Member will provide written notice to the other Member (the “Non-Initiating Member”) setting forth a description of such KC-390 Opportunity, including any materials received from the potential purchaser with respect to such KC-390 Opportunity (the “Cooperation Request”). Within 15 Business Days following delivery of a Cooperation Request, the Members shall meet (telephonically or in-person) to discuss in good faith the Members’ use of commercially reasonable efforts to support the pursuit

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of such KC-390 Opportunity. If, following such good faith discussion, the Members are not able to agree upon a framework for commercially reasonable cooperation to pursue such KC-390 Opportunity (other than due to Reasonable Limitations), then, subject to the following conditions, Embraer, if the Initiating Member, may elect, upon written notice to the Company and Boeing, to pursue such KC-390 Opportunity for Embraer Parent’s own account (any such opportunity pursued by Embraer Parent, a “Separate Campaign”). If Embraer Parent pursues a Separate Campaign, any order ultimately received by Embraer Parent in respect of such Separate Campaign shall be deemed an “Additional Excluded Order;” provided that any such order shall only be deemed an Additional Excluded Order if in pursuing such Separate Campaign (a) contemporaneously with the submission of a bid or similar proposal, Embraer Parent has specified in writing to the potential purchaser that Embraer Parent (and not the Company) will be solely responsible for all liabilities and obligations related to or arising from any orders received by Embraer Parent in respect of such Separate Campaign and (b) the terms of any Contracts entered into in connection with any orders received by Embraer Parent in respect of such Separate Campaign would not impose any liability or obligation on the Company, Boeing Parent or any of Boeing Parent’s Affiliates. The right to pursue a Separate Campaign in accordance with this Section 5.9 will be the sole recourse for any breach of this Section 5.9 by a Member and, notwithstanding anything in this Agreement to the contrary, no breach or alleged breach of any covenant set forth in this Section 5.9 shall be taken into account in determining whether the conditions set forth in Section 6.2(c) or Section 6.3(c) have been satisfied and the covenants set forth in this Section 5.9 shall be deemed to have been performed in all respects for purposes of Section 6.2(c) or Section 6.3(c).

Section 5.10 Adoption of Key Policies. As soon as reasonably practicable after the date hereof, and no later than the date on which all conditions set forth in Article VI have been satisfied (other than such conditions to be satisfied at the Closing itself), Embraer shall cause the Company to adopt the Accounting Policies and Practices, the Anti-Bribery Policy, the Code of Conduct and the Export-Import Compliance Plan, each in the respective forms attached hereto as Exhibit B and Exhibits H-1 through H-3.

ARTICLE VI CONDITIONS TO CLOSING

Section 6.1 Conditions to Each Member’s Obligations to Effect the Closing. The obligation of each Member to effect the Closing shall be subject to the satisfaction (or, to the extent permitted by applicable Law, waiver by both Members), as of the Closing, of each of the following conditions:

(a) Closing of Commercial Aviation JV. The Closing (as defined in the MTA) shall have occurred.

(b) No Governmental Orders. On the Closing Date, there shall be no Governmental Orders in effect that prevent, prohibit or make illegal the Closing or the transactions contemplated by this Agreement and the other Transaction Documents; provided that no Member shall be entitled to assert the failure of the condition set forth in this Section 6.1(b) to be satisfied as the basis for not effectuating the completion of the Closing (i) if such Member failed to take any action required under this Agreement to satisfy the condition set forth in this Section 6.1(b) or

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(ii) whose breach of this Agreement shall have been the primary cause of, or shall have primarily resulted in, the failure of the condition set forth in this Section 6.1(b) to be satisfied.

(c) Required Approvals. All Required Regulatory Approvals (except for receipt of the FAB License, which condition is set forth in Section 6.3(h)), the Second Golden Share Approval and the Shareholder Approval each shall have been obtained.

Section 6.2 Conditions to Embraer’s Obligation to Effect the Closing. The obligation of Embraer to effect the Closing shall be subject to the satisfaction (or, to the extent permitted by applicable Law, waiver) as of (or simultaneously with, as the case may be) the Closing, of each of the following conditions:

(a) Fundamental Representations and Warranties. The Fundamental Representations made by Boeing shall have been true and correct in all respects (other than de minimis inaccuracies) as of the date hereof and as of the Closing, as though made on, and as of, such date and time.

(b) Other Representations and Warranties. All other representations and warranties of Boeing set forth in Article III and Article IV (other than the Fundamental Representations made by Boeing) shall have been true and correct in all material respects (without giving effect to any limitation as to “materiality”) as of the date hereof and as of the Closing, as though made on, and as of, such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date).

(c) Covenants. Boeing shall have performed and complied with the obligations and covenants applicable to Boeing, in each case, to be performed and complied with by Boeing at or prior to the Closing in accordance with this Agreement, except where the failure of Boeing to perform or comply with the obligations and covenants applicable to Boeing has not had and would not reasonably be expected to have a material and adverse impact on a Member or the Company.

(d) Closing Date Contribution. Boeing shall, at the Closing, make its Closing Date Contribution pursuant to Section 2.2(b).

(e) Officer’s Certificate. Boeing shall have delivered to Embraer a certificate from a duly authorized officer of Boeing, in form and substance reasonably satisfactory to Embraer, dated as of the Closing Date, stating that the conditions specified in Section 6.2(a), Section 6.2(b) and Section 6.2(c) have been satisfied.

(f) Deliverables. Boeing shall have delivered or caused to be delivered the items set forth in Section 2.3(a).

(g) Required Consents. Boeing shall have delivered evidence reasonably satisfactory to Embraer that Boeing has obtained the Required Consents allocated to Boeing (as designated opposite Boeing’s name on Schedule 1.1(b)).

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Section 6.3 Conditions to Boeing’s Obligations to Effect the Closing. The obligation of Boeing to effect the Closing shall be subject to the satisfaction (or, to the extent permitted by applicable Law, waiver), as of (or simultaneously with, as the case may be) the Closing, of each of the following conditions:

(a) Fundamental Representations and Warranties. The Fundamental Representations made by Embraer shall have been true and correct in all respects (other than de minimis inaccuracies) as of the date hereof and as of the Closing, as though made on, and as of, such date and time.

(b) Other Representations and Warranties. All other representations and warranties of Embraer set forth in Article III and Article IV (other than the Fundamental Representations made by Embraer) shall have been true and correct in all material respects (without giving effect to any limitation as to “materiality”) as of the date hereof and as of the Closing, as though made on, and as of, such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date).

(c) Covenants. Embraer shall have performed and complied with the obligations and covenants applicable to Embraer, in each case, to be performed and complied with by Embraer at or prior to the Closing in accordance with this Agreement, except where the failure of Embraer to perform or comply with the obligations and covenants applicable to Embraer has not had and would not reasonably be expected to have a material and adverse impact on a Member or the Company.

(d) Closing Date Contribution. Embraer shall, at the Closing, make its Closing Date Contribution pursuant to Section 2.2(b).

(e) Officer’s Certificate. Embraer shall have delivered to Boeing a certificate from a duly authorized officer of Embraer, in form and substance reasonably satisfactory to Boeing, dated as of the Closing Date, stating that the conditions specified in Section 6.3(a), Section 6.3(b) and Section 6.3(c) have been satisfied.

(f) Deliverables. Embraer shall have delivered or caused to be delivered the items set forth in Section 2.3(b).

(g) Required Consents. Embraer shall have delivered evidence reasonably satisfactory to Boeing that Embraer has obtained the Required Consents allocated to Embraer (as designated opposite Embraer’s name on Schedule 1.1(b)).

(h) FAB License. The FAB License shall be in full force and effect in accordance with its terms.

ARTICLE VII TERMINATION, AMENDMENT AND WAIVER

Section 7.1 Termination. This Agreement may be terminated prior to the Closing:

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(a) by the joint written election of the Members;

(b) by either Member if:

(i) the MTA has been terminated in accordance with its terms; or

(ii) prior to the Closing, the condition provided in Section 6.1(a) has not been met, the satisfaction of such condition is impossible and such condition has not been waived in writing by the other Member; provided that the right to terminate this Agreement under this Section 7.1(b)(ii) shall not be available to either Member in the event that the failure of any such condition to be satisfied on or prior to the Closing was primarily caused by, or results primarily from, such Member’s breach of its representations, warranties, covenants, agreements or other obligations in this Agreement;

(c) by Embraer if Boeing is in breach of any of its covenants, agreements or other obligations in this Agreement, or is in breach of, or there is an inaccuracy with respect to, any of the representations or warranties made by Boeing set forth in Article IV, which breach or inaccuracy (i) would result in any condition to Closing set forth in Section 6.2 not being satisfied, and (ii) by its nature cannot be cured or has not been cured by Boeing, as the case may be, by the date 90 Business Days after Boeing’s receipt of written notice of such breach or inaccuracy from Embraer; provided that Embraer is not then in material breach of any of its representations, warranties, covenants, agreements or other obligations in this Agreement;

(d) by Boeing if Embraer is in breach of any of its covenants, agreements or other obligations in this Agreement, or is in breach of, or there is an inaccuracy with respect to, any of the representations or warranties made by Embraer set forth in Section 3.1 or Article IV, which breach or inaccuracy (i) would result in any condition to Closing set forth in Section 6.3 not being satisfied, and (ii) by its nature cannot be cured or has not been cured by Embraer, as the case may be, by the date 90 Business Days after Embraer’s receipt of written notice of such breach or inaccuracy from Boeing; provided that Boeing is not then in material breach of any of its representations, warranties, covenants, agreements or other obligations contained in this Agreement; or

(e) by Boeing if there is the issuance of a final, non-appealable Governmental Order prohibiting the consummation of the transactions contemplated by this Agreement.

Section 7.2 Effect of Termination. In the event of the termination of this Agreement as provided in Section 7.1, this Agreement shall immediately cease to be of any further force or effect and there shall be no further obligation on the part of any Party. Notwithstanding the foregoing, nothing in this Agreement shall relieve any Party from Liability for any breach of any covenant or other obligation in this Agreement prior to the date of termination.

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ARTICLE VIII INDEMNIFICATION

Section 8.1 Survival.

(a) The Fundamental Representations shall survive the Closing until the 90 th day following the expiration of the applicable statute of limitations. All representations and warranties set forth in Section 3.1(d), Section 3.1(e) and Section 3.1(f) shall survive for a period of 36 months following the Closing Date. All representations and warranties set forth in Article III and Article IV which are not Fundamental Representations or the representations and warranties set forth in Section 3.1(d), Section 3.1(e) and Section 3.1(f) shall survive for a period of 24 months following the Closing Date.

(b) The covenants, agreements and other obligations of the Members set forth in this Agreement shall survive the Closing in full force and effect until fully performed in accordance with their terms.

(c) Notwithstanding anything herein to the contrary, no knowledge of, or investigation by or on behalf of, any Party will constitute or give effect to a waiver of such Party’s right to enforce any representation, warranty, covenant or agreement contained herein or in any other Transaction Document, or in any way limit such Party’s right to indemnification under this Article VIII.

(d) No Claim regarding a breach of any such representation, warranty, covenant, agreement or other obligation shall be made after the expiration of the applicable survival period. Any Claim for indemnification asserted in writing prior to the expiration of any such survival period as provided in this Section 8.1 (regardless of whether a Legal Proceeding has been commenced) shall have been timely made for purposes of this Article VIII such that the representation, warranty, covenant, agreement or obligation that is the subject of such Claim, to the extent of such Claim only, shall survive until such Claim has been fully and finally resolved in accordance with the terms of this Agreement. For the avoidance of doubt, the separate obligations of the Parties under this Article VIII shall survive until 90 days after the expiration of the survival period for the last representation, warranty, covenant, agreement or other obligation under this Agreement.

Section 8.2 Indemnification by a Member. Subject to the provisions of this Article VIII, each Member (the “Indemnifying Person”) shall indemnify the Company and the other Member (collectively, the “Company Indemnified Persons”) for any and all Indemnity Losses incurred by such Company Indemnified Persons to the extent arising from (a) the failure of any representation or warranty made by such Member in this Agreement to have been true and correct as of the date hereof and as of the Closing, as though made at and as of the Closing, or the failure of any certificate delivered by such Member pursuant to Section 6.2(e) or Section 6.3(e), as applicable, of this Agreement to have been true and correct when delivered or (b) any breach or failure by such Member to perform any of its covenants or obligations contained in this Agreement (except for those set forth in Section 5.8) (clauses (a) and (b), the “Indemnity Claims”).

Section 8.3 Limitations on Indemnification.

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(a) No Indemnifying Person shall have any obligation to indemnify any Company Indemnified Person unless and until the aggregate Indemnity Losses incurred or suffered by all Company Indemnified Persons entitled to indemnification from such Indemnifying Person thereunder exceed $2,500,000 (the “Deductible”), in which case, such Indemnifying Person shall be responsible for such Indemnity Losses in excess of the Deductible, and after the aggregate Indemnity Losses paid by such Indemnifying Person exceed (A) $275,000,000, in the case of Embraer, or (B) $275,000,000, in the case of Boeing (in either case, the “Cap”), which amount shall be reduced dollar-for-dollar for Embraer or Boeing, as applicable, for payments made by such party arising out of any indemnification claims made under the LLC Agreement; provided, that neither the Deductible nor the Cap shall apply to any amounts payable in respect of Indemnity Losses arising from or related to (x) any inaccuracy or breach of any Fundamental Representation or (y) any Indemnity Claim based on Fraud, although such amounts shall be aggregated with all other Indemnity Losses to determine if indemnification obligations exceed the Deductible, and no such amounts shall be counted towards the Cap.

(b) For purposes of this Article VIII, when (i) determining whether any breach or inaccuracy of a representation or warranty in this Agreement has occurred and (ii) calculating the amount of any Indemnity Losses relating thereto, in each case, all references as to materiality or other similar materiality-based qualifications set forth therein shall be disregarded.

(c) In the event any Company Indemnified Person becomes aware of any breach giving rise to an indemnification obligation of any Indemnifying Person under Section 8.2, such Company Indemnified Person shall take commercially reasonable steps to, in its reasonable judgment, mitigate any Indemnity Losses which form the basis of such indemnification obligation. Any and all amounts paid or payable by a Company Indemnified Person in connection with any mitigation required by this Section 8.3(c) shall constitute Indemnity Losses. Nothing in this Section 8.3(c) is intended to supersede any obligations under Law to mitigate Indemnity Losses.

Section 8.4 Non-Third Party Claims. The indemnity obligations of an Indemnifying Person pursuant to Section 8.2 arising out of or relating to any Indemnity Claim by a Company Indemnified Person, other than in respect of a Third Party Claim, shall be subject to the following terms and conditions:

(a) A Company Indemnified Person seeking indemnification under Article VIII shall give the Indemnifying Person notice (each such notice, a “Notice of Claim”) of such Indemnity Claim (each a “Non-Third Party Claim”) stating (to the extent known or reasonably anticipated) the nature and basis of such Non-Third Party Claim and, to the extent available to the Company Indemnified Person, the amount thereof (the “Claim Amount”); provided that, the failure to give such Notice of Claim shall not affect the rights of the Company Indemnified Person hereunder, except to the extent that the Indemnifying Person shall have been actually and materially prejudiced by reason of such failure. Any Notice of Claim delivered pursuant to this Section 8.4(a) may be supplemented, and any Claim Amount may be increased, added or supplemented, at a later date by the Company Indemnified Person.

(b) If the Indemnifying Person objects to such Non-Third Party Claim or Claim Amount, or any portion thereof, as specified in such Notice of Claim, the Indemnifying Person shall, within 30 days after receipt of any such Notice of Claim, deliver to the Company Indemnified

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Person, a written notice (a “Reply Certificate”), (i) noting, in reasonable detail, its objection to the applicable Non-Third Party Claim or Claim Amount or any portion thereof, and (ii) specifying in reasonable detail, to the extent practicable, the nature and basis for such objection. Any Reply Certificate delivered pursuant to this Section 8.4(b) may be supplemented at a later date by the Indemnifying Person.

(c) If a Reply Certificate is not timely delivered by the Indemnifying Person in accordance with Section 8.4(b) with respect to any Notice of Claim, or if the Indemnifying Person timely delivers a Reply Certificate and does not object to a portion of the Non-Third Party Claim or Claim Amount in such Reply Certificate or a supplement thereto, then the Indemnifying Person shall be deemed to have acknowledged its obligation to indemnify the Company Indemnified Person, as applicable, in full for the Claim Amount specified in such Notice of Claim with respect to the applicable Non-Third Party Claim (or the uncontested portion thereof), and the Indemnifying Person shall pay such Claim Amount (or the uncontested portion thereof) to the Company Indemnified Person, in accordance with Section 8.6(a).

(d) If the Company Indemnified Person receives a timely Reply Certificate in accordance with Section 8.4(b), the Indemnifying Person shall not be required to pay the contested portion of any Claim Amount referred to in such Reply Certificate unless and until either (i) mutual agreement of the Company Indemnified Person and the Indemnifying Person has been reached as to the payment of the Claim Amount (or any other amount mutually agreed upon by such parties) or (ii) a final non-appealable Governmental Order or arbitral ruling of the International Centre for Dispute Resolution (the “ICDR”) has been entered pursuant to Section 9.6 resolving the Non-Third Party Claims contested in such Reply Certificate and indicating that the Company Indemnified Person is entitled to such Claim Amount.

Section 8.5 Third Party Claims. The indemnity obligations of an Indemnifying Person pursuant to Section 8.2, in each case, resulting from any Claim by a Third Party in a Legal Proceeding (a “Third Party Claim”) shall be subject to the following terms and conditions:

(a) A Company Indemnified Person seeking indemnification under this Article VIII in respect of a Third Party Claim shall give the Indemnifying Person notice of such Third Party Claim that is asserted against, imposed upon or incurred by the Company Indemnified Person and that may give rise to an obligation of such Indemnifying Person under this Article VIII stating (to the extent known or reasonably anticipated) the nature and basis of such Third Party Claim and the amount thereof promptly after such Company Indemnified Person receives any written notice of such Third Party Claim; provided that the failure to give such notice shall not affect the rights of the Company Indemnified Person hereunder except to the extent that the Indemnifying Person shall have been actually and materially prejudiced by reason of such failure.

(b) Subject to Section 8.5(c), if the Indemnifying Person (i) agrees in writing to assume responsibility for all Indemnity Losses arising out of such Third Party Claim (with no reservation of any rights) and (ii) reasonably demonstrates to the Company Indemnified Person, in writing, the financial ability of the Indemnifying Person to provide full indemnification with respect to such Third Party Claim (including the ability to post any bond required), then the Indemnifying Person shall have the right to undertake, by counsel or other representatives of its own choosing (provided such counsel or other representative is reasonably satisfactory to the

27 1034377.14-CHISR01A - MSW

Company Indemnified Person) the defense of such Third Party Claim at the Indemnifying Person’s sole risk and expense.

(c) In the event that (i) the Indemnifying Person shall elect not to undertake such defense; (ii) the Indemnifying Person shall fail to undertake to defend such Third Party Claim, or diligently pursue or maintain such defense, within 30 days after delivery of notice by the Company Indemnified Person, as applicable, of such Third Party Claim; (iii) such Third Party Claim seeks non-monetary relief or involves criminal or quasi-criminal allegations or involves a Governmental Authority; (iv) it could reasonably be expected that such Third Party Claim may materially and adversely affect the Company Indemnified Person (as determined by such Person in good faith), other than as a result solely of money damages or other money payments; or (v) the Company Indemnified Person reasonably concludes that it and the Indemnifying Person have conflicting interests with respect to such Third Party Claim, then the Company Indemnified Person (upon further notice to the Indemnifying Person) shall have the right to undertake the defense, compromise or settlement of such Third Party Claim, by counsel or other representatives of its own choosing, on behalf of and without limiting the indemnification obligations of the Indemnifying Person under this Agreement. In the event that the Company Indemnified Person undertakes the defense of a Third Party Claim under this Section 8.5(c), the Indemnifying Person shall pay to the Company Indemnified Person, in addition to all other amounts required to be paid hereunder, the reasonable costs and expenses (including reasonable legal fees) incurred by the Company Indemnified Person in connection with the investigation, defense, compromise or settlement thereof as and when such costs and expenses are so incurred. Notwithstanding the foregoing, if the Indemnifying Person has satisfied the conditions set forth in clauses (i) and (ii) of Section 8.5(b) with respect to a Third Party Claim, the Company Indemnified Person shall not, without the Indemnifying Person’s consent (which consent shall not be unreasonably withheld, conditioned or delayed), settle or consent to the entry of a Governmental Order obligating the Indemnifying Person to pay any amounts with respect to such Third Party Claim.

(d) Anything in this Section 8.5 to the contrary notwithstanding, the Indemnifying Person shall not, without the Company Indemnified Person’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), settle or compromise any Third Party Claim or consent to the entry of any Governmental Order or arbitral ruling unless (i) the Indemnifying Person agrees in writing to pay all amounts payable pursuant to such settlement, compromise or Governmental Order or arbitral ruling as provided in this Agreement, (ii) such settlement, compromise or Governmental Order or arbitral ruling includes as an unconditional term thereof the giving by the claimant or the plaintiff to the Company Indemnified Person an irrevocable release from all Liability in respect of such Third Party Claim in form and substance satisfactory to the Company Indemnified Person, (iii) such settlement, compromise or Governmental Order or arbitral ruling would not result in the finding or admission of any violation of applicable Law, and (iv) such settlement, compromise or Governmental Order or arbitral ruling does not impose any injunctive relief or material operational restrictions on the Company Indemnified Person or admit to any wrongdoing by or on behalf of the Company Indemnified Person.

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Section 8.6 Additional Indemnification Provisions.

(a) To the extent an Indemnity Loss gives rise to an Indemnity Claim by a Company Indemnified Person (i) under more than one provision of this Agreement (including, for example, multiple representations, warranties or covenants), such Company Indemnified Person may seek recovery under any or all such provisions and clauses, and (ii) under one or more provisions of this Agreement, such Company Indemnified Person shall be entitled to bring such Indemnity Claim under this Agreement notwithstanding that the Indemnity Loss may or may not also give rise to a Claim under another Transaction Document; provided that in the case of (i) and (ii), notwithstanding anything to the contrary herein or in any other Transaction Document, any Indemnity Loss under this Agreement shall be determined without duplication of recovery for the same Loss by reason of the state of facts giving rise to such Indemnity Loss constituting a breach of more than one representation, warranty, covenant or agreement of this Agreement or any other Transaction Document.

(b) The amount for which any Indemnifying Person shall be liable with respect to any Indemnity Loss incurred by any Company Indemnified Person shall be reduced to the extent that such Company Indemnified Person shall theretofore have actually realized any proceeds (net of any costs or expenses expended by such Company Indemnified Person in seeking such proceeds, including the present value of any increases in insurance premiums) recovered from Third Parties (including insurers) with respect to such Indemnity Loss or any of the events, conditions, facts or circumstances resulting in such Indemnity Loss.

(c) In any case where a Company Indemnified Person or any of its Affiliates recovers from Third Parties any payments in respect of a matter with respect to which an Indemnifying Person has indemnified and paid it pursuant to this Article VIII such Company Indemnified Person will promptly pay over to the Indemnifying Person the amount so recovered, received or accrued (net of any reasonable costs to such Company Indemnified Person to obtain such recovery), but not in excess of any amount previously so paid by the Indemnifying Person to or on behalf of the Company Indemnified Person in respect of such matter.

(d) If any Person is required to withhold or deduct any Taxes from or in respect of any amount payable pursuant to this Article VIII, the amount payable by such Person shall be increased as may be necessary so that after withholding or deducting all Taxes, including withholdings or deductions applicable to any additional amount payable under this Section 8.6(d), the recipient of any such payment receives a net amount equal to the amount it would have been entitled to receive it no such Taxes had been withheld or deducted.

(e) All amounts owed by an Indemnifying Person under this Article VIII shall be paid promptly (but in any event within five Business Days from the date of determination of such amounts owed) by the Indemnifying Person through wire transfer of immediately available funds to the account designated in writing by the Company Indemnified Person entitled to such payment.

Section 8.7 Exclusive Remedies. Other than (a) with respect to any right a Party may have to injunctive relief or specific performance (including pursuant to Section 9.6), or (b) in the case of Fraud, the Members acknowledge and agree that the indemnification provisions of Article

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VIII shall be the sole and exclusive remedies of the Company Indemnified Persons for any Claims for monetary relief related to any breach of any representation, warranty, covenant or other obligation in this Agreement by either Member; provided, for the avoidance of doubt, that this Section 8.7 shall not limit any rights or remedies of either Member or the Company under the LLC Agreement.

ARTICLE IX MISCELLANEOUS

Section 9.1 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including fees and disbursements of legal counsel, financial advisors and accountants, incurred in connection with the Transaction Documents and the transactions contemplated by the Transaction Documents shall be borne by the Party incurring such costs and expenses; provided that the Company shall be responsible for all transfer, documentary, real property transfer, share transfer, sales, use, value added, stamp, registration and other similar Taxes incurred in connection with the transactions contemplated by this Agreement.

Section 9.2 Amendment; Waiver. No amendment, supplement or modification of this Agreement (whether direct or indirect) shall be effective unless each of the Members (a) has been provided at least 30 days prior written notice of such proposed amendment, supplement or modification in accordance with Section 9.10 prior to its execution in accordance with the immediately following clause (b) and (b) has signed a written instrument expressly referencing this Agreement and the specific provisions hereof that are intended to be so amended, supplemented or modified and consenting to such amendment, supplement or modification. Any purported amendment, supplement or modification that fails to comply with the foregoing shall be null and void ab initio . Any failure by a Party to comply with any obligation, covenant, agreement or condition herein may be waived by the other parties hereto only by a written instrument signed by the party granting such waiver, and such waiver shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure to comply with this Agreement.

Section 9.3 Assignment; Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or delegated by the Company or either of the Members (whether by merger, operation of Law or otherwise) without the prior written consent of the Company and the other Member and any purported assignment in violation of this Section 9.3 shall be void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assignees.

Section 9.4 No Third-Party Beneficiaries. Except as set forth in Article VIII, this Agreement is for the sole benefit of the Company, the Members and Embraer Parent and their successors and permitted assigns, and nothing in this Agreement or any other Transaction Document is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever whether under Law or otherwise, including any right of employment for any specified period, under or by reason of this Agreement.

Section 9.5 Governing Law. This Agreement and the rights and obligations of the Parties arising out of or relating hereto shall be governed by and construed in accordance with the

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Laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the State of New York.

Section 9.6 Arbitration.

(a) Except as otherwise explicitly set forth herein, any dispute, controversy or Claim arising out of, relating to or in connection with this Agreement (a “Dispute”) shall be referred to and finally and definitely settled by arbitration administered by the ICDR in accordance with its International Arbitration Rules (the “ICDR Rules”), except as expressly modified by this Section 9.6.

(b) The arbitration shall be conducted in the English language and the seat of the arbitration shall be in New York City (in the New York County), New York, United States.

(c) If, considering both claims and counterclaims as expressly estimated in the “Notice of Arbitration” and the “Answer” thereto (as those terms are defined in the ICDR Rules), the total amount in dispute submitted to arbitration is less than the amount of (or equivalent to) one million U.S. dollars ($1,000,000), and there is no Claim for injunctive or equitable relief, then the arbitration shall be resolved by one arbitrator appointed as set forth in Section 9.6(d). In all other cases, the arbitration shall be resolved by three arbitrators appointed as set forth in Section 9.6(e). There shall be no ex parte communications between the Parties and (i) the arbitrators, or (ii) the arbitrator candidates included on the lists provided pursuant to the process described in Section 9.6(d) and Section 9.6(e).

(d) If the arbitration is to be resolved by one arbitrator as set forth in Section 9.6(c), then such arbitrator shall be selected after the filing of the Answer using the ICDR list method established in the ICDR Rules, except that the ICDR shall provide a second list (i) if the parties to arbitration fail to agree on any of the Persons listed, (ii) if acceptable arbitrators are unable or unavailable to act, or (iii) if the appointment cannot be made from the initially submitted list for any other reason, within 15 days from the receipt of the first list of arbitrators by the Parties. Prior to preparing the lists of arbitrators to be used for the selection of the arbitral tribunal, the ICDR shall consult with the Parties and take into consideration the need for any particular expertise or knowledge that the arbitrators should have to resolve the Dispute.

(e) If the arbitration is to be resolved by three arbitrators as set forth in Section 9.6(c), then the three arbitrators shall be selected after the filing of the Answer using the ICDR list method established in the ICDR Rules, except as modified herein. The parties to the arbitration shall first attempt to agree on three arbitrators from the initial list provided by the ICDR. If the parties to the arbitration fail to reach an agreement on all three arbitrators within 15 days of the parties receiving the initial list of arbitrators from the ICDR, each Party shall nominate one arbitrator from such list. Neither the ICDR nor the Parties shall communicate to the arbitrators which Party nominated them. The third arbitrator shall be appointed pursuant to the ICDR list method, except that the ICDR shall provide a second list if the appointment cannot be made from the remaining arbitrators identified on the initial list within 15 days of receipt of the first list of arbitrators by the Parties. If the parties to the arbitration are unable to select the third arbitrator

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from the second list provided by the ICDR, then such third arbitrator shall be appointed by the ICDR.

(f) The arbitral tribunal, or the emergency arbitrator as provided in the ICDR Rules, shall have the power to grant any remedy or relief that it deems appropriate, including specific performance and penalties in the event of non-compliance with its orders or awards, as well as interim, conservatory or provisional measures. The Parties undertake to comply with any interim award or Governmental Order granting such provisional measures without delay and any such measures may be enforced in any court of competent jurisdiction.

(g) By agreeing to arbitration, the Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other interim Governmental Order in aid of arbitration proceedings, or to issue Governmental Orders in connection with the enforcement of any award. The Parties shall be entitled to seek injunctive, provisional, or other equitable relief in any court of competent jurisdiction pending the commencement or determination of any arbitration proceedings, and exercising any such right shall not be deemed (i) incompatible with the agreement to arbitrate as set forth in this Section 9.6 or (ii) a waiver of the right to arbitrate.

(h) All arbitration proceedings pursuant to this Section 9.6 shall be confidential and shall not be disclosed except as, and only to the extent, necessary to prepare for or conduct the arbitration hearing on the merits, as required by applicable Law, or required in connection with any court application for interim relief or post-arbitration confirmation or enforcement proceedings.

(i) Any award rendered by the arbitral tribunal in any arbitration proceeding pursuant to this Section 9.6 shall be in writing, be reasoned and determine a final term for compliance with its decision by the Parties and shall be final and binding on the parties thereto, and judgment thereon may be entered in any court of competent jurisdiction. Notwithstanding anything herein to the contrary, the arbitrators shall not make decisions on the basis of equity (equidade ).

(j) In no event will any of the Parties be required to pay defeated fees (honorários de sucumbência ) to the attorneys of the prevailing Party.

Section 9.7 Severability. If any provision of this Agreement or the application of any provision hereof to any circumstances is held invalid, unenforceable, or otherwise illegal by a court of competent jurisdiction, the remainder of this Agreement and the application of such provision to other circumstances shall not be affected. Upon any such determination that any term or other provision is invalid, unenforceable, or otherwise illegal, the Company and the Members shall negotiate in good faith to modify this Agreement to the extent (and only to the extent) necessary to make it valid, enforceable and legal and still effect the original intent of the Company and the Members, as expressed in the terms hereof, and the Parties undertake to execute any amendment to this Agreement, in accordance with Section 9.2, that is agreed to by the Parties reflecting any changes agreed upon by the Parties.

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Section 9.8 Counterparts; Electronic Delivery. This Agreement may be executed and delivered in two or more separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. This Agreement, the agreements referred to herein, and each other agreement, consent or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a photographic, portable document format (.pdf), facsimile or similar reproduction of such signed writing using a facsimile machine or electronic mail shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

Section 9.9 Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. The use of the word “including” in this Agreement shall be by way of example rather than by limitation. Reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. The use of the words “or,” “either” and “any” shall not be exclusive. The word “extent” in the phrase “to the extent” shall convey the concept of degree, and such phrase shall not mean simply “if”. Except as otherwise indicated, all references in this Agreement to “Schedules,” “Sections” and “Exhibits” are intended to refer to Schedules, Sections and Exhibits to this Agreement. The terms “hereof,” “hereunder,” “herein” and words of similar import will refer to this Agreement as a whole and not to any particular provision of this Agreement. The use of the word “threatened” in this Agreement shall be deemed followed by “in writing.” All references to “dollars” or “$” shall be to U.S. dollars. All references to “R$” shall be to Brazilian Reais. References to any provisions of Law shall be construed as references to such provisions as amended, expanded, consolidated or reissued, or as their applicability may be altered from time to time by other rules, and shall include any provision from which they originate (with or without modifications), regulations, instruments or other legal rules subordinate thereto. References to any period of days shall be deemed to be the relevant number of calendar (unless Business Days are specified), provided that all references to terms or periods in this Agreement shall be counted excluding the date of the event that causes such term or period to begin and including the last day of the relevant term or period. All periods provided for in this Agreement ending on a day that is not a Business Day shall be automatically extended to the first subsequent Business Day. This Agreement shall be construed as if drafted jointly by the Parties.

Section 9.10 Notices. All notices hereunder shall be in writing and shall be deemed to have been duly given or made (i) as of the date delivered if delivered personally, mailed by registered or certified mail (postage prepaid, return receipt requested) or sent by overnight courier (providing proof of delivery) or (ii) as of the date transmitted if sent by electronic transmission to the following electronic mail addresses, in each case, to the addresses below (or at such other contact information for a party hereto as shall be specified by like notice):

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If to the Company:

Prior to the Closing:

EB Defense, LLC c/o Embraer S.A. Av. Presidente Juscelino Kubitschek 1909 14 th floor – North Tower 04543-907 São Paulo, Brazil Attention: Commercial Vice President, Contracts & Offset Embraer Defense & Security Email: [email protected]

with a copy (which shall not constitute notice) to:

The Boeing Company 100 N. Riverside Plaza Chicago, IL 60606 United States of America Attention: Anthony Kent Fisher, Vice President, Corporate and Strategic Development Edward J. Neveril, Chief Counsel of Mergers and Acquisitions Email: [email protected] [email protected]

After the Closing, notices shall be sent to the address of the Company (as set forth in the notice provisions of the LLC Agreement) and for the attention of the CEO of the Company, with copies (which shall not constitute notice) to:

The Boeing Company 100 N. Riverside Plaza Chicago, IL 60606 United States of America Attention: Anthony Kent Fisher, Vice President, Corporate and Strategic Development Edward J. Neveril, Chief Counsel of Mergers and Acquisitions Email: [email protected] [email protected],

and to:

Embraer S.A. Av. Presidente Juscelino Kubitschek 1909 14 th floor – North Tower 04543-907 São Paulo, Brazil

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Attention: Commercial Vice President, Contracts & Offset Embraer Defense & Security E mail: [email protected]

If to Embraer:

Embraer S.A. Av. Presidente Juscelino Kubitschek 1909 14 th floor – North Tower 04543-907 São Paulo, Brazil Attention: Commercial Vice President, Contracts & Offset Embraer Defense & Security E mail: [email protected]

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036 United States of America Attention: Paul T. Schnell, Esq. Thomas W. Greenberg, Esq. E-Mail: [email protected] [email protected]

and:

Barbosa, Müssnich, Aragão Advogados Av. Pres. Juscelino Kubitschek, 1455, 10 andar São Paulo, SP 04543-011 Brazil Attention: Paulo Cezar Aragão Roberto Dias Carneiro E-Mail: [email protected] [email protected]

If to Boeing:

The Boeing Company 100 N. Riverside Plaza Chicago, Illinois 60606 United States of America Attention: Anthony Kent Fisher, Vice President, Corporate and Strategic Development Edward J. Neveril, Chief Counsel of Mergers and Acquisitions Email: [email protected]

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[email protected]

with a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP 300 N. LaSalle Street Chicago, Illinois 60654 United States of America Attention: R. Scott Falk, P.C. Michael H. Weed, P.C. Joydeep Dasmunshi, Esq. Email: [email protected] [email protected] [email protected]

Section 9.11 Entire Agreement. The Transaction Documents collectively constitute the complete agreement among the Company, the Members and the other Parties, and supersede all prior agreements and understandings, both written and oral, between the parties hereto with respect to the transactions contemplated by this Agreement, unless otherwise specifically provided in a written instrument executed by the Parties expressly referencing this Agreement and this Section 9.11.

Section 9.12 Public Announcements. Except as otherwise provided herein, prior to the Closing, (a) the Parties shall consult in advance with each other before issuing any press release or otherwise making any public disclosure or public statements with respect to this Agreement or the transactions contemplated hereunder; and (b) no such press release, public disclosure or public statement shall be made unless mutually agreed upon by the Parties or required by Law or applicable stock exchange regulation.

Section 9.13 Parent Guarantees.

(a) Boeing Parent Guarantee. Boeing Parent hereby irrevocably and unconditionally guarantees the complete performance in full of Boeing’s obligation to make its Closing Date Contribution under this Agreement. To the fullest extent permitted by applicable Law, Boeing Parent waives presentment to and protest to any other Person of any of the guaranteed obligations and also waives notice of acceptance of its guarantee and, except as set forth in this Section 9.13(a), any other defenses or benefits available to guarantors or sureties under applicable Law. The obligations of Boeing Parent hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, decree in bankruptcy or otherwise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the guaranteed obligations or otherwise. Notwithstanding any of the foregoing, nothing herein shall be deemed to waive or limit Boeing’s ability to assert any Claims, defenses or other rights that Boeing may have under this Agreement.

(b) Embraer Parent Guarantee. Embraer Parent hereby irrevocably and unconditionally guarantees the complete performance in full of Embraer’s obligation to make its

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Closing Date Contribution under this Agreement. To the fullest extent permitted by applicable Law, Embraer Parent waives presentment to and protest to any other Person of any of the guaranteed obligations and also waives notice of acceptance of its guarantee and, except as set forth in this Section 9.13(b), any other defenses or benefits available to guarantors or sureties under applicable Law. The obligations of Embraer Parent hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, decree in bankruptcy or otherwise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the guaranteed obligations or otherwise. Notwithstanding any of the foregoing, nothing herein shall be deemed to waive or limit Embraer’s ability to assert any Claims, defenses or other rights that Embraer may have under this Agreement.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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The undersigned have entered into this Contribution Agreement effective as of the date first written above.

EB DEFENSE, LLC

By: Embraer Aircraft Holding, Inc., its sole member Name: Its:

BOEING EB DEFENSE, LLC

By: The Boeing Company, its sole member Name: Its:

THE BOEING COMPANY

By: Name: Title:

EMBRAER AIRCRAFT HOLDING, INC.

By: Name: Title:

EMBRAER S.A.

By: Name: Title:

EXHIBIT 8.1

List of Subsidiaries of Embraer S.A.*

Name Jurisdiction of Incorporation Embraer Aircraft Holding, Inc. Delaware, U.S.A. Embraer Aircraft Customer Services, Inc. Florida, U.S.A. Embraer Aircraft Maintenance Services, Inc. Delaware, U.S.A. Embraer Executive Jet Services, LLC Delaware, U.S.A. Embraer Executive Aircraft, Inc. Delaware, U.S.A. Embraer Aero Seating Technologies, LLC Delaware, U.S.A. Embraer CAE Training Services, LLC Delaware, U.S.A. Embraer Engineering & Technology Center USA, Inc. Delaware, U.S.A. Embraer Defense and Security, Inc. Delaware, U.S.A. Embraer Business Innovation Center, Inc. Delaware, U.S.A EB Defense LLC Delaware, U.S.A. ELEB Equipamentos Ltda. Brazil Embraer GPX Ltda. Brazil Embraer Defesa e Segurança Participações S.A. Brazil Atech—Negócios em Tecnologias S.A. Brazil SAVIS Tecnologia e Sistemas S.A. Brazil Visiona Tecnologia Espacial S.A. Brazil Yaborã Empreendimentos e Participações Ltda. Brazil Embraer Aviation Europe – EAE France Embraer Aviation International – EAI France Embraer Europe SARL France Embraer (China) Aircraft Technical Services Co., Ltd. China Embraer Spain Holding Co., SL Spain ECC Investment Switzerland AG Switzerland ECC Insurance & Financial Company Limited. Cayman Islands, BWI Embraer Finance Ltd. Cayman Islands, BWI Embraer Overseas Limited Cayman Islands, BWI Embraer Portugal , S.A. Portugal Embraer Portugal Estruturas Metálicas, S.A. Portugal Embraer Portugal Estruturas em Compósitos, S.A. Portugal Airholding – SGPS, S.A. Portugal OGMA – Indústria Aeronáutica de Portugal S.A. Portugal Embraer Asia Pacific Pte Ltd. Singapore Embraer CAE Training Services (UK) Limited United Kingdom Embraer Merco S.A. Uruguay Visiona International B.V. Netherlands Embraer Netherlands Finance B.V. Netherlands Embraer Netherlands B.V. Netherlands

* None of the subsidiaries listed is a significant subsidiary for purposes of Regulation S-X under the Securities Exchange Act of 1934, as amended, see item 4D of the Annual Report on Form 20-F to which this Exhibit 8.1 is an exhibit. The list does not include (i) certain joint venture (see item 4B of the Annual Report on Form 20-F to which this Exhibit 8.1 is an exhibit for more information on such joint venture and entities established in our strategic alliances) and (ii) certain non-material special purpose vehicles. EXHIBIT 12.1 CERTIFICATION

I, Paulo Cesar de Souza e Silva, certify that: 1. I have reviewed this annual report on Form 20-F of Embraer S.A.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and 5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and to the audit committee of the company’s board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 29, 2019

By: /s/ Paulo Cesar de Souza e Silva Name: Paulo Cesar de Souza e Silva Title: President and Chief Executive Officer EXHIBIT 12.2 CERTIFICATION

I, Nelson Krahenbuhl Salgado, certify that: 1. I have reviewed this annual report on Form 20-F of Embraer S.A.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and 5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and to the audit committee of the company’s board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 29, 2019

By: /s/ Nelson Krahenbuhl Salgado Name: Nelson Krahenbuhl Salgado Title: Executive Vice-President and Chief Financial and Investor Relations Officer EXHIBIT 13.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Embraer S.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Paulo Cesar de Souza e Silva, President and Chief Executive Officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes Oxley Act of 2002, that to the best of my knowledge: (i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 29, 2019

By: /s/ Paulo Cesar de Souza e Silva Name: Paulo Cesar de Souza e Silva Title: President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the company and will be retained by the company and furnished to the Securities and Exchange Commission or its staff upon request. EXHIBIT 13.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Embraer S.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Nelson Krahenbuhl Salgado, Executive Vice-President and Chief Financial and Investor Relations Officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the U.S. Sarbanes Oxley Act of 2002, that to the best of my knowledge: (i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 29, 2019

By: /s/ Nelson Krahenbuhl Salgado Name: Nelson Krahenbuhl Salgado Title: Executive Vice-President and Chief Financial and Investor Relations Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the company and will be retained by the company and furnished to the Securities and Exchange Commission or its staff upon request.