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HIGHLIGHTS  In 2Q18, Embraer delivered 28 commercial and 20 executive (15 light and 5 large) jets, compared to the 35 commercial and 24 executive (16 light and 8 large) jets in 2Q17;  The Company‟s firm order backlog was US$ 17.4 billion at the end of 2Q18, including contracts of the Services & Support segment;  Reported EBIT and EBITDA1 in 2Q18 were US$ (17.7) million and US$ 44.1 million, respectively, yielding margins of -1.4% and 3.5%. The reported EBIT and EBITDA figures include the negative impact of a non- recurring special item of US$ 127.2 million related to additional costs (cost base revision) on the KC-390 development contract in 2Q18, resulting from the recent incident with prototype 001 in May (see page 9 for more details);  Adjusted EBIT and adjusted EBITDA, excluding the impact of the KC-390 cost base revision, were US$ 109.5 million and US$ 171.3 million, respectively. Adjusted EBIT margin in 2Q18 was 8.7% and adjusted EBITDA margin in the same period was 13.6%. Year-to-date, adjusted EBIT margin for the Company was 6.0% and adjusted EBITDA margin was 11.6%, in line with Embraer‟s published 2018 guidance ranges of 5-6% for adjusted EBIT and 10-11% for adjusted EBITDA;  2Q18 Net loss attributable to Embraer shareholders and Loss per ADS were US$ (126.5) million and US$ (0.69), respectively. Adjusted Net income (excluding deferred income tax and social contribution and special items) for 2Q18 was US$ 6.1 million, with Adjusted earnings per ADS of US$ 0.03;  Embraer generated US$ 47.8 million in Free cash flow in 2Q18, and finished the quarter with total cash of US$ 3,341.1 million and total debt of US$ 4,062.3 million, yielding net debt of US$ 721.2 million;  The Company reaffirms all aspects of its 2018 financial and aircraft deliveries guidance, which does not include the non-recurring impact of the KC-390 cost base revision recognized in 2Q18.

MAIN FINANCIAL INDICATORS2 in millions of U.S dollars, except % and earnings per share data IFRS (1) (1) (1) (1) 1Q18 2Q17* 2Q18 YTD18 Revenue 992.0 1,771.2 1,256.5 2,248.5 EBIT 26.4 177.5 (17.7) 8.7 EBIT Margin % 2.7% 10.0% -1.4% 0.4% Adjusted EBIT 26.4 168.1 109.5 135.9 Adjusted EBIT Margin % 2.7% 9.5% 8.7% 6.0% EBITDA 89.5 258.3 44.1 133.6 EBITDA Margin % 9.0% 14.6% 3.5% 5.9% Adjusted EBITDA 89.5 248.9 171.3 260.8 Adjusted EBITDA Margin % 9.0% 14.1% 13.6% 11.6% Adjusted Net Income (Loss) 2 (24.6) 126.5 6.1 (18.5) Adjusted earnings per share - ADS basic (0.1342) 0.6882 0.0331 (0.1010) Net income (loss) attributable to Embraer Shareholders (12.3) 61.7 (126.5) (138.8) Earnings (losses) per share - ADS basic (US$) (0.0671) 0.3353 (0.6898) (0.7569) Adjusted Free Cash Flow (430.9) 219.8 47.8 (383.1) Net debt (758.6) (661.5) (721.2) (721.2) (1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

1 EBIT and EBITDA are non-GAAP measures. For more detailed information please refer to page 13. 2 Adjusted Net Income (loss) is a non-GAAP measure, calculated by adding Net Income attributable to Embraer Shareholders plus Deferred income tax and social contribution for the period, in addition to adjusting for non-recurring items. Under IFRS for Embraer‟s Income Tax benefits (expenses) the Company is required to record taxes resulting from unrealized gains or losses due to the impact of changes in the Real to US Dollar exchange rate over non-monetary assets (primarily Inventory, Intangibles, and PP&E). The taxes resulting from gains or losses over non-monetary assets are considered deferred taxes and are presented in the consolidated Cash Flow statement, under Deferred income tax and social contribution, which was US$ (69.9) million in 2Q17, US$ (48.6) million in 2Q18 and US$ 17.8 million in 1Q17. Adjusted Net Income (loss) also excludes the net after-tax special items of US$ 5.0 million in 2Q17 and US$ (84.0) million in 2Q18. 1

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São Paulo, , July 31, 2018 - (: EMBR3, NYSE: ERJ). The Company's operating and financial information is presented, except where otherwise stated, on a consolidated basis in dollars (US$) in accordance with IFRS. The financial data presented in this document as of and for the quarters ended June 30, 2018 (2Q18), March 31, 2018 (1Q18) and June 30, 2017 (2Q17), are derived from the unaudited financial statements, except annual financial data and where otherwise stated.

REVENUES AND GROSS MARGIN Embraer delivered 28 commercial and 20 executive aircraft (15 light jets and 5 large jets) in 2Q18, for a total of 48 jets delivered during the quarter. This compares to the Company‟s total aircraft deliveries of 59 jets in 2Q17, of which 35 were commercial jets and 24 were executive jets (16 light jets and 8 large jets). For the first six months of 2018, Embraer delivered 42 commercial jets and 31 executive jets (23 light jets and 8 large jets), compared to deliveries of 53 commercial jets and 39 executive jets (27 light jets and 12 large jets) over the first six months of 2017. Embraer remains confident in its 2018 guidance for 85 to 95 total commercial jet deliveries and 105 to 125 total executive jet deliveries (70-80 light jets and 35-45 large jets). The Company again expects the Executive Jets segment to deliver a significant volume of aircraft during the fourth quarter of 2018, similar to the seasonality of previous years. Consolidated revenues in the quarter were US$ 1,256.5 million, representing a year-over-year decline of 29.1% compared to 2Q17, due to a combination of lower deliveries in the Commercial and Executive Jets segments in the quarter and a significant decline in Defense & Security segment revenues in 2Q18 as a result of cost base revisions related to the KC-390 development contract. In addition, 2Q17 Defense & Security revenues were the highest quarterly revenues reported in 2017 due to the launch of the SGDC satellite in May of 2017. These declines were only partially offset by 5.6% year-over-year growth in Services & Support revenues in the quarter. Year-to-date, Embraer consolidated revenues were US$ 2,248.5 million in the first six months of 2018 as compared to US$ 2,813.7 million in the first six months of 2017, with the decline driven principally by lower deliveries in the Commercial Aviation and Executive Jets segment as well as a 38.9% fall in Defense & Security revenues, driven by the aforementioned factors in the quarterly comparison above. The Company‟s consolidated gross margin in 2Q18 was 11.2% as compared to the 17.8% gross margin reported in 2Q17. The year-over-year decline in gross margin was principally a result of the cost base revision on the KC-390 contract in the Defense & Security segment. Over the first six months of the year, Embraer‟s consolidated gross margin was 14.3% compared to 17.4% over the first six months of 2017.

EBIT AND ADJUSTED EBIT In 2Q18, EBIT and EBIT margin as reported were US$ (17.7) million and -1.4%, respectively, compared to EBIT of US$ 177.5 million and EBIT margin of 10.0% reported in 2Q17. The decline in reported EBIT and EBIT margin relative to last year‟s second quarter is largely due to the impact of a special non-recurring item recognized in 2Q18 related to a cost base revision on the KC-390 development contract resulting from the recent incident with prototype aircraft 001 in May, which negatively impacted reported results by US$ 127.2 million. The reported EBIT in 2Q17 also included non-recurring special items with a net positive impact of US$ 9.4 million, including: 1) a positive impact of US$ 1.2 million related to reversal of certain provisions for the Company‟s voluntary redundancy program, 2) a positive impact of US$ 11.7 million related to the conversion of claims from the Republic Airways bankruptcy, and 3) a negative impact of US$ 3.5 million related to taxes on remittances executed for payments following the finalization of the FCPA investigation. Embraer‟s EBIT and EBIT margin over the first six months of 2018 was US$ 8.7 million and 0.4%, respectively, compared to US$ 218.2 million in EBIT and a 7.8% reported EBIT margin over the first six months of 2017. It is important to note that the impact of the KC-390 cost base revision booked in 2Q18 does not impact the Company‟s 2018 guidance for adjusted EBIT of US$ 270-355 million (adjusted EBIT margin of 5.0-6.0%) and adjusted EBITDA of US$ 540-650 million (adjusted EBITDA margin of 10.0-11.0%).

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Excluding the KC-390 cost base revision of US$127.2 million, 2Q18 adjusted EBIT was US$ 109.5 million and adjusted EBIT margin was 8.7%, compared to 2Q17 adjusted EBIT of US$ 168.1 million and adjusted EBIT margin of 9.5%. During the first half of 2018, the Company‟s adjusted EBIT was US$ 135.9 million and adjusted EBIT margin was 6.0%. Embraer reiterates its 2018 guidance for adjusted EBIT and adjusted EBITDA (and their respective adjusted margins) mentioned in the previous paragraph. During 2Q18, administrative expenses totaled US$ 41.4 million, representing a slight increase from the US$ 39.7 million reported in 2Q17. In the first six months of 2018, administrative expenses were US$ 85.7 million as compared to US$ 82.3 million in the first six months of 2017. Selling expenses declined from US$ 79.7 million in 2Q17 to US$ 71.0 million in 2Q18, reflecting year-over-year improvement across the majority of the Company‟s business units as Embraer continues to achieve cost efficiencies. Selling expenses were also lower in the first half of 2018 as compared to the first half of 2017, at US$ 142.3 million versus US$ 152.6 million. Research expenses increased slightly in the quarter, at US$ 10.1 million in 2Q18 vs. US$ 9.3 million in 2Q17. Year-to-date, research expenses were US$ 19.9 million in 2018 as compared to US$ 17.5 million in 2017, and are tracking in line with Embraer‟s 2018 guidance for US$ 50 million in research expenses. Other operating income (expense), net in 2Q18 was an expense of US$ 35.5 million, compared to the US$ 9.2 million reported in 2Q17. Last year‟s reported other operating income (expense) figure includes the previously mentioned special items totaling a net positive impact of US$ 9.4 million. Excluding the net benefits of these special items, 2Q17 other operating income (expense), net was expense of US$ 18.6 million. The principal reasons for the increase in other operating expense in 2Q18 relative to 2Q17 included higher taxes on remittances related to our used aircraft leasing operations and higher expenses on consulting services.

NET INCOME Net income (loss) attributable to Embraer shareholders and Earnings (Loss) per ADS for 2Q18 were US$ (126.5) million and US$ (0.69) per share, respectively, compared to US$ 61.7 million in net income (loss) attributable to Embraer shareholders and US$ 0.34 per share in Earnings (Loss) per ADS in 2Q17. Over the first six months of 2018, net income (loss) attributable to Embraer shareholders was US$ (138.8) million and Earnings (Loss) per ADS was US$ (0.76) per share. Adjusted net income (loss), excluding deferred income tax and social contribution and the total after-tax impacts of any special items booked in the period, was US$ 6.1 million in 2Q18 and Adjusted Earnings (Loss) per ADS was US$ 0.03 per share, compared to US$ 126.5 million in adjusted net income and US$ 0.69 per share in adjusted earnings per ADS in 2Q17. In the first half of 2018, adjusted net income (loss) attributable to Embraer shareholders was US$ (18.5) million and adjusted earnings (loss) per ADS was US$ (0.10) per share. This compares to adjusted net income (loss) attributable to Embraer shareholders of US$ 166.9 million in the first half of 2017 and adjusted earnings (loss) per ADS of US$ 0.91 per share over the same time period. Net income (loss) and adjusted net income (loss) in the first half of 2018 were negatively impacted by lower operating results in addition to higher net financial expenses and net foreign exchange losses. The higher net financial expenses are largely due to our current net debt position and lower financial income from our cash and equivalents, while foreign exchange losses are associated to the recent devaluation in the versus the U.S. dollar.

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MONETARY BALANCE SHEET ACCOUNTS AND OTHER MEASURES Embraer finished 2Q18 with a net debt position of US$ 721.2 million, compared to the net debt position of US$ 758.6 million at the end of 1Q18. The improvement in the Company‟s net debt position is largely a result of the positive free cash flow generation during the quarter, as explained further below. Embraer‟s total loans position at the end of 2Q18 was US$ 4,062.3 million, declining US$ 124.7 million from the total loans position reported at the end of 1Q18.

in millions of U.S.dollars (1) (1) (1) FINANCIAL POSITION DATA 1Q18 2Q17 ** 2Q18 Cash and cash equivalents 1,287.5 1,207.4 1,132.6 Financial investments 2,140.9 2,343.1 2,208.5 Total cash position 3,428.4 3,550.5 3,341.1 Loans short-term 438.0 304.2 361.0 Loans long-term 3,749.0 3,907.8 3,701.3 Total loans position 4,187.0 4,212.0 4,062.3 Net debt* (758.6) (661.5) (721.2) * Net debt = Cash and cash equivalents + Financial investments short-term and long term - Loans short-term and long-term ** Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9) (1) Derived from unaudited financial information.

Adjusted net cash generated in operating activities net of adjustments for financial investments was US$ 133.8 million in 2Q18 and adjusted free cash flow for the quarter was US$ 47.8 million. This compares to adjusted net cash generated in operating activities net of financial investments of US$ 397.5 million and adjusted free cash flow of US$ 219.8 million in 2Q17. The principal factors explaining lower free cash flow generation in 2Q18 include lower benefits from working capital (particularly higher inventories) and a net loss reported in 2Q18. Over the first six months of 2018, adjusted Free cash flow was negative US$ 383.1 million, compared to adjusted Free cash flow of positive US$ 20.7 million over the first six months of 2017. Embraer continues to expect the Company‟s adjusted Free cash flow for 2018 will be a use of US$ 100 million or better.

in millions of U.S.dollars IFRS 2Q17 * 3Q17 * 4Q17 * 1Q18 2Q18 YTD18 Net cash generated (used) by operating activities (1) 361.4 115.5 589.9 (311.0) 133.8 (177.2) Adjustment for non-recurring cash impacts 36.1 20.4 18.2 - - - Adj. Net cash generated (used) by operating activities 397.5 135.9 608.1 (311.0) 133.8 (177.2)

Net additions to property, plant and equipment (60.5) (47.3) (76.3) (39.7) (31.1) (70.8) Additions to intangible assets (117.2) (111.1) (125.1) (80.2) (54.9) (135.1) Adjusted Free Cash Flow 219.8 (22.5) 406.7 (430.9) 47.8 (383.1) (1) Net of financial investments: 2Q17 96.2, 3Q17 30.8, 4Q17 132.0, 1Q18 629.5 and 2Q18 108.1 * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

Net additions to total PP&E were US$ 31.1 million in 2Q18, versus US$ 60.5 million in net additions reported in 2Q17. Of the total 2Q18 additions to PP&E, CAPEX amounted to US$ 16.1 million, additions of aircraft available for or under lease was US$ 1.9 million, and additions of pool program spare parts was US$ 13.4 million. The Company‟s CAPEX amounted to US$ 38.9 million over the first half of 2018, compared to US$ 80.9 million in the first half of 2017. Although CAPEX spending should ramp in the second half of the year, the Company recognizes that CAPEX could finish 2018 slightly lower than its outlook of US$ 200 million. In 2Q18, Embraer invested a total of US$ 54.9 million in product development, principally related to the development of the E-Jets E2 commercial jet program, which continues to progress according to schedule. Development expenditures net of contributions from suppliers in 2Q18 were US$ (3.6) million, and over the first six months of the year amounted to US$ 9.6 million. Although the Company also expects development

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spending to increase in the second half of the year, 2018 development spending net of supplier contributions could finish the year lower than its outlook for US$ 300 million.

in millions of U.S.dollars 2Q17 3Q17 4Q17 1Q18 2Q18 YTD18 CAPEX 45.5 30.1 68.7 22.8 16.1 38.9 Contracted CAPEX (Included in CAPEX) 0.5 0.8 0.4 - 1.9 1.9 Additions of aircraft available for or under lease 4.8 4.8 - 6.0 1.8 7.8 Additions of Pool programs spare parts 11.4 12.1 7.8 10.9 13.4 24.3 PP&E 61.7 47.0 76.5 39.7 31.3 71.0 Proceeds from sale of PP&E (1.2) 0.3 (0.2) - (0.2) (0.2) Net Additions to PP&E 60.5 47.3 76.3 39.7 31.1 70.8

in millions of U.S.dollars 2Q17 3Q17 4Q17 1Q18 2Q18 YTD18 Additions to intangible 117.2 111.1 125.1 80.2 54.9 135.1 Contributions from suppliers - - - (67.0) (58.5) (125.5) Development (Net of contributions from suppliers) 117.2 111.1 125.1 13.2 (3.6) 9.6 Research 9.3 14.2 17.5 9.8 10.1 19.9 R&D 126.5 125.3 142.6 23.0 6.5 29.5

The Company‟s total debt decreased US$ 124.7 million to US$ 4,062.3 million at the end of 2Q18 compared to US$ 4,187.0 million at the end of 1Q18. Short-term debt at the end of 2Q18 was US$ 361.0 million and long-term debt was US$ 3,701.3 million. The average loan maturity of the Company‟s debt at the end of 2Q18 was 5.6 years. The cost of Dollar denominated loans at the end of 2Q18 rose slightly to 5.26% p.a. compared to 5.22% p.a. at the end of 1Q18. The cost of real denominated loans also rose, to 3.47% p.a. at the end of 2Q18 vs. 3.40% at the end of 1Q18.

Embraer‟s EBITDA over the last 12 months (unadjusted EBITDA LTM) to financial expenses (gross) for 2Q18 declined to 1.76 vs. 2.67 at the end of 1Q18. At the end of 2Q18, 12% of total debt was denominated in Reais. Embraer‟s cash allocation management strategy continues to be one of its most important tools to mitigate exchange rate risks. By balancing cash allocation in Real and Dollar assets, the Company attempts to neutralize its balance sheet exchange rate exposure. Of total cash at the end of 2Q18, 81% was denominated in US Dollars. Complementing its strategy to mitigate exchange rate risks, the Company entered into certain financial hedges in order to reduce its cash flow exposure. The Company‟s cash flow exposure is due to the fact that approximately 10% of its net revenues are denominated in Reais while approximately 20% of total costs are denominated in Reais. Having more Real denominated costs than revenues generates this cash flow exposure. For 2018, around 45% of the Company‟s Real cash flow exposure is hedged if the US Dollar depreciates below an average rate floor of R$ 3.32. For exchange rates above this level, the Company will benefit up to an average exchange rate cap of R$ 3.75.

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OPERATIONAL BALANCE SHEET ACCOUNTS

in millions of U.S.dollars (1) (1) (1) SELECT BALANCE SHEET DATA 1Q18 2Q17 * 2Q18 Trade accounts receivable 898.4 812.4 918.9 Customer and commercial financing 15.9 33.2 15.3 Inventories 2,480.4 2,460.9 2,535.0 Property, plant and equipment 2,075.2 2,158.9 2,004.1 Intangible 1,877.9 1,770.5 1,853.6 Trade accounts payable 893.5 923.9 941.2 Advances from customers 944.8 887.9 1,083.2 Total shareholders' equity 4,183.9 4,080.3 3,990.1 (1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9) During 2Q18, trade accounts receivable increased US$ 20.5 million to end the quarter at US$ 918.9 million, largely due to increased accounts receivable in the Commercial Aviation segment due to some deliveries at the end of the quarter in which payment was received in July. Inventories were also higher at the end of 2Q18, at US$ 2,535.0 million, an increase of US$ 54.6 million from that reported at the end of 1Q18. Offsetting these consumptions of working capital during the quarter, Embraer had a US$ 47.7 million increase in trade accounts payable to US$ 941.2 million at the end of 2Q18 and a US$ 138.4 million increase in advances from customers to end the quarter at US$ 1,083.2 million. Intangibles decreased slightly, from US$ 1,877.9 million at the end of 1Q18 to US$ 1,853.6 million, and property, plant, and equipment ended 2Q18 at US$ 2,004.1 million, compared to US$ 2,075.2 million at the end of 1Q18.

TOTAL BACKLOG Considering all deliveries as well as firm orders obtained during the period, the Company‟s firm order backlog ended 2Q18 at US$ 17.4 billion.

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SEGMENT RESULTS The Commercial Aviation segment represented 60.3% of consolidated revenues in 2Q18 versus 52.9% of revenues in 2Q17, as the segment‟s revenues declined at a lower rate than consolidated Company revenues in the quarter. The portion of Executive Jets revenues also increased, from 15.8% in 2Q17 to 16.5% in 2Q18, despite a year-over-year decline in deliveries. The Defense & Security segment reported an 88.8% decline in revenues in 2Q18 as compared to 2Q17, and its portion of total Company revenues fell from 17.2% in 2Q17 to 2.7% in 2Q18. The Defense & Security segment‟s year-over-year decline in revenues resulted from a combination of the aforementioned cost base revisions on the KC-390 development contract (leading to a negative adjustment during 2Q18 of revenues recognized in previous periods, as defense contracts are generally accounted for under percentage of completion) and a higher comparison with 2Q17 reported revenues positively impacted by the launch of the SGDC in May. Revenues for Services & Support grew 5.6% year-over-year to US$ 256.3 million, representing 20.4% of the Company‟s consolidated revenues in 2Q18, compared to 13.7% in 2Q17. Other segment revenues were 0.1% of consolidated revenues in 2Q18.

in millions of U.S.dollars NET REVENUES (1) (1) (1) (1) BY SEGMENT 1Q18 % 2Q17* % 2Q18 % YTD18 % Commercial Aviation 379.7 38.3 936.9 52.9 757.1 60.3 1,136.7 50.6 Executive Jets 127.8 12.9 280.6 15.8 207.3 16.5 335.1 14.9 Defense & Security 242.5 24.4 304.2 17.2 34.2 2.7 276.7 12.3 Services & Support 239.0 24.1 242.6 13.7 256.3 20.4 495.3 22.0 Others 3.0 0.3 6.9 0.4 1.6 0.1 4.6 0.2 Total 992.0 100.0 1,771.2 100.0 1,256.5 100.0 2,248.5 100.0 (1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

COMMERCIAL AVIATION In 2Q18, Embraer delivered a total of 28 commercial jets, as shown below:

DELIVERIES 1Q18 2Q17 2Q18 YTD18 Commercial Aviation 14 35 28 42 EMBRAER 170 - - 1 1 EMBRAER 175 11 31 20 31 EMBRAER 190 3 2 2 5 EMBRAER 195 - 2 2 2 EMBRAER 190-E2 - - 3 3

During the second quarter, Embraer celebrated a major milestone when Norway‟s Widerøe took delivery of the first three E190-E2 aircraft. Scandinavia‟s largest started its scheduled passenger service with the aircraft in late April. As expected, the aircraft is presenting outstanding operational results, flying 8 cycles for 11 hours per day, accumulating 300 flight hours with 100% schedule reliability. During 2Q18, Embraer announced that American Airlines Inc. signed a firm order for 15 E175 jets with a 76- seat configuration. The contract has a value of US$ 705 million, based on current list prices, and was included in the Company‟s 2Q18 backlog. Deliveries under this contract will take place between March and November of 2019. American Airlines selected Envoy, a wholly owned subsidiary of American Airlines Group, to operate the 15 aircraft, which will be configured with 12 First Class seats and 64 Main Cabin seats, including Main Cabin Extra seats. Combined with the airline‟s three previous orders for the E175, the new contract resulted in a total of 89 E175s for American Airlines.

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Embraer and Mauritania Airlines signed a firm order for two E175 jets with a 76-seat configuration, as part of its fleet modernization program. The E175s will replace some of its older narrow body jets and complement its younger fleet. The contract, valued at US$ 93.8 million based on current list prices, was signed in June and therefore included in the 2Q18 backlog. Deliveries will take place in 2019. Air Costa‟s order for 50 E-Jets E2 is no longer considered in Embraer‟s backlog as of the end of 2Q18. This backlog adjustment has no impact on the E2‟s production or delivery schedule for 2018 or for 2019. At the end of 2Q18, the backlog and cumulative deliveries for Commercial Aviation were as follows: COMMERCIAL AVIATION Firm Orders Options Total Deliveries Firm Backlog BACKLOG E170 191 5 196 191 - E175 622 165 787 531 91 E190 587 44 631 551 36 E195 172 1 173 166 6 E175-E2 100 100 200 - 100 E190-E2 50 72 122 3 47 E195-E2 80 65 145 - 80 TOTAL E-JETS 1,802 452 2,254 1,442 360

EXECUTIVE JETS The Executive Jets segment delivered 15 light and 5 large jets, totaling 20 aircraft in 2Q18.

DELIVERIES 1Q18 2Q17 2Q18 YTD18 Executive Aviation 11 24 20 31 Light Jets 8 16 15 23 Large Jets 3 8 5 8

In 2Q18, Embraer‟s Legacy 450 set a new transatlantic speed record on a flight between Portland, Maine in the United States and Farnborough in the United Kingdom, according to the U.S. National Aeronautic Association (NAA) and the Fédération Aéronautique Internationale. The record-setting flight occurred on March 7, 2018, with two pilots and two passengers on a ferry flight of Embraer‟s new Legacy 450 demonstrator aircraft. The flight lasted six hours and five minutes, covering a distance of 2,756 nautical miles (5,105 km) at an average speed of 521.89 mph (840 kph). Also in the second quarter, Embraer participated in the 18th European Business Aviation Convention and Exhibition (EBACE) in Geneva, Switzerland, from May 29 to May 31. The company placed the entire Embraer Executive Jets portfolio on static display and presented the following highlights:  Embraer announced a purchase agreement with Air Hamburg for four Legacy 650E business jets. With this additional order, the Germany-based business charter operator, which serves European, Russian and Middle Eastern destinations, will expand its Embraer flagship fleet to 17 aircraft (15 Legacy 600/650 and two Phenom 300). Air Hamburg is the world‟s largest operator of the Legacy 600/650 aircraft. The delivery of these aircraft started in 2Q18 and should continue through 1Q19;  The Phenom 100EV made its EBACE debut. The entry-level jet, an evolution of the Phenom 100E, delivers improved performance with modified engines and a new avionics suite. The evolution of Embraer‟s very first clean-sheet-design business jet, which entered into service in 2008, is the result of continuous customer feedback and the Company‟s commitment to continue delivering revolutionary aircraft with superior value to the Market;

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 The debut of the Phenom 300E. The new aircraft is designated “E” for “Enhanced” in reference to its entirely redesigned cabin and the addition of the industry-leading nice® HD CMS/IFE (Cabin Management System/InFlight Entertainment) by Lufthansa Technik. The Phenom 300, the new model‟s successful predecessor that entered the market in late 2009, has been the best-selling and most delivered light business jet for the last six years;  Enhancements to the Legacy 450 and Legacy 500 aircraft also debuted, including best-in-class cabin altitude (5,800 ft.), new seat designs with a broader selection of options, new AVANCE L5 internet connectivity and readiness for the Future Air Navigation System (FANS). Also, Embraer announced Ka- Band ultra-high speed connectivity for the Legacy 450 and 500, with EIS expected for 2019. Also in 2Q18, Embraer delivered its first Phenom 300E in Asia Pacific to Northern Escape Collection. The Phenom 300E offers Northern Escape Collection an elegant solution to provide their guests access to its collection of private lodges in Queensland including Orpheus Island Lodge, Daintree Ecolodge and Mt Mulligan Lodge.

DEFENSE & SECURITY The development of the KC-390 program continues to progress and the basic certification (green aircraft) from the Brazilian National Civil Aviation Agency (ANAC) is expected for the second half of 2018, as initially planned. The flight test campaign achieved more than 1,700 flight hours by the end of 2Q18, despite an incident involving prototype 001 in May, when it experienced a runway excursion while performing ground tests at Embraer's Gavião Peixoto (SP) facility, with extensive damage to the fuselage and landing gears. The first serial production KC-390 (aircraft 003) was completed in the first half of 2018 and is currently undergoing certification trials. This first serial production aircraft would be delivered to the (FAB) by the end of 2018, as previously announced. However, as a result of the incident involving prototype 001, as described above, and an effort to minimize the potential impact on the test campaign for final military certification (FOC – Final Operational Capability), the FAB has agreed to leave aircraft 003 available for Embraer to be used in the completion of the flight test campaign alongside prototype aircraft 002. As a result, the entry into service of the KC-390 with the FAB, previously expected by the end of 2018, will now occur with the delivery of the second serial production aircraft (004), in 2019. Deliveries of the serial production aircraft to follow will continue to occur on their contracted dates, with no changes. The change to the flight test campaign plan under this new scenario, with the use of prototype 002 and serial aircraft 003, is in final revision and the economic impact of these changes of approximately US$ 127 million was already considered in the 2Q18 results. Meanwhile, the serial production of the KC-390 program progresses normally, with the assembly of aircraft numbers 004 to 008. During 2Q18, two A-29 Super Tucano aircraft were delivered to the US Air Force “USAF” under the Light Air Support “LAS” Program. With respect to ongoing modernization programs, Embraer delivered the third aircraft of the AF1/1A Program to the Brazilian Navy, DAerM during the quarter. The program is focused on the modernization of the avionics systems of AF1/1A aircraft. The first stage of the technical and operational evaluation of the SISFRON Pilot Phase was concluded by the Brazilian Army in the second quarter, comprising most of the project subsystems. The second evaluation stage, which will involve Communications Intelligence, is planned to occur in the third quarter. During the same period, Visiona concluded the assisted operation of the SGDC‟s system. In addition, the migration to the final Control Center facilities was initiated.

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SERVICES & SUPPORT In April, Embraer Services & Support completed the first upgrade of a Phenom 300 light business jet with a two-person divan, increasing the aircraft's capacity to 11 occupants, the highest in its class. Also in April, CommutAir, a United Express carrier, selected Embraer Services (EAMS) in Nashville, as the exclusive heavy maintenance provider for the company‟s fleet of up to 61 ERJ-145 aircraft. Per the three-year agreement, EAMS will provide maintenance, modification, and repair services. In the same month, Embraer Services & Support and Belavia, Belarusian Airlines, the leading carrier of Belarus, signed an agreement for the support of Belavia‟s fleet of Embraer E-Jets. The deal will streamline Belavia‟s fleet support and improve aircraft availability. In a multi-year deal, Embraer‟s popular component support solution is being tailored to Belavia‟s specific needs, offering customized exchange plus repair coverage for a wider scope of components, as well as access to a range of special tooling and ground support equipment needed for heavy maintenance checks, allowing Belavia to move those checks „in-house‟.

PARTNERSHIP WITH On July 5, 2018, Embraer announced that it entered into a preliminary and non-binding memorandum of understanding (MOU) with The Boeing Co. (Boeing), through which the parties have established the basic premises for a potential business combination of certain businesses, which will include the creation of a joint venture (JV) between the Company and Boeing. This JV will consist of the transfer of the Commercial Aviation business of Embraer and its related operations, services, and engineering capabilities, and Boeing, upon closing of the transaction, will acquire 80% of the JV for US$ 3.8 billion, while Embraer will retain a 20% stake in the JV. The Company will retain the Executive Jets and Defense & Security business units, as well as their related operations, services, and engineering capabilities. In addition, in order to enable mutual growth and stability of the business, the parties involved in the transaction will enter into long-term operating contracts involving engineering services, reciprocal intellectual property licenses, research and development agreements, agreement to share the use of certain facilities and preferential treatment in the supply of certain products, components and raw materials. Also, Boeing and Embraer will assess the feasibility of joint investments for the promotion and development of new markets and applications for defense products and services, notably the KC-390, on jointly identified opportunities. Embraer and Boeing have begun negotiations on the final documents of the transaction, which will guide in a binding manner, the structure and financial terms of the transaction on mutually satisfactory bases. Following the completion of due diligence and the carve-out audit, and in the event that Boeing and Embraer reach a consensus on such definitive documents of the transaction, the parties will submit necessary approvals for completion of the transaction, including among others, 1) approval by the Brazilian government, 2) approvals by the competent corporate bodies of both parties involved in the transaction, and 3) approval of anti-trust authorities. The Company expects this transaction to close by the end of 2019, and the transaction is expected to provide Embraer with significant cash proceeds to reinforce the balance sheet and return meaningful proceeds to its shareholders upon closing.

CLASS ACTION UPDATE In August, 2016, a putative securities class action was filed in a U.S. court against the Company and certain of its former executives, asserting claims in connection with allegedly false and misleading statements and omissions concerning the FCPA investigation and related matters. On March 30, 2018, the Court granted the motion to dismiss filed by the Company and such decision was not appealed.

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RESTATED 2017 RESULTS FOR NEW ACCOUNTING RULES Please see below selected information from the restated quarterly results for the adoption of IFRS 15 (Revenue from Contracts with Customers) and IFRS 9 (Financial Instruments) on January 1, 2018.

EMBRAER S.A. CONSOLIDATED STATEMENTS OF INCOME (in millions of U.S.dollars, except earnings per share)

1Q17* 2Q17* 3Q17* 4Q17* Revenue 1,042.4 1,771.2 1,296.4 1,729.0 Cost of sales and services (868.7) (1,455.8) (1,054.3) (1,384.4)

Gross profit 173.7 315.4 242.1 344.6 Operating Income (Expense) Administrative (42.6) (39.7) (47.8) (49.0) Selling (72.9) (79.7) (78.7) (87.7) Research (8.2) (9.3) (14.2) (17.5) Other operating income (expense), net (9.3) (9.2) (52.7) (131.3) Equity in gain or losses of associates (0.1) - (0.1) 1.4

Operating profit before financial income 40.6 177.5 48.7 60.5 Financial expenses, net (4.7) (11.5) 1.7 (21.6) Foreign exchange gain, net 6.9 (7.1) 4.9 1.9

Profit (loss) before taxes on income 42.8 158.9 55.3 40.8 Income tax (expense) income 12.2 (86.9) 45.9 2.8

Net Income (loss) 55.1 72.1 101.2 43.6 Attributable to: Owners of Embraer 53.2 61.7 99.9 41.2 Noncontrolling interest 1.9 10.4 1.3 2.4

* Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

ADJUSTED EBIT RECONCILIATION 1Q17 * 2Q17 * 3Q17 * 4Q17 * Operating profit before financial income (EBIT) 40.6 177.5 48.7 60.5 Provision for voluntary redundancy scheme 7.6 (1.2) - - Impact of penalty provision - 3.5 3.6 3.1 Non-recurring items related to Republic Airways - (11.7) - (11.5) Impairment loss Defense and security business - - - 8.7 Impairment loss Executive Jet business - - - 54.2 Adjusted EBIT 48.2 168.1 52.3 115.0 Adjusted EBIT Margin % 4.6% 9.5% 4.0% 6.7% * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

ADJUSTED NET INCOME (LOSS) RECONCILIATION 1Q17 * 2Q17 * 3Q17 * 4Q17 * Net Income (loss) attributable to Embraer 53.2 61.7 99.9 41.2 Net change in Deferred income tax & social contribution (17.8) 69.9 (44.8) (22.2) After-tax provision for voluntary redundancy scheme 5.0 (0.8) - - Impact of penalty provision - 3.5 3.6 3.1 After-tax Non-recurring items related to Republic Airways - (7.7) - (7.6) After-tax Defense and security business impairment loss - - - 5.7 After-tax Executive Jet business impairment loss - - - 35.8 Adjusted Net Income 40.4 126.6 58.7 56.0 Adjusted Net Margin 3.9% 7.1% 4.5% 3.2% * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9) 11

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RECONCILIATION OF IFRS AND “NON GAAP” INFORMATION

in millions of U.S.dollars We define Free cash flow as EBITDA RECONCILIATION (1) (1) (1) operating cash flow less LTM* (IFRS) 1Q18 2Q17 ** 2Q18 Additions to property, plant Net Income Attributable to Embraer 190.5 288.4 2.3 and equipment, Additions to Noncontrolling interest 16.2 14.0 7.6 intangible assets, Financial Income tax income (expense) 30.3 (121.3) (0.8) Financial income (expense), net 76.3 (72.1) 106.7 investments and Other assets. Foreign exchange gain (loss), net (0.1) 10.6 2.1 Free cash flow is not an Depreciation and amortization 306.1 338.3 287.1 accounting measure under EBITDA LTM 619.3 458.0 405.0 IFRS. Free cash flow is (1) Derived from unaudited financial information. presented because it is used * Last Twelve Months internally as a measure for ** Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9) evaluating certain aspects of our business. The Company also believes that some investors find it to be a useful tool for measuring Embraer's cash position. Free cash flow should not be considered as a measure of the Company's liquidity or as a measure of its cash flow as reported under IFRS. In addition, Free cash flow should not be interpreted as a measure of residual cash flow available to the Company for discretionary expenditures, since the Company may have mandatory debt service requirements or other nondiscretionary expenditures that are not deducted from this measure. Other companies in the industry may calculate Free cash flow differently from Embraer for purposes of their earnings releases, thus limiting its usefulness for comparing Embraer to other companies in the industry. EBITDA LTM represents earnings before interest, taxation, depreciation and amortization accumulated over a period of the last 12 months. It is not a financial measure of the Company‟s financial performance under IFRS. EBIT as mentioned in this press release refers to earnings before interest and taxes, and for purposes of reporting is the same as that reported on the Income Statement as Operating Profit before Financial Income.

in millions of U.S.dollars (1) (1) (1) (1) EBITDA RECONCILIATION 1Q18 2Q17 * 2Q18 YTD18 Net Income (loss) attributable to Embraer (12.3) 61.7 (126.5) (138.8) Noncontrolling interest 2.1 10.4 1.8 3.9 Income tax (expense) income (7.9) 86.9 55.8 47.9 Financial income, net 44.9 11.5 41.9 86.8 Foreign exchange gain (loss), net (0.4) 7.1 9.3 8.9 Depreciation and amortization 63.1 80.8 61.8 124.9 EBITDA 89.5 258.4 44.1 133.6 EBITDA Margin 9.0% 14.6% 3.5% 5.9% (1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

EBIT and EBITDA are presented because they are used internally as measures to evaluate certain aspects of the business. The Company also believes that some investors find them to be useful tools for measuring a Company‟s financial performance. EBIT and EBITDA should not be considered as alternatives to, in isolation from, or as substitutes for, analysis of the Company‟s financial condition or results of operations, as reported under IFRS. Other companies in the industry may calculate EBIT and EBITDA differently from Embraer for the purposes of their earnings releases, limiting EBIT and EBITDA‟s usefulness as comparative measures.

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in millions of U.S.dollars (1) (1) (1) (1) ADJUSTED EBIT RECONCILIATION 1Q18 2Q17 * 2Q18 YTD18 Operating profit before financial income (EBIT) 26.4 177.5 (17.7) 8.7 Provision for voluntary redundancy scheme - (1.2) - - Impact of penalty provision - 3.5 - - Expenses related to KC-390 cost base revision - - 127.2 127.2 Non-recurring items related to Republic Airways - (11.7) - - Adjusted EBIT 26.4 168.1 109.5 135.9 Adjusted EBIT Margin % 2.7% 9.5% 8.7% 6.0%

(1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

in millions of U.S.dollars (1) (1) (1) (1) ADJUSTED EBITDA RECONCILIATION 1Q18 2Q17 * 2Q18 YTD18 EBITDA 89.5 258.3 44.1 133.6 Provision for voluntary redundancy scheme - (1.2) - - Impact of penalty provision - 3.5 - - Expenses related to KC-390 cost base revision - - 127.2 127.2 Non-recurring items related to Republic Airways - (11.7) - - Adjusted EBITDA 89.5 248.9 171.3 260.8 Adjusted EBITDA Margin % 9.0% 14.1% 13.6% 11.6%

(1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

Adjusted EBIT and Adjusted EBITDA are non-GAAP measures, and both exclude the impact of several non- recurring items, as described in the tables above.

in millions of U.S.dollars (1) (1) (1) (1) ADJUSTED NET INCOME (LOSS) RECONCILIATION 1Q18 2Q17 * 2Q18 YTD18 Net Income (loss) attributable to Embraer (12.3) 61.7 (126.5) (138.8) Net change in Deferred income tax & social contribution (12.3) 69.9 48.6 36.3 After-tax provision for voluntary redundancy scheme - (0.8) - - Expenses related to KC-390 cost base revision - - 84.0 84.0 Impact of penalty provision - 3.5 - - After-tax Non-recurring items related to Republic Airways - (7.7) - - Adjusted Net Income (24.6) 126.6 6.1 (18.5) Adjusted Net Margin -2.5% 7.1% 0.5% -0.8% (1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9) Adjusted Net Income is a non-GAAP measure, calculated by adding Net Income attributable to Embraer Shareholders plus Deferred Income tax and social contribution for the period, as well as removing the impact of non-recurring items. Furthermore, under IFRS for purposes of calculating Embraer‟s Income Tax benefits (expenses), the Company is required to record taxes resulting from gains or losses due to the impact of the changes in the Real to the US Dollar exchange rate over non-monetary assets (primarily Inventories, Intangibles, and PP&E). It is important to note that taxes resulting from gains or losses over non-monetary assets are considered deferred taxes and are accounted for in the Company‟s consolidated Cash Flow statement, under Deferred income tax and social contribution.

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SOME FINANCIAL RATIOS BASED ON “NON GAAP” INFORMATION

(1) (1) (1) CERTAIN FINANCIAL RATIOS - IFRS 1Q18 2Q17 * 2Q18 Total debt to EBITDA (i) 6.76 9.20 10.03 Net debt to EBITDA (ii) 1.23 1.44 1.78 Total debt to capitalization (iii) 0.50 0.51 0.50 LTM EBITDA to financial expense (gross) (iv) 2.67 2.02 1.76 LTM EBITDA (v) 619.2 457.9 405.0 LTM Interest and commissions on loans (vi) 232.3 226.2 230.5 (1) Derived from unaudited financial information. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9)

(i) Total debt represents short and long-term loans and financing. (ii) Net cash represents cash and cash equivalents, plus financial investments, minus short and long-term loans and financing. (iii) Total capitalization represents short and long-term loans and financing, plus shareholders equity. (iv) Financial expense (gross) includes only interest and commissions on loans. (v) The table at the end of this release sets forth the reconciliation of Net income to adjusted EBITDA, calculated on the basis of financial information prepared with IFRS data, for the indicated periods. (vi) Interest expense (gross) includes only interest and commissions on loans, which are included in Interest income (expense), net presented in the Company‟s consolidated Income Statement.

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FINANCIAL STATEMENTS

EMBRAER S.A. CONSOLIDATED STATEMENTS OF INCOME (in millions of U.S.dollars, except earnings per share) (1) (1) Three months ended on Six months ended on 30 Jun, 2017 * 30 Jun, 2018 30 Jun, 2017 * 30 Jun, 2018 Revenue 1,771.2 1,256.5 2,813.7 2,248.5 Cost of sales and services (1,455.8) (1,116.2) (2,324.5) (1,926.4)

Gross profit 315.4 140.3 489.1 322.1 Operating Income (Expense) Administrative (39.7) (41.4) (82.3) (85.7) Selling (79.7) (71.0) (152.6) (142.3) Research (9.3) (10.1) (17.5) (19.9) Other operating income (expense), net (9.2) (35.5) (18.5) (65.2) Equity in gain or losses of associates - - (0.1) (0.3)

Operating profit (loss) before financial income 177.5 (17.7) 218.2 8.7 Financial expenses, net (11.5) (41.9) (16.2) (86.8) Foreign exchange gain, net (7.1) (9.3) (0.2) (8.9)

Profit (loss) before taxes on income 158.9 (68.9) 201.8 (87.0) Income tax (expense) income (86.9) (55.8) (74.6) (47.9)

Net Income (loss) 72.1 (124.7) 127.1 (134.9) Attributable to: Owners of Embraer 61.7 (126.5) 114.8 (138.8) Noncontrolling interest 10.4 1.8 12.3 3.9

Weighted average number of shares (in thousands) Basic 735.4 733.5 735.4 733.5 Diluted 735.9 734.5 736.0 734.2

Earnings (losses) per share Basic 0.0838 (0.1725) 0.1561 (0.1892) Diluted 0.0838 (0.1722) 0.1560 (0.1890)

Earnings (losses) per share - ADS basic (US$) 0.3353 (0.6898) 0.6245 (0.7569) Earnings (losses) per share - ADS diluted (US$) 0.3351 (0.6889) 0.6240 (0.7562) (1) Derived from unaudited financial statements. * Restated

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EMBRAER S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions of U.S.dollars) (1) (1) Three Months Ended Six months ended 30 Jun, 2017 * 30 Jun, 2018 30 Jun, 2017 * 30 Jun, 2018 Operating activities Net income (loss) 72.1 (124.7) 127.1 (134.9) Items not affecting cash and cash equivalents Depreciation 53.2 40.4 103.2 83.3 Government grants amortization (0.8) (0.8) (1.5) (1.6) Amortization 34.5 27.9 62.5 52.1 Amortization contribution from suppliers (6.9) (6.5) (12.5) (10.5) Allowance for inventory obsolescence 4.2 9.7 5.5 11.1 Provision for adjustment to market value 11.8 4.6 15.0 14.9 Provision (reversal) allowance for doubtful accounts (1.1) (0.7) 4.2 (4.4) Gains (losses) on fixed assets disposal 7.4 3.3 7.3 7.1 Deferred income tax and social contribution 69.9 48.6 52.1 36.3 Accrued interest 11.5 (4.4) 17.8 1.7 Interest over marketable securities (3.9) (8.4) (6.8) (16.2) Equity in the losses of associates 0.1 - 0.1 0.3 Share-based remuneration 0.1 - 0.3 0.1 Foreign exchange gain (loss), net 9.8 14.6 5.0 21.6 Residual value guarantee (2.2) (3.2) (10.3) (0.9) Provision for voluntary redundancy scheme (1.2) - 6.4 - Other (10.3) (1.6) (11.7) (3.8) Changes in assets Financial investments 96.2 108.1 (407.4) 737.6 Derivative financial instruments 12.6 32.6 (0.6) 32.0 Collateralized accounts receivable and accounts receivable (97.2) (35.4) (123.9) (175.1) Customer and commercial financing 4.0 0.6 4.2 1.1 Inventories 217.3 (20.4) 20.5 (330.3) Other assets 111.1 9.4 178.6 (37.7) Changes in liabilities Trade accounts payable 29.9 52.9 (28.2) 121.9 Non-recourse and recourse debt 2.4 0.8 4.9 3.9 Other payables (42.0) (104.4) (20.0) (68.9) Contribution from suppliers - 58.5 86.0 125.5 Advances from customers 16.8 134.7 3.3 127.3 Taxes and payroll charges payable 13.4 8.1 8.8 (22.5) Financial guarantees (11.3) (5.6) (31.1) (13.1) Other provisions (11.6) 5.0 (20.9) 21.1 Unearned income (132.1) (1.9) (148.6) (18.6) Net cash generated (used) by operating activities 457.7 241.8 (110.7) 560.4 Investing activities Additions to property, plant and equipment (61.7) (31.3) (114.2) (71.0) Proceeds from sale of property, plant and equipment 1.2 0.2 19.2 0.2 Additions to intangible assets (117.2) (54.9) (234.3) (135.1) Investments in associates (0.3) (1.2) (0.4) (2.2) Proceeds from held to maturity securities (12.4) (188.8) 8.0 (334.3) Dividends Received - - 0.1 - Restricted cash reserved for construction of assets (2.7) (0.1) 1.7 (0.1) Net cash used in investing activities (193.1) (276.1) (319.9) (542.5) Financing activities Proceeds from borrowings 8.4 45.6 765.4 92.3 Repayment of borrowings (58.4) (90.7) (332.3) (156.9) Dividends and interest on own capital (24.9) (19.1) (34.2) (37.3) Proceeds from stock options exercised 0.9 0.8 4.8 3.1 Acquisition of own shares (5.0) - (5.0) - Net cash generated (used) by financing activities (79.0) (63.4) 398.7 (98.8) Increase (Decrease) in cash and cash equivalents 185.6 (97.7) (31.9) (80.9) Effects of exchange rate changes on cash and cash equivalents (9.1) (57.2) (2.2) (57.3) Cash and cash equivalents at the beginning of the period 1,030.9 1,287.5 1,241.5 1,270.8 Cash and cash equivalents at the end of the period 1,207.4 1,132.6 1,207.4 1,132.6

(1) Derived from unaudited financial statements. * Restated 2017 results for new accounting rules (IFRS 15 and IFRS 9) 16

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EMBRAER S.A. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in millions of U.S. dollars) (1) (1) A S S E T S As of March 31, As of June 30, 2018 2018 Current assets Cash and cash equivalents 1,287.5 1,132.6 Financial Financial assets investments 1,890.2 1,956.5 Trade accounts receivable, net 898.4 918.9 Derivative financial instruments 23.8 10.9 Customer and commercial financing 2.0 1.9 Collateralized accounts receivable 195.2 204.9 Inventories 2,480.4 2,535.0 Income tax and Social Contribution 101.5 104.4 Other assets 273.2 226.6 7,152.2 7,091.7 Non-current assets Financial investments 250.7 252.0 Derivative financial instruments 7.4 5.4 Customer and commercial financing 13.9 13.4 Collateralized accounts receivable 88.6 73.0 Guarantee deposits 396.9 386.9 Deferred income tax 4.9 4.7 Other assets 121.2 119.9 883.6 855.3

Investments 6.2 6.4 Property, Property, plant plant and and equipment equipment, net 2,075.2 2,004.1 Intangible assets 1,877.9 1,853.6 3,959.3 3,864.1

TOTAL ASSETS 11,995.1 11,811.1 (1) Derived from unaudited financial information.

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EMBRAER S.A. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in millions of U.S. dollars) (1) (1) LIABILITIES As of March 31, As of June 30, 2018 2018 Current liabilities Trade accounts payable 893.5 941.2 Loans and financing 438.0 361.0 Non-recourse and recourse debt 21.7 26.0 Other payables 321.0 252.1 Advances from customers 859.4 992.4 Derivative financial instruments 5.1 22.7 Taxes and payroll charges payable 45.4 37.7 Income tax and social contribution 10.4 22.9 Financial guarantee and residual value 35.9 39.0 Provisions 137.1 131.9 Dividends payable 23.3 7.1 Unearned income 148.1 148.0 2,938.9 2,982.0 Non-current liabilities Loans and financing 3,749.0 3,701.3 Non-recourse and recourse debt 345.3 341.8 Other payables 23.0 24.4 Advances from customers 85.4 90.8 Derivative financial instruments - 0.1 Taxes and payroll charges payable 70.1 60.9 Deferred income tax and social contribution 248.2 298.3 Financial guarantee and residual value 115.8 103.9 Provisions 139.6 124.2 Unearned income 95.9 93.3 4,872.3 4,839.0

TOTAL LIABILITIES 7,811.2 7,821.0

Shareholders' equity Capital 1,551.6 1,551.6 Treasury shares (47.2) (45.6) Revenue reserves 2,640.1 2,651.2 Share-based remuneration 37.4 37.4 Retained earnings (losses) (7.6) (150.2) Accumulated Other Comprehensive Loss (100.9) (146.7) 4,073.4 3,897.7 Non-controlling interest 110.5 92.4 Total company's shareholders' equity 4,183.9 3,990.1 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 11,995.1 11,811.1 (1) Derived from unaudited financial information.

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INVESTOR RELATIONS

Eduardo Couto, Chris Thornsberry, Caio Pinez, Nádia Santos, Paulo Ferreira and Viviane Pinheiro. (+55 12) 3927 1000 [email protected] ri.embraer.com.br

CONFERENCE CALL INFORMATION Embraer will host a conference call to present its 2Q18 Results on Tuesday, July 31, 2018 at 11:00 AM (SP) / 10:00 AM (NY). The conference call will also be broadcast live over the web at ri.embraer.com.br

Conference ID: EMBRAER

Telephones USA / International: (Toll-free) +1 (866) 262-4553 / (Dial-in) +1 (412) 317-6029 Telephones Brazil: +55 (11) 3193-1001 / +55 (11) 2820-4001

ABOUT EMBRAER Embraer is a global company headquartered in Brazil with businesses in commercial and executive aviation, defense & security. The company designs, develops, manufactures and markets aircraft and systems, providing customer support and services. Since it was founded in 1969, Embraer has delivered more than 8,000 aircraft. About every 10 seconds an aircraft manufactured by Embraer takes off somewhere in the world, transporting over 145 million passengers a year. Embraer is the leading manufacturer of commercial jets up to 150 seats. The company maintains industrial units, offices, service and parts distribution centers, among other activities, across the Americas, Africa, Asia and Europe. For more information, please visit www.embraer.com.br

This document may contain projections, statements and estimates regarding circumstances or events yet to take place. Those projections and estimates are based largely on current expectations, forecasts of future events and financial trends that affect Embraer’s businesses. Those estimates are subject to risks, uncertainties and suppositions that include, among others: general economic, political and trade conditions in Brazil and in those markets where Embraer does business; expectations of industry trends; the Company’s investment plans; its capacity to develop and deliver products on the dates previously agreed upon, and existing and future governmental regulations. The words “believe”, “may”, “is able”, “will be able”, “intend”, “continue”, “anticipate”, “expect” and other similar terms are intended to identify potentialities. Embraer does not undertake any obligation to publish updates nor to revise any estimates due to new information, future events or any other facts. In view of the inherent risks and uncertainties, such estimates, events and circumstances may not take place. The actual results may therefore differ substantially from those previously published as Embraer expectations.

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Embraer S.A. Quarterly information (ITR) and report on review of quarterly information at June 30, 2018

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1. OPERATIONS ...... 14 2. PRESENTATION OF THE FINANCIAL STATEMENTS AND ACCOUNTING PRACTICES ...... 14 3. CRITICAL ACCOUNTING ESTIMATES ...... 26 4. CASH AND CASH EQUIVALENTS ...... 27 5. FINANCIAL INVESTMENTS ...... 28 6. TRADE ACCOUNTS RECEIVABLE, NET ...... 28 7. DERIVATIVE FINANCIAL INSTRUMENTS ...... 29 8. CUSTOMER AND COMMERCIAL FINANCING ...... 31 9. COLLATERALIZED ACCOUNTS RECEIVABLE AND RECOURSE AND NON-RECOURSE DEBT ...... 31 10. GUARANTEE DEPOSITS ...... 32 11. INVENTORIES ...... 33 12. OTHER ASSETS ...... 34 13. INTEREST IN ENTITIES ...... 35 14. RELATED PARTIES ...... 38 15. PROPERTY, PLANT AND EQUIPMENT ...... 41 16. INTANGIBLE ASSETS ...... 45 17. IMPAIRMENT TEST ...... 46 18. TRADE ACCOUNTS PAYABLE ...... 46 19. LOANS AND FINANCING ...... 47 20. OTHER PAYABLES ...... 49 21. ADVANCES FROM CUSTOMERS ...... 50 22. TAXES AND PAYROLL CHARGES PAYABLE ...... 50 23. INCOME TAXES ...... 51 24. FINANCIAL GUARANTEES AND RESIDUAL VALUE GUARANTEES ...... 52 25. PROVISIONS AND CONTINGENT LIABILITIES ...... 53 26. POST-RETIREMENT BENEFITS...... 56 27. FINANCIAL INSTRUMENTS ...... 57 28. STOCKHOLDERS' EQUITY ...... 69 29. SHARE-BASED COMPENSATION ...... 70 30. EARNINGS PER SHARE ...... 71 31. REVENUE (EXPENSES) BY TYPE ...... 72 32. OTHER OPERATING INCOME (EXPENSE), NET...... 75 33. FINANCIAL INCOME (EXPENSE), NET ...... 76 34. FOREIGN EXCHANGE GAINS (LOSSES), NET ...... 76 35. RESPONSIBILITIES AND COMMITMENTS ...... 76 36. SUPPLEMENTAL CASH FLOW INFORMATION ...... 77 37. SEGMENT INFORMATION ...... 77

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(A free translation of the original in Portuguese)

Report on Review of Quarterly Information

To the Board of Directors and Shareholders Embraer S.A.

Introduction

We have reviewed the accompanying parent company and consolidated interim accounting information of Embraer S.A. ("Company"), included in the Quarterly Information Form (ITR) for the quarter ended June 30, 2018, comprising the statement of financial position at that date and the statements of income and comprehensive income for the quarter and six-month periods then ended, and the statements of changes in stockholders´equity and cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory information.

Management is responsible for the preparation of the parent company and consolidated interim accounting information in accordance with the accounting standard CPC 21, Interim Financial Reporting, of the Brazilian Accounting Pronouncements Committee (CPC) and International Accounting Standard (IAS) 34, Interim Financial Reporting issued by the International Accounting Standards Board (IASB), as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim accounting information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the interim information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying parent company and consolidated interim accounting information included in the quarterly information referred to above has not been prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to the preparation of the Quarterly Information, and presented in accordance with the standards issued by the CVM.

Other matters

Statements of value added

We have also reviewed the parent company and consolidated statements of value added for the six- month period ended June 30, 2018. These statements are the responsibility of the Company’s management, and are required to be presented in accordance with standards issued by the CVM applicable to the preparation of Quarterly Information (ITR) and are considered supplementary information under IFRS, which do not require the presentation of the statement of value added. These

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statements have been submitted to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they have not been prepared, in all material respects, in a manner consistent with the parent company and consolidated interim accounting information taken as a whole.

São José dos Campos, July 30, 2018

PricewaterhouseCoopers Auditores Independentes CRC 2SP000160/O-5 “F”

Rafael Alvim Guimarães Contador CRC RJ104572/O-0

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Parent Company and Consolidated Statements of Financial Position as of June 30, 2018 and December 31, 2017 (In thousands of reais)

Parent Company Consolidated ASSETS Note 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) CURRENT Cash and cash equivalents 4 2,371,103 2,413,501 4,367,076 4,203,719 Financial investments 5 6,535,824 6,591,628 7,543,898 7,825,304 Trade accounts receivable, net 6 1,313,482 782,289 3,543,206 2,527,957 Accounts receivable from subsidiaries 1,495,176 1,250,940 - - Derivative financial instruments 7 40,546 95,390 42,079 97,652 Customer and commercial financing 8 - - 7,358 7,029 Collateralized accounts receivable 9 - - 790,101 614,101 Inventories 11 6,195,328 4,548,176 9,774,439 7,108,011 Income tax and social contribution 201,032 162,741 402,576 254,479 Other assets 12 679,116 573,976 873,823 844,361 18,831,607 16,418,641 27,344,556 23,482,613

NON-CURRENT ASSETS Financial investments 5 656,210 565,567 971,530 831,372 Trade accounts receivable, net 6 - - - 149 Accounts receivable from subsidiaries 380,983 486,052 - - Derivative financial instruments 7 20,350 14,939 20,797 15,980 Customer and commercial financing 8 - - 51,706 47,337 Collateralized accounts receivable 9 - - 281,586 341,133 Guarantee deposits 10 1,301,517 1,100,035 1,491,806 1,302,678 Deferred income tax 23.1 - - 18,115 7,924 Other assets 12 323,201 326,808 462,261 401,543 2,682,261 2,493,401 3,297,801 2,948,116 Investments 13 7,553,719 6,292,727 24,552 18,387 Property, plant and equipment 15 3,989,845 3,542,957 7,727,586 6,962,927 Intangible assets 16 6,712,013 5,857,496 7,147,064 6,227,137 20,937,838 18,186,581 18,197,003 16,156,567

TOTAL ASSETS 39,769,445 34,605,222 45,541,559 39,639,180

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Parent Company and Consolidated Statements of Financial Position as of June 30, 2018 and December 31, 2017 (In thousands of reais)

Parent Company Consolidated LIABILITIES Note 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) CURRENT Trade accounts payable 18 2,835,936 2,089,893 3,628,888 2,728,027 Loans and financing 19 1,231,170 1,164,059 1,391,763 1,286,591 Non-recourse and recourse debt 9 - - 100,422 58,092 Other payables 20 471,143 503,776 971,854 966,583 Accounts payable to subsidiaries 1,080,154 987,374 - - Advances from customers 21 2,730,132 1,913,354 3,826,622 2,793,974 Derivative financial instruments 7 85,350 27,646 87,672 29,233 Taxes and payroll charges payable 22 109,485 198,337 145,536 233,889 Income tax and social contribution - - 88,311 53,227 Financial guarantee and residual value guarantee 24 90,576 19,191 150,316 73,559 Dividends 12,801 109,776 27,200 121,651 Unearned income 413,534 351,908 571,043 542,657 Provisions 25.1 474,018 346,816 508,667 414,073 9,534,299 7,712,130 11,498,294 9,301,556

NON-CURRENT LIABILITIES Loans and financing 19 12,141,844 10,804,897 14,271,571 12,602,199 Non-recourse and recourse debt 9 - - 1,318,091 1,146,081 Other payables 20 80,561 58,552 94,129 71,162 Advances from customers 21 343,922 331,967 350,092 344,207 Derivative financial instruments 7 509 373 509 373 Taxes and payroll charges payable 22 234,574 229,051 234,759 232,072 Deferred income tax and social contribution 23.1 1,071,728 820,252 1,150,054 854,280 Financial guarantee and residual value guarantee 24 375,981 398,051 400,776 445,284 Unearned income 295,626 221,104 359,317 322,406 Provisions 25.1 661,806 534,866 479,046 450,312 15,206,551 13,399,113 18,658,344 16,468,376 TOTAL LIABILITIES 24,740,850 21,111,243 30,156,638 25,769,932

STOCKHOLDERS' EQUITY Capital 28.1 5,159,617 4,789,617 5,159,617 4,789,617 Treasury shares 28.2 (120,283) (134,801) (120,283) (134,801) Revenue reserves 4,703,059 5,072,609 4,703,059 5,072,609 Share-based remuneration 29 78,940 78,742 78,940 78,742 Cumulative translation adjustments 28.6 5,748,359 3,687,812 5,748,359 3,687,812 Retained losses (541,097) - (541,097) - 15,028,595 13,493,979 15,028,595 13,493,979 Noncontrolling interest - - 356,326 375,269 TOTAL STOCKHOLDERS' EQUITY 15,028,595 13,493,979 15,384,921 13,869,248

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 39,769,445 34,605,222 45,541,559 39,639,180

The accompanying notes are an integral part of this interim financial statements.

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Parent Company and Consolidated Statements of Income Six Months Ended June 30, 2018 and 2017 (In thousands of reais)

Year to Date Parent Company Consolidated Note 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) REVENUE 5,553,040 6,377,538 7,760,429 8,969,422 Cost of sales and services (4,838,179) (5,219,940) (6,682,505) (7,408,519) GROSS PROFIT 714,861 1,157,598 1,077,924 1,560,903

OPERATING INCOME (EXPENSE) Administrative (159,413) (150,111) (293,425) (262,182) Selling (448,172) (401,395) (486,049) (485,151) Research (58,603) (54,012) (66,900) (55,680) Other operating (expense) income, net 32 (383,447) (54,923) (225,344) (57,086) Equity in income (losses) of associates 227,061 2,836 (918) (458) OPERATING PROFIT BEFORE FINANCIAL INCOME (EXPENSE) (107,713) 499,993 5,288 700,346

Financial income (expense), net 33 (256,298) (4,161) (298,273) (50,998) Foreign exchange gain (loss), net 34 (47,640) 8,026 (32,807) (1,116) PROFIT (LOSS) BEFORE TAXES ON INCOME (411,651) 503,858 (325,792) 648,232

Income tax (expense) income 23.2 (95,424) (134,484) (167,902) (239,379) NET INCOME FOR THE PERIOD (507,075) 369,374 (493,694) 408,853

Atributable to : Owners of Embraer - - (507,075) 369,374 Noncontrolling interest - - 13,381 39,479

Earnings per share (R$) Basic 30.1 (0.69) 0.50 (0.69) 0.50 Diluted 30.2 (0.69) 0.50 (0.69) 0.50

The accompanying notes are an integral part of this interim financial statements.

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Parent Company and Consolidated Statements of Income Quarters Months Ended June 30, 2018 and 2017 (In thousands of reais)

Quarters ended on Parent Company Consolidated Note 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) REVENUE 3,437,588 4,111,919 4,533,095 5,701,233 Cost of sales and services (3,074,640) (3,319,070) (4,046,831) (4,684,825) GROSS PROFIT 362,948 792,849 486,264 1,016,408

OPERATING INCOME (EXPENSE) Administrative (72,381) (77,881) (149,628) (128,283) Selling (247,520) (201,852) (255,147) (256,164) Research (30,405) (29,082) (35,295) (29,945) Other operating (expense) income, net 32 (264,852) (20,401) (129,114) (28,118) Equity in income (losses) of associates 143,867 (14,222) 61 (180) OPERATING PROFIT BEFORE FINANCIAL INCOME (EXPENSE) (108,343) 449,411 (82,859) 573,718

Financial income (expense), net 33 (132,628) (21,044) (151,509) (36,873) Foreign exchange gain (loss), net 34 (67,132) (17,841) (34,532) (22,842) PROFIT BEFORE TAXES ON INCOME (308,103) 410,526 (268,900) 514,003

Income tax (expense) income 23.2 (158,866) (209,634) (191,570) (279,675) NET INCOME (466,969) 200,892 (460,470) 234,328

Atributable to : Owners of Embraer - - (466,969) 200,892 Noncontrolling interest - - 6,499 33,436

Retained (loss) per share (R$) Basic 30.1 (0.64) 0.27 (0.64) 0.27 Diluted 30.2 (0.64) 0.27 (0.64) 0.27

The accompanying notes are an integral part of this interim financial statements.

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Parent Company and Consolidated Statements of Comprehensive Income (Loss) Six Months Ended June 30, 2018 and 2017 (In thousands of reais)

Year to Date Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) NET INCOME FOR THE PERIOD (507,075) 369,374 (493,694) 408,853

ITEMS THAT WILL NOT BE RECLASSIFIED FOR THE RESULT Actuarial gain (loss) on post employment benefit obligations (1,281) 119 (1,281) 119 Translation adjustments 1,129,664 123,919 1,097,340 141,688 ITEMS THAT MAY BE SUBSEQUENTLY RECLASSIFIED FOR THE RESULT Financial instruments (55,812) (22,260) (55,812) (22,260) Translation adjustments 987,976 142,018 987,976 142,018 OTHER COMPREHENSIVE INCOME, NET OF TAX EFFECTS (i) 2,060,547 243,796 2,028,223 261,565

TOTAL OF COMPREHENSIVE INCOME 1,553,472 613,170 1,534,529 670,418

Attributable to: Owners of Embraer - - 1,553,472 613,170 Noncontrolling interest - - (18,943) 57,248

(i) Items presented above are net of deferred income tax of R$ 1.281 and R$ 119 for the period ended June 30, 2018 and 2017, respectivelly.

The accompanying notes are an integral part of this interim financial statements.

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Parent Company and Consolidated Statements of Comprehensive Income (Loss) Quartes Months Ended June 30, 2018 and 2017 (In thousands of reais)

Quarters ended on Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) NET INCOME (466,969) 200,892 (460,470) 234,328

ITEMS THAT WILL NOT BE RECLASSIFIED FOR THE RESULT Actuarial gain (loss) on post employment benefit obligations (1,244) 339 (1,244) 339 Translation adjustments 1,097,946 306,387 1,080,539 330,927 ITEMS THAT MAY BE SUBSEQUENTLY RECLASSIFIED

FOR THE RESULT Financial instruments - - - - Translation adjustments (63,102) (51,452) (63,102) (51,452) 934,622 289,192 934,622 289,192 OTHER COMPREHENSIVE INCOME, NET OF TAX EFFECTS (i) 1,968,222 544,466 1,950,815 569,006

TOTAL OF COMPREHENSIVE INCOME 1,501,253 745,358 1,490,345 803,334

Attributable to: Owners of Embraer - - 1,501,253 745,358 Noncontrolling interest - - (10,908) 57,976

(i) Items presented above are net of deferred income tax of R$ 1.244 and R$ 339 for the period ended June 30, 2018 and 2017, respectivelly.

The accompanying notes are an integral part of this interim financial statements.

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Statements of Changes in Stockholders' Equity Six Months ended June, 2018 and 2017 (In thousands of reais)

Revenue reserves Accumulated other comprehensive (loss) income Actuarial gain For Result in on post investment transactions with employment Cumulative Other Total Treasury Share-based Invesment Statutory and working Retained non controlling benefit translation comprehensi Noncontrolling Shareholders Capital Shares remuneration Subsidy Reserve capital earnings interest obligations adjustment ve income Total interest ' Equity AT JANUARY 01, 2017 (Previously filed) 4,789,617 (115,364) 77,097 81,903 393,704 3,949,275 - (12,400) (106,624) 3,449,302 37,090 12,543,600 301,258 12,844,858 Adjustment related to accounting policy change - - - - - 39,525 - - - 2,643 - 42,168 - 42,168 AT JANUARY 01, 2017 (Restated) 4,789,617 (115,364) 77,097 81,903 393,704 3,988,800 - (12,400) (106,624) 3,451,945 37,090 12,585,768 301,258 12,887,026 Net income for the period ------369,374 - - - - 369,374 39,479 408,853 Translation adjustments ------265,937 - 265,937 17,769 283,706 Financial instruments ------(22,260) (22,260) - (22,260) Other comprehensive income ------119 - - 119 - 119 Total comprehensive income ------369,374 - 119 265,937 (22,260) 613,170 57,248 670,418 Share-based remuneration - - 1,051 ------1,051 - 1,051 Stock option grants exercised - 23,344 - - - - (8,238) - - - - 15,106 - 15,106 Acquisition of non controlling interest - (16,467) ------(16,467) - (16,467) Allocation of profits: Investment subsidy - - - 1,531 - - (1,531) ------Interest on own capital ------(58,839) - - - - (58,839) - (58,839) AT MARCH 31,2017 (Restated) 4,789,617 (108,487) 78,148 83,434 393,704 3,988,800 300,766 (12,400) (106,505) 3,717,882 14,830 13,139,789 358,506 13,498,295

AT JANUARY 01, 2018 (Previously filed) 4,789,617 (134,801) 78,742 95,223 433,493 4,475,202 - (12,400) (75,933) 3,806,599 3,555 13,459,297 375,269 13,834,566 Adjustment related to accounting policy change - - - - - 68,691 - - - (34,009) - 34,682 - 34,682 AT JANUARY 01, 2018 (Restated) 4,789,617 (134,801) 78,742 95,223 433,493 4,543,893 - (12,400) (75,933) 3,772,590 3,555 13,493,979 375,269 13,869,248 Net income for the period ------(507,075) - - - - (507,075) 13,381 (493,694) Translation adjustments ------2,117,640 - 2,117,640 (32,324) 2,085,316 Financial instruments ------(55,812) (55,812) - (55,812) Other comprehensive income ------(1,281) - - (1,281) - (1,281) Total comprehensive income ------(507,075) - (1,281) 2,117,640 (55,812) 1,553,472 (18,943) 1,534,529 Share-based remuneration - - 198 ------198 - 198 Stock option grants exercised - 14,518 - - - - (4,224) - - - - 10,294 - 10,294 Allocation of profits: Investment subsidy - - - 450 - - (450) ------Interest on own capital ------(29,348) - - - - (29,348) - (29,348) Capital increase 370,000 - - - - (370,000) ------AT JUNE 30, 2018 5,159,617 (120,283) 78,940 95,673 433,493 4,173,893 (541,097) (12,400) (77,214) 5,890,230 (52,257) 15,028,595 356,326 15,384,921

The accompanying notes are an integral part of this interim financial statements.

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Parent Company and Consolidated Statements of Value Added Six Months Ended June 30, 2018 and 2017 (In thousands of reais)

Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) REVENUE Gross revenue of products and services 5,612,823 6,431,864 7,837,070 9,050,510 Provision for doubtful acount - reversals and additions 3,909 (8,679) 16,799 (22,753) Revenue related to construction of own assets 6,152 428,210 75,171 195,177 Other revenues (38,031) 77,385 120,980 138,487 5,584,853 6,928,780 8,050,020 9,361,421 INPUT MATERIAL PURCHASED FROM THIRD PARTIES Product costs (3,659,445) (3,805,752) (4,587,865) (4,703,886) Materials, electricity, third-party services and other (901,350) (853,115) (1,820,026) (1,984,233) (4,560,795) (4,658,867) (6,407,891) (6,688,119)

GROSS VALUE ADDED 1,024,058 2,269,913 1,642,129 2,673,302 Depreciation and amortization (347,589) (378,757) (459,047) (523,037) VALUE ADDED PRODUCED BY THE COMPANY 676,469 1,891,156 1,183,082 2,150,265

VALUE ADDED RECEIVED IN TRANSFER Equity in the earnings (loss) of subsidiaries 227,061 2,836 (918) (458) Financial income 160,037 277,813 191,143 291,650 TOTAL VALUE ADDED FOR DISTRIBUTION 1,063,567 2,171,805 1,373,307 2,441,457

DISTRIBUTION OF VALUE ADDED Personnel 743,252 1,152,027 1,096,007 1,250,238 Taxes, charges and contributions 252,856 246,296 53,514 186,814 Income (expense) tax and social contribution expense (benefit) 95,424 134,484 167,902 239,379 Insterests and rentals 479,110 269,624 549,578 356,173 Interest on own capital/dividends 29,348 58,839 29,348 58,839 Retained earnings (losses) (536,423) 310,535 (536,423) 310,535 Noncontrolling interest - - 13,381 39,479 DISTRIBUTED VALUE ADDED 1,063,567 2,171,805 1,373,307 2,441,457

The accompanying notes are an integral part of this interim financial statements.

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Parent Company and Consolidated Statements of Cash Flows Six Months Ended June 30, 2018 and 2017 (In thousands of reais)

Parent Company Consolidated Note 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) OPERATING ACTIVITIES Net income (losses) (507,075) 369,374 (493,694) 408,853 ADJUSTMENT TO NET INCOME FOR ITEMS NOT AFFECTING CASH Depreciation 15 175,641 189,598 284,771 328,208 Amortization of Government grants - - (5,496) (4,830) Amortization 16 171,948 189,159 179,772 199,659 Amortization of contribution from suppliers (36,572) (40,014) (36,572) (40,014) Provision (reversal) for inventory obsolescence 24,685 20,813 39,947 17,239 Provision for adjustment to market value, inventories, property plant and equipament and intagible - - 50,257 47,883 Provision (reversal) allowance for doubtful accounts (4,773) 6,592 (17,034) 15,048 Losses on fixed assets disposal - - 23,856 23,627 Deferred income tax and social contribution 23.2 98,877 133,747 128,762 166,905 Interest income on loans (33,001) 17,894 (1,793) 54,222 Interest over marketable securities (42,762) (12,453) (55,641) (21,782) Equity in the losses of associates 13.2 (227,061) (2,836) 918 458 Share-based remuneration 198 1,051 198 1,051 Foreign exchange gain (loss), net 34 93,929 5,408 77,162 16,195 Residual value guarantee 24 (4,376) (32,653) (4,376) (32,653) Provision for voluntary redundancy scheme - 18,183 - 19,707 Other 4,783 4,975 (12,924) (37,501)

CHANGES IN ASSETS: Financial investments 2,033,132 (1,749,771) 2,439,047 (1,265,474) Derivative financial instruments 115,997 165 118,219 (1,571) Collateralized accounts receivable and accounts receivable (369,559) 991,869 (582,794) (393,155) Customer and commercial financing - (3,404) 3,825 14,045 Inventories (724,043) 22,167 (1,058,854) 80,575 Other assets (141,054) (53,215) (119,027) 565,750

CHANGES IN LIABILITIES: Trade accounts payable 385,556 61,377 416,666 (95,536) Non-recourse and recourse debt - - 13,407 15,782 Other payables (177,675) 573,142 (249,391) (61,352) Contribution from suppliers 419,045 268,905 419,045 268,905 Advances from customers 405,371 (31,573) 477,284 11,602 Taxes and payroll charges payable (86,515) (31,452) (68,233) 28,411 Financial guarantees (15,075) (7,909) (44,807) (99,385) Other provisions 136,439 (55,668) 70,750 (66,139) Unearned income 35,739 (80,347) (63,133) (479,403) NET CASH GENERATED (USED) IN OPERATING ACTIVITIES 1,731,799 773,124 1,930,117 (314,670)

INVESTING ACTIVITIES Acquisition of property, plant and equipment 15 (83,106) (177,792) (242,359) (364,758) Proceeds from sale of property, plant and equipment 805 278 773 60,149 Additions to intangible assets 16 (442,807) (709,789) (457,736) (744,390) Additions to investments in subsidiaries and affiliates 13 (12,028) (34,168) (7,388) (1,214) Disposal in investments in subsidiaries and affiliates 11,172 198,606 - - Investments measured at amortized cost (1,246,974) 385,261 (1,246,836) 39,286 Dividends received 83 290 83 292 Restricted cash reserved for construction of assets - - (302) 5,110 NET CASH USED IN INVESTING ACTIVITIES IN CONITNUED OPERATIONS (1,772,855) (337,314) (1,953,765) (1,005,525)

FINANCING ACTIVITIES Proceeds from borrowings 15,831 27,395 314,950 2,377,574 Repayment of borrowings (254,184) (285,419) (541,373) (1,061,828) Dividends and interest on own capital (127,251) (109,364) (127,251) (109,363) Proceeds from stock options exercised 10,294 15,106 10,294 15,106 Aquisition of own shares - (16,467) - (16,467) NET CASH GENERATED (USED) IN FINANCING ACTIVITIES (355,310) (368,749) (343,380) 1,205,022

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (396,366) 67,061 (367,028) (115,173) Effects of exchange rate changes on cash and cash equivalents 353,968 57,069 530,385 63,194 Cash and cash equivalents at the beginning of the year 2,413,501 2,350,403 4,203,719 4,046,185 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2,371,103 2,474,533 4,367,076 3,994,206

The accompanying notes are an integral part of this interim financial statements.

13 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186

Embraer S.A.

Notes to the Interim financial statements at June 30, 2018 In thousands of reais, unless otherwise stated

1. Operations

Embraer S.A. ("Embraer" or "Parent Company" or together with its subsidiaries as "Consolidated" or "the Company") is a publicly-held company incorporated under the laws of the Federative Republic of Brazil with headquarters in São José dos Campos, State of São Paulo, Brazil. The corporate purpose of the Company is:

(i) To design, build and market aircraft and 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, as well as perform 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 are listed on the enhanced corporate governance segment of the Stock Exchange in Brazil ("B3"), as the New Market ("Novo Mercado"). Embraer S.A. also has American Depositary Shares (evidenced by American Depositary Receipts - ADRs) which are registered with the Securities and Exchange Commission ("SEC") and are listed on the New York Stock Exchange ("NYSE"). The Company has no controlling group and its capital is comprised entirely of common shares.

These interim financial statements were approved by the Company on July 30, 2018.

2. Presentation of the interim financial statements and accounting practices

2.1 Presentation and preparation of the interim financial statements

The Company's interim parent company and consolidated financial statements has been prepared and is being presented in conformity with the International Accounting Standards - ("IAS") IAS 34/CPC 21 (R1) issued respectively by the International Accounting Standards Board ("IASB") and by the Accounting Pronouncements Committee (CPC in portuguese), related to the interim report. This interim financial statements should be read together with the parent company and consolidated financial statements as of December 31, 2017, which were prepared in conformity with the accounting practices adopted in Brazil and with the International Financial Accounting Standards (IFRS), respectively.

2.1.1 Basis of preparation

This interim financial statements has been prepared under the historical cost convention (except when the item requires different criteria) and adjusted to reflect assets and liabilities measured at fair value. after the initial measurement, or marked to market when classified as available assets for sale .

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management of the Company to exercise its judgment in the process of applying the Company's accounting policies. This interim financial statements includes accounting estimates for certain assets, liabilities and transactions.

14 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

The areas which involve a higher degree of judgment or complexity, or assumptions and estimates significant to the financial statements, are disclosed in Note 3.

2.1.2 Consolidation

The interim consolidated financial statements includes the balances of June 30, 2018 financial statements of the Company and all subsidiaries directly or indirectly controlled by Embraer, special purpose entities (SPEs) controlled by the Company, exclusive investment funds (FIE) and participation investment funds (FIP). Jointly controlled entities (joint ventures) are not consolidated and are presented as Investments and accounted for by the equity method. Joint operations are consolidated in proportion of the investment.

The interim consolidated financial statements of each of the Company's entities is prepared in its functional currency and converted to the presentation currency as described in Note 2.2.3.

All accounts and balances arising from transactions between consolidated entities are eliminated.

15 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Company's corporate structure

Below are informations regarding the Company´s consolidated subsdiaries and joint controlled entities:

Participation Entity Country Core activities Embraer Group

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 USA, Inc. 100% EUA Engineering services related to aircraft research and development

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 Training Services 100% EUA Comprises corporate and institutional activities

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

Supply of the Brazilian Government's Geostationary Defense and Strategic Visiona Tecnologia Espacial S.A. 51% Brazil 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% Coordinates investments in subsidiaries in Portugal

OGMA - Indústria Aeronáutica de Portugal S.A. 65% Portugal 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 Compósitos S.A. 100% Portugal Fabrication of composite parts and products for the aviation industry

Embraer (China) Aircraft Technical Services Co. Ltd. 100% China Sales and maintenance for after sales 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 Holding Co. SL 100% Spain Concentrates corporate activities abroad

ECC Investment Switzerland AG 100% Switzerland Coordinates investments in subsidiaries abroad

ECC Insurance & Financial Company Limited. 100% Cayman Islands Covers financial guarantees offered in 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

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. The consolidated SPEs, in which the Company has control, are: PM Limited, Refine Inc., RS Limited, River One Ltd. and Table Inc. Other SPEs in which Embraer has no control are not consolidated, based on technical analyses made by Management. Except for the aforementioned consolidated SPEs, the Company has no significant risks attributed to other structured operations involving SPEs.

16 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Consortium Tepro - Entity constituted by SAVIS Tecnologia e Sistemas SA, a company controlled by Embraer Defesa & Segurança and Bradar Indústria S.A., newly incorporated by Embraer SA, with the objective of assist the Brazilian Army implementation of the first phase of the Integrated Frontier Monitoring System (“Sistema Integrado de Monitoramento de Fronteiras” - Sisfron). Located in Campinas - SP, the consortium is 93.5% owned by Savis and 6.5% owned by Bradar.

Equity investment fund (FIP) - An Embraer initiative in conjunction with BNDES, FINEP and Desenvolve SP , created with the aim of strengthening the aerospace supply chain, aerospace, defense and security and promoting integration of systems related to these sectors through support for small and medium enterprises. FIP is not consolidated in the Company's financial statements, but its results are presented in the equity in investees line.

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 PRINCIPAL ACCOUNTING PRACTICES

2.2.1 Significant Accounting Practices

The significant accounting policies adopted by the Company were changed due to the adoption of IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRIC 22 Foreign currency transactions and advance consideration (CPC 48, CPC 47 and ICPC 21, respectively) when compared to the financial statements issued as of December 31, 2017.

See below their impacts in the interim financial statements:

2.2.1.1 Amendments by the adoption of IFRS 9, IFRS 15 and IFRIC 22 (CPC 48, CPC 47 and ICPC 21)

As a result of changes in the accounting policies of the Company, the previous year’s financial statements were restated:

The following tables show the adjustments in each line item. Line items not impacted were not presented. As a result sums and subtotals cannot be recalculated based on the provided amounts. The adjustments are explained in details in the tables below:

17 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Balance Sheet

Parent Company Consolidated

IFRS 15 / CPC 47 IFRS 9 / CPC 48 IFRS 15 / CPC 47 IFRS 9 / CPC 48 As of December 31, 2017 Published Restated Published Restated Adjustments Adjustments Adjustments Adjustments

Trade accounts receivables, net 744,181 44,570 (6,462) 782,289 2,372,236 117,954 37,767 2,527,956 Other current assets 15,636,352 - - 15,636,352 20,954,656 - - 20,954,656 Total Current Assets 16,380,533 44,570 (6,462) 16,418,641 23,326,892 117,954 37,767 23,482,612

Deferred income tax and social contribution - - - - 9,371 (1,447) - 7,924 Investments 6,257,484 6,122 29,120 6,292,727 18,387 - - 18,387 Other non-current assets 11,893,854 - - 11,893,854 16,130,256 - - 16,130,256 Total Non-Current Assets 18,151,338 6,122 29,120 18,186,581 16,158,014 (1,447) - 16,156,567

TOTAL ASSETS 34,531,871 50,692 22,658 34,605,221 39,484,906 116,507 37,767 39,639,179 Advances from customers 1,852,223 61,130 - 1,913,353 2,643,789 150,185 - 2,793,974 Provisions 368,989 (22,172) - 346,817 467,506 (53,433) - 414,073 Other current liabilities 5,451,960 - - 5,451,960 6,093,509 - - 6,093,509 Total Current Liabilities 7,673,172 38,958 - 7,712,130 9,204,804 96,752 - 9,301,556

Deferred income tax and social contribution 820,541 1,908 (2,197) 820,252 831,440 10,067 12,773 854,280 Other non-current liabilities 12,578,861 - - 12,578,861 15,614,096 - - 15,614,096 Total Non-Current Liabilities 13,399,402 1,908 (2,197) 13,399,113 16,445,536 10,067 12,773 16,468,376

Equity 13,459,297 9,825 24,855 13,493,978 13,834,566 9,688 24,994 13,869,248

TOTAL LIABILITIES 34,531,871 50,692 22,658 34,605,221 39,484,906 116,507 37,767 39,639,179

Statement of income for the period IFRS 9 / CPC IFRS 9 / CPC IFRS 15 / CPC 47 IFRS 15 / CPC 47 As of June 30, 2017 Published 48 Restated Published 48 Restated Adjustments Adjustments Adjustments Adjustments Revenue 6,377,460 78 - 6,377,538 8,913,464 55,958 - 8,969,422 Cost of sales and services (5,221,809) 1,869 - (5,219,940) (7,407,632) (887) - (7,408,519) Gross Profit 1,155,651 1,947 - 1,157,598 1,505,832 55,071 - 1,560,903 Oprating income (expense) (698,187) 45,785 (5,203) (657,605) (871,074) 5,448 5,069 (860,557) Operating profit 457,464 47,732 (5,203) 499,993 634,758 60,519 5,069 700,346

Financial result 3,866 - - 3,866 (52,113) - - (52,113) Profit before taxes on income 461,330 47,732 (5,203) 503,859 582,645 60,519 5,069 648,233

Income tax expense (income) (133,739) (2,514) 1,769 (134,484) (215,575) (22,098) (1,705) (239,378) Net income 327,591 45,218 (3,434) 369,375 367,070 38,421 3,363 408,855

Cash Flow Parent Company Consolidated IFRS 15 / IFRS 9 / IFRS 15 / IFRS 9 / As of June 30, 2017 Published CPC 47 CPC 48 Restated Published CPC 47 CPC 48 Restated Adjustments Adjustment Adjustments Adjustment

Net income 327,591 45,218 (3,434) 369,375 367,070 38,421 3,363 408,854

Items not affecting cash 533,681 (37,652) 3,434 499,463 760,520 (3,736) (3,363) 753,421 Changes in assets and liabilities (91,246) (4,468) - (95,714) (1,416,703) (60,242) - (1,476,945)

Cash (used) generated by operating activities 770,026 3,098 - 773,124 (289,113) (25,557) - (314,670)

Cash used in investing activities (337,314) - - (337,314) (1,005,525) - - (1,005,525)

Cash (used in) generated by financing activities (368,749) - - (368,749) 1,205,022 - - 1,205,022

Effects of exchange rate variation on cash and cash equivalents 60,167 (3,098) - 57,069 37,637 25,557 - 63,194 Increase (decrease) incash and cash equivalents 63,963 3,098 - 67,061 (89,616) (25,557) - (115,173)

Cash and cash equivalents at the beginning of the period 2,350,403 - - 2,350,403 4,046,185 - - 4,046,185 Cash and cash equivalents at the end of the period 2,474,533 - - 2,474,533 3,994,206 - - 3,994,206

a) IFRS 9/CPC 48 – Financial Instruments

Beginning in January 01, 2018 the Company adopted IFRS 9/CPC 48 as a basis for recognition, derecognition, classification and measurement of financial instruments. Additionally, the method used to estimate the loss allowance for expected credit losses of financial assets changed. The new method is no longer based on historical losses, but rather on historical and forward looking data.

The net Trade accounts receivable balance changed as a result of the new IFRS 9 impairment estimate which considers expected losses.

The Company uses the simplified IFRS 9 approach to estimate the expected credit losses, which results in expected losses for all receivables and assets by contract.

18 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

The loss allowance for expected credit losses of receivables as of December 31, 2017 increased by R$ 6,462 in the Parent Company and decreased by R$ 37,767 in the Consolidated. Loss risks of other financial assets are periodically monitored and no credit risk was identified as of June 30, 2018.

Additionally the classification category names were changed though no impacts were noted in subsequent measurements.

The table below presents the financial instruments presented as of December 31, 2017 with the new classifications:

PARENT COMPANY Note 2017 Category CPC 38/IAS 39 Categoya CPC 48/IFRS 9 Assets Cash and cash equivalents 4 2,413,501 627,467 Loans and receivables Fair value through other comprehensive income 1,786,034 Loans and receivables Amortised cost Accounts receivable from subsidiaries 1,736,992 Loans and receivables Amortised cost Financial investments 5 7,157,195 766,990 Measured at fair value through profit or loss Fair value through other comprehensive income 2,992,415 Measured at fair value through profit or loss Amortised cost 2,003 Measured at fair value through profit or loss Fair value through profit or loss 3,395,788 Held to maturity Amortised cost Guarantee Deposits 10 1,100,035 Loans and receivables Amortised cost Trade accounts receivable, net 6 744,181 Loans and receivables Amortised cost Customer and commercial financing 9 - Loans and receivables Amortised cost

Derivative financial instruments 7 110,329 Measured at fair value through profit or loss Fair value through profit or loss

Other assets (i) 13 199,405 Measured at fair value through profit or loss Amortized cost 13,461,638

Liabilities Loans and financing 19 11,968,956 10,317,030 Measured at fair value through profit or loss Amortised cost 1,651,926 Liabilities measured at amortised cost and other liabilities Fair value through profit or loss

Trade accounts payable and others liabilities 3,639,595 Liabilities measured at amortised cost and other liabilities Amortised cost

Financial guarantee and of residual value 24 417,242 360,345 Measured at fair value through profit or loss Fair value through profit or loss 56,897 Liabilities measured at amortised cost and other liabilities Amortised cost

Derivative financial instruments 7 28,019 Measured at fair value through profit or loss Fair value through profit or loss 16,053,812

Consolidated Note 2017 Category CPC 38/IAS 39 Categoya CPC 48/IFRS 9 Assets Cash and cash equivalents 4 4,203,719 725,639 Loans and receivables Fair value through other comprehensive income 3,478,080 Loans and receivables Amortised cost Financial investments 5 8,656,676 830,432 Measured at fair value through profit or loss Fair value through other comprehensive income 3,495,359 Measured at fair value through profit or loss Amortised cost 2,003 Measured at fair value through profit or loss Fair value through profit or loss 194,603 Available for sale Fair value through profit or loss 4,134,280 Held to maturity Amortised cost Guarantee Deposits 10 1,302,678 Loans and receivables Amortised cost Collateralized accounts receivable 8 955,234 Loans and receivables Amortised cost Trade accounts receivable, net 6 2,372,385 Loans and receivables Amortised cost Customer and commercial financing 8 54,366 Loans and receivables Amortised cost Derivative financial instruments 7 113,632 Measured at fair value through profit or loss Fair value through profit or loss Other assets (i) 13 276,460 Measured at fair value through profit or loss Amortized cost 17,935,150 Liabilities - Loans and financing 19 13,888,752 4,182,607 Measured at fair value through profit or loss Fair value through profit or loss 9,706,183 Liabilities measured at amortised cost and other liabilities Amortised cost Trade accounts payable and others liabilities 4,969,945 Liabilities measured at amortised cost and other liabilities Amortised cost Financial guarantee and of residual value 24 518,843 360,345 Measured at fair value through profit or loss Fair value through profit or loss 158,498 Liabilities measured at amortised cost and other liabilities Amortised cost Capital Lease 19 38 Measured at fair value through profit or loss Amortised cost Derivative financial instruments 7 29,606 Measured at fair value through profit or loss Fair value through profit or loss 19,407,184

19 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

The Company opted for keeping IAS 39/CPC 38 requirements for hedge accounting until IASB finalizes its analysis over macro hedge.

IFRS 9/CPC 48 effects are presented retrospectively.

b) IFRS 15/CPC 47 – Revenue from contracts with customers

Beginning in January 01, 2018 the Company adopted IFRS 15/CPC 47 as the basis for revenue recognition as well for certain assets, liabilities and costs. Therefore, new information will be disclosed according to the new standard guidances

The main changes brought by the standards for revenue recognition were:

• Combination of certain contracts negotiated with the same customer whose products and/or services are a single performance obligation, but were segregated into two different companies of the Embraer Group; • Changes of performance obrigation quantities and re-allocation of the transation price among them; and • Change in the transaction price due to the existence of variable consideration in certain contracts.

The IFRS 15/CPC 47 Adoption Project identified the need to combine contracts whose scopes were divided among more than one company of the Embraer Group. Therefore, a combined contract margin had to be calculated and a new combined revenue was adjusted to reflect it.

There was changes in the performance obligation quantities of certain contracts. It led to the redistribution of the transaction price among the performance obligations. The redistribution followed the standard guidance related to the stand-alone estimation and discount allocation. The stand-alone estimation used observable data or, when it was not available, used historical data or projections approved by Management.

IFRS 15/CPC 47 defined that variable consideration affects the transaction price. Before the adoption of such standard certain variable considerations were expensed as Other operating expense. The methods used to identify variable considerations and the restraints over them did not change.

The Company adopted this standard retrospectively with the use of certain practical expedients. Therefore, all affected line items were retrospectively recalculated (revenues, costs of products and services, assets, liabilities and operating expenses).

The Company opted for using the practical expedients of paragraphs C5 (a) (ii) and C5 (d), which are transcribed below:

“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 complete completed contracts at the beginning of the earliest period presented.

(d) for all reporting 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 and an explanation of when the entity expects to recognise that amount as revenue.”

The Company does not expect the use of these practical expedients has material effects.

c) IFRIC 22/ICPC 21 – Foreign currency transactions

This accounting interpretation became effective beginning as of January 01, 2018 and provides clarification about the transaction date to be used to convert advances made or received in foreign currency. According to this, the transaction date of advances paid or received is the date in which the entity first recognizes the advance paid to a supplier or received from a customer.

20 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

The Company has chosen to make the transition prospectively (i.e. the balances of all advances, including the principal plus the accumulated exchange rate variation, as of December 31, 2017, will be deemed to be the beginning balances of such advances and this date will be deemed to be the transaction date).

The impacts of such interpretation in the first quarter of 2018 are immaterial.

2.2.2 Significant Accounting Practices

IFRS 16 – Leases: The Company will adopt this standard beginning on January 01, 2019. It is still assessing the standard and its impacts in the existing transactions. However it is not possible to measure the impact of this standard in the financial statements.

The concepts and practices related to the functional currency used, because of their impacts on the interim financial statements, are described below.

2.2.3 Functional and presentation currency

We present below the concepts and practices related to the functional currency used as a function of its impact on the financial statements.

a) Parent Company Functional 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 its 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 products and services; this is the currency in which the sales price of its products 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; • Currency in which the Company largely obtains funds for financial operations and in which it normally receives for its sales and accumulates cash.

b) Presentation Currency of the Interim Financial Statements

The presentation currency is the currency in which the financial statements are presented and normally is defined by the legal obligations of the Company. Following Brazilian legislation, this interin financial statements is presented in Brazilian Reais, converting the financial statements prepared in the functional currency of the Company to Reais, using the following criteria:

• Assets and liabilities by the exchange rate of the end of the period; • Result accounts (Profit or Loss), other comprehensive income (loss), statements of cash flow and value added by the average monthly rate; and • Equity by the historical cost of formation.

The resulting adjustment arising from the conversion above is recognized in a specific account denominated "currency translation adjustments", in equity. c) Translation of subsidiaries' financial statements

For the subsidiaries with a functional currency different from the US Dollar (the Company's functional currency), the assets and liabilities accounts are converted to the Company's functional currency, by using the exchange rate at the end of the reporting period. The profit or loss accounts are converted by the average monthly exchange rate. The resulting conversion adjustments are recognized in the specific account denominated "currency translation adjustments".

Below are presented the consolidated statements of financial position, statements of income and statements of 21 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated cash flows in the Company's functional currency (US Dollars) and converted to the presentation currency (Brazilian Reais).

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

06.30.2018 12.31.2017 (Restated) ASSETS US$ R$ US$ R$ CURRENT ASSETS Cash and cash equivalents 1,132,599 4,367,076 1,270,773 4,203,719 Financial assets 1,956,506 7,543,898 2,365,570 7,825,304 Trade accounts receivable 918,929 3,543,206 764,195 2,527,957 Derivative financial instruments 10,913 42,079 29,520 97,652 Customer and commercial financing 1,908 7,358 2,125 7,029 Collateralized accounts receivable 204,912 790,101 185,641 614,101 Inventories 2,534,996 9,774,439 2,148,734 7,108,011 Income tax and social contribution 104,408 402,576 76,928 254,479 Other assets 226,627 873,823 255,248 844,361 7,091,798 27,344,556 7,098,734 23,482,613

NON-CURRENT ASSETS Financial assets 251,966 971,530 251,322 831,372 Trade accounts receivable - - 45 149 Derivative financial instruments 5,394 20,797 4,831 15,980 Customer and commercial financing 13,410 51,706 14,310 47,337 Collateralized accounts receivable 73,029 281,586 103,124 341,133 Guarantee deposits 386,899 1,491,806 393,796 1,302,678 Deferred income tax and social contribution 4,698 18,115 2,395 7,924 Other assets 119,888 462,261 121,385 401,543 855,284 3,297,801 891,208 2,948,116 Investments 6,367 24,552 5,558 18,387 Property, plant and equipment 2,004,146 7,727,586 2,104,875 6,962,927 Intangible assets 1,853,588 7,147,064 1,882,448 6,227,137 4,719,385 18,197,003 4,884,089 16,156,567

TOTAL ASSETS 11,811,183 45,541,559 11,982,823 39,639,180

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

06.30.2018 12.31.2017 (Restated) LIABILITIES US$ R$ US$ R$ CURRENT Trade accounts payable 941,151 3,628,888 824,676 2,728,027 Loans and financing 360,953 1,391,763 388,933 1,286,591 Non-recourse and recourse debt 26,044 100,422 17,561 58,092 Other payables 252,050 971,854 292,196 966,583 Advances from customers 992,433 3,826,622 844,611 2,793,974 Derivative financial instruments 22,738 87,672 8,837 29,233 Taxes and payroll charges payable 37,745 145,536 70,704 233,889 Income tax and social contribution 22,904 88,311 16,091 53,227 Financial guarantee 38,984 150,316 22,237 73,559 Dividends 7,054 27,200 36,775 121,651 Unearned income 148,100 571,043 164,044 542,657 Provisions 131,921 508,667 125,171 414,073 2,982,077 11,498,294 2,811,836 9,301,556

NON-CURRENT LIABILITIES Loans and financing 3,701,325 14,271,571 3,809,613 12,602,199 Non-recourse and recourse debt 341,846 1,318,091 346,457 1,146,081 Other payables 24,412 94,129 21,512 71,162 Advances from customers 90,796 350,092 104,053 344,207 Derivative financial instruments 132 509 113 373 Taxes and payroll charges payable 60,885 234,759 70,155 232,072 Deferred income tax and social contribution 298,266 1,150,054 258,247 854,280 Financial guarantee 103,941 400,776 134,608 445,284 Unearned income 93,189 359,317 97,463 322,406 Provisions 124,241 479,046 136,128 450,312 4,839,033 18,658,344 4,978,349 16,468,376 TOTAL LIABILITIES 7,821,110 30,156,638 7,790,185 25,769,932

STOCKHOLDERS' EQUITY Capital 1,551,567 5,159,617 1,438,007 4,789,617 Treasury shares (45,592) (120,283) (51,781) (134,801) Revenue reserves 2,651,236 4,703,059 2,765,137 5,072,609 Share-based remuneration 37,392 78,940 37,330 78,742 Cumulative translation adjustments (146,739) 5,748,359 (109,498) 3,687,812 Retained losses (150,204) (541,097) - - 3,897,660 15,028,595 4,079,195 13,493,979 Noncontrolling interest 92,413 356,326 113,443 375,269 TOTAL SHAREHOLDERS' EQUITY 3,990,073 15,384,921 4,192,638 13,869,248

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 11,811,183 45,541,559 11,982,823 39,639,180

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

CONSOLIDATED STATEMENTS OF INCOME

06.30.2018 06.30.2017 (Restated) US$ R$ US$ R$ REVENUE 2,248,498 7,760,429 2,813,690 8,969,422 Cost of sales and services (1,926,361) (6,682,505) (2,324,494) (7,408,519) GROSS PROFIT 322,137 1,077,924 489,196 1,560,903

OPERATING INCOME (EXPENSE) Administrative (85,652) (293,425) (82,312) (262,182) Selling (142,335) (486,049) (152,530) (485,151) Research (19,905) (66,900) (17,489) (55,680) Other operating income, net (65,218) (225,344) (18,542) (57,086) Equity in income (losses) of associates (282) (918) (145) (458) OPERATING PROFIT BEFORE FINANCIAL INCOME (EXPENSE) 8,745 5,288 218,178 700,346

Financial income (expense), net (86,777) (298,273) (16,194) (50,998) Foreign exchange gain (loss), net (8,932) (32,807) (236) (1,116) PROFIT (LOSS) BEFORE TAXES ON INCOME (86,964) (325,792) 201,748 648,232

Income tax (expense) income (47,890) (167,902) (74,645) (239,379) NET INCOME (134,854) (493,694) 127,103 408,853

Atributable to : Owners of Embraer (138,767) (507,075) 114,793 369,374 Noncontrolling interest 3,913 13,381 12,310 39,479

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

CONSOLIDATED STATEMENTS OF CASH FLOWS

06.30.2018 06.30.2017 (Restated) US$ R$ US$ R$ OPERATING ACTIVITIES Net income (losses) (134,854) (493,694) 127,103 408,853 ADJUSTMENT TO NET INCOME FOR ITEMS NOT AFFECTING CASH Depreciation 83,283 284,771 103,215 328,208 Amortization of Government grants (1,605) (5,496) (1,520) (4,830) Amortization 52,107 179,772 62,502 199,659 Amortization of contribution from suppliers (10,506) (36,572) (12,521) (40,014) Provision (reversal) for inventory obsolescence 11,079 39,947 5,451 17,239 Provision for adjustment to market value, inventories, property plant and equipament and intagible 14,897 50,257 14,970 47,883 Provision (reversal) allowance for doubtful accounts (4,357) (17,034) 4,177 15,048 Losses on fixed assets disposal 7,059 23,856 7,256 23,627 Deferred income tax and social contribution 36,340 128,762 52,125 166,905 Accrued interest 1,710 (1,793) 17,835 54,222 Interest over marketable securities (16,170) (55,641) (6,844) (21,782) Equity in the losses of associates 282 918 145 458 Share-based remuneration 61 198 332 1,051 Foreign exchange gain (loss), net 21,585 77,162 4,985 16,195 Residual value guarantee (855) (4,376) (10,320) (32,653) Provision for voluntary redundancy scheme - - 6,366 19,707 Other (3,793) (12,924) (11,683) (37,501)

CHANGES IN ASSETS: Financial investments 737,551 2,439,047 (407,371) (1,265,474) Derivative financial instruments 31,964 118,219 (638) (1,571) Collateralized accounts receivable and accounts receivable (175,064) (582,794) (123,938) (393,155) Customer and commercial financing 1,117 3,825 4,227 14,045 Inventories (330,323) (1,058,854) 20,546 80,575 Other assets (37,745) (119,027) 178,588 565,750

CHANGES IN LIABILITIES: Trade accounts payable 121,893 416,666 (28,151) (95,536) Non-recourse and recourse debt 3,871 13,407 4,939 15,782 Other payables (68,904) (249,391) (19,963) (61,352) Contribution from suppliers 125,500 419,045 85,969 268,905 Advances from customers 127,323 477,284 3,280 11,602 Taxes and payroll charges payable (22,481) (68,233) 8,766 28,411 Financial guarantees (13,065) (44,807) (31,096) (99,385) Other provisions 21,110 70,750 (20,901) (66,139) Unearned income (18,612) (63,133) (148,607) (479,403) NET CASH GENERATED (USED) IN OPERATING ACTIVITIES 560,398 1,930,117 (110,776) (314,670)

INVESTING ACTIVITIES Acquisition of property, plant and equipment (70,973) (242,359) (114,268) (364,758) Proceeds from sale of property, plant and equipment 202 773 19,182 60,149 Additions to intangible assets (135,075) (457,736) (234,233) (744,390) Additions to investments in subsidiaries and affiliates (2,215) (7,388) (374) (1,214) Held to maturity (334,290) (1,246,836) 7,959 39,286 Dividends received 22 83 93 292 Restricted cash reserved for construction of assets (55) (302) 1,681 5,110 NET CASH USED IN INVESTING ACTIVITIES (542,384) (1,953,765) (319,960) (1,005,525)

FINANCING ACTIVITIES Proceeds from borrowings 92,269 314,950 765,422 2,377,574 Repayment of borrowings (156,934) (541,373) (332,313) (1,061,828) Dividends and interest on own capital (37,333) (127,251) (34,228) (109,363) Proceeds from stock options exercised 3,093 10,294 4,753 15,106 Acquisition of own shares - - (4,972) (16,467) NET CASH GENERATED (USED) IN FINANCING ACTIVITIES (98,905) (343,380) 398,662 1,205,022

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (80,891) (367,028) (32,074) (115,173) Effects of exchange rate changes on cash and cash equivalents (57,283) 530,385 (2,065) 63,194 Cash and cash equivalents at the beginning of the year 1,270,773 4,203,719 1,241,504 4,046,185 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 1,132,599 4,367,076 1,207,365 3,994,206

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

3. CRITICAL ACCOUNTING ESTIMATES

Preparation of the financial statements in conformity with CPCs and IFRS 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 the accompanying 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.

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. Sales revenues

In the Defense & Security segment, a significant portion of revenue is derived from long-term development and construction contracts with the Brazilian and foreign governments, revenue from which is recognized by the POC method, using incurred costs or physical progress as a reference for revenue measurement. In the case of contracts measured at incurred cost, the Company determines a margin at the inception of the contract, which is applied to cost for revenue recognition purposes. During the course of the contract, the Company assesses the costs incurred, adjusting the margin if necessary to reflect variations in cost in relation to the projection and adjusting revenue recognition based upon projected costs to completion. If the total costs of work in progress were 10% lower than Management's estimates, the revenue recognized on June 30, 2018 would have increased by R$ 3,155,494; if they were 10% higher, revenue would have decreased by R$ 1,191,593.

There were no changes in the judgments made by the Company about the timing of revenue recognition upon adoption of IFRS 15/CPC 47.

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 27.4.5 for a sensitivity analysis of residual value guarantees.

3.3. Impairment

The impairment test considers the Company's medium and long-term strategic plan, brought to present value at the WACC rate compatible with the market and that reflects the stockholders' expectations of return. In preparing or using this information, the Company adopts 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 - a WACC 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 fixed assets available for leasing to third parties is measured at the sale value, or value-in-use. That is to say, assessment of the recoverable value 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.

The conclusion of the sensitivity analysis was that there would be no additional losses should the discount interest rate be 10% lower or higher than the rate used

26 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

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 28.4 for sensitivity analysis of financial instruments.

3.5. Taxes on income

The Company is 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. The Company also recognizes 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, 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 June 30, 2018, the deferred income tax expense would have been higher or lower by approximately R$ 565,353.

3.6. Post-retirement benefits

The Company and certain of its subsidiaries have a post-employment medical benefit plan that provides medical care to retired employees. To identify the future exposure of this benefit and therefore its measurement in the financial statements, the Company and its subsidiaries use assumptions that are usually based on statistical data, often observed internally or supplied by institutes or entities dedicated to this type of activity.

4. 4Cash and cash equivalents

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Cash and banks 168,132 12,908 1,178,856 1,268,256 168,132 12,908 1,178,856 1,268,256

Cash equivalents Private securities (i) 1,067,886 627,467 1,308,664 725,639 Fixed deposits (ii) 1,135,085 1,773,126 1,879,556 2,209,824 2,202,971 2,400,593 3,188,220 2,935,463 2,371,103 2,413,501 4,367,076 4,203,719

(i) Investment in Bank Deposit Certificates - CDBs and Investments deposits by Brazilian financial institutions, with a grace period for redemption less than 90 days without impacting the remuneration.

(ii) Fixed term deposits in US Dollars with original maturities of 90 days or less.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

5. Financial investments

5.1 Parent company

06.30.2018 12.31.2017 (Restated) Fair value through Fair value through Fair value through Fair value through Amortised cost other comprehensive Total Amortised cost other comprehensive Total profit or loss profit or loss income income Financial instruments Private securities (i) 513,558 25,906 - 539,464 572,181 766,990 306,388 1,645,558 Structure Note (ii) 5,294,234 - - 5,294,234 3,395,029 - - 3,395,029 Fixed-Term Deposit (iii) 1,357,577 - - 1,357,577 2,115,849 - - 2,115,849 Other - - 759 759 - - 759 759 7,165,369 25,906 759 7,192,034 6,083,059 766,990 307,147 7,157,195

Current portion 6,509,159 25,906 759 6,535,824 5,517,492 766,990 307,147 6,591,628 Non-current portion 656,210 - - 656,210 565,567 - - 565,567

5.2 Consolidated

06.30.2018 12.31.2017 (Restated) Fair value through Fair value Fair value through Fair value through Amortised cost other comprehensive through profit or Total Amortised cost other comprehensive Total profit or loss income loss income

Financial instruments Private securities (i) 513,558 25,906 - 539,464 572,166 830,432 306,388 1,708,985 Structure Note (ii) 6,165,253 - - 6,165,253 4,133,521 - - 4,133,521 Investment funds - - 4,899 4,899 - - - - Fixed-Term Deposit (iii) 1,578,896 - - 1,578,896 2,618,774 - - 2,618,774 Other - - 226,916 226,916 34 - 195,362 195,396 8,257,707 25,906 231,815 8,515,428 7,324,495 830,432 501,749 8,656,676

Current portion 7,286,177 25,906 231,815 7,543,898 6,688,485 830,431.76 306,387.24 7,825,304 Non-current portion 971,530 - - 971,530 636,010 - 195,362 831,372

(i) Private securities, being classified as Amortized Cost the investments deposits, as Fair Value through Other Comprehensive Income, investments in CDB's and Committed Transactions, and also classified as Fair Value through profit and loss of investments in Committed Transactions issued by Brazilian financial institutions, with original maturities greater than 90 days.

(ii) Structured Notes issued by financial institutions of which R$ 4,633,938 that is subject to the credit risk of Brazilian government securities issued in Brazil.

(iii) In the "Fair value through other comprehensive income" category, it refers to shares of the newly created Republic Airways Holdings, a company emerged from the old Republic Airways Holding’s Chapter 11. These shares were received by the Company as part of the Republic Airways Holdings emerging plan.

The weighted average interest rates at June 30, 2018 for cash equivalents and financial investments in reais and in dollars were 6.68% p.a. and 2.22% p.a. (10.18% p.a. and 1.72% p.a. at December 31, 2017), respectively.

6. Trade accounts receivable, net

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) Foreign customers 600,451 336,297 1,853,534 1,512,226 Brazilian Air Force 660,012 391,751 1,783,398 1,148,863 Domestic customers 74,765 78,210 96,760 45,961 1,335,228 806,258 3,733,692 2,707,050 Provision for doubtful accounts (21,746) (23,969) (190,486) (178,944) 1,313,482 782,289 3,543,206 2,528,106

At June 30, 2018, the accounts receivable of R$ 1,224,549 in the Parent Company and R$ 3,127,173 in the Consolidated (December 31, 2017 - R$ 698,432 in the Parent Company and R$ 2,210,163 in the Consolidated) were current and not past due. The analysis of past due accounts receivable is presented below:

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Up to 90 days 38,700 29,871 207,700 160,657 From 91 to 180 days 12,890 10,408 37,687 51,874 More than 180 days 37,343 43,578 170,646 105,412 88,933 83,857 416,033 317,943

The Company's sales are denominated in various currencies and trade accounts receivable from customers are as follows:

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) U.S. dollars 644,550 355,680 2,441,172 1,666,495 Euros 17,980 14,794 423,718 384,368 Reais 650,952 411,815 676,555 457,267 Other currencies - - 1,761 19,976 1,313,482 782,289 3,543,206 2,528,106

The consolidated balances at June 30, 2018 for accounts receivable and revenue recognized in accordance with the POC method totaled R$ 2,366,761 (December 31, 2017 - R$ 1,721,710) and R$ 1,063,872 (June 30, 2017 - R$ 1,486,524), and the costs related to these contracts totaled R$ 1,277,656 (June 30, 2017 - R$ 1,294,071) in the period.

7. Derivative financial instruments

Derivative financial instruments are contracted to protect the Company’s operations from exchange and interest rate fluctuations and are not used for speculation.

As of June 30, 2018, the Company had derivative financial instruments such as swaps and option to purchase interest rate, currency put and call options and Non-Deliverable Forwards (NDF).

The Company enters into swap contracts to exchange a floating rate loan to a fixed rate loan or to exchange cash flows in U.S. dollars for cash flows in reais, or vice versa, and to exchange Euros for U.S. dollars or vice versa according to the need to protect the transactions in accordance with the valuation of the Company. These derivative financial instruments are also contracted for the purpose of exchanging the investment index at pre- fixed interest rates for floating interest rates. The fair value of these instruments is measured using a discounted cash flow model, determined by applying the contractual rates up to maturity and discounted to present value on the date of the consolidated financial statements at the current market rates.

Cash flow hedges are contracted to protect highly probable cash flows denominated in reais related to salaries expenses against exchange rate variations. The financial instrument normally used by the Company for this type of transaction is the zero-cost collar, which consists of buying put options and selling call options contracted with the same counterparty and with zero net premium. The fair value of these instruments is determined in accordance with the observable market pricing model (through market information providers) and widely used by market players to measure similar instruments. When the U.S. dollar closing rate is between the put and call exercise values, the fair value reflects the extrinsic value of the option, i.e., the value that is directly connected to the time remaining to maturity. The projected cash flows will affect the income statement according to the accrual period.

Non- Deliverable Forwards are contracted to protect the Company against the risk of fluctuations in exchange rates. The fair value is determined in accordance with the observable market pricing model.

As of June 30, 2018, the Company did not have any derivative contracts subject to margin calls.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Parent company Consolidated Settlement Purpose Risk Counterparty 06.30.2018 12.31.2017 06.30.2018 12.31.2017 date

Brazilian Real expenses (i) Exchange rate Citibank 2019 (22,728) 2,730 (22,728) 2,730 BofaMLynch 2018 (2,355) 1,106 (2,355) 1,106 Santander 2019 (16,077) 4,559 (16,077) 4,559 BNP Paribas 2019 (22,641) 4,172 (22,641) 4,172 Bradesco 2019 (13,132) - (13,132) - Itau BBA 2019 (6,084) - (6,084) -

Export financing (ii) Interest rate Bradesco 2018 6,180 12,037 6,180 12,160 BofaMLynch 2018 6,937 14,781 6,937 14,781 Santander 2019 10,079 16,697 10,079 16,697

Project developmento (ii) Interest rate Itau BBA 2023 766 1,154 766 1,154 Votorantim 2022 1,114 1,775 1,114 1,775 BofaMLynch 2023 1,214 2,287 1,214 2,287 Santander 2023 6,294 9,034 6,294 9,034 HSBC 2022 928 1,401 928 1,401 Société Générale 2022 499 775 499 775 Safra 2022 507 732 507 732 Morgan Stanley S/A 2023 7,221 9,883 7,221 9,883 Bradesco 2022 1,632 2,253 1,632 2,253

Investments (iii) Interest rate Bradesco - - (3,774) - (3,774) Santander - - (430) - (430) BofaMLynch - - (119) - (119) BNP Paribas - - (342) - (342)

Export (iv) Exchange rate and Interest rate Santander - - - - (215) Export (v) Itau BBA 2027 14,683 1,599 14,683 1,599 Derivative Designated as Hedge Accounting (24,963) 82,310 (24,963) 82,218 - Recourse and non-recourse debt (vi) Interest rate Natixis 2022 - - 1,981 3,122

Acquisition of property, plant and equipment (vii) Interest rate Compass Bank 2024 - - (474) (642)

Export (viii) Exchange rate Santander Totta 2018 - - (1,849) - Natixis - - - - (853) BNP Paribas - - - - 181 Others Derivatives - - (342) 1,808 (24,963) 82,310 (25,305) 84,026

(i) Zero-cost collar derivative financial instruments, classified as hedge accouting of US$ 172,717 thousand, equivalent to R$ 572,917, with purchase of PUT at the weighted average exercise price of R$ 3.32 and sale of CALL at the weighted average exercise price of R$ 3.75 for the year 2018. Derivative financial instruments in the zero-cost collar, designated as hedge accouting of US$ 250,000 thousand, equivalent to R$ 847,500, with the purchase of PUT at the weighted average exercise price of R$ 3.39 and sale of CALL at the weighted average exercise price of R$ 4.04 for the year 2019.

(ii) Derivative financial instruments (interest swaps) , classified as hedge accouting,of R$ 1,768,778, equivalent to US$ 458,732 thousand, of the Export Financing and Project Development lines subject to a weighted average fixed interest rate of 6,39% p.a. for a floating weighted average rate equivalent to 44.90% of the CDI.

(iii) Derivative financial instruments (interest swaps), classified as hedge accounting, converting pre-fixed interest rate to a floating average rate equivalent to CDI percentage, fully closed in the second quarter of 2018.

(iv) Derivative financial instruments (interest swaps), classified as hedge accounting, of US$ 2,882 thousand, equivalent to R$ 9,435 related to the dollar currency exchange plus 4.65% p.a. to Real and floating rate equivalent to 129.50% of CDI, closed in the second quarter of 2018.

(v) Derivative financial instruments (interest swaps) , classified as hedge accounting, which converted of R$ 313,230, equivalent to US$ 100,000 thousand, from a debt instrument with LIBOR 6 month interest rate to fixed interest of 2,37% p.a.

(vi) Derivative financial instruments (interest swaps), which converted of US$ 10,299 thousand, equivalent to R$ 39,712 of the obligations with and without right of return, from a fixed weighted average interest rate of 8.4 % aa for a floating interest rate equivalent to LIBOR 6 months + 1.14% p.a.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

(vii) Derivative financial instruments (interest swaps), related to an operation of US$ 3,466 thousand equivalent to R$ 13,364, which converted financing operations subject to a floating interest rate of LIBOR 1 month + 2.44% p.a. for fixed interest of 5.23% p.a.

(viii) Derivative financial instruments (Non-Deliverable Forwards), amounting to US$ 10,000 equivalent to R$ 38,558, relating to U.S. dollar to Euro currency exchanges.

At June 30, 2018 the fair value of derivative financial instruments was presented in the Statement of Financial Position as follows: Parent company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Assets Current portion 40,546 95,390 42,079 97,652 Non-current portion 20,350 14,939 20,797 15,980

Liabilities Current portion (85,350) (27,646) (87,672) (29,233) Non-current portion (509) (373) (509) (373)

Net derivative financial instruments (24,963) 82,310 (25,305) 84,026

8. Customer and commercial financing

Customer and commercial financing refers to the partial financing of certain aircraft sales by the Company, mainly dollar-denominated, at average interest rates at June 30, 2018, 3.24% p.a. in the Consolidated (December 31, 2017 – 3.24% p.a in the Consolidated), secured on the aircraft covered by the financing and at present value when applicable. The maturities are monthly, quarterly and half-yearly, classified as follows:

Consolidated 06.30.2018 12.31.2017 Current portion 7,358 7,029 Non-current portion 51,706 47,337 59,064 54,366

At June 30, 2018, the amount of R$ 12,259 was accrued for losses in accordance with the Company's policy (December 31, 2017 - R$ 10,367).

At June 30, 2018, the long-term customer financing maturities were as follows:

Consolidated 3,470 6,940 6,940 6,940 27,416 51,706

9. Collateralized accounts receivable and recourse and non-recourse debt

Refers to structured transactions in which the value to be received comprises financial inflows receivable over time and aircraft residual values in specified return conditions to be received at the end of the contract. Residual value of aircrafts is monitored with the objective of recognizing its fair value in the accounting. These structured transactions were financed by a third party, with the amount being recognized as recourse and non-recourse debt.

31 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

The cash flow of certain structured transactions was sold to third parties, to whom financial guarantees were given. In these cases the cash inflow remains recognized in the collateralized accounts receivable and recourse and non-recourse debt in the corresponding liabilities.

9.1 Collateralized accounts receivable Consolidated 06.30.2018 12.31.2017 Estimated residual value of leased assets 831,351 713,241 Minimum lease payments receivable 495,762 422,256 Guaranteed operation (cash inflow) 153,970 141,352 Impairment (i) (409,396) (321,615) Net amount 1,071,687 955,234

Current portion 790,101 614,101 Non-current portion 281,586 341,133

(i) The amount recognized relates to the devaluation of assets linked to structured financing.

At June 30, 2018, the maturities of the amounts classified as non-current assets are as follows:

Consolidated 2019 51,183 2020 163,905 2021 29,085 2022 15,262 After 2022 22,151 281,586

9.2 Recourse and non-recourse debt

Consolidated 06.30.2018 12.31.2017 W ith right of recourse 1,356,925 1,147,632 Without right of recourse 61,588 56,541 1,418,513 1,204,173

Current portion 100,422 58,092 Non-current portion 1,318,091 1,146,081

At June 30, 2018, the maturities of the amounts classified as non-current liabilities were as follows:

Consolidated 2019 1,250,279 2020 14,747 2021 15,653 2022 15,262 After 2022 22,150 1,318,091

10. Guarantee deposits Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Sales financing guarantees (i) 1,264,543 1,063,031 1,264,543 1,063,031 Sales structure guarantees (ii) - - 188,334 201,122 Others 36,974 37,004 38,929 38,525 1,301,517 1,100,035 1,491,806 1,302,678

(i) Financial investments denominated in US dollars, tied to sale financing structures until the completion of

32 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

such structures and settlement of a obligation with and without right of return in the same amount. (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.

In 2004, seeking to ensure profitability compatible with the term of the guarantee, the Company invested principal of US$ 123,400 thousand in 14-year structured notes. 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 include: (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.

At June 30, 2018, the guarantor to whom the guarantees are linked was in compliance.

11. Inventories Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Work-in-process 2,571,555 1,690,129 3,304,102 2,025,758 Raw materials 2,183,466 1,885,016 3,255,568 2,863,326 Spare parts 471,820 418,435 1,544,799 1,340,514 Finished goods (i) 409,858 145,606 895,589 297,380 Held by third parties 360,583 199,141 455,140 272,125 Aircraft available for sales (ii) - - 375,298 337,430 Inventory in transit 403,166 355,815 329,496 281,768 Consumption materials 153,163 133,885 182,309 157,444 Advances to suppliers 23,141 23,919 123,698 95,554 Provision for adjustment to market value - - (60,843) (56,969) Provision for obsolescence (iii) (381,424) (303,770) (630,717) (506,319) 6,195,328 4,548,176 9,774,439 7,108,011

(i) The following aircraft were held in the finished products inventory:

• At June 30, 2018: one Embraer 175, three Embraer 195, threeLegacy 450, five Legacy 500, one Phenom 100, four Phenom 300, one Lineage, and four Ipanemas; and

• At December 31, 2017: one Legacy 450, one Phenom 100, one Phenom 300, one Super Tucano, two Legacy 500, one Lineage, and two Ipanema

Of the total aircraft inventories at June 30, 2018, one EMBRAER 175 had been delivered by July 26, 2018.

(ii) The following used aircraft were held in inventory as available for sale:

• At June 30, 2018: one ERJ 140, one Legacy 500, two Lineage, one Phenom 300, and 33 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

• At December 31, 2017: three EMBRAER 140, two Lineage and one Boeing BBJ 737

(iii) An expected loss by obsolescence was recorded for items without activity for over two years and with no planned use in the production program, as well as to cover expected losses from excess inventories or obsolete work in process, except for inventories of spare parts, for which the provision is based on technical obsolescence of items without activity for over two years.

12. Other assets Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Taxes recoverable (i) 427,285 417,922 555,115 565,795 Court-mandated escrow deposits (ii) 195,546 199,405 204,804 206,803 Loan with a Joint Operation (iii) - - 78,769 65,331 Prepaid expenses 49,656 52,688 74,379 73,979 Advances to employees 63,951 38,502 71,020 41,279 Advances for services rendered - - 45,725 38,184 Credit with suppliers (iv) 6,887 5,607 7,068 6,009 Compulsory loan - - 4,902 4,326 Collateral pledge 1,049 1,049 2,852 2,640 Other 257,943 185,611 291,450 241,558 1,002,317 900,784 1,336,084 1,245,904

Current portion 679,116 573,976 873,823 844,361 Non-current portion 323,201 326,808 462,261 401,543

(i) Taxes recoverable

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 ICMS (State value-added tax) and IPI (Excise Tax) 243,809 224,044 326,624 318,671 PIS (Social Integration Program) and COFINS (Contribution for Social Security) 130,403 140,843 153,219 169,129 Income tax and social contribution 29,355 29,012 29,355 29,012 Income tax recoverable - - 755 443 Others 23,718 24,023 45,162 48,540 427,285 417,922 555,115 565,795

Current portion 313,948 303,562 390,939 398,570 Non-current portion 113,337 114,360 164,176 167,225

(ii) Court-mandated escrow deposits relate to amounts deposited in connection with pending legal actions, substantially federal taxes and contributions where a liability has been established, as described in Note 22.

(iii) Refers to the joint operation of the Embraer Group, in which only assets and liabilities under the Company's responsibility are consolidated. Thus, the amount presented refers to the balance of the intercompany loan receivable from the other partner of EZ Air Interior Limited.

(iv) Refers to rework carried out on products supplied by third parties, to be reimbursed in accordance with contractual agreements and credits negotiated with certain suppliers that will be consumed over time.

34 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

13. Interest in entities

13.1 Investment amounts

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Reapresentado) (Reapresentado) In subsidiaries ELEB Equipamentos Ltda – ELEB 490,936 420,004 - - Embraer Aircraft Holding Inc. – EAH 2,231,196 1,849,472 - - Embraer Australia PTY Ltd. – EAL - 1,362 - - Embraer Aviation Europe SAS – EAE 912,987 810,154 - - Embraer Defesa e Segurança Part. S.A. – DSP 259,095 111,995 - - Embraer GPX Ltda – GPX 55,138 56,825 - - Embraer Netherlands B.V. – ENL 1,933,548 1,617,505 - - Embraer Netherlands Finance B.V. – ENF 39,583 27,551 - - Embraer Overseas Limited – EOS 52,773 46,829 - - Embraer Spain Holding Co. S.L. – ESH 1,549,069 1,323,409 - - Fundo de Investimento Embraer Venture 4,859 - - - Indústria Aeronáutica Neiva Ltda – NEIVA - 9,249 - - Outros 24,535 18,372 24,552 18,387 7,553,719 6,292,727 24,552 18,387

13.2 Change in investments in parent company

Balance at Equity in Cummulative Disposal/Transfer 12.31.2017 income translation Loss provision Balance at (Restated) (losses) adjustment Dividends investments Addition 06.30.2018 ELEB Equipamentos Ltda – ELEB 420,004 413 70,519 - - - - 490,936 Embraer Aircraft Holding Inc. – EAH 1,849,472 68,716 313,008 - - - - 2,231,196 Embraer Australia PTY Ltd. – EAL 1,362 - 14 - - (1,376) - - Embraer Aviation Europe SAS – EAE 810,154 (7,764) 110,597 - - - - 912,987 Embraer Defesa e Segurança Part. S.A. – DSP 111,995 151,200 (4,100) - - - - 259,095 Embraer GPX Ltda – GPX 56,825 (1,678) (9) - - - - 55,138 Embraer Netherlands B.V. – ENL 1,617,505 53,074 262,969 - - - - 1,933,548 Embraer Netherlands Finance B.V. – ENF 27,551 6,611 5,421 - - - - 39,583 Embraer Overseas Limited – EOS 46,829 (1,592) 7,536 - - - - 52,773 Embraer Spain Holding Co. S.L. – ESH 1,323,409 5,453 220,207 - - - - 1,549,069 Entidades de propósito específico – EPE´s - (46,809) - - 46,809 - - - Fundo de Investimento Embraer Venture - 164 55 - - - 4,640 4,859 Indústria Aeronáutica Neiva Ltda – NEIVA 9,249 191 411 - - (9,851) - - Other 18,372 (918) (225) (82) - - 7,388 24,535 6,292,727 227,061 986,403 (82) 46,809 (11,227) 12,028 7,553,719

Balance at Balance at Equity in Cummulative Disposal/Transfer 12.31.2016 income translation Loss provision 12.31.2017 (Restated) (losses)adjustment Dividends investments Addition (Restated) ECC do Brasil Participações S.A. – ECB 4,142 (113) (218) - - (3,811) - - ELEB Equipamentos Ltda – ELEB 382,013 35,328 2,663 - - - - 420,004 Embraer Aircraft Holding Inc. – EAH 1,547,021 239,655 29,842 - - - 32,954 1,849,472 Embraer Australia PTY Ltd. – EAL 1,324 (89) 127 - - - - 1,362 Embraer Aviation Europe SAS – EAE 614,813 107,138 88,203 - - - - 810,154 Embraer Credit Ltd. – ECL 18,911 287 (631) - - (18,567) - - Embraer Defesa e Segurança Part. S.A. – DSP 236,866 (128,097) 3,226 - - - - 111,995 Embraer GPX Ltda – GPX 55,818 1,037 (30) - - - - 56,825 Embraer Netherlands Finance B.V. – ENF 18,373 8,730 448 - - - - 27,551 Embraer Netherlands B.V. – ENL 1,420,157 140,625 56,723 - - - - 1,617,505 Embraer Overseas Limited – EOS 47,994 (1,750) 585 - - - - 46,829 Embraer Representation LLC – ERL 208,608 (90) (9,912) - - (198,606) - - Embraer Spain Holding Co. S.L. – ESH 1,276,175 23,917 23,317 - - - - 1,323,409 Entidades de propósito específico – EPE´s - (89,818) - - 89,818 - - - Indústria Aeronáutica Neiva Ltda – NEIVA 2,924 (406) (49) - - (5,839) 12,619 9,249 Other 12,712 3,992 6 (322) - - 1,984 18,372 5,847,851 340,346 194,300 (322) 89,818 (226,823) 47,557 6,292,727

The disposal of investment in Embraer Representation LLC - ERL, of R$ 198,606 in February, 2017 was because of the subsidiary's closure, 99% corresponding to R$ 185,987, was merged into Embraer S.A. and 1% corresponding to R$ 12,619 into Indústria Aeronáutica Neiva Ltda. - Neiva.

35 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

13.3 Information referring to the direct wholly owned subsidiaries

06.30.2018 Net income Holding Total assets Total liabilities Stockholder´s (loss) % equity for the year ELEB Equipamentos Ltda – ELEB 100.00 759,061 258,361 500,700 1,155 Embraer Aircraft Holding Inc. – EAH 100.00 3,360,585 1,106,178 2,254,407 67,934 Embraer Aviation Europe SAS – EAE 100.00 949,364 33,342 916,022 (7,574) Embraer Defesa e Segurança Part. S.A. – DSP 100.00 277,942 18,566 259,376 151,200 Embraer GPX Ltda – GPX 99.99 57,512 2,374 55,138 (1,678) Embraer Netherlands B.V. – ENL 100.00 2,582,373 648,765 1,933,608 53,029 Embraer Netherlands Finance B.V. – ENL 100.00 7,226,565 7,186,982 39,583 6,611 Embraer Overseas Limited – EOS 100.00 2,667,863 2,615,090 52,773 (1,592) Embraer Spain Holding Co. SL – ESH 100.00 1,549,133 64 1,549,069 5,453 Entidades de propósito específico – EPE´s 100.00 1,045,344 1,370,164 (324,820) (46,809) Fundo de Investimento Embraer Venture 100.00 4,899 40 4,859 164 Indústria Aeronáutica Neiva Ltda – NEIVA 99.99 - - - (12) 227,881

12.31.2017 (Restated) Net income Holding Total assets Total liabilities Stockholder´s (loss) % equity for the year ECC do Brasil Participações S.A. – ECB 99.99 - - - (114) ELEB Equipamentos Ltda – ELEB 99.99 655,497 227,832 427,665 37,539 Embraer Aircraft Holding Inc. – EAH 100.00 2,843,223 972,866 1,870,357 239,759 Embraer Australia PTY Ltd. – EAL 100.00 1,362 - 1,362 (89) Embraer Aviation Europe SAS – EAE 100.00 883,218 70,429 812,789 107,570 Embraer Credit Ltd. – ECL 100.00 - - - 287 Embraer Defesa e Segurança Part. S.A. – DSP 100.00 247,586 135,591 111,995 (128,097) Embraer GPX Ltda – GPX 99.99 85,475 28,650 56,825 1,037 Embraer Netherlands B.V. – ENL 100.00 2,437,944 820,344 1,617,600 140,542 Embraer Netherlands Finance B.V. – ENF 100.00 6,191,599 6,164,048 27,551 8,730 Embraer Overseas Limited – EOS 100.00 2,280,095 2,233,266 46,829 (1,750) Embraer Representation LLC – ERL 99.99 - - - (90) Embraer Spain Holding Co. SL – ESH 100.00 1,323,600 191 1,323,409 23,917 Entidades de propósito específico – EPE´s 100.00 920,658 1,154,112 (233,454) (89,818) Indústria Aeronáutica Neiva Ltda – NEIVA 99.99 9,810 490 9,320 (425) 338,998

The equity method of accounting excluded unrealized profit on the sales operations between the subsidiaries and the Parent Company.

13.4 Information referring to the direct wholly owned subsidiaries

(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 the Notes 2.1.2 - Consolidated Financial Statements and 2.1.3 - Company's Corporate Structure and are consolidated into the Embraer group.

There are no contractual or legal restrictions on the Parent 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;

• 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. 36 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

(ii) Subsidiaries with participation of non-controlling stockholders

Non-controlling stockholders have interests in the group entities listed below; however, based on contractual agreements and analysis of the current accounting standards, the Company has control and therefore has the right to consolidate these 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% EZ Air Interior Limited Ireland 50.0% 50.0%

Although the Embraer group holds 51.0% of the entities Harbin Embraer Aircraft Industry Company Ltd., Embraer CAE Training Services Ltd., and Visiona Tecnologia Espacial S.A. and Embraer CAE Training Services, the powers enumerated 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 entities.

The financial position of the group entities, described below hold non-controlling interest, but based on contractual agreements and analysis of current accounting standards, the Company has control and has the right to consolidate these entities:

OGMA - Indústria Aeronáutica de Portugal S.A.

06.30.2018 12.31.2017 Cash and cash equivalents 47,639 36,694 Current assets 725,174 686,807 Non current assets 249,262 218,304 Current liabilities 372,941 388,349 Non current liabilities 552 2,828 Noncontrolling interest 210,330 179,877

06.30.2018 06.30.2017 Revenue 220,761 345,971 Net income for the year 11,125 14,334

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 which share the joint management of the significant activities of the entities.

The net assets and liabilities of the joint operations are recognized in consolidation in accordance with the rights and obligations assigned to Embraer.

06.30.2018 12.31.2017 Cash and cash equivalents 8,525 4,056 Current assets 125,296 95,237 Non current assets 28,259 23,372 Current liabilities 216,665 159,379 Non current liabilities 17,182 14,578

06.30.2018 06.30.2017 Revenue 78,729 71,787 Net loss for the year (14,259) (3,207) 37 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

14. Related parties

14.1 Related party transactions

Transactions between the Parent Company and its direct or indirect subsidiaries are described in Note 2.1.2 and refer basically 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) intercompany loans to subsidiaries abroad with interest rates compatible with those received 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 account of sales 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) intercompany loan contracts with the subsidiaries abroad with interest rates equivalent to those paid by the Company to acquire similar funding (vii) export financing; and

• amounts in profit or loss: (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 intercompany loans; (iii) supplementary pension plan.

14.1.1 Parent company - June 30, 2018

Current Non Current Financial Profit (loss) Assets Liabilities Assets Liabilities Result Aero Seating Technologies, LLC - 40,794 - - - (3,242) ATECH Negócios em Tecnologias S.A. 72 1,473 - - - 600 S.A. 47,457 71,471 1,269,217 - 19,929 - Banco Nacional de Desenvolvimento Econômico e Social – BNDES - 261,971 - 594,174 (16,248) - Bradar Indústria S.A. 338 (3,918) 2 - 3,471 228 Caixa Econômica Federal 6,944 - - - 341 - Comando da Aeronáutica 660,012 449,315 - - - (96,673) ELEB - Equipamentos Ltda 9,609 32,217 107,031 - 3,803 4,114 Embraer Aircraft Customer Services, Inc. – EACS 697,036 441,444 - - - 186,934 Embraer Aircraft Holding Inc. – EAH - 141 - - - - Embraer Aircraft Maintenance Services Inc. – EAMS 109 954 - - - (270) Embraer Asia Pacific PTE. Ltd. 12,791 13,068 - - - (12,804) Embraer Aviation Europe SAS – EAE 875 4,261 - - - (2,630) Embraer Aviation International SAS – EAI 156,067 57,578 17 - - 20,151 Embraer CAE Training Services – ECTS - 236 - - - 21 Embraer China Aircraft Technical Services Co., Ltd. – BJG 19,138 6,214 - - - (20,590) Embraer Defense and Security – JAX 57,884 10,191 - - - (82,296) Embraer Defesa e Segurança Participações S.A. 18,466 - - - - - Embraer Engineering Technology 11,998 - - - - (3,176) Embraer Executive Aircraft Inc. – MLB 456,766 18,717 - - - 92,770 Embraer Executive Jet Services – EEJS 224 296 - - - 592 Embraer Finance Ltd. – EFL 1 - 273,948 - - - Embraer GPX Ltda – GPXS 1,233 17,974 - - - (4,453) Embraer Netherlands B.V. – ENL 1,641 531,749 - - - (137,734) Embraer Portugal Estruturas em Compósitos S.A. – EEC 1,396 57,416 - - - 2,387 Embraer Portugal Estruturas Metálicas S.A. – EEM 1,566 126,412 - - - 239 Embraer Portugal Holding - 1 - - - 425 Embraer Prev - Sociedade de Previdência Complementar - 34 - - - (34,595) Entidade de propósito específico – EPE´s - 123,385 - - - - EZ Air Interior Limited 4,059 69,967 - - - - Financiadora de Estudo e Projetos – FINEP - 45,524 - 191,248 (4,359) - Harbin Embraer Aircraft Industry Company Ltd. – HEAI 2 - - - - (3,996) OGMA – Indústria Aeronáutica de Portugal S.A. 1,060 4,911 - - - 622 Marinha do Brasil 4,312 - - - - (44,846) Savis Tecnologia e Sistemas S.A. 57,268 1,294 - - 1,906 159 Visiona Tecnologia Espacial S.A. 332 172 - - - 394 2,228,656 2,385,262 1,650,215 785,422 8,843 (137,669)

38 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

14.1.2 Parent company - December 31, 2017 (Restated)

Current Non Current Assets Liabilities Assets Liabilities Aero Seating Technologies, LLC - 31,756 - - ATECH Negócios em Tecnologias S.A. 68 2,289 - - Banco do Brasil S.A. 716,766 301,045 1,094,152 - Banco Nacional de Desenvolvimento Econômico e Social – BNDES - 292,353 - 724,530 Bradar Indústria S.A. 50,551 - 88,382 - Caixa Econômica Federal 32,355 - - - Comando da Aeronáutica 391,751 298,606 - - ELEB - Equipamentos Ltda 3,970 49,752 107,814 - Embraer Aircraft Customer Services, Inc. – EACS 449,799 351,704 - - Embraer Aircraft Holding Inc. – EAH - - 1 - Embraer Aircraft Maintenance Services Inc. – EAMS 67 548 - - Embraer Asia Pacific PTE. Ltd. 6,927 10,058 - - Embraer Aviation Europe SAS – EAE 548 3,953 - - Embraer Aviation International SAS – EAI 110,927 53,269 17 - Embraer CAE Training Services – ECTS - 716 - - Embraer China Aircraft Technical Services Co., Ltd. – BJG 23,624 3,429 - - Embraer Defense and Security – JAX 148,354 9,720 - - Embraer Defesa e Segurança Participações S.A. 14,158 - - - Embraer Engineering Technology 13,075 - - - Embraer Executive Aircraft Inc. – MLB 409,998 1,960 - - Embraer Executive Jet Services – EEJS 145 759 - - Embraer Finance Ltd. – EFL 2 1 235,027 - Embraer GPX Ltda – GPXS 26,663 32,715 - - Embraer Netherlands B.V. – ENL 2,500 574,828 - - Embraer Portugal Estruturas em Compósitos S.A. – EEC 1,040 46,476 - - Embraer Portugal Estruturas Metálicas S.A. – EEM 813 105,753 - - Embraer Portugal Holding - 375 - - Embraer Prev - Sociedade de Previdência Complementar - 526 - - Entidade de propósito específico – EPE´s - 105,856 - - EZ Air Interior Limited 928 61,750 - - Financiadora de Estudo e Projetos – FINEP - 50,903 - 210,180 Indústria Aeronáutica Neiva Ltda – NEIVA 1 - - - OGMA – Indústria Aeronáutica de Portugal S.A. 501 6,114 - - Marinha do Brasil 21,827 - - - Savis Tecnologia e Sistemas S.A. 78 - 54,825 - Visiona Tecnologia Espacial S.A. 105 326 - - 2,427,541 2,397,540 1,580,218 934,710

39 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

14.1.3 Parent company - June 30, 2017 (Restated) Financial Profit (loss) Result Aero Seating Technologies, LLC - (5,914) ATECH Negócios em Tecnologias S.A. - (399) Banco do Brasil S.A. (2,589) - Banco Nacional de Desenvolvimento Econômico e Social – BNDES (26,085) - Bradar Indústria S.A. 4,737 (87) Caixa Econômica Federal 20,358 - Comando da Aeronáutica - (20,869) ELEB - Equipamentos Ltda 6,147 (652) Embraer Aircraft Customer Services, Inc. – EACS - (8,916) Embraer Aircraft Holding Inc. – EAH 149 - Embraer Aircraft Maintenance Services Inc. – EAMS - (354) Embraer Ásia Pacific PTE. Ltd. 295 (13,440) Embraer Aviation Europe SAS – EAE - 117 Embraer Aviation International SAS – EAI 2,790 2,359 Embraer CAE Training Services – ECTS - (569) Embraer China Aircraft Technical Services Co., Ltd. – BJG - (25,493) Embraer Defense and Security – JAX - 4,015 Embraer Executive Aircraft Inc. – MLB - 28,272 Embraer Executive Jet Services – EEJS - (1,439) Embraer GPX Ltda – GPXS - 9,088 Embraer Netherlands B.V. – ENL 5,585 (36,677) Embraer Portugal Estruturas em Compósitos S.A. – EEC - (258) Embraer Portugal Estruturas Metálicas S.A. – EEM - 165 Embraer Portugal Holding - (348) Embraer Prev - Sociedade de Previdência Complementar - (33,795) Financiadora de Estudo e Projetos – FINEP (4,267) - Indústria Aeronáutica Neiva Ltda. – NEIVA - (7) Harbin Embraer Aircraft Industry Company Ltd. – HEAI - 1 Marinha do Brasil - (3,130) OGMA – Indústria Aeronáutica de Portugal S.A. - 461 Savis Tecnologia e Sistemas S.A. 3,126 159 Visiona Tecnologia Espacial S.A. - 221 10,246 (107,489)

14.1.4 Consolidated - June 30, 2018

Current Non Current Financial Profit (loss) Assets Liabilities Assets Liabilities Result Banco do Brasil S.A. 79,176 104,125 1,269,217 1,231,890 (1,993) - Banco Nacional de Desenvolvimento Econômico e Social – BNDES - 261,971 - 594,174 (16,248) - Caixa Econômica Federal 6,944 - - - 341 - Comando da Aeronáutica 1,783,398 460,038 - - - (100,891) Embraer Prev - Sociedade de Previdência Complementar - 947 - - - (36,579) Empresa Portuguesa de Defesa – EMPORDEF - 26,152 - - - - Exército Brasileiro (109) 13,319 - - - 5,192 Financiadora de Estudo e Projetos – FINEP - 45,524 - 191,248 (4,359) - Marinha do Brasil (156) - - - - (44,294) Telecomunicações Brasileiras S.A. – Telebrás - 5,908 - - - 1,006 1,869,253 917,984 1,269,217 2,017,312 (22,259) (175,566)

14.1.5 Consolidated - December 31, 2017 (Restated)

Current Non Current Assets Liabilities Assets Liabilities Banco do Brasil S.A. 751,677 307,203 1,094,152 1,056,873 Banco Nacional de Desenvolvimento Econômico e Social – BNDES - 292,353 - 724,530 Caixa Econômica Federal 32,360 - - - Comando da Aeronáutica 1,148,863 298,606 - - Embraer Prev - Sociedade de Previdência Complementar - 633 - - Empresa Portuguesa de Defesa – EMPORDEF - 23,004 - - Exército Brasileiro - 36,882 - - Financiadora de Estudo e Projetos – FINEP - 51,852 - 213,826 Marinha do Brasil 21,827 - - - Telecomunicações Brasileiras S.A. – Telebrás - 6,451 - - 1,954,727 1,016,984 1,094,152 1,995,229

40 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

14.1.6 Consolidated - June 30, 2017 (Restated)

Financial Profit (loss) Result Banco do Brasil S.A. (1,223) - Caixa Econômica Federal 4,504 - Comando da Aeronáutica - (112,384) Embraer Prev - Sociedade de Previdência Complementar - (35,904) Exército Brasileiro - 8,397 Telecomunicações Brasileiras S.A. – Telebrás - 90,590 Marinha do Brasil - 1,982 3,281 (47,319)

14.2 Brazilian Federal Government

Through its direct and indirect interests and on account of holding a "golden share", the Brazilian Federal Government is a significant shareholder. At June 30, 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. Consequently, transactions between Embraer and the Brazilian Federal Government or its agencies meet the definition of related party transactions.

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); • 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:

06.30.2018 06.30.2017 Short-term benefits (i) 18,929 13,594 Stock option program 6,236 206 Labor contract termination 1,740 1,740 Total remuneration 26,906 15,540

(i) Includes salaries and social security contributions.

Key Management includes members of the statutory Board of Directors and Executive Directors.

15. Property, plant and equipment

The annual weighted average depreciation 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 rate (%) Class of assets 06.30.2018 12.31.2017

Buildings and improvements 3.7% 4.6% installations 5.0% 5.5% Machinery and equipment 10.1% 13.0% Furniture and fixtures 8.1% 11.8% Vehicles 24.8% 27.7% Aircraft 10.4% 15.8% Computers and peripherals 31.9% 28.2% Tooling 17.6% 16.4% Other assets 0.1% 0.7% Exchange pool program assets 3.7% 3.8% 41 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

15.1 Parent company PARENT COMPANY 06.30.2018 Computers Spare part Buildings land Machinery and Furniture and Construction Land Installations Vehicles Aircraft (i) and Tooling Other assets exchange Total improvements equipment fixtures in progress peripherals pools Cost At December 31, 2017 33,983 1,757,520 482,712 1,835,957 182,362 38,930 6,191 501,547 1,785,351 86,050 279,166 27,296 7,017,065 Additions - - - 22,884 3,236 137 - 1,910 25,547 1,507 14,062 6,851 76,134 Additions - incorporations - - - 44,134 276 - 3,731 1,116 - 215 - 614 50,086 Disposals - - - (6,226) (1,063) (82) (962) (1,050) (3,903) - - - (13,286) Impairment ------Reclassifications* - 11,675 1,967 4,610 (3,265) (42) - (409) (23) (4,289) (32,418) (10,224) (32,418) Interest on capitalized assets ------8,295 8,295 Translation adjustments 5,628 292,925 80,277 308,809 30,005 6,463 1,230 83,229 298,176 13,889 44,951 5,258 1,170,840 At June 30,2018 39,611 2,062,120 564,956 2,210,168 211,551 45,406 10,190 586,343 2,105,148 97,372 305,761 38,090 8,276,716 Accumulated depreciation At December 31, 2017 - (466,790) (328,384) (1,038,739) (93,217) (26,629) (5,470) (401,822) (1,007,824) (32,982) (72,251) - (3,474,108) Depreciation - (22,187) (3,856) (46,480) (2,384) (1,465) (593) (17,066) (77,033) (28) (4,549) - (175,641) Depreciation - incorporations - - - (39,197) (193) - (2,840) (884) - - - - (43,114) Disposals - - - 4,130 477 79 962 970 1,517 - - - 8,135 Reclassifications* - - 1,235 (1,228) - - - - (7) - - - - Interest on capitalized assets - (2,532) ------(2,532) Translation adjustments - (80,396) (54,712) (179,761) (15,607) (4,598) (1,109) (68,857) (176,562) (5,468) (12,541) - (599,611) At June 30,2018 - (571,905) (385,717) (1,301,275) (110,924) (32,613) (9,050) (487,659) (1,259,909) (38,478) (89,341) - (4,286,871)

Net At December 31, 2017 33,983 1,290,730 154,328 797,218 89,145 12,301 721 99,725 777,527 53,068 206,915 27,296 3,542,957 At June 30,2018 39,611 1,490,215 179,239 908,893 100,627 12,793 1,140 98,684 845,239 58,894 216,420 38,090 3,989,845

PARENT COMPANY 12.31.2017 Computers Spare part Buildings land Machinery and Furniture and Construction Land Installations Vehicles Aircraft (i) and Tooling Other assets exchange Total improvements equipment fixtures in progress peripherals pools Cost At December 31, 2016 33,436 1,449,422 460,918 1,696,008 177,992 36,760 6,099 473,725 1,673,928 94,140 320,190 210,391 6,633,009 Additions - - - 94,127 8,745 1,228 - 21,730 93,261 26,669 5,318 148,911 399,989 Disposals - (1,114) (66) (10,092) (2,055) (1,099) - (611) (3,115) - - - (18,152) Impairment - - - (7,308) - - - - (7,022) - - - (14,330) Reclassifications* 44 277,555 14,377 34,560 (5,074) 1,454 - (832) 49 (36,047) (50,191) (401,641) (165,746) Interest on capitalized assets ------73,144 73,144 Translation adjustments 503 31,657 7,483 28,662 2,754 587 92 7,535 28,250 1,288 3,849 (3,509) 109,151 At December 31, 2017 33,983 1,757,520 482,712 1,835,957 182,362 38,930 6,191 501,547 1,785,351 86,050 279,166 27,296 7,017,065

Accumulated depreciation At December 31, 2016 - (416,278) (315,780) (903,054) (85,070) (25,388) (4,735) (367,901) (851,180) (30,895) (61,618) - (3,061,899) Depreciation - (40,006) (7,626) (126,017) (7,784) (2,910) (642) (27,963) (140,093) (457) (9,367) - (362,865) Disposals - 116 59 8,292 1,163 971 - 537 1,015 - - - 12,153 Reclassifications* - 19 - 38 - 1,085 - (4) (53) (1,085) - - - Interest on capitalized assets - (2,875) ------(2,875) Translation adjustments - (7,766) (5,037) (17,998) (1,526) (387) (93) (6,491) (17,513) (545) (1,266) - (58,622) At December 31, 2017 - (466,790) (328,384) (1,038,739) (93,217) (26,629) (5,470) (401,822) (1,007,824) (32,982) (72,251) - (3,474,108)

Net At December 31, 2016 33,436 1,033,144 145,138 792,954 92,922 11,372 1,364 105,824 822,748 63,245 258,572 210,391 3,571,110 At December 31, 2017 33,983 1,290,730 154,328 797,218 89,145 12,301 721 99,725 777,527 53,068 206,915 27,296 3,542,957 *Non-cash transactions (reclassification within asset groups). 42 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

15.2 Consolidated

CONSOLIDATED 06.30.2018 Computers Spare part Buildings land Machinery and Furniture and Construction Land Installations Vehicles Aircraft (i) and Tooling Other assets exchange Total improvements equipment fixtures in progress peripherals pools Cost At December 31, 2017 36,710 2,454,014 533,283 3,214,156 248,100 57,955 638,658 629,236 2,053,988 86,244 2,224,945 253,539 12,430,828 Additions - 1,218 - 26,504 3,509 273 26,043 5,481 26,793 1,507 83,807 67,224 242,359 Disposals - (4,554) (106) (59,073) (1,926) (116) (962) (2,647) (3,939) - (29,587) - (102,910) Impairment ------(19,531) - - - - - (19,531) Reclassifications* - 17,877 6,136 14,309 (2,492) (12) (306,598) (5,352) 421 (4,289) (45,248) (26,824) (352,072) Discontinued operations ------8,293 8,293 Translation adjustments 6,079 404,763 88,859 540,523 39,486 8,986 74,780 100,961 324,737 13,892 334,857 44,506 1,982,429 At June 30,2018 42,789 2,873,318 628,172 3,736,419 286,677 67,086 412,390 727,679 2,402,000 97,354 2,568,774 346,738 14,189,396

Accumulated depreciation At December 31, 2017 - (694,199) (344,279) (1,676,312) (144,170) (43,882) (269,177) (491,133) (1,090,871) (32,958) (680,920) - (5,467,901) Depreciation - (34,192) (4,977) (80,137) (4,439) (1,798) (19,643) (22,584) (87,474) (28) (29,499) - (284,771) Disposals - 4,273 56 56,901 1,344 79 962 2,487 1,536 - 10,614 - 78,252 Reclassifications* - 225 1,234 (845) (4) - 110,509 4 (388) - - - 110,735 Interest on capitalized assets - (2,532) ------(2,532) Translation adjustments - (118,123) (57,401) (296,095) (23,594) (6,964) (33,605) (81,772) (169,722) (5,461) (102,856) - (895,593) At June 30,2018 - (844,548) (405,367) (1,996,488) (170,863) (52,565) (210,954) (592,998) (1,346,919) (38,447) (802,661) - (6,461,810)

Net At December 31, 2017 36,710 1,759,815 189,004 1,537,844 103,930 14,073 369,481 138,103 963,117 53,286 1,544,025 253,539 6,962,927 At June 30,2018 42,789 2,028,770 222,805 1,739,931 115,814 14,521 201,436 134,681 1,055,081 58,907 1,766,113 346,738 7,727,586

43 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

CONSOLIDATED 12.31.2017 Computers Spare part Buildings land Machinery and Furniture and Construction Land Installations Vehicles Aircraft (i) and Tooling Other assets exchange Total improvements equipment fixtures in progress peripherals pools Cost 36,122 2,141,791 508,417 2,964,657 241,598 54,970 1,031,730 583,984 1,915,690 96,074 2,182,965 379,591 12,137,589 Additions - 13,484 - 130,712 11,761 1,228 45,202 36,888 98,593 27,464 139,521 257,983 762,836 Disposals - (26,612) (72) (32,318) (5,981) (2,237) (25,233) (2,477) (3,115) (31) (105,957) (3,482) (207,515) Impairment (ii) - - - (7,308) - - (83,731) - (7,022) - - - (98,061) Reclassifications* 44 272,845 15,142 71,615 (4,626) 1,470 (333,416) (2,323) 16,325 (38,459) (71,452) (456,654) (529,489) Discontinued operations ------73,265 73,265 Translation adjustments 544 52,506 9,796 86,798 5,348 2,524 4,106 13,164 33,517 1,196 79,868 2,836 292,203 At December 31, 2017 36,710 2,454,014 533,283 3,214,156 248,100 57,955 638,658 629,236 2,053,988 86,244 2,224,945 253,539 12,430,828

Accumulated depreciation At December 31, 2016 - (623,624) (330,355) (1,451,101) (130,734) (41,205) (501,971) (444,058) (909,259) (30,886) (653,555) - (5,116,748) Depreciation - (68,115) (9,575) (192,497) (12,861) (3,737) (81,769) (38,381) (162,358) (457) (57,249) - (626,999) Disposals - 13,339 62 24,103 3,211 2,021 21,651 2,032 1,015 16 27,988 - 95,438 Reclassifications* - 2,034 1,182 62 - 1,085 289,468 (4) (53) (1,085) - - 292,689 Interest on capitalized assets - (2,875) ------(2,875) Translation adjustments - (14,958) (5,593) (56,879) (3,786) (2,046) 3,444 (10,722) (20,216) (546) 1,896 - (109,406) At December 31, 2017 - (694,199) (344,279) (1,676,312) (144,170) (43,882) (269,177) (491,133) (1,090,871) (32,958) (680,920) - (5,467,901)

Net At December 31, 2016 36,122 1,518,167 178,062 1,513,556 110,864 13,765 529,759 139,926 1,006,431 65,188 1,529,410 379,591 7,020,841 At December 31, 2017 36,710 1,759,815 189,004 1,537,844 103,930 14,073 369,481 138,103 963,117 53,286 1,544,025 253,539 6,962,927

* Non-cash transactions. On "aircraft" and "exchange pool program assets" the amount refers to aircraft and items transferred to the inventory. In September 2017, 17 ERJ 145 aircraft were transferred to inventory in order to be sold, after a part-out procedure, under a revenue share model.

44 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

(i) The aircraft are used for testing, shuttle and operating leases and are adjusted to the fair value, when applicable. The following aircraft are held:

• June 30, 2018: six ERJ 135, 24 ERJ 145, one Embraer 170, one Embraer 190, one Embraer 120, one Legacy 450, one Legacy 500, 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 of Legacy 650 UGCs and Monitoring, Sensing and Radars (Note 17).

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.

16.1 Parent company

PARENT COMPANY 06.30.2018 Embraer's Development External acquisitons Commercial Defense and Executive Jets Other Software Other Total Aviation Security Intangible cost At December 31, 2017 5,888,988 4,397,719 106,946 19,074 972,952 (2) 11,385,677 Additions 321,228 76,615 6,635 124 6,166 - 410,768 Contributions from suppliers (419,045) - - - - - (419,045) Additions to incorporations - - 39,253 - 5,490 - 44,743 Reclassification (1,449) (507) - (9,150) 9,154 - (1,952) Interest on capitalized assets 14,836 5,799 - - - - 20,635 Translation adjustments 955,714 739,845 20,954 2,973 162,494 2 1,881,982 At June 30,2018 6,760,272 5,219,471 173,788 13,021 1,156,256 - 13,322,808

Amortization acumulated At December 31, 2017 (3,371,133) (1,509,729) (88,226) (3,874) (555,221) 2 (5,528,181) Amortization (57,781) (67,314) (2,966) (81) (43,806) - (171,948) Amortization of contribution from suppliers 17,343 19,229 - - - - 36,572 Depreciation of incorporations - - (9,988) - (2,716) - (12,704) Interest on capitalized assets (398) (1,936) - - - - (2,334) Reclassification (47) 47 - - - - - Translation adjustments (562,499) (255,731) (15,755) (649) (97,564) (2) (932,200) At June 30,2018 (3,974,515) (1,815,434) (116,935) (4,604) (699,307) - (6,610,795)

Intangible net At December 31, 2017 2,517,855 2,887,990 18,720 15,200 417,731 - 5,857,496 At June 30,2018 2,785,757 3,404,037 56,853 8,417 456,949 - 6,712,013

PARENT COMPANY 12.31.2017 Embraer's Development External acquisitons Commercial Defense and Executive Jets Other Software Other Total Aviation Security Intangible cost At December 31, 2016 4,816,089 4,206,400 96,631 168,652 873,553 5,473 10,166,798 Additions 977,633 244,547 9,592 7,769 161,872 - 1,401,413 Contributions from suppliers (268,905) - - - - - (268,905) Disposals - - - - (853) - (853) Impairment - (151,925) - - - - (151,925) Reclassifications 227,591 11,187 (1,004) (151,973) (80,525) (5,276) - Interest on capitalized assets 35,131 15,304 - - - - 50,435 Translation adjustments 101,449 72,206 1,727 (5,374) 18,905 (199) 188,714 At December 31, 2017 5,888,988 4,397,719 106,946 19,074 972,952 (2) 11,385,677

Amortization acumulated At December 31, 2016 (3,194,648) (1,331,864) (79,524) (205) (478,486) (1,556) (5,086,283) Amortization (181,088) (180,128) (8,349) (366) (67,205) - (437,136) Amortization of contribution from suppliers 42,928 44,719 - - - - 87,647 Interest on capitalized assets - (5,015) - - - - (5,015) Reclassifications 14,016 (13,390) 1,004 (3,114) (13) 1,497 - Translation adjustments (52,341) (24,051) (1,357) (189) (9,517) 61 (87,394) At December 31, 2017 (3,371,133) (1,509,729) (88,226) (3,874) (555,221) 2 (5,528,181)

Intangible net At December 31, 2016 1,621,441 2,874,536 17,107 168,447 395,067 3,917 5,080,515 At December 31, 2017 2,517,855 2,887,990 18,720 15,200 417,731 - 5,857,496

45 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

16.2 Consolidated CONSOLIDATED 06.30.2018 Embraer's Development External acquisitons Commercial Defense and Business Executive Jets Other Development Software Other Total Aviation Security acquisiton Intangible cost At December 31, 2017 6,038,212 4,484,315 111,095 19,074 46,461 1,136,513 39,734 149,058 12,024,462 Additions 329,291 77,258 6,635 124 2,309 3,603 - 38,516 457,736 Contributions from suppliers (419,045) ------(419,045) Disposals - - - - - (6,810) - - (6,810) Interest on capitalized assets 13,440 5,243 ------18,683 Reclassifications (51) 47 39,255 (8,817) (36,644) 8,821 - (6,316) (3,705) Translation adjustments 981,485 754,249 21,639 2,640 5,603 189,541 477 29,014 1,984,648 At June 30,2018 6,943,332 5,321,112 178,624 13,021 17,729 1,331,668 40,211 210,272 14,055,969

Amortization acumulated At December 31, 2017 (3,414,183) (1,567,142) (92,316) (3,874) (22,501) (683,995) - (13,314) (5,797,325) Amortization (58,722) (69,932) (2,980) (81) (172) (46,482) - (1,403) (179,772) Amortization of contribution from suppliers 17,343 19,229 ------36,572 Disposals - - - - - 6,650 - - 6,650 Interest on capitalized assets (398) (1,936) ------(2,334) Reclassifications (47) 47 (9,988) - 16,714 - - (3,017) 3,709 Translation adjustments (569,745) (265,525) (16,421) (649) (2,817) (119,190) - (2,058) (976,405) At June 30,2018 (4,025,752) (1,885,259) (121,705) (4,604) (8,776) (843,017) - (19,792) (6,908,905)

Intangible net At December 31, 2017 2,624,029 2,917,173 18,779 15,200 23,960 452,518 39,734 135,744 6,227,137 At June 30,2018 2,917,580 3,435,853 56,919 8,417 8,953 488,651 40,211 190,480 7,147,064

CONSOLIDATED 12.31.2017 Embraer's Development External acquisitons Commercial Defense and Business Executive Jets Other Development Software Other Total Aviation Security acquisiton Intangible cost At December 31, 2016 4,938,328 4,302,729 100,718 168,652 44,353 1,015,677 68,101 105,699 10,744,257 Additions 1,001,948 245,700 9,592 7,769 6,027 179,790 - 52,095 1,502,921 Contributions from suppliers (268,905) ------(268,905) Impairment - (164,233) - - - - (28,673) (6,156) (199,062) Disposals - - - - (4,772) - - - (4,772) Interest on capitalized assets 35,131 15,304 - - 122 - - - 50,557 Reclassifications 227,595 11,181 (1,004) (151,973) - (80,530) - (5,269) - Translation adjustments 104,115 73,634 1,789 (5,374) 731 21,576 306 2,689 199,466 At December 31, 2017 6,038,212 4,484,315 111,095 19,074 46,461 1,136,513 39,734 149,058 12,024,462

Amortization acumulated At December 31, 2016 (3,235,048) (1,385,199) (83,554) (205) (18,456) (585,669) - (10,869) (5,319,000) Amortization (183,062) (183,290) (8,349) (366) (3,615) (86,833) - (3,743) (469,258) Amortization of contribution from suppliers 42,928 44,719 ------87,647 Interest on capitalized assets - (5,015) ------(5,015) Reclassifications 14,012 (13,376) 1,004 (3,114) - (13) - 1,487 - Translation adjustments (53,013) (24,981) (1,417) (189) (430) (11,480) - (189) (91,699) At December 31, 2017 (3,414,183) (1,567,142) (92,316) (3,874) (22,501) (683,995) - (13,314) (5,797,325)

Intangible net At December 31, 2016 1,703,280 2,917,530 17,164 168,447 25,897 430,008 68,101 94,830 5,425,257 At December 31, 2017 2,624,029 2,917,173 18,779 15,200 23,960 452,518 39,734 135,744 6,227,137

17. Impairment test

As of December 31, 2017, the Company performed the anual test for recoverability of assets for those CGU’s with goodwill and/or internally developed intangible assets. This test resulted in loss recognitions of R$ 178,563 and R$ 28,673 related to Legacy 650 CGU (Executive Jets segment) and Monitoring, Sensoring and Radars CGU (Defense & Security segment), respectively. For the quarter ending June 30, 2018 there were no impairment indicators, and therefore, no loss was recognized for this period except for some losses of aircraft in property, plant and equipment.

18. Trade accounts payable

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Foreign suppliers 1,178,337 829,974 2,282,957 1,804,049 Risk partners (i) 977,656 535,883 977,656 535,883 Domestic suppliers 199,657 257,760 368,275 388,095 Subsidiaries 480,286 466,276 - - 2,835,936 2,089,893 3,628,888 2,728,027

(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 46 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

and significant additional expense. This dependence makes the Company vulnerable to the performance, quality and financial position of its risk-sharing suppliers/partners.

19. Loans and financing

19.1 Parent company

Contractual Effective Currency interest rate - % interest rate - % Maturity 06.30.2018 12.31.2017 Other currencies: Working Capital US$ 5,05% a 6,38% 5,14% a 7,42% 2027 11,549,021 9,163,682 Libor 3M + 2,25% Libor 3M + 2,25% 2026 - 728,569 11,549,021 9,892,251 In local currency:

Project development R$ 3,50% a 4,50% 3,50% a 4,50% 2023 1,112,493 1,305,536 TJLP + 1,92% a 5,00% TJLP + 1,92% a 5,00% 2022

Credit Note for Exportation R$ 10,85% a 11,00% 10,85% a 11,00% 2019 711,500 771,169 1,823,993 2,076,705 Total 13,373,014 11,968,956 Current portion 1,231,170 1,656,528 Non-current portion 12,141,844 10,312,428

19.2 Consolidated

Effective Currency interest rate - % interest rate - % Maturity 06.30.2018 12.31.2017

Other currencies: 5,05% a 6,38% 5,05% a 7,42% 2027 11,327,486 9,706,145 1,25% a 5,24% 1,25% a 5,24% 2021 476,568 729,898 US$ Libor 6M + 1,35% a 2,60% Libor 6M + 1,35% a 2,60% 2027 858,810 394,129 Working capital Libor 3M + 2,25% Libor 3M + 2,25% 2026 867,482 728,569 Euro 1,00% a 3,37% 1,00% a 3,37% 2026 90,197 46,344

Export Financing US$ 4.65% 4.65% 2018 - 10,105

1,04 a 1,10% 1,04 a 1,10% 2035 Property, plant and equipment US$ 218,798 192,356 Libor 1M + 2,44% a 2,5% Libor 1M + 2,44% a 2,5% 2037

Finance leasing US$ Libor 6M + 3,40% Libor 6M + 3,40% 2018 - 38 13,839,341 11,807,584 In local currency: R$ 3,50% a 4,50% 3,50% a 4,50% 2023 Project development 1,112,493 1,310,037 TJLP + 1,92% a 5,00% TJLP + 1,92% a 5,00% 2022

Credit Note for Exportation R$ 10,85% a 11,00% 10,85% a 11,00% 2019 711,500 771,169

Total 1,823,993 2,081,206 15,663,334 13,888,790 Current portion Non-current portion 1,391,763 1,286,591 14,271,571 12,602,199

In October 2009, Embraer Overseas Limited issued US$ 500,000 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, the transactions made by it are presented as third party transactions on the Parent Company Financial Statements.

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 million of the aggregate principal of existing notes and US$ 337,2 million 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 million in principal at a rate of 5.696% p.a., maturing on September 16, 2023.

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 million at a rate of 5.15% p.a.

In August 2013, Embraer S.A. contracted financing totaling approximately R$ 303,9 million, equivalent to 47 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

US$ 78,8 million, at a fixed rate of 3.50% per annum, from the Financier of Studies and Projects (Financiadora de Estudos e Projetos - FINEP ) for use in the research and new product development program.

In December 2013, Embraer S.A. signed a contract with BNDES for use in the development of the E-Jets E-2 aircraft in the amount of R$ 1,4 billion, equivalent to US$ 365,9 million at a fixed rate of 3.5% 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 billion 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 December 2015, Embraer S.A. contracted loans of R$ 685 million, equivalent to US$ 177,7 million, at a weighted average rate of 10.96% a year, in the form of Export Credit Notes in order to invest in export and production of goods for export.

In August 2016, Embraer Portugal S.A., a subsidiary of Embraer S.A., contracted US$ 200 million, equivalent to R$ 771.2 million for working capital and acquisition of fixed assets at a fixed rate of 3.068% p.a.

In February 2017, Embraer Netherlands Finance B.V., Embraer S.A. subsidiary, issued a offering registered with the SEC of US$ 750 million 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.

In September 2017, Embraer S.A. contracted of US $ 100 million, equivalent to R $ 385.8, maturing in 2027 at a floating rate of Libor of 6 Months + 2.60%, for investment in working capital.

At June 30, 2018, the maturities in financing and the long-term composition were as follows:

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017

Opening balance 11,968,956 11,200,708 13,888,790 12,254,022 Principal addition 16,788 2,912,924 306,499 3,109,502 Interest addition 395,065 630,831 364,024 637,471 Principal payment (286,389) (1,523,745) (521,686) (1,724,401) Interest payment (386,852) (609,178) (336,714) (616,597) Foreing exchange 1,665,447 (642,584) 1,962,421 228,793 Total 13,373,014 11,968,956 15,663,334 13,888,790

Parent Company Consolidated

2019 172,959 246,479 2020 954,938 990,312 2021 414,947 1,263,819 2022 2,150,877 2,162,507 After 2022 8,448,123 9,608,454 12,141,844 14,271,571

48 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

19.3 Currency analysis

Total debt is denominated in the following currencies:

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017

US dollar 11,549,021 9,892,251 13,749,144 11,761,240 Brazilian Real 1,823,993 2,076,705 1,823,993 2,081,206 Euro - - 90,197 46,344 13,373,014 11,968,956 15,663,334 13,888,790

19.4 Interest and guarantees

At June 30, 2018, loans denominated in US dollars (87.8% of the total) are mainly subject to fixed interest rates. The weighted average rate was 5.26% p.a. (5.18% p.a. at December 31, 2017).

At June 30, 2018, loans denominated in Reais (11.6% of the total) are subject to fixed interest rates or interest based on the Brazilian Long-term Interest Rate ("TJLP"). The weighted average rate was 3.47% p.a. (3.72% p.a. at December 31, 2017).

At June 30, 2018, loans denominated in euros (0.6% of the total) were predominantly subject to fixed charges and weighted average rate of 0.16% p.a. (1.32% p.a. at December 31, 2017).

Part of the financing is secured by property, machinery, equipment, commercial pledges and bank guarantees totaling R$ 1,403,852. With respect to the subsidiaries' financing, the guarantees are surety or consent of the Parent Company, with a total of R$ 313,005 at June 30, 2018 (R$ 268,679 at December 31, 2017).

19.5 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/EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization, as defined), as well as limits for debt service cover based on EBITDA/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 and payment of dividends in excess of the minimum mandatory dividend in the event of default on financing, and transactions with affiliated companies.

As of June 30, 2018, the Company was in compliance with all the restrictive clauses.

20. Other payables

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Other accounts payable (i) 89,887 105,830 451,249 436,184 Provision related to payroll (ii) 274,311 253,041 396,805 359,092 Contractual obligations (iii) 64,737 55,737 64,837 55,742 Provision employee profit sharing 48,281 65,639 59,331 98,551 Long-term incentive (iv) 28,806 26,604 48,064 32,677 Comissions 42,108 34,956 42,108 34,956 Brazilian Air Force 1,975 4,082 1,975 4,082 Insurance 1,599 16,439 1,614 16,461 551,704 562,328 1,065,983 1,037,745

Current portion 471,143 503,776 971,854 966,583 Non-current portion 80,561 58,552 94,129 71,162

(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.

49 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

(ii) Refers to employee vacation 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 29 - Share-based Remuneration.

21. Advances from customers Parent company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) Denominated in U.S. Dollar 2,383,557 1,938,531 3,398,344 2,702,044 Denominated in Real 690,497 306,790 778,370 436,137 3,074,054 2,245,321 4,176,714 3,138,181

Current portion 2,730,132 1,913,354 3,826,622 2,793,974 Non-current portion 343,922 331,967 350,092 344,207

The balance of advances from customers related to construction contracts using the POC method is 878.837 in the Parent Company and R$ 1.057,008 in the Consolidated at June 30, 2018 (R$ 696,509 in the Parent Company and R$ 924,758 in the Consolidated at December 31, 2017).

22. Taxes and payroll charges payable

Parent company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 INSS (social security contribution) (i) 269,046 268,564 282,274 277,955 IRRF (Income tax withholding income tax) 38,454 73,513 45,538 79,901 IPI (Manufacturing tax) 11,711 12,207 13,546 13,919 PIS and COFINS (ii) 10,407 17,087 10,895 18,438 FGTS (Government Employee Severance Indemnity Fund) 6,616 3,589 6,657 3,673 Installment of taxes 2,888 46,339 2,888 49,693 Others 4,937 6,089 18,497 22,382 344,059 427,388 380,295 465,961

Current portion 109,485 198,337 145,536 233,889 Non-current portion 234,574 229,051 234,759 232,072

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 R$ 182,654 at June 30, 2018 (R$ 180,557 at 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 R$ 8,178. Currently the remaining amount involved in the dispute in respect of the notice established in the collective agreement is R$ 38,398 in the Parent Company and R$ 38,584 in the Consolidated at June 30, 2018 (R$ 37,487 in the Parent Company and R$ 37,669 in the Consolidated at December 31, 2017).

50 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

(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.

• The other suit disputes the inclusion of the foreign exchange variation in the PIS/PASEP calculation base and an appeal decision is awaited. The amount involved in the suit is R$ 11,082 at June 30, 2018 (R$ 11,007 at December 31, 2017).

With respect to the litigation issues mentioned above, the remaining provisions will be kept until there is a final outcome and no further appeals can be made.

23. 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 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.

23.1 Deferred taxes

The components of deferred tax assets and liabilities are as follows:

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) Differences between basis: account x tax 60,308 25,588 23,761 47,824 Provision Gain not realized 76,219 50,832 76,219 50,832 Tax loss carryforwards 268,585 - 285,613 14,783 Effect of differences by fixed asset (24,665) (15,887) (38,133) (26,784) Temporarily non-deductible provisions (94,200) (220,266) (76,635) (251,601) Difference between tax basis (Real) and functional currency measurement basis (US dollar) (1,357,975) (660,519) (1,402,764) (681,410) Deferred tax assets (liabilities), net (1,071,728) (820,252) (1,131,939) (846,356)

Total deferred tax asset - - 18,115 7,924 Total deferred tax liability (1,071,728) (820,252) (1,150,054) (854,280)

The changes in deferred taxes that affected profit or loss were as follows:

Parent Company Consolidated From the Other From the Other statement of comprehens statement of comprehens income ive income Total income ive income Total

At december 31,2016 (Restated) (501,648) (314,635) (816,283) (506,046) (363,554) (869,600)

Temporarily non-deductible provisions (73,490) - (73,490) 82,973 - 82,973 Tax loss carryforwards - - - (77,354) - (77,354) Difference between tax basis (real) and functional currency measurement basis (US dollar) (25,190) - (25,190) (26,293) - (26,293) Provision gain not realized (2,568) - (2,568) (2,568) - (2,568) Effect of differences by fixed asset 75,990 - 75,990 74,601 - 74,601 Differences between basis: account x tax 52,776 (31,487) 21,289 675 (28,790) (28,115) At december 31,2017 (Restated) (474,130) (346,122) (820,252) (454,012) (392,344) (846,356) Temporarily non-deductible provisions 126,066 - 126,066 174,966 - 174,966 Tax loss carryforwards 268,585 - 268,585 270,831 - 270,831 Difference between tax basis (real) and functional currency measurement basis (US dollar) (697,456) - (697,456) (721,354) - (721,354) Provision gain not realized 25,387 - 25,387 25,387 - 25,387 Effect of differences by fixed asset (8,778) - (8,778) (11,350) - (11,350) Differences between basis: account x tax 187,319 (152,599) 34,720 132,758 (156,821) (24,063) At june 30, 2018 (573,007) (498,721) (1,071,728) (582,774) (549,165) (1,131,939)

51 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

23.2 Reconciliation of tax benefit Parent Company Consolidated 30.06.2018 06.30.2017 30.06.2018 06.30.2017 (Restated) (Restated) Profit (loss) before taxation (411,651) 503,858 (325,792) 648,232 Income tax and social contribution expense at the nominal Brazilian composite tax rate - 34% 139,961 (171,312) 110,769 (220,399) Tax on profits of overseas subsidiaries - (1,304) - (1,304) Diff between tax basis (real) and functional currency measurement basis (US dollar) (697,456) (57,681) (721,354) (60,199) Research and development tax incentives - 26,165 4,681 27,746 Interest on own capital 9,978 20,005 9,978 20,005 Translation effects for investments - 26,305 - 26,305 Translation effects 356,183 120,568 360,022 183,406 Equity in the earnings of subsidiaries 77,151 (12,757) (312) (156) Gain or Loss in Subsidiary Equity - - 45,818 - Fiscal credits (recognized and non recognized) and tax rate - - (12,556) (66,581) Tax rate diference - - 6,210 (52,148) Income tax and social contribution income (expense) benefit as reported - 13,714 56,600 (100,091) Other 18,759 (98,187) (27,758) 4,037 (235,385) 36,828 (278,671) (18,980) Income tax and social contribution income (expense) benefit as reported (95,424) (134,484) (167,902) (239,379)

Income tax and social contribution current (expense) benefit as reported 3,453 (737) (39,140) (72,474) Income tax and social contribution income (expense) benefit as reported (98,877) (133,747) (128,762) (166,905)

The effective tax rate for the period ended June 30, 2018 was 23.2% in the Parent Company and 51.5% in the Consolidated as compared to 26.7% in the Parent Company and 36.9% in the Consolidated at June 30, 2017.

On December 22, 2017 the US President approved the "Tax Cuts and Jobs Act" changing numerous provisions including reduction of the corporate income tax rate from 35% to 21% and certain business-related exclusions, deductions and credits.

The Company verified a net gain impact of R$ 15,563 its US subsidiaries due to a revaluation of deferred tax assets and liabilities.

24. Financial guarantees and residual value guarantees

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Financial guarantee of residual value 416,722 360,345 416,722 360,345 Accounts payable (i) - - 84,535 101,601 Financial guarantee 49,835 56,897 49,835 56,897 466,557 417,242 551,092 518,843

Current portion 90,576 19,191 150,316 73,559 Non-current portion 375,981 398,051 400,776 445,284

The activity on the financial guarantees and residual guarantees is shown below:

24.1 Parent company

Financial Financial guarantee of Total guarantee residual value At december 31, 2016 74,118 398,359 472,477 Additions 3,886 - 3,886 Market value adjustment - (41,908) (41,908) Guarantee amortization (21,798) - (21,798) Translation adjustments 691 3,894 4,585 At december 31, 2017 56,897 360,345 417,242 Market value adjustment - (4,376) (4,376) Guarantee amortization (15,075) - (15,075) Translation adjustments 8,013 60,753 68,766 At june 30, 2018 49,835 416,722 466,557

52 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

24.2 Consolidated

Financial Accounts Financial guarantee of Payable Total guarantee residual value (i) At december 31, 2016 74,118 398,359 214,410 686,887 Additions 3,886 - 11,538 15,424 Interest additions - - 6,416 6,416 Disposals - - (129,795) (129,795) Market value adjustment - (41,908) - (41,908) Guarantee amortization (21,798) - - (21,798) Translation adjustments 691 3,894 (968) 3,617 At december 31, 2017 56,897 360,345 101,601 518,843 Interest additions - - 2,915 2,915 Disposals - - (32,647) (32,647) Market value adjustment - (4,376) - (4,376) Guarantee amortization (15,075) - - (15,075) Translation adjustments 8,013 60,753 12,666 81,432 At june 30, 2018 49,835 416,722 84,535 551,092

(i) Accounts payable and additional provision:

• Republic Airways Holding - Refers to liabilities assumed on the acquisition of Republic Airways aircraft as a result of the bankruptcy filing (Chapter 11) of the client in February 2016, which is partially concluded. As of June 30, 2018, the obligation assumed in Accounts payable was R$ 84,535.

25. Provisions and contingent liabilities

25.1 Provisions

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) Product warranty (i) 239,255 206,707 384,131 334,597 Provisions for labor, taxes and civil (ii) 180,862 159,326 202,167 179,159 Post retirement benefits (Note 26) 102,960 98,086 127,194 119,385 Taxes 153,494 131,597 155,208 138,327 Environmental provision 8,230 4,872 10,372 6,030 Loss provision investments (iii) 324,820 233,454 - - Other 126,203 47,640 108,641 86,887 1,135,824 881,682 987,713 864,385

Current portion 474,018 346,816 508,667 414,073 Non-current portion 661,806 534,866 479,046 450,312

(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 25.1.1.

(iii) Refers to provision for losses on investments relating to subsidiaries which have a net capital deficiency.

53 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Change in provision:

Parent Company Provisions Product Post retirement Environmental Loss provision Provision for labor, taxes and Taxes Others Total warranties benefits provision investments VRS civil At December 31, 2016 (Restated) 206,397 134,372 283,807 84,947 2,168 138,275 80,181 2,742 932,889 Additions 84,148 10,102 36,181 65,113 7,204 24,917 22,406 237,391 487,462 Interest - 14,441 41,413 - - - - - 55,854 Disposals (68,163) (56,424) (195,228) (18,463) (4,500) - (98,633) (192,401) (633,812) Reversals (9,245) (4,405) (6,851) - - - (3,954) - (24,455) Translation adjustments (6,430) - 4 - - 70,262 - (92) 63,744 At December 31, 2017 (Restated) 206,707 98,086 159,326 131,597 4,872 233,454 - 47,640 881,682 Additions 28,773 - 28,205 39,174 4,600 18,387 - 369,199 488,338 Interest - 4,874 8,235 - - - - - 13,109 Monetary adjustments - - 256 - - - - - 256 Disposals (20,913) - (7,495) (17,277) (1,242) - - (290,534) (337,461) Reversals (4,252) - (7,664) - - - - - (11,916) Translation adjustments 28,940 - (1) - - 72,979 - (102) 101,816 At june 30, 2018 239,255 102,960 180,862 153,494 8,230 324,820 - 126,203 1,135,824

Consolidated Provisions Product Post retirement Environmental Provision for labor, taxes and Taxes Others Total warranties benefits provision VRS civil At December 31, 2016 (Restated) 306,745 149,877 303,319 92,765 3,206 82,547 43,115 981,574 Additions 140,479 10,733 42,037 66,046 8,910 23,766 259,855 551,826 Interest - 14,404 41,710 - - - - 56,114 Monetary adjustments - - 161 - - - - 161 Disposals (85,879) (50,727) (202,038) (20,484) (5,982) (102,200) (215,920) (683,230) Reversals (22,575) (4,527) (7,405) - - (4,057) - (38,564) Translation adjustments (4,173) (375) 1,375 - (104) (56) (163) (3,496) At December 31, 2017 (Restated) 334,597 119,385 179,159 138,327 6,030 - 86,887 864,385 Additions 43,825 197 28,562 39,174 6,124 - 363,845 481,727 Interest - 5,223 8,523 - - - - 13,746 Monetary adjustments - - 256 - - - - 256 Disposals (33,546) - (8,269) (22,293) (1,606) - (342,825) (408,539) Reversals (10,103) - (8,025) - - - - (18,128) Translation adjustments 49,358 2,389 1,961 - (176) - 734 54,266 At june 30, 2018 384,131 127,194 202,167 155,208 10,372 - 108,641 987,713

25.1.1 Labor, tax and civil provisions

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Tax related Income tax (i) 34,565 33,549 34,565 33,549

Social integration program and 22,997 22,483 22,997 22,483 Social security financing contribution Social security contributions (ii) 9,259 9,365 9,259 9,365 Import taxes (iii) 3,071 3,041 3,071 3,041 FUNDAF - - 74 29 Others - - 890 879 Total Tax related 69,892 68,438 70,856 69,346 Labor related Plurimas 461/1379 (iv) 39,705 37,426 39,705 37,426 Reintegration (v) 18,054 16,127 18,711 16,830 Indemnity (vi) 10,479 6,965 10,617 7,572 Third parties 4,700 2,815 4,860 2,943 Others 37,393 26,763 56,779 44,250 Total Labor related 110,331 90,096 130,672 109,021 Civil related Indemnity (vii) 639 792 639 792 TotalCivil related 639 792 639 792 180,862 159,326 202,167 179,159

Current portion 76,621 70,201 77,346 71,040 Non-current portion 104,240 89,125 124,820 108,119

(i) The Company has obtained injunction to suspend collection of withholding tax related to values transferred overseas.

54 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

(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) Indemnity claims in connection with alleged work-related accidents, pain and suffering, etc.

(vii) 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 (Note 2.2.23), 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.

25.2 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 discussion related to the ISSQN rate in the amount of R $ 208,938 on June 30, 2018.

• The Company is involved in a legal dispute related to tax credits paid by its subsidiaries abroad amounting to R$ 22,190 at June 30, 2018 (R$ 21,800 at December 31, 2017).

• The Company has contingent liabilities amounting to R$ 123,386 at June 30, 2018 related to labor claims (R$ 92,656 at December 31, 2017).

• 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 and the SEC, the Company assumed the following main obligations:

• Payment of US$ 98.2 million to the SEC (of which US$ 20.0 million or R$ 64,0 million due to the CVM and the MPF under the TCAC , as disgorgement of profits.

• Payment of $ 107.3 million to the DOJ as a 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.

• 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 monitorship for a period of 03 (three) years.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

In February 2017, the United States authorities appointed a monitor as required under the above- mentioned definitive agreements with the United States authorities. In October 2017, the monitor delivered his first report, which contained certain observations and recommendations to further improve the Company's compliance program, including the review and/or creation of anti-corruption related policies and procedures.

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.

• In August 2016, a putative securities class action was filed in a US court against the Company and certain of its former executives. In March 30, 2018 the Court granted the motion to dismiss, filed by the Company and was no appeal against this decision. Therefore, such class action is closed.

26. Post-retirement benefits

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Medical benefits plan Brazil 102,960 98,086 110,414 105,191 Medical benefits plan subsidiaries - - 16,780 14,194 Post-retirement benefits 102,960 98,086 127,194 119,385

26.1 Post-retirement healthcare benefits provided by the Company in Brazil

The Parent Company and some of its subsidiaries have medical healthcare provided to its employees that is defined as a post-employement 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 at which the contribution made by the retired employees is insufficient to cover the medical plan expenses, which would represent exposure for the Company.

26.2 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 employees concerned and their dependents are provided on an accrual basis based on actuarial studies and the calculation is reviewed annually.

26.3 Defined contribution pension plan

The Company and certain subsidiaries sponsor a defined contribution pension plan for their employees, in which participation is optional. The Company's contributions to the plan for the six months ended June 30, 2018 and 2017 were R$ 35,249 and R$ 34,822, respectively.

56 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

27. Financial instruments

27.1 Financial instruments by category

27.1.1 Parent company

06.30.2018 Fair value Fair value through other Note Amortised cost through profit or Total comprehensive loss income Assets Cash and cash equivalents 4 1,373,456 997,647 - 2,371,103 Accounts receivable from subsidiaries 1,876,159 - - 1,876,159 Financial investments 5 7,165,369 25,906 759 7,192,034 Guarantee Deposits 10 1,301,517 - - 1,301,517 Trade accounts receivable, net 6 1,313,482 - - 1,313,482 Derivative financial instruments 7 - - 60,896 60,896 13,029,983 1,023,553 61,655 14,115,191 Liabilities Loans and financing 19 11,557,495 - 1,815,519 13,373,014 Trade accounts payable and others liabilities 4,467,794 - - 4,467,794 Financial guarantee and of residual value 24 49,835 - 416,722 466,557 Derivative financial instruments 7 - - 85,859 85,859 16,075,124 - 2,318,100 18,393,224

12.31.2017 (Restated) Fair value Fair value through other Note Amortised cost through profit or Total comprehensive loss income Assets Cash and cash equivalents 4 1,786,034 627,467 - 2,413,501 Accounts receivable from subsidiaries 1,736,992 - - 1,736,992 Financial investments 5 6,083,818 766,990 306,388 7,157,195 Guarantee Deposits 10 1,100,035 - - 1,100,035 Trade accounts receivable, net 6 782,289 - - 782,289 Derivative financial instruments 7 - - 110,329 110,329 11,489,168 1,394,457 416,717 13,300,341 Liabilities Loans and financing 19 11,968,956 - - 11,968,956 Trade accounts payable and others liabilities 3,639,595 - - 3,639,595 Financial guarantee and of residual value 24 56,897 - 360,345 417,242 Derivative financial instruments 7 - - 28,019 28,019 15,665,448 - 388,364 16,053,812

27.1.2 Consolidated

06.30.2018 Fair value Fair value through other Note Amortised cost through profit or Total comprehensive loss income Assets Cash and cash equivalents 4 Cash and 3,128,773 cash equivalents 1,238,303 - 4,367,076 Financial investments 5 Financial 8,257,707 assets 25,906 231,815 8,515,428 Guarantee Deposits 10 1,491,806 - - 1,491,806 Collateralized accounts receivable 9 Trade accounts1,071,687 receivable, net - - 1,071,687 Trade accounts receivable, net 6 Collateralized 3,543,206 accounts receivable - - 3,543,206 Customer and commercial financing 8 Customer 59,064 and commercial financing - - 59,064 Derivative financial instruments 7 Derivative financial - instruments - 62,876 62,876 17,552,243 1,264,209 294,691 19,111,143 Liabilities Loans and financing 19 12,946,665 - 2,716,669 15,663,334 Trade accounts payable and others liabilities 6,113,384 - - 6,113,384 Financial guarantee and of residual value 24 134,370 - 416,722 551,092 Derivative financial instruments 7 - - 88,181 88,181 19,194,419 - 3,221,572 22,415,991

57 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

12.31.2017 (Restated) Fair value Fair value through other Note Amortised cost through profit or Total comprehensive loss income Assets Cash and cash equivalents 4 Cash and3,478,080 cash equivalents 725,639 - 4,203,719 Financial investments 5 Financial 7,325,253 assets 830,432 500,991 8,656,676 Guarantee Deposits 10 1,302,678 - - 1,302,678 Collateralized accounts receivable 8 Collateralized 955,234 accounts receivable - - 955,234 Trade accounts receivable, net 6 Trade 2,527,957accounts receivable, net - - 2,527,957 Customer and commercial financing 8 Customer 54,366 and commercial financing - - 54,366 Derivative financial instruments 7 Derivative financial - instruments - 113,632 113,632 15,643,568 1,556,071 614,623 17,814,262 Liabilities Loans and financing 19 13,888,752 - - 13,888,752 Trade accounts payable and others liabilities 4,969,945 - - 4,969,945 Financial guarantee and of residual value 24 158,498 - 360,345 518,843 Capital Lease 19 38 - - 38 Derivative financial instruments 7 - - 29,606 29,606 19,017,233 - 389,951 19,407,184

27.2 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 following methods were used to estimate the fair value of each category of financial instrument for which it is possible to estimate the fair value.

The carrying amounts of cash, financial investments, accounts receivable, other financial assets and current liabilities are approximately their fair values. The fair value of securities measured at amortized cost is estimated by the discounted cash flow methodology. The fair value of non-current loans is based on the value of the contractual cash flows. The discount rate used, when applicable, is based on 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 available in active markets for identical assets or liabilities at the reporting date. 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.

• Level 2 - pricing inputs other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reporting date. However, they can be directly or indirectly observable at the statement 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

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

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.

27.2.1 Parent company

06.30.2018

Level 2 Level 3 Total Book value

Assets Cash and cash equivalents 4 997,647 - 997,647 2,371,103 Financial investments 5 25,906 759 26,665 7,192,034 Derivative financial instruments 7 60,896 - 60,896 60,896 1,084,449 759 1,085,208 9,624,033 Liabilities Loans and financing 19 1,815,519 - 1,815,519 1,815,519 Financial guarantee and of residual value 24 - 416,722 416,722 416,722 Derivative financial instruments 7 85,859 - 85,859 85,859 1,901,378 416,722 2,318,100 2,318,100

12.31.2017 (Restated)

Level 2 Level 3 Total Book value

Assets Cash and cash equivalents 4 627,467 - 627,467 2,413,501 Guarantee Deposits 10 1,073,377 - 1,073,377 1,100,035 Derivative financial instruments 7 110,329 - 110,329 110,329 1,811,173 - 1,811,173 3,623,865 Liabilities Loans and financing 19 - - - 10,317,030 Financial guarantee and of residual value 24 - 360,345 360,345 360,345 Derivative financial instruments 7 28,019 - 28,019 28,019 28,019 360,345 388,364 10,705,394

Fair value of financial instruments measurement using significant unobservable imputs (Level 3) Assets Liabilities At 12.31.2016 (Restated) 759 398,359 Market value - (41,908) Translation adjustments - 3,894 At 12.31.2017 (Restated) 759 360,345 Market value - (4,376) Translation adjustments - 60,753 At 06.30.2018 759 416,722

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

27.2.2 Consolidated

06.30.2018

Level 2 Level 3 Total Book Value

Assets Cash and cash equivalents 4 1,238,423 - 1,238,423 4,367,076 Financial investments 5 25,906 231,815 257,721 8,515,428 Derivative financial instruments 7 62,876 - 62,876 62,876 1,327,205 231,815 1,559,020 12,945,380 Liabilities Loans and financing 19 2,716,669 - 2,716,669 2,716,669 Financial guarantee and of residual value 24 - 416,722 416,722 416,722 Capital Lease 19 - - - - Derivative financial instruments 7 88,181 - 88,181 88,181 2,804,850 416,722 3,221,572 3,221,572

12.31.2017 (Restated)

Level 2 Level 3 Total Book Value

Assets Cash and cash equivalents 4 725,639 - 725,639 4,203,719 Financial investments 5 830,432 194,603 1,025,035 8,656,676 Guarantee Deposits 10 - - - 1,302,678 Collateralized accounts receivable - - - 955,234 Trade accounts receivable, net 6 - - - 2,372,385 Customer and commercial financing 8 - - - 54,366 Derivative financial instruments 7 113,632 - 113,632 113,632 1,669,703 194,603 1,864,306 17,658,690 Liabilities Loans and financing 19 - - - 4,182,569 Financial guarantee and of residual value 24 - 360,345 360,345 360,345 Capital Lease 19 - - - 38 Derivative financial instruments 7 29,606 - 29,606 29,606 29,606 360,345 389,951 4,572,558

Fair value of financial instruments measurement using significant unobservable imputs (Level 3) Assets Liabilities At 12.31.2016 (Restated) 114,077 398,359 Adding Shares 156,640 - Disposal Claim (115,796) - Remeasurement 37,895 - Market value - (41,908) Translation adjustments - 3,894 Exchange variation 1,787 - At 12.31.2017 (Restated) 194,603 360,345 Adding Shares 4,627 - Disposal Claim 704 - Market value - (4,376) Translation adjustments - 60,753 Exchange variation 31,881 - At 06.30.2018 231,815 416,722

27.3 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 identifying 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 offsetting elements in the

60 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

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.

27.3.1 Capital management

The Company uses capital management to ensure the continuity of its investment program and offer a return to its stockholders and benefits to its stakeholders and also to maintain an optimized capital structure in order to reduce costs.

The Company may review its dividends payment policy, pay back capital to the stockholders, 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 to maximize the return to the stockholders. The ratio between the liquidity and the return to the stockholders 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.

At June 30, 2018, cash and cash equivalents and financial investments was lower than the financial indebtedness of the Company in R$ 2,780,830. At December 31, 2017 cash and cash equivalents and financial investments was lower than the financial indebtedness of the Company's by R$ 1,028,395.

Of the total financial indebtedness as of June 30, 2018, 8,9% was short-term (9.3% at December 31, 2017) and the average weighted term was equivalent to 5.6 years (6,0 years at December 31, 2017). The Company's own capital accounted for 33.8% of the total liabilities at June 30, 2018 and 35.0% at December 31, 2017.

27.3.2 Credit risk

Credit risk is the risk of a counterparty to a transaction 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.

• Financial investments

The credit risk of cash and financial investments, which is managed by the Company's Financial Department, is in compliance with the risk management policy. The credit limit of counterparties is reviewed on a daily basis in order to minimize concentration of risks and mitigate financial losses due to the bankruptcy of a counterparty. The Financial Management Committee assists the Financial Department in examining and reviewing operations with counterparties.

• Accounts receivable

The Company may incur losses on amounts receivable from sales of spare parts and services and customer credit ratings are analyzed continuously in order to reduce this risk. The Company may also be subject to credit risk on accounts receivable from aircraft sales until the financing structure has been completed. To minimize this credit risk, the Company operates with financial institutions to facilitate structuring of the financing.

To cover possible losses on doubtful accounts, the Company has recorded an allowance considered sufficient by management to cover expected losses on realization of the receivables. The following tables present the credit risk classification of the respective counterparty of the financial 61 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

investments (including cash and cash equivalents) and other financial assets held by the Company.

a) Credit risk for counterparties with external assessment

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 Cash and cash equivalents 2,371,103 2,413,501 4,367,076 4,203,719 Financial investments 7,192,034 7,157,195 8,515,428 8,656,676 Derivative financial instruments 60,896 110,329 62,876 113,632 Total 9,624,033 9,681,025 12,945,380 12,974,027

Based on external appraisal: AAA 37,521 172,743 37,521 172,743 AA 4,377,130 4,479,898 4,762,926 4,653,372 A 3,218,082 4,475,570 4,481,645 5,674,022 BBB 1,990,538 552,055 3,433,355 2,276,772 BB - - 1,014 1,550 N/A 762 759 228,919 195,568 Total 9,624,033 9,681,025 12,945,380 12,974,027

N/A - Not available: no observable input to credit assessment. As of June 30, 2018 includes amounts related to credit right received in the bankruptcy filing of Republic Airways.

b) Credit risk for counterparties without external evaluation

Parent Company Consolidated 06.30.2018 12.31.2017 06.30.2018 12.31.2017 (Restated) (Restated) Collateralized accounts receivable - - 1,071,687 955,234 Trade accounts receivable, net 1,313,482 782,289 3,543,206 2,528,106 Customer and commercial financing - - 59,064 54,366 Accounts receivable from subsidiaries 1,876,159 1,736,992 - - Total 3,189,641 2,519,281 4,673,957 3,537,706

Based on internal appraisal: Group 1 883 13,679 1,294 18,645 Group 2 88,933 83,857 416,033 317,943 Group 3 3,099,825 2,421,745 4,256,630 3,201,118 Total 3,189,641 2,519,281 4,673,957 3,537,706

Group 1 : New customers (less than one year) Group 2 : Customers (more than one year) impaired Group 3 : Customers (more than one year) not impaired

27.3.3 Liquidity risk

This is the risk of the Company not having sufficient liquid 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 dollars and reais, based on contracts for future disbursements and receipts, and monitored daily 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:

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

a) Parent company

Less than one One to three Three to five More than five Total year years years years

At June 31, 2018 Loans and financing 17,110,445 1,747,049 3,050,852 5,340,117 6,972,427 Trade accounts payable 2,835,936 2,835,936 - - - Financial Guarantees 466,557 90,576 100,679 113,478 161,824 Other Liabilities 1,038,502 11,828 220,577 708,784 97,313 Total 21,451,440 4,685,389 3,372,108 6,162,379 7,231,564

At December 31, 2017 Loans and financing 15,000,997 1,561,682 2,389,993 3,220,905 7,828,417 Trade accounts payable 2,089,893 2,089,893 - - - Financial Guarantees 417,242 19,191 173,630 102,987 121,434 Other Liabilities 814,895 9,378 153,596 575,904 76,017 Total 18,323,027 3,680,144 2,717,219 3,899,796 8,025,868

b) Consolidated

Less than one One to three Three to five More than five Total year years years years

At June 31, 2018 Loans and financing 19,926,554 2,116,662 3,840,266 5,534,797 8,434,829 Trade accounts payable 3,628,888 3,628,888 - - - Recourse and Non Recourse Debt 1,418,513 100,422 1,265,026 30,915 22,150 Financial Guarantees 551,092 150,316 100,679 113,478 186,619 Other Liabilities 933,001 1,103 182,610 385,302 363,986 Total 26,458,048 5,997,391 5,388,581 6,064,492 9,007,584

At December 31, 2017 Loans and financing 17,865,560 1,626,322 2,596,427 4,036,277 9,606,534 Trade accounts payable 2,728,027 2,728,027 - - - Recourse and Non Recourse Debt 1,204,173 58,092 1,100,555 26,523 19,003 Financial Guarantees 518,843 73,559 173,630 102,987 168,667 Other Liabilities 844,253 37,670 152,483 305,377 348,723 Total 23,160,856 4,523,670 4,023,095 4,471,164 10,142,927

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).

27.3.4 Market risk

a) Interest rate risk

This risk arises from the possibility of the Company incurring losses on account of interest rate fluctuations that increase the financial expense of liabilities subject to floating interest rates, reducing the income on assets subject to floating rates and / or fluctuations in fair value when calculating the price of assets or liabilities marked to market at fixed rates.

The items in the financial statements most affected by interest risks are:

• Cash, cash equivalents and financial investments - 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, analyzing a variety of risk factors that might affect the return on the investments. The financial income determined in the period already reflects the effects of marking the assets in the Brazilian and foreign investment portfolios to market.

• Loans and financing - the Company uses derivative contracts to hedge against the risk of fluctuations in interest rates on certain transactions, and also continuously monitors market interest rates to evaluate the potential need to contract new derivative transactions to protect against the risk of volatility in these rates. 63 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

At June 30, 2018, the Company's cash, cash equivalents, financial investments and loans and financing were indexed as follows:

a.1) Parent company

Without derivative effect Pre-fixed Post-fixed Total Amount % Amount % Amount % Cash, cash equivalents and financial investments 7,955,878 83.19% 1,607,259 16.81% 9,563,137 100.00% Loans and financing 12,497,056 93.45% 875,958 6.55% 13,373,014 100.00%

With derivative effect Pre-fixed Post-fixed Total Amount % Amount % Amount % Cash, cash equivalents and financial investments 7,955,878 83.19% 1,607,259 16.81% 9,563,137 100.00% Loans and financing 10,681,540 79.87% 2,691,475 20.13% 13,373,015 100.00%

a.2) Consolidated

Without derivative effect Pre-fixed Post-fixed Total Amount % Amount % Amount % Cash, cash equivalents and financial investments 10,802,560 83.85% 2,079,944 16.15% 12,882,504 100.00% Loans and financing 14,130,552 90.21% 1,532,782 9.79% 15,663,334 100.00%

With derivative effect Pre-fixed Post-fixed Total Amount % Amount % Amount % Cash, cash equivalents and financial investments 10,802,560 83.85% 2,079,944 16.15% 12,882,504 100.00% Loans and financing 12,325,931 78.69% 3,337,403 21.31% 15,663,334 100.00%

At June 30, 2018, the Company's cash equivalents and floating rate financing were indexed as follows:

a.3) Parent company

Without derivative effect With derivative effect Amount % Amount % 1,607,259 100.00% 1,607,259 100.00% Cash equivalents and financial investments CDI 1,607,259 100.00% 1,607,259 100.00%

Loans and financing 875,957 100.00% 2,691,475 100.00% . CDI - 0.00% 1,815,518 67.45% . LIBOR 867,482 99.03% 867,482 32.23% . TJLP 8,475 0.97% 8,475 0.32%

a.4) Consolidated

Without derivative effect With derivative effect Amount % Amount %

Cash equivalents and financial investments 2,079,944 100.00% 2,079,944 100.00% CDI 1,848,129 88.85% 1,848,129 88.85% LIBOR 231,815 11.15% 231,815 11.15%

Loans and financing 1,532,782 100.00% 3,337,403 100.00% . CDI - 0.00% 1,815,518 54.40% . LIBOR 1,524,307 99.45% 1,513,410 45.35% . TJLP 8,475 0.55% 8,475 0.25%

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

b) Foreign exchange rate risk

The Company's functional currency is the US dollar (Note 2.2.2).

Consequently, the Company's operations which are most exposed to foreign exchange gains/losses are those denominated in Reais (labor costs, taxes, local expenses, financial investments and loans and financing) as well as assets and liabilities in subsidiaries with a currency different from their functional currency.

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 daily 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 does not protect against the risk of fluctuations in future results due to the appreciation or depreciation of the Real that can, when measured in dollars, show an increase or reduction of the share 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 profit or loss.

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 7).

At June 30, 2018, the Company had assets and liabilities denominated in several currencies, as shown below: b.1) Parent company

Without the effect of derivative transactions 06.30.2018 12.31.2017 (Restated) Loans and financing Brazilian reais 1,823,993 2,076,705 U.S. dollars 11,549,021 9,892,251 13,373,014 11,968,956 Trade accounts payable Brazilian reais 249,968 352,636 U.S. dollars 2,561,590 1,709,692 Euro 20,925 26,114 Other currencies 3,453 1,451 2,835,936 2,089,893 Total (1) 16,208,950 14,058,849

Cash and cash equivalents and financial investments Brazilian reais 1,615,381 2,273,793 U.S. dollars 7,947,740 7,296,895 Euro 4 8 9,563,137 9,570,696

Trade accounts receivable: Brazilian reais 650,952 411,815 U.S. dollars 644,550 355,680 Euro 17,980 14,794 1,313,482 782,289 Total (2) 10,876,619 10,352,985

Net exposure (1 - 2): Brazilian reais (192,372) (256,267) U.S. dollars 5,518,321 3,949,368 Euro 2,941 11,312 Other currencies 3,441 1,451

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

b.2) Consolidated

Without the effect of derivative transactions 06.30.2018 12.31.2017 (Restated) Loans and financing Brazilian reais 1,823,993 2,081,206 U.S. dollars 13,749,144 11,761,240 Euro 90,197 46,344 Other currencies - - 15,663,334 13,888,790 Trade accounts payable Brazilian reais 214,805 289,839 U.S. dollars 3,142,165 2,053,920 Euro 265,665 380,521 Other currencies 6,253 3,747 3,628,888 2,728,027 Total (1) 19,292,222 16,616,817

Cash and cash equivalents and financial investments Brazilian reais 1,857,706 2,481,732 U.S. dollars 10,398,766 9,853,693 Euro 602,569 322,552 Other currencies 23,463 202,418 12,882,504 12,860,395

Trade accounts receivable: Brazilian reais 676,555 457,267 U.S. dollars 2,441,172 1,666,495 Euro 423,718 384,368 Other currencies 1,761 19,976 3,543,206 2,528,106

Total (2) 16,425,710 15,388,501

Net exposure (1 - 2): Brazilian reais (495,463) (567,954) U.S. dollars 4,051,371 2,294,972 Euro (670,425) (280,055) Other currencies (18,971) (218,647)

The Company has other financial assets and liabilities also influenced by foreign exchange variations that are not included in the table above. They are used to minimize exposure in the currencies presented.

27.4 Sensitivity analysis

In the terms defined by CVM, in Instruction 475/08, 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 of the monetary and foreign exchange variations on the financial income and expense determined on the balances recorded at June 30, 2018, in the event of the occurrence 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 financial statements. The use of different assumptions and/or methodologies could have a material effect on the estimates presented below.

27.4.1 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 fixed interest rates were not included. The probable scenario is based on the Company's

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated estimates 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.

In the sensitivity analysis of derivative contracts, positive and negative variations of 25% and 50% were applied to the market yield curve (BM&FBOVESPA) as of the reporting date.

27.4.2 Interest risk factor

a) Parent company

Additional variations in book balances (*) Amounts Probable Risk factor exposed at -50% -25% +25% +50% scenario 06.30.2018

Cash, cash equivalents and financial investments CDI 1,607,259 (50,468) (24,350) 1,768 27,886 54,004 Net impact CDI 1,607,259 (50,468) (24,350) 1,768 27,886 54,004

Loans and financing LIBOR (867,482) (10,131) (4,347) 1,437 7,220 13,004 Net impact LIBOR (867,482) (10,131) (4,347) 1,437 7,220 13,004

Loans and financing TJLP (8,475) (292) (153) (13) 127 267 Net impact TJLP (8,475) (292) (153) (13) 127 267

Rates considered CDI 6.39% 3.25% 4.88% 6.50% 8.13% 9.75% Rates considered LIBOR 2.50% 1.33% 2.00% 2.67% 3.33% 4.00% Rates considered TJLP 6.75% 3.30% 4.95% 6.60% 8.25% 9.90%

(*) The positive and negative variations of 25% and 50% were applied on the rates in effect at 06.30.2018.

b) Consolidated

Additional variations in book balances (*) Amounts Probable Risk factor exposed at -50% -25% +25% +50% scenario 06.30.2018

Cash equivalents and financial investments CDI 1,848,129 (58,031) (27,999) 2,033 32,065 62,097 Net impact CDI 1,848,129 (58,031) (27,999) 2,033 32,065 62,097

Cash equivalents and financial investments LIBOR 231,815 (2,707) (1,162) 384 1,929 3,475 Loans and financing LIBOR (1,524,307) 17,801 7,638 (2,525) (12,687) (22,850) Net impact LIBOR (1,292,492) 15,094 6,476 (2,141) (10,758) (19,375) Financial investments TJLP ------Loans and financing TJLP (8,475) 292 153 13 (127) (267) Net impact TJLP (8,475) 292 153 13 (127) (267)

Rates considered CDI 6.39% 3.25% 4.88% 6.50% 8.13% 9.75% Rates considered LIBOR 2.50% 1.33% 2.00% 2.67% 3.33% 4.00% Rates considered TJLP 6.75% 3.30% 4.95% 6.60% 8.25% 9.90%

(*) The positive and negative variations of 25% and 50% were applied on the rates in effect at 06.30.2018.

27.4.3 Foreign exchange risk factor a) Parent company

Additional variations in book balances (*) Amounts Probable Risk factor exposed at -50% -25% +25% +50% scenario 06.30.2018 Assets Cash, cash equivalents and financial investments BRL 1,615,381 833,650 443,165 52,679 (337,807) (728,293) Other assets BRL 1,838,923 949,460 504,729 59,997 (384,734) (829,466) 3,454,304 1,783,110 947,894 112,676 (722,541) (1,557,759) Liabilities Loans and financing BRL (1,823,993) (941,751) (500,631) (59,510) 381,611 822,732 Other liabilities BRL (1,497,553) (773,206) (411,033) (48,859) 313,314 675,487 (3,321,546) (1,714,957) (911,664) (108,369) 694,925 1,498,219 Net impact 132,758 68,153 36,230 4,307 (27,616) (59,540) Exchange rate considered 3.8558 1.8650 2.7975 3.7300 4.6625 5.5950

(*) The positive and negative variations of 25% and 50% were applied on the rates in effect at 06.30.2018.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

b) Consolidated

Additional variations in book balances (*) Amounts Probable Risk factor exposed at -50% -25% +25% +50% scenario 06.30.2018 Assets Cash, cash equivalents and financial investments BRL 1,857,706 959,158 509,884 60,610 (388,664) (837,938) Other assets BRL 1,595,839 823,953 438,009 52,066 (333,877) (719,820) 3,453,545 1,783,111 947,893 112,676 (722,541) (1,557,758) Liabilities Loans and financing BRL (1,823,993) (941,751) (500,631) (59,510) 381,611 822,732 Other liabilities BRL (1,497,553) (773,206) (411,033) (48,859) 313,314 675,487 (3,321,546) (1,714,957) (911,664) (108,369) 694,925 1,498,219 Net impact 131,999 68,154 36,229 4,307 (27,616) (59,539) Exchange rate considered 3.8558 1.8650 2.7975 3.7300 4.6625 5.5950

(*) The positive and negative variations of 25% and 50% were applied on the rates in effect at 06.30.2018.

27.4.4 Derivative contracts

a) Parent company

Additional variations in book balances (*) Amounts Probable Risk factor exposed at -50% -25% +25% +50% scenario 06.30.2018

Interest swap - fair value hedge CDI 43,370 31,923 14,344 (3,379) (17,547) (32,073) Hedge designated as cash flow US$/R$ (83,017) 610,663 245,980 29,532 (318,267) (686,786) Hedge designated as cash flow LIBOR 14,683 (38) (19) 5 18 57 Total (24,964) 642,548 260,305 26,158 (335,796) (718,802) Rate considered CDI 6.39% 3.25% 4.88% 6.50% 8.13% 9.75% Rate considered US$/R$ 3.8558 1.8650 2.7975 3.7300 4.6625 5.5950 Rate considered LIBOR 2.50% 1.33% 2.00% 2.67% 3.33% 4.00%

(*) The positive and negative variations of 25% and 50% were applied on the rates in effect at 06.30.2018.

b) Consolidated

Additional variations in book balances (*) Amounts Probable Risk factor exposed at -50% -25% +25% +50% scenario 06.30.2018 Derivative Designated as Hedge Accounting

Interest swap - fair value hedge CDI 43,370 31,923 14,344 (3,379) (17,547) (32,073) Hedge desifnated as cash flow US$/R$ (83,017) 610,663 245,980 29,532 (318,267) (686,786) Hedge desifnated as cash flow LIBOR 14,683 (38) (19) 5 18 57 Interest swap LIBOR 1,507 (7) 9 25 32 323 Foreign Exchange option EUR/US$ (1,848) (9,168) (2,167) 1,334 3,435 4,835

Total (25,305) 633,373 258,147 27,517 (332,329) (713,644)

Rate considered LIBOR 2.50% 1.33% 2.00% 2.67% 3.33% 4.00% Rate considered CDI 6.39% 3.25% 4.88% 6.50% 8.13% 9.75% Rate considered US$/R$ 3.8558 1.8650 2.7975 3.7300 4.6625 5.5950 Rate considered LIBOR 1.1658 0.5850 0.8775 1.1700 1.4625 1.7550 Rate considered Object - price

(*) The positive and negative variations of 25% and 50% were applied on the rates in effect at 06.30.2018.

27.4.5 Residual value guarantees

The residual value guarantees are reported in a manner similar to derivative financial instruments.

Based on residual value guarantee contracts in force, the Company calculates 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.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Additional variations in book balances Amounts Probable exposed at -50% -25% +25% +50% scenario 06.30.2018

Financial guarantee of residual value 416,722 (493,670) (419,932) (3,800) 302,176 330,814 Total 416,722 (493,670) (419,932) (3,800) 302,176 330,814

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 end of the reporting period.

28. Stockholders' equity

28.1 Capital

The authorized capital is divided into 1,000,000,000 common shares. The Company's subscribed and paid up capital at June 30, 2018 was R$ 5,159,617 and was comprised of 740,465,044 common shares, without par value, of which 6,680,507 shares were held in Treasury.

As of December 31, 2017 the Reserve for investment and working capital balance exceeded 80% of the Capital balance as set in the Company’s bylaws (article 50, paragraph 1) and additionally the revenue reserves (excluding fiscal incentives reserve) exceeded the legal limit as per article 199 of Law 6,404/76; consequently it was approved a capital increase of R$ 370,000 in the Board meeting held on March 5, 2018. The capital increase was presented in the first quarter of 2018.

28.2 Treasury shares

Common shares acquired using resources from the investment and working capital reserve. This operation was conducted in accordance with rules approved by the Statutory Board of Directors in a meeting held on December 7, 2007 and corresponds to 6,680,507 common shares and R$ 120,283 as of June 30, 2018. These shares lose voting and economic rights during the period in which they are held in Treasury.

Value (R$ Share value Net income of thousand) Quantity (R$) uses

In the beggining of the year 134,801 7,423,705 18.16 - Used for stock options plan (i) (14,518) (743,198) 19.53 4,224 At june 30, 2018 120,283 6,680,507 18.01 4,224

(i) Common shares used on stock options granted by the executive remuneration plan, as described in Note.

At June 30, 2018, the market value of the shares held in treasury was R$ 162,069 (December 31, 2017 - R$ 148,474).

28.3 Investment subsidy reserve

This reserve was formed pursuant to 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 subsidies received by the Company, which cannot be distributed to stockholders in the form of dividends, recognized in the statements of income in the same line as the investments.

These subsidies are not included in the calculation of the minimum mandatory dividends.

28.4 Investment and working capital reserve

The purpose of this reserve is: (i) to retain funds earmarked for investments in property, plant and equipment, without detriment to retained earnings, pursuant to art. 196 of Law 6,404/76; (ii) the Company's working capital (iii) redeem, reimburse or purchase shares of the Company and (iv) be distributed to the stockholders.

28.5 Interest on own capital

Interest on own capital is allocated to dividends and approved by the Statutory Board of Directors as follows: 69 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

• 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 R$ 14,672, corresponding to R$ 0.02 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 first quarter of 2018 in the amount of R$ 14,676, corresponding to R$ 0.02 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.

Interest on own capital approved or paid during the ínterim periods is treated as an advance on the mandatory dividends and is adjusted in the last quarter of the year to total a 15% participation in the Company's results in accordance with the bylaws.

28.6 Other comprehensive income (loss)

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 and changes in the fair value of financial instruments measured at fair value through other comprehensive income .

29. 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.

29.1 Stock options

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 Weighted average Outstanding Grants Exercised Canceled (i) exercise share options Price (R$) Grants on january 23, 2012 4,860,000 (3,200,050) (1,009,100) 650,850 11.5 Grants on march 20, 2013 4,494,000 (1,238,443) (1,266,890) 1,988,667 15.7 At june 30, 2018 9,354,000 (4,438,493) (2,275,990) 2,639,517

(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.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

29.2 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.

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 Grant value stock stock (i) shares (R$) Grants on February 25, 2014 1,570,698 30.351 158,692 3,835,542 Grants on March 03, 2015 1,237,090 30.163 482,230 11,655,363 Grants on March 10, 2016 1,095,720 31.056 460,307 11,125,507 Grants on June 09, 2016 55,994 1.130 26,350 636,880 Grants on August 25, 2016 70,978 1.125 34,724 839,281 Grants on August 24, 2017 1,925,926 30.470 498,725 12,054,051 Grants on April 12, 2018 1,394,532 30.156 115,887 2,636,531 At june 30, 2018 7,350,938 154.451 1,776,915 42,783,155

(i) Performance shares until June 30, 2018 considering the plan's vesting period.

30. Earnings per share

30.1 Basic

Basic earnings per common share is computed by dividing net income for the period by the weighted average number of shares outstanding during the period, excluding shares acquired by the Company and held in treasury.

Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) Net income attributable to owners of Embraer (507,075) 369,374 (507,075) 369,374 (507,075) 369,374 (507,075) 369,374

Weighted average number of shares (in thousands) 733,513 735,427 733,513 735,427

Basic earnings per share - reais (0.6913) 0.5023 (0.6913) 0.5023

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

30.2 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, with options to purchase shares, for which a calculation is made 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 attached to options to purchase shares. The number of shares calculated as described above is compared with the number of shares issued, assuming the exercise of share purchase options.

Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) Net income attributable to owners of Embraer (507,075) 369,374 (507,075) 369,374 Profit used to determine diluted earnings per share (507,075) 369,374 (507,075) 369,374

Weighted average number of shares (in thousands) - diluted 733,513 735,427 733,513 735,427

Dilution for the issuance of stock options (in thousands) (i) 705 609 705 609

Weighted average number of shares (in thousands) - diluted 734,219 736,036 734,219 736,036

Diluted earnings per share - reais (0.6906) 0.5018 (0.6906) 0.5018 (i) Refers to the effect of potentially dilutive shares.

At June 30, 2018, no anti-dilutive effects related to stock option plans were identified.

31. CONTRACT REVENUE WITH CUSTOMERS

Revenue comprises the amount of consideration received or that the entity expects to receive for the sale of products and services in the ordinary course of business. It is presented net of taxes, devolutions, rebates and discounts, as well as, in the Consolidated, after intercompany sales eliminations.

a) Revenues from sales of aircraft and spare parts

Revenues from sales of aircraft and spare parts are recognized when control, according to the definition of the standard, is transferred to the customer (i.e. when all the conditions for recognition are met). Revenues from sales of commercial, executive and other aircraft and spare parts are generally recognized at the time of delivery or shipment.

The Company usually receives advances from customers related to aircraft sales contracts, before the control transference. The Company concluded that there is no significant financing component in this operation.

The customer pays for sales of spare parts 30 days after the control transference, on average.

In the aircraft sales contracts, the Company may have agreed to supply spare parts, training, technical representative services and other performance obligations, which may or may not be delivered together with the aircraft. In those cases, revenues are recognized when control of the respective product or service is transferred to the customer.

b) Revenues from service contracts

Revenues from service contracts are recognized at the control transference moment (i.e. as the services are rendered).

In the Defense and security segment, some services (e.g. modernization service) follow a payment schedule agreed by the parties.

Regarding the maintenance service contracts, the Company receives payment 30 days after control transference, on average.

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Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Revenues from Exchange Pool Program are recognized monthly during the contract period and is broken down into a fixed fee and a variable fee, which is proportional to the actual hours flown by the aircraft supported by the program. The payment term is around 30 days.

c) Revenue from development contracts o

In the Defense and security segment there are operations related to products and technologies development whose control transference to the customer happens over time. In those cases, their revenues are recognized over time using the percentage of completion (POC) method based on incurred cost or physical measurements. Some contracts have price escalation clauses based on defined indexes and these are recognized on an accrual basis. The adjustments of revenue recognition relating to sales of the Defense & Security segment contracts is based on Management's best estimates as they become evident. The Company concluded that the POC method provides reliable basis to estimate the progress of those contracts whose revenues are recognized over time.

In such contracts there is a payment schedule agreed by the Company and the customers, which are different from one contract to another. After assessment, the Company concluded that there is no significant financing component the Defense and security segment contracts as there is no will from one party to finance the other party and there are factors that affect the payment date and are not under the control of either party.

The amounts of revenue by category are presented below:

• Revenue by category at June 30, 2018:

Commercial Defense and Service & Executive Jets Other Total Aviation security Support Aircraft 3,817,565 121,494 1,104,383 - 1,242 5,044,684 Spare Parts - - - 662,998 14,323 677,321 Service - 302,254 - 1,031,108 59 1,333,421 Aircraft/Development (Defense BU) - 354,795 - - - 354,795 Others 160,227 110,615 78,802 564 - 350,208 Total 3,977,792 889,158 1,183,185 1,694,670 15,624 7,760,429

North America Europe Asia Pacific Brazil Other Total

Aircraft 2,991,390 1,409,630 389,573 70,820 72,160 111,110 5,044,683 Spare Parts 260,133 126,315 23,991 16,714 227,909 22,260 677,322 Service 576,401 369,410 160,657 78,736 79,198 69,017 1,333,419 Aircraft/Development (Defense BU) - 6,043 2,348 646 327,262 18,497 354,796 Others 249,714 11,858 4,524 18,277 10,545 55,291 350,209 Total 4,077,638 1,923,256 581,093 185,193 717,074 276,175 7,760,429

• Revenue by category at June 30, 2017 (Restated):

Commercial Defense and Service & Executive Jets Other Total Aviation security Support Aircraft 4,410,552 97,908 1,341,265 - 3,135 5,852,860 Spare Parts - - - 489,096 43,574 532,670 Service - 352,222 - 1,013,057 1,368 1,366,647 Aircraft/Development (Defense BU) - 966,153 - - - 966,153 Others 101,336 29,420 120,259 77 - 251,092 Total 4,511,888 1,445,703 1,461,524 1,502,230 48,077 8,969,422

North America Europe Asia Pacific Latin America Brazil Other Total

Aircraft 4,496,903 570,782 766,880 - 16,331 1,965 5,852,861 Spare Parts 312,004 107,911 28,527 15,347 48,083 20,798 532,670 Service 504,061 360,456 131,433 60,880 242,144 67,672 1,366,646 Aircraft/Development (Defense BU) 4 11,000 4,059 - 940,483 10,607 966,153 Others 118,175 - 2,175 - 39,448 91,294 251,092 Total 5,431,147 1,050,149 933,074 76,227 1,286,489 192,336 8,969,422

73 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

• Revenue by category at June 30, 2017 (Previously filed):

Commercial Defense and Service & Executive Jets Other Total Aviation security Support Aircraft 4,410,552 96,893 1,341,265 - 3,135 5,851,845 Spare Parts - - - 489,096 43,574 532,670 Service - 288,018 - 1,013,057 1,368 1,302,443 Aircraft/Development (Defense BU) - 970,625 - - - 970,625 Others 101,336 34,209 120,259 77 - 255,881 Total 4,511,888 1,389,745 1,461,524 1,502,230 48,077 8,913,464

North America Europe Asia Pacific Latin America Brazil Other Total

Aircraft 4,496,902 569,767 766,880 - 16,331 1,965 5,851,845 Spare Parts 312,004 107,911 28,527 15,347 48,083 20,798 532,670 Service 504,061 360,456 131,433 60,880 177,941 67,672 1,302,443 Aircraft/Development (Defense BU) 4 11,000 4,059 - 944,955 10,607 970,625 Others 118,175 - 2,175 - 44,237 91,294 255,881 Total 5,431,146 1,049,134 933,074 76,227 1,231,547 192,336 8,913,464

The contracts are grouped in the categories above as they have are affected similarly by economic factors.

The deferred revenue balances (contracts liabilities) as of June 30, 2018 are R$ 433,913 in the Parent Company and R$ 487,692 in the Consolidated and as of December 31, 2017 are R$ 370,982 in the Parent Company and R$ 431,238 in the Consolidated.

See below the roll forward for the costs to obtain contracts:

Sales commissions Bank guarantee Total At December 31, 2016 (Restated) - 21,063 21,063 Additions - 4,741 4,741 Disposals - (1,315) (1,315) Exchange rate variation - 435 435 At December 31, 2017 (Restated) - 24,924 24,924 Additions 274 2,620 2,894 Disposals - (1,322) (1,322) Exchange rate variation 7 4,226 4,233 At June 31, 2017 281 30,448 30,729

The were no impairment losses of costs to obtain contracts.

The contract assets are amortized when (or as) the revenue is recognized.

As of June 30, 2018 the impairment losses of contract receivables were R$ 3,537 in the Parent Company and R$ 39,666 in the Consolidated and as of June 30 , 2017 were R$ 8,679 in the Parent Company and R$ 59,349 in the Consolidated.

Out of the total revenues of the second quarter of 2018, R$ 168,301 were included in the contract liability balance at the beginning of the period in the Parent Company and R$ 277,277 in the Consolidated, while for the second quarter of 2017, R$ 153,763 in the Parent Company and R$ 275,686 in the Consolidated were included in the contract liability balance at the beginning of the period.

The Company had a firm order backlog (i.e. contracts with unsatisfied or partially satisfied performance obligations). The amount allocated to the unsatisfied (or partially satisfied) performance obligations as of June 30, 2018 was R$ 67,050,727. According to the Company’s estimatimates R$ 54,324,558 will be recognized as revenue in the next 5 years.

The amounts above do not include short term contracts (one year or less), as permitted by the standard. Still according to the standard, the amounts above do not include variable considerations that are restricted.

32. Revenue (expenses) by type

The Company opted to present items in the statement of income by function. The table below shows the detailed costs and expenses by nature:

74 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) As presented in the statements of income: Net revenue 5,553,040 6,377,538 7,760,429 8,969,422 Cost of sales and services (4,838,179) (5,219,940) (6,682,505) (7,408,519) Administrative (159,413) (150,111) (293,425) (262,182) Selling (448,172) (401,395) (486,049) (485,151) Research (58,603) (54,012) (66,900) (55,680) Other income (expenses), net (383,447) (54,923) (225,344) (57,086) Equity in earnings of subsidiaries/investees 227,061 2,836 (918) (458) Operating profit (107,713) 499,993 5,288 700,346

Revenue (expenses) by nature: Revenue from sales of goods 5,259,078 5,718,428 6,971,505 7,320,710 Revenue from sales of services 374,527 729,432 895,866 1,746,749 Sales deductions (80,565) (70,322) (106,942) (98,037) General manufacturing costs (i) (4,490,590) (4,841,183) (6,217,962) (6,880,652) Depreciation (175,641) (189,598) (284,771) (328,208) Amortization (171,948) (189,159) (179,772) (199,659) Personnel expenses (200,962) (175,009) (191,915) (388,058) Selling expenses (72,192) (68,436) - (96,792) Restructuring expenses - (18,181) (23,745) (19,706) Other income (expense) (549,420) (395,979) (856,976) (356,001) Operating profit (107,713) 499,993 5,288 700,346

(i) Refers to costs with materials, direct labor and general manufacturing expenses.

33. Other operating income (expense), net

Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 (Restated) (Restated) Corporate projects (106,094) (1,173) (106,094) (1,173) Assets devaluation (i) - - (53,283) (45,451) Taxes on other outputs (43,200) (39,247) (43,200) (41,065) Expenses system project (18,322) (28,678) (18,322) (28,678) Provision for contingencies (15,924) (6,755) (15,858) (7,143) Training and development (11,989) (15,593) (11,989) (15,593) Flight safety standards (7,265) (7,526) (7,265) (7,526) Aircraft maintenance and flights costs - fleet (6,129) (4,957) (6,129) (4,957) Contractual fines (ii) 301 21,255 (1,063) 19,310 Other Intercompany operations (220,716) - - - Reversal of tax provisions (iii) - 14,419 - 14,419 Restructuring expenses (iv) - (18,181) - (19,706) Financial guarantee - - - 31,562 Accounts payable for penalties - (10,830) - (10,831) Contractual fines revenue (v) 7,505 20,641 8,240 20,782 Miscellaneous Sales 8,254 7,786 14,363 19,066 Royalties 27,505 13,079 27,505 13,079 Reimbursement of expenses 34,610 12,655 34,880 14,673 Others (31,983) (11,818) (47,129) (7,854) (383,447) (54,923) (225,344) (57,086)

(i) Impairment of assets related to certain aircraft in fixed assets and devaluation of the residual value related to assets related to structured operations recorded in collateralized accounts receivable.

(ii) Refers to contractual penalties to be paid to customers and suppliers due to failure to comply with contractual conditions.

75 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

(iii) Refers to recognition of the Modernization of Tax Administration Fund (FUNDAF) legal decision which was favorable to the Company.

(iv) Refers to the amounts provisioned to comply with the Company's obligations related to the voluntary termination plan.

(v) Substantially fines charged to customers for cancellation of sales contracts, mainly in the executive segment, in accordance with the contract.

34. Financial income (expense), net

Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 Financial income: Interest on cash and cash equivalents and financial assets 133,616 209,248 163,471 234,803 Interest on taxes, social charges and contributions - 1,435 - 1,397 Interest on receivables 37,494 49,680 36,240 69,567 Residual value guarantee 4,376 32,653 - 26,305 Taxes over financial revenue (15,669) (23,959) (15,940) (24,323) Other 220 8,756 7,372 (16,099) Total financial revenues 160,037 277,813 191,143 291,650

Financial expenses: Interest on loans and financing (335,643) (273,509) (392,799) (320,960) Residual value guarantee - - (828) - Interest on taxes, social charges and contributions (10,373) - (10,382) - IOF tax on financial transactions (1,554) (7,142) (1,989) (8,039) Financial restructuring costs (2,221) (1,516) (2,221) (1,516) Other (20,373) (12,778) (35,049) (23,564) Total financial expenses (370,164) (294,945) (443,268) (354,079)

Derivative transactions (46,171) 12,971 (46,148) 11,431 Financial income (expense), net (256,298) (4,161) (298,273) (50,998)

(i) Debt forgiveness due to PERT (see Note 22 (ii)).

35. Foreign exchange gains (losses), net Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 Assets : Cash and cash equivalents and financial assets (229,001) (29,537) (283,703) (29,133) Tax credits (102,285) (11,057) (110,172) (10,759) Trade accounts receivable, net (194,498) (20,076) (122,630) (55,026) Advances to suppliers - - (4,715) - Other (61,367) (6,053) (69,333) 1,393 (587,151) (66,723) (590,553) (93,525) Liabilities : Loans and financing 282,796 28,809 283,714 28,624 Advances from customers - 4,461 - 27,325 Provisions 78,661 10,468 82,461 8,545 Taxes and charges payable 47,055 (81) 46,479 (1,178) Accounts payable 49,845 10,040 72,581 11,349 Suppliers 23,916 4,703 19,286 22 Provisions for contingencies 11,004 2,916 11,529 2,910 Other (55) (1) (2,659) (267) 493,222 61,315 513,391 77,330 Net monetary and foreign exchange variations (93,929) (5,408) (77,162) (16,195)

Derivative transactions 46,289 13,434 44,355 15,079 Foreign exchange gain (loss), net (47,640) 8,026 (32,807) (1,116)

36. Responsibilities and commitments

36.1 Trade-in

The Company has offered 7 trade-in aircraft options. Trade-in transactions are directly tied to contractual obligations with the customer and the purchase of new aircraft. The exercise of the trade-in option is dependent on the customer complying 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

76 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

by the Company. The Company continuously monitors all trade-in commitments in order to anticipate any adverse economic impact.

36.2 Leases

In the Parent Company the operating leases refer to telephone and computer equipment and in the subsidiaries, to operating leases for buildings and land, machinery, vehicles and computer equipment. At June 30, 2018 the amounts recognized totaled R$ 14,801 (June 30, 2017 - R$ 18,868). These leases expire at various dates through 2040.

At June 30, 2018, the Company has operating leases with payments scheduled as follows: Parent Year Company Consolidated 2018 4,046 15,039 2019 3,869 23,043 2020 - 16,302 2021 - 15,389 After 2021 - 86,642 7,915 156,415

36.3 Financial guarantees

The table below provides quantitative data on the Company's financial guarantees provided 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.

06.30.2018 12.31.2017 Maximum financial guarantees 351,799 356,110 Maximum residual value guarantees 1,019,200 884,510 Mutually exclusive exposure (i) (111,965) (96,058) Provisions and liabilities recorded (Note 24) (466,557) (417,242) Off-balance sheet exposure 792,477 727,320 Estimated proceeds from financial guarantees and underlying assets 946,518 883,061

(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.

37. Supplemental cash flow information

36.1 Payments made during the period and transactions not affecting cash and cash equivalents

Parent Company Consolidated 06.30.2018 06.30.2017 06.30.2018 06.30.2017 Payments made during the período: Income tax and social contribution - - 106,183 74,083 Interest 110,416 117,581 347,320 173,189

Non-cash financing and investing transactions Additions to property, plant and equipment by transfer to pool parts inventory - (36,650) - - Additions to property, plant and equipment, with transfer from inventory-aircrafr - - - 41,033 Write off on Property, Plant and Equipment by transfer to pool parts inventory (32,418) - (45,248) (46,062) Write off on property, plant and equipment for providing for the sale of inventory - - (306,598) - Transferência por AFAC - 4,065 - -

38. Segment information consolidated

The management determined the operational segments of the Company, based on the reports used to make 77 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated strategic decisions, reviewed by the Company's CEO. From 2018 the Company will present the Service and Support segment as an operating segment.

Statement of income data by operating segment six months period ended June 30, 2018:

Total Commercial Defense and Service & Executive Jets Other reportable Unallocated Total Aviation security Support Segments Revenue 3,977,792 889,158 1,183,185 1,694,670 15,624 7,760,429 - 7,760,429 Cost of sales and services (3,252,419) (1,217,978) (981,693) (1,208,566) (21,849) (6,682,505) - (6,682,505) Gross Profit 725,373 (328,820) 201,492 486,104 (6,225) 1,077,924 - 1,077,924 Gross Profit % 18.2% -37.0% 17.0% 28.7% -39.8% 13.9% - 13.9%

Operating income (expense) (386,633) (135,458) (285,302) (254,180) (11,063) (1,072,636) - (1,072,636) Operating profit before financial income (expense) 338,740 (464,278) (83,810) 231,924 (17,288) 5,288 - 5,288

Financial income (expense), net ------(298,273) (298,273) Foreign exchange gains (losses), net ------(32,807) (32,807) Loss before taxes on income ------(325,792)

Income tax (expense) income ------(167,902) (167,902) Net income (493,694)

Revenue by geographic area six months period ended June 30, 2018:

Commercial Defense and Service & Executive Jets Other Total Aviation security Support North America 2,122,867 225,507 998,836 720,937 9,491 4,077,638 Europe 1,271,174 186,148 126,163 339,771 - 1,923,256 Asia Pacific 396,621 4,110 5,472 174,890 - 581,093 Latin America, except Brazil 18,576 80,864 443 85,310 - 185,193 Brazil 668 364,863 52,271 293,139 6,133 717,074 Other 167,886 27,666 - 80,623 - 276,175 Total 3,977,792 889,158 1,183,185 1,694,670 15,624 7,760,429

Statement of income data by operating segment six months period ended June 30, 2017 (Restated):

Total Commercial Defense and Service & Executive Jets Other reportable Unallocated Total Aviation security Support Segments Net Revenue 4,511,888 1,445,703 1,461,524 1,502,230 48,077 8,969,422 - 8,969,422 Cost of sales and services (3,616,602) (1,338,642) (1,341,793) (1,075,003) (36,479) (7,408,519) - (7,408,519) Gross Profit 895,286 107,061 119,731 427,227 11,598 1,560,903 - 1,560,903 Gross Profit % 19.8% 7.4% 8.2% 28.4% 24.1% 17.4% - 17.4%

Operating income (expense) (227,233) (121,674) (208,792) (263,019) (9,302) (830,020) (30,537) (860,557) Operating profit before financial income (expense) 668,053 (14,613) (89,061) 164,208 2,296 730,883 (30,537) 700,346

Financial income (expense), net ------(50,998) (50,998) Foreign exchange gains (losses), net ------(1,116) (1,116) Profit before taxes on income ------(82,651) 648,232

Income tax (expense) income ------(239,379) (239,379) Net income 408,853

Revenue by geographic area six months period ended June 30, 2017 (Restated):

Commercial Defense and Service & Executive Jets Other Total Aviation security Support North America 3,393,936 138,880 1,140,811 717,822 39,698 5,431,147 Europe 393,485 188,080 155,749 312,835 - 1,050,149 Asia Pacific 628,176 13,271 163,760 127,867 - 933,074 Latin America, except Brazil 848 7,780 1,184 66,415 - 76,227 Brazil 1,496 1,069,771 - 206,843 8,379 1,286,489 Other 93,947 27,921 20 70,448 - 192,336 Total 4,511,888 1,445,703 1,461,524 1,502,230 48,077 8,969,422

78 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186 Embraer S.A.

Notes to the Interim financial statements In thousands of reais, unless otherwise stated

Statement of income data by operating segment six months period ended June 30, 2017 (Previously filed)

Total Commercial Defense and Service & Executive Jets Other reportable Unallocated Total Aviation security Support Segments

Revenue 4,511,888 1,389,745 1,461,524 1,502,230 48,077 8,913,464 - 8,913,464 Cost of sales and services (3,616,602) (1,338,719) (1,341,793) (1,074,039) (36,479) (7,407,632) - (7,407,632) Gross Profit 895,286 51,026 119,731 428,191 11,598 1,505,832 - 1,505,832 Gross Profit % 19.8% 3.7% 8.2% 28.5% 24.1% 16.9% - 16.9%

Operating income (expense) (227,194) (126,157) (208,792) (269,092) (9,302) (840,537) (30,537) (871,074) Operating profit before financial income (expense) 668,092 (75,131) (89,061) 159,099 2,296 665,295 (30,537) 634,758

Financial income (expense), net ------(50,998) (50,998) Foreign exchange gains (losses), net ------(1,115) (1,115) Loss before taxes on income ------582,645

Income tax (expense) income ------(215,575) (215,575) Net income 367,070

Revenue by geographic area six months period ended June 30, 2017 (Previously filed):

Commercial Defense and Service & Executive Jets Other Total Aviation security Support North America 3,393,936 138,879 1,140,811 717,822 39,698 5,431,146 Europe 393,485 187,065 155,749 312,835 - 1,049,134 Asia Pacific 628,176 13,271 163,760 127,867 - 933,074 Latin America, except Brazil 848 7,780 1,184 66,415 - 76,227 Brazil 1,496 1,014,829 - 206,843 8,379 1,231,547 Other 93,947 27,921 20 70,448 - 192,336 Total 4,511,888 1,389,745 1,461,524 1,502,230 48,077 8,913,464

39. Subsequent event

On July 5, 2018, Embraer hereby informs its shareholders and the market in general that, on this date, it has entered into a preliminary and non-binding memorandum of understanding, with The Boeing Co. (“Boeing”), through which the parties have established the basic premises for a potential combination of certain businesses (“Memorandum” and “Transaction”, respectively) as detailed below. The execution of the Memorandum was duly authorized by Company’s Board of Directors at a meeting held on this date.

The Transaction will include the creation of a joint venture between the Company and Boeing, in the form of a Brazilian company (the “New Partnership”), which will operate the commercial aviation business currently being operated by the Company and combined with the operations of the New Partnership. Boeing will acquire, upon payment to the Company, shares issued by the New Partnership, so that the Company and Boeing will hold 20% and 80% of the total capital and voting stock of the New Partnership, respectively.

The executive jets and defense & security business units, among others, will not be accessible to the New Partnership and will continue to be developed and operated by Embraer.

The New Partnership will be administered by a Board of Directors and a Management Board, both bodies composed of professionals with appropriate qualifications to fill their respective positions, and Boeing shall have control of the New Partnership. The Company shall have governance rights and shall be entitled to veto certain matters, subject to terms and conditions to be established in the definitive documents.

As of July 5, 2018, the Company and Boeing will begin negotiations of the definitive agreements for the Transaction, which shall set forth in a binding manner, the structure and financial terms of the Transaction on mutually satisfactory bases. In the event that the parties reach a consensus on such definitive documents of the Transaction, Embraer will consult the Brazilian Government, and the parties shall submit necessary approvals for completion of the Transaction, including among others, (i) approval by the Brazilian Government; (ii) approvals by the competent corporate bodies of both parties involved in the Transaction; and (iii) approval of the competent regulatory authorities.

Accordingly, it is not possible at this time to provide any guarantee as to entry into definitive agreements or the consummation of the Transaction.

79 WorldReginfo - 34358543-32d0-4d08-9bf7-903c4798e186