Third Annual Analyst & Investor Meeting - Corporate Market

III Annual Analysts & Investors M e etingNov 22, 2 0 0 2III Annual Analysts & Investors M e etingNov 22, 2 0 0 2

Contents

• Our Forecast Method

• Scenario

• Market Overview

• Legacy in the market

• Legacy Product

Market Forecast Methodology

• Determine External Scenario

• Examine Internal Scenario

• Evaluate Business Jet Forecasts from Inside and Outside Sources (Top-Down Analysis)

• Perform Customer Focused Research /Survey(Bottom-Up Analysis)

• Analyze Results and Make Forecast for Inclusion in Action Plan

Scenario Overview

Ø Corporate Aviation Market has been strong and robust one

Ø Main drivers

- Fractional/ownership demand/expansion

- Globalization

- Security issues

- New models with more performance and comfort

- Airline service insatisfaction

Ø “Corporate Aircraft: tool to leverage business” a Corporate Jet Study

Scenario Overview

Ø After Sep 11: new security measures, increased interest in business aviation,

new program launches and competitors movements in business expansion

Ø Business aviation historical data demonstrates that this sector has important

participation in economy rebound

Market share by manufacturerWorldwide Corporate Jet Fleet

USA:

MEXICO:

BRASIL:

11774(70%)8,710 (76%)

444 (4%)

377 (3%)

1,240 (11%)

365 (3%)

63 (1%)

222 (2%)Brasil: 279

Mexico: 416

USA & Canada: 8.710

Total Market Forecast10 Years period (2003-2012) forecast

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Embraer Teal Honeywell Rolls Royce(est)

Forecast Average

Average: 750 per yearAverage: 750 per year

M arket O v ervie wM arket O v ervie w

Market SegmentationMarket Segmentation

Lears and Citations

$10.0 - 13.0M

$5.0 - 7.0M

$13.0 - 20.0M

$20.0 - 30.0M ChallengerG IV-SP

Lear 55/60Hawker 800; Citation VII

Supermidsize

Midsize

S m all

Large

Falcon 50

$2.4 - 5.0M

$12 - 13.0M

$6.0 - 7.0M

$9 – 10 M

$16.0 - 22.0M

$24.0 - 32.0M

$ 46 - 64.0M • BBJ1 / BBJ 2• Airbus 319 CJ

• Challenger 604• Falcon 900• G 400

• Citation X • Falcon 50 • Falcon 2000 • G200 • Challenger 300 • Horizon

• Hawker 800 XP • G100• Lear 60 • Sovereign

• Lear 45 • Excel

$20.4M

• G 500 / G 550• Global Express• Falcon 7X• Global 5000

$ 33 - 45.0M

• Citation Jet • CJ1 • CJ2 • • SJ-30 • Premier • Mustang

• Beechjet 400A • Lear 31 • Bravo

Global

Ultra-Long Range

Large

Supermidsize

MidsizeMidlightLight

Entry

20021993

Lears and Citations

$10.0 - 13.0M

$5.0 - 7.0M

$13.0 - 20.0M

$20.0 - 30.0M ChallengerG IV-SP

Lear 55/60Hawker 800; Citation VII

M arket O v ervie wM arket O v ervie w

Source: Business and Commercial Aviation May 2001

Aircraft Cabin Volume Baggage Range Price (cu.ft./ m3) (nm) (US $M)

Challenger 300 860/ 24.3 120 / 3.40 3,067 16.3

Horizon 757/ 21.4 110 / 3.11 3,245 17.3

Citation X 508/ 14.3 72 / 2.04 3,077 18.9

Gulfstream 200 870/ 24.6 150 / 4.25 3,606 20.1Falcon 50EX 700/ 19.8 115 / 3.25 3,250 19.5

Legacy 1,410/ 39.9 240/ 6.79 3,100 20.4Falcon 2000 1,024/ 28.9 134 / 3.79 3,038 23.5

Challenger 604 1,035/ 29.3 115 / 3.25 3,973 23.8Falcon 900C 1,267/ 35.8 127 / 3.58 4,404 29.5

G400 1,525/ 43.1 169 / 4.78 3,976 32.7

Best ValueBest Value

Supermidsize Segment Forecast

100120140160180200

Supermidsize segment forecast Embraer

0

50

100

150

200

250

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Average2003 /2012

Average:163 per yearAverage:163 per year

Large Segment Forecast

Average: 96 per year

Large segment forecast Embraer

0

20

40

60

80

100

120

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Average2003 /2012

Source: AIN

Market share by manufacturerProjected Supermidsize/Large Market Share by Manufacturer

Source: Embraer Corporate Jets

Forecast for the period of 2003 to 2012(163 +96 = 259 a/c on average/year)

17%

23%

23%

10%

10%

17%

CessnaRaytheonEmbraer (over 240 A/C)General DynamicsBombardierDassault

Legacy OrderbookLegacy Orderbook

Legacy Worldwide Aircraft Orders

USA - Executive 34 35 69

USA - Shuttle 32 56 88

Europe - Executive 2 - 2

Latin America - Executive 5 - 5

Total 73 91 164

Current as of September 2 0 0 2

Corporate Aircraft Fa milyCorporate Aircraft Fa mily

• Engine – A1/3

• No Winglets

• Range – 1730 – 1830 nm

• 16-37 Passengers

• Engine – A1E

• Winglets

• Range - 3100 NM

• 10-18 Passengers

Executive Version

Shuttle Versions

Executive VersionExecutive Version

C o m p arisonsC o m p arisons

1 0 2 0 3 0 4 0 5 0ft

m 3 6 9 12 15

Challenger 300

2 5‘(7.62 m)

2 3‘ 8”(7.22 m)

Horizon

G 2 0 0 2 4‘ 6”(7.46 m)

Super MidsizeFloor Plan Comparison

Source: Conklin & de Decker’s “The Aircraft Comparator”

42’6”(12.94m)

C o m p arisonsC o m p arisons

Horizon

Challenger 300

G200

W idth Height A isle Recess

Challenger 300 7 '2 '' (2 .1 8 m ) 6 '1" (1.85m)

Horizon 6 '6" (1.98m) 6 '0"(1.83m)

G 2 0 0 7 '2" (2.18m) 6 '4" (1.93m) 6" (0.15m)

Legacy 6 '1 1 "(2 .1 m ) 6 '0" (1.83m) 2" (0.05m)

Supermidsize – Cross Section Comparison Source: Conklin & de Decker’s “The Aircraft Comparator”

1 0 2 0 3 0 4 0 5 0ft

m 3 6 9 12 15

C o m p arisonsC o m p arisons

Challenger 604 25’6”(7 . 7 7 m)

G 4 0 041’(12.5 m)

LargeFloor Plan Comparison

Source: Conklin & de Decker’s “The Aircraft Comparator”

42’6”(12.94m)

C o m p arisonsC o m p arisons

W idth Height A isle Recess

Challenger 604 8 '2" (2.48m) 6 '1 " ( 1 . 8 5 m )

G 4 0 0 7 '4" (2.22m) 6 '2 " ( 1 . 8 7 m )

Legacy 6 '1 1 " (2 .1 m ) 6 '0 " ( 1 . 8 3 m ) 2 " ( 0 . 0 5 m )

Challenger 604

G400

MidsizeCross Section Comparison

Large – Cross Section Comparison Source: Conklin & de Decker’s “The Aircraft Comparator”

Interior Configuration Interior Configuration

Interior Configuration Interior Configuration

Galley

Interior Configuration Interior Configuration

First Seating Area

Interior Configuration Interior Configuration

Second Seating Area

Interior Configuration Interior Configuration

Third Seating Area

Interior Configuration Interior Configuration

Lavatory

PerformancePerformance

Range – As Projected North AmericaTakeoff at ISA Long Range Cruise85% annual winds10 pax @ 200 lbNBAA reservesAE 3007 A1E Engines

PerformancePerformance

Range – As Projected Latin AmericaTakeoff at ISA Long Range Cruise85% annual winds10 pax @ 200 lbNBAA reservesAE 3007 A1E Engines

PerformancePerformance

Range – As Projected EuropeTakeoff at ISA Long Range Cruise85% annual winds10 pax @ 200 lbNBAA reservesAE 3007 A1E Engines

PerformancePerformance

Range – As Projected Asia & AfricaTakeoff at ISA Long Range Cruise85% annual winds10 pax @ 200 lbNBAA reservesAE 3007 A1E Engines

Aircraft ReliabilityAircraft Reliability

Built to operate within typicalairline schedule of 2,500 – 3,000 hours per year:

- Minimum downtime for inspections

- Ease of maintenance

- High reliability

12 Operational Legacy

Over 600 planes of the same family flying across the globe

Aircraft Availability – Over 99%

Proven Aircraft Maturity

Product Enhance m e ntsProduct Enhance m e nts

R olls-Royce AE 30 0 7 A 1 E EngineR olls-Royce AE 30 0 7 A 1 E Engine

• Increased Thrust – 7%

• Improved Fuel Efficiency

• Improved Field Performance

• Improved Time to Climb

This New Engine Provides:

0

20

40

60

80

1 0 0

1 2 0

Takeoff Sideline A p p roach

Noi

se Lev

el (EPNd

B)

Cumulative

Stage IV requires a cumulative reduction of ten dB total with at least two dB in any two conditions combined.

Legacy Noise Levels

Stage IIIStage III

Stage III

0

50

1 0 0

1 5 0

2 0 0

2 5 0

3 0 0Stage IV

R olls-Royce AE 30 0 7 A 1 E EngineR olls-Royce AE 30 0 7 A 1 E Engine

Airframe Aerodynamic Improvements

Engine New A1E Engine

Avionics New EICAS Software Version

APU Model 500R

Interior New Options

Exterior Paint Best Warranty in the Industry

Product Enhance m e ntsProduct Enhance m e nts

Product Improvements

Progra m Enhance m e ntProgra m Enhance m e nt

Sales & Design Center

Aircraft CertificationAircraft Certification

Certification Completed

• FAA – September 2002

• JAA – July 2002

• CTA – December 2001

Legacy Market OutlookLegacy Market Outlook

10 year objectives:

• Produce & deliver 240Legacys

• Annually deliver between 24and 30 aircraft

• Average 10% Market shareof the supermidsize/large category

10 year objectives:

• Produce & deliver 240Legacys

• Annually deliver between 24and 30 aircraft

• Average 10% Market shareof the supermidsize/large category

Price - Executive Configuration $20,425,000*

* January 2002 Economic Conditions

Ideal balance between capability, cost, performance & price

Legacy ShuttleLegacy Shuttle

Seating Configurations

19 Seats at 19 Seats at 37 in Pitch37 in Pitch

31 Seats at 31 Seats at 36 in Pitch36 in Pitch

37 Seats at 37 Seats at 31 in Pitch31 in Pitch

Interior ConfigurationInterior Configuration

Low Density Version

Interior ConfigurationInterior Configuration

High Density Version

Interior Configuration Interior Configuration

F o r w a r d-Facing Galley Aft-Facing Galley Lavatory

Range – Shuttle (Low Density Version)

Takeoff at ISA +20Mach 0.7885% annual winds18 pax @ 200 lbNBAA reservesAE 3007 A1/3 Engines

PerformancePerformance

Price - Corporate Shuttle US$ 17,100,000*

* January 2002 Economic Conditions

Making good business sense

Changing expectations of what a business jet should be